Managing Fear, Focus Amid Layoffs

With major layoffs in the news almost every day, many managers are finding it difficult to keep employees focused and motivated, even at companies that haven’t downsized.

And to make matters worse, managers are forced to play both ends: They need to keep worried employees working while their jobs also are vulnerable.

Keeping employees motivated during the dot-com bust was one of the challenges faced by HomeGain, an Emeryville, Calif., online real estate firm.

“We know our employees are concerned,” said John Baker, HomeGain president. “Everything around us is looking terrible. But the good news is, we have 100 employees and many millions in the bank. Our employees are grateful they have a job. But we’re not yet at the point where our profitability will pay for our business.”

In fact, HomeGain has been a survivor. The company was fighting for market share with 12 competitors just two years ago. Only two are left.

Baker said he must rally his employees to stay productive, so the company has a shot at staying in business long-term. Yet he wants to be honest with his employees about the firm’s future; painting too rosy a picture will only lead to feelings of disappointment and betrayal later on.

Being as candid as possible is the right thing to do, said Elaine Biech, an executive consultant and president of Ebb Associates in Portage, Wis.

“At a time like this, you cannot over-communicate,” Biech said.

Baker holds monthly meetings at HomeGain to field employees’ questions and keep them up to date.

“We put all our cards on the table about our status: that our money’s not running out tomorrow, that jobs are secure for a while for those who are contributing to the company’s successes,” Baker said.

But Biech would go further. “Consider changing it from monthly to weekly meetings, even if you have to say something over and over, and it’s boring. Because if you don’t, they will make something up.” In addition, employees could submit anonymous questions that they might be reluctant to ask in person, she said.

“You could even have a ‘Rumor Wednesday’ when everyone submits rumors and they’re addressed,” Biech said. “Keep available for questions. Your entire management team should be out there making yourselves available to employees.

“And don’t change your behavior. I know in situations like this it seems easier to hide in your offices. But those employees of yours will be watching every move you make.”

Company management should also continue to celebrate successes with staff, Biech said, and infuse some levity into the workplace to bolster spirits.

Baker’s concerns are repeated by managers at many firms.

“My hat is off to them, because you’ve got to remember that they’re playing it from two ends,” pointed out Joseph Dadourian, a Los Angeles-based workplace psychologist. “They might be laid off too, but they have to keep the team playing. They have to be a good role model and empower their people to do the work for themselves, not for the company.”

Honest communication is paramount, experts say, yet many managers are inclined to take refuge in their offices as tensions rise. They become anxious about fielding staff questions (and may not be permitted to do so by senior management), and are frustrated that they can’t offer consoling assurances about their employees’ future.

So they remain silent, and their passivity becomes grist for the gossip mill.

“Rumors fill the vacuum,” said Paul Sniffin, a managing partner at OI Partners in Baltimore. “They’re usually worst-case scenarios and they bring the productivity way down.”

Dadourian said managers should view gossip mills as evidence that their employees are hungry for information. These managers should quickly address rumors, and allow staff to express their concerns.

“Don’t let your employees learn the bad news from the media,” said Jordan Kaplan, professor of managerial science at Long Island University in Brooklyn.

If companywide morale and productivity are flagging, managers must realize that quick fixes aren’t possible.

They’ll need to work daily to rebuild a culture of trust, reliability and, if possible, predictability, said Santa Monica-based counselor Ruth Luban, author of “Are You a Corporate Refugee? A Survival Guide for Downsized, Disillusioned and Displaced Workers.” “Without these, workers will be saying, ‘Why should we want to give more?’ ” Luban said. “It’s almost like battle fatigue. Understand that it’s normal behavior in a crisis. People are going to be dazed and confused during a major change.”

Even if managers are supervising individuals whose jobs are threatened, they can take time to help their staff create personal development plans, Sniffin said. They also can devise incentives (for example, short trips, awards, gifts) for good performance, said Mylle Mangum, president of MMS Incentives in Atlanta.

“If the employee believes his manager is interested in him as a person, that person feels better and is more motivated about their situation,” said Steve Harvey, a managing partner at OI Partners in Los Angeles.

Should layoffs be imminent, managers must be sure that all staff are treated fairly.

“It’s important to show employees that the company cares, because they’ll either be emissaries or adversaries for it after they leave,” Mangum said.

If permitted by senior management, managers should spell out in advance what will occur during layoffs.

The more employees know, the better prepared they can be. Candid discussions about outplacement services, benefits and severance packages can put staff more at ease.

“Say, ‘If you’re one of the ones laid off, here’s what we’re going to do to help you,’ ” said Tim Dimoff, president of FACS Consulting in Akron, Ohio. “I call this the ‘Ramp Method’ because you’re easing into the situation. We’ve found employee reaction to be positive to it, because they’ve been conditioned about future possibilities.

“But what they don’t accept is being lied to or not told anything, then being abruptly escorted out by a guard. I call that the ‘Cliff Method.’ ”

Badly handled, impersonal layoffs tend to create long-lasting problems, Dimoff said.

“You’re sending a message, ‘This will be the raw treatment you’ll be getting if you’re next,’ ” he said. “There’s tremendous backlash when your workers see a guy they’ve worked with for years being treated like a criminal.”

The morale of the survivors tends to plummet after a round of layoffs.

Remaining employees fear there may be more terminations. They miss their former colleagues. In many cases, they also find themselves taking on the additional work of those let go.

Managers should realize that, even after the most compassionately handled downsizing, remaining staff members need time to recover from the shock of recent events. Their job performances may decline initially. They’ll require forums to voice their concerns.

“But what I see time and again is that many managers don’t acknowledge what happened. It’s ‘Get back to work,’ ” Luban said.

Managers who feel they lack the skills to handle such dire staff difficulties should ask for help from their human resources department or employee assistance program, Luban said.

“Employees are going to need avenues for venting,” she said. “It’s a step toward healing.”