ESSAY KELLEY HOLLAND

Downsizing. Restructuring. Headcount reduction. Whatever they are called, layoffs instill dread, guilt or both in managers. The loss of a job is among life’s most traumatic events .
Because of this, managers can become so consumed by the prospect of firing people that they fail to adequately remotivate the employees who remain.
But they make this mistake at their peril. Study after study has found that employers who eliminate jobs may not bolster productivity over the long run. Too often, their anxious and overworked remaining employees become riskaverse and unproductive, or leave for other jobs. As companies hire new workers or turn to outside vendors to compensate, the short-term savings from layoffs can evaporate.
The wobbly economy is producing a steady stream of layoffs worldwide. So it is more important than ever for managers to understand how best to handle these downsizings, not just for those who lose their jobs, but also for those who are still working.
Some experts believe that workers have developed a certain amount of resiliency after decades of corporate firings and layoffs. That may be true for some of them, but others are still hit hard when co-workers lose their jobs, and managers need to let each employee process the cutback in a way that seems appropriate.
Warren Bennis, a professor of management at the University of Southern California and the author of “On Becoming a Leader,” laid out a core precept for managers dealing with layoffs.
“Respect is the key word,” Professor Bennis said. Too often, he said, “business today just seems to be so callous.”
He decried bureaucracies that “lay down edicts” about cutbacks and treat employees as if they were invisible or indistinguishable - the opposite, he said, of respecting them, which in essence means seeing them clearly and individually.
Employees need to hear right away where cutbacks are being made, and whether additional reductions are coming. Many employees wonder about the fairness of layoffs, and managers can go a long way toward re-establishing trust if they can describe sacrifices of their own, like pay cuts or forgone bonuses.
Managers also need to listen to employees’ reactions to layoffs. This can help employees move on and focus on new responsibilities and objectives.
For example, ComPsych, a provider of employee assistance programs based in Chicago, runs seminars at companies that have eliminated jobs; the first half of the program often consists of employees talking about their reactions to the layoffs, said Anita Madison, the company’s vice president for training and consulting.
Articulating an organization’s goals is particularly important during layoffs. Some managers solicit employee ideas about how to reach those goals. That can help with motivation - especially when employees are being asked to do more with less.
“Often the first casualty in a downsizing is employee morale,” said Wayne F. Cascio, a professor of management at the University of Colorado, Denver, who has studied the effect of layoffs on productivity. Employees who outlast a round of staff cuts, Professor Cascio said, “are looking for signals, and they want to know how they are going to be better off.”
“They want to know if they have a future,”he added.