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5 Guidelines to a No-Layoff Policy

September 27th, 2011

Most every week there is news of a company layoff.  Layoffs are a curse on Corporate America. The act of eliminating jobs to appease investors is a big kick in the gut to everyone involved:

  • The departing employees – definitely the hardest hit, including their families
  • The surviving employees – afraid they might be next, plus the stress of doing more work with less
  • The leadership team – must live with their decision that is affecting the lives of current employees, former employees and their family members

When a layoff occurs, an employee is provided a short explanation, an envelope with important employment separation and benefit documents, an empty box, and time to clean out their desk and say good-bye to their friends/coworkers.  The next moment the dazed employee is on the street, going home wondering what the future holds.

Although I realize we live in a world of uncertainty where none of us are guaranteed anything,  I do believe there is a cure for the curse of Corporate America.  I am a firm believer in a No Lay-off Policy.

I am certain layoffs began as the board of director’s invention to appease stockholders and investors.  A layoff does not increase the value of the company, it simply erodes the confidence employees will have in the future stability of the organization.  When employee confidence erodes so does customer service and loyalty.

It takes courage and discipline to take such a stand as creating and implementing a no layoff policy. To faithfully state to your employees, “we have a no layoff policy,” is a sign your company is a step above the rest.

With so much uncertainty in America’s economy, it would be good for employees to know that when they show up to work on Monday they won’t be carrying a box home with their personal belongings due to no fault of their own.

A no-layoff policy, however, requires an employer to follow five important guidelines:

  1. Hire responsibly: Resist the temptation to throw people at projects and not think about the future consequences.
  2. Hire the right people: Invest time and energy to make sure every employee is a good fit for the company.
  3. Monitor performance: Provide performance feedback on a regular basis.  Leaders must coach their employees and release non-performing employees with dignity and respect.
  4. Set high expectations: Be very clear in what is expected from your people. Don’t be afraid to set the expectations high as long as you have given them the tools to succeed.
  5. Review mistakes: If a mistake is made, don’t just gloss over the situation. Use mistakes as coaching and learning opportunities.

3 Comments so far:
  1. David Yamada says:

    Great blog post, Kevin. Thanks for raising some thoughtful alternatives to the waves of layoffs we continue to see across the country.

    I am sure that if more organizations practiced the principles you recommend here, employee morale and productivity would take a quantum leap forward.

    David Yamada

    • Thanks David. Layoffs, RIFs, rightsizing, downsizing, etc., are all corporate poison and the effects last a long time. It may raise the stock price in the short term, but hurts the long-term value of a company. Thanks for reading and commenting.

  2. [...] Kennemer of The People Group recently summarized this standard layoff protocol (link here): When a layoff occurs, an employee is provided a short explanation, an envelope with important [...]

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