HR Article Analysis

Downsizin" rel="nofollow">ingOne outcome of downsizin" rel="nofollow">ing must be to preserve the organization's in" rel="nofollow">intellectual capital. Used sparin" rel="nofollow">ingly and with plannin" rel="nofollow">ing, downsizin" rel="nofollow">ing can be an organizational lifesaver, but when layoffs are used repeatedly without a thoughtful strategy, downsizin" rel="nofollow">ing can destroy an organization's effectiveness. Read the article “Downsizin" rel="nofollow">ing With Dignity: You Can Downsize With Care—for People and the Busin" rel="nofollow">iness” by Alan Downs. http://humanresources.about.com/od/layoffsdownsizin" rel="nofollow">ing/a/downsizin" rel="nofollow">ing.htm (see 2nd page) This article presents an Executive Summary regardin" rel="nofollow">ing how to treat people durin" rel="nofollow">ing a downsizin" rel="nofollow">ing, in" rel="nofollow">includin" rel="nofollow">ing both the people who leave and the people who remain" rel="nofollow">in. Throughout the article the author mentions different considerations durin" rel="nofollow">ing the downsizin" rel="nofollow">ing process and the impact on the remain" rel="nofollow">inin" rel="nofollow">ing employees. Utilizin" rel="nofollow">ing the in" rel="nofollow">information presented in" rel="nofollow">in this module, summarize an effective downsizin" rel="nofollow">ing, citin" rel="nofollow">ing your research on employment law, readin" rel="nofollow">ings, and your experience. In your article analysis: a. Briefly summarize the article (1-3 paragraphs). b. Identify considerations for the downsizin" rel="nofollow">ing process. c. Explain" rel="nofollow">in the impact of downsizin" rel="nofollow">ing on employees remain" rel="nofollow">inin" rel="nofollow">ing with the organization. d. Outlin" rel="nofollow">ine the requirements for an effective downsizin" rel="nofollow">ing, based on readin" rel="nofollow">ings, research, and your experience. Guidelin" rel="nofollow">ines The article analysis must follow these formattin" rel="nofollow">ing guidelin" rel="nofollow">ines: double spacin" rel="nofollow">ing, 12-poin" rel="nofollow">int Times New Roman font, one-in" rel="nofollow">inch margin" rel="nofollow">ins, and APA citations. Page length requirements: 3-5 pages, not in" rel="nofollow">includin" rel="nofollow">ing cover page and references. Downsizin" rel="nofollow">ing With Dignity You Can Downsize With Care - for People and the Busin" rel="nofollow">iness By Alan Downs in" rel="nofollow">in Busin" rel="nofollow">iness: The Ultimate Resource** Updated April 29, 2015. Executive Summary • Downsizin" rel="nofollow">ing or doin" rel="nofollow">ing layoffs is a toxic solution. Used sparin" rel="nofollow">ingly and with plannin" rel="nofollow">ing downsizin" rel="nofollow">ing can be an organizational lifesaver, but when layoffs are used repeatedly without a thoughtful strategy, downsizin" rel="nofollow">ing can destroy an organization's effectiveness. How you treat people really matters - to the people who leave and the people who remain" rel="nofollow">in. • One outcome of downsizin" rel="nofollow">ing must be to preserve the organization's in" rel="nofollow">intellectual capital. • How downsized employees are treated directly affects the morale and retention of valued, high-performin" rel="nofollow">ing employees who are not downsized. • Downsizin" rel="nofollow">ing should never be used as a communication to fin" rel="nofollow">inancial centers or in" rel="nofollow">investors of the new management's tough-min" rel="nofollow">inded, no-nonsense style of management - the cost of downsizin" rel="nofollow">ing far outweighs any benefits thus gain" rel="nofollow">ined. Introduction Make no mistake: downsizin" rel="nofollow">ing is extremely difficult. It taxes all of a management team's resources, in" rel="nofollow">includin" rel="nofollow">ing both busin" rel="nofollow">iness acumen and humanity. 5 Best Places to Retire No one looks forward to downsizin" rel="nofollow">ing. Perhaps this is why so many otherwise first-rate executives downsize so poorly. They ignore all the signs poin" rel="nofollow">intin" rel="nofollow">ing to a layoff until it's too late to plan adequately; then action must be taken immediately to reduce the fin" rel="nofollow">inancial drain" rel="nofollow">in of excess staff. The extremely difficult decisions of who must be laid off, how much notice they will be given, the amount of severance pay, and how far the company will go to help the laid-off employee fin" rel="nofollow">ind another job are given less than adequate attention. These are critical decisions that have as much to do with the future of the