I have an ethical dilemma that has been troubling me for some time. I work as an HR manager with an MNC that has seen massive layoffs in the past few months. As an HR manager, this is obviously not an easy task and asking some of the seasoned folks in the company to leave was emotionally very draining. I believe that an employee must be respected for his/her contributions to the organization and while the layoffs may be due to business decisions, compensation in terms of severance package is not enough. What can we do to ensure that the employee is respected and the whole experience is handled with grace and compassion?

I can fully empathize with you. This is one of those unfortunate experiences many of us in HR have or will go through in our careers. Yes, this is always a very emotionally draining experience. In times to come, with major economic upheavals, rapidly changing technology, major changes in markets and mergers, divestitures and acquisitions, the industries are likely to face more of such unfortunate situations. Reduction of workforce, layoffs, retrenchment, etc. are part and parcel of our role, we have to deal with these situations firmly, but with due sensitivity, care and warmth. This should be done keeping in mind the due dignity and respect that people deserve.

While I am sure corporations do offer some reasonable compensation as severance pay to the departing people, what is an optimal severance pay can always be debated. The definition of what is an optimal compensation will be very personal and unique, depending on who you are (the financial controller, the HR professional, the exiting employee, or the lawyer, etc.). It will also depend on your past experiences, belief systems, etc.

My thoughts:

As an HR professional, you should get more concerned about the rehabilitation of the exiting people. Think of providing these people help in outplacement rather than worrying about the quantum of compensation alone.

In the long-term, as an HR community, we should focus on helping people acquire portable skills, help them acquire capabilities for not only today’s great performance, but also preparing them for tomorrow. It is all about helping our people remain employable/marketable in all times.

Create a culture of lifelong learning, multi skilling, etc. so that people remain agile.
Encourage people early in their careers to make adequate savings for the rainy day, etc.
On the whole, as HR professionals, if we do a good job during the growth/steady phase of the corporation, it is relatively easier to deal with the phase of downturn and uncertainties.

Vivek is a Senior HR professional with over 35 years of experience, ranging several leadership positions, in India and abroad. He leads his consulting practice since 2003 and presently works as a Strategic HR Advisor to Reliance Industries, and is also an independent Director on the Board of Motilal Oswal Financial Services Ltd. Prior to this, he was based in Singapore for several years where he was Director HR - Operations at Hewlett Packard for the Asia Pacific Region.
Allow Vivek to clear your career and professional dilemmas by writing to us at  ask@peoplematters.in