The Advantage

January 2003

Outplacement Can Help Lower the Impact of Layoffs

When are business managers more uncomfortable than when giving performance appraisal feedback? As difficult as appraisals are for some people, most find the task of telling employees they are laid off to be more difficult.

Although most of us would be delighted if our businesses kept growing year after year, reality will likely bring downturns from time-to-time. When that happens to large companies, they may be able to avoid layoffs by assigning employees to other duties. Smaller firms are often caught in an either-or situation, forced to remove employees from the payroll to lower company costs as revenues shrink.

Terminating employees, especially if they have been good workers, is an uncomfortable task. Even when adequate explanation and some severance pay are given, employees are usually paralyzed by the trauma your action delivers. As badly as you feel about conveying the message, the employee feels worse about hearing it. No matter how desperately you wish you didn’t have to do it, your feelings of regret won’t send the employee’s kids to college.

During the past two decades, we have witnessed a precipitous drop in public confidence in all kinds of institutions. Studies done by poling organizations indicate confidence in business and business leadership has fallen from approximately 70 percent in the late 1960s to 15 percent today. Large business layoffs have undoubtedly contributed to this erosion of former beliefs in business as an institution. Criminal and ethical problems have also entered the picture in big ways recently.

Can anything be done to absorb some of the traumatic impact of a layoff announcement? Is there anything a manager can do to personally feel better about the action of terminating employees? The answer to both questions is, Yes.

Outplacement services are often the tool used to dampen impact on employees and protect the company. Here is what you can expect from using a professional outplacement firm to help with your problem of workforce reduction.

• Faster re-employment of your people, thereby reducing lengthy unemployment compensation claims. You can help control your unemployment compensation insurance rates by lessening the frequency and length of your claim history.
• Protect morale of employees who will be staying rather than leaving. There is sometimes a survivor’s guilt effect which strikes those remaining on the payroll. That takes employee concentration and energy away from production. These impacts can be reduced through humane termination procedures which include provision of outplacement services to those leaving.
• Your personnel practices say a lot about your company to everyone: the community in which you’re located, your customers, and key people you may seek to hire. Using outplacement services can promote your company’s public image as a caring employer.

What is professional outplacement? Services provided by these firms span the spectrum from group training programs (least expensive) to one-on-one counseling with private office facilities for the candidate’s use (most expensive). Some firms provide individualized attention throughout a ten-week program and guarantee their work by supporting a new marketing campaign at no additional cost should the client be dissatisfied with the first new career position.

Usually, outplacement programs include some form of assessment for the client’s abilities, interests, personality, technical and management skills. The more detailed the assessment process, the more benefit will be gained by the individual client, and costs increase accordingly. Assessment results are used to establish a career strategy plan.

Some firms will simply provide clients with a computerized listing of newspaper help wanted advertisements. Although these may be touted as coming from publications all across the country, value to the client is really determined by personal interest in relocating to another geography in the career search process. Additionally, some industry research has indicated that the vast majority of positions which might be made available for the right candidate, are never advertised.

It is important, then, when shopping for an outplacement firm to help with your force reduction problem, that you be sure their process will teach clients how to develop a successful network research and marketing plan. Only people who know how to do that will be able to tap into unadvertised positions.

What about costs? Every situation is different, and in the outplacement industry, fees are generally set according to the services selected. It might be thought of as an ala carte approach where you pay only for those features you wish to build into your company’s program. Understanding that characteristic of the industry is important for companies that have yet to use such services.

Group seminar programs can last from a half-day to several days. A two day program will typically cost a few hundred dollars per employee participant. One-on-one counseling programs can range in cost from 8% to 20% of the employee’s annual salary.

Your outplacement firm can also help you design the separation package and communications program necessary for successful implementation of a force reduction effort.

It is a service even as a small employer you can use effectively, easing termination trauma and lowering overall costs for your company.

People-Centered Motivation

Want to improve sales, increase market share, or expand your customer base? Try being a people-centered manager.

People-centered managers, as an emerging new breed, are sometimes thought to be warm and tender, easy to please, a friend before all else, and not interested in results. In reality, however, people-centered managers are serious professionals who approach the job of managing in a no-nonsense way.

