A third of workers had to go, but how did HR settle on a process that saw some of the best workers laid off? And why did management feel uncomfortable questioning the decisions?
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Mass terminations are an unfortunate reality of the current business environment, and when it comes to implementation it can be hard to work out the best approach. Unfortunately for one UK company, their procedure turned out to be ineffective.
Residential care facility Mental Health Care had to reduce its staff of 58 by 19, and the HR department was determined to be fair and transparent in the process. It established three criteria for rating staff: a competency assessment, accounting for 60% of the score; and disciplinary and sickness absence records, each worth 20%. The competency testing was based on a framework used for recruitment, and was carried out by a team which had not worked with any of the individuals being assessed. Because the testing was worth more in the overall process, in most cases redundancies were determined entirely by this result.
A line manager who worked with the employees was surprised with the results, because some excellent workers were selected for redundancy, but he was reluctant to disagree because of the emphasis placed on the ‘robust, fair and transparent process’.
The Employment Tribunal found the process was unfair because the primary selection tool was one used for recruitment and no explanation had been given as to why it had been used in a redundancy exercise and manager opinions were ignored.
On appeal, the Employment Appeal Tribunal upheld the decision, saying while it was commendable the employer had put a lot of resources into it, by choosing an elaborate and HR-driven method the employer was of the benefit of input from managers and others who actually knew the staff.
“This case serves as a reminder about the negative consequences of 'doing things right' as opposed to 'doing the right things'. Here the process adopted produced results which were acknowledged to be surprising, but which were persisted in principally because the methodology was thought to be watertight,” UK lawyer Makbool Javaid said.
The aim of avoiding subjectivity and bias should be at the core of any redundancy selection process, but employers should not lose track of common sense, Javaid added. Provided decisions can be backed-up by persuasive reasons as to why a specific view has been taken, including examples from previously documented performance reviews, employers will have a strong defense to any challenge.
