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15 June 2012 @ 12:23 am
The Real LJ Idol: "The Business Of Managing Toward Failure"  
The Business of Managing Toward Failure
real lj idol | week 30 (prompt 1) | 848 words
Scared Money Never Wins

x-x-x-x-x

One of my friends is losing her job.

Her job is necessary and she does it well, but her company decided to reduce its headcount by some bean-counter-determined amount, and she's fallen victim to the numbers.

That's what thirty years of corporate loyalty and excellent job performance will get you these days.

Her company sent out retirement offers to everyone who'd worked there for a certain minimum number of years. This was to trigger voluntary headcount reduction. Once the retirement-offer window closed, the company looked at how many people still needed to be cut and then dropped the axe. My friend could have retired early, but chose not to take the offer. She needed the salary, she wanted to stay with the company another five years before retiring, and she knew how important her current project was for the company's near-term revenue.

So she banked her future against her continued value to the company. With her track record, her current project, and her love of the company, why leave before she wanted or had to?

That's where things got ugly.

You would think that when laying people off by percentages, a company would begin by firing the low-performing employees and then look at its business objectives and make further cuts in the less-critical areas. This removes the least-productive workers, and preserves the company's most important interests. Simple, right?

Welcome to business-as-run-by-attorneys. My friend's company did remove some of its low-performers, but its next step was to randomize the remaining cuts by having high-level corporate suits fire people without applying any specific knowledge to the decision whatsoever.

I.e., rather than letting lower-level managers (who know their employees and projects) decide whom to select, the corporation's goal was to prevent knowledge from entering the firing equation. Except, one suspects, that when choosing talented employees to fire, the company probably targeted the ones with lots of accumulated benefits and years of service.

Corporations look at long-term employees and see people with higher salaries and "expensive" benefits' packages. In the last couple of decades, there has been a relentless drive to push those people out the door—especially if it can be done before they retire with full pensions.

Lower-level managers and coworkers view those same people as knowledge centers. Long-term workers are the ones who know the business, know how to do their job most efficiently, and can be crucial in getting projects finished on time. When those employees leave the company (whether by choice or by being forced out), their lower-level peers are whom it affects. Any new people who are hired not only lack the experience to immediately help the business, they also have to be trained. So, the remaining coworkers lose a productive teammate, and waste additional time making up for the lost work and training the new people. Those coworkers feel thrashed and frustrated, and projects become late. The corporation loses revenue due to the delay, and angry and demoralized employees are more likely to leave for new jobs. The cycle of thrashing continues.

What, you might wonder, is the reason behind randomly firing people (including important people) instead of choosing according to business need? It is solely to reduce the chance of being sued by the people who were laid off.

In other words, the company suffers lost revenue and productivity because it is focused on avoiding the possibility of lost revenue from lawsuits.

This situation is a microcosm of (I'll say it again) the bean-counter mentality that drives corporations today. "Productivity" is a nebulous quantity that is hard to measure, so typically it is left out of the equation altogether. The effects are very visible at the lower levels of a company, but since they are both invisible and unquantifiable at higher levels, they are simply ignored. What about delayed revenue from lost productivity? That's the kind of annoyance that is best dealt with by hand-wringing and more bean-counting, and by sending chastising emails to the corporation's employees, telling them to "try harder."

That idea that losing productivity and revenue is the expected outcome of the corporation's own business policies never seems to occur to the high-level people who make the big decisions. They are so obsessed with short-term savings and avoiding lawsuits that they never realize that their overly cautious choices may actually cost them more money in the long-term.

When the revenue numbers come in and show that the company has lost money yet again, the corporation tiptoes through a nervous twelve to eighteen months and then usually resorts to pulling the layoff lever once more.

Now my loyal, hardworking friend is heartbroken and unemployed at fifty-plus years of age, and has to look for a new job. Her division of the company may also lose needed sales, since she won't be around to finish her project, and it's all happening because her company's layoff policies only considered her cost to the company without also factoring in her contribution.

