Leadership Tips

Are Performance Reviews Dead?

Over the decades, we’ve attempted to automate it, systematize it, and make the process more uniform.

We’ve tried to transform it from a yearly “report card” into a corporate workhorse to increase productivity and engagement, enhance vertical goal alignment, make compensation fairer, generate ideas, and (dare we say it), ambition.

We’ve even turned it into an entire industry. Cascading goals, pay-for-performance strategies and sophisticated appraisal software were supposed to be the “wave of the future.” Providers offered newer, more scientific methods, promising to:

  • eliminate the unpredictability of performance evaluation; and
  • make the process invulnerable to the quirks or failings of managers who were doing the evaluating; and
  • better justify using the performance review as a tool for determining compensation and advancement.

Still, a recent study by Deloitte found that more than 70 percent of organizations surveyed globally were not happy with their performance evaluation process and were looking for change.

Ouch. With all of the re-evaluating, updating and transforming we’ve attempted, have we ever truly improved the performance review — or is it a “lame duck” beyond saving?

Clearly, you can’t just abandon reviews entirely. But if your processes were developed five or more years ago, they may no longer serve your company well — and may require a fresh approach. Why?

Corporate structures are flatter. Relationships today are rarely 1:1 between an employee and a supervisor; rather, people work in intersecting teams with both leaders and peers. The result is that no one manager has access to all the data she needs to fully evaluate an individual’s performance.

Philosophies about the purpose of employee evaluations are changing. Sure, it’s important to have a basis for determining raises and promotions — as well as terminations and layoffs — but isn’t it just as important that the process encourages engagement and ongoing development? The Deloitte study found that “fewer than 30 percent of all organizations feel their existing process drives any level of performance or engagement at all.” That’s an opportunity lost: employees hunger for management processes that will help them to grow and develop, not simply assess their current success or failure.

What’s more, evaluations that focus on ranking employees are often only helpful to the top performers; low rankings rarely result in improved performance but instead lead to discouragement and disaffection.

Rapidly evolving projects, assignments and goals make the annual performance review cycle obsolete. How can an employee be evaluated against last year’s goals when this year’s goals are entirely different? What about goals that change from month to month? Today’s workplace demands a fluid, progressive appraisal process that moves with and responds to constantly changing goals and assignments.

Simply put, the nature of your workplace is changing. To be effective, your review processes should change as well. How, then, should you build this new performance appraisal process?

Some experts say the annual review will continue to be important wherever compensation is revisited annually. However, the yearly review can exist alongside, or as a supplement to, an ongoing performance management process that is more dynamic and situational and incorporates feedback from multiple sources. Here are some strategies for building such a process:

  • Create opportunities for employees and groups of employees to set their own goals and revisit these goals for self-appraisal frequently.
  • Train managers to offer frequent feedback on performance. Encourage them to act as coaches: positive feedback is given often, and negative feedback is specific, immediate and given with the goal of improving performance rather than just “weeding out” poor performers.
  • Recognize achievement in real time. Waiting until end-of-year reviews or recognition ceremonies dilutes the impact of that all-important pat on the back. The purpose of recognition is not to make everyone else jealous; it’s to encourage more of the same.
  • Resist schemes that can create perverse incentives, such as pay for performance, which encourages employees to focus on their individual output, sometimes to the detriment of team performance., such as pay for performance, which encourages employees to focus on their individual output, sometimes to the detriment of team performance.
  • Develop a culture in which feedback is common and expected by adopting tools for all employees to give one another feedback, both vertically and peer-to-peer.
  • Explore vehicles for crowdsourcing feedback and recognition. Internal social newsfeeds, carried out in real time, offer opportunities to enhance the culture of feedback and bring multiple viewpoints into the recognition process. Making feedback social makes it less competitive and more cooperative. And it gives managers access to data and perspectives they might not otherwise see.

So are performance reviews dead? Absolutely not. But to be effective in today’s workplace, they require a culture of continuous, broad-based, developmental feedback and appraisal that informs your annual review process. Revising your review strategy will improve performance, satisfaction, retention and engagement in your company. And that’s a winning recipe for everyone.

Get Your Ducks in a Row

Want better results from your temporary employees – every time? Then get your staffing “ducks” in a row. Use these simple tips to prevent problems, ensure temporaries get off to a great start, streamline management, and get the most from your investment.

Don’t “wing it.” Your temporary employees will arrive prepared to work. So get ready for them – before they start. Assemble necessary paperwork and orientation materials, and make sure that their work areas are stocked and ready to go. When you take care of these details ahead of time, your temporaries can get down to work more quickly.

Provide essential information up front. When temporaries have essential information at their fingertips, they spend more time on productive work – and less time seeking assistance. Carefully review temporaries’ job responsibilities, as well as your expectations, at the outset of assignments. Explain what they should do if they:

  • encounter a problem
  • need a question answered
  • finish their work early

Welcome them to the flock. When temporary employees feel valued and welcomed, they’re motivated to work harder – and perform better – for you. So although they may only be with you for a short time, make temporaries feel like a part of the team. Introduce them to co-workers and supervisors. Be sure they know where to park, eat lunch, and get a glass of water. Explain how their work fits into your company’s “big picture.”

