Introduction
The organizations have to incorporate the decision of layoffs in order to ensure its profitability in the long terms. These decisions support the strategic direction of the company which requires the organization to remain consistent towards minimizing the cost by means of dismissing the employees. The current paper enlightens the ways that managers need to incorporate in order to hinder the negative emotions caused by the dismissal of the employees and enlightens the formal procedure to conduct the dismissal meeting. Moreover, the compensation mechanism for the dismissed employees is also discussed in this paper.
Ways to Cope with Negative Emotions
The manager is required to address the negative emotions prevailing in the organization in order to maintain the morale of the employees so that they remain highly engaged to their work related tasks and organization. The employees are highly prone to become anxious and feel job insecurity, which can reduce their productivity and work engagement. In this instance, the managers are required to communicate with the employees and enlighten them with the strategic importance of lay-offs. The employees are required to be provided with the factual information about their importance in the organization, which can make the employees believe that they are playing a prominent role in the organization (Noer, 2009).
The prevalence of communication between the staff and management should address the actual reason of lay-offs and the current process that the organization is using for the staffing mechanism. The manager can enlighten the employees with the upcoming layoffs and their schedules, and should also make the employees believe that the organization will recommend the employees for other jobs in the industry. In this manner, the good will of the company will be maintained and the extent of negative emotion among the employees will be hindered (Noer, 2009).
The manager can make the management visible and supportive for the employees by means of interacting with employees on a regular basis and motivating them in such manner that their morale remains persistent. The employees feel anxious when the company incorporates lay-offs and the absence of managers in such condition can worsen the extent of negative emotions. The employees need to believe that the management stands with them and hence, the manager can ensure them about this notion by being with the employees during the work procedures (Noer, 2009).
The manager can also acknowledge the employees about the decision of the organization as it will help the employees to develop positive emotions for the organization. The managers have to incorporate the transformational leadership in order to keep the employees motivated, challenged and engaged with the organization. The manager can provide the employees with the advice related to their career and can keep them motivated towards the future prospects of the company. In this manner, the employees’ inclination towards negative emotions can be hindered in an effective manner (Noer, 2009).
Process of Conducting Dismissal Meeting
The process of dismissal is considered challenging for the managers as they have to address the negative emotions of the employees while keeping them motivated and perceive good will of the company in accordance with the decision of dismissal. The steps in conducting the dismissal meeting as discussed below:
The employee should be asked to meet the manager privately in order to ensure the privacy and dignity of the employee.
The meeting panel should be comprised of the direct supervisor and HR manager and the time duration of the meeting should be kept brief.
The meeting panel should remain calm throughout the meeting regardless of the employee’s response in the meeting.
The employee should be provided with the benefits of termination and should be enlightened with the organization’s strategy towards the decision of termination. The meeting should be focused on discussing the reason of termination that is incorporated in accordance with the organization’s policy and strategic direction rather than any personal inclinations. It is also necessary to provide employee with the adequate reference to support the career related prospects of the employee. It is essential to review the severance, insurance and release agreement. The employee should also be provided with the termination letter in accordance with the company policy.
After the conduction of meeting, the employee is required to be asked to repossess the personal items and give employee adequate time in order to incorporate a respectful gesture.
The company property is also required to be retrieved during and after the conduction of meeting, in which company car, mobile phone, tools, badges, uniform, and credit cards are required to be collected by the HR associate.
The employee should be provided with the paycheck in an efficient manner and the paycheck should be comprised of monthly compensation, prior bonuses, vacation pay, severance pay, insurance and other benefits.
It is required that the employee should be asked to leave the company premises after the collection of necessary items and provision of pay checks.
The complete termination process is required to be documented including the comments made by the client, as they might be useful in future.
