Severance with a Smile

Not all pink slips are created equal. Terminate employees properly, and you will find that keeping existing employees, strengthening your reputation and attracting qualified candidates is easier and less expensive than using Donald Trumps favorite youre fired method.

If layoffs are coming due to this shaky economy, give employees fair warning and the full picture. Communicate clearly, especially during one-time or limited layoffs, so that your best employees will stay and help. Otherwise, a mass exodus of talent will make recovery harder. Here are four ideas to consider:

1. Never fire anyone on the spot. You might think you caught an employee committing gross misconduct, such as stealing company goods, but you might be wrong. According to Dr. Jane George-Falvy, a lecturer in management at the University of Washingtons Foster School of Business, the right choice is to send the employee home with pay and to conduct an investigation. Also, get clearance from supervisors before terminating anyone.
2. Take time to prepare. Before holding the meeting with the employee in question, make sure you set it up in a private conference room and bring a witnessperhaps a union representative or your human resources person. Immediately provide the comprehensive take-home packet so the person being terminated knows what to do next. If your company has more than 100 employees, know and comply with the Worker Adjustment and Retraining Notification Act (WARN). Walk into the discussion prepared for anything that can fly at you, George-Falvy advises.
3. Be honest, reassuring and future focused. Keep your door open, communicate frequently and address concerns immediately, says Patty Peaquin, human resources manager at the Seattle-based law firm Keller Rohrback LLP. Discuss how the decision helps the business in the long term and what the business is doing to move forward. You dont want to dwell on the fact that you made a difficult decision, she cautions, but you need to put out there that you did it.
4. Remember that real feelings are involved. Respect that [employees] may need time to regain their composure, Peaquin says. Consider sending other workers off-site to coffee before escorting people to collect their belongings. Above all, take care of yourself, Peaquin adds. You need to allow yourself the room to realize that you are doing something difficult, she says.

If youre still not convinced, consider these two real-life stories below, from Amanda Close, president of the Close Group, a Seattle-based strategic human resources consultant. Ask yourself which company you would rather do business with or would recommend to others.

Company #1: Management for a gaming company summoned all employees to an auditorium for an unexpected company-wide meeting. From a podium, the owner read a list of names and then said, If your name has been called, you have been laid off. No further explanation was given. People left shocked, confused and humiliated.

It was very hard for the company to recover, says Close. It was up to each group the next day to figure out how to proceed.

Company #2: Department supervisors for an insurance company notified their teams about the bad news in advance. Then, supervisors and human resources personnel met laid-off employees individually and privately to present a comprehensive severance and job transition packet, including severance pay, access to career transition services, health-care information and unemployment benefits information. Also, supervisors informed retained employees about what happened, why it happened, what benefits laid-off personnel got and the companys strategy for success.

Treat [employees] with the same respect as you did when you hired them, Close advises. They are going to tell their friends and family and neighbors and neighbors neighbors a better story.