Gruntled Employees

The pink-slip blues

Great piece in today's New York Times discussing the pain of layoffs from the other side of the table. In "Handing Out the Pink Slips Can Hurt, Too," Matt Cooper, an executive at a recruitment-outsourcing firm called Accolo, describes his experience in letting people go. The article is well written and sincere. Matt writes:

It was gut-wrenching knowing that a bomb was about to go off. I had hired and trained many of these people. We wanted to be as humane as we could in letting them go.

I don't think anyone expects people to feel sorry for an employer who has to do the laying off; obviously, it's much harder on the laid-off employees. But it's worth remembering that most of the time, the people doing the terminations have taken it personally, too, and are doing it as a last resort.

Managers and employers: the more you can convey this to the people you are firing, the less likely they will be to sue you.

Another important lesson from the piece:

We offered as much severance as we could, and the other executives and I told the remaining employees that we didn’t want to close the door on those who lost their jobs. We encouraged them to reach out to their ex-colleagues and keep in touch. Then we all got on LinkedIn and wrote endorsements for those who were laid off.

It cost nothing to write those LinkedIn references, except a little bit of time and thought. But I'll bet that those employees appreciated it.

Well done, Matt.

Monday, Bloody Monday

I was going to write something about the Supreme Court's decision Monday in Crawford, further expanding the ability of employees to win retaliation lawsuits, but that's going to have to wait. (For those who can't wait, a PDF of the decision is here.)

Instead, the biggest news on the workplace front was Monday's 70,000-plus employees' getting laid off by major US employers. Twenty thousand at Caterpillar. Another 26,000 at Pfizer. Eight thousand at Sprint, and 7,000 at Home Depot. CNN has an especially cheerful chart here breaking down the 207,000 workers laid off in 2009. (They also came up with the "Bloody Monday" reference, near as I can tell.)

We've already posted on the media's propensity to play up bad economic news (see "Fear sells"). And we still need to point out that the S&P 500 is up more than 12 percent in the ten weeks since November 20. (Granted, it had been up as high as 24 percent just a few weeks ago.) But these layoff numbers are too huge to ignore.

What can you say?

Over at KnowHR, Frank Roche's post "How in the Hell Do You Lose 71,400 Jobs in One Day?" sums it up well. And I particularly like his advice:

I wish I had some really great HR advice today. I’m a little shell shocked, but here’s what I’d say: For those of you who are still there ... kick ass. Do your best work. Stop going to meetings. Start doing things. Make money.

Now’s the time to do our best work.

I completely agree. I would add that HR professionals, managers, and executives need to get in the trenches and rally the troops (feel free to add any other militaristic metaphors you like). Fear is driving the economy, and fearful employees are not gruntled employees. Thus, fear diminishes profits.

Talk to your employees. Tell them that it's going to be all right, that we'll make it through this OK. Live together, die alone. (No, wait ... that's something else.)

Tell them to do one extra thing today that will help make the company more profitable. Make one extra call to get a sales appointment. Perform one extra quality check of a component. Think of one extra idea for innovation.

And then do it again tomorrow. And the next day.

Pretty soon, there'll be no more recession. And no more Bloody Mondays.

Layoffs: Do you want the good news first?

Is it me, or are we seeing a trend in press releases and internal memos about layoffs? In announcing the layoffs, whether publicly or "internally and confidentially" (which these days just means publicly with a slight delay — who really, in this day and age, thinks these memos and emails are going to remain confidential?), the companies explain the layoffs, cite the recession, but then talk about how good their company is doing.

Do they ask the workers they're laying off, "Do you want the good news first or the bad news?"

Examples abound. A CNET article entitled "IBM quietly lays off North American staff" comes right after Big Blue announced a 12 percent increase in earnings. Cellphone maker Ericsson issued a release entitled "Ericsson Reports Strong Fourth Quarter," but laid off 5,000 workers worldwide. Internet News had this headline: "EMC Trims Staff Levels Despite Record Revenues." According to Above the Law, a sizable regional law firm issued an internal email talking about its "strong 2008" while announcing that it was laying off 6 percent of its lawyers.

