Layoff debate continues

Last week’s column regarding the ethics of layoffs generated some interest among readers (see “examining layoff ethics,” /article/03/04/11/15ethmat_1.html). Many had layoff experiences to share. Some had questions, and others had comments on the employment arena in general. Here are some interesting readers’ remarks, along with my responses.

One reader asks: “Didn’t a previous discussion establish that corporations are not moral agents? How, then, does the concept of ethics apply to them? True, some of your arguments say that the corporations would be better off in the long run if they handled layoffs differently. But that is not a matter of ethics, just self-interest. I think you’ve already let corporations off the hook as far as ethical behavior is concerned.”

Good question! I don’t think you need to let anyone or anything off a hook that they aren’t on. Corporations are neither moral nor immoral. They are amoral — without moral motivation — just like your automobile. If no constraints are placed on corporations — either through laws or regulations — the pressure on managers to achieve the corporate aim of greater profits is considerable.

However, in the case of a layoff, the only thing the corporate entity demands is profit. And it’s the human agents who decide how that happens. If it doesn’t happen, they will be punished. But the morality of what they do isn’t of any concern to the corporation (and I’m aware here that I’m anthropomorphizing corporations) as long as it meets the bottom line goals.

In the matter of layoffs, the ethical considerations come to bear not on the corporations, which are demanding only profits, but on the individuals who make more or less ethical decisions regarding how that profit is achieved.

Another reader asks: “Why is it intrinsically fair to relieve the burden on older workers? Why wouldn’t it be fair to relieve the burden on younger workers? They have shorter resumes and less savings.”

Older workers — and by this I mean those who have worked for the company for a longer time — have contributed more to the company, adding to its success. They are also less able to absorb the burden of a layoff, perhaps because of greater financial obligations or because they are closer to retirement. That’s where I believe the scales weigh in favor of the longer-term employee.

“It seems that when times are good, indulgence is king,” One reader explains. “I live in California and have seen the worst of the worst, not only in business, but government as well. But when things get rough, somehow conservatism is king. It’s a flip-flop between two extremes, and our economy suffers. This exposes man’s bent towards greed. Not all are necessarily greedy, but it is greed that prevails.”

I call this “corporate bulimia.” Managers should realize that all business trends are cyclical, but many times managers don’t. When times are good, managers binge on workers, adding them at breakneck speed and with high salaries. When times are bad, managers purge them just as quickly, often gutting the operation in the process.

Another reader challenges: “I do enjoy your column, but I think you do a disservice to your readers to suggest that a human being can have an ethical relationship with a corporation. Corporations are not bound by ethics, they are only bound by the requirements of law.”

Actually, I raised just this issue in an earlier column (unfortunately no longer in the archive). I wondered whether human persons had an obligation to a corporation, because corporations have no moral motivation in their relationship with humans. Many readers objected even to the premise of my question, arguing that our ethical obligations were related to the corporate agents with whom we interact — or that ethical obligations always exist, whether or not the entity with which we’re dealing is a moral agent.

“As a business student with some work and managerial experience, I think that layoffs should be viewed as a personal failure by upper management,” one reader states. “Upper management lays out the future of the organization, and they should know where their industry is going and be prepared for shocks. Instead of rewarding companies for layoffs, Wall Street should see layoffs as management that really doesn’t know what it is doing and demand more evidence that they have learned from that failure.”

I agree — to a point. I’ve always believed that although some layoffs are necessitated by adverse business conditions, many are the failure of management to plan properly or, as I stated above, to understand that business is cyclical. So during times of rapid business growth, many managers seem to think that it will last forever.

Here’s another perspective: “I believe this problem started in the 60s with the ‘me’ generation. What do you propose to turn this self-centered, impersonal climate around? It is one thing to say something is unfair and other perspectives should be taken, but how are 40-plus years of practice changed?”

I would propose that people stop trying to attribute blame for everything that’s wrong in society to “the ’60s,” the Republicans, Doctor Spock, or eating meat. I refer to this as the “lone gunman” theory, in which we try to describe complex social situations in terms of one thing that we don’t like. The problems in society, the economy, and especially in the workplace have their roots in numerous developments going back to the beginning of the Industrial Revolution. To believe that prior to 1960 we lived in some halcyon world is just fantasy. It’s also dangerous, because it leads us to propose solutions that not only won’t solve the problems, but could make some of them worse.

“One issue that you did not deal with in your column, but I think is important, is the ethics of the salary scales themselves that let economic value to the organization get out of line with the salary paid to the worker,” adds one reader. “This after all is one of the reasons that older workers are preferred as layoff targets.”

I couldn’t agree more. I think that in many cases, “merit” raises have become disconnected from actual merit. They are given more as annual increase for people who show up every day and do their jobs, rather than as an indication of increased value to the bottom line.

Another reader adds: “It is past time to tolerate the bloated salaries of many corporate executives. If their companies are in serious trouble, where were they when these signs and symptoms began, and is not this what we are paying them for? Poor performance should be treated with salary and/or fringe benefits decreases until the problems are effectively solved. If they cannot provide leadership in troubled times, what good are they?”

This argument is hard to argue with — unless, of course, you’re one of the high-paid executives. They could probably launch some vehement, although perhaps unpersuasive, arguments about why their salaries should increase while company fortunes decrease.

And finally, the conclusion of one reader: “That’s why they are called Human Resources Department: They treat people just like a barrel of crude, or any other resource — lowest cost commodity. I’ve worked for this company for 34 years and have seen it go from a company that cared for its employees to one that uses bean counters to determine how to treat them.”

In many cases, I think this is an accurate description, although it’s not universally true. Some companies do treat employees fairly and treat them as individuals. Others see them as disposable “resources,” just as you describe.