"Resizing the Organization: Maximizing the Gain While Minimizing the Pain of Layoffs, Divestitures, and Closings"

Mitchell Marks and Kenneth De Meuse

Organizational Dynamics

2005, 34(1), pp. 19-35

Resizing is a word that attempts to avoid the negative connotations now associated with downsizing, while reflecting the goal of "becoming agile, flexible, and proactive."

Resizing is occurring for a number of reasons:

• Globalization has led to job relocation
• Deregulation and denationalization have transferred huge organizations from governments to private ownership
• Technological changes have increased productivity or made certain businesses outdated
• The slowing economy led a number of businesses to look to resizing as a cost reduction approach
• Mergers and acquisitions have made some employees redundant

Some common psychological reactions to resizing are:

• Survivor syndrome (including guilt and depression)
• Loss of confidence in management
• Heightened cynicism
• Decreased morale
• Dismal outlook
• Loss of control

Some common behavioral reactions to resizing are:

• Working harder, not smarter
• Lack of direction
• Risk avoidance
• Political behavior and loss of team play
• Role ambiguity

Some principles of transition management recommended in the article are:

• Prepare employees in advance for the impending change
• Involve employees in the resizing process
• Communicate openly, honestly, and frequently throughout the resizing process
• Give employees an inspiring long-term vision, but not stretch targets
• Address the emotional side of the resizing process
• Take a long-term perspective

The article also provides a list of 10 guidelines for effective communication during organizational resizing:

• Recognize that communication will assume a larger role during times of organizational resizing
• Be positive
• Be honest
• Do not promise that things will remain the same
• Keep the promises you do make
• Talk specifics whenever you can
• Do not feed the rumor mill
• Listen for implied meanings and hidden agendas
• Remember the customer
• Over-communicate

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"New Developments in Performance Management"

G. Latham, J. Almost, S. Mann, and C. Moore

Organizational Dynamics

2005, 34(1), pp. 77-87

This article summarizes things learned in the past decade about ways organizations can overcome problems with the traditional performance appraisal. Five general areas are addressed by the authors:

• Legal issues—"Organizations are most likely to win court challenges when:
  • The appraisal instrument is based on a written job analysis
  • It is behavioral
  • There is a written manual for appraising and then coaching an employee
  • Reliability and validity of the appraisal decisions have been documented
  • The results of an appraisal have been reviewed with the employee
  • Organizations can show that appraising and coaching of employees is "fair"
• The appraisal instrument—Instruments usually provide behaviorally-based, trait-based or results-based measures. Employees and raters are most likely to have positive attitudes "if the appraisal instrument facilitates assessments that are: (1) perceived as factual, objective, and unbiased; (2) explicitly related to the organization's strategy; (3) developmental, in that the assessment specifies what the employee must start doing, stop doing, continue doing, or do differently to improve performance; and (4) conducive to setting specific high goals for doing so."
• Who should appraise and coach the employee—Multisource, 360-degree feedback is now used at an estimated 90 percent of the Fortune 1000 firms. Most commonly, feedback is collected from the supervisor, subordinates, peers, and oneself.
• Objectivity and fairness—Training should teach raters:
  • The relevant performance criteria for evaluating people
  • The relevant job behaviors to observe
  • Ways to effectively minimize rating biases and errors
  Raters should also be formally evaluated on "the accuracy and comprehensiveness of appraisals of others, as well as on the extent to which organizational justice principles are followed, and specific high goals are set."
• The coaching process itself—Year-round performance feedback and coaching is recommended. Self-efficacy should be instilled in employees.

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"Implementing Successful Kanbans"

John Gross

Industrial Engineer

April 2005, pp. 37-39

The author of this article identifies a number of fears that keep organizations from implementing lean production instead of push systems:

• Fear of losing control
• Fear of lack of employee ability
• Fear of running out of material
• Fear of missed shipments
• Fear for job security

Ways to directly address these fears and successfully implement kanban systems are:

• Size the kanbans to current operational conditions-Consider production requirements, changeover time, downtime, and scrap
• Adapt container sizes to allow better kanban control
• Make kanban signals visual
• Develop rules that provide decision points plus checks and balances
• Train operators to run the kanban operations
• Set up audit plans to keep assumptions current and maintain system discipline
• Develop a phased improvement plan to reduce kanban quantities

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"Managers—The Missing Link in the Reward Change Process"

Thomas Davenport and Darryl Roberts

Journal of Organizational Excellence

Spring 2005, pp. 3-16

Many organizations are making large-scale changes in the rewards and benefits they provide to their employees. Often, these efforts are not very effective in increasing productivity, reducing costs, or improving employee commitment.

