As this article is being written, the economic news continues
to deal with a struggling economy and with companies continuing
to reduce their work forces. Too often this process is
done by cutting in general, such as mandating, say, a 10 percent
reduction in all departments or closing entire departments
without considering other viable alternatives. Since it may be
necessary for you to downsize your company, whether in
response to economic conditions or in response to structuring
your company to be leaner and faster, here are some thoughts
and guidelines that may prove helpful.
Make the Appropriate Decisions. What is the targeted payroll
cost reduction? Which personnel or departments will be eliminated
or reduced! In what order and in what time frame will
the downsizing begin, continue and end? Consider how you
will determine those to be released. Here are some criteria: Performance,
merit ratings, seniority, veteran preference, future
needs, early retirement.
Here are some other cost-saving options that might pertain
even after downsizing is complete: Eliminate part-time staff,
reduce hours and short-term leaves; make reassignments and/or
transfers, offer leaves of absence and forced vacations.
Rationale. Develop a clear, logical statement of the situation
and why downsizing is necessary Tie this into positive aspects
of organizational survival and effectiveness. Inform everyone
about what is going to occur and why, how it will happen, when
it will start and when it will end, the options available to affected
employees and benefits to the organization, such as survival
and effectiveness.
Implement. Follow the timetable, and provide followup, contact
and feedback.
Provide support such as out-training services and outplacement
services. Help employees learn how to locate other positions.
Reassure employees not affected when the downsizing is over,
and keep them at full employment. These activities strengthen
public image and can contribute to better labor relations.
Openness. Management must develop the capacity to encourage,
and be receptive and open to, input from employees. Information
must be shared openly throughout the organization
Congruity. Employees must have confidence in the information
received. All levels of management must deliver the same
message.
Autonomy. Management must trust their subordinates to use
their judgment in implementing their responsibilities in the
downsizing.
Feedback and finality. Management must be willing to make
decisions with input from subordinates, and yet must be able
to stand by their decisions once made.
Shared values. There must be a common understanding of the
organizations vision, mission and goals and the need for the
organization to survive so that the majority of employees survive
as well.
Failure to properly approach and deal with downsizing often
results in staff suspicion of management motives and actions,
skepticism of management’s plans and programs, increased territoriality
on the part of employees, departments or units, institutionalized
resistance to any change even if beneficial, and
development of “We/They” attitudes.
About the Author
L. Douglas Mault is president of the Executive Advisory Institute,
Yakima, Wash.
