Human Law Ezine - August 2010
How to maintain employee morale in a difficult work environment
Last week, we learnt that prisons could be forced to close and courts brought to a standstill under the plans to make one in five civil servants redundant. A leaked letter sent to staff at the Ministry of Justice warned that substantial redundancies were inevitable as the department’s £9 billion annual budget was cut by £2 billion as part of the Government’s austerity drive. Unions predicted that this would lead to 15,000 civil servants out of a total of 80,000 losing their jobs.
It is quite clear that the public sector is hurting and with a fragile private sector recovery, many organisations still have to consider redundancy programmes.
Against this background what can management do to maintain morale and productivity in an extremely challenging work environment?
- Be direct. The key to preserving morale during a phase of redundancies is to be open about the process with your employees, and communicate clearly to them. Through clear communication, you can eliminate unpleasant surprises leading to in resentment and anger. All information regarding redundancy should come from just one source, yourself. Furthermore, resist the tendency to hide behind lawyers even if key legal issues are being discussed. If you are discussing such issues with the need for a lawyer to be present, be there as well.
- Be prepared. Rather than shock your employees by announcing redundancies out of the blue, lay the groundwork and lead up to it over a period of months Consider discussing your organisations's financial situation with employees on a regular basis and do not come up with an announcement of redundancies out of the blue. Be open about the challenges your organisation faces and list alternatives for dealing with them.
- Be truthful. When explaining redundancies to surviving employees, distinguish the short-term impact from your long-term positive expectations. Emphasise that the layoffs are an undesirable but necessary part of your plan to get the organisation back on track.
If employees sense the position is in fact worse than you let on, they will become more disillusioned and your credibility will be diminished. However, balance your frank assessment of the current position with a look at your long-range goals, which may be more optimistic.
- Obtain feedback. Just as you should use exit interviews for employees before they leave, ask outgoing contractor workers too. This can be a useful of obtaining feedback. They can give an unbiased view of how the workers feel in their position. The danger for management is that it can be lost in a cocoon of the stress of making people redundant so getting external feedback is really useful.
- Maintain integrity. Before asking remaining workers to make sacrifices, set an example. If pay is being frozen at worker level, this should be maintained at an executive level as well. It is interesting that executive pay specialists Hewitt New Bridge Street have released their annual report on packages in the FTSE 100, which shows that although companies have been more restrained on basic salary awards, bonuses have risen. Median pay for the highest paid directors in the FTSE 100 has risen from around £2.5m to £3m, and the typical bonus earned was about 120% of salary. This does not sit comfortably with what other people in business are experiencing namely low orders, profits under pressure and job losses.
- Do not exploit employees. Don't use the vulnerability of employees by seeking to adjust their contract terms. One employee whom I recently advised told me that further to a wave of redundancies, the organisation took the opportunity to introduce new terms and conditions which were more restrictive on the employees. This is unethical, illegal, exploitative of the business relationship and misguided. That employee will be looking for a new employer when the market picks up.
- Have support processes in place. Training which we are doing is increasingly focused on dispute resolution at an early stage and organisations are recognising that mediation skills and formal mediation processes have their place.
To discuss the legal aspects of redundancy or find out about our fixed fee redundancy advice service call Human Law Mediation on 0844 800 3249 or email Justin Patten here.