That, ladies and gentlemen, is a tragedy. It is also the reality of how far too many companies' "smart" decisions are now being made.




LJ Idol voting for this round is open to all current season participants. Details here.

 
 
 
similiesslipsimiliesslip on June 15th, 2012 02:38 pm (UTC)
That is so sad. I really feel for your friend.

I really, really hope she finds another job soon. So disheartening!

I do think that having people ready to sue at every turn is ruining many areas of our American lives:(
The Coalition For Disturbing Metaphorshalfshellvenus on June 15th, 2012 05:50 pm (UTC)
My husband was actually a lawyer himself, working to represent companies against exactly these kinds of lawsuits.

His take on this is that companies cannot avoid getting suied, because it's a fact of life. Sometimes plaintiffs are self-entitled wackos, and sometimes they have legitimate cases, but either way, somebody will sue you at some point.

So by setting up this policy of "randomizing" firing to avoid being sued... the company has terminated a model employee for no other reason than that she costs them money-- as does every employee.

At companies like hers, targeting people who are more expensive in terms of salary and benefits means that you're picking the people who have been around for a long time. So in effect, you are practicing a form of age discrimination-- particularly if it's an employee with excellent performance working in a needed capacity.

I.e., an employee who has solid and legitimate grounds for a lawsuit!

Taking their chances and only firing people with low performance reviews or whose part of the business is less essential not only preserves the company's strenth in the long-term, it also means that they've fired with cause.

And people fired with cause are far less likely to find lawyers to represent them in lawsuits because their chances of winning are much lower.

Really, the paranoia over something that can't be avoided results in companies making decisions that are doubly stupid. :(
themysteriousgthemysteriousg on June 15th, 2012 03:10 pm (UTC)
This is so very typical and a bigger picture of why this nation is failing to grow. I fear for my kids trying to work in this extended model. I'm more fearful for my husband who has the old-school mentality that working hard and productively means something.

The Coalition For Disturbing Metaphorshalfshellvenus on June 15th, 2012 05:59 pm (UTC)
I'm more fearful for my husband who has the old-school mentality that working hard and productively means something.

And what's so frustrating is that it should. For years, companies relied on employees being loyal and working hard (they go hand in hand, when you have a good work ethic). When the company violates its side of that trust, the whole equation breaks down.

I think they're in for a real shock-- both when the economy picks up again and workers start chasing the best current packages, and also when more young employees from the Entitlement Generation start filling those vacated positions. The sword will start to cut both ways, then.

Our work ethic is fading in this country, and when companies stop rewarding those who practice it, they encourage that erosion.

Young people who are dedicated and work hard? Oh, they're out there. But they are also the first ones to leave for a better offer, both because they have less invested in their current company (having not worked there as long), and also because this business model is the one they've grown up with. They have far fewer hopes or illusions about how loyal companies will be to them. More power to them.
nodressrehersalnodressrehersal on June 16th, 2012 02:55 am (UTC)
"...it's all happening because her company's layoff policies only considered her cost to the company without also factoring in her contribution."

That really sums it all up perfectly.
The Coalition For Disturbing Metaphorshalfshellvenus on June 16th, 2012 08:02 am (UTC)
And it's so wrong-- both on a moral and business level-- and leaves lower profits and personal devastation in its wake.

Where is the justification for such a poor choice? :(
whipchickwhipchick on June 20th, 2012 12:34 am (UTC)
What a shame. And yes, I think it's creating a whole generation of employees with much less company loyalty - why should anyone be loyal when the company has no interest in their ongoing success?
The Coalition For Disturbing Metaphorshalfshellvenus on June 20th, 2012 12:41 am (UTC)
It's so frustrating-- you want to smack businesses upside the head and say, "You lose in the long run with policies like this. And you ruin it for everyone else!"

