Re-organization and Layoff: Decision Making Evaluation Paper

PHL/320-Critical Thinking and Decision Making
July 20, 2015

Re-organization and Layoff: Decision Making Evaluation Paper The term “working poor” aptly describes most employees in the middle income tax bracket. Middle class Americans typically live paycheck to paycheck. These workers face difficulty saving money as incomes barely cover living expenses. The financial struggles of middle class employees greatly intensifies when a facing a layoff. The laid off employees not only deal with the loss of income after a layoff; they also encounter barriers in finding a new job. During the past three economic recessions, millions of American jobs disappeared as companies decided to save money of labor costs by outsourcing “middle-skill” jobs (Tankersley, 2014). Middle class jobs are increasingly hard to find. Learning Team A discussed the financial strain sustained by these displaced workers. The team decided a company’s best course of action to assist these employees consists of offering a severance package to discharged workers.

The Severance Package

There are many considerations that a company must make when determining to lay off employees. One such consideration is how the decision will impact the company’s reputation with current and displaced employees. Employees will experience a multitude of emotions including anger, fear, and resentment. However, there are ways to reduce the amount of discontent experienced for the company, most importantly, the offer of a severance package. This package should include a monetary portion as well as preparedness for future endeavors. The primary concern for any employee experiencing a loss of employment is money. They are preoccupied with how they will maintain their financial obligations. If a company can help ease this burden, it will retain a positive relationship with all employees, current and displaced. This will further maintain a positive image with the company’s customers and vendors. During the transition period, it is equally important to assist the displaced employee with unemployment benefits and training for new opportunities.
The Business Decision The severance package is the most important part of the layoff process. However, how the company makes the decision for the severance is a different story. This process is difficult and includes more than just handing a check to the employee. The company has to consider where it stands legally and maintain its position with the employee. The decision to terminate the employee should be free from personal bias and the employee's tenure with the company should be considered along with supporting facts as to why this employee was chosen to be displaced. The cost of terminating the employee will need to be considered along with legal counsel as the severance package is a binding contract. Depending on the state that you live in will determine if the employee can receive vacation time. This should be taken up with the Human Resources Department. At this time, the severance package should reviewed by legal counsel. After being reviewed by legal counsel, the severance agreement is ready for distribution. It should have a clause in it that discusses age discrimination and relinquishing the employee's right to sue the company. The final business decision regarding the severance package should be held in a face to face meeting with the employee. This is especially important because it allows the employee to review his severance package and ask questions. At this point, the employee should be advised of any stipulations or policies regarding the severance pay.
Negotiating Severance Negotiating your severance package up front is another way to ensure that if there was ever a big layoff, there would be no confusion between the employer and employees. Many employees take jobs not knowing how long they will be employed. Some stay employed with the same company for years and others for months. Some companies are not as loyal to their employees as the employees are to them. Even though the subject of layoffs can be sensitive and awkward, must be the conversation initiated and included in the employment agreement. This will help to minimize any level of surprise regarding the various aspects of the layoff process as it relates to severance packages.

What to Expect in a Severance Package Remember there are no legal obligation to offer a severance package therefore there are no mandatory size package for employees, but there is an accepted formula used to determine an average severance package. Most employers calculate the number of severance weeks, the number of years the employee worked and the minimum state mandated base. The severance week offered typically is 1 to 4 weeks but on average is 1-2 weeks per year. By calculating these steps the employer can determine a Severance Package there will also be guidelines for sick days, unused vacation time and personal days another matter to consider is that some companies require you to sign contracts that protects them in an event there are layoffs and that contract policies can be modified to protect the company.

Reference: https://www.severance-lawyers.com/entitled-severance-pay/ http://untemplater.com/business/how-much-is-the-average-severance-package/
http://jobsearch.about.com/od/salary/a/severance.htm