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Downsizing Assessment
"Assessment" is not usually the activity one associates with Downsizing. But if downsizing your organization is in your near future, assessment may be the one activity that will help
 Downsizing and layoffs are part of the price
of becoming more competitive. The price for
not doing it, however, is much higher in
both economic and human terms.
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Robert J. Eaton
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your downsizing proceed
- quickly,
- cost-effectively,
- legally,
- fairly, and
- leave you with the best talent for "life after reorganization."
If your current performance records can provide you with the performance rankings you need in all your different job families, then you're lucky. If not, you are not alone. More than one organization has attempted a downsizing based on the employees' present and future value to the organization, only to end up with unanticipated results. Take heart, now there's...
Downsizing Assessment with the Scaled Comparison
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If You Approach Downsizing Correctly, You Can Avoid These Classic Mistakes:
Your Existing Performance Data Don't Help - Many organizations find out too late that their existing performance data don't work well as downsizing appraisal. That's usually because they earlier opted for a performance appraisal process that was "developmental and objectives-oriented", rather than comparative (a comparative process shows you who is performing better than whom). Downsizing decisions based on performance require comparative data about performance.
Downsizing Based on Something Else - Lacking comparative data about performance, it's easy to turn to some other factor. The most common "other factor" is seniority — you keep the workers who have the longest tenure. Seniority as a basis for making any personnel decision is an anachronism left over from an age when "more years meant more experience meant greater value to the organization". If that still applies in your situation, congratulations. Your problem is solved.
"Salary Recovery" - This is another way deciding who to keep and who to downsize. A quick look at the costs of labor will tell you that some workers, at the upper end of the salary curves are costing the organization much more than workers at the other end of the curve. Eliminating a high salaried person "recovers" more salary for the budget, hence the term Salary Recovery. It also means giving the bad news to fewer people. Legal people have another name for it — Age Discrimination. Be sure to set aside a reserve fund for settling claims. And the fund will need to be much larger than the amount of salary you recovered.
"The Fast Downhill" - In light of an impending downsizing, top management will sometimes order an immediate reappraisal of all workers, so that records show the differences in the performance needed to select the ones to be laid off. (This wouldn't be necessary if ongoing appraisals clearly demonstrated performance differences.) Legal experts term this "the fast downhill" because it inevitably means that the people targeted for the downsizing receive a sudden drop in their evaluations, just before layoffs are announced. This kind of downsizing assessment seldom has the benefit the organization expects in a legal challenge.
"X Percent" Across the Board - Under a perverted conception of the term "fairness", management may announce that budgets will be cut by a certain percentage, to be applied across all areas and units. There are few actions which have a greater negative effect on the concepts of performance and value than this one. It presumes, against all logic, that each profit center contributes equally to the organization's success, and that each area has exactly the same proportion of valued and excess performers. In reality, it is a tacit admission that existing performance data are inadequate for making these difficult decisions.
Thursday Night Meetings, Friday Massacre - Inevitably, there will be organizations who ignore the financial warning signs until far past the time when reasonable, thoughtful action could be taken. Word of the downsizing comes down on Wednesday, management is told to announce the names of persons to be laid off on Friday. On Thursday night, managers and supervisors meet to draw up the lists. Friday the announcement is made, the affected individuals are informed, and top management thinks on Monday things will go on as before.
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There's Got To Be a Better Way...
As bad as the above list sounds, everyone who has been through a downsizing knows most of it to be all too true. A better way to conduct downsizing evaluation must be able to do a better job given that 1) the organization has probably waited too long, 2) existing performance data are probably inadequate to the task and, 3) yes, there will be a fixed percentage of reduction with which to contend. It would also be helpful if 4) the method would be acceptable to the people being evaluated and 5) wouldn't cost an arm and a leg.
Downsizing Assessment Using the Scaled Comparison...
has been designed to function under the conditions just described.
- It works well under demanding time constraints. It won't work on a Thursday night for a Friday announcement, but it has evaluated as many as 33,000 people in a 6-month period.
- It is a comparative process, which means the results show the highest performers down to the lowest.
- It can identify the highest and lowest performers across different divisions, departments or areas. So you can achieve the "X Percent" required, but retain the best talent in each area.
- It has proven to be an acceptable process for a difficult situation. In most cases, individuals select 5 to 10 persons from their work situation to be their evaluators. Legal action following downsizing has been far less than expected, and cases are quickly resolved, usually in favor of the organization.
- The cost per person is reasonable.
 This tool is available online and in paper and pencil format.
Show me what Downsizing Assessment looks like.
If you are interested, you can contact us and tell us about your needs and situation. You can also click here to learn more about how we work together on a project like this.
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