Training & Telephone Coaching for Managers & Leaders  Case Histories

Downsizing, Reorganizing and Profitability

Martyn Carruthers

Downsizing for Managers

Reorganizing, mergers and downsizing are part of your organizational life, affecting both your employees being terminated and those who remain. Terminated employees may lose self-confidence and motivation, and have difficulties finding other work. Your remaining employees may distrust you and your organization, and show decreased loyalty, morale and productivity.

Your remaining employees may perceive the laid off employees as victims, and you as a victimizer. Your remaining employees may identify with those who are laid off, especially if they feel that the victims were poorly compensated. Victim Identification is a systemic diagnosis associated with overt and covert demonstrations of irrational anger and hostility.

Conversely, if a company is perceived to care for displaced workers, remaining employees can become more committed - even during a layoff. Companies can consider the cost of employee discontent, and manage downsizing to maintain the loyalty of remaining employees.

Employee loyalty is affected by equity, security, management, integrity, empowerment, communications, benefits and support - which will all be analyzed and discussed during downsizing. Good relationship management can avoid some hazards of downsizing.

Poorly-planned downsizing can do worse than darken your company image. Angry employees may precipitate expensive lawsuits, family tragedies, punitive awards and outrageous settlements. You can minimized all of these if you assist departing employees to become re-employed.

Systemic Solutions assists executives and managers through six phases of downsizing. We assist managers, employees and their families to make this transition, while promoting an organization as community-oriented. This package can motivate remaining employees, reduce legal costs, avoid excessive severance payments and simplify later hiring.

We also coach employees to cope with their loss. We help rebuild confidence, identify strengths, target areas of knowledge and skills, and coach employees to find new work. Some key points are:

1. Manage Communication:

1. Communicate with employees honestly
2. Broadcast official news of a downsizing
3. Explain reasons for restructuring
4. Provide frequent opportunities for questions
5. Meet employee representatives

2. Manage Employee knowledge:

1. Which skills are transferable
2. Effective resumes and cover letters
3. Question interviewers
4. Respond to interview questions
5. Who is suited for self-employment

3. Manage Selection:

1. Identify essential skills needed by the organization
2. Identify employees with those essential skills
3. Evaluate employees performance
4. Performance records
5. Ensure selection criteria are consistently applied

4. Manage Dismissal:

1. Respect employees' personal worth
2. Keep initial conversations to 10 minutes
3. Guide employees to services for finding work
4. Provide information about benefit packages
5. Referr employees to out-placement services

5. Manage Outplacement:

1. Paid notice
2. Career placement services or consultants
3. On-site job listings around the country
4. On-site job placement services
5. Counselors and/or support groups

6. After it's over:

1. Meetings with remaining employees
2. Reassure remaining employees that their jobs are safe
3. Answer employee questions and/or concerns
4. Involve employees in planning
5. Focus on the future, learn from the past

Conclusion
You can improve organizational performance, quality and reputation - even when down-sizing and terminating employees. Well-planned downsizing can develop your company image, while avoiding angry employees, expensive lawsuits and family tragedies.

Systemic Solutions can dignify these transitions and assist departing employees, while promoting your organization as community-oriented. Successful downsizing motivates remaining employees, reduces legal costs, avoids excessive severance payments and will attract future employees.

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