Resizing The Organization 29 docx

They will acknowledge the concerns of managers and employees to be terminated and then go through a step-by-step process of how the meeting will be conducted.. Its representatives explai

Managerial Considerations and Training

Some top executives assume that managers accept the necessity for resizing, agree with it, and are fully capable of delivering the un-pleasant message They are wrong on all counts Managers often have close ties with their employees They might not see the strate-gic necessity for planned terminations or may not be entirely sup-portive of the actions to be taken The company risks a “they made

me do it” attitude that can be conveyed to the affected employees

It is important that managers buy into the reasons behind the resiz-ing and the selection process Top management should not simply assume that this understanding and support are automatic The so-lution is gaining their support as to the logic behind the actions to

be taken and then train the managers in how to deliver the message Meeting with managers is important for a number of reasons Typically, managers are apprehensive about how to inform em-ployees that their jobs have been eliminated Furthermore, the managers are coping with organizational change, and it is stressful for them What is the impact on their positions and career paths? Upper-level management must communicate why the terminations are necessary and how the company will benefit in the long run If

an outplacement consulting firm has been retained, its consultants can be called on to conduct this meeting They will acknowledge the concerns of managers and employees to be terminated and then go through a step-by-step process of how the meeting will be conducted

This meeting has secondary advantages In addition to train-ing managers in how to notify employees of job loss, invariably there is a review of the entire process Issues such as security, tim-ing, communication, and possible problem situations surface De-cisions are made by the group At the conclusion of the meeting, all participants will have a greater feeling of confidence that the plan will be implemented with a minimum of surprises

Although the substance of the meeting with the notifying man-agers will vary with circumstances and corporate culture, the session generally includes an explanation of the reasons behind the staff re-ductions by top management These reasons may be supplemented

by a written explanation available for use by managers during their sessions with terminating employees Training may include an audio

or videotape These training aids feature the overall do’s and don’ts

H OW TO I MPLEMENT O RGANIZATIONAL R ESIZING 261

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of giving notice Often, scenarios illustrate how to (and how not to) conduct a termination meeting (see Exhibit 11.1)

The Role of Human Resources

The human resource (HR) department plays a key role during mass layoffs Ultimately, it is charged with the responsibility of success-fully implementing the reduction Success is defined in this way:

• The cutbacks take place as scheduled

• There are no security breaches

• The list of those leaving passes legal review

• Termination meetings are carried out with sensitivity

• Communication is handled effectively

• The dignity of departing employees is maintained

To achieve this success, the HR department needs to operate

in strict secrecy Lists of employees designated for termination are restricted to a few employees HR works with the department man-agers to develop their layoff lists and secures approval from the ex-ecutive in charge HR should develop a master schedule of the individual and group termination meetings, attending select meet-ings as needed Its representatives explain the termination bene-fits to leaving employees, as well as field questions and complaints

In addition, HR may have a key role with internal and external communications as appropriate Depending on the size of the cut-backs and the company unit being affected, these stakeholders may include members of the board of directors, key customers, finan-cial institutions, the union (if applicable), and community offifinan-cials

Personal Security

Various security issues need to be considered Although the chance

of violence on the part of departing employees is rare, it is possi-bility At a cement plant several years ago, blue-collar employees thought that they were attending a safety meeting when in actual-ity they were told that they were being laid off They reacted an-grily to this trickery, and before long, hard hats were flying about the room The HR manager retreated quickly, leaving it up to me,

Exhibit 11.1 Agenda for Training Managers

on How to Conduct a Termination Meeting.

A Scenario: Need to explain why the reduction is necessary.

