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Setting layoff criteria? You can ignore past performance

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in Leaders & Managers,Management Training,Performance Reviews

When planning a layoff or restructuring, you can set criteria for who gets the ax by focusing on employees’ potential future contributions and ignoring their past performances.

For example, if your newly restructured company aims to be more innovative and flexible, there’s nothing wrong with looking for those characteristics when selecting employees you think will best transform the organization. You don’t have to be a slave to past performance reviews, especially if those reviews reflected the needs of a different sort of organization.

Recent case: Ellice Luh, a Chinese-American woman, went to work for J.M. Huber Company as the tech manager of the company’s dental research group.

The company, in the midst of a restructuring, decided to eliminate the dental research group and create one large research section. Luh and another manager both interviewed for the single manager position.

While Luh had positive evaluations, her competitor had been criticized for his management style. Still, the company hired the other manager because he told interviewers that he was thinking about new uses for existing products and was excited about product development. In contrast, Luh said she didn’t see herself with the company in five years.

Luh sued, alleging discrimination. She said the company had to consider her past performance reviews. But the court said no and rejected her claim, saying the company could look to other, forward-looking qualities if that’s what the new job required. (Luh v. J.M. Huber Company, No. 05-1240, 4th Cir., 2006)  

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