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Steps and Processes for Employee Dismissal

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Steps and Processes for Employee Dismissal
Diana Graves
Strayer University
Professor Kenneth R. Lewis, B.S., M.A., Ed.D.
HRM520: Strategic Human Resource Management
November 15, 15

Abstract
This paper presents methods in which management can best coordinate and head a dismissal meeting during employee layoffs. These methods will touch on how management can best cope with the negative emotions associated with employee layoffs, how to conduct a proper dismissal meeting step by step, how compensation is determined for separated employees and how the impact of a dismissed employee affects a company as a whole. These methods will be best achieved by structured communication between management and employees. In addition, the paper will show that employees should receive proper notification prior to dismissal by management.

During times of hardships, companies may choose to layoff employees. These times can be difficult and stressful if not handled properly. This paper will present a couple of different methods on how managers can make this period less stressful for employees, as well as show the impact of layoffs on the company as a whole. These methods will touch on proper and improper ways of communicating between managers and employees and give several steps on how to conduct dismissal meetings.
Coping with Negative Emotions After an Employee Layoff Layoffs within a corporation are a difficult time for all. Management can find ways to help make this process a little easier for its employees in multiple ways. Some of these methods are communicating in a timely manner with employees, keeping rumors to a minimum and ensuring that employees hear company news directly from their manager. Having proper lines of communication open to employees is key for any branch of a company. One of the best ways to help combat the negative emotions associated with a layoff is to speak to employees on ways to boost morale. During layoffs, morale can be lowered; finding ways to increase the positive can help tremendously. Another way to combat the negative emotions is to recognize that rumors regarding additional layoffs will circulate. This can cause employees to feel that they might be next on the chopping block. Recognizing and stopping rumors regarding any company news can help employees feel secure in their positions. If there is company news that needs to be addressed, it should come directly from management. This can ensure that employees feel that they matter to their manager. This also lowers the risk of having incorrect rumors spread. These announcements should be made during a face-to-face team meeting; this gives employees the chance to provide feedback. By ensuring that these methods are completed, management can help remaining employees feel that they have a bit more security. An example of performing incorrect communication regarding mass layoffs can be seen from a mass layoff executed by Radio Shack.
Radio Shack a few years back illustrates how not to fire employees. One day, 400 employees opened their email accounts to learn that they had been dismissed from the company. The messages reportedly read, “The workforce reduction notification is currently in progress. Unfortunately, your position is one that has been eliminated.” Sending such traumatic news via email is insensitive to the needs of employees and has been widely criticized (Stewart, G.L., 2011, p. 276).
This method of informing employees of their termination exasperates an already stressful time for the company and its employees. Proper communication during this time would alleviate some of this stress for employees.
Conducting the Dismissal Meeting Employee layoffs generally come with a dismissal meeting, in which an employee is informed that his or her position is being terminated. Performing a dismissal meeting follows multiple steps. The first step is to conduct a face-to-face meeting with the employee to discuss his or her termination. The meeting should be held during the beginning of the week as to give the employee the opportunity to get right into finding a new position and not dwell on the negative of losing his or her job. The meeting should be clear and brief as to what the process will be during and after the termination. Although “the dismissal meeting is not a time for a lengthy discussion of how things might have been different” (Stewart, Greg L, 2011, p. 277), the employee should be allowed to speak and/or vent regarding the situation. During the meeting, the employee should be presented with a written summary of the meeting as well as information regarding the severance compensation, information regarding continued health insurance, depending on the length of service and what the process will be to return any company property, such as ID cards, laptops and keys. During the meeting, it is always a good idea to have a third party present as a witness for the legal protection of all involved. Lastly, notify security about the dismissal; this step protects not only the manager delivering the news but also the company. This is especially necessary when the employee being dismissed has had a history of violent and/or disturbing behavior.

Separated Employee Compensation The compensation package for separated employees differs with length of service to the company. “Typically the package includes: your severance pay terms, Your vacation pay terms, COBRA (Benefits) Information, Return of Property, Non Compete, Confidentiality Agreement Unemployment Information, and General Release of Claims and Covenant Not To Sue” (“10 Things to Know,” n.d.). The basic benefits afforded to a separated employee may include health benefits through the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA is voluntary, and allows former employees and their dependents to have health insurance through the company for up to eighteen months (“Know Your Rights,” n.d.). The benefits will also include a severance package; this package includes the last check for the last pay period worked up to the termination date, and on occasion will include the employees 401 package, any stock invested by the employee, and, for a lot of states, unused paid vacation time. There are some states that do not require vacation time to be paid, including Arkansas, Florida, Georgia, Hawaii, Idaho, Mississippi, Nevada, new Jersey, New Mexico, Ohio, Pennsylvania, South Dakota, Washington State, and Wisconsin (“Vacation Payout Requirements,” 2008). Severance pay will be based on length of service, averaging from one (1) week to two (2) weeks for one (1) year of service and from four (4) weeks and up for five (5) to ten (10) years of service. Employees who quit before being laid off will not be eligible for a severance package.

