Not the most desirable situation especially if it is not controlled by HR and the organization is small (less than 50). In small organizations (likes of boutique companies/single owner) HR systems are not so organized, controlled and procedures are not very well planned and exhaustive. In such situations when the pressure is on the bottom line, profit margins and EBIDTA, decisions about laying off people/trimming the strength are tough to make.
I have known someone who has been through this and the narration was equally nightmarish.
The toughest challenge is the selection or preparing the list of people. Definitely easy to decide on the basis of performance/contribution and project a professional approach, but there is a lot more that runs behind the scene. Performance in small organizations are not easy to assess as people tend to multi-task and KRA's are merely on paper. Their are certainly obvious roles but employees tend to perform various roles and provide support on extended responsibilities.
The first learning was into the term of the particular employee, the number of years the employee had spent. There are often one or two employees who are part of the company from day one with the owner/entrepreneur. They have been through the thick and thin of the circumstances, learnt from the early failures, partnered every planning process and contributed their extra hours without question. And then suddenly a time comes when the account books are under pressure and investors are asking for favorable results with numbers. It is indicated that remove the least productive, old horses, low cost entities, single role players to make the numbers look pleasing. There is also pressure to get specialists, aggressive workers, energetic and passionate MBA's fresh out of college or with relevant experience that the environment gets even more tensed. The question looms as to whether we should do away with the "old is gold" policy and lay them off or try to change the scenario by figuring out ways to handle the stressed bottom line.
There are often one or two employees who happen to be the bread earners/single earners of a family and their income sustains the daily running of the family. Unfortunately the number of people dependant on that one source is also not a good realization. The person is under tremendous pressure to make ends meet. Often compromises on temptations, always tensed about sudden expenses and always on the edge. There are often fixed payouts every month towards loans, education fees, medical bills etc and there is a thin line between pleasure and paucity. In such circumstances how will a decision to snap the source of income be accepted by the family members and moreover the employee himself.
There are often one or two people who have been waiting for the next appraisal/ pay hike so that they could buy the color TV, washing machine, cooker or geyser. They have been sincerely planning for the next elevation, child's education, maternity, purchase a flat, buy a car/bike, child's bicycle, new school bad, new shoes, study table, cooler etc and then the company decision to part ways comes as big blow to ambitions and dreams. Just when they thought they had reached a certain level and superior place they seem to be exiled in endless despair. How will the blow and damage to emotions sink in with the family and especially the employee.
There are often one or two people who would have taken an educational loan or trying to meet the part time educational expenses through this job. Then there are people whose parents are ill and need medical support constantly, newly wed couples, just blessed with the first child or second one, admission fee for child's higher education, child's marriage or any such change in regular life that might have recently happened and then the company decides to make further changes in its structure.
How sensitive are we as decision makers about such instances before taking any decision? Is it considered irrational to even think in this manner? Will it reflect unprofessionalism if we get stuck up? Will it reflect incompetency? Will it question your job instead on failing to take bold decisions?
Many such questions come to my mind and I sincerely don't have answers. Is our HR Policy prepared or do they accomodate such considerations? What should be the managers role play who has to take these decisions and how does it affect their own lives? I am sure it affects them equally like those who get disowned.