I recently made some drastic changes in my Airline which included ending worthless interlining contracts, streamlining my fleet composition, reorganizing and optimizing my routes. The outcome of all these, as expected, is to cut down unnecessary overhead while increasing profitability.
I have now come to the point where I have to lay-off redundant personnel - 87 employees. I was wondering what the best time to do this would be? My week-end closing is on Thursday and thus I was wondering, should I lay-off before week-end closing or after? I am not sure how compensations are calculated. I also want to increase the salaries of the remaining staff by 5% and I was wondering if the impact will be immediate - if it will be effective this week-end closing or the following one?
I will appreciate any pointers with regards to this management decision. Thanks.
Your staff will always be paid at your week ending date, so whatever changes you make will be effective your next week ending day.
Since your week ending date is on Thursday you can play around with the salaries up until then and nothing will happen, but once Thursday rolls around, your employees will be paid whatever salary you have set by then. Once they have been paid you can play around with the settings again and nothing will change until the following Thursday. So obviously the best time to change the settings would be a couple of hours before your week ending date.
As for laying off staff, you should fire them before the week ending date. They will get paid their regular salary until that day and then get six week´s worth of salary as compensation (as a one-time payment, i.e. the entire sum gets paid at once in full). So if you wait until after week ending day before firing them you would actually give them one additional regular salary before they get their compensation.