They work with employees to set specific, exacting goals. They routinely challenge every employee to attain their own personal best performance. They demonstrate a belief in exceptionally high standards, and insist that others measure up to the same standards they set for themselves. They delegate, demand accountability, support experimentation to find new ways to satisfy customers, and they inspire people by sharing their personal vision.

People-centered managers are good people motivators. Here’s how they do it:

• They set goals for themselves and with their workers. They explain the need for goals in each of these categories:
  • Maintenance Goals - Involving day-to-day activities required to keep the business alive and doing what it must do.

  • Problem Solving Goals - Focusing on eliminating road-blocks, and getting rid of bugs in customer service systems or other essential operations.

  • Creative Goals - Finding innovative ways to do the job better, reducing costs, increasing revenues.

  • Personal Goals - Continuing personal development in technical or managerial skills.

  They must recognize that goals are necessary for motivation. People must have a target to hit or something to look forward to achieving.

• They give each employee a stake in their work. They explain the problem at hand and ask the employee to help find a solution. They avoid giving lists of assignments. They might say, A lot of time is being wasted in delivering orders and I believe it could be helpful to identify how we might improve the process. Because I think you could work on this problem effectively, I’d like you to handle it. In that way, they give their employee insight into the issue, and also foster a positive attitude about it because they state a strong belief that the employee has the ability required to succeed with the task.

• They evaluate employee work performance. Nothing is quite as rewarding as being told one has done an assignment well, and the effort is appreciated. People-centered managers understand their people NEED feedback and arrange to provide it when things are going well, not just during troubled times.

• They trust their employees to perform the tasks assigned. They avoid looking over the shoulder and telling employees HOW to do the job which has been assigned. They check with employees periodically on progress of the project, but essentially, leave the assignment in the hands of the person it has been given to. People-centered managers avoid nitpicking.

• They contribute to their employee’s self-esteem by giving recognition for individual contributions. They also support employees’ attempts to take on projects or assignments which will stretch their personal limits and bring about personal growth. People-centered managers respect individuals and the enormous potential each has.

If there is only one rule to be written about employee motivation, it is this: What gets rewarded, gets done. Rewards are so important to the human animal that performance will shift in sometimes dramatic ways to achieve them.

Rewards come in many forms. People-centered managers reward employees very effectively by simply saying thank you for the extra effort made to deal with a particular job assignment. Knowing you noticed will make that employee proud to be on your team. After an unusually rough week, during which your secretary or assistant met all your deadlines, giving a few hours of paid-time off or a gift certificate for a nice restaurant will cement that loyalty and reinforce the performance.

The point is, rewards need not be limited to salary increases. Personalizing the reward you use will strengthen its value. If the employee is a fishing buff, get that special lure as your thank you gift. A macramé kit will be well received by someone interested in hand crafts. A thank you card could be all that is needed. Personalizing your selection says to the employee you care enough about them and their contribution to make the personal effort required to choose something special for them.

People-centered managers give rewards when their people do things right.

Do you want to improve your sales results? Try giving a reward to the account executive who develops a way to identify potential customers, or the one who makes five more appointments in a week than is normal. It is these daily achievements which need to be recognized and rewarded because they will collectively yield the greater sales volume you want.

Be a people-centered manager. Help your people feel good about themselves and their accomplishments.

Every Employee is Responsible for Profit

Want to increase your profits? Make every employee responsible for customer sales and service!

Sounds simple, doesn’t it? It is. Why, then, don’t more businesses do it?

One of the biggest problems in customer service is the reluctance of managers to look on customer service as a marketing strategy. Too many see it as an after-sale service, something relating back to the previous sale rather than ahead to the next one. according to the International Customer Service Association.

Most service and manufacturing businesses depend upon keeping customers once they are giving you orders. Future orders depend on keeping those customers satisfied. And, satisfaction is based, more than anything else, on how your customers perceive the quality of service they receive from you and your employees.

Often, though employees don’t really understand their important role in customer service. Managers usually have a clearer picture of company strategies and standards than do employees. Therefore, effective marketing to employees paves the way for better marketing with the customers they all serve.