organization as they do with the future of the laid-off employees. So what happens? These decisions are handed to the legal department, whose primary objective is to reduce the risk of litigation, not to protect the morale and in" rel="nofollow">intellectual capital of the organization. Consequently downsizin" rel="nofollow">ing is often executed with a brisk, compassionless efficiency that leaves laid-off employees angry and survivin" rel="nofollow">ing employees feelin" rel="nofollow">ing helpless and demotivated. Helplessness is the enemy of high achievement. It produces a work environment of withdrawal, risk-averse decisions, severely impaired morale, and excessive blamin" rel="nofollow">ing. All of these put a stranglehold upon an organization that now desperately needs to excel. Avoidin" rel="nofollow">ing the Pitfalls of Downsizin" rel="nofollow">ing Ineffective methods of downsizin" rel="nofollow">ing abound. Downsizin" rel="nofollow">ing malpractices such as those that follow are common; they are also in" rel="nofollow">inefficient and very dangerous. Allowin" rel="nofollow">ing Legal Concerns to Design the Layoff Most corporate attorneys will advise layin" rel="nofollow">ing off employees on a last-hired, first-fired basis across all departments. The method for downsizin" rel="nofollow">ing that is most clearly defensible in" rel="nofollow">in a court of law, for example, is to lay off 10% of employees across all departments on a seniority-only basis. This way no employee can claim that he or she was dismissed for discrimin" rel="nofollow">inatory reasons. Furthermore, attorneys advise again" rel="nofollow">inst sayin" rel="nofollow">ing anythin" rel="nofollow">ing more than what's absolutely necessary to either the departin" rel="nofollow">ing employees or the survivors. This caution is designed to protect the company from makin" rel="nofollow">ing any implied or explicit promises that aren't then kept. By strictly scriptin" rel="nofollow">ing what is said about the layoffs, the company is protectin" rel="nofollow">ing itself from verbal slips by managers who are themselves stressed at havin" rel="nofollow">ing to release valued employees. This approach may succeed from a legal perspective, but not necessarily from the larger and more important concern of organizational health. First, layin" rel="nofollow">ing off employees by a flat percentage across different departments is irrational. How can it be that accountin" rel="nofollow">ing can cope with the same proportion of fewer employees as human resources? Could it be that one department can be externalized and the other left in" rel="nofollow">intact? The decision of how many employees to lay off from each department should be based on an analysis of busin" rel="nofollow">iness needs, not an arbitrary statistic. The concept of layin" rel="nofollow">ing off employees strictly on the basis of seniority is also irrational. The choice of employees for a layoff should be based on a redistribution of the work, not the date the in" rel="nofollow">individual employee was hired. Sometimes an employee of 18 months has a skill far more valuable than one with 18 years' seniority. Give as Little Notice as Possible Out of fear and guilt many executives choose to give employees as little forewarnin" rel="nofollow">ing as possible about an upcomin" rel="nofollow">ing layoff or downsizin" rel="nofollow">ing. Managers fear that if employees know their fate ahead of time, they might become demoralized and unproductive -- they may even sabotage the busin" rel="nofollow">iness. However, there is no documented evidence that advance notice of a layoff in" rel="nofollow">increases the in" rel="nofollow">incidence of employee sabotage. The lack of advance notice about downsizin" rel="nofollow">ing, however, does dramatically in" rel="nofollow">increase mistrust of management among survivin" rel="nofollow">ing workers. Trust is based on mutual respect. When employees discover what has been brewin" rel="nofollow">ing without their knowledge or in" rel="nofollow">input (and they will when the first person is let go), they see a blatant disrespect for their in" rel="nofollow">integrity, destroyin" rel="nofollow">ing trust. By not givin" rel="nofollow">ing employees in" rel="nofollow">information that could be enormously helpful to them in" rel="nofollow">in plannin" rel="nofollow">ing their own lives, management in" rel="nofollow">initiates a cycle of mistrust and helplessness that can be very destructive and require years to correct. Afterward Act as if Nothin" rel="nofollow">ing Happened Many managers believe that after a layoff, the less said about it the better. With luck, everyone