Perhaps some of this is Churchillian stiff-upper-lip talk to rally the remaining troops (and investors). But it's a safe bet that many of the laid-off workers (as well as a lot of those still left on board) will be left wondering if the layoffs were truly necessary.

To be sure, the job cuts may help prop up profit margins right now. But companies need to remember that the recession will end. And on the other side, these companies might wonder why they're no longer employers of choice in the eyes of the talent they will then need to hire. People remember how they're treated on the way out, and they tend to tell other people.

Bottom line: make sure your messages are consistent. If you're laying people off, don't brag about how well things are going.

• • •

A language note: The verb — to lay off someone — is two words. The noun — layoff — is one, without a hyphen. The adjective — a laid-off worker — is hyphenated because it's a phrasal (or compound) adjective that precedes the noun. But the worker was laid off — no hyphen.

It's hard enough to do a layoff. It shouldn't be so hard to write about it.

Of layoffs and leaks

Notwithstanding my last rosy post on the economy, "Fear sells," we are indeed spending a lot of time at our firm talking with clients about layoffs. They are, without a doubt, one of the worst things an HR professional or a management lawyer has to deal with. (Of course, let's not forget: they are much harder on the laid-off employees.)

One of the concerns we heard over and over from our corporate clients was how to avoid the gossiping and rumormongering that can surround layoffs like circling vultures. Oftentimes, ahead of a planned layoff, companies will go all CTU-style need-to-know on their employees. The thinking here is that layoffs should be kept secret until they're rolled out at H-hour. This keeps the rumors to a minimum, and keeps employees productive until the embargo lifts and the layoffs actually occur.

That's dumb.

Well-intentioned, but dumb. You see, one of the principles of this blog is that any given employee at any given time has a certain probability — P — of suing the employer. Certain events, such as firing the employee, tend to raise P. While it is impossible to reduce P to zero, it is the role of managers, HR pros, and employment lawyers to help lower P.

This is my fifteenth year of helping employers fix workplace problems. In my experience, surprising employees with bad news tends to increase P. For that reason, we always tell clients that an employee who is about to be disciplined or fired should not be surprised by it. Otherwise, the surprise acts as a multiplier of the bad feelings that come with the bad news, and it raises P even more.

The same is true in a layoff situation. To be sure, no one wants the workplace shut down because everyone's too busy gossiping and spreading rumors before an expected layoff. But carefully leaking some information about the upcoming layoff, maybe a week beforehand, gives people a chance to come to grips with their possible fate. Those whose departments are underperforming, or whose own work performance is weak, may come to realize that their departure is inevitable. I'm not saying that they're going to be happy about it. But without the element of surprise to exacerbate the hurt feelings and other emotions that come with a layoff, their personal P may be low enough to avoid lawsuits.

F-I-R-E-D, fired, fired, fired!

Update from Monday's post, "Employee loyalty and football":

Boston College athletic director Gene DeFilippo announced today that he had fired football head coach Jeff Jagodzinski because the two men were "really divided on the future of this program and what we wanted for the program." It had been reported in the past few days that Jagodzinski was considering interviewing for the newly vacant head-coach position with the New York Jets ("J-E-T-S! Jets! Jets! Je ... oh, shut up already.") DeFilippo told the press that if Coach Jags did indeed interview, he would be fired. This morning, The Boston Globe reported that Jagodzinski did interview to be HC of the NYJ, and then DeFilippo followed through with his threat this afternoon.

There had been reports that Jagodzinski's contract with BC had a quasinoncompete clause saying that he couldn't interview for an NFL slot during the first three years of his five-year term (he just finished his second season). But the Globe later reported that there was no such clause. Jagodzinski's pay is reportedly over $1 million a year, although the guaranteed base is apparently much lower.

The Globe's Mark Blaudschun has this story on how DeFilippo felt betrayed, while Globe columnist Dan Shaughnessy decries the trend of sports figures failing to live up to their contracts.