Allow the staffing service to conduct training. If your temporary employees require training, ask your staffing partner to handle it for you. Provide all feedback to the staffing firm’s service coordinator and request that they, as the workers’ “employer of record,” coach their employees.

Never tolerate poor performance. Staffing services are designed to enhance your company’s performance – not undermine it. Carefully monitor temporary employees’ productivity, accuracy and attitude. If an individual fails to live up to your expectations, ask the staffing firm to replace him immediately.

Simple, proactive steps like these can help you get better results from your temporary staff – every time. And whenever you need highly skilled temporaries to:

  • provide coverage for vacations or unplanned absences,
  • tackle special projects,
  • handle sudden surges in business, or
  • take over repetitive or non-core activities

How to Reverse Negativity in the Workplace

Do any of these workplace issues sound familiar?

  • Morale is low.
  • Employees are making preventable mistakes because they don’t seem to care.
  • No one seems to have fun at work anymore.
  • Employees spend a lot of time complaining and griping.
  • Gossip, whispers and rumors are distracting people from their jobs.
  • Employees talk badly about management, other departments, customers or each other.
  • Many employees are requesting transfers to another department, or even quitting.
  • Absenteeism is increasing.
  • People stop talking when the manager comes in.
  • Even your best people are losing their enthusiasm.
  • You’re spending more time than usual soothing feelings and putting out fires.

If you answered yes to two or more of the above statements, you might have a serious negativity problem. And when negativity goes unchecked, morale nosedives, productivity suffers, communication comes to a halt and people stop working well together. Business, of course, will suffer.

The typical workplace has its ups and downs in terms of employee negativity, but when you’ve been in a down cycle for too long, it’s time to take control and turn it around. When employers understand the causes of employee negativity and implement measures to prevent it, they can create a more productive and positive work environment.

What really causes employee negativity?

A study conducted by Towers Perrin and researchers Gang & Gang surveyed a randomly selected group of 1,100 employees and 300 senior human resources executives working for mid-sized and large-sized companies in the United States and Canada. Participants were asked to describe their feelings about their current work experience.

The study determined that the reasons for most of the employee negativity included:

  • An excessive workload
  • Concerns about management’s ability to lead the company forward successfully
  • Anxiety about the future, particular longer-term job, income and retirement security
  • Lack of challenge in their work, with boredom intensifying existing frustration about workload
  • Insufficient recognition for the level of contribution and effort provided, and concerns that pay isn’t commensurate with performance.

The study also found that some employees with a negative outlook were seeking new jobs, but the majority were planning to stick it out, despite their unhappiness.

How Can You Reverse Employee Negativity?

The most direct way to reverse negativity is to talk to your employees. Find out who is unhappy and why. Then try to address these concerns–and include employees in the decision making process, especially when you’re making decisions that affect their everyday working life.

For example, if too many employees are feeling overworked, try to divide the work more equally across several employees or see if there are any duties or responsibilities you can eliminate altogether.

Companies that experience a business downturn will hear employees expressing concerns about both management and their future with the company. Following a period of financial woes, management will have to work to regain employee trust. Earn this trust by offering consistent, transparent communication–that is, share information about the company, its successes and its future plans. Be honest but not alarmist about any bad news.

If several employees tell you they feel they’ve been passed over unfairly for a promotion, take a hard look at your promotion system to make sure it’s fair and equitable. Make sure your employees know exactly what is expected of them if they want to make the next step up the ladder.

If you hear that an employee is bored or frustrated in his current position, work with him or her to create a professional development plan and possibly add some new projects or responsibilities.

Finally, they might not tell you this, but employees love recognition for their work. They gain a sense of professional self-worth and feel more confident and competent when management takes the time to commend them for a job well done–or even compensates them somehow.

Nothing affects employee morale more insidiously than persistent workplace negativity. It saps the energy of your organization and diverts critical attention from work and performance. Negativity can come from one person, one event or one policy. It will become stronger unless you acknowledge it exists and work out ways to make things better. While you may not win over every chronic complainer, others will appreciate your willingness to listen and provide solutions. You’ll know you’ve succeeded when your employees return to being productive and positive.

Easing The Pain how to handle layoffs

Downsizing. Rightsizing. Call it what you want. While cutting staff is sometimes a necessary business strategy, few decisions are more unpleasant—especially if you’re the one who has to do the firing. Tom Peters may have described it best, when he wrote, “as a manager, it made me sick to my stomach every time I had to fire someone.”

No question, layoffs are painful. And not just for the downsized employees. Cutting staff hurts managers, co-workers, and even subordinates. But, you can ease the pain. Keep the following advice in mind if layoffs loom on your company’s horizon.

Before Taking Action, Validate Assumptions

According to a recent American Management Association survey, less than half of the companies that laid people off increased their profits after the downsizing. While reducing headcount will decrease short-term expenses, more often, layoffs result in confusion, mistrust, frustration, low morale, and poor productivity.

Human capital is your company’s most critical asset. Cut it at your own peril. You may recall the lessons of Al “Chainsaw” Dunlap who slashed his way to fame during the mid-90s. His draconian cuts at Sunbeam drove talent out of the company and ultimately cost shareholders hundreds of millions of dollars.

Before executing a downsizing strategy, evaluate and then re-evaluate the financial implications of your decision. For some alternative strategies, read the Layoff Alternatives sidebar at the end of this article.

