Co-written by Karin Otto and Dana Lemelin of Gevity HR

Downsizings are not easy for companies to go through, but they are a fact of corporate life. Low morale due to downsizings can cause long-term damage to the company, including decreases in productivity, loss of knowledge within the organization, or even an exodus of key staff. Fortunately, there are things that you, the manager, can do to maintain good morale and productivity during layoff periods.

Pre-Layoff Planning

State Your Purpose.
Make sure you and your fellow managers are in agreement about the short-term and long-term objectives of a layoff. Is the company changing direction and thus in need of employees with new skills? Is money tight right now? Are certain geographic locations no longer part of the company's long-term plans? Agreeing on the desired outcomes of the layoffs will enable you to most efficiently make decisions about who will stay and who needs to go.

Come up with Employee Options.
Before jumping into downsize-mode, consider other ways to manage employees. Perhaps offering employees voluntary retirement packages or giving them opportunities to transfer to other locations would achieve a portion of your objectives.

Protect Yourself.
In order to protect the company, be sure to brush up on your company's non-discrimination policy as well as any applicable federal, state or local laws. Use your findings to make certain that your layoffs are legally compliant. Remember that race, age, gender, color, religion, national origin, veteran status, disability, and any other characteristics protected by law should not affect your decisions. This will ensure that your layoff decisions are objective and discrimination-free. It is also a good idea to put your layoff criteria in writing in the event that terminated employees claim wrongful termination in the future.

You can provide additional protection for your company by offering severance packages in return for signed waivers releasing any claims against the company. Make sure you consult with a lawyer before handing out severance letters, as you want to make sure your company is adequately protected in your city and state.

Prepare Outplacement Services.
You may want to seek the services of an outplacement company that could provide your terminated employees with aid in finding a new job. Employees and ex-employees talk to one another. Communicating that the company is doing its best to help laid off employees can be very valuable in maintaining remaining employees' morale and trust as they watch their co-workers and friends re-enter a confusing and daunting job-search environment.

Communicating the Layoffs.

A good communications plan is the next step in effectively managing morale in a downsizing environment.

Give Fair WARNing?
First, determine whether you will provide advance notice or not. Under the federal Worker Adjustment and Retraining Notification Act (WARN), some employers are required to provide 60 days notice to employees of forthcoming plant closings or mass layoffs. Whether you are legally required to give notice or not, it is a good idea to consider the good will your company will receive from giving employees and their communities time to prepare for layoffs.

If you choose to give advance notice, set a date for the layoffs and stick to it — wavering on decisions sends confusing messages to employees and will reflect poorly on the company's leadership.

Announce the News Properly.
When announcing a layoff, you must act quickly. According to Bernadette Kenny, Executive Vice President of the outplacement firm Lee Hecht Harrison, "Once the announcement is made, the cuts should be implemented as swiftly as possible. Organizations who do not act quickly lose credibility with employees, and performance and retention suffer."

Formulate a simple, clear and timely communication in the form of a letter (or email) from the top manager/owner that can be consistently reiterated or supported by other managers. This communication should include the following points (followed by examples):

• Why the company is downsizing and what the company hopes to achieve as a result:
  • "We are looking to make tough decisions to keep the company on course during rough economic times…"
    
  • "As our company makes the bold move to focus on a new strategic direction, we find it necessary to review our current team and make sure we have the appropriate skill sets for the challenges that lay ahead…"
• What objective criteria were used to determine who will be/have been terminated:
  
  • "Decisions will be based on the following criteria: (specific) job knowledge, skills, abilities, etc…"
• What is in it for the employees who are terminated, as well as for those remaining:
  • "For those of you who are let go, this is an opportunity for you to revise your career and life goals…"
    
  • "For those of you who have been chosen to remain with the company, this is an opportunity for you to step up to the plate, take on new responsibilities, learn new skills…and boost your career development and chances of promotions…."
• How remaining employees will be supported as they prepare to take on additional responsibilities as well as what those new responsibilities will be:
  
  • "The following managers have been selected to work with you to delineate your new responsibilities…you will be meeting with your manager this afternoon to discuss your new role…"
• What are the company's expectations of employees going forward:
  
  • "As the company changes its strategic direction, we expect all employees to exhibit professionalism, provide clients with world-class customer service, maintain sales quotas exceeding X, etc…."

In this communication it is important to be honest and "tell it like it is." People respect your efforts to communicate what's going on behind the scenes — good and bad. Without upfront communications employees will talk, create more worry among employees, experience lower morale and ultimately become distracted from time spent being productive in their positions.

Post-Layoff Best Practices.
In the post-layoff period, continue open and honest communications to employees. Even with the best plans, layoffs can lead to confusion and uncertainty among remaining employees.

Establish a Dialogue.
One good way to boost morale during this phase is to give employees opportunities to get involved in meetings that help plan for the new needs of the organization. Soliciting suggestions as to how to make things work better with the existing staff and resources can benefit you as much as your employees. In some cases you may not be able to implement an idea, but the simple act of acknowledging employees' contributions will establish and maintain open lines of communication. Listening to what someone has to say can have as much effect on morale as on the actual process itself of changing an organization.

Establish New Goals.
Remember to communicate deliverables and performance measures. Many employees don't even know they are being resistant to change. Give them specific direction — i.e., examples of work that is acceptable and valued — and then give them constructive and positive feedback as needed.

Recognize and Reward.
In order to maintain momentum in your organization towards reaching new goals and meeting expectations, remember to maintain a recognition program — even in tough economic times. The recognition — not necessarily the physical or monetary reward — is what counts!

The following are some examples of ways to reward, recognize and ultimately boost morale during tough, post-layoff times:

• Remember that a simple "Thank you" or "Good job" can go a long way
  
• Organize pizza luncheons among teams
  
• Create an "Employee of the Month" program
  
• Promote deserving individuals to new positions of leadership
  
• Publicly recognize great performance
  
• CC executives on emails to deserving employees recognizing them for outstanding performance
  
• Organize company movie or bowling nights
  
• Hang inspirational posters in the office

Be a Role Model.
Finally, remember that you are a leader! Your actions and words are being closely monitored. If you appear worried and deliver conflicting messages, your employees will be worried and confused. If you exhibit your confidence in the new direction of the company and maintain consistent messages, your employees will become confident about their own career paths and develop trust in the organization.

Keep the Program Going Long After the Fact.
Efforts you make to boost morale should not fade away as the events of downsizing move further into the past. While downsizing is an unpleasant task for any organization, it can prove to be a smart step in the company's future success. Keep the lines of communication open. Allow continued employee participation in future planning as the company is faced with new challenges. Use this opportunity to create a new culture that will strengthen the business rather than perpetuate more of the same only a few months later.

Gevity HR provides outsourced management solutions in benefits administration, payroll processing and legal compliance.

To learn more about workplace issues in your area, contact your local Ajilon Pinstripe branch or visit them at ajilonpinstripe.com.

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