This poor woman, too, worked at a company that had a reputation for NOT being like this, and valuing employees. But apparently, not in the modern age. :(
Kristenpixiebelle on June 20th, 2012 04:59 am (UTC)
My step-dad worked for the same place for 15 years. It was just a lowly position at a truck stop, but he knew the place inside and out and did the job as perfectly as possible. But at 55, he was too old and being paid too much when they could get a younger guy in there for cheaper.

So they fired him and he never did find another job in the small town they live in.

Not completely what you're saying, but sad nonetheless. I think my view on the corporate world is fairly obvious these days (or maybe just to Java and myself), but I'm so glad to be in the non-profit sector right now. So much stuff in corporations that I simply can't get behind.
The Coalition For Disturbing Metaphorshalfshellvenus on June 20th, 2012 07:53 am (UTC)
No, I think much of this is similar. Was he really "too old," or was his experience-based salary more than the company wanted to pay? It's so frustrating, and what an awful impact it has on a loyal employee when they get "stranded" by this kind of company decision.

Nobody who still needs to work wants to be stranded at 55 (the exact age of my friend). Not only is it jarring, but nobody wants to hire you because you are "overqualified." Wow-- so overqualified that you can't get actual work. Ugh.

I've worked at non-profits too, which often relieves you of some of the corporate mentality. Unfortunately, there can also be some lawlessness in Personnel policies (basic respect, lack of bullying/harassment, etc.) because the entity may feel less accountable to "regular business considerations." And often, it IS less accountable.

Not that that will happen to you. How badly they wanted you, combined with how badly you want to do that kind of work, seems like a VERY good match. :)
Jemima Paulerjem0000000 on June 20th, 2012 07:23 am (UTC)
*hugs* I hope she finds something quickly, hopefully with good benefits and all.
The Coalition For Disturbing Metaphorshalfshellvenus on June 20th, 2012 07:55 am (UTC)
I hope so too, but my fear is that she'll be deemed "overqualified" and be stuck dinking around with part-time work for years that won't quite meet the bills.

She's 55, she loved that company, she was still doing good work for them, and yet they screw her over like this? It's just so galling. :(
Jemima Paulerjem0000000 on June 22nd, 2012 08:25 am (UTC)
*hugs* :( Some companies are mean.
blahblahblah, whateverkathrynrose on June 20th, 2012 08:46 pm (UTC)
My company did a similar thing. Thankfully, I was so unhappy, I took the package on the first round even though I was too young to officially retire. Almost exactly a year later, they did another round but it was involuntary. A lot of really seasoned folks are gone now, and my friends who are still working there are suffering mightily.

Anyone who says corporations are people have either never worked for a corporation or have never worked for a human being.

I worry about our world. I really do.
The Coalition For Disturbing Metaphorshalfshellvenus on June 20th, 2012 09:55 pm (UTC)
Almost exactly a year later, they did another round but it was involuntary.
Oh gosh, I hate that!

A lot of really seasoned folks are gone now, and my friends who are still working there are suffering mightily.
This is part of what's so frustrating: these choices are not actually better for business in the long (or even short) run. They just look better to shareholders.

Anyone who says corporations are people have either never worked for a corporation or have never worked for a human being.
One of the worst recent Supreme Court decisions. There is no constitutional basis for that idea, and a child could tell you that those two entities are not remotely the same.

I'm glad you survived your company's layoff. Were you able to find work again? One of the things I worry about most for my friend is that 'work' is not the same as 'a job with health care'. That can be an enormous issue when you lose your job. :(
blahblahblah, whateverkathrynrose on June 21st, 2012 03:12 am (UTC)
I've not worked in almost 2 years. Thankfully I had savings and my house and car were paid for.

Tougher times are coming, though.
m_malcontentm_malcontent on June 21st, 2012 04:41 am (UTC)
Groan I knew when you said "lawyers" and "random"....they were lawsuit-dodging. That is moronic, I feel so sorry for your friend...I would hope the company fails out of spite..but that would just mean more good people out of work.