Practice Open Communication

Few things devastate morale faster than negative word-of-mouth. Don’t let the grapevine become your source of communication. To protect morale and retain control over how information is communicated, be candid with your employees.

Always start the process with your management team. Make sure everyone knows the reasons for the layoff, where the cuts are being made, and why specific people or groups were selected. When the time comes to roll out the news, you want everyone in management to be relaying the same story.

As soon as possible after management has been informed, announce the cuts to the remainder of your staff. The longer you wait, the more information will leak. Explain why downsizing is unavoidable, what you’ve done to evaluate other options, and why certain areas are being cut.

Equally important is to provide clear direction for the survivors. Reassure them about the company’s future. Offer a specific plan showing how work will get done and what events will trigger new hires. And if further cuts may be needed, make this known as well along with the criteria for those cuts.

Breaking layoff news is never easy, but you will gain far more trust, respect, and team commitment if you do it the right way.

Avoid Legal Risks

To avoid claims of discrimination or unfairness, make sure you develop and adhere to a formal company layoff process. When evaluating candidates who may be laid off, ask yourself the following questions:

  • Does this person have performance problems?
  • Is he or she working on low-priority tasks?
  • How does his or her contribution measure up to the contributions of others?
  • Can his or her duties be easily assigned to others?
  • Does he or she possess difficult-to-replace skills?

Develop criteria and measurements that are as objective as possible. And before you begin the layoff process, gather necessary supporting documentation (i.e., work volume reports, status reports, reviews, disciplinary documentation) to support your decisions. Be sure to include HR on the planning and announcement team to ensure that legal requirements are followed and necessary paperwork is completed.

Show Respect and Offer Support

Train those who will deliver the layoff news to do so with compassion, and provide as much advance notice as possible. In addition, consider offering outplacement as far down the organization as you can afford. One company went so far as to create a “transition intranet,” which included job leads, counseling services information, resume-writing tips, and downloadable HR paperwork.

By being sensitive and supportive, you reinforce your concern for your staff and strengthen rapport with surviving employees. Compassion also helps keep potentially volatile emotions under control and reduces the risk of post-layoff “company bashing” and legal action.

Of course, compassion doesn’t preclude the need for a formal security plan. Theft and data corruption can occur during layoffs. Plan to eliminate access to company information systems as soon as layoff announcements are made. If necessary, bring in extra security to protect employees and physical assets.

Survivors Need Support too

Most likely, you’re going to expect the surviving employees to reach new company goals by increasing their workload, improving efficiency, and adapting quickly to a changed work environment. If they are to be successful, you must establish performance plans with specific, measurable, and obtainable objectives—and then give them the necessary resources to succeed.

However, before getting to the new goals, be sure to address your employees’ emotional well-being. Left unchecked, morale can plummet when layoffs occur, leading to decreased productivity, increased scrap and rework, higher turnover, and poor customer service. Offer counseling to the survivors. One CIO held chat sessions and encouraged his people to share their feelings. By dealing directly with the natural sadness and anxiety, he and his group were able to find resolution.

Announce the Layoffs to Your Customers

Don’t let your customers find out about your layoffs indirectly. They may draw faulty conclusions about your motive or your situation, which can mean lost business—precisely what you can’t afford.

Instead, prepare and send a formal notification, and whenever practical, meet with customers face-to-face. Explain the business decisions behind the layoff, and demonstrate how you plan to maintain excellent levels of customer service with a smaller workforce. Then, back up your words with deeds. Continue to demonstrate that you are a true partner committed to solving their problems, and they’re more likely to remain loyal to you.

Last Words

In the end, layoffs are unfortunate and never easy to manage. However, the best strategy for dealing with a layoff is to avoid having one in the first place.

Most businesses operate with excess labor capacity in order to meet peak demand requirements. As an alternative, consider staffing at lower, core levels, and supplementing with skilled temporary employees as needed. By staffing strategically, you avoid increasing fixed personnel expenses and can painlessly adjust staff levels to meet your work load.

Skilled temporary staff can be used to meet demand for industrial, administrative, professional and technical personnel. Your staffing partner can work with you to evaluate your staffing requirements and develop a proactive plan for hiring, training, and managing temporaries on an as-needed basis.

Layoff Alternatives

Before you decide to initiate layoffs, consider these 10 cost savings alternatives:

  • Reduce Hours Worked — Consider four-day work weeks, or ask employees to trade pay for extra vacation days.
  • Lower Wages — Ask your people to take a temporary cut in pay.
  • Allow Attrition — Wait for employees to retire or leave on their own and reassign their duties to those who remain.
  • Encourage Leaves of Absence — Offer people a leave of absence with full benefits for a specified time period. Promise them a job upon their return, but inform them it may not be the same job or at the same pay level.
  • Reduce Overtime — Allow compensatory time off instead of overtime pay, or place limitations on the use of overtime.
  • Offer Early Retirement — Let eligible employees take advantage of an early retirement package. Supplement the offer with outplacement services.
  • Institute a Hiring Freeze — You can save money and reduce the number of people affected by a downsize if one becomes necessary.
  • Offer Shared Ownership — Allow employees to trade pay for company stock.
  • Promote Job Sharing — Allow two or more full time employees to convert to part time, and let them share the work of one or more job positions.
  • Strategic Staffing — Use temporary employees to supplement a smaller core staff as needed and avoid the need for future layoffs.