Compensation Plan
The non-officer employee should be provided with the severance pay for the minimum of 6 months and the eligibility of the severance pay is decided on the basis of two extents. First of all, if the company has incorporated termination in order reduce the headcount in the company and minimize the cost, then the company is liable to pay the severance pay to the employee. Secondly, if the company has eliminated the position from the hierarchical structure of the company, then the company is liable to grant severance pay to the employee (Holzmann et al., 2011).
The employee should be compensated for the accrued days of work, including the vacation days, which will be compensated by the monetary means. The employee will be provided with the amount that has been deducted from the salary of the employee. The standard procedure of the company’s payroll will be incorporated in order to pay the severance pay and other dues. However, the employee can also be provided with the severance pay in a single payment rather than executing more than one checks. In this instance, the agreement will be made and signed by the employee and the company’s finance representative in order to release the occurrence of claim after the provision of the check (Holzmann et al., 2011).
The office employees are also eligible to the severance pay up to the duration of 6 months under the situation of termination that has been incorporated for the dismissal of position or company’s profitability prospects. The organization has to ensure that the organization’s strategic objectives do not hinder the wellbeing of the employee and hence, vacation pay, accrued days and insurance is required to be paid off by the organization. The employee has the choice to collect the amount either simultaneously in a single check or should wait for the minimum of 15 days, as it varies from company to company. However, it is preferred that the employee is provided with the adequate compensation in the most efficient manner so that the company can avoid the prevalence of possible claims and law-suit by the employee (Holzmann et al., 2011).
Chart and Timeline
The charts depicting the severance payment process and timeline are illustrated below:
Effect of layoffs on the Company
The decision of layoff is incorporated to decrease the administration cost of the company and increase the profitability in the long term. However, the decision of layoff can also be risky for the company and can increase the cost in the short run. The company will have to pay for the severance pay, vacation pay and accrued days in order to address the wellbeing of the employees and maintain its good will. The company will have to justify the reason of lay-offs in order to ensure that the employees do not incorporate any claims and law-suits and challenge the ethical inclinations of the company. The cost incurred by the lay-offs will decrease the profitability of the company and can also hinder the productivity due to the loss of potential employees (Datta et al., 2010).
The company will have to ensure that the existing employees are highly engaged with their work related tasks and do not incorporate any negative emotions towards the company. The organization will have to make the employees satisfied with their existing jobs rather than facing the possible turnover intention among the employees lead by the job insecurity due to the prevailing employee lay-offs. The company may lose the potential and trained employees, which is also considered as a loss of investment that the company incorporated for the development of the employee. The company will be challenged with the staffing of new employees in future when the company decides to expand its operations. In this instance, the company will have to recruit, select and train the new employees which will increase the overall staffing cost (Datta et al., 2010).
The decision of layoff can enhance the bottom line of the company for a short duration of time but it can be hindering for the company under the prevalence of growth and business expansion strategy. The company will have to develop policies and strengthen the internal communication in order to understand the concerns of the existing employees because most of the employees will be considering to switch their jobs due to the prevalence of job insecurity. Moreover, the layoff incorporated for the key position holders of the company can result in the employee turnover because the subordinates may follow their key personnel and hence, the company can lose more employees than projected (Pugh et al., 2003).
References
Datta, D. K., Guthrie, J. P., Basuil, D., & Pandey, A. (2010). Causes and effects of employee downsizing: A review and synthesis. Journal of Management, 36(1), 281-348.
Holzmann, R., Pouget, Y., Vodopivec, M., & Weber, M. (2011). Severance pay programs around the world: history, rationale, status, and reforms (pp. 17-120). Forschungsinstitut zur Zukunft der Arbeit GmbH.
Noer, D. M. (2009). Healing the wounds: Overcoming the trauma of layoffs and revitalizing downsized organizations. John Wiley and Sons.
Pugh, S. D., Skarlicki, D. P., & Passell, B. S. (2003). After the fall: Layoff victims' trust and cynicism in re‐employment. Journal of Occupational and Organizational Psychology, 76(2), 201-212.
