I was all set to write a post about dignity and fired employees, and then Nick Roy's HR Horizons beat me to it with a terrific post called "Firing Employees with Dignity." (Just to be clear: we're talking about firing employees in a way that preserves their dignity — not firing dignified employees.) In it, Nick talks about softening the emotional blow of firing people. He gives good advice, including "NEVER fire someone by email" — advice RadioShack could have used.
Here's what I can add: As a management-side employment litigator for the past dozen years, I've seen firsthand the effect of firing people without protecting their dignity. It is, in my experience, the number-one leading indicator of employee lawsuits. It is one thing to lose your job; it's another to lose face. Employees who feel like they lost more than their job — who feel like they were screwed over — are much, much more likely to sue.
In fact, you can mathematize it:
RD = 1 - (NA + FS)
where RD is the fired employee's retained dignity, NA is the employee's natural anger over being fired, and FS is amount by which the employee feels screwed. (All values are on a scale from .00 to 1.00.) You can then plug the retained dignity into a rough formula for the likelihood of an employee lawsuit:
Plawsuit = (1 - RD) + [STR(case) * $]
where the probability of the fired employee suing is based on the retained dignity, the strength of the case, and the amount of money to be won.
Some forward-thinking companies are beginning to use HR metrics to quantify the return on investment for various human-capital operations and initiatives. (For more on this interesting topic, click on the books The HR Scorecard and The ROI of Human Capital in the booklist to the right.) Companies should consider adding retained dignity to these metrics.
There have always been ethical reasons for firing employees in a way that preserves their dignity. Now there are financial reasons, too. Higher retained-dignity scores mean lower employee-lawsuit costs.