Criteria for layoff need to be made clear

A couple of summers ago, Radio Shack got the wrong kind of publicity when it used e-mail to notify more than 400 employees in Fort Worth, Texas, they had lost their jobs.

The company defended the method at the time, saying employees were directed by e-mail to talk with human resources for further information. Still, the misstep was ridiculed as heartless in the media and on late-night TV.

"We've come a long way in terms of sensitivity," said Thomas Shea, chief executive of human resources consulting firm Right Management's Florida/Caribbean region. "Companies have learned the consequences of not handling it well."

In these tough economic times, when some companies are forced to scale back their labor force, how can they handle it in a way that saves face for their workers and doesn't demoralize the remaining staff?

"There's no good way to lay somebody off," said John Challenger, CEO of Challenger Gray & Christmas, a Chicago-based HR consulting firm. "Employers can try to minimize the feelings of anger and betrayal. It's not only the right thing to do, but it sends a message to the organization: 'We had to make these layoffs but we tried to do them in a way that respects people.' "

In a planned layoff, the worker's direct manager or supervisor should thank the employee for his or her time of service and explain that the layoff decision is economic rather than personal.

"What you're looking for is consistency in message, brief and to the point. Don't drag out the notification meeting," Shea said. "When an employee is in a state of shock or disbelief, he is not absorbing."

The manager needs to say the layoff is a business decision and to avoid getting into a debate or argument. The employee then should be directed to human resources or an outplacement service to talk about severance, benefits and career transition.

"The problems occur when a manager mixes up a performance review with a termination," Shea said.

Employers can best prepare their workers for a layoff by being honest and consistent in their message. "It's the unknowns that kill you, not the facts," Shea said.

Trying to keep a planned layoff secret is nearly impossible when employees have access to the Internet, he said. "What gets employees upset is when they feel they're not being given all the information they could."

Unclear criteria used to choose who is laid off also can cause bitter feelings among employees.

A recent Supreme Court ruling in a case involving age discrimination in the work force is likely to have an effect on how employers choose workers to lay off.

"It was a shifting of the burden," said Sheila Cesarano, a labor lawyer with Shutts & Bowen in Miami. "It's a big change in how employers have to approach layoffs. Now they're going to have to be the ones coming forward with reasonable explanations with the selection process."

Cesarano recommends employers have objective criteria before selecting employees for a layoff. For example, "Employers may have five factors equally weighted or one (factor) 50 percent weighted," she said.

Mark Zelek, a labor lawyer with Morgan Lewis & Bockius in Miami, said seniority, education and critical skills could be criteria used to retain employees for mid- to higher-level jobs. Be careful with performance reviews, however. If employers go back more than a few years, they're on "less firm ground," he said.

In either circumstance, though, employers need to take a snapshot of their work force before and after the layoff, and make sure the "after" doesn't look too different, the lawyers say. Employers want to avoid targeting any single demographic group in the work force.