Downsizing companies should be fair

In today’s economy you would be hard-pressed to meet someone who hasn’t been affected in one way or another by layoffs or downsizing in a company. It goes without saying the process can be extremely difficult and quite painful for all involved. I would tell you as a business leader it not only affects your employees, but also your customers, and ultimately your business.

In a recent study conducted by Temple University, it was determined that many employees who were laid off would actually return to that employer. If you take care of them, they will take care of you, even if they no longer work for the company. This helps reinforce the basic principle behind employees feeling appreciated.

The study showed that “45 percent of layoff victims would return to work for their former employer.” Fairness is key. If perceptions from layoff victims are negative, this could have a grave effect on current employees, as well as the company image. Treat layoff victims with dignity and respect, and your current employees will see this and appreciate it.

Why do we work? Simple — a paycheck. But according to American psychologist Abraham Maslow’s theory of the hierarchy of needs, humans are motivated by self-fulfillment and personal change through self-growth. The basic principle is that you must fulfill a bottom level of need before you can go to another level in need.

The bottom need emphasizes the basic needs of everyday life such as eating and sleeping and as you move up different levels on the theory, you are increasing amounts of “sense of worth” until you have self-actualization to maintain positive human behavior. So it goes beyond just getting a paycheck.

Many individuals take pride in what they do, whether at home or at work. Employers can be great and realize increased productivity if they take the time to understand what motivates their employees and put that information to good use.

Employees are more likely to exceed productivity standards if they feel valued within their organization. A crucial factor to organizational success is employee s’ understanding of the mission and how they fit into the overall picture.

We are fortunate in Las Vegas to have one of the most sought-after places to work: Zappos. The online shoe and apparel company has set the standard for many other employers. Although its open cultural philosophy may scare some employers, success doesn’t lie and some of its basic operating principles should be researched by others.

In Tony Hsieh’s book “Delivering Happiness,” the Zappos CEO says creating a corporate culture with happiness at its center is a powerful model for its business as well as significantly increasing each employee’s personal happiness. Makes sense. If you are happy at work and doing what you love to do, why wouldn’t you be happy?

It is this happiness from employees that ultimately radiates to the customer and fellow employees. The Zappos philosophy of “wowing” the customer is understood by every employee, and it is from this corporate culture of happiness that the company even offers money to new-hire employees to leave the organization if they are not happy.

As a human resource professional, I believe human resource departments have two types of clients and customers. We have the customers who purchase our products and we have our internal customers: our employees. I believe both are essential to a well-run organization.

Just like taking care of customers, it is imperative to take care of all employees to achieve what you want in the future: a successful organization. When building a foundation of loyal customers, extending that same effort to your employees is just as crucial. When your employees are loyal, it is much easier to effectively incorporate change.

Most people recoil at the idea of change. However, change is omnipresent. It is an essential part of any successful organization. It is vital to have a well-thought out and detailed communication plan to effectively execute change management within an organization. How you communicate that change can make or break the company.

Someone once told me everyone is striving to become No. 1 in their field and if you are currently No. 1, don’t forget that someone else is trying to make you No. 2. Businesses everyday are being “bumped” from that much coveted spot.

How do you contend with being usurped from the top or how do you become No. 1? Change. Change is an inevitable piece when holding your top spot in the market place. Successful businesses, such as Zappos and FedEx, do this and are constantly reinventing themselves to maintain their position. This change is an inevitable part of any successful business.

During times of significant change comes uncertainty and fear. Planning for the future and the effect to the business is a delicate balance. During any major business change, employees can feel a magnitude of emotions, such as being overwhelmed, doubt, insecurity, anxiety and many other ill feelings. It is always a challenge to ease these feelings because of how they will affect the business.

Good leaders listen to their employees and use change management to help fine-tune communication plans. Although everyone handles change differently, if communicated effectively and appropriately, potential damages can be mediated and change can lead to a more productive work environment — even if layoffs are required. There are multiple stages to change and not all are good.

