How can managers and employees rethink their organizations even as they confront the need to downsize - Essay Example

? Trust, Empowerment, and Communication: Building Flexible, Resilient and Innovative Workplaces during Downsizing 20 February When improperly managed, organisational changes can produce stress and unproductive conflict. Downsizing can be particularly depressing, not just for laid-off workers, but also to “survivors.” Survivors face the challenges of guilt and more complex, often additional, challenging roles and responsibilities. Maertz, Wiley, LeRouge, and Campion (2010) learned that survivors of layoffs experienced the lowest levels of perceived organizational performance, job security, affective and calculative attachments to the organisation, and elevated turnover intentions than a non-downsizing comparison group. Mishra, Mishra, and Spreitzer (2009) presented a gripping question: “How can managers and employees rethink their organisations even as they confront the need to downsize?” Managers and employees can rethink their organisations by developing organisational flexibility as part of the organisational culture, empowering line managers and HR in helping design and lead organisational change efforts, promoting innovation and creativity, and enhancing communication with stakeholders. Rethinking organisations requires changing how downsizing is perceived and defined and one of the ways to do this is through developing organisational flexibility as part of the organisational culture. Mishra et al. (2009) explained that flexibility can take different forms, such as work flexibility and management flexibility (41). They stressed: “Greater organisational flexibility can enhance human capital” (Mishra et al. 2009: 41). Enhanced organisational flexibility can take place when employees cross-train each other, while also engaging customers and suppliers. When employees and the management see organisational flexibility as part of organisational life and culture, they will be more prepared of organisational changes, including downsizing. Openness to changes is demonstrated through several cases. Mishra et al. (2009) gave the example of Rhino Foods Inc., a dessert producer in Burlington, Vermont, who created a strategic response to downsizing, which enhanced organisational flexibility. Ted Castle, Rhino Foods president, requested his best employees to volunteer for tasks outside the company, instead of just laying them off. He promised to rehire them when economic conditions are better (Mishra et al. 2009: 41). Survivors had the opportunity to learn new knowledge and skills, so that they can replace lost employees. Rhino Foods continued this program, which expanded to five partner companies who hired Rhino employees during low-peak season. Mishra et al. (2009) believed that this practice enhanced organisational flexibility because the organisation discovers new talents. Organisational flexibility must be embedded in the organisational culture through work redesign and other transformed work patterns. The organisation must prepare employees and managers for openness to thinking about work, without losing sight of the strategies, mission and vision of the organisation. Organisational flexibility should be tied to psychological flexibility too. Lynch (1989) asserted that organisational flexibility requires re-examining work per se and how it can and should be done, the existing technologies, and the ways organisations are structured to do work. This paper extends an understanding of future technologies and changing social patterns because they impact future organisational demands and the actions of competitors. Although organisational flexibility requires organisational level changes, they cannot be attained without meaningful individual-level changes. Bond, Flaxman and Bunce (2008: 645) define psychological flexibility as the “ability to focus on the present moment and, depending upon what the situation affords, persist with or change one’s (even inflexible, stereotypical) behaviour in the pursuit of goals and values.” Bond et al. (2008) wanted to know if greater psychological flexibility can result to higher goal-based context sensitivity. They conducted a quasi-experiment to compare intervention for “control-enhancing work reorganization intervention” for two groups with or without this intervention. Findings showed that the effects of the intervention were greater for people with high psychological flexibility. People who had higher levels of psychological flexibility believed that they had more job control because of the intervention (Bond et al. 2008: 652). The level of control led to better mental health and lower absence rates, which shows that individual flexibility mediates performance measures and intervention (Bond et al. 2008: 652). Human resource (HR) must determine and respond to psychological flexibility levels of employees. HR managers must develop employees’ inner flexibility to outer changes, especially emotional ones that involve downsizing and other work redesign intervention measures. Aside from organisational flexibility, employees and managers can develop a new way of seeing their organisations if organisations promote innovation and creativity. Mishra et al. (2009) stated that downsizing should not be a discrete event with no larger purposes. Downsizing must be a product of innovation in work design and even, organisational systems and cultures. Innovation, however, requires both trust and empowerment (Hopkins and Weathington 2006; Mishra et al. 2009: 42). Jeff DeGraff, professor of management and organizations at the University of Michigan’s Ross School of Business and a foremost specialist on innovation in organizations, asserted: “A winning culture and competencies are what create the unique value propositions of firms. These take years to develop because they grow through the interactive work of leaders,” however, “they can be quickly undone by downsizing and the obligatory clumsy treatment of hard-won talent” (Mishra et al. 2009: 42). Mishra et al. (2009) recommended the importance of the management’s role in embedding hope and providing a scintillating vision of the future. This vision must be credible and realistic, so that employees can trust management decisions (Mishra et al. 2009: 42). Hopkins and Weathington (2006) studied perceptions of justice (distributive and procedural), trust, and commitment to organisations, satisfaction, and turnover intentions for survivors of downsizing. Their findings showed that trust partially affected the connection between distributive justice and organizational, and between trust and affective commitment; trust