Femi was the first to resume work on Monday as he has always done for over a year now. He works like a robot non-stop from From 7 am to 7 pm. It is a torrid job but one that he has now gotten used to over the years as he strives to work his way up the ladder.
His hard work has also gone unnoticed accumulating a number of staff of the month awards as his colleagues recognize his hard work. And so when he turned on his computer that faithful Monday morning and couldn’t log on to his profile, it never occurred to him that he has just been rendered jobless.
Corporate downsizing is back on the front burner for a lot of industries, especially tech startups looking to reduce overheads amidst a global economic crunch that has impacted the funding market. With venture financing drying up for the first time in years, companies have resorted to downsizing as they opt for financial stability over rapid growth.
One of the quickest strategies for cost-cutting is firing employees or corporate downsizing as they like to call it. And when this happens, employees are often at a loss as to why they are affected. “Why me” is a familar question most employees like to ask when they are fired during a downsizing.
If you are lucky to meet a honest HR officer they give you the right reasons but most times they do not especially if they need to protect certain confidentiality requirement. We did speak to some HR consultants over the years and we identified the criteria companies use to determine who stays or who goes.
LIFO – LIFO is an acronym for Last In First Out and is a frequently used mode of sacking. Here the most recent employee in a unit, department, or office will be fired should there be a need to put names forward.
- It doesn’t actually matter if the employee was a performer or was just recently hired for a recent job position. Joan, an employee of a popular car sales shop in Lagos, inform Nairametrics that she got fired three months after being employed.
- She was told that the company was going through some financial stress and was purely a victim of LIFO.
FIFO – This is an acronym for First In First Out and is the opposite of LIFO. Here employees who are already close to retiring are put forward for corporate downsizing.
- For example, employees with months or a few years to retire are fast-tracked and asked to leave.
- The FIFO approach is not as common as LIFO but is used by some organizations as well.
Disciplinary Issues – Here employees who have been queried or found wanting in the past are put forward for consideration in the event of a mass sack.
- Managers who have been mandated to use this criterion call for the files of employees in their Units and then start to look for who has had the most disciplinary issues.
- For example, staff on single or final warnings will most likely be asked to leave compared to those who have only been queried.
- An employee of a commercial bank who wished to remain anonymous informed us that she was served a warning letter because she will not sleep with her boss.
- Eventually, when the company was downsizing she got affected.
Appraisal – Companies also rely on the results of periodic appraisals in deciding whether an employee or employees should be recommended for a sack.
- Appraisals involve reviewing an employee’s performance against key performance indicators during a review period.
- Those who perform below their peers are often singled out to be fired.
- Eddie (not his real name) informed Nairametrics that he was told to leave after he came last during a general appraisal conducted in his unit.
- Prior to that, he had met his key performance indicators (KPI’s) only to be asked to leave after he supposedly came last in a new round of appraisals specifically conducted for the purpose of looking for who to go.
Redundancy – Organisations also decide who gets sacked or not by weeding our redundant roles or departments.
- For organizations that are not just looking to downsize but are also restructuring, redundancy methods are a common feature.
- For example, multiple roles and job functions can be collapsed thus churning out redundant positions making it easier to sack.
- This method is often easier for organizations as it doesn’t target specific individuals but roles.
- Another victim interviewed by Nairametrics said he was told that his role in a leading foreign airline was made redundant after the company closed and outsourced its call center.
Set criteria – There are also instances where certain criteria such as age, qualification, and experience are used as a basis for a mass sack.
- Department heads can make decisions on who to sack if victims fall short against their peers in terms of qualifications and experience.
- HR practitioners inform Nairametrics that this criterion were perhaps a major factor in the increased spate of Nigerians going abroad for higher degrees.
Random selection – This is perhaps the worst method and is used mostly in cases where a large percentage of employees are required to leave.
- Here employees scheduled for sack are hand-picked regardless of their commitment, work ethics, or value.
- Department heads are simply instructed to recommend a number of people for firing regardless of their performance.
- It typically happens in organizations that are facing major financial difficulties.
- A lot of oil servicing companies were said to have used random selection in sacking thousands of employees this year as the price of oil crashed and oil majors cut down budgets.
Femi got to know later that he was a victim of Random Selection ashHis boss had a choice to make between him and another staff who was married and had a family to feed. Being single meant Femi was an easier target.
This article was first published in November 2015 but has now been updated to reflect new information.