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Introduction
A downturn in the economy or in an employers specific type of business as well as internal business conditions may force an employer to consider making a reduction in staff (RIF). A RIF, as other types of involuntary terminations, may have a longterm effect on the remaining workforce and the success of the business. An employer considering a RIF needs to review alternatives to the staff reduction, identify the laws involved and decide how to communicate its decisions to employees and how to keep remaining staff motivated and productive. This sample presentation is intended for presentation to supervisors and other individuals who manage employees. It is designed to be presented by an individual who is knowledgeable in federal and state employment laws and has experience implementing a reduction in force. This is a sample presentation that must be customized to comply with state and federal laws and the employers own policies and practices.
SHRM 2008
Objectives
SHRM 2008
Alternatives to a RIF
Improving internal processes. Hiring freeze. Reducing or freezing compensation. Curtailing overtime. Shorter work weeks or reduced work hours. Job sharing. Increasing employees share of benefit costs. Cutting perks. Early retirement programs. Reducing advertising costs.
SHRM 2008
SHRM 2008
Non-Discrimination Laws
Title VII of Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, religion, sex and national origin. Americans with Disabilities Act (ADA) prohibits discrimination on the basis of disability. Age Discrimination in Employment Act (ADEA) prohibits discrimination on the basis of age. National Labor Relations Act (NLRA) prohibits discrimination on the basis of union activities. State laws: many states have additional anti-discrimination laws (e.g., sexual orientation).
SHRM 2008
SHRM 2008
Questions? Comments?
SHRM 2008
For example, reducing human capital costs by a percentage or dollar amount. Are all employees at all locations and levels considered in this RIF? Is the RIF localized to one or more plants, divisions, job categories?
Do NOT use a RIF as a means to get rid of staff for reasons other than the established selection criteria.
SHRM 2008
Harassment/discrimination complaints made by employees. FMLA leave requests. WC claims. OSHA complaints. Wage and hour complaints. Union grievances.
Use statistical workforce analysis to determine if there is disparate impact against age. Use this analysis for race and other minority status as well. Legal counsel should review all decision-making criteria and documentation to reduce liability.
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Determine which employees within job categories will be affected by the RIF and who will be retained or offered other positions within the organization. Consider how subjective the criteria is and how to document meeting the criteria. Some common selection criteria:
Location. Job categories. Type of employment (contingent or part-time). Seniority. Skill set. Merit (documented performance history). Prior disciplinary actions. Project or client assignments. Multiple criteria.
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Questions? Comments?
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Develop a communication plan: Who is responsible for communication? Who is attending? (dont forget employees on leave) What is the key message? When should it be delivered? How will it be conveyed?
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Questions? Comments?
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Questions? Comments?
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Summary
There are numerous alternatives to consider before making a reduction in force, including a hiring freeze, shortening the workweek or reducing hours, and cutting benefits programs. Various federal and state employment laws may be involved, including WARN and non-discrimination laws. Determining the financial goal and scope of the RIF as well as the selection criteria are important issues that require planning and preparation.
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Summary (contd)
Planning for a RIF meeting includes deciding who will conduct the meeting, the physical location, security concerns and preparing to address concerns and questions. Issues and actions afterwards include the reactions of employees, such as nervousness and uncertainty, engaging in discussions of worst case scenarios and negative speculation. It is important to communicate often and openly answering questions, asking for feedback and providing praise, training, resources and time for the remaining employees to succeed.
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Course Evaluation
Please be sure to complete and leave the evaluation sheet you received with your handouts.
Thank you for your attention and interest!
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