will just forget and move on. Why keep the past alive? The reality is, survivin" rel="nofollow">ing employees will talk about what's happened whether the management team does or doesn't. The more the company tries to suppress these discussions and act as if nothin" rel="nofollow">ing has happened, the more subversive the discussion becomes. Remain" rel="nofollow">inin" rel="nofollow">ing employees will act as a consequence of what has happened regardless of whether the management does. Recovery from a layoff is greatly hastened if managers and employees are allowed to speak their min" rel="nofollow">inds freely about what's happened. In fact, it can be a great opportunity for the team of survivin" rel="nofollow">ing employees to pull together and renew ties. When management refuses to acknowledge what has really taken place, it appears emphatically heartless, feedin" rel="nofollow">ing the employees' sense of helplessness. If management won't talk about it even after the fact, what else is it hidin" rel="nofollow">ing? "To downsize effectively you have to have empathy with the people who are losin" rel="nofollow">ing their jobs. " (Percy Barnevik) Downsizin" rel="nofollow">ing Effectively When faced with an organization that isn't functionin" rel="nofollow">ing at optimal efficiency and thin" rel="nofollow">inkin" rel="nofollow">ing that a layoff is needed, there are a few key prin" rel="nofollow">inciples to keep in" rel="nofollow">in min" rel="nofollow">ind. Observin" rel="nofollow">ing these prin" rel="nofollow">inciples won't completely elimin" rel="nofollow">inate the dangers of downsizin" rel="nofollow">ing, but they will help to avoid the common pitfalls of a poorly planned layoff. Is the Problem Too Many People or Too Little Profit? The critical first question to ask before any layoff is: Is the need for this layoff driven by havin" rel="nofollow">ing too many employees or too little profit? If it's too little profit, this is the first warnin" rel="nofollow">ing sign that your company isn't ready for a layoff. Usin" rel="nofollow">ing a layoff solely as a cost cuttin" rel="nofollow">ing measure is utterly foolish: throwin" rel="nofollow">ing away valuable talent and organizational learnin" rel="nofollow">ing by dumpin" rel="nofollow">ing employees only makes a bad situation worse. When your busin" rel="nofollow">iness lacks revenue, annihilatin" rel="nofollow">ing in" rel="nofollow">intellectual capital and thus reducin" rel="nofollow">ing the efficiency of remain" rel="nofollow">inin" rel="nofollow">ing resources as well as the potential for future growth is not the solution. If the answer is too many employees, then you've begun the process of a well-thought-out strategy for change. To legitimately determin" rel="nofollow">ine if you have too many employees, look at the organization's busin" rel="nofollow">iness plan, not its head count. What product and services will you be offerin" rel="nofollow">ing? Which of these products and services is likely to be profitable? What talent will you need to run the new organization? These questions will help you plan for the post-layoff future. These issues will enable a quick turnaround from the in" rel="nofollow">inevitably negative effects of downsizin" rel="nofollow">ing to positive growth in" rel="nofollow">in value and efficiency. What will the Post-Layoff Company Look Like? Havin" rel="nofollow">ing a clear, well-defin" rel="nofollow">ined vision of the company is imperative before the layoff is executed. Management should know what it wants to accomplish, where the emphasis will be in" rel="nofollow">in the new organization, and what staff will be needed. Without bein" rel="nofollow">ing directed accordin" rel="nofollow">ing to a clear vision of the future, the new organization is likely to carry forward some of the same problems that in" rel="nofollow">initially created the need for the layoff. Unfortunately, many managers underestimate the momentum of the old organization to recreate the same problems anew. Unless there is a clearly defin" rel="nofollow">ined, shared vision of the new company among the entire management team, the past will be likely to sabotage the future and create a cycle of repeated layoffs with little improvement in" rel="nofollow">in organizational efficiency. Always Respect People's Dignity The methods employed in" rel="nofollow">in many poorly executed layoffs treat employees like children. Information is withheld and doled out. Managers' control over their employees is violated. Human resource representatives scurry around from one hush-hush meetin" rel="nofollow">ing to another. How management treats laid-off employees is how it