ExxonMobil Continues to deny using a PIP as a Layoff

Is ExxonMobil considering letting go of certain employees using PIPs (Performance Improvement Plans)? 2020 saw the confirmation of the speculations that have been going around ExxonMobil circles for months by Forbes & Business Insider. It seems that ExxonMobil modified its performance reviews to support additional job cuts in an effort to "cut more workers without using traditional layoffs."

As to Forbes, Exxon assigns a performance rating to its employees, with the lowest-ranking staff, "Needs Significant Improvement," facing the possibility of termination. Another name for the "Needs Significant Improvement" category is "NSI." A "Performance Improvement Plan," or PIP, which is essentially a severance offer to leave the company, is frequently extended to employees in this group. ExxonMobil broadened the definition of the NSI category to encompass at least 8% of US paid workers.

When it came to ExxonMobil, it made sense strategically to reduce employment through performance reviews rather than through layoffs. "Companies can avoid a requirement to give employees and state officials 60 days' notice under the Worker Adjustment and Retraining Notification Act by not calling job cuts layoffs," according to Business Insider. They also gain from being able to persuade potential employers that, should they do well, their jobs will remain steady.

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ExxonMobil denied in a statement to Business Insider that the company's goal was to "reduce headcount through [their] talent management process," adding that workers who fall into the NSI category are given chances to keep their jobs and perform better.

Prior to the US coronavirus pandemic, ExxonMobil stipulated that only 3 percent of its workforce needed to fall into the NSI group. They broadened that category as of April to possibly cover 8% of workers. Business Insider was informed by a former employee, "Don't be fooled by the performance metrics." Undoubtedly, there was a layoff.

The NSI category did not include new hires before April. Anyone with fewer than two years of experience in the NSI category may now be requested to quit the company due to an amendment made to that policy. After working for the organization for more than two years, those who fall under the NSI category will have the opportunity to finish a "performance improvement plan." A provision in their "Waiver & Release" forms that said they "...will not apply for future employment with XOM" alarmed a number of ExxonMobil workers ("ExxonMobil Corp. Layoffs – TheLayoff.Com"). These "No Re-Apply" clauses are fairly frequent and are, according to an article from Sklover Working Wisdom.com, "nothing more than an attempt by employers and their lawyers to avoid future lawsuits by employees who were paid severance."

 

Sources :

• Jones, Benji. “Leaked Documents Reveal Exxon Changed Its Employee Ranking System amid the Coronavirus Pandemic, Putting More Workers at Risk of Getting Cut.”  Business Insider , 24 July 2020.
• Jones, Benji. “Exxon Made Managers Dub Some Employees Poor Performers to Cut Staff – Business Insider.”  Business Insider , Business Insider, 30 July 2020, https://www.businessinsider.com/exxon-managers-dub-some-employees-poor-performers-cut-staff-2020-7.
• “The Retirement/Transition Guide for ExxonMobil Employees.” The Retirement Group, The Retirement Group, 11 Aug. 2020, https://telecom.theretirementgroup.com/att-guide-download-google
• Hiller, Jennifer, et al. “Exxon Prepares Spending, Job Cuts in Last Ditch Move to Save Dividend.”  Reuters , 30 July 2020.
• Gross, Elana. “ExxonMobil Reportedly Changed Its Employee Review Process To Increase Performance-Related Job Cuts.”  Forbes , 24 July 2020.
• “Retirement Plans-Benefits & Savings.” U.S. Department of Labor, 2019, www.dol.gov/general/topic/retirement.
• “ExxonMobil Corp. Layoffs – TheLayoff.Com.”  TheLayoff.Com – Layoffs Discussion Board , 27 July 2020, https://www.thelayoff.com/exxon-mobil
• Sklover, Alan. “‘My Severance Agreement Says I Can Never Re-Apply; Can I Get around That?’ – Sklover Working Wisdom.”  Sklover Working Wisdom , 20 Mar. 2014, https://skloverworkingwisdom.com/my-severance-agreement-says-i-can-never-re-apply-can-i-get-around-that/.
• “Generating Income That Will Last throughout Retirement.” Fidelity, 22 Jan. 2019, www.fidelity.com/viewpoints/retirement/income-that-can-last-lifetime.
• XOM Summary Plan Description, 2017