Key Steps In Effective Layoffs

Few firms really know how to do layoffs right, and unfortunately, there really aren’t any “how-to” books or seminars on layoffs. But taking the right actions couldn’t be more crucial during this sensitive process, and as a layoff strategist, I recommend a structured approach to ensure this happens.

If you’re in the unfortunate position of having to do a layoff, here are some of the key steps you need to take.

1. Layoff planning and strategy

The first step in doing layoffs is to become an in on how to do them well. The secret is to be scientific and disciplined. Remember: peoples’ lives and a company’s survival are involved, making it that much more important that you do not take a “learn as you go” approach.

In the planning and strategy phase, your company will need to:

  • Identify the common problems that can occur during layoffs
  • If you don’t already have one, develop a comprehensive workforce plan that includes supply and demand forecasts, “headcount fat” smoke detectors, redeployment and layoff elements
  • Do research and benchmarking in order to identify the characteristics and critical success factors of a successful layoff. Become an expert in workforce planning and layoffs by reading, utilizing consultants, and benchmarking. It’s crucial to know when and why layoffs work, as well as why they often fail
  • Where possible, study the results of previous company layoffs. Identify the key individuals involved and seek their counsel and advice. Seek out and talk to both “survivors” and laid-off individuals to get their reaction on what worked and what didn’t.
  • If it has not already been done, set the company’s business objectives for the next 24 months. Then identify where and how layoffs can contribute to those goals. Sales, product development, market and economic growth, competitor actions and demand forecasts need to be updated.
  • Overall business unit needs must be identified, including which businesses require a low-cost structure in order to be profitable
  • Establish any needed procedures for laying off your international personnel in accordance with local laws and cultures
  • Alternatives to layoffs must be evaluated and utilized. (Common strategies include: executive pay cuts, across-the-board pay cuts, voluntary or forced use of vacation, partial or total hiring freezes, voluntary separations, reduced hours, etc.)
  • Get overall “go ahead” approval from the CEO, especially since even beginning layoff discussions can have negative business and morale impacts
  • Identify the proposed goals of the layoff process. Typical goals include cost reduction in targeted areas, and eliminating poor performers and people with skills that are no longer needed. This is generally done in conjunction with the CFO.
  • Identify the amount you need to save
  • Narrow down the range of layoffs options and the advantages and disadvantages of each. Present them to top management and let them cull down the list to just two.
  • Conduct an extensive cost/benefit analysis of the two options and present them to senior management for final approval.
  • Involve the CFO early in the process. Utilize their financial acumen and knowledge of cost accounting to help in identifying key cost and “leading indicator” ratios that let them know when the company is getting even a little “fat.” Metrics and performance standards must be developed to insure that managers continually maintain a lean workforce.
  • Set the final goals for the layoff process.
  • Develop a rough written layoff plan and have it evaluated by outside experts.
  • Set the budget for the layoff process. Include costs for outplacement, counseling, extended benefits, severance packages, consultant and legal advice, closing facilities, retraining and redeployment. Costs are almost always underestimated, so over-budget by at least 20%.

One of the primary reasons layoffs fail is that the company becomes distracted, and thus there is a tendency to take its attention away from customers. As a result it is necessary to develop a separate plan to keep business units and managers focused on the needs of your customers. Develop metrics and systems to monitor customer satisfaction during and immediately after the layoff process. Often it is necessary to personally visit key customers in order to reassure them.

As early as possible (often before layoffs are even considered), your company should also notify managers and employees what criteria will be used if there should be a layoff. This provides them with an opportunity to build up their skills and performance.

2. Who should be involved?

To determine which personnel should ultimately be involved in the execution of the layoff plan, start by developing an initial layoff planning team.

  • Keep it small, but be sure to include representatives of the CFO’s office, HR, the corporate attorney, and the senior managers whose departments are being affected. It is highly important that line management “own” the layoff process.
  • Select a senior manager to become a layoff expert. Their role is to manage the process and to educate others on how to do effective layoffs.
  • If there’s a union involved, bring their leadership into the process at an early stage. Educate the union leadership on the business issues and the critical success factors for layoffs. Identify the legal requirements related to unions and layoffs.

It is essential that layoffs are done and “owned” by individual line managers. Otherwise they will blame everyone else if the layoffs fail.

3. When should it is done?

Setting a target date for the layoffs is an important step. Whenever possible, avoid key business peaks, major holidays, and vacation periods (both because of the inconvenience and the potential negative PR issues). Most effective layoff processes are completed within 60 days.

Unfortunately there are no “good” layoff days, but experience generally tells us that doing them early in the week is preferable so that laid-off employees can begin their job search immediately don’t have to languish over a long weekend.

