Reference no: EM13851909

Managing Workforce Flow

Learning Objectives

After studying this chapter you should be able to:
Discuss ways to make socialization more effective.
Describe the six different types of turnover.
Discuss employee retention strategies.
Discuss various ways of downsizing a company's workforce.
Describe how to effectively terminate an employee.

Time for Productivity

Many organizations invest more money in hiring new employees than in helping them acclimate and become productive.
Most new hires want to get off to a good start, but need help doing so.
It takes mid-level managers an average of six months to get
up to speed in a new job.
Even in restaurants and hotels it can take about 90 days for a new employee to attain the productivity level of an existing employee.
On average, the time for new external hires to achieve full productivity is eight weeks for clerical jobs, 20 weeks for professionals, and more than 26 weeks for executives.

Orientation and Socialization

Orientation (or onboarding): the process of completing new hires' employment-related paperwork, and familiarizing them with their jobs, coworkers, work spaces, work tools, and the company's policies and
benefits
Socialization: a long-term process of planned and unplanned, formal and informal activities and experiences through which an individual acquires the attitudes, behaviors, and knowledge needed to successfully participate as an organizational member
The primary goal of socialization is to get new employees up to speed on their jobs and familiarize them with the organization's culture, or the norms, values, behavior patterns, rituals, language,
and traditions that provide a framework that helps employees interpret and understand everyday experiences

Socialization

Can speed up the time it takes new hires to reach the point at
which they start generating a return on the company's investment
in them.
Can improve employee retention and employee engagement, lessen the impact of reality shock, and facilitate new hire adjustment and integration.
People who are well socialized in their organizational roles tend to have higher incomes, be more satisfied, more involved with their careers and more adaptable, and have a better sense of personal identity than those who are less socialized.
Socialization prepares employees to perform their jobs effectively, fit into the organization, and establish productive work relationships.



Effective Socialization

Actively involve new employees
 Encourage them to ask questions
 Clarify new roles and their connection to business strategy
Manager must take the time to get the employee up to speed
Pairing coworkers with new hires for days or weeks can facilitate their transition
Assess transition progress using metrics including engagement, 30-, 60-, and 90-day retention rates, and supervisor satisfaction

Managing the Flow
of the Workforce

Having the right people in the right jobs to execute business strategy requires effectively managing turnover and retention, succession management, redeployment, and separations.

Turnover

Why Top Performers Leave

Identifying Turnover Causes

Exit interviews: asking departing employees why they are leaving to acquire information that can be used to improve conditions for current employees
Employee satisfaction surveys can identify problems that can be addressed to prevent additional turnover

Retention Strategies

Retention During Mergers and Acquisitions

Create financial agreements with key talent that serve as golden handcuffs and create mobility barriers.

Financial incentive packages such as retention bonuses or stock options that mature over time can retain essential employees, and increase their commitment to making the merger successful.

Companies can also increase the value of severance packages offered to workers who stay until a merger or acquisition is completed to keep important talent from leaving prematurely.
These types of agreements are typically solidified in a written contract that specifies the financial incentives that the employee will receive if they stay with the company for a specified time.
Managing Succession

Succession management should integrate talent management with the organization's strategic plan.
Succession plans need to support the organization's long-term direction, growth, and planned change, and should enable an organization to have the right people in the right place at the right time to execute the business strategy.
Career planning and succession management are often integrated to
ensure that employees are motivated to accept the higher-level jobs.
Mobility policies: specify the rules by which people move between jobs within an organization and clearly document the rules for opening notification, eligibility qualification, compensation and advancement, and benefit changes related to advancement.
Mobility policies should be well developed, clearly communicated, and perceived as fair by employees.

Workforce Redeployment

Workforce redeployment: the movement of employees to other parts of the company or to other jobs the company needs filled to match its workforce with its talent needs.
Workforce redeployment software and services help organizations match their talent to specific business needs in the most profitable way.
Matching employees' expertise and knowledge to customers' needs and deploying the right people is the same way a supply chain deploys assets.
For firms trying to maximize the efficiency of their workforce, which is particularly important for companies pursuing a low- cost strategy, workforce optimization is critical.