vicariously treats remain" rel="nofollow">inin" rel="nofollow">ing employees -- everythin" rel="nofollow">ing you do in" rel="nofollow">in a layoff is done in" rel="nofollow">in the arena, with everyone observin" rel="nofollow">ing. How laid-off employees are treated is how survivin" rel="nofollow">ing employees assume they may be treated. Why does this matter? Because successfully plannin" rel="nofollow">ing for the new organization will keep it goin" rel="nofollow">ing and improve its results. You must keep that exceptional talent, who are also the employees most marketable to other organizations. When they see the company treatin" rel="nofollow">ing laid-off employees poorly, they'll start lookin" rel="nofollow">ing for a better place to work, fearin" rel="nofollow">ing their heads will be next to roll. Respect the Law While it's important not to allow the legal department to design a layoff, it's nevertheless important that you respect the employment laws. In different countries such laws in" rel="nofollow">include entitlements tied to civil rights, age discrimin" rel="nofollow">ination, disabilities, worked adjustment, and retrain" rel="nofollow">inin" rel="nofollow">ing. These laws are important and should be respected for what they in" rel="nofollow">intend as well as what they prescribe -- or proscribe. If you have planned your lay-off accordin" rel="nofollow">ing to busin" rel="nofollow">iness needs, and not on head count or seniority, you should have no problem upholdin" rel="nofollow">ing the law. You will almost always fin" rel="nofollow">ind yourself in" rel="nofollow">in legal trouble when you base your layoff on factors other than busin" rel="nofollow">iness needs. Min" rel="nofollow">ini-cases: Good Examples Durin" rel="nofollow">ing the merger of BB&T Fin" rel="nofollow">inancial Corporation and Southern National Corporation, redundant positions were elimin" rel="nofollow">inated through the strategic use of a hirin" rel="nofollow">ing freeze. Hewlett-Packard implemented a so-called fortnight program in" rel="nofollow">in which all employees were asked to take one day off without pay every two weeks until busin" rel="nofollow">iness revenue in" rel="nofollow">increased. Min" rel="nofollow">ini-case: Bad Example Scott Paper conducted a layoff of 10,500 employees in" rel="nofollow">in the mid-1990s. In the years that followed Scott was unable to in" rel="nofollow">introduce any new products and saw a dramatic decrease in" rel="nofollow">in profitability, until it was eventually bought out by competitor Kimberly-Clark. Makin" rel="nofollow">ing it Happen Downsizin" rel="nofollow">ing successfully is immensely difficult. The followin" rel="nofollow">ing ideas can help to focus thin" rel="nofollow">inkin" rel="nofollow">ing for anyone considerin" rel="nofollow">ing such a move. • Treat all employees with respect. Communicate too much rather than withhold in" rel="nofollow">information. • Research applicable laws and follow the spirit of the legislation. • Afterward, give employees the psychological space to accept, and discuss, what has happened. Conclusion There are two important factors to keep in" rel="nofollow">in min" rel="nofollow">ind when plannin" rel="nofollow">ing a layoff: respectin" rel="nofollow">ing employee dignity and busin" rel="nofollow">iness plannin" rel="nofollow">ing. No one, from the mail room to the board-room, enjoys downsizin" rel="nofollow">ing; but when the need for a reduction in" rel="nofollow">in staff is unavoidable, a layoff can be accomplished in" rel="nofollow">in such a way that the problem is fixed and the organization excels. **Alan Downs is a management psychologist and consultant who specializes in" rel="nofollow">in strategic human resources plannin" rel="nofollow">ing and helpin" rel="nofollow">ing busin" rel="nofollow">iness executives reach their maximum potential. He has authored several books, in" rel="nofollow">includin" rel="nofollow">ing AMACOM's Corporate Executions (1995), the much-acclaimed expose on downsizin" rel="nofollow">ing, The Seven Miracles of Management (Prentice Hall,1998), and The Fearless Executive (AMACOM 2000). Downs is widely sought for in" rel="nofollow">interviews by newspaper, TV, and radio broadcasts. He has also written on management topics for numerous national newspapers and trade publications, in" rel="nofollow">includin" rel="nofollow">ing Management Review and Across the Board. Show Full Article Related • What Are the 9 Best Practices in" rel="nofollow">in Layoffs? • How to Nurture Employees Who Survive a Layoff • Want 7 Tips for Compassionate Layoffs? • Alternatives to Layoffs - Protectin" rel="nofollow">ing Your Investments