Jagodzinski must be hoping that the interview went well, or that he lines up something else soon. DeFilippo in his press conference today did say, "I love Jags." So he's got that going for him.

What do you think? Was it fair for Jagodzinski to pursue what he thought was an opportunity to better his career, despite having committed to stay at BC for five years? Was it the right call for BC to swiftly punish Jagodzinski for his disloyalty? I'm a management lawyer, and I can't stand the Jets, so I'm siding with BC here. Go Eagles!

On performance evaluations and paper shuffling

Ron Baker is the world's leading guru on value pricing, and his amazing books and ideas have formed the foundation for much of my firm's no-hourly-billing business model and our new sister blog, The Client Revolution. But he recently posted an article on his Verasage Institute blog on a topic closer to this blog's workplace focus: performance evaluations. In "Performance Appraisals: Paper Shuffling," Ron criticizes the practice of annual performance evaluations as outdated and overly focused on the negative.

Ron questions the slavish devotion to appraisals: 

Firms have an irrational faith in the effectiveness of performance appraisals. Most firms and employees are dissatisfied with the performance appraisal process, so it remains a curiosity why this methodology continues to exist.

He believes that the goal of firms should be to 

strive to create a meritocratic environment that rewards risk taking and innovation, rather than rigid, stultifying union-type jobs that reward seniority, mediocrity, and complacency.

Getting rid of the annual performance evaluation is a good step in that direction.  

KnowHR's Frank Roche makes a similar argument in "Focusing on the Negative Never Works."

At a time when so much in the workplace is negative, shouldn't we take a more-positive approach?

Employee loyalty and football

I went to law school at Boston College. Here's the thing about going to law school at BC: the law school is fairly cut off from the rest of the university. So we don't really care how the school's teams are doing.

Unless they're doing well. When BC shocked No. 1 Notre Dame in the 1993 "Holy War" game, 41-39 as time expired, and Sports Illustrated put BC on its cover, we were all about Boston College. But this year, when BC missed out on the Orange Bowl and then got beaten at the always-prestigious Whatever Bowl Music City Bowl, I glanced at the headline, yawned, and moved on to discussions of the Red Sox Hot Stove season.

But today The Boston Globe reported that BC was threatening to fire football coach Jeff Jagodzinski because he was contemplating interviewing for the vacant head-coach position of the New York Jets. As a fair-weather BC fan, I can't say that I care that much. And as a New England Patriots fan, I loathe everything about the J-E-T-S-Jets-Jets-Jets (especially that lame crowd chant).

But as an employment lawyer, the issue intrigues me. Moving up from coach of a barely Top 25 college team to head coach of an NFL franchise is a big career coup. In much of the sporting world, there is an unwritten rule that a team will let its coaches, managers, and other staffers interview for a job with another team if the new job would be a step up. Firing, or threatening to fire, Coach Jags would appear to be a breach of this protocol.

On the other hand, Jagodzinski makes more than $1 million a year coaching at BC. Interviewing for a new job with the Jets raises serious questions about his loyalty to the university that offered him his first head-coaching position. The Globe's Mark Blaudschun reports that Jags is not considered the front-runner for the Jets position, although he is apparently tight with aged Jets QB Brett Favre. In any event, if the reports about BC's willingness to fire Jagodzinski for interviewing with the Jets are true, then he has an important and very risky decision to make this week.

Many employers face the same situation that Boston College is facing. They want their employees to be loyal, and they take offense when employees show a willingness to look elsewhere. For example, a close friend of mine interviewed with a law firm while she was working at another firm. Unfortunately (and unforgivably), some knucklehead at the new firm left a message on my friend's office voicemail about the interview. Except that it wasn't her voicemail. And the person who ended up with the voicemail went and told on her. And my friend got fired. (Never leave voicemails!)

