Being Fired is Better For Your Ego, Or Maybe the Company's

Here's an interesting fact: if you were fired for lack of performance, that hurts a lot less than being laid off.

Or so says a new study, according to newswise.com. 

A new study finds that corporate downsizing reduces managerial diversity, especially when layoff decisions consider workers’ position or tenure. But when layoffs are based on performance evaluations, managerial diversity remains intact — at least when it comes to white women and blacks, says the Wevb site.

“It seems that the more individualized process of evaluating each worker on his or her merits — rather than using blanket criteria such as position or tenure — creates awareness and accountability among executives and motivates them to think deeply and creatively about who they should keep during downsizing,” said study author Alexandra Kalev, an Associate Professor of Sociology and Anthropology at Tel Aviv University at newswise.com. “This outcome of performance-based downsizing is not only good for managerial diversity, but also for the future of the company because the best performers are kept.”

I'm not so sure of her logic.  I've been both -- fired for not being able to outline step-by-step how different farmers grow different crops (OK, so I focused on what the horses and barn looked like and the morning glories blooming on the mailbox).  And laid off, 18 months after being hired by one of the largest corporations in the U.S., along with the rest of my department.  Silly me.  I went out and got another job before the announcement was made so received no severance!

Getting fired really damaged my pride. Getting laid off with a hundred others wasn't even worth a tear.  But I guess the point is that you can often throw the baby out with the bathwater -- along with your diversity -- with massive layoffs.

Looking at it from the company's viewpoint, “In an average downsizing organization where layoff decisions considered workers’ position, the shares of white women and blacks in management declined by almost 25 and 20 percent, respectively,” said Kalev. “Downsizing by tenure reduced the share of white women in management by more than 20 percent. Notably, two-thirds of companies in my sample used position or tenure as criteria for layoff decisions.”

Making matters worse for white female and black managers is that position-based downsizing, "the most harmful type of downsizing for those groups, became increasingly prevalent over the course of the study period," newswise.com quotes Kalev. In the early 1980s, downsizing companies made position-based layoffs less than 30 percent of the time. By 2002, however, downsizing companies made position-based layoffs more than 50 percent of the time."
Downsizing is increasingly done in ways that hit managerial diversity the hardest, while downsizing practices that help protect diversity have become less and less common, Kaley said at newswise.com notes. "If these trends continue, women and minorities will become increasingly rare in management jobs.”
So I guess it's better for the company -- and its diversity -- if they fire you for poor performance rather than making sweeping layoffs.  I get that.  But for the person involved, any way you go is just not much fun.


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