4. Before the layoff process begins

Before layoffs begin and redeployment plans are executed, a few crucial steps need to be taken:

  • Develop violence and suicide prevention guidelines, as well as dispute resolution and anonymous feedback systems, to handle issues that arise before, during, and after the layoffs
  • Identify both the national (WARN) and the local legal requirements for layoff notification and layoff processes
  • Develop a process for escorting out laid-off employees that both protects the firm but also allows individuals to maintain their dignity and say there goodbyes
  • Develop tools for maintaining morale during and after the layoff process. These include frequent meetings, layoff related web pages, counseling, telephone hot lines, additional training and even project completion or “stay on” rewards
  • Determine the appropriate severance pay, benefits, outsourcing assistance and other things to be given to those laid off
  • Develop a list of “prohibited or discouraged practices” for managers in order to prevent them from playing favorites
  • Determine the appropriate manager-to-employee ratio that should be maintained after the layoff

5. Setting the layoff criteria

The best way to start setting criteria for making layoff decisions is to develop multiple systems for ranking and rating employees. Begin with the understanding that most assessment systems are weak (which is why the secret to success is multiple assessments). Start with forced ranking, but be sure to include additional assessment systems in order to triangulate and avoid outrageous errors (additional assessment tools might include traditional performance appraisal, employee self rankings, team rankings, customer ratings, output data, 360 degree evaluations, outside consultant assessments, other manager’s assessments, assessment center ratings, training scores, simulations and skill assessments, etc.)

To get the evaluation process going:

  • Identify the essential skills the company will need for the immediate future (in order to identify individuals with those skills, to develop any people that are capable of quickly developing the skills we need, and to drop those without the essential skills). Also identify the key skills that are hard to replace.
  • Identify the key individuals that are either hard to replace or that would adversely impact the company if they left and began working for a direct competitor
  • Identify the top performers the company needs to keep using multiple criteria and forced ranking
  • Identify the top performers who are currently in “excess” jobs and who can easily be retrained or redeployed
  • Identify areas where technology has a higher ROI than people, so that technology can be used not just to replace people but also to increase productivity
  • Identify the high cost areas and any non-essential divisions or job classifications where layoffs can be focused (and at the same time identify those that should be protected)
  • Identify (or reassess) which jobs require highly experienced and skilled talent (which is generally also expensive) and which jobs can operate with inexperienced talent
  • Identify jobs or departments that can be effectively outsourced or eliminated altogether
  • Identify bottom performers
  • Set the final criteria for selecting which jobs, skills, and individuals are needed (or not needed) by the firm
  • Identify potential diversity and adverse impact areas and concerns

6. The layoff process itself

This is the most difficult part, and the steps here are crucial:

  • Identify the estimated number of individuals that need to be laid off in order to meet your cost goals
  • Begin the ranking and employee selection process. Try to do it within a two-week period
  • Do a rough calculation to insure that the number of people selected will result in the targeted cost savings
  • Have HR identify (and train) the individuals on their staff who will monitor the process, answer questions, and advise managers
  • Set up communications and information-gathering systems to identify employee concerns, answer their questions, and squelch rumors
  • Develop a PR strategy for externally communicating the layoffs
  • Train managers in the process, including the right and wrong ways to select employees and to communicate their termination
  • Identify managers who will be let go and identify their replacements (generally, managers are the first to be let go)
  • Evaluate, select and hire the necessary vendors (outplacement, relocation and counseling)
  • Develop a process for notifying individuals of their fate (both those being layoffs and those being retained)
  • Develop an information packet for the individuals being laid off. Include in it frequently asked questions and answers, key contact individuals and help resources. Also included information for any help that may be available to family members.
  • Identify individuals and groups that, although selected fairly, will feel an adverse impact. Identify probabilities and risks with the help of HR.
  • Whenever possible, give managers a range of choices on how each reduces costs and increases productivity
  • Identify individuals who may be at risk of resorting to workplace violence. Develop a plan to mitigate any potential violence (or the fear of violence).
  • Have HR explain outplacement, benefits continuation and career counseling options
  • Have onsite counseling and security available on “layoff days”
  • During the actual notification interview, be sure that that managers don’t “over explain” or prolong the interview.
  • Develop a process for notifying individuals who are offsite
  • After notifying individuals employees, be sure to collect security badges and develop a process for collecting outstanding equipment they might have outside the office

On “the day after,” it’s essential that managers hold meetings with the survivors to identify issues and answer questions. It is also important that they be given new goals and assignments so that they can get back to work right away.

7. Additional factors

A few additional concerns to keep in mind, and the steps needed to address them:

  • Identify a blocking strategy to prevent competitors from poaching your top talent during turbulent times
  • Identify who, among your key talent “keepers,” is at risk of leaving and develop retention strategies for them
  • Identify “flexible staffing” options that in the future will allow you to rapidly reduce our workforce without the need for layoffs
  • Develop effective productivity improvement tools and train managers on how to use them (in order to avoid most or all layoffs in the future)
  • Develop “smoke detectors” to help identify and forecast “headcount fat,” so that in the future, mass layoffs can be prevented
  • Identify areas where increased hiring will be needed, even while you simultaneously layoff workers in other areas
  • Develop effective metrics and reward systems (for the future) that recognize and reward managers for high productivity, avoiding layoffs, and low headcount fat
  • Train individual managers to exercise restraint in hiring and to make it an ongoing process to “let go” their weak performers and excess staff
  • Develop effective, just-in-time (JIT) recruiting and hiring systems that can be put into action just in case head count becomes too lean because too many people were laid off. (It turns out it’s cheaper and more effective to run lean and hire rapidly then it is to carry excess employees over a long period of time)
  • Update the overall workforce plan periodically (of which layoffs are just a single element) in order to ensure that human capital is effectively managed. After the layoffs, make workforce planning an ongoing process that continually removes the deadwood (bottom 5%.)
  • Anticipate the reaction of direct competitors (both product and talent competitors) and develop strategies to counter their moves. (Often, competitors see layoffs as an indication of weakness and will see them as an opportunity to exploit your company.)
  • Identify the things that employees will “stop doing” or will do at lower quality after the layoffs (because they are a low priority and there will be less people around to do them)
  • Conduct an extensive “postmortem” on the layoff process. Identify successes and failures in the event that future layoffs are necessary


Last but not least, here are just a few of things that you need to avoid during the layoff process.


