Preserving Team Unity During Restructuring and Downsizing

Few decisions are as difficult in the business world than those following the realization that the business unit is wrongly positioned to suit the current mission.   Emotions tend to overwhelm good business reason, and sometimes decisions that seem to make sense are bad for many other reasons. This is not a course taught in business school, and managers are often ill-prepared to deal with the difficulty of the decisions needing to be made.

• Mistrust in this type of situation unfortunately runs rampant. Even when it seems silly, it is still there.  I once attended a management holiday party prior to an upcoming major January restructuring; all of the attendees there knew what was pending and there was a somber overtone to the festivities.  Our business leader had gifts for everyone on the team, beautiful candles chosen by his spouse that in any normal environment would be highly valued.  But some of the candles were short and stout, some of them were taller and thinner, and team members started whispering about who got the tall thin ones versus who got the short stout ones, and attributing that to who goes and who stays. It was terrible!  Yet no matter how silly it was, it still remained on people’s minds.
• Remember to always act with concern and compassion for the entire employee population during this time.  Good people face job loss; we should never treat affected employees as if they are lower than others or that they don’t have value.  Frankly, if they didn’t have value, then managers didn’t do their job in managing them out in advance of a downsizing event.
• With the broad employee population, develop a good communications plan with timing and message that precedes the event, to develop an understanding of business conditions and why this is the only alternative, not so far in advance that all of your best employees run for the exits — but also not so far delayed that they all see it coming and by not discussing it your leadership credibility becomes damaged.  Best practices also include individual one-on-one discussions with each ‘survivor’ employee following the event, detailing changes in job responsibility but also take the opportunity to genuinely note his or her specific value to the organization.  Have each manager perform due diligence on these discussions; they become memorable and valuable to the employee.
• Team unity also hinges on the belief among the employee population that the process is built upon the highest level of integrity, that this is a necessary action designed for the best possible future, that selections were made fairly and not just among the “good old boys” network, and that impacted employees will be treated fairly with sufficient severance and outplacement.  Employees also need to believe that another event is not going to happen again in six months or a year; if they believe this, your best employees are going to be headed for the exits anyway.  If you think this restructuring isn’t going to put your business in the best possible cost and strategic position following the job eliminations, then cut deeper to avoid another short term downsizing.
• I’ve seen organizations believe that they are doing exiting employees a favor by announcing job elimination weeks or months in advance and having the employees work until their departure date.  In my opinion, this does not help team unity at all — it creates an awkward situation in the work area and it doesn’t take long before the work that affected employees are doing becomes less and less meaningful.  My recommendation would be that if you want to give them extra time, set up a career center and have them focus their time on finding a new position elsewhere, which is the most important thing for them.
• Leadership team unity is a complex topic unto itself; because of their role in helping to select team members who stay or go they have to be involved in advance.  They are in unfamiliar territory, they may have to choose between personal favorites and hand-chosen team members, and they may feel that they are personally at risk as well.  They need to be given guidance on how to choose (I strongly recommend a decision matrix here), with specific objectives by budget and headcount.
• Leadership team process needs oversight, typically by the business leader and the HR leader.   Keep fairness and equity an objective and decide in advance how to handle potential angles that may cause team distrust after the restructuring event is over.  For example, decide what ‘headcount elimination’ and ‘budget reduction’ mean in practical terms.  Eliminating a job that the manager was “thinking” or “planning” to add next year (therefore avoiding one more current team exit) becomes viewed with distrust.  However, eliminating a job that was just recently vacated and actively posted is different; so also is one that has been recently approved by a job requisition process and there is current activity to fill.  Eliminating a job or headcount by outsourcing the process may be appropriate, but then the cost of the outsourced process needs added back to the budgetary side of the discussion and must not be missed.  It’s best to decide and communicate these things in advance so as not to damage your own credibility later.
• I recommend a single, across-the-board objective for headcount and cost reduction, such as 15% in all areas.  Yes, some teams are stronger and have better players, some teams are more critical to the business mission, some teams have been managed tighter and more cost-effectively than others.  Yet when downsizing is looming, every decision becomes suspect and subject to charge of favoritism; even if not, the residual after-effects following a restructuring may cause team members to look upon each other with mistrust if one team is significantly less impacted than others.  Facing the same difficult objective that is evenly distributed across the board can actually help to bring management teams together.  I’ve seen the establishment of a “strategic team” to make the tough decisions for the business, but a pending downsizing tends create a much less sharing environment and management closes ranks.  Agreement becomes very difficult and this approach tends not to succeed.
• The business must maintain confidentiality.  No messages until according to plan, and don’t ‘leak’ word that announcements will take place at a future time — wait and delay is disastrous to employee productivity and morale.  You cannot tell your best employees that they are ‘safe’ just to try to keep them from leaving during the stressful situation.   By definition, those who you do not tell this are not ‘safe’.  And sharing this prior to completion of your process may run the risk of being wrong.
• Time the restructuring announcements appropriately.     Do not send a terrible message by waiting until Friday of the workweek.   Recommended would be a Tuesday or a Wednesday; don’t arbitrarily cancel all meetings in advance of that day — you’ll be signaling the upcoming event to employees.  Start right away at the beginning of the workday — don’t let managers agonize in wait.  Train managers well in advance, and script employee discussions with role play so all are comfortable that they are ready, preferably without reading from the page.  Prepare Q & A responses in writing and test them on managers in advance.  Experience tells me that this event is as hard on management making decisions and delivering messages as it is on impacted employees at the time.  Move affected employees directly into de-briefing sessions with a trained outplacement specialist and begin their focus on a future process of finding a new job.  Then following the exit discussions, call the remaining ‘survivor’ employees together and discuss new work arrangements and the priorities moving forward.