Downsizing is challenging to say the least. On the surface head count and salaries appear to be the simplest way to save money. As a human resource professional, I would challenge business leaders to look at other avenues to save money because downsizing is a complicated and potentially damaging process.

There are multiple factors in determining if downsizing or layoffs are appropriate. If a tough business decision is made and layoffs are in the future of an organization, a key to the process is making sure all employees are taken care of. This includes current employees who remain at the organization as well as those who were just let go or are about to leave.

Do employees understand the need behind layoffs? In a good organization the communication plans are well-defined and clearly state the company’s need for the downsizing.

Most states do not require organizations to offer any layoff benefits to former employees. Severance benefits and other items, such as outplacement services, paid benefits coverage, to name a few, are normally done at the will of the organization and are not legally required.

Pro-employee organizations empathetically recognize the need to take care of their current and previous employees because they too can become customers who may have an effect on the organization in the future. Providing severance or outplacement services, although not legally required, are the right things to do.

Unfortunately, I have been part of a large organizational downsizing and as a human resource professional this was not an enjoyable part of my job. It is painful to know that the decisions you are making affect the lives of people who had become a part of the organization’s family.

In my experience to help ease the announcement of the layoffs, downsized employees should be treated fairly, with compassion and with a great deal of care. I was sure to let employees know that layoff decisions were not taken lightly.

Layoffs and change management became a large portion of my job. I was personally affected by an organizational layoff when my employer dwindled down to a small size from all of our reorganizational structuring.

As someone who was affected from a reorganization of divisions, I found that how you treat downsized employees is essential to your perception of that organization. I was laid off, and it hurt at the time, but the manner in which the organization handled that process has maintained a sense of loyalty in me years later. I still speak highly of my previous employer and I am one of the 45 percent who would return to work for them in a heartbeat.

I understood the business reasons that led to my layoff and now can look back years later and say I am in a better place because of it. There were many colleagues and friends left behind to deal with the aftermath of the reorganization .

Also to be considered are the survivors of a downsizing. I would challenge employers to consider those left behind and be careful not to adopt the mentality of “you should just be happy to have a job.”

Current employees affected by an organizational downsizing will tell you they feel overworked, underappreciated and just plain exhausted. The work distribution of an organization that recently downsized becomes a heavy burden on the survivors.

Employees also carry around a consistent fear that additional layoffs may happen . I myself have recently been asked, “How many hats can you wear at one time?” I had to describe how much work I can take on.

Why do companies think this has to be the case? Sure, the work needs to get done and the need to run lean business operations is understood, but at what cost?

Running lean business operations comes with challenges, concerns, additional work loads and a sharper focus of keeping the business afloat. It is imperative that the wounded organization not lose focus on maintaining the trust it has worked so hard to build with its current employees. Even if employees say they are fine, employers must realize that deep down relationships have been altered and damaged.

Companies need to invest time and energy into those who have survived. This will help with productivity, boosting morale and start to repair the damage by building back trust.

I agree, more often than not, if you take care of your employees they will have a desire to come work for you again. This is a potential resource that human resources may have to tap or use in the future.

Again, the greatest needs are the need to feel appreciated and the need to have a feeling of worth.

Think about what an organization can do to maintain a sense of loyalty with employees, even if they no longer work for the company. On a daily basis, huge numbers of employees leave organizations. Is it for the money? Is it because of feeling underappreciated? Or is it because they feel undervalued?

A favorite question I ask managers is: Why do most employees leave an organization? The majority will tell you it is the money.

The truth is when employees leave an organization, it is because of the lack of appreciation they have felt. This can result in the loss of company’s top talent and could be detrimental to an organization’s future.

Again, communication is key. You will naturally have some employees who won’t understand but explanations should be given. There are numerous things organizations can do to show appreciation: Offers of severance benefits and, if available, some type of outplacement service for displaced workers are great starting points.

Companies don’t want employees to hold grudges. This also should involve remaining employees. Downsizing is an extremely challenging change to any business.

Although layoffs are done for business needs, businesses need to remember all of those who are impacted.

Michelle Scafidi is a senior professional in human resources.

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