  • Allow managers or the CFO to randomly pick a target layoff number (10%) without any metrics or logic, because that taints the process, causing it to lose credibility
  • Allow employees to voluntarily select themselves for layoff (which will result in the early departure of top performers)
  • Allow laid-off people to “stay around” for weeks or even months after being identified
  • Protect all managers from layoffs
  • Protect a disproportionate number of people at corporate headquarters
  • Allow managers to cut only costs (travel and paperclips) and protect all of their people (dooming the survivors to failure)
  • Layoff all of the HR people who are now experts in layoffs

And finally, don’t fail to “write up” the lessons learned from the layoff process, so that successes are remembered and mistakes avoided!

Maintaining Morale And Productivity During Layoffs

The uncertainty caused by layoffs can impact both companies and employees in many ways, most of them negative. During large-scale layoffs, morale and productivity can plummet. Even more importantly, it’s common for firms to lose their focus on the customer. If a firm is to avoid the need for future layoffs, HR must be proactive and anticipate all major morale and productivity problems.

Here are some action steps to take if your firm is currently undertaking or considering layoffs.

Improving Morale and Productivity During the Layoff Process
Focus on productivity. Layoffs are distracting, there’s no way around it. During layoffs it’s crucial that you use metrics and rewards to narrow your focus and avoid distractions. Managers must raise both performance goals AND the performance-based rewards associated with them, so that everyone notices that things have changed. Results metrics that are routinely distributed to managers help to keep attention focused on your already worried customers. Metrics send get the message across to employees about what is important, and rewards makes them do the expected much faster.

  • Rumors. Unfortunately, people often “guess” that there will be layoffs soon, whether there are any planned or not. Smart HR people develop “rumor hotlines” and other communication mechanisms to combat these rumors. Start with a “call-in” line in HR. If you have an intranet, use a moderated chat room or anonymous e-mail system to allow employees to get fast, direct answers.
  • Work with managers. Bad managers are always a problem. But during layoffs, they are a disaster. HR must identify weak managers quickly, and either drop them or retrain them. In addition to training, you need to add rewards and measures for great people management to the mix to make sure every manager is aware that mistakes made during a layoff will cost them. In addition, measure and reward the retention of top performers during and right after layoffs to keep managers focused on this real possibility.
  • Offer counseling. Re-publicize your EAP counseling services. Consider offering them onsite one day a week during the “stressed out” period caused by layoffs. Make it easy to get help. Just knowing that help is close by will relieve much of the tension.
  • Get consulting help. Utilize professional networks and consulting firms to help to manage the layoff process. Learning as you go is a disaster. If you are not the first in your “neighborhood” to do them, learn lessons from your neighbors on how to keep productivity up.
  • Survey your employees. Do pulse or email surveys of a sample of your key workers in order to identify their issues and concerns. Use that information to modify your communications and morale-building approach.
  • Don’t drag it out. When costs get out of hand, you need to act quickly in order to minimize customer impacts. Decide how to do layoffs long before the need arises. When the time comes, decide who must go and then “do it” within a two-week period.
  • Post your layoff criteria. Determine long before you do layoffs what the criteria will be for being laid off and announce it. Even though it might seem counterintuitive, this openness actually allows all employees to know what criteria will be used, so that those who currently fit the criteria can have an opportunity to work harder toward becoming exempt from the layoff criteria. For top performers and those in key jobs, it also reduces anxiety and allows them to see that they are important and needed.
  • Be aware of people who are “overworking” to look good. Be aware that some employees will overwork in order to look good. This happens both before and after layoffs. Smart managers and HR professionals monitor performance, errors, and accidents closely to ensure “overwork” doesn’t go too far.
  • Work more closely with the union. If you keep your union involved during every step you will avoid many rumors (and the employee stress that goes with them). You will also have an opportunity to build a closer relationship between the union and the company, which will pay off handsomely later.

Action Steps for Improving Morale and Productivity Right After the Layoff

And you thought after the “deed is done” life would get easier? Actually, the hard part occurs after the layoff day. Here are some action steps to follow in order to minimize the pain.