The strategic objective here is to avoid having your leadership team and employee teams become torn apart by behaviors during a downsizing or restructuring event.  By thinking through several of these objectives in advance and keeping the concept of team unity as an important outcome, you stand a much better chance of being successful through the event.

Motivation: My favorite indicator for management success

I’ve spent a lot of years interviewing and hiring candidates for management positions at both high and lower levels of the organization.  During that time I’ve tried a lot of different methods and looked over a lot of indicators for what it is that tends to make an individual successful as a manager.

My favorite?  Intrinsic motivation.  I’ve come to believe that the candidates that I see who are intrinsically motivated to do this work because they like the work, or they enjoy the type of people they get to work with, or they appreciate the customers with whom they get to interact — those are my favorite candidates.  Intrinsically motivated individuals rarely get messed up if we haven’t trained them right — they’ll read a book, look up a colleague, or take a class. Intrinsically motivated individuals tend not to get freaked out that the manager hasn’t given them enough feedback — they’ll seek it out from the clients, co-workers, or the manager himself.  An intrinsically motivated person will often not get too upset if he finds out somebody else is getting paid more for similar work — he’ll demonstrate better performance or recognize that what he’s receiving is fair pay for the work, and work that he enjoys.  She’s motivated by the the work, even if she is upset at the boss right now, because of her intrinsic motivation.

Extrinsically motivated individuals, in my experience, need something else keeping them “going” toward the right kind of performance in this job.  Incentive plans, feedback, bigger jobs or more power, all of these are things that in my thoughts help them overcome the fact that to them it’s just a job.  They tend to be motivated only by the WIIFM concept – “what’s in it for me”, and they really believe that everybody else is solely driven by that, too.   Sorry, this kind of lack of commitment to the overall organization’s success (instead of solely my own success) kind of rubs me the wrong way, and I believe it has no business in a managerial or leadership role.

I believe it rubs employees the wrong way, too.  People tend to like following an individual because it’s the right thing to do, or the organization will succeed for doing these things, or they are enjoying being part of a winning strategy.   Employees don’t like following an individual just so he or she can get promoted or get more money at their expense.