Employers do have a right to expect loyalty from their workers. But loyalty is not the same as servitude. And if an employee feels she can better her career and her life by looking elsewhere, how can you blame her? Instead of worrying about employee "disloyalty," employers should focus on things that make an employee want to stay: career development, increased responsibility, maybe even more money or benefits. On the other hand, a million dollars a year is a million dollars a year.

What do you think? Should BC fire Coach Jags for merely interviewing for a new job?

Dear [insert name]: You're fired

Our very first post was about RadioShack's submoronic firing of 400 employees last year by email (see "Radio Shack Deletes 400 Workers, Common Sense"). Now, the blogosphere is abuzz with CompUsa's decision to close its remaining stores (see CNNMoney article) and its soulless form letter notifying its employees. The excellent tech blog Engadget included what it describes as a copy of the form letter sent to employees in a biting post, "CompUSA sends out layoff letters: bad service extends to employees, too." Here is the letter, taken from the Engadget post (the store number and location were previously redacted, which is lawyerspeak for blotted out):

Now I can't personally vouch for the authenticity of the letter, and Engadget describes its source as an anonymous CompUSA employee. Nor could I confirm the identity of CompUSA's HR director, although there is an HR person with that name in the DFW metropolitan area. It certainly looks like an authentic WARN Act letter, which the government requires.

But what a letter. I appreciate that CompUSA had a lot of employees to fire, but couldn't they have bothered to insert the unlucky recipient's name in each letter? (You know, guys, they have computers that can do that now.) Did they need to keep reminding the fired worker that CompUSA is incorporated (at least for now) — four times in a three-paragraph letter? Couldn't they get a human being to actually sign the letter? Repeating the name in boldfaced italics doesn't count.

You're firing people. Have the decency to act like it means something to you. It certainly means something to the employees. A personalized letter — or even a seemingly personalized mail-merged special — with a real human being's signature makes a difference. It might not seem like a lot — it might even seem like a waste of time — but people notice these things.

Getting fired sucks. But getting fired suckily (by email, by form letter, during the holidays) sucks even more. Worse, it makes the fired employees more disgruntled, and thus more likely to sue. You've already messed up the big things (running your company into the ground); at least try not to mess up the little things.

Bonus irony note: Check out CompUSA's tagline:

Obviously they didn't get it. They didn't get it at all.

Here are some other voices on the topic:

• Tampa Bay's Channel 10 News has a story on the company's remarkable retention-bonus scheme: if you work the next two months until the store closes, you get — wait for it — a whole week's pay! (Woo.) The station has posted a PDF of the "Separation Bonus Plan"; the story is here: "Employees cry foul over CompUSA closings"
• The incomparable New York Times technology columnist David Pogue had this explanation for the company's failure back when they began their store closings last March: "The Gutting of CompUSA."
• The always excellent HR Capitalist has this great post on how another stumbling company, Circuit City, tried to lure back some of their previously fired, higher-paid workers at a lower wage: "Circuit City - We Fired You, Please Present This Coupon to Get Your Old Job Back for Less Pay..."
• That particular move garnered Circuit City a spot on the Fortune "Top 101 Dumbest Moments in Business 2007."

*******

[Updated 20 December 2007 to clarify the Circuit City references, and to add more on what CompUSA could have done right. Big shout out to Martin Ebel, the top Commonwealth of Massachusetts civil-rights lawyer and frequent Gruntled commenter (which is different from a commentator). Another big shout out to Christopher Mirabile, world-class general counsel, for pointing out the Engadget post.]

Fire stupidly, lose your own job (eventually)

US Attorney General Alberto Gonzales resigned today, largely because of how he mishandled the firing of nine Assistant US Attorneys last year. We covered the story last March in "Attorneygate moral: Don't fire stupidly," where we sagely predicted that Gonzales would be out by Opening Day. (Missed it by this much.) For comprehensive background on the firings and their aftermath, read the excellent summaries at Peter Lattman's ever-fabulous Wall Street Journal Law Blog here and at the Washington Post's site here.

Gruntled Employees doesn't much care about the politics of the issue. Instead, the important lesson for employers and managers and HR professionals is the one we talked about in March:

The moral is: Fire who you want to fire, own the decision, and then shut up about it.

