First and foremost, constant and
consistent communication and the
reasons for the layoffs are essential. In
difficult times people know when
their company is suffering and when
it is doing well. The role of the leader
is to make clear what is happening,
why it is happening, and when it will
happen. It is also the leader’s goal to
show confidence that this action is
necessary for the long-term health of
the company, and that there is every
belief that the company will survive
into the future. Ideally, it is a one-time
event, rather than a purge that occurs
slowly over time.While no leader can
ever promise that it will not happen
again, the ideal is to have a major
downsize and then to begin to
rebuild. If the layoff was handled in a
way that the terminated employees
were treated with the utmost respect,
there was generous severance and
outplacement benefits, and they were
allowed to leave with their dignity,
the survivors may feel sad, and a bit
guilty for surviving, but will retain
their positive feelings about the
company and their continued
contribution. Their commitment to
the company is actually increased
further if they believe that the
decisions about who would go and
who would remain were based on a
clear model of critical skills and
knowledge and performance
necessary for the ongoing success of
the company.
I once consulted to a large global
company where they needed to
downsize each function and division
by a significant number of positions –
approaching 50%. I worked with
themon amodel that beganwith a job
evaluation inventory of all the
positions in the company. Once that
was accomplished we evaluated each
position and altered it to meet the
critical skills necessary to support a
new and aggressive strategy. This
resulted in a significant reduction in
the number of positions, as many
were combined into new roles.
Ultimately each position was
changed by a minimum of 54%. To
accomplish this, we communicated
with the entire company about what
was about to occur and we provided
a time frame for the roll-out of this
initiative. To minimize the expected
disruption, we decided to proceed in
a progressive fashion, focusing on
one function/division at a time. We
then notified everyone in the division
that their job had been eliminated,
sharing the list and descriptions of
new jobs now available. Everyone
had the opportunity to apply for a
maximum of three jobs, or could
choose to apply for none, and receive
a severance package. If, however, they
applied for a new job and did not
receive it, they would also receive a
severance package; if they did receive
an offer, they could not turn it down
and still receive a severance package.
We took a top-down approach so
each level was selected, beginning at
the most senior levels of leadership,
and they were then responsible for
selecting the level below.
Despite the significant number of jobs
cut, that year the company received
its highest scores on job satisfaction
in recent memory. It was especially
noteworthy that the highest rated
score was for meritocracy; i.e.,“I feel
thatwhat I knowismore important in
getting ahead than who I know.”
Many employees said that for the first
time ever they believed that skill trumped political maneuvering in
determining success.
The belief that decisions are based on
performance and strategic need rather
than politically based is the core of a
successful downsizing that results in
motivated rather than depressed and
angry survivors. The remaining
employees must understand that the
decisions were based on critical skills
and performance factors and not on
who is best protected by a senior
leader. When all three factors—
honest and open communication,
retained dignity andmeritocracy—are
ensured, the remaining workforce
will happily commit to working
towards building corporate success.
It is not what occurs that determines
this, but rather how it occurs that
counts.