How to I look for intrinsic motivators?  Funny, it comes out in so many ways during an interview.   People who volunteer in community organizations because it’s the right thing to do, or “I remember when I was in that situation and I want to help somebody else”.  Or, why did you choose that particular major in college?  Was it to contribute to society (intrinsic) or make more money (extrinsic)?  How does he treat the Administrative Assistant outside the Manager’s office?  Does he treat her nice because it’s the right thing to do (intrinsic) or not so nice because he figures she can’t do anything for him anyway (extrinsic).  (Yeah, ok, sometimes they know we look at that stuff so he’s smart enough to play along.  But you may be amazed at how many treat her like dirt anyway, and I never hire one of them.)  Why did you join the military?  Couldn’t get a job anywhere else (who knows, might be extrinsic, dig deeper) or I wanted to serve and commit to a noble cause (intrinsic)?

Sadly, some organizations really like the extrinsically motivated person, because they’ll often do whatever the boss wants them to do, even if it’s borderline unethical, in hopes of getting that next raise or promotion.  Some bosses like that.  I never have, because in my mind a person who’s unethical about this can be unethical about just about anything.  Especially in HR, if you’ve got no ethics, you’ve got nothing.   

Just like any indicator during an interview, looking for just intrinsic motivation isn’t perfect…. there may be other failure factors.  But it’s my favorite, for me it’s the most telling, and I don’t believe it’s ever steered me wrong.  HR professionals, if you agree with me, make sure you’re looking at this and develop your own body of knowledge around how to get at it.  It won’t steer you wrong, either.

Create your own confidential mini-data warehouse using Excel

I’d like to recommend some ways HR can better manipulate payroll and HRIS data in a confidential manner, and keep it in your control and current.  Sometimes as HR professionals we don’t know how to do this sort of thing and it’s hard to ask for IT support with the subject being confidential data.  So what we do is we figure out a basic system using existing reports, sometimes keying it in to a separate spreadsheet for the current project (like yearly incentive or Merit increase processing); then in six weeks’ time it’s useless data that is already outdated by people changes in the business. Time to learn one process that can be re-used and updated in a flash, with a single set of skills that you can use with an entirely different HRIS system in the future.

I’m going to propose to you a way to change this scenario for the better — we will learn how to develop a mini-data-warehouse that feeds off your current HRIS and updates automatically to current data when you open it.  It’s going to take some learning and a little work.  It’s too much for one blog, so we’re going to talk about it in a series: first, we’ll learn how to export data from an HRIS database in a manner useful for Excel; second, we will learn how to import the data into Excel and set up an automatic data feed that will update every time you open your spreadsheet; third, we will show how to create some simple tables or Pivot Tables that can present your data in a meaningful way; and fourth, we’ll demonstrate how to create multiple reports / analyses from the same set of data so you don’t have to go into your HRIS’ report generator every time, and you can create a quick HR dashboard of meaningful information ready for your viewing.   We’ll look at one more advanced subject following — the idea of knitting together dissimilar data sources into this same dashboard to enhance your reporting (e.g., mix payroll and HR data from different databases into your Excel dashboard).

Sound daunting?  It should, but I believe we can step through the key essential functions to do these things and help you sweep away the unnecessary stuff.  I’m sure there are more technical and better ways to do this, but I’m trying to teach HR folks how to create your own and keep current, confidential data in your control and presented in the manner you or your chief clients want to see it.  

I.  Seek the .csv data output option in your HRIS report generator.   Although many different systems produce a variety of different reporting options, almost all will have some option that allows you to output report data into a .csv (comma separated variable) format.  Go into your HRIS report generator, generate a report with bunches, just bunches of employee data with employee identifiers (whatever you use, SSN, payroll ID, clock number, whatever, so you know who’s who and who additional data like clock punches should belong to), and tell your HRIS reporter to output report data in .csv.  Why csv?  Because nearly everybody’s system has the option, it skips all the report generator stuff about formatting, etc., and it takes up minimal space in the file so Excel can import it quicker than many other file formats — and when you’re dealing with a bunch of data, fast is good.  I like fast.

