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Are Your Layoffs Actually Performance-Based?

Eric Crews
|
2.1.2024
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Making hard decisions is…hard.

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Sometimes, life gives you no alternative.

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4 years ago, COVID-19 turned our lives upside down.

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(Incidentally, we launched this newsletter less than a month before the massive shutdowns began. For a few weeks there, we provided near-daily updates based on the latest developments. It was truly a crazy time.)

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Many companies didn’t make it.

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Many more made it because the pandemic acted like a forcing function. They had to make the choices they should have been making all along.

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When COVID arrived, it had been quite a while since our last “reset.” 

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Teams were trimmed down to retain the highest performers. Companies were right-sized.

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And, in the case of our clients, they were often better off in the long run.

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Fast-forward to today. Prudent companies are again facing a situation again where layoffs are necessary. 

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(Ironically, some of the right-sizing is a correction from a post-COVID boom.)

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Again, I’m talking to leadership teams. Again, we’re looking at reductions in workforce.

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Here’s what I always ask as we go through this exercise:

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What percentage of these cuts are actually performance-based? Who should we have cut anyway?

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The answer? Across the board, approximately 33-50% of layoffs are actually based on performance.

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How’s that for being honest with yourself?

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***

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I talk about this concept often, but that’s because it so often bears repeating.

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Employees who are just “good enough” actually aren’t. 

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If you have team members who can’t meet your standards for the roles they’re in, your growth will come to a standstill.

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You’re overtaxing your A players. They’re picking up the slack, even if you don’t see it.

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And you’re investing valuable budget into employees who aren’t contributing the way you need them to.

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Those team members aren’t bad people. I’m not saying that at all.

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But if you wouldn’t hire them again today…they probably don’t belong in your organization.

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It’s a hard lesson to learn because our emotions get involved.

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But the moral of the story is this: don’t wait for a crisis before you evaluate your team’s performance. 

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Keep the people who fit your Core Values, want to succeed in their roles, and get results. Let the others go, and reinvest your dollars and your energy elsewhere in the business.

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Want help evaluating your team members? Talk to one of our consultants about building your all-star team.

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