Friday, September 23, 2011

How to Maintain Employee Motivation and Commitment after a Layoff

More and more companies are forced to lay off employees as the world economy continues to tumble.

Downsizing the business is a fast and effective way to reduce expenses, maintain profitability, and ensure the continuation of the business. But how you lay people off will a have long-lasting effect on those who remain with your company. Poorly handled decisions today can impact productivity and morale now and for a long time in the future.

Employees who stay with your company after a layoff often have confused emotions as they wrestle with the changes brought about by the reorganization. A paradox of conflicting loyalties stirs within them. Feelings of concern for former colleagues are juxtaposed with feelings for oneself. Previous feelings of loyalty to the company now conflict with loyalty to oneself. Employees question their previous work effort as they worry about whether they have a future with your enterprise.

While employees are going through these internal emotional struggles several other factors impact their future motivation and commitment.

Invariably surviving employees are expected to take on more work. Normally they are asked to do more work for the same pay or, worse yet, for less pay because of the company’s declining financial position. Since most layoffs are undertaken to cut costs, the downsizing often results in salary freezes for those who stay with the company. Moreover, some former motivators may also have been eliminated, such as company cars, travel and entertainment budgets, or professional development expenses. Finally, there may be less career advancement opportunities after a downsizing, making one’s future with the organization less certain.

Importance of Open Communication

The most important thing you can do to maintain morale and commitment after a layoff is to openly communicate with your employees.

Many managers are hesitant to share information with employees after a reorganization, particularly if the information is of a negative nature. However, your workers expect you to bring up all relevant issues in a straightforward manner, especially any negatives that might impact them directly. Avoiding these issues sends a message that either the issues are not important or, worse yet, the employees themselves are not important enough for you to share information with them.

The absolute worst thing you can do after a layoff is to send a message to remaining employees that they are not important. The more information you share with your employees during difficult economic times, the more they will feel you are concerned about their future. Likewise, the more employees feel you are concerned about their future, the more they will be concerned about the future of the business.

One critical thing to remember during a reorganization is that when people lack real data, they make up their own. Usually what people make up is far worse than reality. You can stop the rumor-mills that typically run rampant during a downsizing by being up front with the employees.

There are three crucial objectives you should have for your communication with employees during a reorganization.

First, you should do everything you can to mitigate the usual fears employees have when an organization is in transition.

Second, you should view every employee contact as an opportunity to build rapport with your workers.

Finally, your message should be formulated and presented so well that it focuses the energy and effort of the employees where you want it – on the customers – rather than on the company. What you say must eliminate from the employees all doubt, worry, gossip, wondering, and hesitancy.

At the conclusion of your message you want the workers worrying about their work, not worrying about their jobs or their employer. To do this you must understand the psyche of the employees and address the concerns they worry about the most during a layoff.

What Employees Want to Know

Invariably there are five predictable questions employees will have during a company downsizing. Although the specific verbiage of the questions highlighted here may not be exactly how the employees would articulate their concerns, the answers to these questions will address most of the issues employees will be wondering about. When you know these questions in advance you can target your communication to address the employees’ concerns before they come up. This in turn shows the workers you are empathetic to their needs, thereby building rapport between you and them.

Your answers to five critical questions will determine whether surviving employees will remain motivated and loyal to a company after a layoff.

The questions are: 1) Was the downsizing integral to the business’ overall strategy to survive?; 2) What does the future look like for the company?; 3) Is there still a place for me in the company with continued opportunities for advancement?; 4) Will those employees who are let go be treated fairly?; and 5) What is expected of the employees who remain at the company after a downsizing?

Integral to Business Survival

Employees want to know that the reorganization is not random or whimsical. Remaining employees have to be assured that the layoffs were necessary and not just done arbitrarily. A clear business need for the change must be supported by facts and figures. Employees need to know and understand the business reasons for the layoff and what the consequences would have been had the layoffs not occurred. The layoffs must be logically tied to the future business needs of the company and should have only affected those departments that were non-productive or no longer essential to the business.