Practical tip/trick #1:  “comma separated variable” is just the name the industry uses for the file type.  It means that for every field (piece of data) you have within an employee record (think ID, Last Name, First Name, start date, etc. all collected together) that it’s separated from the next field by a comma.  But you can use other field separators and still meet .csv standards, and I recommend that you use a TAB.  First reason for this is that in many payroll systems, annual salary has a comma in it, which means that halfway through “52,334” the system reads that as two fields, which screws up everything after that comma.    Or employee name “Jones, Edwin R.” in your mind is one name, but in .csv it’s two fields.  Tabs, on the other hand, aren’t that normally used in employee data files.  Second reason is that there are options within Excel that make using the Tab really easy, and I like easy.

II.  When in doubt, dump it.  For most HR applications, I don’t recommend exporting the weekly payroll stuff, because you can have hundreds of records per employee (and usefulness of how much a guy paid in local taxes last month is pretty low).  However, payroll header information (like name, address, work location, base rate of pay, YTD overtime and pay, etc.) might be useful, even if you don’t know that you need it for your current report : when creating a data warehouse,  export extra stuff anyway.  Later in this project you will be looking at your data saying, “wow, now that I can get this far with the data I’ve got, if I only had these other data points I could really make a dynamite report” — and it’s not too much for the system or your spreadsheet to take extra stuff at this time.  We will set up your data feed as an external data source in Excel so you won’t even see the extra stuff or know that it’s there.

This is also an attempt to focus your knowledge base toward Excel rather than five or six different HRIS report generators (heavens, I so wish there were a standard for this!!  In one of my recent HRIS systems, we had FIVE different report generators to learn in the same package!!!).

III. Save the export file someplace convenient and confidential.  You’ll need it for the next step.  Give it a standard name that you will remember.  If it’s truly confidential, I tend to store it on my computer’s desktop, because with most employer’s servers the user account backup does not include the desktop.  IT folks will tell you, “but then your file never gets backed up”, but I don’t care because when we set it up to run automatically out of HRIS I’ll get new data anyway.

I’m a big fan for allowing management to make strategic decisions based on real data and current information rather than perception and opinion.  This is the first step in helping us get there.

Later post, we’ll import the .csv information into Excel and set up the automatic data updating routines, and give you a bit of a teaser for what you might be able to do with it.

Jump into the Performance Appraisal dialogue!!

Sometimes I think I’m just too practical to be as strategic as I want to be.   Strategically, I think in a perfect world that managers can provide the kind of feedback that keeps even the most needy Millenial going, to coach and counsel every member of a team to the highest performance standard, to avoid that uncomfortable, awful, diabolical performance appraisal conversation ending each fiscal year that tries to sum up the entire employee year in 10 minutes.  So, I’ve said it, I hate performance appraisals.  But, I admit, the practical part of me doesn’t know a better system that actually works.

In my world, managers are outstanding at providing feedback to employees who are like them, who cozy up to them, who clearly will eventually be on a peer track to them.  Then there’s everyone else.  Those are the people I worry about, because without the performance appraisal the two of them might never have the coaching conversation, or the growth conversation.

There are clearly flaws in the performance appraisal system.  No matter how rare it is that managers and employees set up good objectives for the following year, the world changes throughout that year and some keep those objectives current better than others.  Of course, many employees have no objectives, or they are so broad you can drive a truck through them, and then at year end the flowery ‘year end results’ documents come through with over-edited opinion of how great the year was (of course this is written by the employee!) and the manager doesn’t believe any of it anyway.   He or she has his opinion, and besides, there has to be a forced ranking so as a manager I’m comparing lions and tigers and I have to make up my own criteria based on who I like, anyway.  It’s fraught with problems, and weaknesses, and for all those managers who hate it more than I do, it’s a process to suffer through a few short weeks at the end of the fiscal year.

Like it or not, employees know what ratings other employees receive (or they think they do).  When they feel that the slug of an employee in the next cubicle got the same raise as their high-performing self, and especially if the performance appraisal system drives merit raises as most do, the process actually becomes a retention issue for higher performing employees.  Yet there are a lot of managers that think they should give everyone roughly the same appraisal / raise out of ‘fairness’ and they will actually drive this retention issue.  Then who quits?  The high performer.  Who stays?  The slug next door.  Who wins?  Nobody.  But the manager still is lulled into believing it’s fair.

