10.8 Downsizing at Simtek
Karen Jacobs-McKinney is the manager of a group of 10 sales representatives at Simtek, a large computer components manufacturer. The company was founded by President and CEO John Simmons and has grown from a small, privately held start-up company to a publicly held corporation.
Simtek has been known for fair treatment of its nonunion employees and for employee relation policies that are above average. Pay and benefits are in the top fourth of the industry. The only major criticism leveled at Simtek was a charge that the company was not committed to its stated pro-diversity policy. Of its 400 employees, women and minorities represent less than 2%.
Jacobs-McKinney was the first woman of color hired by Simtek and is the only female manager in the company. She has been employed for five years and has worked very hard to be recognized as a fair and capable manager in white, male-dominated organization. Karen has just been faced with an extremely difficult task. Her immediate supervisor has told her that Simtek is reengineering and her unit will have to downsize by two or three people. There will be a moderate severance package. Karen has to decide who will be released. She has both flexibility and responsibility for selecting among employees who have roughly equal work histories, skills, and potential.
The employees in Ms. Jacobs-McKinney’s unit consist of seven white males, one white female, one African American male, and one Asian American female. When she compares the work performance of the 10, she finds that all have performed equally well. All have similar knowledge of the products, and their sales levels are also very similar. The white female, the African American male, and the Asian American female have all been hired in the past two years in an effort to increase diversity within the organization. The white males have all been employed there at least five years. If Karen relies on seniority to determine who should be laid off, then the department will lose all of the diversity that the company has tried to increase in the past two years. However, she also knows that if she decides to keep any of the new employees, then most likely she will be involved with thatcompany in a reverse discrimination suit. White males have threatened legal action, complaining that Simtek now hires almost exclusively women and minorities.
The personnel manager has just called Karen requesting the names of the employees who will be terminated. She has one week to decide what to do.
Discussion Questions
1. What will be the likely impact if the three employees are terminated?
2. What will be the likely impact if more senior employees are terminated?
3. What criteria should Karen use in making her decision?
4. Who should Karen terminate? Why?
5. Can you think of other leaders and organizations who have faced similar decisions? How did they respond? What happened as a result of their choices?