HR Leadership Questions

Q&A Session – HR Leadership in Difficult Times: Implementing RIFs, Reorganizations and Freezes

Questions and Answers from Our HR Leadership Webinar

The following is a transcript of the question and answer session that followed PayScale’s webinar, HR Leadership in Difficult Times: Implementing RIFs, Reorganizations and Freezes. The topics covered in these questions include voluntary staff reductions, pay freezes and overtime pay. Answers are provided by PayScale’s director of customer service and education, Stacey Carroll, M.B.A., SPHR.

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Q: Can you ask for volunteers who want to be laid off?

A: Yes, but check with a lawyer first. Even if you ask for lay-off volunteers, if the people who volunteer disproportionately represent a protected class then you may still be in legal hot water. In addition, you must remember that if you ask for lay-off volunteers the folks who are highly marketable, e.g. high performers, may be the ones who take you up on this, and they may not be the ones that you want to lay-off. You most likely want to be more in control of who stays and who goes for legal and performance reasons.

Q: Can you talk about smart staffing?

One of the main reasons why HR is important to an organization is that HR takes responsibility for staffing the organization appropriately. I believe it is the most important and the most difficult task that HR does. So, when we talk about coming out of this recession and kicking off hiring again, take the opportunity to get the right person in the right spot. There are more qualified people looking for work right now. Take this opportunity to pick some of them up. And remember, don’t wait for tough economic times to lay-off poor performers. Poor performers should be managed through their performance problems. Don’t wait for layoffs to deal with these employees.

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Q: Can there be wage and hour issues with hybrid positions that result from reducing staff or re-organizing?

A: Yes, definitely. Position descriptions should be the basis of decision making about who is exempt or non-exempt. If you change the essential functions of the position, it needs to be re-evaluated for eligibility for overtime. Also, be really careful with reduced schedules and thus reduced pay for exempt employees. Make sure to check with counsel.

Q: What if there is a conflict between HR policy and an employee offer letter?

A: This is a great question for a lawyer but generally if something is in writing to the employee, that’s what they are entitled to. If there is a conflict between the employee offer and the HR policy, usually the more generous offer applies. It’s a good idea to have all of your employee offer letters come from HR, or at least be reviewed by HR before they are sent.

Q: Our company has already had a reduction in force. Do you have any suggestions for keeping employee morale high? Communicating who has been RIF-ed?

A: Keep your employees focused on business objectives and how RIFS help. Many companies are very realistic about numbers and outcomes, celebrate successes and keep their workforce informed. It is difficult to decide on how to release names – some just do it by position. There’s a fine line to walk regarding how to keep employees focused and avoid gossip rooms. It is best to focus on the job position and let people figure out the exact who.

Q: How do you lower salary for over-market costs and keep employee morale high in the company?

A: If the company has a clear HR policy on this and a communication strategy then it’s easier to deal with these situations. In this situation, it’s not personal, it’s policy. People should know how pay decisions are made, and that the company has an HR policy for surveying market data to make its decisions. People are not going to be happy about losing money but if things are well documented, current data is used, and it’s not personal, you’re most likely to reduce problems.

Q: Do you have any information regarding what companies usually do: broad versus piece-meal pay freezes?

A: I don’t have any data but what we have seen more often is across-the-board pay freezes. I’m not a big fan of “across-the-board” anything, as you’ve probably heard me say in other webinars or blog posts. It’s better to make decisions about pay using market data and internal skills and employee performance evaluations. You don’t want to get top performers or underpaid employees mixed up with those that aren’t. It’s better to be strategic rather than across-the-board. But, if there is no budget allocated, then you have no choice, just make sure when there is a sliver of a budget that it’s spent where it will have the biggest impact.

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