Web Resources:
Employee Downsizing, Layoff, & Termination

A. Making the Decision
B. Strategic Plan for Future of Company
C. Assessing the Workforce
D. Deciding Who Should Leave
E. Carrying Out the Downsizing

A. Impact on Business
B. Emotional Impact

I. Individual Terminations

Vincent Dicarlo: How to Avoid Employee Lawsuits—The Exit Interview (1997)
Sensible advice on what to say when terminating an employee.

CCH Business Owner's ToolKit
The Business Owner's Toolkit presents the following articles (among others):

• Termination Meeting Checklist & Employee Exit Interview Form
  Twelve step plan for conducting a termination meeting and a simple form to use when interviewing employees who leave voluntarily.

• Setting Up the Termination Meeting
  Who, when, and where?

• What to Do at a Termination Meeting
  Succinct and clear steps for conducting a termination meeting.

• Using Proper Termination Procedures
  To avoid potential lawsuits, it's important to use proper termination procedures; this article outlinesprocedures for a number of discharge situations.

• Before Firing for Misconduct  or Poor Work
  Overview of the steps you need to take before firing someone for insubordination, breaking a work rule, or other types of misconduct.

• Conducting an Investigation
  Basic and advanced advice for conducting investigations.

• What if you fire someone on the spot?
  What to do if you make the mistake of firing someone on the spot.

Fair Measures Corp: Wrongful Terminations
Extensive FAQ on wrongful terminations and firings—makes for interesting reading.

Ten Tips to Prevent Termination Headaches (2004)
Solid advice written from a lawsuit-prevention point of view:

1. Follow your written termination policies
2. Investigate thoroughly before considering termination
3. Consider alternatives to termination in appropriate cases
4. Give the employee an opportunity for corrective action before termination, where appropriate
5. Carefully consider each step of the termination
6. Document the causes for termination
7. Plan the details of the termination meeting
8. Give the employee the real reason for the termination
9. Limit your discussions of the termination
10. Evaluate your termination process on a regular basis

Jeff Olsen: How to Stay Calm While Firing a Worker (2001)
Addresses the difficulty of firing and includes tips for conducting a firm but polite termination interview.

William S. Frank: 25 Ways to Prevent Workplace Violence During Terminations
This is a useful article especially for planning individual terminations. The focus is on preventing workplace violence by handling the termination well, and not on “security” per se. In fact, the author recommends that an organization not escort people from the building with armed guards, or make them pack their belongings in front of colleagues. Some good advice: Take threats seriously, but don’t return threats.

A. Making the Decision

Brad Watson: To Layoff or Not to Layoff—What’s an Employer to Do?
Two-page guide for employers outlining each step in the layoff process from making the decision to the announcement. Very wise and complete.

Katharine Giacalone: Five Ways to Reorganize Right (2003)
Steps to take in order to avoid “shaking up” the organization:

1. Think through the vision and goals of the reorganization. What are the short- and long-term gains?
2. Create a plan with milestones and timelines.
3. Hire an outside facilitator for strategy meetings.
4. State the future goal clearly and succinctly.
5. Form a cross functional team to examine business processes: Senior execs, finance department, people who actually do the work. Then eliminate duplication of effort and ensure proper use of technology.
6. Reengineer the way things are done. Make sure the system continues to be implemented (i.e. train employees to use it).
7. Inventory the organization’s talent: Do this before starting to cut costs.
8. Decide on the cuts and reassignments.

Luke Vernon: The Downsizing Dilemma: A Manager's Toolkit for Avoiding Layoffs (2002)
This 14-page PDF article serves to introduce or remind managers of the alternatives to eliminating jobs when faced with cost reductions. Suggests a simple process and gives creative examples of methods companies have used.

Short-term Cost Reductions:

Solicit cost-reduction methods from employees

Institute a hiring freeze

Mandatory vacations

Compressed workweek

Temporary facility shutdowns

Salary reductions

Mid-range Adjustments, Where Expenditures Need to be Lowered for 5 to 10 months:

Extended salary reduction

Voluntary sabbaticals

Employee lending

Employee lending to nonprofit organizations

Long-range Adjustments (11-24mos)--Easing Layoff Agony:

Maintain communication with laid-off employees

Transition intranet site and career service center

Rehiring bonuses

Job fairs

Stock option severance package

B. Strategic Plan for Future of Company

Seth N. Leibler: Five Critical Actions You Can Take to Increase Training’s Value... When Companies are Downsizing (2002)
Written for performance improvement professionals whose companies have recently experienced downsizings.

Serving the American Public: Best Practices in Downsizing (1997)
Thorough benchmark study by the federal government on downsizing. The Internet resources provided are somewhat out of date. Includes chapters on:

Leadership strategies

Advance Planning and Preparation

External and Internal Information

Setting Strategic Direction

Translating Strategic Direction Into Action

Performance Evaluation and Reporting

Appendices: Downsizing resources on the Internet, Training available to federal managers, government resources, agency contacts and other sources

C. Assessing the Workforce

HMR Guide: Ways in Which Employees Can Be Let Go (2001)
Discusses voluntary and involuntary separations.

