Being Proactive in Downsizing
 How well we, as an institution, handle workforce
issues will have major consequences for the morale of
our employees and their commitment and
productivity.
 It is possible to come through a downsizing period
with minimal impact on our workforce, and perhaps
even an enhanced capacity to continue progress
toward our institutional aspirations
“The Cycle of Failure”
1. Where organizations are not proactive, the possibility of
2.
3.
4.
5.
or actual downsizing increases employee dissatisfaction
and anxiety in the workplace
Workforce become less motivated; less “engaged” or
cooperative
Surviving employees “look elsewhere” for better work
conditions; possible loss of best employees
Productivity drops further affecting customer service and
institutional image and reputation
Less productivity adversely impacts achieving
institutional aspirations, and a decline in support
Studies to Inform Us
1. Downsizing leads to declines in employee morale as
reported by companies
- 56% (Watson Wyatt 1993); 80% (AMA
1994)
2. Negatively affect s organizational commitment (Brockner, Grover, Reed, Dewitt, & O'Malley, 1987; Knudsen, Johnson,
Martin, & Roman, 2003)
3. Job satisfaction - (Armstrong-Stassen, 2002; Luthans & Sommer, 1999)
4. Job involvement - (Brockner, Grover, & Blonder, 1988),
Studies…
5. Trust (Armstrong-Stassen, 2002)
6. Organizational commitment and job satisfaction
consistently predict voluntary turnover - (Tett &
Meyer, 1993),
7. Significant increases in psychological distress
one month after the announcement and prior to
the event itself - (Swaen et al.’s (2004)
Unintended Consequence
1. Unanticipated voluntary turnover
2. Destruction of “The Psychological Contract” –
equated with layoffs ; the most severe downsizing
action
3. Lose key talent
Retaining Talent
4. 11% of workforce is highly committed; must retain
these! (Corporate Leadership Council – 2004)
5. Emotional commitment is the key to retention
 7 times less likely to leave
 Give 50% more effort
6. Organizations are 2X better overall performance
7. Manager and “open door” senior mgt are key drivers
Conclusion:
Build downsizing strategies
accordingly
Agenda
1. Introduction: Impact on the workforce – data,
morale, productivity, talent
2. A guide to intelligently handling downsizing –
Principles
3. Strategies after Downsizing
How? – SDP Triad - Say, Do, Provide
 It’s not vision or mission that motivates people, it’s
relationships.
1. Executives – trust is the key, value the employee –
core values, appreciation, do everything we can, we
rely on you to get us through this and position our
institution for the future (Kenexa 2008)
2. Supervisors and Managers – 19 of top 25 factors (CLC
2004). What they do is critical.
3. Human Resources – inform managers of the impact
of their relationships with employees; train them to
work well with employees ; fair practices, safety and
well-being (Ipsos Insight 2008)
Watson Wyatt Study: Factors –
Successful Restructuring
 Not a matter of luck
 Communicate effectively
 Involve employees
 Mobilize managers
 Adopt recovery actions
 Provide appropriate training to employees
How to Cut Costs Without Cutting Off Future Growth: Lessons From the
Restructurings of the Early 1990s Watson Wyatt p. 2
More Factors…
 Reduce their workforce only once
 Select workers carefully to minimize those replaced
 Pay particular attention to recovery actions
 …adverse impacts from restructuring eliminated 17.5
percent of their workforce
 Rehiring previously terminated employees which is
especially common among firms using reductions in
force significantly undermine their chances of success
Workforce Principles
1. Communicate to Fully Engage the Workforce. Help
direct their energy and skills to continuing to provide
services in achieving institutional mission and goals.
2. Utilize a Partnership Strategy Model that Reflect
Institutional Core Values. Treat people fairly and
recognize their need to feel valued. Communicate
honestly and directly with your employees.
3. Recognize that Talent Development and Retention Is a
Top Institutional Priority: Encourage training and new
opportunities.
4. To the Extent Possible, Minimize Adverse Economic
Impact on Employees: Consider a range of options –
furloughs, modified work schedules, severance packages,
in addition to layoffs.
5. Redesign Jobs and Work/Business Processes for Optimal
Efficiency and Productivity
6. Be Mindful of Legal Issues – ADEA, Adverse Impact
More slides….more slides….
Strategies After Downsizing:
Shape the Organization for Continuity
Can’t Ignore the Reality…
1. Economic downturn has adverse impact
2. Higher Ed must retrench
3. We can choose how we respond
Key Elements
1. Develop an organization that is consistent with the
vision, culture and core values.
2. Provide/redesign/consolidate jobs, processes and
structures to achieve strategic goals and operational
priorities.
3. Develop strategies to adapt to changing outside
influence from economic, technical, financial, and
political environments. Keep stakeholders and
constituents informed.
4. Set forth the role of the campus leadership,
supervisors/managers, the workforce, HR/training
and development.
Develop an Institutional
Effectiveness Strategy
1. Needs explicit recognition and endorsement as an
institutional driver
1. An IE strategy brings together the institutional
workforce at all levels – executive, administrative,
managerial/supervisory, faculty, and staff - in a
collaborative and integrated endeavor to improve the
institution
Key Workforce Factors
in Institutional Effectiveness
 Morale
 Productivity
 Job Design
 Business Processes
 Training and Talent Acquisition and Development
 Measurement and Outcomes
 Working Relationships with Employees and
Management
Use High Involvement HR Practices
1. The workforce facilitates organizational success
2. Monitor workforce attitudes – look at turnover
statistics and employee satisfaction
3. Provide for “procedural justice” - grievance or
appeals process, a confidential problem-solving
avenue (“hotline”), an ombudsperson designated for
complaint resolution
4. Set up an explicit, targeted training program for
supervisors, managers, and employees – for
new/changed duties, to acquire new skills or
knowledge, and to learn new/modified processes or
procedures
Career Development Strategy
 Career resource center
 Assessment of skills, knowledge, abilities
 Education
 Rotation through jobs and locations
 Special assignments
 Succession planning
 Enabling voluntary transfers to provide job breadth
Training/Development Strategy
 Objective: Develop bench strength and managerial
and workforce agility
 In the face of cut backs on education and
development, consider the following:
 Mentoring
 Professional coaches
 On-the-job training
 Apprenticeships
Workforce Planning Strategy
1. Collect data on employee knowledge, skills, abilities,
2.
3.
4.
5.
and experience
Evaluate characteristics of the workforce today and
the organization’s future workforce needs
Determine existing or anticipated gaps
Fill urgent gaps by promoting from within or
recruiting
Anticipated gaps can be filled by cross-training,
educating, and mentoring