1. Management actions

  • Make your CEO more visible. During tough times the top leaders need to be highly visible to help excite your employees and to look like leaders. Confident leaders attending staff meetings and company events will alleviate some of the fears that your organization is a “rudderless ship.” Make sure the executives have answers to frequently asked questions as well as the names of experts to refer employees to, in case they don’t know the answer to a question themselves. Periodic informal chats (via video conference, email, or in person) are also effective.
  • Hold managers accountable. Continue your efforts to measure and reward good people management. During these tough times, managers must be on their best behavior, because they are the prime point of contact for most layoff-related information. Bad managers have historically caused a majority of the problems that occur during layoffs. Make sure managers reinforce the message to employees that things are different now, and that everyone must change the way they work.
  • Eliminate work. You can’t do the same volume and quality of work with 10% less people. Prioritize your tasks and customers. Require all employees to stop doing non-essential work. Re-engineer your processes and change job descriptions to make it clear what remaining work and which customers really matter. Close unprofitable plants and drop weak product lines. Re-engineer the way you work to produce better results by working smarter.
  • Develop smoke detectors. Develop forecasts and measurement tools that will warn you long before you need to do another layoff. Having to do second round repeat layoffs can be even more traumatic, since they reduce employee confidence that management has things under control. HR also needs to identify top performers who are at risk of leaving, so that special attention can be paid to them.
  • Put limits on people expenditures. Many managers circumvent the firm’s cost cutting goals by bringing laid-off workers back as consultants or contractors, often at a higher rate. Cap all people-related expenditures, don’t just cut headcount.
  • Don’t freeze all hiring. Some areas can be growing even as layoffs occurs in other areas. Limited hiring in targeted areas reinforces the idea that the company is still growing, and that management knows where to invest resources. An across-the-board hiring freeze sends the opposite message — that the company is just cutting costs blindly and that management really can’t make tough decisions. Now is the time to develop effective workforce and redeployment plans so that reducing headcount can become an ongoing but less traumatic process.
  • Track to see where they go. Occasionally companies cut the wrong people or cut too many employees. By identifying the firms where your good employees end up, you can stay in touch with them so that they can be later targeted for rehire when there are openings. Tracking where they go also allows you to better assess the costs and the benefits of the layoff, because you know how many employees went to our direct competitors.

2. Counseling-related steps

  • Counseling survivors. Offering onsite EAP counseling for a period of two weeks after the event is generally a good idea. Make it easy for employees to talk out their problems and get answers from information mechanisms that you know have worked during other layoffs. The most common form of stress that employees face is what is known as “survivor’s guilt.” It results from the fact that “you” have a job, and some of your coworkers and friends don’t. Managers must be made aware of the phenomenon, and then they must identify those going through this guilt. Next, the manager needs to have a heart to heart with the survivor in order to let them know that it’s okay to be a survivor. Current employees also need to know that the “departed” are being treated well. Offer professional counseling in extreme cases. A list of the warning symptoms of depression need to be distributed to managers so that they can assist in the early identification and treatment of “depressed” employees.
  • Consider the family. Families undergo trauma also. Consider a letter to them thanking them for the support of “their” family member during this tough time. Or hold an event where the CEO talks to them and reassures them. You might also offer counseling to spouses of the remaining employees or provide early information that lets the family know what stress they might encounter and how to handle it.
  • Consider the HR people. HR professionals who worked on the layoff process are likely to be the most stresses of all employees. Counseling, time off, or “special talks” can help reduce their trauma.

3. Providing information

  • Over-communicate. After layoffs, it is essential that you keep two-way communications going: first, in order to ensure that the employees know when the cost reduction targets are actually met, and second, to give them an avenue to vent their frustrations and to get answers to their questions. Consider a layoff newsletter or a targeted web page to provide employees with the needed information. Open book management, although it may be initially uncomfortable, is the short-term solution to keep everyone feeling in on things.
  • Redo your external image. Bad PR as a result of negative press coverage from large layoffs can impact your future recruiting, retention, sales, and brand image efforts. Layoffs can ruin a “great place to work” image among potential recruits (and even customers) overnight. You can directly counter your negative press by getting positive write-ups describing your great people practices in key industry publications. It’s also wise to encourage employees to spread the word to their friends (through employee referral programs) that things are back on track.
  • Global staff. Assume that your remotely located staff feel unloved and left out, even though they survived the layoff. Increase the information flow and, if possible, go visit them.

4. Other actions

  • Increase the tools. There is a natural tendency to cut equipment and expenses in order to avoid cutting people. That can be a big mistake. Instead, increase the tools and technology available in key jobs, so that the remaining few people can do more with less.
  • Lawsuits. Lawsuits can distract managers and consume their time right when you need them to be focused on our employees and customers. Work with the legal department to minimize business impacts and to settle quickly when the ROI is positive.
  • Violence in the workplace. Frustration can lead to threats and actual violence from former and current employees. Effective layoff planning requires that you identify potential “problems” and develop a process that both prevents problems and leaves current employees feeling secure.
  • Developing an “overall headcount fat” index. If you don’t have time to look at the numerous external and internal factors that are potential warning signs of excess employees (or “headcount fat”), you might consider using a simplified overall “fat index,” which would give you a quick snapshot of how you are doing in different parts of the organization.


Deciding to do layoffs is a traumatic enough decision for managers and HR people. But unfortunately, even after the actual layoff is done, your problems will not diminish. It takes strong metrics, rewards, communications, and an excellent counseling system if you are to maintain morale, avoid turnover and increase productivity.

MANAGING DIVERSITY: Meeting the Needs of Workforce 2020

Organizations are responding to the diverse needs of their employees in a number of different ways. Outlined here are some ideas that might be adopted as a means to introduce diversity.


For some organizations, assessing where they are and determining where they want to be may be the preliminary phase of diversity management. Organizations that have not been involved in formal or informal affirmative action analysis may first want to conduct an analysis to gain an understanding of the current makeup of their workforce, and then establish a vision for where they want to be.