Involuntary Employee Separations

Downsizing: the intentional reduction of employees intended to
improve the efficiency or effectiveness of the firm.
Can improve the financial standing of a firm by reducing and changing the workforce structure in a way that improves operational results.
Downsizing is usually done in response to a merger or acquisition, revenue or market share loss, technological and industrial change, new organizational structures, and inaccurate labor demand forecasting.
Downsizing is a popular intervention for organizations looking to improve flexibility, reduce bureaucratic structure, increase decision-making efficiency, and improve communication.
Private sector employers often downsize to reduce costs to maximize shareholder returns, and to remain competitive in an increasingly global economy.

Public sector downsizings are driven by budget reductions and technology improvements that allow fewer workers to do the same amount of work.
Effective Downsizing

Fully planning the downsizing is important to reduce the negative consequences the downsizing has on employees and the company.
Unintended outcomes of a downsizing include:
 Increased costs from voluntary turnover, training, and consultants
 Reduced shareholder value
 Decreased efficiency due to the loss of expertise
 Reduced morale and motivation (waves of downsizing are the worst)
 Increased absenteeism and turnover of desirable employees due to stress and uncertainty
 Lower employee trust in the company
 A damaged reputation as an employer
 When a company's employees take advantage of unemployment insurance, the
company's future premiums rise
 Higher cost of attracting top talent after a downsizing
Given that downsizing is a traumatic event, no matter how well prepared the workforce is for the impending change, the process should be carried out in the most expedient manner possible.

Survivor Syndrome

Survivor syndrome refers to the emotional effects of the downsizing
on surviving employees, during and after a downsizing.
These effects include fear, anger, frustration, anxiety, and mistrust, which can threaten the organization's survival.
Survivors often are preoccupied with whether additional layoffs will occur, and feel guilty about retaining their jobs while separated coworkers are struggling.
Can lead to a variety of adverse effects including higher turnover, lower commitment and loyalty, and less flexibility among surviving employees.
Although some studies suggest that "survivor's guilt" leads to increased effort, other studies suggest that job insecurity reduces productivity.

Downsizing Assistance to
Displaced Employees

Help in locating listings of vacant jobs and central pools of displaced workers for whom the employer attempts to find positions.
Many large organizations help employees find employment elsewhere in the organization through central processing points that bring together displaced employees and vacant positions.
Employers frequently provide résumé coaching, job fairs, and access to office equipment to facilitate employee transitions out of the company.

Seven Typical
Downsizing Activities

1. A workforce demographics review including retirement and other loss projections and assessments of the age, diversity, and skills of the workforce;
2. Assessment of available options to avoid involuntary separations, such as a hiring freeze, buyouts, early retirement, retraining, and relocations;
3. Detailing full-time employee reductions by year, location, program, occupation, position, and person;
4. Conducting the downsizing or reduction in force;
5. Providing career transition/job placement assistance;
6. Providing assistance for survivors of downsizing; and
7. Ensuring that an adequate retraining program is in place.

Layoffs

Layoff: temporary end to employment.
Employers tend to dislike layoffs compared to other downsizing methods, in part because they are forced by law (in the case of most public sector employees) or by bargaining agreements to employ seniority-based criteria in deciding which employees to separate during layoffs.
This does not guarantee that the right competencies will remain in the company to allow it to execute its business strategy and emerge from the downsizing in a more competitive position, and often means the retention of the most expensive employees.
Layoffs also increase employee health problems and withdrawal behaviors.
Layoffs often have a negative impact on employee diversity, since women and minorities tend to be disproportionately affected by seniority-based layoff policies.
During a layoff, career transition assistance is usually provided to employees along with job placement and training assistance, severance pay, and continuation of benefits such as health insurance for a period of time.
Layoffs have a negative impact on a firm's reputation that is significantly stronger for newer than for older firms.

Some Layoff Alternatives
Attrition due to retirement, death, or resignation
Hiring freeze: not hiring any new employees
Early retirement incentives: allow retirement with full or reduced pension benefits at an earlier age than normal
Buyout incentives: a lump sum payment to encourage voluntarily quits
Leave without pay
Flexible work arrangements
Workforce redeployment
Cross training and retraining
Reducing work hours and/or pay
Sharing company ownership with workers in exchange for lower pay
Increasing the use of temporary or contract employees who are let go rather than laying off core workers