This article provides five requirements to make these efforts successful:

• Establish a thorough analytical basis for rewarding change—Collect data from employees first, before making changes based on guesswork
• Give managers information and build their skills to convey it—Managers should understand the change thoroughly and be prepared to answer questions from employees
• Consider rewards and reward changes holistically—Studies show that employees view their reward portfolios through "generalized impressions about how much the organization values their well-being"
• Understand and respond to change management requirements—Variations in the source of change, the pace of change, the direction of change, and the magnitude of change will all influence the approach organizations and managers should take
• Ensure the reward change process is fair—changes should be applied consistently across time and people, remain free of bias, be based on accurate information, conform to reasonable standards of values, ethics and morality, and take into account the opinions and suggestions of the people affected by the decision or change

The authors state that managers can contribute to making reward change a success in three ways:

• Participate in reward system design and restructuring—Managers are aware of how changes will likely affect their employees, the managers' own concerns about the change will be addressed, and the managers will have added credibility and understanding of the change
• Reestablish an energizing deal—Manager involvement leads to more feeling of ownership of the change
• Demonstrate individual fairness—This is done through consideration of the individual employee's viewpoint, consistent application of criteria, justification for the change, truthful communication, and courtesy in delivery of the message

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"Your Company's Secret Change Agents"

Richard Pasquale and Jerry Sternin

Harvard Business Review

May 2005, pp. 74-81

Over the past 14 years, the authors of this article have been trying to uncover organizational innovators whom they call positive deviants—"usually individuals on the periphery of their organizations or societies who are far removed from the orthodoxies of mainstream change endeavors. These innovators' uncommon practices and behaviors enable them to find better solutions to problems than others in their communities."

The unorthodox approach to change endorsed in this article has six steps:

1. Make the group the guru—"In the positive deviance model, problem identification, ownership, and action begin in and remain with the community"-This reduces overdependence on official champions or leaders, who may act as facilitators in this model
2. Reframe through facts—This approach first looks at the conventional explanation of the situation, then looks for exceptions to the explanation that are doing well, and then focuses attention on the exceptions.
3. Make it safe to learn—Threats to those who challenge the status quo conceptualization must be minimized, and the community must be sufficiently invested in finding workable solutions.
4. Make the problem concrete—Pivotal issues must be dramatized in compelling ways.
5. Leverage social proof—Positive deviants should provide actual evidence that the common view of social reality does not work the way everyone says it does.
6. Confound the immune defense response—In order to minimize natural resistance, fan the already existing sparks of change that already exist within the organization or community. Outsiders trying to force change rarely works.

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Change Agents

John McNeil, GP Deltapoint
 

Pasquale and Sternin focus on positive deviants as problem solvers and positive agents for needed change. When we are working with organizations that need to change, we often work with Internal Consultants (ICs): core personnel who take time away from their old positions. Sometimes these jobs are part time, but more often they are full time assignments for the duration of the change initiative. While management teams often feel at the outset that these positions will rotate over time, we generally observe that the skills, knowledge, methods and contacts the ICs obtain are unique and uniquely valuable, so that the ICs are asked to remain in these teaching positions for the duration of the change.

As long term assignees, the ICs will be key players in facilitating the role of positive deviants and in leveraging their energy and insight. We recommend the development of four facilitation skills for ICs: building relationships; facilitating; giving and receiving feedback; and managing resistance. We coach ICs specifically in these tasks through concepts and hands-on examples. In addition to facilitation though, an IC must act as an information expert (involving decision making and diagnosis) and as an advisor (coaching, using organizational savvy, managing time and managing projects). These roles will also involve seeking out and engaging the positive deviants.

John Gross provides a list of kanban implementation issues. Of course, kanbans are generally part of a larger lean manufacturing initiative. GP Deltapoint's white paper on HR issues in lean manufacturing environments covers teaming, union issues, motivation and skills, and change management. It also highlights the role-changes involved in lean production for operators, quality inspectors and nine other jobs, including management. Copies of the white paper can be obtained by e-mailing us; an updated and revised edition will be published in the next month.

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