For organizations that have not met their goals of diversity, a targeted recruitment program may be the initial step. Many businesses are looking at focused, targeted recruitment programs that directly speak to blacks, women, older workers, and other labor market segments.


Many organizations, especially those that have not had diversity represented in their workplaces, are finding that they must educate and inform their managers and employees on diversity issues. These organizations are offering educational seminars and sensitivity training to ensure that their management teams are comfortable and supportive of all employees.

One large multi-unit employer, for example, has developed a series of training programs focused on different labor market segments, including older workers, younger workers, and people with disabilities, to ensure that their management team could effectively recruit and retain members of these important labor market segments.

Other organizations have also modified their on-going training efforts so that all new and existing managers and supervisors are exposed to diversity training as part of the supervisory training process.


Some organizations are finding that their corporate cultures are not open to diversity. Companies such as Dow Corning have had to make major modifications to their corporate culture to ensure that all employees have equal opportunities for growth and advancement.


Some companies, like Honeywell, have formed special employee task forces, employee networks, or offices of diversity to discuss and report to top management on various employment issues. For example, Honeywell has formed an Older Worker League (OWL) to review benefits, employment issues, and other topics that impact their workers as a group. They report on these issues to top management and keep the organization tuned in to how various programs benefit or exclude this labor market segment.

US West boasts “resource groups” for American Indian, Asian, black, differently abled, gay and lesbian, Hispanic, Vietnam Veteran, and women employees. These are typical of groups being formed across the country to better enable employers to meet the needs of their employees.


Some organizations have found that if diversity is to succeed, then all managers must be held accountable for that success. Performance criteria and bonuses must be based upon the effective management of diversity, including recruitment and retention. Once managers understand that their personal success in the organization is linked to a shared commitment to that goal, organizations can begin to see change take place.

Diversity in the workplace will be with corporate America for many years to come. It is the organization that wishes to remain competitive that will embrace the opportunities of diversity and meet the needs of the Workforce 2020.

Workplace Conflict Resolution: What’s Creating Workplace Conflict and 9 Easy Ways to Resolve It

A radio interviewer recently asked me if I thought there was more conflict in the workplace today than in the past. After thinking about it, I replied, “Yes, I think there is more conflict today.”

Here are three main reasons:

  • Today’s workplace is much more egalitarian. We have flatter chains of command, dotted line relationships, and primarily knowledge workers who are capable of making decisions themselves and have the freedom to move on to another job if they don’t like the way they are being treated.
    In prior years, the workplace consisted of a clear authoritarian structure and chain of command. Workers obeyed orders, kept their gripes and personal issues to themselves, and did their work. If they failed to perform effectively, they were immediately fired and replaced.
  • Today, people of all ages from all over the world have come to work together. They have different values, goals, behavioral expectations, and prior experiences. Yet they are expected to work together without really understanding why all the misunderstandings between them occur.
  • Women are now in the workplace in equal numbers to their male counterparts. Although we’ve come a long way towards understanding each other and working harmoniously together in the workplace, there are still behavioral differences in teasing, flirting, confrontation, aggression, and simple communication styles.

Dealing with Different People in the Workplace

Your organization is going to continue to have people of all genders, ages, cultures, styles, and expectations working together. You need to provide them with:

1. A common culture with clearly defined behavioral expectations. This includes policy, procedures, statements of corporate values, and culture—and the follow through to hold people accountable.

2. Diversity training that teaches how to manage different people as well as how to get them to cooperate at meetings and other group forums. Your organization needs to delve into training. Trainers need to understand cognitive and communication styles, values around politeness, and dealing with superiors, as well as issues of pride, humility, conformity, and all the other differences that cause conflicts in the workplace.

3. Acceptance and recognition of differences, so your organization doesn’t try to have a “one size fits all” method of managing.

4. More attempts to help each other clear up disagreements and misunderstandings – rather than passing judgment and deciding who is right and who is wrong.

Management Style and Hours Worked

When management creates a clear set of guidelines as to work expectations, and measures success rather than time spent, it will be easier for people to know what to do because the parameters are clear. Here’s what your organization can do to avoid conflicts in the workplace related to management styles:

1. Publish policy, procedures, values, expectations, and guidelines. Since there no longer is a supervisor with a whip looking over each worker’s shoulder, it is these documents that guide your employees’ behaviors.

2. Managers need to learn how to correctly manage different individuals to enable each person to be successful. Some people need more instruction and others need to be left alone to create. Some are more trustworthy than others and can be relied upon to know their own limits and decision-making authority. Others need to be managed more tightly.

3. Reward the quality and the quantity of the work, not time. Managers need to stop the subtle and not-so-subtle remarks about not seeing a worker on a Saturday or early in the morning.

4. Employees need to have flexible time whenever possible. Some jobs require attendance at set hours. Most do not. People with young children at home might want to go home for a few hours in the late afternoon and return either to work, or to their home computer after their children have been put to bed.

5. Recognize that less is often more. If people get to relax, have a family life, recreation, and pleasure, they are almost always more productive and creative during their working time.

Although conflict is here to stay, it certainly can be mitigated by taking the needs and differences of people seriously and by teaching them about each other and how to work together. Stop being afraid and start being kind.