I wish I had a better system, and I’m interested if anyone out there would like to offer up practical ideas of systems that work.   Most of the enticing ideas I’ve heard so far sound good, but I’m not yet convinced that they will actually work in a real-world environment. People need honest, straight-up feedback, and some will get it, yet some will not.  It’s the worst feeling in the world when an HR exec has to hear that an employee has become a train wreck because things were said and believed about the employee but nobody told him.  Sometimes you come upon the situation and the damage is already way past saving.  Personally, I really don’t believe the PA solves this issue either, but it can at least be a signal to an employee that things aren’t as right as they should be, which should at least enable the employee to come back later and initiate the tough conversation that the manager should have the guts to start (but didn’t).

I don’t plan to write at all today about the promotability discussion, because that one is pretty scary, and in my opinion should have no place driving a discussion about the raise in the paycheck.  (Performance and promotability are summarily two different things.  Period. )  I’ve had little luck over the years getting calibration among management groups about what promotability actually is, and I’ve found even myself bending the definition on a regular basis.   We’ll talk about it, including the fabled 9-blocks, another day.

Talk to me.  Have you experienced or implemented a system that can get rid of the traditional performance appraisal and still provides the feedback and development that employees need?  What do you do about merit increases (scrap those too, a meritorious discussion)?

Look for capabilities more than just job skills

We spend a lot of effort searching for job skills when we hire people, and beyond minimum qualifications part of this is a waste of time.    Why do we do this?   One reason we do this is that hiring managers don’t want to spend their time training someone new to do the job.   Funny part is, they do anyway.  In my experience,  especially for firms that don’t have a strong culture of training and development, we spend a lot of new hires’ time training them in ‘this is the way we do this here’.   Therefore the new hire gets hired for a set of skills based on the way he has learned it in another place, but then we re-train him in our way of doing it anyway.   So why did we focus on mostly job skills in the hiring process?

Then there is the failure factor.  Rarely, very rarely in my experience, do individuals fail on their new assignments due to lack of skills.  Far more often, they fail because they haven’t integrated well to our culture or environment, or they don’t work well with others.  Once again, if we have focused on the skills in the hiring process, we’ve missed the opportunity to study the things that matter more in the assessment: capabilities and personal traits.  In two years’ time, those skills won’t make any difference because he is thoroughly engaged in our firm’s process, and if he’s not a good team contributor you’re stuck with him.   Again, why did we focus most of our time on skills during the hiring process?

We also focus on skills because we’re being lazy.  Skills can be seen right in front of us on the resume, no more work involved.  Looking for interpersonal, cultural, and team abilities require better structure to our questions, stronger assessment practices, and a lot better idea what past failure factors of others have been (or specifically what we are looking for in terms of these abilities).

Yes, have someone in the interview process verify the job skills that they have listed on their resume to ensure that they have some familiarity with the subject and relevant concepts.  Beyond that, spend time to develop behavioral-based questions like, “Tell me about the last situation you encountered with multiple component failures” to assess the problem-solving skills or “Describe how you go about learning a subject area in which you have no formal training or experience, in the context of the last time you had to do this” for personal development and learning.  An excellent practice is to divide up the job competencies (of which job skills is only one) into categories (such as interpersonal, team, leadership, communications, etc.) and have interviewers choose one or two categories of their interview focus.  This avoids everyone asking about the same thing(s).

For many jobs, you can also use a professionally-developed assessment that can determine both knowledge and aptitude, giving you a clear identification of the level of the bona-fide occupational requirements (BFOQ) for the position.  We’ll talk more about these kinds of assessments as the subject of a future post.

What I’m arguing for is a shift in hiring assessment from “what does she know” to a) “does she have fundamental concepts of the skill area”, b) “how capable is she in learning new things”, and c) “how can she adapt to a new work team and new environment, and our firm”. Since you’re going to retrain her anyway, selecting the best candidate as the one who knows the most “stuff” is silly, particularly if you don’t know that your best candidate can work in the environment or might not be very good at learning new things.  Stop wasting time and dig deeper to focus on things that make a bigger difference to the strategy of your business.