The Kinder Cut: A Macro Communication Strategy for Delivering News of Job Termination

Abstract

A Voluntary Retirement Scheme (VRS) ought to be good news for employees; it gives them the freedom to retire early with a substantial sum of money, tax free, as compensation. But, in many Indian companies, VRS is retrenchment through the backdoor. Employees identified as redundant or undesirable are pressured to leave. That they have been ‘selected’ for VRS can be devastating news for them especially when finding alternative jobs with similar remuneration and social status is difficult. This paper explores the communication strategies that employers can adopt to deliver well the bad news of job loss. Researchers have been studying the role of communication in softening the blow of job termination. Their discussions tend to be around micro communication strategies that depend largely on the verbal component of the complex communication process. This paper illustrates and recommends a macro communication strategy that would: actively deploy several mutually reinforcing non-verbal as well as verbal moves, especially a range of management actions that work down employee expectations help employees perceive as fair both the company's decision to downsize and the manner of downsizing. A review of several studies of perceived fairness prompts one to conclude that perception of distributive, procedural, and interactional justice helps people accept a variety of unpleasant experiences without anger. If they perceive procedural and interactional justice, they may even overlook low distributive justice. This paper identifies employee expectations that have to be met or worked down by organizations to facilitate the perception of fairness in their job termination. These include: absence of viable alternatives to downsizing adequacy of notice of termination objectivity and transparency in selecting employees to be terminated humaneness in the way the downsizees are treated. As culture and tradition largely determine the scope of some of these and similar expectations, this paper touches upon what Indian employees expect in the event of downsizing. This analysis is followed by a brief discussion of the way three Indian companies of different sizes – Pennar Industries Limited, Pennar Investor Services Private Limited, and Everest Limited – downsized. In the first two cases there was no litigation, violence or strike although the compensation paid was well below the employees' original demand. In the third case there was litigation although an attractive compensation was offered to employees opting for VRS. The first two used a macro communication strategy that conveyed convincingly to the survivors and downsizees alike that the decision to downsize was unavoidable the low compensation offered was fair under the given circumstances the company was treating the downsizees humanely. The third company relied largely on a micro communication strategy driven by logic and data; it did achieve its target of personnel reduction but failed to convince the employees of its fairness.