Leaders should ask these questions before conducting performance-based layoffs

Over the past few weeks, both Meta and Microsoft have announced that they will be conducting company wide performance-based layoffs. Meta even put a marketing spin on the practice of getting rid of employees based on poor performance, calling it “non-regrettable attrition.” On the surface this may make sense: leaders want to ensure every individual at the company is making an impact in some way and contributing to the bottom line. And here’s the biggest mistake that can occur during performance-based layoffs: deciding to embark on this process assuming that there are well-defined goals and metrics for individuals, and a clear understanding of what “good” versus “poor” performance looks like.

If you have been asked to be involved in executing performance-based layoffs, consider the following:

Look at factors beyond the final performance rating

Many leaders assign a number, on a scale of 1 to 5, aligning to a forced bell curve when it comes to assessing the performance of their talent. And we must take the time to consider factors and details beyond the final performance rating that was given to the individual. There can be so many details behind what can be perceived as “a low rating” or “poor performance” that need to be looked at.

Consider the following:

• Is this person new to their role? I once worked at a company that had the following rule: Individuals who were new or six months into their role automatically received “not fully meeting expectations”—an automatic 2 rating regardless of how they were actually doing on the job
  
• How many new managers has this person had in the past year? Who rated this individual and are they still at the company? Does the most recent manager actually understand what this individual does and works on?
  
• Is this the first low performance rating they have received? What was their rating during their last review? Is there a pattern of this individual not performing or is this an outlier?
  
• Was this person on any type of leave? I once worked at another company where it was uncovered that a number of women, including myself, were given the lowest performance rating when we were all out on maternity leave.

On the other hand, you can have individuals receiving high performance ratings because they are well-liked or friends with the CEO, but have actually not achieved their goals. Look beyond the number assigned to an individual to assess whether or not they are actually performing on the job. 

Review self-evaluations versus the manager’s evaluations

When leading performance-based layoffs, take a look at the documentation that’s available from the most recent performance cycle. The truth about performance often lies in between an individual’s self-evaluation versus the manager’s evaluation: what the individual thinks they achieved versus what the manager believes they have achieved.

Here are some things to look for in the reviews:

• Where do the reviews overlap? Are there any distinct differences?
  
• Where do you see subjectivity in the manager’s review? Do you spot any potential bias? 
  
• Is the individual taking accountability for any performance gaps and sharing what they learned?
  
• Is there a team project that failed that somehow this one individual is being unfairly judged for?

Don’t wait to deal with performance issues

We must hold leaders accountable who don’t deal with performance issues. I have worked with too many leaders who don’t want to take responsibility for someone who is not performing on the job. Instead, they will try to eliminate their role, move them to another team and make them someone else’s problem, put them on a performance improvement plan, or create a difficult working environment to get them to resign. And finally, they wait for a company wide performance layoff so they don’t have to intervene.

If you have chosen to lead other people, it’s a responsibility and a privilege. You have to teach them how to do their job, coach them through mistakes, and give them detailed feedback when they aren’t able to complete tasks. When you decide to label someone a low performer, it’s time to self reflect on what role you played in this situation. If someone can’t be upskilled to do the job, is unhappy in the job, or can’t achieve the clear metrics of the role, your responsibility is to help them move on to what they are meant to do next. And to deal with this quickly, and not wait for an entire year for company wide performance-based layoffs. Leaders who aren’t held accountable for their team’s poor performance should also have that reflected in their review and it should impact their compensation.

While on the surface performance-based layoffs may sound like a good idea, make sure you are evaluating individuals fairly. Then you can make the decision if they should stay or move on externally to what they are meant to do next in their career.

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