Downsizing Dilemma

ook, Allison, I sympathize completely with our employees' need to locate new jobs. But the department isn't going out of business and I've got a program to run. So you'll understand if I can't have my employees reading want ads and sitting in career planning workshops on the clock," snapped Graham Johnson, director of the Bureau of Community Services.

"I thought we had taken all your concerns into account when we did our downsizing plan," responded Allison Locano, the deputy assistant secretary for administration. "But, of course, we knew we'd have to make tough decisions to keep the interests of employees and our ongoing programs in balance." Locano was meeting with the director and the personnel chief to figure out how their organization could accommodate displaced employees without damaging the program's continuity.

So the inevitable conflict Locano had dreaded was upon them. The Administration's streamlining initiative had required her department to cut 2,000 positions from its workforce of 26,000 without much specific guidance. Planning for this painful adjustment was well under way when a congressional budget cut had necessitated even larger staff reductions and had targeted specific programs. The Bureau of Community Services was the hardest hit, with some programs facing funding cuts and others being eliminated entirely.

Having experienced downsizing agonies at her previous agency, Locano swung into action as soon as Congress' intentions became clear. She asked the Secretary to establish a departmentwide Workforce Readjustment Planning Task Force, consisting of all the bureau directors and heads of major offices. They were to develop a plan for realigning staff and to work up buyout and early retirement options to avoid a reduction in force (RIF).

Locano insisted a key portion of the plan should be a concentrated effort to help targeted employees prepare for new jobs and for job searching. Director of Personnel Dorine Kingman was put in charge of this effort, which Locano had made a top priority. Kingman's package included career planning workshops, individual counseling, resume preparation assistance and online job information at work sites and personnel offices. All her major recommendations had been approved by the task force.

Locano was particularly gratified when the Secretary, in announcing the workforce readjustment plan, gave special emphasis to job placement help and pledged that the workforce "could count on the support of top management in a time of need just as top management had always been able to count on our staff." But she was also well aware that plans and sincere endorsements were no guarantee of faithful execution. A number of officials-Johnson among them-expressed reservations about the time and resources diverted to assisting employees with job searches while line managers struggled to fulfill program commitments with sharply reduced staffs and funds. "It would be a lot easier if we could just buy out enough people to satisfy the cut," Johnson said at one task force meeting.

Two months into the readjustment program, a small but growing number of employees had already jumped ship. The specter of a RIF had not entirely vanished. One afternoon, a visibly agitated Kingman reported to Johnson that two Community Services employees had complained of being prevented from attending career planning workshops and another confided to a job counselor that her supervisor wouldn't let her view the online job information "when there's work to be done." One of them had already taken up the matter with the union local, whose president, a member of the task force, had reminded Kingman of the Secretary's "solemn commitment."

Kingman's visit to Johnson evoked a bitter and emotional response, leaving the problem in Locano's lap. Locano wondered how many other employees had been restrained from exercising their rights. What is it doing to morale? How many programs are suffering from de facto part-time employment as apprehensive employees devote major efforts to salvaging their careers? What is happening to the balance between employee and program interests that management needs to maintain?

RICHARD J. WISNIEWSKI:

BE WILLING TO NEGOTIATE

Richard J. Wisniewski is deputy associate administrator of the Office of Space Flight at NASA. Educated as a physicist, he has worked in aeronautics, space research and management for more than four decades. He has led a number of downsizing activities.

The situation faced by Allison Locano was born in the process that developed the Workforce Readjustment Planning Task Force downsizing plan. It is not obvious that employees were actually involved in any meaningful manner in the downsizing and restructuring. Few, if any, directors assume responsibility for helping employees find new jobs. The directors are more focused on and responsive to fulfilling program commitments. The fact that the Secretary had been prevailed upon to establish the task force hints at a lack of understanding of the importance and urgency of a humane downsizing plan. The Secretary's announcement and endorsement of the workforce readjustment plan is not necessarily an indication the line management team will be held accountable. Downsizing tends to result in top management selecting the proper consoling words while delegating to a staff organization responsibility for specific actions and plans.

