Downsizing -- The Long Term Effects

Few government departments or branches have escaped the necessity of downsizing. The last three or four years have brought almost constant cuts in staffing, and some departments have been "hit" several times. For many downsizing has become an annual process.

When managers are faced with downsizing, they tend to focus on the immediate and practical needs that emerge at the time when staff are being let go. After all, employees need to be selected and notified, one of the most difficult tasks for any manager. Jobs responsibilities need to be shuffled, and generally the period where downsizing is occurring is very busy and emotionally taxing.

Unfortunately, there is a tendency for managers to focus on those that are leaving rather than those that remain. This also holds true for central training and consulting agencies who are asked to support the laid off employees with career development help, counselling, and other supports. There is no question that laid off employees deserve and need these kinds of supports and services. Unfortunately, there is a tendency to forget that after the laid-off workers are gone, the "survivors" must soldier on, and the manager must deal with the long-term effects on the remaining organization.

We are now seeing the effects of downsizing on those that remain. One of the most telling comments is often put forth by employees a year or two after downsizing, and it goes like this: "Sometimes I think that the ones who were laid off are the lucky ones". They usually go on to describe a workplace where employees feel:

. a lack of executive commitment to their functions
. confusion about the priorities of their organization
. increased workloads
. confusion about their mandate
. a sense of being betrayed by executives and managers
. a profound sense of distrust
. a sense of futility with respect to long-term planning
. undervalued and unappreciated

In operational terms, this translates into a number of problems.

. the organization moves towards less risk-taking and innovation
. destructive conflict tends to increase
. internal competition for resources increases
. individual staff members devote less effort to working together and more attention to doing things that will protect themselves.
. general listlessness and lethargy
. decreases service levels and increased public hostility

It is easy to understand these effects when they occur close to the time when down-sizing occurs, and remaining staff "grieve" the loss of friends and colleagues. But, these effects are now being seen as long as one or two years AFTER the downsizing period. There are indeed long term effects of downsizing that need to be addressed.
Understanding The Organizational Downcycle

5 Tips to a Healthy Work Environment

Gossip is a destructive force in the workplace. It ruins relationships, harms reputations and interferes with productivity. Most importantly, it damages employee morale and makes the office a place where people dread coming each morning.

After dealing with a particularly rampant case of gossip in my public relations firm, I decided it was time to stop the rumor-mongering once and for all. I created a “no-gossip zone” in which my employees and I agreed that we would not gossip—either with each other or about each other.

More than a year and a half later, my firm is flourishing, my employees are happy and gossip is nonexistent. In fact, it went so well that I was even asked to write a book about it, to show other companies how to implement this system in their offices. Here are some guidelines for creating an emotionally healthy work environment.

1. Define gossip. Quite simply, gossip is anything negative that’s said out of the hearing range of the person being discussed. If you have negative feedback about someone’s work performance, you should discuss it with him or her—not with anyone else. Positive comments are not considered gossip, and celebrity gossip is still safe territory.

2. Agree on a “no-gossip” policy. After you define gossip, everyone in your organization should agree to a “no-gossip zone” policy. To create such a zone, everyone on your team must be on board, because gossip is a contagious and easily transmittable social malady. If some team members refuse to agree to a no-gossip policy, you might have to consider letting them go. People who aren’t willing to work together as a team to create a better work environment are not the best employees, and they may cause morale and productivity problems with other staff members.

The Effects of Change On The Manager

One of the least mentioned effects of change relates to how it affects the manager leading that change, and his or her ability to undertake the leadership role. We have already talked about the effects of change on the individual employee, and of course managers are subject to the same reactions, resistances and strains. Some types of change, such as restructuring, or downsizing can put considerable strain on the leaders of an organization.
Stress, Stress & More Stress

One primary concern regarding change is the stress it imposes on those undergoing the change. Managers, because they have obligations to their staff, not only have to deal with change as employees but also need to carry some of the concerns of their staffs. In the case of downsizing, the stress levels can be extremely high, because the manager is charged with conveying very upsetting information.

Stress is part of the job, but in times of change, it is critical that you recognize that it may cause you to act in ways that are less effective than usual. As with anything connected with change, the major concern is not short term but long term. If your stress levels result in marked loss of effectiveness, the risk is that a vicious cycle will be set up, where ineffective leadership results in creating more long term problems, which increases your stress, which reduces your effectiveness even more.

Leadership Critical To Managing Change

If you are to manage change effectively, you need to be aware that there are three distinct times zones where leadership is important. We can call these Preparing For the Journey, Slogging Through The Swamp, and After Arrival. We will look more carefully at each of these.

The Role of Leadership

In an organization where there is faith in the abilities of formal leaders, employees will look towards the leaders for a number of things. During drastic change times, employees will expect effective and sensible planning, confident and effective decision-making, and regular, complete communication that is timely. Also during these times of change, employees will perceive leadership as supportive, concerned and committed to their welfare, while at the same time recognizing that tough decisions need to be made. The best way to summarize is that there is a climate of trust between leader and the rest of the team. The existence of this trust, brings hope for better times in the future, and that makes coping with drastic change much easier.

In organizations characterized by poor leadership, employees expect nothing positive. In a climate of distrust, employees learn that leaders will act in indecipherable ways and in ways that do not seem to be in anyone's best interests. Poor leadership means an absence of hope, which, if allowed to go on for too long, results in an organization becoming completely nonfunctioning. The organization must deal with the practical impact of unpleasant change, but more importantly, must labor under the weight of employees who have given up, have no faith in the system or in the ability of leaders to turn the organization around.

Leadership before, during and after change implementation is THE key to getting through the swamp. Unfortunately, if haven't established a track record of effective leadership, by the time you have to deal with difficult changes, it may be too late.

This is an ideal time for leaders to introduce positive new change, such as examination of unwieldy procedures or Total Quality Management. The critical thing here is that leaders must now offer hope that the organization is working towards being better, by solving problems and improving the quality of work life. While the new vision of the organization may have begun while people were slogging through the swamp, this is the time to complete the process, and make sure that people buy into it, and understand their roles in this new organization.

Conclusion

Playing a leadership role in the three phases is not easy. Not only do you have a responsibility to lead, but as an employee yourself, you have to deal with your own reactions to the change, and your role in it. However, if you are ineffective in leading change, you will bear a very heavy personal load. Since you are accountable for the performance of your unit, you will have to deal with the ongoing loss of productivity that can result from poorly managed change, not to mention the potential impact on your own enjoyment of your job.