Inclusive Cultures Find Seats on the Bus for Good Workers
In July, after the business owner of my longest-held client company returned from a three-week vacation, I suddenly received an unexpected text message: “Don’t do any more work until we talk.” This followed my fixing an integration issue on their website. Concerned, I responded immediately, asking if something had gone wrong. The reply was vague, indicating that we needed to talk and that they would reach out to me.
The Calm Before the Storm
Before leaving for vacation, our relationship with the client remained as positive and encouraging as we’d enjoyed for more than a decade. I had recently visited their office, engaging in a productive conversation that ended with me drafting a comprehensive marketing plan. They even gifted me a few small products as a token of appreciation. Additionally, just two months earlier, the company recognized my contributions and encouraged me to represent their company on a nationally syndicated podcast. Given these positive interactions, I felt secure in my role.
Radio Silence and Growing Anxiety
However, my confidence started to wane after two weeks of radio silence and not receiving my payment from the previous month. Frustrated and anxious, I contacted the owner, who informed me that he was withholding my check until we spoke. This was certainly not standard practice. When we eventually had the conversation, he revealed that the company had made some changes.
The Sudden Shift
To my surprise, the company had decided to switch from its 14-year-old hosting provider and website developer to a new developer, reducing its annual cost from $10,000 to just $1,700. They made this drastic change without consulting me, their advisor of 12 years. Instead, an office worker made a single phone call to a local provider, and they swiftly took the first offer.
The owner informed me they considered terminating our agreement because they deemed my services redundant. The new company claimed they would handle all hosting, development, and consulting for a fraction of my fee, boasting a team of 68 employees. However, a quick investigation revealed that the new provider operated out of a small shared-office space and offered hosting on a white-labeled $3-per-month VPS (virtual private server) from a poorly rated hosting company. I shared this information with the owner, hoping to shed light on the potential risks of their decision.
Two days later, the owner called me. Without any pleasantries, he informed me that he had decided to terminate the contract to save money and avoid redundancies. Despite my earlier accolades, I was suddenly deemed to have delivered “ZERO value” to him in 2024. This abrupt and impersonal termination not only disappointed me; it shook my confidence to the core, scaring and saddening me.
People Are Not Redundant
This experience highlights a critical issue in modern business practices: labeling people as redundant. Every human possesses unique and valuable strengths, bringing distinct value to organizations with their gifts. Each individual has the potential to contribute to the organization’s success in ways that cannot be easily quantified or replaced.
Theoretical Perspectives from Industrial-Organizational Psychology
From the perspective of Industrial-Organizational (I-O) Psychology, labeling workers as redundant can harm both the individual and the organization. Those who experience job loss express a loss of dignity and belonging as a human being, plus fear of the sudden shift in their financial situation (Hiswåls et al., 2017). Add, then, this new identity of a redundant cog in the machine, and they can exhibit signs of mental illness. Therefore, this can pose problems from an ethical standpoint. Here are some key theories and concepts that shed light on the impact of such practices:
Job Embeddedness
Job embeddedness theory suggests that employees’ connections to their jobs and communities are critical for their retention and performance. When workers are deemed redundant, it disrupts these connections, losing valuable knowledge, skills, and relationships crucial for the organization’s success (Bambacas & Kulik, (2013).
Psychological Contract
The psychological contract refers to the unspoken, informal agreements between employees and employers. When employers abruptly terminate employees by labeling them redundant, they breach this psychological contract, leading to decreased trust, morale, and engagement among the remaining workforce.
Organizational Citizenship Behavior (OCB)
Organizational Citizenship Behavior (OCB) encompasses the voluntary, extra-role behaviors that employees engage in, which contribute to organizational effectiveness. Employees who feel secure and valued are more likely to exhibit OCB. Conversely, labeling workers as redundant can diminish these behaviors, reducing overall organizational performance.
Leadership and Organizational Development Theories
From a leadership and organizational development perspective, labeling employees as redundant can undermine the foundations of a healthy and thriving organization. Here are some relevant theories:
Transformational Leadership
Transformational leadership emphasizes the importance of inspiring and motivating employees to achieve their full potential. Leaders who view their employees as unique contributors foster an environment of trust, creativity, and innovation. Conversely, labeling employees as redundant contradicts the principles of transformational leadership, leading to a disengaged and demoralized workforce.
Human Capital Theory
Human capital theory posits that employees are valuable assets whose skills, knowledge, and abilities contribute to the organization’s competitive advantage (Jiang & Messersmith, 2018). When employees are deemed redundant, it represents a failure to recognize and leverage this human capital, resulting in a loss of valuable resources and capabilities.
Positive Organizational Scholarship (POS)
Positive Organizational Scholarship (POS) focuses on the strengths and virtues of individuals and organizations. It emphasizes the importance of fostering a positive work environment that nurtures employee well-being and performance. Labeling workers as redundant contradicts the principles of POS, leading to a negative work environment that stifles growth and success.
Best Practices for Managing Redundancies
If an organization cannot avoid layoffs due to redundant work, some practices that can help mitigate the negative impacts include:
- Transparent Communication: Keep the affected workers informed about the reasons for the redundancy and the decision-making process. Transparency can help reduce anxiety and build trust.
- Support and Resources: Provide severance packages, outplacement services, and career counseling to help the affected workers transition to new opportunities.
- Consider Alternatives: Before making redundancies, explore alternative solutions such as reducing hours, reassigning roles, or implementing temporary pay cuts.
- Plan the Transition: Ensure a smooth transition by developing a comprehensive plan that includes knowledge transfer, training for the remaining team members, and maintaining service quality.
- Monitor and Adjust: Continuously monitor the impact of the redundancy on the business and be prepared to make adjustments as necessary to address any unforeseen issues.
Firing redundant workers presents a complex and challenging problem for employers that requires careful consideration of the practical, ethical, and human implications. My personal experience underscores the importance of making informed, thoughtful decisions rather than hasty cost-cutting measures. By valuing the expertise and relationships that long-term workers bring to the table, businesses can avoid the hidden costs and negative impacts associated with terminations due to perceived redundancy, ultimately fostering a more resilient and successful organization.
To be clear: As unique contributors with the potential to drive value and success for their organizations, people are not redundant. By recognizing and leveraging the potential of its people, businesses can build stronger, more innovative, and more successful teams. That way, we can build more Harmonious Workplaces.
References
Bambacas, M., & Kulik, T. C. (2013). Job embeddedness in China: How HR practices impact turnover intentions. International Journal of Human Resource Management, 24, 1933–1952. http://dx.doi.org/10.1080/09585192.2012.725074
Jiang, K., & Messersmith, J. (2018). On the shoulders of giants: a meta-review of strategic human resource management. International Journal of Human Resource Management, 29(1), 6–33. https://doi-org.libauth.purdueglobal.edu/10.1080/09585192.2017.1384930
Hiswåls, A. S., Marttila, A., Mälstam, E., & Macassa, G. (2017). Experiences of unemployment and well-being after job loss during economic recession: Results of a qualitative study in east central Sweden. Journal of public health research, 6(3), 995. https://doi.org/10.4081/jphr.2017.995
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