Realizing management's lack of real commitment, Locano needs to clearly establish with the Secretary the extent to which Johnson and other bureau directors will be held accountable for helping their employees. If the Secretary is holding directors accountable for an orderly and successful downsizing, Locano's strategy can be direct and to the point: "Mr. Johnson, you and your line managers' performance and monetary awards are affected by what you do to support outplacement activities and how you do it. Now, let's discuss your execution of the downsizing program and how we will measure your performance and that of your management team." If the department chief is not holding his bureau directors accountable, Locano should ask the Secretary to meet with his bureau directors to clarify what he expects of them under the readjustment plan. This buys a show of support.

Once responsibilities are clarified, Locano still faces a situation unlikely to significantly improve unless she also overcomes the basic cause of resistance. The resistance is centered primarily on satisfying program commitments with a smaller staff providing fewer direct labor hours per day because they are investing more time in career planning. She must propose a workforce utilization option that also will meet program requirements. Locano must demonstrate to bureau directors that supporting outplacement activities is in the best interest of their programs. Her downsizing experience at her last agency provides a level of expertise that the line managers are unlikely to possess.

Locano should assess and describe the possible impact of nonsupport on directors' programs. For example, if employees are prevented from spending time on outplacement activities, they may become preoccupied with anxiety about job loss and productivity still will suffer. Locano needs to hit hard on the fact that managers face a situation in which it is difficult to retain their best people. Managers who are not committed to helping people in a downsizing situation are not generally perceived as trustworthy to the most talented people.

Since a RIF also is a likely outcome if the readjustment plan is not supported by managers, Locano should include its impact. First, she should inform them that a RIF will require significant management involvement and lost time on their part. Second, the cost of a RIF is likely to exceed the salary savings, and the offset will have to come from program funds. Locano should provide managers with a likely range of costs they will have to absorb. She should point out that employee involvement in restructuring has generally been a very effective mechanism to offset employee anxiety and help rebuild morale in organizations. Survey data supports this claim.

At this point the managers should be weighing the situation in favor of supporting the readjustment plan as the lesser of two evils. This should set the stage for negotiating with the bureaus an appropriate level of outplacement activities to minimize program impact. Sometimes the threat of implementing a RIF is sufficient to gain management's support for a series of practical outplacement activities, because they recognize how difficult it is to control the outcome of layoffs.

BRYON S. BEREANO:

ADDRESS WORKERS' CONCERNS

Bryon S. Bereano is staff director of the Federal Employment and Retirement Monitor Inc., a nonprofit clearinghouse for information and legislation affecting federal employees, military personnel and retirees.

The problem Allison Locano is facing is encountered daily by managers and supervisors in today's federal workplace. Sympathetic Members of Congress are attempting to provide them with tools to promote voluntary attrition rather than large-scale RIFs. Agency officials responsible for downsizing and career transition assistance need to keep up with these efforts and make sure their employees are able to take advantage of them.

For example, bills waiving the onerous 2 percent per year penalty for retirement before age 55 have been introduced by Reps. Albert Wynn, D-Md., and Constance Morella, R-Md. A bill put forward by Rep. James Moran, D-Va., would protect from inflation the deferred annuities of those leaving the civil service before they are retirement-eligible. Moran would base their pensions on pay rates in effect when they reach age 62. Both measures would be attractive to employees considering voluntary separation, but it is unlikely that the budget-conscious Congress will pass either one because of potentially high costs to the Civil Service Retirement Fund.

As for buyouts, the mood of the House Government Reform and Oversight Committee early this summer was not to grant governmentwide authority. The committee will consider buyouts for agencies facing significant downsizing because of a change in mission or other budget or congressional actions. In dealing with Graham Johnson and other executives, Locano can revisit the prospects for an agency-specific buyout based on the combination of staff cuts resulting from Administration and congressional initiatives. Legislative approval of a buyout would remove the pressure and distraction of job-hunting from much of the workforce.

However, Locano needs to know that she will probably not be able to rely on congressional help to provide her and her agency with the necessary tools to make this downsizing as painless as possible. Of course, the objective is to conduct as few RIFs as are necessary. Locano needs to work with Johnson and all the line managers, department heads, task force members and union leaders to develop the most rational agency staffing plan and a career transition services plan in which all offices participate.

An agencywide job placement program would help workers find jobs sooner, translating into less work time spent looking though want ads. Just as important is the morale of the workers left behind. A RIF can be as devastating to the workers who remain as it is to those who lose their jobs.

