How To Manage Performance During Downsizing

Have you been affected by downsizing in your organisation during the economic downturn?

The after-effects of downsizing in a company can last for years, as you try to encourage the people who stay to commit their loyalty to the future benefit of the business.

But we’ve found in our research that many companies spend a disproportionate time on helping the people laid off and less real-time on the people who will be left, and that may store up difficulties for the future.

When you manage downsizing ineffectively, there’s a danger that a downward spiral will be set up, which can be damaging to the morale and performance of the whole company.

So you need to take action when downsizing occurs, rather than leave it until problems arise. How can you proactively take action with renewal strategies that will help you look forward rather than back when this situation arises?

1. You must be proactive in your management stance, especially in the time period just after the change has occurred. Your action or otherwise at this point will create either an atmosphere of hope or one of despair. This should be a time when you offer your skills and communication to the long-term future of the business, by clarifying expectations, supporting team members and rebuilding trust. You need to communicate direction, vision, mission, strategies, priorities, commitment, objectives and goals for the future. Without these, the people who stay with you after the downsizing will still be fearful of the risks ahead.

2. Your prime attention should be on supporting the people who stay. If you are using outside help to assist in the downsizing operation, most attention, quite rightly, will be on the staff whose jobs have disappeared. However, enlist the help of the agencies you are using to create firm foundations for growth in the people who will be staying with you.

3. Think of the future now with a long-term perspective. One-off meetings to reassure staff, or one-hit training courses, will not offer the necessary support that people need for long-term safety and security. Put yourself in your staff’s shoes…what reassurance would you need to confirm that your future job is safe and that your role is more important than ever to the company’s successful future?

Remember that the business may have been on a downward trend for some time, and it may take a long time to get confidence back after a cut-back. Positive, proactive action on your part will play an important role in re-establishing trust in the company and its future. You may need, with your management team, to re-assess the strategies that your business uses to go to market in the future.

Ideally, the time taken to reassess your future operational needs should be as short as possible, so you have the continued support of your team members and colleagues to take the company forward during the difficult rebuilding time.

By spending time thinking about the needs of the people working with you in the future, and how to manage performance, you give yourself a good chance of rebuilding towards a successful outcome.

Thanks again


Sean McPheat

Managing Director

MTD Training   

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Updated on: 25 August, 2010

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