It may seem that the most complicated task an HR manager faces is finding and hiring a new employee who will meet the requirements of the workplace and the expectations of the company. However, making a decision about dismissing staff members turns out to be extremely challenging as well, especially when this necessity is caused not by an employee’s bad performance but rather by a reduction of the company’s size, budget shortfalls, etc.
The situation is aggravated by the fact that there is no single correct approach to decision-making connected with downsizing. It may seem to be the optimal decision to be guided by centuries-old principles of classical economic theory that imply a comparison of expenses and effects.
From this perspective, it is reasonable to dismiss a 45-year-old manager with average performance who has a high salary due to the substantial work experience rather than a 26-year-old high-flyer performing higher than average (Segalla, Jacobs-Belschak & Muller, 2001, p. 60).
However, when analyzing the situation from the perspective of “distributive justice”, it may seem to be inappropriate to dismiss a loyal 46-year-old employee who is unlikely to get a good position at another company and keep a young ambitious employee who may leave the company at any moment and will easily find a job (p. 62).
To solve the contradiction, I find it reasonable to focus on not “whom to dismiss” but rather on “whom to retain”. It is necessary to analyze the company’s goals, mission, and corporate culture and answer the question: what staff does it need? Does a company need young energy and innovations? Or does it require loyalty and experience? Having analyzed all important factors, it is necessary to compose an evaluation form and rate the “candidates” for dismissal.
The following criteria may be included: performance, potential in the company, experience, loyalty, chances to find another job, experience, involvement into the corporate culture, clients’ feedback (or student evaluation in case the company is an educational organization), etc. It will be much easier to make the decision about the dismissal based on the results of this assessment.
References
Segalla, M., Jacobs-Belschak, G., & Muller, C. (2001). Cultural Influence on Employee Termination Decisions: Firing the Good, Average, or the Old? European Management Journal 19(1), 58-72.