B Objectives of the notification meeting

1 Reduce impact on employees and their emotional reaction

2 Preserve employees’ dignity

3 Deliver an unpopular message

4 Avoid litigation

5 Preserve future relationships

6 Limit adverse public relations

C How to deliver the message

1 In private—never at a meal

2 Neutral conference room preferred

3 Rehearse the actual words to be used; get to the point quickly

4 Go from the general scenario to the specific; explain the reasons for termination

5 Display a serious demeanor

6 Brief meeting—ten minutes is normal

7 Termination decision is final and not subject to negotiations

8 Address company assistance available

9 Listen to employee reaction; be calm; anticipate “Why me?”

questions

10 Repeat the message as necessary to ensure understanding

11 Explain next steps in the termination process

12 Offer personal support as appropriate

D Play videotapes and audiotapes (if available) dramatizing various

employee reactions that may ensue.

E Role-play: Managers alternately deliver and receive a termination message to another manager.

F Review all aspects of the notification day:

1 Times of day to start and finish notifications

2 Manager-employee notification meeting schedules

3 Consider security issues: software, documents, facility access, and badges

4 Review impact on operations

5 Role of HR, outplacement consultants, governmental assistance agencies, employee assistance plan

6 Special cases (for example, absent employees, car pools, out-of-town employees, shift workers)

7 Postnotification meetings

8 Communication to stakeholders, both internal and external

G Questions and answers

as the outplacement consultant, to explain the benefits of the reemployment workshop in which they were entitled A check later revealed that a vending machine had been kicked in, and gunshots were fired at the guard shack (fortunately equipped with bullet-proof glass)

I was involved in another situation where sales employees across the country were called to what they believed was a routine sales meeting, only to be informed that they were being termi-nated Although their reaction was not violent, it was an employee relations disaster for the remaining employees who heard about this treatment

The moral of these stories is that management must be truth-ful and sensitive to the feelings of the departing employees Em-ployees have long memories of how they were treated on their last day More important, the remaining employees are watching If they perceive that their coworkers were treated poorly, their attitudes and performance will be adversely affected Personal security on the day of notification can be addressed by having a plain-clothes security officer in the facility All notifying managers should know the extension number of security in the event help is needed It is not recommended that uniformed security officers escort depart-ing employees out of the builddepart-ing

There are other security issues to be addressed These include intellectual property, company property (such as laptop comput-ers), company credit cards, and computer security The chances of sabotage and theft diminish when management preserves the dig-nity of its departing employees Some managers rationalize that employees given notice are good people and will not suddenly turn against their employer In contrast, some employers are concerned about individual employees whom they may judge to be disgrun-tled Their computer access is ended before notification, whereas other employees who are deemed to be trustworthy retain access after notice is given How to handle the computer access situation

is a management decision that balances risk with trust The deci-sion to grant or not to grant access is particularly important if the notified employees do not immediately exit the facility

In one situation, a terminated systems administrator hacked into the computer system and published user IDs, passwords, and secret company information on public chatrooms (Conlin, 2001)

This same author reported that the FBI estimates the cost of the average insider attack is $2.7 million and recommended termi-nating computer access immediately before notice is given An-other situation to avoid was one related to me by a laid-off employee He stated that he knew he was about to be terminated before actually being informed because he could not log into his computer network that morning There are better ways to let an employee know that his services are no longer needed

Employee Notice Considerations

Another question is how much time should elapse between an em-ployee’s notice of termination and his or her last day of work It should be stressed that the Worker Adjustment and Retraining No-tification (WARN) Act requires sixty days’ advance notice to every affected employee This notice must be in writing and individually given to the employee If it is not, the organization is subject to gov-ernmental fines and employee back pay Obviously, there are cer-tain conditions required for this act to be enforced (for example,

a company must employ one hundred or more individuals) Aside from a layoff triggering the WARN Act, the number of days before departure varies widely One employee expressed how pleased she was that she was given notice This enabled her to finish projects, say good-bye to associates, and begin preparations for a new posi-tion Other organizations want those employees notified to be off the premises within hours, never to return again In general, em-ployees resent being given a surprise notice and a quick departure Management should decide this issue in keeping with its corporate culture and practice

Invariably, there are special situations to consider—for example:

• How does the company notify employees who are on vacation

or sick leave?