It's hard to fire someone, if you're any kind of a real human being. And it should be, because it's someone else's life your messing with. You should struggle with the decision. But once you've made the decision, you have to act on it and own it. Resist the temptation to make explanations and excuses that (you hope) will get you or your company off the hook.

In the Attorneygate case, who is to say whether firing the AUSAs was fair? Doesn't matter (except to the AUSAs, their families, and the decisionmakers who pulled the trigger). The law says that they are subject to removal by the President. Period. They are — like most American workers — employees at will.

After-the-fact explanations for why you fired someone rarely tell the whole story. The real answers are usually incredibly complicated, and don't sound as clean as a better-manufactured reason. But the manufactured reason isn't the truth. And people will generally learn the truth, eventually. And when people start to see the holes in your just-right story, they're going to think you're covering up something more nefarious, like discrimination, or politics, or favoritism.

The Attorney General could have said this: "We fired these prosecutors because we wanted to make a change and put some other people in those spots. And the law says we can." It might not make for a pretty story, but it was probably the truth. The story would have died in a few days, and Alberto Gonzales might still be running the Justice Department and waiting for Justice Stevens to retire. Instead, it's Monster.com for him.

Don't fire stupidly. Fire smartly, quickly, and honestly. And then shut up.

Attorneygate moral: Don't fire stupidly

OK. Time to weigh in on the Justice Department's disastrous firing of the US Attorneys, but from an employment-law perspective instead of a political one. For some background on the story, go to Peter Lattman's always-excellent Wall Street Journal Law Blog. His posts on the topics are archived here. The Washington Post has a nice summary here and a handy chart with art here.

Here's the short version: The Justice Department fired eight United States Attorneys in late 2006. (A US Attorney is the senior federal law-enforcement officer in his or her judicial district; there are 93 districts in the country.) The President appoints the US Attorneys, subject to the Senate's confirmation. Their terms are four years long, but they are subject to removal by the President (see 28 U.S.C. 541(c)). Just like that. In other words, they are employees at will, like 99 or so percent of the rest of us.

So the President fires these eight prosecutors. So what? They're political appointees, and he wants to replace them with new political appointees. The law allows it. Big deal.

Here's the problem, and the lesson for all employers. The White House could have said, "Yes, the President has decided to replace these eight US Attorneys. They're political appointees who serve at the pleasure of the President. It is the President's pleasure to replace them, and the law says he can do that." But the White House and the Justice Department instead started playing the explanations game. Rather than just owning the firings and then shutting up, they started giving reasons and stories that kept changing: Performance problems. Not political. It was Harriet Miers's idea. It was Karl Rove's. Attorney General Alberto Gonzales wasn't involved. OK, he was. (For a summary of the shifting stories, see Dan Eggen's "Accounts of Prosecutors' Dismissals Keep Shifting" in the March 17 Washington Post. Another cool graphic with problematic email quotes is here.)

Now everyone's up in arms over this. Congress wants explanations. Constitutional showdown and all that. Counterstories about how great the prosecutors were. Heck, one of them — David C. Iglesias — is widely reputed to be the model for the main character in A Few Good Men. Great. Now you've gone and fired Tom Cruise. And we're talking the old version: Oscar-nominated, box-office guarantee, Top Gun, Jerry Maguire Tom Cruise — not Scientology-promoting, psychiatry-slamming, couch-jumping Tom Cruise.

The problem wasn't necessarily the firing. Who are we to say that these eight (effectively) at-will employees should have kept their jobs. It's not our decision.

The problem was saying too much about it, and then having the stories change. Once that happened, Congress and the press smelled the blood in the water. Don't be surprised if we hear from some plaintiff-side employment lawyers, too. And Attorney General Gonzales will be sending out résumés by the time Opening Day rolls around.

The moral is: Fire who you want to fire, own the decision, and then shut up about it.

Otherwise Congress will be investigating you for firing Lt. Kaffee.