The human side of downsizing ?

A lay off of any employee is usually a result of economic stresses, a company’s change of direction and cost cutting. Lay off is a dirty business, but necessary for a company to survive and compete successfully.

Jobs lasting a lifetime no longer exist. Today an employee lay off isn’t a black mark on a employee’s record, but an unpleasant experience. By definition, an employee isn’t at fault when you lay him off. His performance and behaviour have been good. Unfortunately he’s just in the wrong place at the wrong time.

It is here that the Human Resources professionals will have to step in and help the company manage this change. Sure this situation is going to whip up a lot of people emotions in the company at all levels. The realisation is that for a company to move ahead, its employees need to move in tandem. Everything comes to a naught if the employees don’t care about where the company is going.

“The essence of effective people management is managing emotions,” James K. Clifton, chairman and CEO of the Gallup Organization, told the Society for Human Resource Management Foundation at its Thought Leaders retreat in 2002.

Another author Thomas A Hickok has said “First, it clearly appears that power has shifted away from rank-and-file employees in the direction of top management/ownership. Accompanying this change is a shift in emphasis away from the well-being of individuals in the direction of the pre-eminence and predominance of the organization as a whole. Second, it appears working relationships have changed away from being “familial” in the direction of being more competitive. Third, the employer-employee relationship has moved away from long-term and stable in the direction of short-term and contingent.”

Hickok suggested five simple question areas that organizational leaders who are interested in probing the moral and spiritual dimensions of downsizing might usefully consider. These include ensuring the fundamental decency of the approach being considered, engaging in appropriate dialogue, thinking through the consequences for those who may be adversely affected, having ready explanations for multiple constituencies, and offering a realistic opportunity for a better future for the organization and the organization’s stakeholders.

Employee Engagement

Organisations need to engage their employees, keep them constantly informed on the progress of the company, the competitive market conditions, the progress of the competitors and share the financial performance of the company. The key is to be transparent, let employees know the status and to prepare them for any eventualities. Organisations have to win the trust of its employees and establish its credibility.

The engagement challenge is about how an employee feels about the work experience, about how he or she is treated. It has a lot to do with emotions. Research after research have concluded that employee emotions are fundamentally related to—and actually drive—bottom-line success in a company.

There is a constant struggle to win trust and establish credibility. You can have the best of the programs in the world—all of it can be lost in a second if the organization does something to destroy the credibility it has built.

A HR Manager of an organization that went through some downsizing exercise shared his experience : “The mistake we made is that we did not work very hard in making the team members understand the competitive situation we were in” and why the discussion breaks had to end. “We should have been doing more education about what the future might be for them – They (employees) wanted to understand the company’s business strategy and where they fit in.”

  • It takes a huge commitment in time and energy for organizations engaging their people. But relative to some of the other investments they make, it has a pretty good return.
    In my personal experience I would suggest that to manage downsizing an organization would have to take care of the following:
  • Is it really necessary. Are there no other alternatives?
  • Be transparent, prepare your employees well in advance, win their trust and confidence.
  • Confide with them about the eventuality and communicate to all employees. Don’t hide any facts.
  • If inevitable be fair in identifying employees to be separated.
  • Give them sufficient time to depart. Don’t stop them from coming to work the next day.
  • Compensate them adequately for the severance in line with market practice and not driven just by the legal provisions.
  • As said earlier be humane in your approach and treat these employees with dignity and compassion.

James K. Clifton, chairman and CEO of the Gallup Organization, told the Society for Human Resource Management Foundation at its Thought Leaders retreat in 2002 : “I think the next decade is going to be about the emotional economy of the workplace,” he said. “HR has an enormous opportunity to provide organizational leadership by increasing the number of engaged workers….HR is the only one with the answers to increased worker engagement. The question is whether companies and organizations will now turn to HR for their strategic leadership in this area.”

Tags: No tags

Add a Comment

Your email address will not be published. Required fields are marked *