The Coalition For Disturbing Metaphorshalfshellvenus on June 21st, 2012 05:22 am (UTC)
Groan I knew when you said "lawyers" and "random"....they were lawsuit-dodging.
Gah-- it pains me even more that this cynical concept has actually become well-known! I not only think it's stupid, I think that on a human basis, it's incredibly immoral and wrong. :(

I worry so for this woman, unemployed at 55 and even if the economy picks up, I'm sure she'll be told again and again that she's overqualified for a job.

Which, really... if businesses are causing short-term employment by destroying employer loyalty, why would they care if she's over-qualified? The fear is that such a person will take the job, and later leave, but in today's climate, they might leave anyway. Why not hire someone who knows her stuff, then? Her business judgment alone would probably benefit a new employer.
Myrnamyrna_bird on June 21st, 2012 04:29 pm (UTC)
This was an excellent piece about the ramifications of "down-sizing." It is so unfortunate for the individual stars who are left without a job.
The Coalition For Disturbing Metaphorshalfshellvenus on June 21st, 2012 06:28 pm (UTC)
Especially after stressing loyalty for so long, and getting it in return, to treat this woman as if she's an expendable thing rather than a person (and strand her, unemployed, at her age!) is just an abomination.

Corporations have no shame, and this is part of the problem with how they conduct business. *sigh*
Ellakiteellakite on June 21st, 2012 07:44 pm (UTC)
My agency pulled something *VERY* similar about a decade ago. We still don't know *WHY*, as our numbers were solid and we were actually increasing our market share. We should have been hiring more people... and instead we were throwing them out the door!

I am so very sorry for your friend.
The Coalition For Disturbing Metaphorshalfshellvenus on June 21st, 2012 11:38 pm (UTC)
We still don't know *WHY*, as our numbers were solid and we were actually increasing our market share. We should have been hiring more people... and instead we were throwing them out the door!
That kind of thing is so infuriating.

From what I've seen, it's because "cutting costs" tends to increase shareholder confidence, and the company's stock value goes up-- assuming they're even large enough for that to mean anything!

But as an overall practice, it is utterly stupid. And god, what it costs actual people. :(
alycewilson: angryalycewilson on June 21st, 2012 09:21 pm (UTC)
Business practices are warped. It's why we're in a recession.
The Coalition For Disturbing Metaphorshalfshellvenus on June 21st, 2012 11:40 pm (UTC)
Exactly. The deficit-funded war, and corporate greed, are killing the economy.

What's worse is to hear certain people saying, "Don't increase taxes on the rich!" (meaning, do not let Bush tax cuts expire). That policy ONLY helps the rich, though I still hear people giving lip-service to Trickle Down Economics-- which was an utter failure.

I love the use of you crabby-Alice icon for this. :)
alycewilson: Red Queenalycewilson on June 21st, 2012 11:46 pm (UTC)
Yes. Tenniel's illustrations had fabulous expressions, unlike most children's books today, where everyone smiles.

I really wish that there were more companies with philosophies like Ben & Jerry's, where they make it a priority to help the workers, the community and the world. Didn't hurt THEIR profits!

Edited at 2012-06-21 11:46 pm (UTC)
java_fiendjava_fiend on June 21st, 2012 11:32 pm (UTC)
This is absolutely disgusting. Seriously infuriating. :-( My heart absolutely goes out to your friend. I hate the corporate mentality where people are just "things" to be used, abused and discarded instead of actual people. They dehumanize people and treat them as expendable commodities. It's beyond sick and wrong. :-(
The Coalition For Disturbing Metaphorshalfshellvenus on June 21st, 2012 11:41 pm (UTC)
It's beyond sick and wrong. :-(

And it doesn't even work! There's really no sound business justification for it.

Though "sound" is the key word there. Ugh.
java_fiendjava_fiend on June 21st, 2012 11:42 pm (UTC)
No, it doesn't work. It's like these idiots that keep insisting "trickle down economics" works! It's a load of horse pucky!!!!