Years of Service | Severance Pay by Months | 6 Months to 1 Year | 2 weeks based on Salary | 1 Year to 4 Years | 1 month based on Salary | 5 Years to 9 Years | 2 months based on Salary | 10 Years to 19 Years | 3 months based on Salary | 20+ Years | 4 months based on Salary |

The following chart and graph depicts the timeline for the disbursement of severance compensation for laid-off employees. It should be noted that employees who have worked less than six (6) months will receive no compensation. Employees who worked less than one (1) year will receive two (2) weeks compensation. Employees who have worked one (1) year to four (4) years will receive one (1) month compensation. Employees who have worked five (5) years to nine (9) years will receive two (2) months compensation. Employees who have worked ten (10) years to nineteen (19) years will receive three (3) months compensation. Employees who have worked twenty (20) years and up will receive four (4) months compensation (“Layoff Guide,” 2015).

Layoffs Effect on Companies There are multiple ways that a layoff can affect a company financially, i.e., voluntary turnover of best employees, decreased productivity, decreased customer loyalty, the company’s reputation can be harmed and many others. A company’s reputation is usually harmed when laying off employees. They do not have higher performance in subsequent years after layoffs. As a result, layoffs do not positively affect a company financially. A company performs layoffs to save money; however, they can suffer financially because of layoffs. They suffer by severance that has to be paid to laid-off employees as well as any overtime pay for remaining employees and pay for any temporary help brought in to help (“Hidden Costs of Layoffs,” 2008). These financial disbursements reverse the effects of the layoff and “in some instances”, cost the company more money. In some instances, after layoffs, some high-performing employees choose to leave for more stable positions outside of the company. These employees see the layoffs as a sign that the company is in trouble and may not be around for too much longer. Because of this, high-performing employee start to distance themselves from the company. Most consider all the pros and cons before making a final decision to ultimately leave the company. When high-performing employees leave the company, they take the connections made with customers with them. When this happens, the relationships built between customers and the company are severed. Customers then find it difficult to maintain ties with the company and at times choose to conduct business elsewhere. These factors produce a decrease in productivity for remaining employees and for the company as a whole. In conclusion, management needs to have open lines of communication between themselves and employees. This fosters a sense of respect toward employees and keeps rumors to a minimum. Management also needs to conduct dismissal meeting in a respectful and professional manner. This should never be done via email, as the example from Radio Shack, as this shows a lack of respect toward employees. Notification of their termination at or near the beginning of the week will allow employees to start the search for other employment. Proper explanation and execution of the compensation package is important to help employees during their transition. During the process of employee layoffs, companies can experience unexpected financial setbacks that they were hoping to avoid. Along with financial setbacks they risk their reputations being affected as well as the loss of great employees and customer relationships and business. A company that cares for its employees will have proper policies and procedures in place for proper and timely notification of its employees.

References
Bergfeld, Carlos. (2008) The Hidden Costs of Layoffs - CBS News. Retrieved November 14, 2015, from http://www.cbsnews.com/news/the-hidden-costs-of-layoffs/
Employee Resource Guide for SPA Layoffs. (2015) Retrieved November 14, 2015, from http://hr.unc.edu/files/2012/11/LayoffGuide-Emp-Final_07252012.pdf
Guerin, Lisa J.D. (n.d.) Layoffs and Plant Closings: Know Your Rights. Retrieved November 12, 2015, from http://www.nolo.com/legal-encyclopedia/layoffs-plant-closings-know-rights-33596.html
Salary.Com. (n.d.) 10 Things To Know About Severance Packages. Retrieved November 13, 2015, from http://www.salary.com/10-things-to-know-about-severance-packages/
Stewart, Greg L. (2011) Human Resource Management, Second Edition. Retrieved November 10, 2015, from https://strayer.vitalsource.com/#/books/9781118182581/cfi/6[s2]/10
Vacation Payout Requirements by State.: Strayer University Library. (2008) Retrieved November 12, 2015, from http://eds.a.ebscohost.com/eds/pdfviewer/pdfviewer?sid=02eef8c9-98a9-43b8-903e-5ea0da8fccc4%40sessionmgr4002&vid=1&hid=4202

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