Scenario Summary

The senior human resource executive of a firm had succeeded in increasing the diversity in its workforce substantially. However, the firm had some unfortunate financial setbacks and the senior human resource executive has no choice but to lay off 300 employees for a period of 6 months. The senior human resource executive is currently puzzled over the criteria to use in selecting people for layoffs. If the senior human resource executive uses strict seniority, women and ethnic minorities will bear the brunt of the layoffs because they are all among the newest employees in the firm. If the senior human resource executive uses strict performance, however, the older and more senior (and predominantly white-male) workers will bear the brunt because the newer employees have the most current training and job skills. The senior human resource executive also wonders what role loyalty should play, because many of the older workers could have left for higher-paying jobs a few years ago but chose to stay.

1. What are the ethical issues in this situation?

2. What are the basic arguments for and against the different criteria in selecting employees to be laid off?

3. What do you think most managers would do? What would you do?