At the same time employees must perceive there is a clearly identified and well-thought-out strategy to return the company to stability and long-term profitability. They need assurance that by downsizing and taking hits now the company will be much better off in the future. Perceptions of unnecessary or illogical reductions in staff cause employees to lose confidence in your ability to protect the future viability of the company. Fears of future layoffs persist when employees see no clear linkage between the reduction in staff and management’s plan to return the company to profitability.

You must be adept at understanding and explaining the business imperative for the change. Employees can buy-in to a reduction in staff, even the elimination of their own positions, given a reasonable business need for doing so. Managers who want to motivate surviving employees must take workers into their confidence and clearly outline the logic behind the downsizing decision.

Outlook for the Future

In a down economy when layoffs are necessary the future is often unknown. People generally are afraid of the unknown. To alleviate their own fears, the remaining employees will latch on to any information they can get about the company’s future plans to return the business to profitability. This is why rumors run rampant during a reorganization. It is the natural human need for information – any information – even if it is false. Surviving employees will remain fearful about the future until they have information that will assuage their fears.

Before addressing the employees you should have a clear vision of where you want to take the company in the future. Leaders who possess and can communicate a confident view of the future can infuse confidence within surviving employees by sharing their vision. Employees are more apt to follow leaders who have a clear view of what the future entails.

Although you may not have a clear view of the future when economic conditions have not yet stabilized, you must share what you know, assume or hope for the future. You must help employees to see the future themselves. Let employees know what they can expect to see and experience in the months ahead. Explain what changes or non-changes the company anticipates over the next one, three, six or twelve months. Share your plans. Be as open, specific and precise as possible. Any hesitancy or waffling from you will damage the confidence and commitment you will receive from your employees.

Opportunities for Advancement

Surviving employees want to know what their future prospects are with the newly reorganized company. Since traditional career paths may have been eliminated, new opportunities for “advancement” must be created. These typically entail such things as compensation for performance rather than position, greater autonomy and decision making authority, or opportunities to improve one’s “employability” through exposure to more aspects of the business. Employees in the new organization will want to work on projects that develop their skills while achieving company goals.

You need to identify the advancement opportunities that will be in play after the reorganization prior to implementation of the change. Nothing demotivates employees faster than to have career options for which one has been striving to attain suddenly become unavailable because of elimination of positions or layers within the company.

Treatment of Downsized Employees

Surviving employees are greatly influenced by how downsized employees were treated when they were let go. Surviving employees want to be assured, should it happen to them, that laid off employees were “cared for” through severance pay, outplacement services, ample advanced notice, and fair and consistent treatment throughout the reorganization. Employees predict how they will be treated in the future based upon how the company treated displaced employees in the past. You will be wise to remember that employees have a long memory when it comes to company reorganizations. They recall exactly what was said back when and who did what to whom. Be very careful when making decisions about how to treat downsized employees.

Expectations of Remaining Employees

Finally, although employees may not know they have this last need, and therefore generally may never articulate it, workers who stay with the company have an inherent desire to know: What is my charge?

Once employees have decided they want to stay with the company after a reorganization, they need clarity on what the company expects of them. What do you want them to do? Should they carry on as they have been doing in the past, or should they do something different? What are their new marching orders?

If you expect employees to change, you must tell them so. If you expect employees to continue doing what they have been doing in the past, you must tell them this also. Never assume that the employees will conclude what you want them to conclude. You must tell them.

After you have gone through a downsizing you must give the surviving employees their charge. You should share with your employees the things that matter most in the new business model. Tell them:

• What it takes to win in the new company

• What they can do to contribute to the success of the company, as well as to their own success

• What is in it for them if they do contribute to the future success of the company

People need hope in the future. Employees need to know that their future will once again be bright as they work to return the downsized company to profitability. Everything you do during a reorganization must be designed to build hope, not destroy it. When you answer point-by-point every question outlined in this article, you mitigate the fears of the employees, you build tremendous rapport with them, and you refocus their energy and effort on the future success of the business. You get people focused on the customers instead of focused on themselves. §

Innovative Management Group is adept at bringing about successful organizational change, particularly on how to maintain employee commitment after a downsizing. We know how to engage your employees at every level of your company and get them to commit to the new organizational conditions. Please call us to learn how we can help focus your employees on the things that matter most.

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