Best Downsizing Practices
Senior leadership should play a vital role
Frequent two-way communication
Involve the right people in downsizing planning
Identify work processes that will not be needed in the future
Incentives such as early retirement and buyouts work well and are
opular with employees
Using multiple strategies and techniques to accomplish goals for downsizing helps to leverage the outcome
Provide transition assistance to separated and surviving employees
Monitor progress
Successful downsizing depends on the survivors' trust, fairness perceptions, and belief in firm's future

Evaluating Downsizing Effectiveness

Meeting authorized full-time employee headcount goals
Increase in the ratio of supervisors to employees
Employee loss due to attrition versus incentive programs
Demographics of buyout recipients
Impact on diversity goals
Ability to meet budgetary limits
Productivity changes
Reduction in total cost of wages and salaries
Number of grievances, appeals, or lawsuits filed
Number of voluntary participants in incentive and career transition programs

Discharging Employees

May happen immediately after a policy violation or other job misconduct (e.g., a safety violation, failure to renew a professional license, etc.), or after a long pattern of poor performance
Rather than separating multiple people from the company as happens with downsizing, terminations focus on individual employees

Discharging Employees, cont.

Even in an age of employment at will, it is important to document the termination and keep thorough and accurate records regarding the cause of the termination.
Having terminated (or laid off) employees sign a severance agreement that includes a release stating that the departing employee gives up some or all rights to sue you can reduce the risk of future litigation.

Employee releases are most often used when a company does not have proper documentation to fire an employee but wants to end the employment relationship and reduce the possibility of a lawsuit.

To be most effective, the release needs to involve some sort of consideration, usually money beyond any standard severance agreement; the employee needs to be given appropriate time to consider the offer and even change his or her mind after signing it; and the employee should be able to negotiate some of its contents to show that it was willingly signed.

Common Termination Errors
Doing it publicly
Writing a positive letter of reference after a termination for
cause (this opens the company to charges of negligent referral)
Trying to document a termination for a just cause case that doesn't exist
Firing an employee after a merit raise or favorable performance review
Stating that the person conducting the termination meeting disagrees with the termination
Juries have also looked unfavorably at terminations that were done at end of a work day or work week, after the employee returns from a business trip, or at beginning of holiday

Termination Tips

Remain impartial, calm, and in control of the conversation; be
respectful at all times
Listen to employee requests for severance terms, but reserve final decisions for a later time; being heard and considered will increase the employee's perceptions of fairness
Be clear and don't send mixed messages
The shock of being fired can prevent the employee from listening to all of what you are saying; repeat yourself if you feel your message is not being heard
Don't give career advice to someone you've just fired
If the person is being terminated, don't say "laid off" because it implies the possibility of return
Hold the meeting in a private, neutral location

Termination Tips, cont.

Deliver information without engaging in an argument; use prepared notes if necessary. Do not ramble, make promises, or say a mistake is being made
Discuss the effective termination date, any severance package, etc.; have the details of the termination and any severance package in writing so the employee can take them with him or her along with the details of the termination
Be aware of legal compliance issues
Write up an accurate record of the termination interview and provide a copy to the employee
Cover matters such as returning identification cards, keys, and how to
receive final paycheck
Involve company security, if needed
After discharge, notify all relevant parties of the termination

Discussion Questions

1. Think of the time you first joined an employer. In what ways did the company and your coworkers socialize you? What could have been done to enhance your socialization experience?
2. How do you think technology can be best used to socialize new employees and get them productive as quickly as possible? When would using technology not be a good way to socialize employees?

Discussion Questions

3. What are the factors that would make you most likely to quit your current job (assuming you are currently working)? What could your organization do to keep you?
4. What downsizing targeting methods do you feel are the most effective? Which are the least effective, and why?
5. If you had to discharge an employee who you thought had the potential for violence, what would you do?

Opening Vignette Exercise

This chapter's opening vignette illustrated how Hilton socializes its new call center reservations and customer care employees. Reread the vignette, and answer the following questions:
 What are the strengths of Hilton's socialization program and
why?
 Do you think that it is appropriate for Hilton to hold supervisors accountable for employee retention during the first 90 days? Why or why not?
 What additional ideas do you have to quickly socialize new employees into a company focused on customer service?

Chern's Case Assignment

a) Write a report recommending appropriate onboarding and socialization strategies, and explain why you are making each  recommendation.
b) Develop a retention plan for the company's top performers.
c) Identify a downsizing strategy to reduce the number of sales associates by 15%.