D. Deciding Who Should Leave

Alan Downs: Downsizing With Dignity
This four-page article makes the following points:

1. Don’t downsize without a thoughtful strategy and plan; it can destroy an organization’s effectiveness.
2. One outcome of downsizing must be to preserve the organization’s intellectual capital.
3. How downsized employees are treated directly affects the morale and retention of high performing “survivors.”
4. Don’t use downsizing as an investor relations tool.
5. Don’t allow legal concerns to design the layoff (i.e. communicating as little as possible, laying off 10% of workforce across the board, etc.).

E. Carrying Out the Downsizing

HRTools.com: Planning a reduction in force
(This free article can be downloaded after registration.) Five page, detailed plan for the five phases of a reduction in force including:

Establishing a planning taskforce

Completing a comprehensive plan

Announcement and implementation

Continuous communication tactics

Assessing results and learning from the experience

Shrinking Smartly: Helping Governments to Downsize Efficiently
This World Bank Group Website presents a clearing house of information, data, and tools for government downsizings all over the world.

David Hornestay: Downsizing Dilemma (1996)
A case study is presented where a voluntary downsizing is planned in a government agency (in order to avoid an involuntary reduction in force) with outplacement help for employees. The leader of the effort meets with resistance from executives for providing employees time on the job for outplacement and job search activities. Three consultants (Richard Wisniewski, Byron Bereano, and Richard Koonce) respond with their opinions of the dilemma.

III. Views on Termination and Downsizing

A. Impact on Business

David Hornestay: Reconsidering Downsizing (1996)
Questions the value of downsizing in improving productivity, particularly with government downsizings, which are made by political officials in a national arena. The author points out that after several decades of battles over budgets, many agencies are simultaneously reinventing, downsizing, and operating on reduced levels, and at the same time “paying for a new array of career transition services for a workforce now devoting much of its time to job searches.”

Jonathan Lurie: Downsizing (1998)
An academic thesis addressing five questions regarding downsizing:

1. Why does the value of a firm increase when it announces a downsizing especially when downsizing is supposedly a signal of rough economic times ahead?
2. Why do strong firms lay off workers in a boom, but not in a recession?
3. Did the proliferation of stock options in executive compensation contribute to the wave of downsizing, especially downsizing that engendered short-term gains, but reduced long-term value?
4. Is downsizing a signal of the strength of a firm?
5. Does the stock market under or over-react to downsizing?

Bliss & Associates: The Business Cost and Impact of Employee Turnover
Presents a four-page comprehensive checklist of items to include when calculating the cost of turnover in any organization. Items include the cost of time, lost productivity, and cash to vendors of services. Calculates that the cost of turnover ranges between 150% to 250% of annual compensation.

The World Bank Group: Martin Rama: Downsizing (2000)
Article discusses using severance as an incentive for voluntary downsizing, and how severance is often mishandled.

B. Emotional Impact

BBC News: Job Cuts 'Harm Those Left Behind'(02/23/04)
A Finnish study of government personnel in departments where more than 18% of staff was cut, found:

Increased number of workers who took sick leave

Increased risk of developing and dying from cardiovascular disease

Employees had to work harder, and felt jobs were less secure

Recommends that companies who downsize should:

• Keep workers informed
• Help redundant employees find new jobs quickly
• Provide support for survivors

John Shepler: Managing After Downsizing: a Manager's Guide to Coping With Layoffs (1999)
Shepler suggest that you: Help the “survivors” go through the transition; Identify the 10 to 15% of employees who are leaders and will help make things work, and put them in charge of others; Exude optimism; Celebrate successes; Build teamwork; Use humor; Over-communicate; Be honest about realities and future expectations; Coach and encourage people.

Special Report: Train After Layoffs! (1996)
This article, based on the American Management Association reports, discusses these topics:

Downsizing and layoffs: not necessarily the same thing

The destructive aspect of layoffs

Evidence in support of increased training budgets after layoffs

Why training after layoffs increases morale and profits

Howard Stein, Ph.D.: Death Imagery and the Experience of Organizational Downsizing (1996)
This 17-page article is highly critical of downsizing as cold, heartless, and somewhat mindlessly unrelated to real economics. The author, who has consulted in numerous downsizings, offers nine examples to support his comparison of downsizing with the inhumane practices of the holocaust. He offers ten ways for leaders to change their thinking and behaviors around downsizing.

Thomas Hickok: Downsizing and Organizational Culture
Thoughtful ten-page article analyzing the most prominent effects of downsizing on corporate culture.

Allen H. Church: Organizational Downsizing: What is the Role of the Practitioner?
Church discusses the ideas of David Noer, Wayne Cascio, and Kim Cameron. The author assumes that “like it or not, we are all temps, and will never again have long careers in companies.” He says that consultants should stop spending energy on helping the people who leave, and focus instead of the people who remain.

IV. Additional Web Resources

U.S. Dept. of Labor: Mass Layoffs Summary
Summarizes layoff statistics for the most recent month as they become available.

HrGopher: Human Resource Management
This search engine for HR links offers 75 links on the topic of “Termination, Firing, and Downsizing,” of which about 20 are actually accessible. Also sells related books.

Business.com
A search engine for small businesses. Lists 20 links related to “layoffs and downsizings.”

Society for Human Resource Management
A wide selection of documents and tools are available for members only.

MeansBusiness
MeansBusiness is a database of business ideas. You can purchase books or summaries of current ideas on downsizing and layoffs.

LookSmart.Com: Downsizing
Twenty articles, most of them available and relevant to the topic “downsizing.”

TrainingABC
TrainingABC produces and sells business training videos on many management topics, including termination.