It's one of the few tasks no manager wants to get comfortable with: laying people off. In fact, you may remember an old Cheers episode in which burly bar patron Norm bemoans his bad luck on being promoted to be his company's chief hatchet man after firing an employee in a particularly empathetic way.
Whether you're a boss at a dot-com or at a mighty blue-chip company, however, you may have to "pink" (pink-slip) employees some day. And with the slowing U.S. economy leading top execs to wonder if they need all those folks on the payroll, that dreaded day may come sooner rather than later.
Managers who've been there generally agree that telling employees they no longer have a job is one of the hardest things you'll ever do. Still, advice from "manager notification-training" experts -- those who coach managers on how to let employees go -- could help make your chore easier.
Dale Klamfoth is a regional vice-president at Drake Beam Morin, a global human-resources-consulting firm that says it has worked with most of the companies in the Standard & Poor's 500 index, to provide both management training and outplacement services for terminated employees. Among the companies that have called recently is AOL Time Warner (AOL ), which cut some 2,000 positions after America Online's takeover of media conglomerate Time Warner.
BusinessWeek Online writer Eric Wahlgren talked recently with Klamfoth about the best ways for managers to break the worst news to employees. Here are 10 dos and don'ts from that conversation.
Be Prepared. All severance materials -- including a notification letter, severance package, benefits brochures, information on outplacement counseling, and other items -- should be given to employees in writing. "You don't want to have to say, 'We'll get back to you,'" Klamfoth says. "They don't want to hear that. They want to hear that the company has considered all their needs and that they will be able to show something to their spouses, because there will be a lot of questions."
Follow a Script. Memorizing (not reading) a script will keep the discussion short and to the point. Try to list two or three reasons for the layoffs. "Although it sounds a little cold, using a script will help a manager deliver a consistent message to all employees," Klamfoth says. "We don't want a manager saying things like, 'This is not the worst thing that ever happened to you,' because it might be the worst thing that ever happened to them."
Move the Process Forward. Schedule meetings for employees with human resources and outplacement services. You should have a plan for how employees will collect personal belongings and turn in company property. You want employees to begin focusing immediately on searching for a new position. "When you have taken away someone's job, you have taken away structure," Klamfoth says. "The way people begin to recover is to have a new structure put in place. You replace structure by saying, 'Here's what we have planned for you.'"
Anticipate Reactions. Be ready for any possible reaction: anger, shock, denial, or a controlled response. Be prepared to deal with each in the best way possible. "Sometimes, a manager will tell me, 'It was terrible. He cried,'" Klamfoth says. "That's a healthy reaction. It means the individual has gotten the message and is processing it."
Keep It Short. You should spend no more than 15 minutes with an employee. If you let the meeting drag on, you may end up offering answers you may regret later or making promises you can't keep, such as helping employees find new jobs. "People are not going to hear much after you tell them that they don't have a job," Klamfoth says. "There isn't much reason to continue past 15 minutes."
Have Kleenex. If employees become emotional, provide tissue. Offer to step out of the room until they regain their composure. "The goal is to have people leave with their dignity intact," Klamfoth notes.
Be Respectful. When an employee is being laid off after 25 years of service, it's probably not a bright idea to turn off the person's computer access or have him or her escorted out of the building. Unless, of course, there's a real security concern. "It's pretty basic," Klamfoth says. "Treat employees the way you would want to be treated."
Reach Out. Know your company's policy on providing employee references. As a result of legal concerns, many companies these days will only confirm an employee's title and dates of employment. If you can't give a reference, you can be of help to employees by offering to look over their resumes or by suggesting they include you in their network. "It says to the employee, 'You should get started on your job search,'" Klamfoth says. "It gets around the reference issue."
Reassure the Rest. You should be there for the troops who remain by telling them that everyone who has been affected by the layoffs has been notified. But stop short of saying the pink-slipping is over, since you may not know what else is coming. "Sometimes the manager just wants to go away and hide," Klamfoth says. But "you should be there for your employees. They may be wondering, 'Am I next?'"
Take Care of Yourself. Although it's natural to internalize some of what you feel as you dispense bad news, you should remember that layoffs are business decisions based on business needs. Be mindful of the importance of exercising and getting rest before notifying employees of the cuts. "Managers have anxiety," Klamfoth says. "We understand that managers often feel worse about this than the employees they are notifying."
Wimp Out. You shouldn't terminate employees over the phone or by mail. It's tacky. "You'd be surprised, but it happens," Klamfoth says. "It ends up with the employee saying, 'I have given so many years of my life, and they didn't have the decency to do this face-to-face.'"
Make It Harder. Avoid flying employees to a central location to be laid off. No one wants to take a business trip, only to find out upon landing that they're being canned. "Once, before one employee was able to get home, a recruiter who found out that he had been fired called his wife," says Klamfoth of one case where Drake Beam had to do damage control. "She was absolutely devastated."
Wait Until Friday. If you wait until Friday to break the news to employees, it will give them the whole weekend to stew. By notifying employees of layoffs early in the week, you give them a chance to get started earlier on their job searches. "During the weekend, they are going to get mad," Klamfoth says. "Those plans they make over the weekend are often about getting even."
Use Pleasantries. By all means, ask employees to have a seat in your office. But firing employees isn't cheery business. It isn't the time to inquire about the family or reminisce about a fishing trip. "We suggest that managers don't say, 'Good morning,' because it isn't going to be a good morning," Klamfoth says.
Use Platitudes. Unless you've been laid off yourself in the past and want to tell employees about how you felt, avoid using feel-good phrases such as, "I understand," or, "I know how you feel." Employees may have sick parents or a monster mortgage you may not know about. "If you say, 'I know how you feel,' it sounds very patronizing," Klamfoth says.
Make Promises. It isn't a good idea to make promises, such as offering to help an employee land a job at another company where you might know of an opening. "If that job you know about doesn't come through, it's like being terminated twice," Klamfoth says.
Apologize. Avoid making statements to employees along the lines of, "If it were up to me, I wouldn't be doing this." Such comments could lead employees to believe that a layoff is personal or hasn't been well thought out. Using the word "sorry" can make a firing decision look like an accident, Klamfoth says. "These types of statements make it sound like a layoff is part of some half-baked plan," he adds. "It makes the employee even more upset."
Squeal. Also on the list of not-so-bright ideas is telling employees who aren't affected that there's going to be a shakeout ahead of time but that they're safe. People talk. "When word spreads, it spreads very quickly," Klamfoth says. "You start having people who are afraid to come to work."
Use Humor. Most employees don't find anything funny about losing the job that pays the rent, feeds the family, and keeps them from having to watch daytime television. Humor is a no-no when you're giving employees the ax. "We just say, 'Stay away from it,'" Klamfoth says. "The employee is going to go home and think, 'That guy thought it was a joke.'"
Be Threatening. Even if you're glad to see an employee go, keep the feelings to yourself. The discussion should remain professional. It's not the time to settle old scores. Klamfoth recalls speaking with an employee who'd been in a long-standing feud with a manager. When the company where this employee worked had to let some people go, the manager made no effort to mask his glee in being able to fire this particular worker. When he was terminated, the manager told him, "I finally got you," Klamfoth says. "The employee sued the company because there was so much hatred there," Klamfoth adds. "If something is personal, people need to let go of that."
By Eric Wahlgren in New York