How do I maintain morale while downsizing?

Citation

Vreede, P. (2009), "How do I maintain morale while downsizing?", Strategic HR Review, Vol. 8 No. 3. https://doi.org/10.1108/shr.2009.37208cab.005

How do I maintain morale while downsizing?

Article Type: Q&A From: Strategic HR Review, Volume 8, Issue 3

Leading industry experts answer your strategic HR queries

We all know that the word “redundancy” creates unsettling emotions. The new economic reality facing directors is that their organization may need to loose a proportion of its employees in the foreseeable future. The process of dismissing employees has become much more complex and takes much longer than in the past as consultation has become an intricate art form, requiring skill and expertise so that it is deemed fair by Tribunals. Therefore, the whole process of a “Headcount Reduction Program” (HRP), from the first board meeting to employees leaving, can take many months.

During this extended time, there is likely to be a pervading air of lack of control and insecurity among employees and managers. These mixed feelings include veiled anxiety, detachment, mistrust and caution, particularly of the organization’s leaders. However long the HRP process, the organization has to continue to operate and maximize its productivity, even while people feel unsettled. Harvard Business School’s John Kotter and global manager Holger Rathgeber provide advice on how to bring about orderly change in their 8-step process guide (Kotter and Rathgeber, 2007).

Most directors I talk to know what they should do and are aware of good practice during a HRP but somehow good sense seems to desert them at this crucial stage. Possibly embarrassment, fear or their own feelings of uncertainty seem to keep them away from influencing the people they most need to keep working with a clear purpose. Being seen on the floor and a varied communication program are required while showing optimism and hope. This maintains morale. Care and compassion are not perhaps the usual skills required in the director’s job but this is an opportunity to show that consistent “motivation of the troops” can be demonstrated by management.

Keeping people informed

During the uncertain times of a HRP everyone looks to directors and managers for leadership and they need to be able to create a feeling that there is a solid plan and that it has been well explained. People will work hard and still feel committed if the ambiguity and indecision is minimized so that the future is not all gloom. A sure way for organizations to loose the goodwill of their people is to be seen to be unfair. It is vital to keep explaining why the selection criteria were chosen and how they relate to everyone. This will be endlessly discussed informally, as well as formally during the consultation process with representatives and individuals.

Organizations that come through a HRP successfully are those where directors understand the legal processes, repetitively explain the details of the HRP and can describe the need for the new organization structure in layman’s terms. Different management members being available to answer questions over several weeks demonstrates leadership and often generates a large element of goodwill and re-engagement. People are more likely to buy in to what is going to happen, even if they are personally likely to leave. If the consultation period is used wisely, not only will the reasons for the proposed redundancies be discussed but the time can be used to brainstorm new ways of working. Morale can be lifted if everyone is given the opportunity to contribute their pet ideas and hates. Conversely, employees who feel ignored or cheated have been known to ignore their company and go out on strike.

Looking to the future

As the time arrives for employees to leave, directors may be tempted to delegate the exit process to “people who know how to sort out the admin”. A few warm words with a personal handshake in the preceding days by a senior member of staff and a letter of thanks from the MD will take much of the sting out of the leaving.

Remaining employees will also appreciate such gestures of goodwill. As the HRP winds down, celebrating the new (smaller) company and its achievements can help the survivors to understand the new reality and help create a new certainty and vision. It will take many meetings and different communication methods to get across a clear vision of the future. A robust redundancy program can be re-invigorating for organizations. For it to be truly successful takes commitment and energy by all the directors and they need to share a common purpose of maintaining morale.

Pose your questions

Please send your HR queries to shr@emeraldinsight.com (100 words max). If you’d like to suggest an expert to answer your query, please include relevant contact details where possible.

Peter Vreede

About the author

Peter Vreede’s career as a HR professional spans 25 years in European, USA and Japanese companies. He established his own management consultancy, People Partners Associates Ltd, advising initially on organization development and facilitating high-level corporate change. More recently he set up a separate specialist division, Redundancy Assist, supporting companies through the complex process of making their employees redundant during a company restructure. Peter Vreede can be contacted at: info@redundancyassist.co.uk