Whether to Fire Employees? As a senior manager for a global player in an automobile supply company, Rebecca Ellis had joined thousands of fellow employees in the excitement surrounding production of the company's new engine/transmission-sensing devices for electric and hybrid vehicles. But barely two years into production, the COVID-19 pandemic struck, requiring employee stay-at-home orders and social distancing. During the shutdown, most customer orders went unfulfilled and the company faced a dramatic financial downturn. With three decades of service to the company, Rebecca led a contingent of managers intent upon keeping together as much of the company and as many employees as possible. "We know there will be some necessary cuts," Rebecca admitted. "But this company has a long history of sticking by its people. Our first priority should be internal streamlining of how we do things and making sure we have the right people on board. Let's carefully evaluate the situations of employees in case we institute a layoff. In the meantime, let's consider across-the-board pay cuts and other options to preserve employee jobs." Many managers liked what they heard from Rebecca. She was well respected and had an unequaled reputation for her leadership and collaborative skills and her ability to work with managers as well as line workers on the factory floor. People marveled at the number of individuals she knew on a personal level throughout the company. Drew Nguyen influenced a second contingent within the management group. A brash go-getter with a reputation for fixing companies in crisis, he proposed immediate across-the-board cuts in employees to implement a solution as quickly as possible. To identify and get rid of lower-ranking employees, he proposed the immediate creation of a forced ranking system. Rebecca rose to her feet in objection. "So we're going to create a system to fire.... "If need be, we fire quickly and cleanly. It's an opportunity to clear out the deadwood." "OK, cut our own hard-working people? It sounds like some lame government commission, Rebecca said. "We've got bright people. This COVID thing simply got worse faster than we imagined. We can work with the people we have in setting up a more efficient workflow, establishing reasonable deadlines to increase output, and if needed cut our own sales .... Nguyen interrupted, "Rebecca, these are not the days of knowing and caring about everyone in the plant. You're not throwing out your wife's uncle Harry. We are taking a serious look at what we do, how we do it, and streamlining everything by keeping the right people in the organization and cutting the rest. Questions 1. What kind of employee social contract is assumed by Rebecca and by Drew? Explain. 2. If you were an HR manager at the company, which view would you support? Why? 3. HR departments hire and develop human capital to serve the organization's strategy and drive performance. Which approach-Rebecca's or Drew's is more likely to have a greater positive impact on performance? Discuss. Whether to Fire Employees? As a senior manager for a global player in an automobile supply company, Rebecca Ellis had joined thousands of fellow employees in the excitement surrounding production of the company's new engine/transmission-sensing devices for electric and hybrid vehicles. But barely two years into production, the COVID-19 pandemic struck, requiring employee stay-at-home orders and social distancing. During the shutdown, most customer orders went unfulfilled and the company faced a dramatic financial downturn. With three decades of service to the company, Rebecca led a contingent of managers intent upon keeping together as much of the company and as many employees as possible. "We know there will be some necessary cuts," Rebecca admitted. "But this company has a long history of sticking by its people. Our first priority should be internal streamlining of how we do things and making sure we have the right people on board. Let's carefully evaluate the situations of employees in case we institute a layoff. In the meantime, let's consider across-the-board pay cuts and other options to preserve employee jobs." Many managers liked what they heard from Rebecca. She was well respected and had an unequaled reputation for her leadership and collaborative skills and her ability to work with managers as well as line workers on the factory floor. People marveled at the number of individuals she knew on a personal level throughout the company. Drew Nguyen influenced a second contingent within the management group. A brash go-getter with a reputation for fixing companies in crisis, he proposed immediate across-the-board cuts in employees to implement a solution as quickly as possible. To identify and get rid of lower-ranking employees, he proposed the immediate creation of a forced ranking system. Rebecca rose to her feet in objection. "So we're going to create a system to fire.... "If need be, we fire quickly and cleanly. It's an opportunity to clear out the deadwood." "OK, cut our own hard-working people? It sounds like some lame government commission, Rebecca said. "We've got bright people. This COVID thing simply got worse faster than we imagined. We can work with the people we have in setting up a more efficient workflow, establishing reasonable deadlines to increase output, and if needed cut our own sales .... Nguyen interrupted, "Rebecca, these are not the days of knowing and caring about everyone in the plant. You're not throwing out your wife's uncle Harry. We are taking a serious look at what we do, how we do it, and streamlining everything by keeping the right people in the organization and cutting the rest. Questions 1. What kind of employee social contract is assumed by Rebecca and by Drew? Explain. 2. If you were an HR manager at the company, which view would you support? Why? 3. HR departments hire and develop human capital to serve the organization's strategy and drive performance. Which approach-Rebecca's or Drew's-is more likely to have a greater positive impact on performance? Discuss.