The What, Why, and How of the Difficult Decision to Fire Employees in Organizations

Hiring and Firing Workers and Professionals is an Integral Part of Free Market Economies

Hiring and firing of workers and professionals is an integral part of any firm and more so for private sector ones that have to undertake periodic downsizing and upsizing based on the market and macroeconomic conditions. Indeed, in any Free Market Capitalist economy, hiring and firing are as natural to the firms and the corporates as water is to a Duck.

Given that market economies are subject to periodic booms and busts, it is only in the order of things that firms need to hire when the economy is booming and downsize when market conditions get tough.

Having said that, it is not always the case that firing employees is a pleasurable and fun activity for both the organization and the employee concerned.

After all, firing is involuntary separation wherein in the same manner in which Divorces and Separations are hard on the individuals concerned, downsizing and firing of workers needs to be handled with care and caution lest there is lingering bitterness from all sides.

While a majority of workers who are laid off are done so when the economy is in a bust phase, there are also cases where employees have to be laid off due to other factors such as violating the contractual terms and conditions, disciplinary reasons, and poor performance.

Why HR Managers Must Handle the Firing Process with Care and Caution

In each of these cases, the event of separation is indeed traumatic for the employees and hence, Human Resource Managers must proceed with utmost caution.

In our experience, we have found that the more sympathetic and empathic the organization is, the better are the chances that the separation would be manageable.

Moreover, it is not only mushy sentiments that are involved here and given the fact that firing of workers should be done as part of the contractual agreements, it is more the reason for organizations to tread carefully lest they are sued for wrongful termination and asked to pay hefty compensation.

Indeed, firing of workers is usually a fraught affair and one that can lead to legal and regulatory complications unless handled carefully and judiciously.

Soften the Blow and Sweeten the Pill

As discussed so far, firing and downsizing need to be handled well and there are some ways and methods that HR managers can employ to soften the blow and lessen the trauma associated with firing.

For instance, they can offer the fired worker use of the companyís office space for a few weeks so that he or she can use the resources such as the Computers, the Printers, and the Fax Machines to apply for new jobs.

In addition, HR managers can be generous with the Severance Package so that the firing process is sweetened with monetary incentives.

For instance, we have found that negotiations over the severance package are usually the most contentious and most tense since they involve significant sums of money.

Indeed, we have come across some employees who are about to be fired and who hire attorneys to help them negotiate a handsome if not fair severance package.

Apart from this, there is also the other important aspect of Healthcare and Pension benefits that fired employees are entitled to.

Of course, the former ceases upon exit and it is only for those Senior Employees that organizations typically let the Insurance coverage continue for a few months more. In addition, it is also the case that pension benefits are pro rated at the time of exit and paid to the employee accordingly.

On the other hand, downsized employees cannot expect their perks to be monetized on a pro rata basis and hence, they need to plan accordingly.

Handling the Actual Firing Event with Empathy and Firmness

Coming to the actual hiring interview and how HR managers can break the news to the employees, one must remember that this aspect is perhaps the most important from an emotional and personal perspective.

While we have discussed the financial benefits and other tangible ones, the intangible aspect lies in how HR managers handle the firing event.

For instance, we have come across employees who are often taken out for lunch or for coffee and then informed about the decision to fire them so that it can be conveyed in a more humane manner.

Indeed, while in the West, firing is commonplace and by this time, most firms and their employee know what to expect and how to behave, in India, in White Collar firms, there is often a disturbing lack of Emotional Intelligence when firing employees.

One need not go far than look for the instances of the many employees who were laid off in the IT (Information Technology) sector over the last few years to understand why there is a need to sensitize the HR managers to take a more empathic approach.

As can be seen from the many news items that described how employees were fired in a rude and abrupt manner, such examples diminish the hard won reputation of the firms and hence, we contend that it is high time India Inc. developed a template for firing that embraces a people first approach rather than a profit oriented approach alone.

Concluding Thoughts

Having said that, we also acknowledge that one cannot behave like in an Indian Wedding where the actual act of the married couple leaving their parental homes is done in a highly emotional manner.

What we want to emphasize is that HR managers tread the fine line between hard and cold facts and emotional and subjective aspects so that the firing event is conducted professionally without name calling.

To conclude, it is hard to let go and harder to leave yet, all sides must be professional and behave like adults.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


Human Resource Management