Managing Consultant/Registered Occupational Psychologist at Industrial Psychology Consultants (Pvt) Ltd
Last In, First Out (LIFO): A Fair Principle for Retrenchment? The "Last In, First Out" principle, where the most recently hired employees are the first to be retrenched, has been a common practice in many organizations. But how credible and fair is this approach, really?
The 'Last In, First Out' (LIFO) principle can negatively impact employee morale by creating a sense of insecurity and undervaluing recent hires' contributions. It may lead to decreased motivation among newer employees, who feel their job security is solely based on tenure rather than performance or skills.
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3mo
Laying off people should be based on objective labour planning to meet the organisational needs in terms of skills, culture fit etc not merely reducing numbers at minimal cost.
Head of Finance & Administration | Chartered Global Management Accountant| Certified Tax Accountant | Project Accounting
3moIn my view, whether LIFO is considered fair as a retrenchment principle depends on the specific context and the values and priorities of the organization. While it has certain advantages in terms of objectivity and cost savings, it can also lead to potential drawbacks related to performance, diversity, and organizational impact. Many organizations now adopt alternative approaches, such as performance-based evaluations or skills assessments, to make more informed and equitable retrenchment decisions.