If you have visions and dreams for quality of customer service, share them with your employees. Tell them your desires about your company’s reputation within the industry. Managers must communicate clearly and repeatedly their desire for employees to treat customers as they would wish to be treated if they were in the customer’s shoes. If you are willing to consider a service guarantee to customers, go ahead. It has been very effective for companies like Chrysler, Federal Express, Domino’s Pizza, and Business Week. Committing to error-free service helps force a company to prove it. A guarantee also forced you to create a system for discovering errors, and provides you opportunities to learn. According to Christopher Hart, a writer for Harvard Business Review, Without a guarantee, many customers won’t complain. Or come back.

Implement a service guarantee carefully, however. Promoting your service and then having people flood you with visits or orders without their expectations being met can be devastating. Promoting service as an advantage to customers without paralleling it with internal efforts can lead only to disaster.

Ask your employees how you all can better do the job of serving the customer. Morris Lasky has turned around more than a hundred organizations (hotels, stores, factories) in the last 30 years. Success magazine unveiled his secret: I’d say that 95 percent of a good bailout campaign comes from the comments of the people who are already there … who know what the problems are, but have never been asked … He troops the line, listens closely and then gives workers the green light to implement solutions they’ve suggested. Why this approach works could be the subject of several books. However, the fact is, that it does work … if you are sincere in your efforts.

To assure success, keep in mind what Disney Resorts says about implementing such a program: If you don’t work for the customer, then you work for somebody who works for the customer. If you’re not helping customers, then you need to help somebody who is; if you don’t do either, you need to look for a job elsewhere, because you’re not worth anything to us.

Effective, quality customer service means having employees respond to the specific customer needs rather than protecting policies, procedures, rules, and regulations. The first half day of training at Nordstrom department stores concentrates on teaching new employees how to say, No problem.

What role do managers have in giving customer service if customer-contact employees are handling everything? Think about it this way: In a traditional organization, the boss is at the top of a pyramid. Lower down on the pyramid come various levels of employees and finally, at the bottom, the customer. In an organization which enforces procedures above all else, all energy is directed toward satisfying the boss, because the boss made the rules and they were designed to control the 10% of employees or customers who inevitably take advantage. The other 90% want to perform well and do business honestly.

Turn the pyramid upside down with the customer at the top, followed by employees and then the boss. What do you have? You find that such a perspective demands that the boss work for the employees, removing roadblocks, helping make necessary arrangements, consulting with customers and other contacts.

One summer employee at Nordstrom, when asked about her boss, said he was a little weird. Why? Three or four times a day, he asks if there is anything he can do to help me. He acts like he works for me. And that is exactly the way Nordstrom wants to keep it.

Ask any owner or manager in the industry and they will say they believe in good customer service. In most cases, however, they don’t give good customer service because their employees are all focused on pleasing upper management rather than concentrating on pleasing their customers.

Convince your employees your interest in quality customer service is real, and you will find they gladly follow your wishes to provide it. After all, it makes their job more pleasant and rewarding.

Better service will bring you more customers because the word gets around about what kind of organization you are and how you treat your customers. Higher profits will follow as a natural course.

Steps for Improving Customer Service

Market Effectively to Your Employees Try techniques like sending mail with service messages to employee’s homes, placing ads in employee publications, and using customer service theme posters, keychains, and flyers in the work area. Publish stories about individual employees efforts to solve specific customer problems.

Ask Employees to Identify Better Ways for the Company to Operate Who knows better the problems faced on a job than the person doing it? Why not get input from the people who know? If possible, implement the suggestions you get from employees for improving your operations. Even if you aren’t sure it will work, trying it may prove otherwise, and increase your profits along the way.

Train Employees that Satisfying Customers is More Important than Abiding by Procedures Ask your employees how you can help them to do their job better or easier. Put yourself into the mental picture as the one working for your employee, and together you report to the customer. Constantly keep in your thoughts the need to satisfy your customer. That’s your ultimate boss, and sales levels are your evaluation.

