Making a Plus of Downsizing

Bosses get more practice these days, but laying off workers will never be easy. An expert explains how to avoid the worst pitfalls

So, the worst has happened and you've had to let some employees go. Layoffs rank close to the top on most entrepreneurs' lists of dread possibilities. Still, life -- and your company -- must go on. How do you recover, regroup, and forge ahead successfully? Not by forcing your remaining employees into jobs they hate or are unqualified for, says Dennis LaRosee, senior vice-president of Praendex of Wellesley Hills, Mass. Resist the impulse to put the wrong people in key positions and your business will bounce back more quickly, LaRosee counsels. He talked recently about "layoff etiquette" with Smart Answers columnist Karen E. Klein.

Q: After they've had to downsize their staff, do most entrepreneurs stumble when it comes to human-resources management after they've had to downsize their staff, or do a round of layoffs?


Well, the natural tendency is to move people into jobs vacated by people they have worked closely with. While this might seem like common sense, it can be a recipe for disaster. Picture the odds against those left behind: They have more work than before, they need to be at least as productive to satisfy customers, and they're worried that they may be next on the chopping block.

Q: What are the top priorities for management, following a layoff?


First, CEOs must encourage a sustained surge of strength among surviving employees. Though it's natural for these employees to feel guilty about coworkers' layoffs, they must work with renewed focus.

Q: How does a CEO go about encouraging increased productivity when the survivors are understandably fearful and discouraged?


They should take the time to key in on their remaining employees' motivations and workplace behaviors, identifying the unique factors that motivate each team member, and adapting their management strategies employee by employee. After layoffs, I believe that an individualized approach to management is the key to harnessing employees' energy, focus, and morale.

Q: How exactly does the individual approach work?


Well, people should be shifted into positions that match their skills and strengths, rather than forced into roles where they are likely to fail. Knowing your employees' individual weaknesses and strengths may take some in-depth evaluation.

Rather than panicking and taking a knee-jerk approach, I tell business owners to sit down with employees and managers, evaluate what it takes to succeed in a particular position, and develop an action plan for that employee's personal and organizational success. This not only empowers employees to identify and leverage their strengths, but it helps them avoid positions requiring behavioral styles that they lack. If there are critical gaps between the work that needs to be done and the workers available to do it, they can be bridged through training and coaching.

Q: What does the in-depth evaluation look like?


Well, we use a proprietary survey, the Predictive IndexR, as a management and recruitment tool, but the evaluation can be any survey, or conversation, that asks employees questions like: Do they see change as essential, or do they like routine? Are they team players or "mavericks"? Do they have a high level of urgency? Are they detail-oriented? Do they like jobs with lots of people contact, or are they more introverted? What do these qualities say about their ability to lead and manage, to follow stringent regulations, or to produce at a fast pace? Will they enhance business performance, or detract from it, if placed in particular jobs?

Q: How does answering such a survey help employees?


I think it makes them understand and appreciate their assets. Many employees don't have a clear sense of the multitude of assets and leadership qualities they have acquired and refined through life experience. Perhaps they have captained several teams or managed a community fund-raising drive. By identifying these roles and sharing them with their managers, employees broaden their view of their competencies and better understand what motivates them naturally, and what types of activities or environments are most conducive to their productivity.

Q: What about midlevel managers? How can they help after a layoff?


Shoring up the trust of your senior people is critical. Give them credible evidence of better times ahead and emphasize their importance in driving growth. The best senior managers are risk-takers who will jump ship if they see more potential elsewhere. Tap into their initiative by holding them accountable for achieving difficult new goals and reward them accordingly.

Q: And what else can the business owner -- the boss -- do to keep the company going?


The most important thing is to remain involved and available. Even in smaller companies, backbiting and infighting are the inevitable results of a remote management style following downsizing. Individual meetings and coaching sessions -- rather than a flurry of memos -- are valuable. Employees join smaller firms to have an opportunity to stretch horizons while making a difference. Through one-to-one mentoring and coaching, you will help them leverage this opportunity and contribute to their sustained morale.

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