Seniority and Performance-Based Layoffs
News Flash: People don’t like to be fired and when they do get fired, they look for someone else to blame. Guess who that would be? “You fired me because I’m X (fill in the blank with the name of a protected class).”
That’s one lawsuit, but that’s not the end of it. The Equal Employment Opportunity Commission (EEOC) has stated that it is going to be looking closely at layoffs, particularly to see if thee is the possibility of a class action. That could be big trouble!
How should you protect yourself? There are three key elements:
- Performance Appraisals
- Job Descriptions
The most important factor for methodology is to select a sensible system for a layoff and then be consistent in applying it. The problem is that there are always some employees who don’t fit your system. For example, you set your layoff selection standards and then discover that if you follow them, you’ll have to fire your best salesperson.
As soon as you make an exception, you’re going to hear “You let him stay and you fired me – it must be because I’m X” You’ll try to justify your actions, but you’ve blown your credibility because you didn’t follow the system.
Seniority is often considered the “safest” way to go. There’s little subjectivity involved, and employees and courts understand the system. It appears to be “fair.”
However, using seniority often won’t leave you with the critical staffing needed to move ahead. In that situation, you need other criteria. Performance is often a criterion, but for that to stand up in court, you’ll need a good performance appraisal system that is consistently managed.
Most organizations have performance appraisal systems, but most of them aren’t very convincing in court.
Consider the following: Do you set clear goals, and do appraisals measure and reward against the goals? Do you train supervisors and managers on how to do appraisals?
The bottom line is that in many cases, appraisal systems aren’t very consistent or reliable and that could mean trouble if you are sued. The best advice is to review your appraisal system now, and get it in shape before you have to demonstrate its fairness in court.