Computer Aided Employee Management

In December 1974, Popular Electronics magazine described the first home computer. It was the first micro computing machine called the Altair 8800 and boasted 256 bytes of memory. And, it had no software that would make it do anything. In the nearly three decades since then we have seen computer technology evolve in remarkable ways. Most microcomputers used in business today have at least 32 megabytes of memory, many have a great deal more. And, there is a spectrum of software available that boggles one’s capacity to understand it all.

Even the smallest businesses employ computers now. In fact, it is hard to find a business operating without one. Accounting and spreadsheet programs have been the traditional applications of business owners and managers. They have been joined by sophisticated desktop publishing applications and computer aided design systems that allow reduced product development time, thus faster response to customer needs.

Record keeping and reporting of valuable management information are functions which have been given new life through computer application software. Not the least of these is the recording and sorting of data concerning employees. Small business owners and managers have as much access to this technology as do multi-national corporations.

Payroll was automated early on. But, now even basic employee and job information is stored and manipulated electronically. Increased government regulation of employers requires information be available quickly so employers can meet ever growing tracking and reporting demands. Keeping records on computer databases is more convenient and requires less space than the old file folder approach. Hundreds of employee records can fit onto one floppy disk these days.

If you haven’t considered using a computerized human resource system, think about how your business might benefit by getting one. No special user training is required for good programs. They are designed with self explanatory menus which take the complexity out of working with them.

Want to do a salary analysis for your sales people? With a computer based HR system all you need to do is call up a standard (built-in) report. Want to track employee progress toward professional certification, or renewal of licenses? How many people went to a given training program or have a given skill? Want a telephone directory for your staff or a set of home mailing labels? It takes only moments with a good mechanized HR system, compared to hours of manual labor the old fashioned way. And, if the boss asks for a specially formatted report of employee information, good systems will allow you to create it in short order.

Some employers want to track employee identification badge numbers, or parking permit numbers. Records of who has received keys to the building and who received special merit salary treatment are all being mechanized today.

Attendance and punctuality records are easily monitored in a mechanized employee record system. This feature alone can pay for the cost of your system. It is easy to get departmental absence averages, individual employee absence logs, and even ranked lists of employee absence.

Complete systems offer even more sophisticated features. You can track on-job injuries and produce case management reports. You can also output official reports required by OSHA regulations.

If your company is large enough to make you subject to equal opportunity laws, your personal computer-based HR system can produce EEO-1 reports, new hire summaries, I-9 citizenship verification reports, VETS-100 reports and multiple other configurations of your headcount detail.

In recent times, employers have been forced to offer benefits coverage to former employees and their dependents. Called COBRA, these requirements created a whole new work load requiring production of recipient logs, notification letters and billing statements. These can all be produced automatically with a good HR data management system.

General cost management on benefits plans is nothing to be taken lightly these days. Your mechanized HR system can give you instant access to information about employee enrollment in each benefit plan, an analysis of company versus employee contributions to any given benefit plan, and specific statements to employees that give details of how much the company is spending on them for personal benefits coverage.

Cost of such systems varies widely. Large corporate systems can cost in the millions. Yet, there are very sophisticated programs now available for use on your office PC. For employers with under 300 workers these can be purchased for under $300. And they will do most of what you want. Remember, reporting flexibility comes with a price. So, expect the less expensive programs to have standard reports that you will not be able to modify. (To see some examples of these smaller systems, go to www.hrwebstore.com and locate HR Software.)

Investing in HR management software is a good business consideration if you have over ten employees. It can usually pay for itself by providing managers with better information, more quickly, so expensive people problems can be avoided or eliminated. There are substantial cost savings to be realized in reduced manual handling of employee records. You can eliminate altogether the manual sorting and report generation requirements you may have had to put up with in the past. Rather than wasting valuable time assembling manual reports, your support people can spend their time on other important tasks.

Yes, we’ve come a long way in 30 years. Computers have helped us land on the moon, produce better printed products more quickly and manage our human resource information costs more effectively.

If you aren’t using a mechanized system for your employee management, give it some serious consideration. It could eliminate a lot of your business management headaches.

A Gentle Word on Behalf of Our Business

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