• What about employees in remote locations or working at home?

• How does a company notify employees on all three shifts simultaneously?

• What should a company do if it operates plants in a number of different time zones around the world?

• What if the driver of the company car pool is terminated? Management needs to plan for and decide the best way to han-dle these cases Normally, notice should be given in person, as op-posed to e-mail or by telephone, even if the notification must be delayed or a special meeting arranged Many organizations hire taxicabs to ensure car-pooling employees a ride home

Notification Day Specifics

Eventually, the day of notification comes The advance planning and preparation will make the day run more smoothly Neverthe-less, the act of informing employees requires careful scrutiny The following points should be considered

Timing

Plans have been made, managers have been trained, and select stakeholders have been notified Now, the day has arrived to give notice to employees whose jobs have been eliminated It is recom-mended that a specific time be established, and each department begin its notifications simultaneously Often, the hour selected is

in the morning, depending on minimal interference with opera-tions Ideally, all notification meetings will be one-on-one When a large number of employees need to be notified, some organiza-tions deliver the message on a small group basis for blue-collar and nonexempt employees Regardless of the specific time selected or whether the notice is given individually or in a group setting, a goal

is to preserve the dignity of employees who are leaving The man-ner in which terminations are conducted greatly affects the likeli-hood of future lawsuits being filed by the dismissed employees Furthermore, it sends a very strong message to surviving employ-ees that management cares about its workers If another job cut needs to be implemented later, these employees recognize that they too will be treated with respect and dignity

Delivering the Message

The actual meeting with employees being terminated should be held in private, preferably in a neutral setting such as a conference room A representative from HR may be present if trouble is

an-ticipated The meeting should be brief, perhaps as short as ten minutes The only message being delivered is the employee’s ter-mination This meeting is not the time for a debate or rehash of past problems The decision must be labeled as final and not sub-ject to negotiation Managers must be prepared to answer the most common question: “Why me?”

An employee who is being told of job termination typically hears about half of what is said, so repetition is helpful It is a good idea to give the employee a one-page written document high-lighting the key points to remember (for example, that vacation pay is included in the final pay check, what to do with company property, and termination benefits) Typically, affected employees

go through several stages that may include denial, anger, fear, loss

of self-confidence, and a desire to negotiate The five-stage model

of grieving developed by Elizabeth Kübler-Ross (1969) can be ex-tremely helpful in knowing what emotional phases an employee may experience Managers who are sensitive to these stages can conduct these meetings more effectively

It is suggested that the manager use an outline of points to ad-dress with the employee to ensure that he or she does not forget something important This termination meeting frequently is a very emotional and difficult time for the manager as well as the af-fected employee It is very easy for the manager to neglect cover-ing a vital aspect A brief script provided to all managers who are involved in this process also will help ensure uniformity in the in-formation that is given to the terminated employees

Termination Benefits

When the notification meeting is completed, employees will want

to know what benefits they are entitled to receive Typically, an HR representative will meet with employees individually or in small groups after the meeting with the departmental manager and ex-plain the benefits outlined in their personal packets These bene-fits include the final paycheck, vacation pay, health insurance coverage, severance pay (if applicable), and any other programs for which they are eligible Finally, checkout procedures will be ad-dressed, including the return of badges, keys, and other items of company property If the company uses a termination agreement

or some form of legal release waiver, it is explained at this meeting

When a large number of employees are leaving, the organiza-tion may contract with an outplacement firm to set up a career cen-ter This center is a special area set aside on the employer’s premises

or off-site to offer a wide array of counseling services, secretarial support, Internet access and telephone lines, open jobs lists, as well

as other means to support the former employees in their job search Local employers may be invited to come on-site to inter-view the terminated employees These services are expensive but can demonstrate to individuals leaving that their former employer

is concerned about their welfare and is willing to spend money to help them find new employment In addition, such actions send strong signals to surviving employees that management cares

