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Sacking with Confidence

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FTdynamo.com As news filters through that Motorola executives shared a £2.5 million bonus three weeks before announcing 3,100 job losses in Scotland, this latest feature from FTdynamo.com written for HR Zone calls for a bit of bravery from business leaders.


Monday night is pink slip night in America. No, nothing to do with a retro craze for Doris Day-style underwear. Pink slips are what US workers receive when they are being laid off; in the UK the equivalent document has a more Orwellian name: the P45. As the number of redundancies mounts, pink slip parties are an increasingly common occurrence (see Party On, Feb 19, this year).

The US human resources industry has decided that it is crueller to inform workers that they are being sacked on a Friday, at the start of the weekend, than on a Monday. Why leave your (soon to be former) colleagues with the anxiety of unemployment all weekend when they could instead try and make a fresh start from the Monday morning?

That’s one way of putting it. The opposite argument is at least as valid. It runs as follows: employees aren’t stupid. They know when a firm is in trouble (often, it has to be said, rather sooner than management itself). People are already going to be anxious about their prospects; it might be better to get all the bad news out as soon as possible. Do you really think people enjoy their weekends more with the sword of Damocles hanging over them? The fact is, what you don’t know can hurt you.

These arguments underline the importance, and difficulty, of sacking with confidence. And it is not just the painful business of redundancy itself that has to be considered. There is also the so-called “survivor syndrome” – the feelings of remaining staff who have not been fired. How much job security will they have? Are they bound to keep looking round wondering who will be next?

One of the easiest ways for chief executives to calm a nervy stock market in the short term is to announce a cost-cutting programme with lots of redundancies. Today, in our more emotionally intelligent and PR-conscious era, CEOs realise they have to accompany these announcements with phrases such as “This is the toughest thing I’ve ever had to do”, or, “It’s been the worst day of my business career.” Compared with sacking thousands of people, CEOs claim, their own redundancy and the destruction of their reputation would be a mere bagatelle.

Some CEOs actually mean it, of course. But good companies show they are serious, and diminish the corrosive effects of survivor syndrome, by offering generous redundancy terms, “outplacement” or extra training and help with the task of finding a new job. It can all be rather costly in fact.

Henry Mintzberg, interviewed recently, wondered out loud why some CEOs can’t stand out from the crowd and refuse to slash and burn. Not only does the slashing and burning have its own significant price tag but, as Mintzberg points out, “This is the future of the company they are jeopardising!”

Let the true business leaders choose this difficult moment to stand up and be counted. They should tell their investors: true shareholder value will be built by sticking to our guns, and not making unnecessary, damaging cuts into the very heart of our business. Better a pay freeze or even a pay cut, the pain being shared by all, than the mindless vandalism of huge redundancy schemes.


FTdynamo features writing and research from leading business schools and management consultancies with expert insight and analysis from FTdynamo. A free trial of its services is available at www.ftdynamo.com

One Response

  1. the power of words
    I don’t want to be Mr Angry of Tunbridge Wells but isn’t there a difference between “sacking” and “redundancy”?
    People are “sacked” when they have failed to perform and have been found wanting…it is a personal thing and reflects on the individual in their hunt for a future role.
    Jobs are made redundant as a business decision relating to the market…it is not personal, shouldn’t carry a stigma, and is not a reflection of an individuals ability.
    I expect “The Sun” to use the emotive (and shorter) word but shouldn’t we try to be a bit more considerate of the folk who get made redundant?

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