The executives at the electronics company Catron are faced with a difficult decision. The organization has weathered consistently poor performance as of late. As a result, the executives believe that they must significantly downsize. During a meeting of senior executives, they discuss the best way to handle the situation. The executives agree that the most logical way of deciding who will be let go is to use position and tenure as the main criteria. One executive remarked, Last hired, first fired makes the most sense, is the fairest, and ultimately will be the most efficient.

However, one executive, Blair, speaks up and asks, Shouldnt we consider other factors, like diversity, when making these decisions? Relying only on position and tenure might not result in the best decisions. The other executives respond that downsizing is not about gender or race. Instead, it is about cutting off the least embedded parts of the organizational chart. Terminating a poorly performing manager who is essential to the culture and has worked for the company for over thirty years would be disastrous for morale. Moreover, terminating someone who plays a key leadership role would harm the coordination of our teams and business processes.

Blair points out that this method of laying off employees and managers could disproportionately affect members of the organization from underrepresented groups. They are more likely to hold the positions that they are considering cutting. Only in recent years has Catron implemented a successful DEI initiative, resulting in the hiring of members from underrepresented groups. Blair says that they should develop another approach to carry out these layoffs that will not have potentially detrimental consequences. Blair suggests adopting a more individualized approach and using performance evaluations to assess which individuals will need to be fired.

One executive chimes in, You mean rank and yank? That never goes over well . . . And I thought that could also cause disparate impact toward our underrepresented groups? Blair responds, No, I do not mean we should rank all of the employees and managers based on performance and cut everyone below a certain benchmark. I just think we need to think about their performance and consider laying off those whose performance is having a detrimental effect on our organizational output and teamwork.

Despite Blair earnestly trying to persuade the other executives, they ultimately decide that the original approach will be the least time-consuming.

Questions- (Answer in short 2-3 sentences).

1. Which approach do you believe is best? Explain.

2. Are there other strategies that organizations could employ to ensure that underrepresented employees and managers are not disproportionately affected by the layoffs?

3. Besides layoffs, what other options might the executives have tried to reduce costs?