Personal Property

Management needs to determine how employees’ personal prop-erty will be removed In order to preserve the dignity of departing employees, many companies give them a choice They either can pack their things immediately after notification (which can be a humiliating experience to do in front of other employees), or they can be offered an opportunity to return after hours or on a week-end to collect their personal items Provisions should be made to

be sure that company property is not taken along with their per-sonal belongings

The Posttermination Meeting

When an organization arranges for outplacement services for an executive or manager, it is common to have the outplacement con-sultant meet with the terminated employee immediately after the notification meeting (see Exhibit 11.2) As the notifying manager leaves the room and the consultant enters, it is difficult to predict what to expect The terminated employee can be in tears (both men and women), sitting in stunned silence, display anger and bit-terness toward the consultant, or refuse to meet altogether At other times, it can be a businesslike meeting with little emotion displayed One of the most unusual sessions that I encountered began with a whoop of joy from the terminated employee It was ten o’clock in the morning, and he pointed out that he had planned to quit at noon Now he was eligible for several months of severance pay

A more typical session begins with a surprised employee who puts on a brave front The role of the consultant is to focus the em-ployee’s thoughts toward the future rather than on the past The employee needs to be reassured that the organization will provide significant assistance in helping him or her get through the period

of unemployment and actively locate a new job The meeting may

be brief if the manager was blindsided and totally unprepared for this development One time I spent ninety minutes with a manager before he was judged able to drive home safely The common thread is to listen, give assurance, and start the person on the road

to the next position

Legal Release Waiver

Many employers do not offer outplacement consulting or en-hanced severance benefits unless departing employees sign a re-lease waiver The rere-lease form stipulates that in consideration for

Exhibit 11.2 Outplacement Consultant

and Terminated Employee Meeting.

A Purpose

1 Gauge emotional state of candidate

2 Sounding board as neutral third party; listen

3 Explain role of outplacement services available

4 Arrange services

B Typical Meeting

l Typically individual meetings but could be in a group setting

2 Starts after employee notification; in private without company representatives present

3 Introduction and explanation of the role of the consultant

4 Listen to employee reactions and concerns; address the issues raised as appropriate

5 Proceed based on employee emotions and willingness to listen

6 Explain outplacement services provided and make arrangements

to start the program

7 End meeting when the employee is ready; average meeting time is about twenty minutes, but can vary widely

C Debrief management in general but maintain employee

confidentiality

these services and increased benefits, the employee relinquishes the right to sue the employer for unjust termination, age discrim-ination, or other causes In order for such a waiver to be legally valid, there are specific ways in which the release must be worded and signed Organizations are advised to seek employment law counsel if the use of releases is contemplated

Severance Pay

A recent survey of severance payments given by organizations re-vealed that the most common practice was one week of severance pay per year of service (Hirschman, 2001) Payments ranged from less than one week per year of service to more than a month per year Although law in the United States does not require severance payments, many employers offer them when the termination is not for cause (that is, performance-related causes) The formula of one week per year of service often is supplemented by a minimum pay-ment, particularly for managerial employees Companies also fre-quently include a maximum severance payment

Meeting with the Remaining Employees

Once the notifications have been completed, it is recommended that each departmental manager hold a meeting with the remain-ing employees to explain what has happened and why It is impor-tant that these employees are told that notifications are over for now Given the unpredictable nature of business, managers should never indicate that downsizing will never happen again Many senior-level executives have given such assurances, only to have to preside over another reduction in force in the future

Communicating with the Media

If plans call for a press release or other media contact, the time to

do it is on the day of notification It is important to identify one employee who will serve the role as media spokesperson This ap-proach will help ensure that a consistent message is given The des-ignated spokesperson must be readily available to answer questions and put forward management’s position in a factual manner In