also affected the connection between procedural justice and turnover intentions. The study of Mone (1997) showed that trust is critical in perceiving managerial actions and employee and organisational outcomes. He stated: “Employee trust as an antecedent of psychological states, affect, and organizational outcome” (Mone 1997: 322). Higher trust levels can reduce the negative effects of downsizing on employee morale and behaviours. Aside from trust, empowerment is important in promoting creativity and innovation in downsized organisations. Mishra et al. (2009) studied numerous companies that downsized and noted that empowered employees enabled them to handle these changes more effectively. Empowerment gives them hope that the company is not haphazardly cutting labour merely to reduce costs, but because it has larger purposes in mind. These purposes consist of being responsive to the emotional and work needs of survivors. Mishra et al. (2009:42) stressed the role of a hopeful message during these times: “The hopeful message should be neither glib nor naive but incorporate present realities... with future benefits.” The benefits must compose of empowerment too, where employees expand their knowledge and skills, as they take on more challenging roles and responsibilities. They must be empowered to access the information and authority needed to do more, now that there are less of them. Doing more with less emphasises doing more because every employees is more than what he/she used to be. They are empowered in terms of competencies and power. With these empowering changes, employees can effectively and efficiently tackle organisational changes. Apart from empowerment, effective communication throughout downturns builds significant relationships that enable employees and managers to trust one another and to remain loyal and enthusiastic in their job roles. Mishra et al. (2009: 42) showed research, where internal communications influence the level of trust between employees and managers. Openness and relevant interactions are important to the process of producing and strengthening relationships between management and employees. Effective communications are “highly transparent, integrated consistently across the organization’s various stakeholders and participative” (Mishra et al. 2009: 42). Managers and employees must be honest to one another. Managers must reveal their intentions and the ends of downsizing, while employees must express their concerns, especially causes of fears and anxieties. The management must be supportive of employees during downsizing too, which is part of the communication process. Lawrence and Callan (2011) proposed a model, which mixes moderation and mediation effects, to explain how perceived available support affects employees’ reliance on support mobilisation to handle change-based stress. Authors collected survey data from 476 health professionals in a large public hospital that experienced downsizing. Findings showed that perceived accessible support moderates coping mechanisms, where support mobilisation influenced the indirect relationship between change-based stress and job satisfaction, in instances of low and high levels of perceived obtainable colleague support. During this time, the management must show support along management and employee levels because and especially when downsizing is abruptly done. Finally, top managers must empower line managers to respond to these changes. Mishra et al. (2009: 43) stressed that top managers must trust and empower line managers, so that they can be flexible and effective during times of downsizing. Line managers must be excellent communicators of organisation vision and mission because downsizing is related to and based on the former. Front-line managers are also vital in expressing compassion that top management cannot always express to employees (Mishra et al. 2009: 43). Bob Lintz, the GM plant manager who has downsized plants for the past twenty years, empowered his employees to communicate any problem with him (Mishra et al. 2009: 43). The problem with the open-door policy is that it undermined the confidence of line managers, since employees directly complained to Lintz, instead of going through them first. In addition, job security became increasingly a stressful concern for them (Mishra et al. 2009: 43). Lintz responded by enhancing trust and communication with line managers. He also provided training for the latter, so that they can be equipped with the right skills and knowledge in managing downsizing efforts and effects (Mishra et al. 2009: 43). Empowering line supervisors and managers help them see downsizing as a means to greater organisational ends. The powerful emotional effects of downsizing on survival morale, loyalty, and performance cannot be undermined. The organisation must have strategies that promote trust, so that employees will believe that these downsizing changes have important purposes to the competitiveness of the company. Managers and employees can rethink their organisations through improved trust, innovation, and communication in their organisation. Organisations must ensure that they create flexible, resilient and creative workplaces through open communications and focusing on innovative responses. References Bond, F.W., Flaxman, P.E. and Bunce, D. (2008). The influence of psychological flexibility on work redesign: Mediated moderation of a work reorganization intervention. Journal of Applied Psychology, 93(3), 645-654. Hopkins, S.M. and Weathington, B.L. (2006).The relationships between justice perceptions, trust, and employee attitudes in a downsized organization. The Journal of Psychology, 140(5), 477-498. Lawrence, S.A. and Callan, V.J. (2011). The role of social support in coping during the anticipatory stage of organizational change: a test of an integrative model. British Journal of Management, 22, 567–585. Lynch, J.G. (1989). Organizational flexibility. Human Resource Planning, 12(1), 21-27. Maertz, C.P., Wiley, J.W., LeRouge, C. and Campion, M.A. (2010). Downsizing effects on survivors: layoffs, offshoring, and outsourcing. Industrial Relations, 49(2), 275-285. Mishra, A.K., Mishra, K.E. and Spreitzer, G.M. (2009). Downsizing the company without downsizing morale. MIT Sloan Management Review, 41-44. Mone, M.A. (1997). How we got along after the downsizing: post-downsizing trust as a double-edged sword. Public Administration Quarterly, 21(3), 309-336. Trevor, C.O. and Nyberg, A.J. (2008). Keeping your headcount when all about you are losing theirs: downsizing, voluntary turnover rates, and the moderating role of hr practices. Academy of Management Journal, 51(2), 259-276. Read More