360DigitalInfluence

We all know that layoffs are hardest on those who lose their jobs. We also know they take a toll on survivors (hence the phrase “survivors’ guilt”). Less acknowledged is that they take a toll on the front line managers who conduct them.

A ten-year longitudinal study compared managers who had been directly involved in layoff activities (including handing out warn and layoff notices and selecting those to be laid off) with those who had not.

Among the “hads,” the study found significantly higher levels of job stress, depression, and emotional exhaustion. Three years after having been involved in layoffs, they continued to experience poor health symptoms.

The study observed that tough economic times can make layoffs seem more necessary and thus easier to understand for everyone, but also offered some input on how to mitigate these effects – principally, through fairness and transparency.

Fairness influences employee attitudes and behavior: “Layoffs that are seen as the result of fair and transparent procedures are likely to shield managers from employee hostility or retaliation.” Developing clear rules and procedures, convening a committee of several managers to oversee the process, and spreading responsibility widely can also help.

Layoffs are never easy or pleasant, but studies like this one remind us that good communication practices can lessen the impact on everyone involved.

Early this past fall, my accountant friend switched jobs, from a huge financial institution that has acquired several smaller banks over the past months to one of the nation’s largest electric utility providers. Our conversations about work have been so much more pleasant since she made the move, so I recently asked her about it.  She said the new company makes her feel valued as an employee and that they took an active interest in their employees well being.  Of course I needed to know more.

She told me that her new company announced a salary freeze many months in advance of annual raises and clearly communicated that they were taking cost-saving measures to avoid layoffs.  Employees were also told they would still receive a bonus if the company met a certain corporate goal, which it did and bonuses were paid.  All examples of good internal communications practices that we’d like to see from more companies, but still I wondered how, as a fairly new employee there, she could talk about feeling valued with such zen. 

She said that while the advanced communications were all nice, and certainly an improvement from her last job where the company had a lot of significant news it should have communicated to employees but rarely did, what really made her feel valued was that she knew that she “wouldn’t be yelled at everyday.”  What?!?!  This was clearly going to be a long conversation. 

She felt her last company did not clearly communicate the expectations that were set of employees, that they were reprimanded for not meeting those expectations, and that when employees were able to decipher management’s expectations, they were not recognized. 

Conversely, her new company, which could not tell her when she would receive her next raise, did tell her, and the rest of their employees, what they needed to know and do to help the company ensure its long-term financial health.  When she goes to work, she knows what she should focus on and how she contributes to her company’s success.  And more importantly, she knows that while her company cannot guarantee her job security, they will keep her in the loop on information that may affect her well being.

On a recent Friday afternoon, an internet startup that shall remain nameless announced a mandatory conference call Monday at 10 AM for its eight employees “to hear a status update on the company.”

After spending the weekend speculating about what the announcement might be, Monday the employees gathered on the phone. They were told that six of them would no longer have jobs, and that in individual phone calls following the conference call they would be notified whether they were to stay or go. Their boss was told that his services were no longer required, as his former employees (and in 2/3 of cases, soon-be-ex employees of the company) listened.

After the call, the employees sat at their computers, with their email open, waiting for the phone to ring. They were friends and colleagues, as workers at many close-knit startups are. The first to receive negative news sent an email to the rest – “SH-T.” As each received the call, he or she added to the round-robin email, until only two were left.

All in all, a textbook case of how not to handle a layoff.

What can we learn?

1. Don’t ruin anyone’s weekend – they can guess until the cows come home, but until they find out for sure, they can’t do anything productive, including sign up for unemployment.
2. Respect the hierarchy – tell managers first, and privately. Tell the affected employees next. You can ask the employees to please give you ten minutes to complete your calls but don’t assume that they will. Explain succinctly what you are doing (“We are laying off six of our nine employees, effective immediately”) and why (“because we are running out of money, and by cutting our staff by 2/3 we can stretch what money we do have for another three months, until we are able to procure additional funding”). Then call each of the employees you hope to retain. Explain what you have done and why, and what you did for the employees that were let go (“We are paying 2 months severance and three months of Cobra to help with the transition”) – knowing that their colleagues were treated with courtesy and respect will help assuage the “survivors’ guilt” that the remaining employees will feel and reassure them that if things continue downhill they will at least be treated well.
3. Rally the team – Schedule a conference call for the remaining employees and lay out your plan for the future. Acknowledge that everyone’s reeling from the recent news but keep your focus on the future - “Now, let’s get to work.”

Buzzword Bingo became all the rage in the mid-1990s after the game was featured in a Dilbert cartoon. Chris Pirazzi, then a software engineer at Silicon Graphics in Mountain View, CA where the game was allegedly invented, says it “arose as a reaction against half-truth and responsibility dodging” in the workplace.

In this recessionary environment, the game has a new relevance, as people tend to gravitate toward clichés and buzzwords when they are uncomfortable – and delivering bad news is never easy.

A few choice terms to avoid:

• Learnings and takeaways – if you’ve made a mistake and learned from it, say so. If you made what seemed like a smart move at the time and then got caught with your pants down, say so. Either way, these are not nouns.
• Scalable – scalable is a word that means very different things, depending on which side of the scale you’re on. To managers and investors, it means you’re flexible and can shrink or grow quickly in response to changing needs. To employees, it means, “You’re disposable.” Don’t use it.
• Unintended consequences – This is another way of saying, “We didn’t see this coming” – and that’s no excuse.
• Impacted – they may be “impacted” when they get your news, but that’s getting pretty personal. “Affected” is a slightly better choice, but “the employees we had to let go” is best.
• Right-sizing – please. Just don’t.