How you lay people off says a lot about you and your organization

WAS IT ONLY TWO YEARS AGO that workers seemed to have all the power? Way back then, with the economy buzzing like a beehive about to issue an IPO on an integrated honeycomb solution, your employees could pick and choose among astounding job offers and demand?and get?wacky perks (onsite pet massages, anyone?). You handed them checks for doing nothing more than sticking around for another quarter. Remember retention bonuses? Weren’t they fun?

Needless to say, those flush times are now a wistful memory. Today, control?if that’s what you want to call hemorrhaging budgets and earnings disappointments?is back firmly in the hands of the employers. And the employers have been laying off folks in droves.

Despite being sensible to the obvious pain felt by those who had lost their jobs, until recently I viewed layoffs with a degree of equanimity, figuring that the thousands sent packing by the likes of Enron, Kmart and Polaroid were, in the long run, better off finding new jobs?no matter how long that took?than they were working for ineptly managed companies.

The closest layoffs had hit to my home was when my brother was sent packing from an investment company following Wall Street’s annus horribilis in 2001. While understandably shocked and dismayed?being called out of a Wednesday morning meeting and escorted to HR by a couple of frozen-faced flunkies was not his idea of a great Humpday?he got over it relatively quickly. Pretty soon he was following up on promising leads and landing interviews. (For one interview, he was whisked off to Scotland for a day, and the grateful Scots sent him a case of champagne as compensation for his trouble. Nice.) He spent half his time networking and job searching, and the other half doing his best Bob Vila impersonation with an overpriced fixer-upper. Within three months, he had a new job and modern plumbing.

Layoff Lessons Learned

It’s tough to put a positive spin on letting people go. Giving employees a one-way ticket off the premises is never pleasant. But it needn’t be cruel either.

When my brother was laid off?along with a couple hundred of his coworkers?it came out of the blue. (Rumor had it that management decided to replace seasoned fund managers like him with fresh-faced MBAs who happened to be a whole lot cheaper.) A 16-year employee with a good performance record, he was treated like a pariah the minute the decision was made to let him go. Besides being publicly summoned to HR out of a meeting, he was watched while he packed up his office (as if, inclined to petty theft, he would not have had ample opportunity over those late nights and long weekends he had put in on the job to pilfer staplers and rubber bands), his voice mail was abruptly disconnected as if he had never existed, and he wasn’t given the chance to say good-bye to his colleagues. Nor were those colleagues who remained told who was let go or why, no doubt filling the survivors’ heads with fear and uncertainty over whose head would be the next to roll. In retrospect, my brother was lucky. He’s moved on to a good job at an untarnished company. His former colleagues remain stuck in a quagmire of sinking morale and pervasive mistrust.

The higher-ups who determined those layoff practices and made those decisions may have feared that, afforded the opportunity, my brother would have bad-mouthed them to his colleagues. They should have realized that their shabby treatment of him spoke more loudly about their characters, their thought processes and their leadership than anything he could possibly have said.

True, his managers were most likely just following HR’s orders for the day. But that doesn’t let them off the hook. HR can do many wonderful things, but it can’t relieve a manager of responsibility for discriminating between right and wrong. People shouldn’t be robbed of their dignity, especially someone who was a valued employee just 24 hours earlier. It strikes me as wrong that managers?who often bend over backward to ease problem employees out the door, offering written warnings, probationary periods and additional hands-on attention?turn into robots once layoffs are decreed.

In addition to being nasty and juvenile, the treatment my brother received is simply bad business. Layoffs are always preceded by weeks, even months, of rumor. During that period of dread, employees devote a considerable portion of their days to speculating, gossiping and staring balefully into space. It would have been a whole lot better for morale and productivity to have given the workforce?if not the individual employees pegged for downsizing?advance notice that the layoffs were in the offing.

The danger with being honest and up front with employees is that some of them won’t wait for the ax to fall. Once they get wind of what’s going on, they’ll hit the road for better prospects. But that’s a risk companies have to take. Employees have the right to make a living, to seek the best opportunities for themselves. Unless an employer can guarantee a lifetime of exciting assignments, steady promotions and plentiful pay raises, honesty really is the best policy.

And as with all things cyclical, the time will come again when companies compete fiercely over hard-to-find talent. (Onsite pet massages, however, may not return in our lifetime.) Many of those employees left behind at my brother’s company, who witnessed 200 of their colleagues carted away as if they were one of America’s Most Wanted, likely have updated rŽsumŽs on hand and headhunters on speed dial, just waiting for the day when the economy picks up. Given the first chance to move on, many will. And his former company will need plenty of luck, not to mention ready cash, to fill their shoes with strong recruits. In the end, the money the company hoped to save by trimming experienced employees will be spent recruiting and hiring competent people in the future. Sounds like a zero-sum game if I’ve ever heard one.

One good thing that may come out of this current downslide is a healthy hit of realism. The power we thought we had over our employers was just an illusion. Whoever pays the bills makes the rules. At times, the rules seem indulgent and tipped in favor of employees, but that’s a dangerous?and fleeting?situation. In a capitalist society, none of us is entitled to lifetime employment; we have to earn our own keep by producing, honing and sharpening our skills, and remaining alert to the vagaries and possibilities of whatever market in which we find ourselves. We can’t be lulled by seemingly beneficent employers or allow our expectations to get out of line. Many of those who have fallen victim to the downslide are suffering all the more because they suspect that their earning potential peaked two years ago and sadly for them, they’re probably right. Hopefully we’ll remember those lessons when the next uptick comes around.