HRM textbook

CHAPTER 14 ETHICS AND EMPLOYEE RIGHTS AND DISCIPLINE 483
salary and benefits, and only 4% blamed supervision. Followed up 18 months later,
however, 24% blamed supervision and only 12% blamed salary and benefits.
Getting to the real problem during the exit interview may thus require digging. Yet
these interviews can be useful. When Blue Cross of Northeastern Pennsylvania
dismissed employees, many said, in exit interviews, This is not a stable place
to work. The firm took steps to correct that misperception for those who stayed
with Blue Cross.
Layoffs, Downsizing, and the Plant Closing Law
Nondisciplinary separations are a fact of corporate life. 108 For the employer, reduced
sales or profits may require layoffs or downsizing. Layoff generally refers to having
selected employees take time off, with the expectation that they will come back
to work. Downsizing refers to permanently dismissing a relatively large proportion
of employees in an attempt to improve productivity and competitiveness. Other
employees may resign to retire or to look for better jobs.
THE PLANT CLOSING LAW Until 1989, there were no federal laws requiring
notification of employees when an employer decided to close a facility. However,
in that year Congress passed the Worker Adjustment and Retraining Notification
Act (popularly known as the WARN or plant closing law). It requires employers of
100 or more employees to give 60 days notice before closing a facility or starting a
layoff of 50 people or more. The law does not prevent the employer from closing
down, nor does it require saving jobs. It simply gives employees time to seek other
work or retraining by giving them advance notice. Although there are exceptions, the
penalty for failing to give notice is 1 day s pay and benefits to each employee for each
day s notice he or she should have received, up to 60 days. The act does not have any
enforcement mechanism beyond suit in federal court. The law is not entirely clear
about how to notify employees. However, a paragraph that might suit the purpose
would be as follows:
Please consider this letter to be your official notice, as required by the federal plant
closing law, that your current position with the company will end 60 days from
today because of a [layoff or closing] that is now projected to take place on [date].
After that day, your employment with the company will be terminated and you will
no longer be carried on our payroll records. Any questions concerning the plant
closing law or this notice will be answered in the HR office. 109
THE LAYOFF PROCESS A study illustrates one firm s downsizing process. In this
company, senior management first met to make strategic decisions about the size and
timing of the layoffs. These managers also debated the relative importance of the skill
sets they thought the firm needed going forward. Front-line supervisors assessed their
subordinates, rating their nonunion employees either A, B, or C (union employees
were covered by a union agreement making layoffs dependant on seniority).
The front-line supervisors then informed each of their subordinates about his or her
A, B, or C rating, and told each that those employees with C grades were designated
surplus and most likely to be laid off. 110
Sensible layoff steps to take therefore include these: 111
* Identify objectives and constraints. For example, decide how many positions
to eliminate at which locations, and what criteria to use.
exit interviews
Interviews with employees who are leaving
the firm, conducted for obtaining information
about the job or related matters, to give the
employer insight about the company.
downsizing
The process of reducing, usually dramatically,
the number of people employed by a firm.