Who Should Be Promoted? Who Should Be Laid Off?

While talking with a friend, a question came up: In one team there were two colleagues with the same title but different responsibilities. Neither had been promoted for several years, yet both had consistently performed well, so objectively both were under pressure to be promoted. Compare their strengths and weaknesses and there is little to choose between them. Now it was fiscal year-end, the season for promotions and raises, and there was only one promotion slot. Who on earth should get it?

This is a knotty problem. If I were the manager, I would first ask myself whether I had already done my utmost to fight for more promotion slots. If not, I would go fight for them right away.

If there was truly no more room to maneuver, the decision would be painful; promoting either one would leave me feeling guilty toward the other. At that point I would have to reframe the question and see what answer emerged: if both resigned at the same time and you could only make a full effort to retain one, whom would you keep?

If I were the manager, the person I would retain is the person I should promote. Because when you are torn, it means there are solid reasons to promote either one; therefore, choose the one whose departure would do the least damage to the team. Choosing this way can also reduce the manager’s own emotional factors to a minimum.

Compared with the “pleasant sorrow” of agonizing over whom to promote, laying people off is probably the thing every manager dreads and avoids. I have handled several layoffs, and the feeling is heart-wrenching.

The first time was just as I was about to become a manager, when the whole company went through layoffs. Every team had to lay people off. Although the final decisions were made by my predecessor, I participated in essentially the whole process. The employee being laid off was in his forties; that year, if I remember correctly, was the year his child was taking the college entrance exam. The conversation itself was sheer torment. Trust me, you would never want to go through it. (Later I watched Up in the Air and learned that there are positions dedicated to helping companies lay people off—which shows just how painful a thing layoffs are.)

The second was after my startup went through a strategic contraction following frenzied expansion; I laid off several colleagues, including interns. On the entrepreneurial journey everyone was like brothers and sisters; laying people off was like a hero cutting off his own wrist—tragic and mournful. I remember talking with a designer: as soon as I opened my mouth, her tears came pouring down. The two ever-deepening tear tracks were like two knives cutting at my heart, one from the left, one from the right. We talked for a very, very long time. That night, when I woke from a dream, my pillowcase was wet.

The third was when my company hit obstacles in its development and underwent a strategic transformation; we had to lay off half the team to keep the business alive—and this time the people being laid off were the development team I had nurtured and built with countless effort. I had recruited them with dreams and the future, yet with my own hands I tore that dream to shreds in front of each of them. Unless you have lived through it, you cannot imagine that suffocating bitterness bottled up inside. For that entire day I was having coffee with different people. During each conversation I thought that if the other person hurled the scalding coffee straight into my face, I might feel much better.

Based on my experience, layoffs fall into several categories:

• Allocated layoffs: Typically, for financial reasons and to preserve vitality, a company carries out allocated layoffs, like metabolism in an organism. Each team is assigned one or more people to cut. Allocated layoffs are a common practice at large companies; many companies have an annual layoff plan of 3–5%.
• Campaign-style layoffs: These usually occur when senior leadership changes. Spend enough time in a large company and you will find that the people at the top are much like officials in the political arena: forming factions, building fiefdoms, and making three bold moves as soon as a new official takes office, and so on. People who have worked in foreign companies are familiar with “organizational restructuring” (reorg): put nicely, it is optimizing the organizational structure; put bluntly, it is punishing dissidents and favoring one’s own faction, using methods not far removed from our Anti-Rightist Campaign and Cultural Revolution (though much gentler, of course). Campaign-style layoffs usually hit the bosses; ordinary employees are under less pressure. Of course, sometimes when the kings of hell fight, the little ghosts suffer.
• Systemic layoffs: Large companies have departments everywhere, and there are always some that do well and some that do not. A poorly performing department is like a tumor under observation; once it deteriorates further, it must be surgically removed in part or in whole—that is systemic layoff. Another case of systemic layoff is a company’s strategic transformation: departments outside the strategic plan are like baggage and are ruthlessly flung away.

Of the layoffs I have handled, the first was an allocated layoff; the latter two were systemic layoffs.

Executing allocated layoffs is truly painful. You have to set your feelings aside and choose with your conscience intact. When the knife is at my throat and I have no choice but to lay people off, I generally choose the employees in the team who are relatively high-paid but low-performing and have no room for growth. This is very unfair to the people being laid off, but it is a last resort; after all, a manager is responsible to the company and the team.

My rank was never high enough to be involved in campaign-style layoffs; at most, during such campaigns I was an executor carrying out allocated layoffs. So I have little experience in that.

Systemic layoffs should be executed by cutting through the knot with a sharp knife; the focus should be on rebuilding the confidence of those who remain and helping those laid off find new jobs. Because those laid off are not laid off for lack of ability, after reassuring those who remain, a manager should mobilize his or her network as much as possible to help the laid-off people find new jobs. This is not mandatory, but trust me: no matter the outcome, as long as you make the effort, you will earn trust and gratitude in return.