Remaining workers live in constant fear that they might be the next to go. If workers see that upper management did not do a good job with their colleagues who were RIF'd, then they will have trouble performing their jobs to the best of their capabilities. This is a serious problem, since RIFs increase individual workload and limit the outlook for enhanced pay and career advancement.

Locano needs to advise upper management that workers are naturally worried about their futures, and a worried worker is an unproductive worker. Managers need to give workers an acceptable amount of time to take advantage of career planning workshops and on-line job services. If employees are assured that their concerns are being addressed, they will more effectively work on the agency's projects.

RICHARD KOONCE:

COMMUNICATE WITH EMPLOYEES

Richard Koonce is a consultant, speaker and the author of Career Power! 12 Winning Habits to Get You From Where You Are to Where You Want to Be.

Locano did the right thing in prevailing upon the Secretary to form the departmentwide Workforce Readjustment Planning Task Force. However, the task force doesn't have an adequate communication plan in place with which to inform employees about the status of downsizing efforts. Indeed, managers who are responsible for administering downsizing programs usually make the mistake of not communicating enough with people, even though they think they are "over-communicating" with them about what's going on.

Perhaps there isn't sufficient unanimity among task force members to ensure that the task force's plans are administered with consistency by all managers across the agency.

Both these factors may be causing the employee rumor mill to kick in, undoing much of the task force's good work.

Task force members could probably use some outside assistance through training or orientation about how to deal with organizational survival issues, even as they are deciding who leaves and who stays. Because downsizing and RIF activities inject new anxieties and "people issues" into the workplace, direct line managers and supervisors can benefit from training that deals with how to handle employees' reactions to change which can range from anger, denial, resentment or other emotional reactions such as crying to workplace sabotage. Managers can also benefit from training on team building, workplace communications, coping with change, stress management, and effectively coaching and mentoring subordinates in a changing work environment.

In times of downsizing and staff realignment, management must pursue a careful and painstaking balancing act. On the one hand, the agency's work must continue, so at least some employees must be assured that for the foreseeable future, their jobs are not at risk. On the other hand, it is important to tell those who are likely to be declared surplus about job placement services-career transition workshops, individual counseling and so forth-as soon as possible, to speed their transition to new jobs within the agency or in other agencies. During this limited transitional phase, managers must anticipate that those in transition will spend most of their time looking for jobs, and not attending to the agency's work.

To prolong the transition of RIF'd employees to new jobs also prevents an organization from moving forward, creating teams, rebuilding morale and effectively managing change.

Unfortunately, what senior management sometimes expects in these situations is to have it both ways: to be able to announce downsizing and restructuring plans without seeing employee productivity dip, and without encountering the inevitable "people issues" that arise in times of transition.

Prior to her meeting with Johnson, Locano would do well to discuss with other line managers how they are dealing with the loss of employee time to job preparation activities. This may give her ideas about recommendations to make to Johnson. She should also touch base informally with at least a few of her fellow task force members, both to bolster her arguments with Johnson and to ensure that she will have broad-based backing for any recommendations she makes to Johnson. Working with the task force will also help ensure that any changes to policy or programs are administered effectively and consistently agencywide.

It appears from this account that Locano may have the unenviable task of having to disabuse the bureau director of his naivete about what really motivates people to work and commit themselves to an organization in transition. If he believes people should be grateful to have jobs, no matter what's happening to their co-workers, he doesn't understand human motivation.

One critical argument Locano needs to use in stressing the importance of providing transition services (as promised) is this: The way those employees not likely to be targeted for RIFs perceive the organization to be treating those who are vulnerable has a large impact on the morale and productivity of those who remain. Employees view downsizing activities as a moment of truth during which an organization reveals its true colors.

A second item Locano needs to discuss with Johnson is reframing people's expectations about how RIFs and staff realignments will be handled in the future, and the nature of the new "employment contract."

There is a very good opportunity to discuss the transition in positive ways with employees. For example, Johnson and others could communicate that although there will not be the kind of job security there was in the past, the agency will make it a policy to provide people with challenging work assignments and development opportunities. The experience would be of value to employees, should they need to find employment elsewhere.