The Webster Industries case is about a company that has seen a lot of growth throughout the years. As a result management became strained and needed to divide the company into groups with a divisional corporate structure. In 1974 the company was faced with financial troubles due to a combination of economic slowdown and growing too quickly. Webster grew too fast and this resulted in “sloppy staffing”. The company did have a PA process in effect, but it was used on a voluntary basis.
The mindset of the employees is that anything can be appealed to the President and Chairman; no decision is really final and can be brought before the owners. The main issue that caused all these layoffs to be done was the fact that the company did not seem to have a growth plan in action to help control and streamline the process. According to a plant manager, “Staffing was done sloppily, so we ended up with a lot of fat”. Carter tried to adjust his departments through demotions to trim the fat, but was denied.
Given the task at hand, to let go 43 managers Carter needs to make sure that he can justify his reasons. Also the perception of fairness is important. He doesn’t seem to understand how that fits into the decision making process. It would be a good idea to involve someone from HR to help make sure that the decisions are fair and it does not seem to single out one group from another. Unfortunately he cannot rely on the PAS, so this will have to be done through determining criteria.
Out of all the options that Carter has thought of, the trim the fat option would be best. This is because it is easier to identify positions that are redundant or are no longer an important part of the business. Carter should start by evaluating the positions themselves. Through identifying which positions are no longer needed he can then start to look at personnel. Then he can devise a plan of which managers to let go. If there are some employees that show growth and promise this would be the time to switch things up.
I think that Carter should develop his termination list without consulting the criteria that the president has laid out for him. Those criteria develop biases through the selection process. People that should be let go because they do not perform or their position is no longer needed could be protected due to Webster’s guidelines. During this selection process Carter needs to make sure that he is documenting his decisions and work with HR to ensure that he is not violating any EEOC or other regulations that could put the company in legal hot water.
The owners of Webster Industries have set a precedence of showing the managers that they do not have control over the decisions made in each department. Employees can appeal to the owner’s for any decisions, including promotions. This process needs to be stopped. The owner’s need to trust their management to make the correct decisions and stand behind them when questioned about it because without that it creates an environment of “I don’t like what you told me so I’ll take it to someone who will give me the answer I want”.
This company has been known to take care of its employees and they should show they care even after the employee has been released. Since approximately one-half of the employed residents work for Webster it would be a good idea to provide employees that have been laid off with all the resources available to them. Whether it is information about unemployment benefits, resume writing workshops, interview skills, and current openings in other companies around Clearwater.
By providing these displaced workers with information about what to do next will show the employees that while they couldn’t keep everyone, they still care about what happens. The ineffectiveness of the performance appraisal system makes it difficult to utilize it as a tool to determine whom to let go. While this issue cannot be solved before the decision is to be made it would be a good idea for Webster’s HR department to form a comprehensive performance appraisal system to be used in the future to help the company make better strategic hiring/re-organization decisions.
This will be a hard transition, but making sure that the lines of communication are open will help employees get back on track. The company needs to make an effort to explain what is happening, why it is happening and how they make their decisions. Not everyone is going to like it, but they need to have good documentation in case any legal issues arise from this round of layoffs.