Use forethought, respect when letting employees go

No matter the reason for a layoff or firing, it's crummy news for the newly jobless. And managers who've terminated employees know that there's no easy way to do it.

Still, some methods are better than others. CoCo Communications employees arrived at the office Tuesday morning ready to start their workday. Many discovered that their key cards did not work, and managers sent them home unemployed.

Some employees gathered at a nearby coffee shop to commiserate and process the shocking news.

"I've been laid off before when I've gotten warning," said Joseph Bui, a 25-year-old former developer for the Seattle-based company. "This is a little bit of a tough pill to swallow."

CoCo executives, who declined the Seattle P-I's repeated requests for more information, join a long list of peers to be criticized for their handling of layoffs. Earlier this year, pending job cuts at Seattle-based Jobster played out in the blogosphere before employees knew what was going on.

Chief Executive Jason Goldberg struggled with the fact that reporters knew about cuts before employees were notified, so he put the message on his blog so folks could hear from him first.

"There's never a good way to manage a layoff. People will always be upset, people will always be unhappy," said Goldberg, who said he tried to show respect and appreciation for the 60 who lost jobs.

Last fall, Big Fish Games played host to an employee cruise on Elliott Bay to celebrate milestones. The next week, some employees were handed layoff notices and escorted out of the Seattle headquarters in a restructuring.

"It came as a shock, and there is really no logic as to why it happened," Kimberlee Stedl, a former program manager, told the P-I at the time. "Why did they take us on this goofy boat cruise if they were just going to can us a few days later? It is kind of insulting."

Western corporate culture has accepted that layoffs are inevitable, and employees of startups know they're taking a risk when they take those jobs. Even so, experts say that disguising problems until the last minute, changing the locks overnight, e-mailing or text-messaging pink slips and other botched ideas make a poor situation worse.

"If you want to ruin your chances for recruiting top talent in the future, treat your current employees disrespectfully," said Carl Robinson, a Seattle consulting psychologist and principal of Advanced Leadership Consulting. "You just wonder what the heck is going on. There is no need to treat people that way."

If layoffs are done poorly, even if a company turns around, "prospective employees and investors are going to have some real questions about the management team," Robinson said.

Washington is an "at-will employment" state -- meaning that no notice is required to fire someone.

"Companies have a lot of flexibility to end employment relationships, just as employees do, as long as there's no unlawful motives or contractual obligations," said Lawton Humphrey, chairwoman of Davis Wright Tremaine LLP's labor and employment practice.

The chances that an employee will sue increase if the employee is surprised or fired without being able to explain himself, Humphrey said. Even if an employee is being fired for doing a poor job, the person should be treated with respect.

"With layoff planning, start thinking about it in advance," she said. "You get more options available if you make decisions not under an incredibly tight time frame."

Those options include salary reductions, furloughs and employee buyouts. Also, the companies that do it "right" provide career counseling and resume help.

When companies don't have the luxury of time -- perhaps because of pressure from the board of directors -- the company should make an effort to preserve people's dignity, Humphrey said.

"Nobody likes to do layoffs. I've never talked with any manager or human resources person who relishes having to do this," Humphrey said. "It's not fun for anyone."

Companies should also come up with a plan on how the layoffs will be described to the community, the press and investors, she said.

Intellectual property concerns are often the culprit for sudden notice. Banks, for example, have to be very swift with their terminations because employees can extract sensitive data within minutes, she said.

But Robinson, the consultant, said that companies should not treat employees as criminals. If employees are asked to return laptops and other property, they usually will without a fight.

"Trying to protect themselves from loss of property -- in my book that's a bogus excuse," he said. "The loss of some money is far outweighed by the loss of credibility and respect that the company has by treating people poorly."

Employees process layoffs through a fog of shock and disappointment. They want to know why they are being laid off, whether it was for a good reason and want to be given a chance to move on successfully, said Rich Doherty, Pacific Northwest market vice president for Right Management.

"It's never just business," Doherty said. "Losing your job is a big deal for anybody and everybody."

Managers, on the other hand, dread having to do it.

"They're nervous, they're thinking, 'I don't know what's going to happen when I talk to the person,' " Doherty said. "How do I tell the right amount of information without telling too much? They're thinking, 'I just don't want to do it at all. I don't want to be here.' "

Employees shouldn't be afraid to ask employers for help, for a reference, or for time to regain composure and continue the conversation later.

"Take your time, take a deep breath and think through what you might need," Doherty said. "You can always ask for anything. There's no harm in doing that. The employer might be willing to negotiate or offer additional resources to help you in your transition."

Also, managers need to tend to the employees who remain, experts said. And that takes a lot of courage.

The hardest part for Jobster's Goldberg was facing employees who stayed on and getting them pumped up again. But he says his efforts worked.

"The outcome is we have an employee base that's more motivated and excited about Jobster than they've ever been," he said.

LETTING PEOPLE GO

DO:

• Fire employees in a private space. Don't make them "walk the gantlet" past co-workers.

• Consider the employees' logistical circumstances. How will they get home that day?

• Preserve dignity. Valuable employees who are laid off because of economics should not have their cell phones and ID cards confiscated and passwords immediately canceled.

• Choreograph the notification in advance.

• Base layoffs on transparent criteria.

DON'T:

• Fire or downsize on a Friday. Support services are closed on weekends, leaving employees to cope on their own.

• Tell employees that the downsizing is finished. It may be tempting, but you never know.

• Terminate an employee via e-mail.

• Turn a layoff into a performance review. Stick to the topic and don't give platitudes such as, "This is as hard for me as it is for you."

• Rush through the meeting. That is salt in the wound.

Source: Corporate ethicist Steve Harrison, author of "The Manager's Book of Decencies: How Small Gestures Build Great Companies."