This is the second installment of a new feature here at the Business of Management blog: Hey Management Guy! If you have a question about a workforce management practice (stupid or otherwise), just post it at the bottom of this blog item or e-mail it to me at jhollon@workforce.com. I’ll pick out the best queries and answer them here each month.

Hey, Management Guy! I just heard that Microsoft accidentally overpaid severance to some workers they laid off last month. Do they really need to pay it back? It seems like a cruel and heartless thing for the company to do to people who just lost their jobs, but in this economy, I guess anything is possible. What do you think?

—Seth from Sioux City, Iowa

Seth:

Take it from The Management Guy: Payback is a bitch.

I discovered this during the late-90s Internet boom when I was working as a vice president at a well-known (but now deceased) San Francisco dot-com.

Somehow, not only was my paycheck being direct-deposited in my bank account, but so was the paycheck of an administrative assistant. This went on for a couple of months until the company controller brought to my attention and—nicely—demanded the money back.

What to do? For me, the answer was simple: I quickly wrote that check because: a) I liked my job, and b) I wanted to keep it. People asked me how I could possibly not know I was getting overpaid, but it was complicated.

I was new on the job, living in San Francisco and working seven-day-a-week dot-com hours, while my wife, family and bank account were all back home in Southern California. I wasn’t terribly focused on anything other than my new job, and my wife had her hands full as well.

The bigger mystery was how the administrative assistant didn’t notice the problem, but she was a bit spacey about everything. The paycheck fiasco raised legitimate questions about her job skills and attention to detail that led (thankfully) to her departure a short time later.

The Microsoft situation is very different. The software giant overpaid the amount of severance it gave “to some of the 1,400 employees it laid off last month, stating that because of an administrative error it had paid them too much severance and now wanted the money returned,” according to the Seattle Post-Intelligencer.

People who get overpaid by mistake, for whatever reason, are generally required to give back the money—they aren’t entitled to it. But in this case, there was another dynamic involved: These people had just been laid off, in a terrible economy, and this mega-bucks company is now coming after them for money.

Should the workers have known they were overpaid? Probably. But remember, they had just lost their livelihood and faced the prospect of having to find a new job in the midst of the worst employment market in more than 30 years. It’s entirely possible that they were just a little bit distracted.

When all of this became public over the weekend, and the media started asking questions about whether Big, Bad Microsoft was right to demand money out of people they just threw out of work, Microsoft did what any smart company would do: It abandoned the cash hunt and became magnanimous.

According to the Seattle Times, “Human-resources chief Lisa Brummel called each of the 25—part of the 1,400 people notified Jan. 22 in the company’s first widespread job cuts—to personally explain the ‘clerical error’ that caused the overpayment, and inform them they could keep the extra dough.”

And as the Post-Intelligencer noted, “at an average of $4,000 to $5,000 for each of the 25 overpaid workers—roughly $100,000 to $125,000 total—this was a public-relations blunder that Microsoft cleaned up on the cheap, at least relative to its $20.7 billion bank balance.”

Did Microsoft do the right thing here? Of course. Would the company have done it voluntarily without the glaring spotlight of media attention? That’s hard to say. But I agree wholeheartedly with the unnamed Microsoft spokesperson who told the Seattle newspapers: “This was a mistake on our part. We should have handled this situation in a more thoughtful manner.”

Truer words were never spoken.

—The Management Guy

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