Being fair in redundancy

No decision is more gut-wrenching and threatening to workplace culture than the decision to let people go, but what can we learn from those organizations that get it right?

Fair in Redundancy

In the UK August marks the beginning of the end of furlough. The amount paid in government grants provided from August onwards will be reduced to reflect people returning to work. Unfortunately, what this means is that companies that haven’t recovered well will be forced to make difficult decisions to survive. And no decision is more gut-wrenching and threatening to workplace culture than the decision to let people go.

The economic impact of the pandemic is tremendous. The IMF has called this the biggest economic downturn since the Great Depression — affecting both advanced and developing economies. Unemployment rates are at an all-time high, and it’s estimated that as many as 42% of all the jobs lost in the US so far in the crisis could be permanent.

“[Redundancy] is a clear decision that is difficult to implement,” said one CEO. If done well, the company survives and hopefully thrives. If done wrong, the subsequent anger and fallout can destroy trust and severely hinder the chemistry of the workplace.

The pandemic has caused some companies to approach layoffs in wrong ways, sometimes catastrophically bad, like in Cirque de Soleil. It’s often not done well because the process is so emotionally charged and tough on everyone – the employee being made redundant, the team that loses a colleague and friend, and the leader who has to take responsibility for the decision.

But what can we learn from the organizations that get it right?

Anticipate the emotional fallout

Organizations that handle redundancies and dismissals well understand the immediate and long-term emotional impact. This awareness allows them to anticipate and mitigate risks, as well as support individuals, teams and leaders.

Fearing my job is on the line

Employees and colleagues are absolutely right to feel afraid their job is on the line. Research confirms their intuition that the pandemic is a life-changing event that will require a lot of personal work to come back from. The emotional scarring from unemployment is both deep and long-lasting. A recent study found that each six-month spell of past unemployment predicts lower life satisfaction after the age of 50, even when people had the opportunity to “heal” in later working life.

The strong links between wellbeing and identity are under-researched and poorly understood. This is why it’s culturally ok to dismiss people from their jobs at a moment’s notice in some countries, and why international development programs perceive a change in livelihood – from fishing to agriculture – to be an obvious solution for communities dealing with the impacts of climate change.

What common solutions overlook is the critical role work plays in our lives. So many daily rituals are entwined with the work we do – our journey to work, our social exchanges, our ideas about what success looks like. Many of the stories we tell ourselves about ourselves are linked to the job we do, how well we perform, and the sense of belonging we feel.

In that light, losing a job is psychologically shattering. Even if we didn’t like our jobs that much, when put on the line, we suddenly appreciate the security they brought us and our families. We feel the instant loss of autonomy that comes with being placed in a process we feel we have little control over.

Sadness and guilt as things change

We’ve seen many leaders take on pain and guilt from letting people go, causing them to withdraw from their people. While this is natural, doing so makes leaders seem more distant and less human to the rest of the survivors. Don’t they feel anything? How insensitive can they be? These thoughts, in effect, cause more pain to the organization.

Leaders should feel encouraged to talk to their teams. Offer to answer questions. It may be necessary to have a group meeting in an “ask me anything” format where everyone can share what’s on their minds. It may be tough, but openness and availability will lessen the stress and anxiety caused by uncertainty.

While sadness is inevitable, it’s a negative emotion that prompts reflection. It can be used to reflect on what was lost in the workplace. It can help identify what was good and give ideas on how to recreate what went well.

Anger over how people have been treated

Frustration and anger may be symptoms of burnout, but it’s also a reaction to when a person’s sense of fairness has been violated. Coworkers, especially close ones, feel others’ pain as if it was their own. In some cases, survivors may have lost their reason for coming to work.

Anger is perhaps the most destructive element that can be introduced to the workplace during this time. If the redundancy process is not done well, people might be fed up and ready to tear things down.

Trust, a resource hard-earned, can be lost easily to anger.

There is an employer brand reason to avoid anger, as well. On their way out the door, former employees may leave bad reviews on Glassdoor and other job platforms. When the pandemic season ends (which it undoubtedly will), and your company looks to hire again, applicants may find these reviews and reconsider working with your organization. Conversely, you could emerge with a stronger image as a great place to work.

Let go of people fairly

One of the Five Ways to Happiness at Work is ‘Be Fair’ – a sense of fairness is foundational to our emotional health.

But what does being fair in a redundancy or dismissal process mean?

Fairness at work is about distributional fairness (the outcome), and procedural fairness (how the outcome was achieved). This critical distinction helps us understand how people process what happens in the workplace, as human beings.

The outcome of any decision or procedure is often less important than the conditions that lead to the outcome. This is because psychological studies show we are more likely to accept a decision we don’t agree with if we think the decision-making process was fair.

When deciding to let someone go, consider how the decision is going to make people feel. Does it seem fair? What are the rules around who makes it onto the redundancy list? Do staffing cuts affect the “shop floor” and upper management as well?

The UK has a great framework from the ACAS that helps employers make sure that their decisions are fair.

Transparency and honesty in these circumstances go a long way in how employees perceive fairness in an organization. Communicate clearly to reduce anxiety. Here are some steps you could take to make layoffs fair:

  • Explain the challenges the organization is facing
  • State what you are planning to do
  • Explain why you have approached it the way you have
  • Sketch out a vision for how you can move on

A clear answer will help give the context and meaning of your actions. Ultimately, fairness is the key to making and implementing difficult redundancy decisions at work. If the decision-making process is deliberate and fair, the result will be much easier to accept by survivors and leaders. Redundancies will cause increased workload for others and impact morale. Be mindful of how survivors are coping and support them in their challenges.

Taking care of leaders

Leaders making employment decisions are human, and they wrestle with the consequence of their choices. Some of the strongest emotions here are guilt and shame. Recognizing the difference between these two emotions can help leaders move through the feelings that surface from the choices they make.

Guilt is a feeling of responsibility or remorse for some offense, whether real or imagined. It’s a healthy emotional response which allows us to see and understand how our actions have hurt others. Shame is directed inwardly – it’s a negative thought process about the self and how we appear to others. It can be such a powerful emotion it crowds out the ability to feel and respond with genuine empathy.

To avoid triggering shame responses in leaders, we go back to the importance of fairness. Did you decide through a proper process? There may be reason for regret and remorse, but if everything was above board, there is no reason for shame. If there was a personal agenda (using the pandemic as an opportunity to clean house), then there might be cause for shame.

What leaders can do to take care of themselves

Before helping others, leaders need to take care of themselves.

Talk to someone

Find someone safe to talk to that’s outside your organization. It’s critical to have a place where you can vent, release tension and deal with your worries. Maybe it’s a mentor figure or a peer.

Talk to your executive team

Letting someone go is not an easy decision, and it shouldn’t be a decision that you make in a vacuum. Talk to your executive team. Share the frustrations and the pain.

Focus on your wellbeing

The best way to deal with uncertainty is to take care of yourself. While there’s a time and place to indulge in some comfort food, it’s best to eat healthily, get regular exercise, practice meditation and get lots of sleep. As a leader, you may be taking on a lot of agitation and emotional burdens. You can’t help others if you’re about to fall apart yourself.