Reflections on MIT's Layoff Process

Lotte Bailyn, Robert McKersie

In an August 12 letter, Tom Kochan, chair of the MIT faculty, asked Professors Lotte Bailyn and Robert McKersie to work with Vice President for Human Resources Alison Alden to review the processes followed in the full set of layoff and redeployment experiences this past year. The request was made because some of these layoffs have caused general concern for faculty involved with the employees that had been let go.

To fulfill this assignment, we interviewed five Human Resource Officers (HROs) about the process in general and specifically about the S^3 layoff; met with senior administrators in one school to understand their interface with HR; met with faculty who have served on the Committee on Academic Performance (CAP); reviewed personnel policies and the task force report with respect to layoffs; and met frequently with Alison Alden.

What we found was that the framework in place is generally sound, though some fine-tuning is appropriate, as will be outlined in our recommendations. In general, consistent with the culture of the Institute, layoffs have been implemented in a very decentralized manner. With some specific exceptions, the layoff process has proceeded smoothly. During the first year of the budget reduction program slightly over 100 individuals have been given layoff notices. Approximately 30 individuals have found employment either at MIT or elsewhere.

We also heard of some innovative arrangements designed to prevent layoffs, such as furloughs and reduced time. These were all locally determined and we believe could be more actively supported. Layoffs should be the very last resort to meet the current economic crisis.

Our sense of the specific layoff that created the most concern, as well as others we have heard of, is that the communications aspects of the process as laid out by the guidelines were not fully followed. For example, the guidelines provide the employee with some say over the communication of what has happened – this did not occur.

Also, there are clearly issues about the decision of whether or not an employee returns to his or her office after receiving the news. Finally, there are some concerns about the particular people involved in giving the information to the employee.

Recommendations

These recommendations are based on our investigation of a few specific cases as well as the layoff process more generally. They can be summarized under several headings: the process before reaching a conclusion about the need for layoffs, the notification event when layoffs are necessary, and proactive steps to help those on layoff regain employment.

Before. In responding to budget realities, units across the Institute have adopted a variety of cost reduction measures that have kept the number of layoffs low. To the extent possible layoffs should be minimized and units should be urged to consider other steps for meeting cost targets. HR, in turn, if a layoff is recommended, should do some specific fact-finding before giving its approval. Specifically:

• To the extent possible all members of the organization should be engaged in fashioning solutions to achieve budget constraints without involving layoffs.
• Publicity could be given to examples where departments have shown creativity in developing options that reduce employment costs without layoffs.
• When it appears that layoffs will be necessary, careful monitoring by HR is required to assure that the plan is sound. In particular, HR needs to check that a layoff does not reflect possible retribution against an employee because of previous actions or tensions within the unit involved.
• It is also important that before a plan involving layoffs (and any associated reorganization) is finalized that faculty who are stakeholders are involved in discussing the plan.

During. Employees should be given as much control as possible about how to handle the communication about their layoff and the access they have to their offices. Specifically:

• Given the seriousness of a layoff event for the individual, careful thought should be given to who conducts the meeting and who else is present.
• During the meeting the individual should participate in shaping a plan for communicating news of the layoff to colleagues, and in most cases, the individual should be encouraged to share this information. “A layoff is not something to be embarrassed about.”
• The decision as to whether the person returns to his or her office should ideally be made by the employee, but at a minimum, the employee should be consulted. This decision should not be pre-determined.
• Employees should be engaged in discussions of how to allocate the time involved in the period of working notice between continuing to perform duties at the Institute versus time spent on job search activities. In some cases the arrangement might provide for payment of the whole or part of the salary involved in one lump sum (using the same formula as currently exists) while continuing the benefits for the notice period.
• Employees should be told that their resumes will be circulated among departments that are hiring, though they are given the opportunity to opt out of this if they so prefer.

After. Employees should be actively followed after the layoff notice has been given. The Institute should not depend only on their initiative to seek help and advice. Specifically:

• To the extent feasible it would be advisable to have a case manager assigned to each person on layoff. This would require recruiting HR staffs across MIT. In any event the point is to help the individual as much as possible.
• An ideal way to show MIT’s commitment to help those on layoff is to facilitate their being hired into vacancies as they develop. This could involve retraining as well as an active referral program (by HR) and some type of signoff by administrators filling positions confirming that they have canvassed the layoff pool.

Finally, there needs to be transparency about the whole process. The Institute should be forthcoming about the numbers who are affected by layoffs as well as by terminations, and should also provide data concerning re-employment.

We also recommend that MIT's Policies and Procedures be reviewed with an eye to emphasizing the importance of input by affected employees to decisions concerning communications to fellow employees and plans for the allocation of time during the working notice period.

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