Organizations often downsize with the aim of restructuring itself as a consequence of various factors such as economic challenges or change in operations. However, while downsizing may be inevitable, leaders must make hard decisions towards personnel management. As such, downsizing is among the most difficult tasks that leaders are confronted with today. However, in order for downsizing to be an effective organizational strategy, leaders must be open to communication while leading during and after the downsizing process to improve the organizations results.
Challenges Facing Managers
Leaders are often aware of an impending downsizing process in advance; hence they are responsible for making a decision of which employees are to be downsized. This aspect impacts on their conscience since they know employees have invested their energy, aspirations and future on their jobs (Armour, 2001). This makes leaders feel guilty and deceptive since they have to discourage employee future goals in the organization. This is because they know that the employees will not be there to see their goals to fruition. Additionally, leaders and employees may develop personal relationships, which make leaders feel guilty of their action on the basis of their knowledge and relationship with employees.
The process of downsizing creates an employee motivation problem; significantly because leaders/managers must reassure the remaining employees that their jobs are secured. Furthermore, leaders must confront challenging questions from employees fearing further job cuts. Employee fears of further downsizing create a challenge of motivation given that retained employees may be uncertain of their job security (Armour, 2001). This leads to some employees seeking alternative employment before they are downsized or reduced employee efficiencies as a consequence of anxiety due to fear of further downsizing. Thus, leaders are face challenge of reassuring employees and motivating them; not only to undertake their normal job quotas but also additional tasks or responsibility as a consequence of downsizing.
Servant leadership is premised on leading strategies, which involve enabling, developing and creating support for team members while aiding the development of their potential. Servant Leadership is critical in mitigating the impacts of a downsizing process through listening and responding to employee concerns while convincing them to expect better rewards. Therefore, a leader must always accept responsibility while presenting strategies aimed at improving the employee’s wellbeing in line with organizational development.
Significantly, servant leadership is critical after a downsizing process in building and motivating the retained employees. Therefore, leaders must facilitate an environment where employees are motivated through organizational programs, create a healthy and growth work environment. This makes employees more autonomous and stronger in execution of their duties without fear of being downsized (Northouse, 2010). Therefore, a leader must be a keen listener and attuned to the employees under their purview; thus they should empathetically appreciate how and what employees are thinking. Servant leadership aids in the mitigation of the diminishing employee morale through tuning into the aspects that motivate and inspires employees; as such, removal of barriers hindering their performance while helping them to optimize their efficiencies is critical.
The impacts of downsizing may not be manageable under traditional organizational leadership approaches; therefore, situational leadership is significantly applicable in managing the impacts of downsizing. This approach enables the leader to develop the commitment and competencies of employees to ensure that they are motivated and capable of efficiently executing new roles or additional responsibilities as a consequence of downsizing (Northouse, 2010). Though informing employees that they no longer have a job is tough, it is significantly difficult to confront the remaining workforce after downsizing, more so, in smaller organizations where employees have become intimately close.
Therefore, a leader must reassure employees in order to dispense their fears and analyze all the available jobs with a new perspective. Jobs must be tailored in light of the prevalent situation. Employees may be required to take additional responsibilities; however, a situational leader takes into consideration the existing jobs and redefines them in order to create tasks require doing at the moment. This ensures that human resources are allocated to the immediate and critical jobs through a critical evaluation of available jobs and employee competencies, qualifications and capacities to take on new tasks or additional responsibilities. Through situational leadership, employees are motivated as a consequence of the leader’s responsiveness to their immediate needs and recognition of their abilities and qualification where in the past they were not acknowledged.
A leader must recognize that employees under their purview are concerned for varying reasons. A number of surviving employees may be concerned that they do not possess the skills and knowledge required to execute their new jobs; therefore, it is critical that a leader demonstrate patience and recognize such concerns while facilitating the employees with the necessary training for the job (Mack & Banks, 2009). Some employees may perceive themselves as incapable of learning new skills; hence unable to take new responsibilities while others may be concerned that there is too much work. In light of these, a leader must demonstrate patience to allow employees time to adapt to their new responsibilities and the reality of their re-defined roles.
A downsizing process may leave a significant number of surviving employees feeling betrayed; therefore, it is critical to restore trust. Though the organizational changes may have significant benefits for the surviving employees in the short term or long term, people will inherently mistrust the organizational leadership. These results from the feeling of loss experienced after co-workers are laid off. Therefore, leaders must empathize with the surviving employees through allowing them space and time to deal with their feeling of loss, denial, anger and guilt of surviving (Klein, 2009). Hence recognizing and identifying with the extent of emotions that surviving employee’s experience.
It is essential employees are reassured of their value not only to the organization but also to individual leaders. Leaders must take time to talk to individual employees; this makes them aware that they are valued. Hence, giving employees unbiased evaluation of their contributions while suggesting areas of improvement. Significantly, a leader must reassure employees of their job security and explain the basis in which the laid off employees were selected. This asserts a leader’s integrity and aids in convincing employees to exert themselves in their re-defined responsibilities. Hence employees do not feel cheated which results in their stepping up to take on broader and high level responsibilities (Mack & Banks, 2009).
The impact of downsizing may have long term consequences if they are not effectively managed. The role of leaders in mitigating these challenges is critical in preventing organizational downcycle while developing a motivated, efficient and robust human capital. Therefore, facing such challenges during and after the downsizing process incurs fewer costs and facilitates immediate renewal of organizational strategies.
- Armour, S. (2001). Managers making layoffs can feel demoralized. USA Today. Retrieved from usatoday30.usatoday.com/careers/news/2001-05-10-managers.htm
- Klein, K. E. (2009). Leadership After Layoffs. Bloomberg BusinessWeek. Retrieved from www.bloomberg.com/news/articles/2009-02-03/leadership-after-layoffsbusinessweek-business-news-stock-market-and-financial-advice
- Mack, W., & Banks, D. (2009). Leading after layoffs: Best Practices for Re-Energizing Your Workforce. Retrieved from //slaytonconsulting.com/wp-content/uploads/2009/11/Leading_After_Layoffs.pdf
- Northouse, P. G. (2010). Leadership: Theory and Practice.( 5th ed.). London, UK: SAGE Publications.