Corporate integrity and retaliation by laid off staff

Employees made redundant often fight back - either bad mouthing their former employer, or taking legal action if they feel their dismissal was unfair. According to Daniel Skarlicki at the University of British Columbia and colleagues, companies wishing to avoid this kind of retaliation need to provide as much information as possible to the staff they're laying off, but more than that, they need to realise that this openness will only be effective if their staff perceive them to be of high integrity.

An initial experiment surveyed 730 people working across a range of industries who'd been laid off by their employers during the previous six months.

Among the 173 participants who responded, those who felt their former employer had low integrity and who received more information about why they had been made redundant were actually more likely to say they planned retaliation. The researchers speculated this was because, given the context of their employers' past behaviour, these employees viewed their companies' explanations as "cheap talk", which they found "distasteful".

A second experiment asked 57 middle managers to imagine scenarios in which they'd been laid off, either with or without transparent explanations as to why, and either in the context of perceiving their employer to be of low or high integrity. This time, the managers given plenty of explanation for their redundancy were far less likely to say they planned to retaliate, so long as their former employer was of high integrity, thus leading the explanations to be judged sincere.

Skarlicki and his colleagues advised that if companies want to ensure that future staff redundancies aren't met with animosity from laid off employees, they need to plan ahead by ensuring that any explanations they give in the future are judged to be sincere. "While the leaders' treatment of the layoff victims during the layoff is indeed important," the researchers said, "the antecedents to retaliation do not begin there, but in the history of previous actions related to integrity."
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Skarlicki, D.P., Barclay, L.J., Douglas Pugh, S. (2008). When explanations for layoffs are not enough: Employer's integrity as a moderator of the relationship between informational justice and retaliation. Journal of Occupational and Organizational Psychology, 81(1), 123-146. DOI: 10.1348/096317907X206848

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