Organizations are sometimes faced with the unavoidable economic decision to downsize operations. Nothing shakes the confidence of employees like a reduction in force. Years of loyal service and devotion to the organization evaporate overnight. People have long memories when the company that rewarded, praised, and promoted them for so long suddenly turns cold and dispassionate. But employers generally do a very bad job when it comes to making termination decisions. On one side of the fence, departing employees are generally armed with a portfolio of satisfactory performance reviews, a nice track record of raises, a history of promotions, and a clean personnel record. On the other side, organizations tend to use shaky retention protocols that make them targets of both the media and social activists. They also have to face legions of shareholders demanding a better return on their investment and must passively watch lawyers line up like cars at a broken toll-booth inviting ex-employees to join class-action suits. And that’s the good part. After the reduction, the company still has to do more with less – and do it with employees whose trust has been badly shaken. Progressive organizations undertake this unpleasant task from a long-term perspective. They try to be as fair and equitable as possible, focus on emerging from the downsizing period with a more efficient workforce, act to reduce the opportunity for class-action suits, attempt to redeploy skilled people, and most of all, never lose sight of survivors’ impressions of how the organization treated their loyal friends and neighbors. I don’t normally work with companies undergoing downsizing operations, but I have a strong feeling about treating people with respect, integrity and fairness, so I occasionally accept this type of job. I don’t make the stay/go decisions. I help organizations gather the data they need to keep the people with the right skills. This brings us to one of the less pleasant, but more critical than ever, uses of competencies: accurately evaluating past performance and using that information to decide who stays and who goes. There are several ways to downsize:
- You can flip a coin. Heads they stay, tails they leave.
- You can fire the old-timer deadwood. Lose your intellectual strength and get an age discrimination lawsuit as a consolation prize!
- You can fire the newest employees. And watch your skilled workforce gradually age and retire.
- You can ask line managers to evaluate employees. With the same “precision” they used to write the performance reviews that are now being used as leverage against you.
- You can give everyone a test that retains winners and discards the rest. Hopefully, you have a “bottomless” legal war chest.
Or, you could embark on a rational evaluation system that assures with reasonable certainty that highly skilled people stay and that marginally skilled people at least feel they are being treated with respect. Outside Testing – More Expensive Than You Can Imagine I heard that one company offers a computer test that includes so-called “norms” for different jobs. You take the test online. If you pass, you get to keep your job. Bogus! To quote Mr. T, that great philosopher of the 1980s, “I pity the fool!” Can you put yourself in the shoes of a judge? Ex-Employee: “Your Honor, I have 15 years of loyal service, 17 raises, 15 above-average performance reviews, and four promotions. Now they say I’m not qualified?” Organization: “Your Honor, forget all that satisfactory job history stuff. This lady did not pass a one-hour test that used norms gathered from jobs outside our organization. She must not be very good.” You tell me, which argument is more persuasive? But, let’s move on. The Past Predicts the Future – If You Can Figure It Out The past contains a tremendous amount of job performance information. The problem is digging it out, cleaning it up and using it to make good retention decisions. This is not as easy as it seems. For one thing, we all know that personnel files and job performance records are almost worthless sources of past performance. In spite of their intent, performance reviews seldom reflect true performance-let alone performance problems. This both a management and a system failure: one many organizations live to regret. We do, however, have examples of past job performance. The problem with using past performance is that it tends to be a cloudy mix of contextual skills (i.e., “schmoozing”) and hard-content skills like analytical ability or planning skills. Study after study shows that managers tend to overemphasize contextual skills and underemphasize “hard” skills. You have probably seen this yourself when a less-than-competent peer received an undeserved raise – largely because his or her manager sees only the “good” part. Managers seldom see a person’s “hard” skills. The manager might think Harry is a good problem solver, but is he, really? Or, does he take credit for someone else’s ability? Did someone else on the team do the work while Harry took credit? You get the point. Unless a rater is on the spot observing the skill being applied, it is hard to separate personal impressions from personal fact. Draw a Target and Set Your Sights A true skills measure requires developing some generic “targets.” These are usually something called “job families.” A job family is a collection of job titles that may differ in technical content, but have similar kinds of responsibility, skills levels or common work content. Job families help simplify the evaluation task and reduce the number of job-specific details that organizations will have to wade thorough. Each job family is then populated with its associated competencies. These are products of pooled information gathered from many individual job items. No, this kind of competency is seldom included on the list provided by HR. With all due respect to their efforts, most HR folks never had to test their competencies for measurement accuracy. This means they are generally composed of nice-sounding objectives and immeasurable outcomes. We need precision here, and research shows there are only a few competencies that can be measured with precision. By that, I mean personal competencies that can be separated from results in the same way that Tiger Woods’ shot-by-shot performance can be separated from his final score. Next, each competency should have a list of job activities that represent and exemplify the job. These are examples of job activities that help explain and clarify the skills you are looking for. This kind of precision can help raters focus on separate dimensions of the job, look at the job from a holistic perspective and not miss any details. It also makes some nice additions to the documentation the organization will use to defend its position (termination decisions, like hiring decisions, should follow the “Uniform Guidelines on Employee Selection Procedures”). By the way, even if you may not be subject to U.S. employment laws, this process will still help your mangers make better decisions by forcing them to focus on “hard” as well as “soft” job performance. Look Around, Look Up, Look Down Now that we have targets, it is time to gather data. Keep in mind, the objective is not to get rid of people, it is to do more with fewer people. I haven’t yet heard an organization say, “We need to get rid of more people so we can do less around here!” Have you? Having fewer people means asking the survivors to do more. Your challenge is to choose the ones who have the best skills for this task. There are several ways to do this, keeping the target competencies always in mind. Behavioral interviews are not only for hiring, they work for retention. Asking the jobholder to give behavioral examples involves the employee in his or her own skill evaluation. They may not like the result, but at least they were given a chance to participate in the process. The job family drives the competencies and the competencies guide the questions. Behavioral interviewing technology can also be used to interview peers, managers, subordinates, and customers about the jobholder’s performance – a 360 degree interview, if you will. Performance appraisals and personnel files should also be reviewed, but they seldom contain useful data. Still, it is good practice to include this information. Sales people, managers and customer service people should participate in additional measures – like realistic simulations. Why? Because this is a critical requirement of their job and we want to keep the best of the best, don’t we? Managers should be asked to “coach” a subordinate, sales people should be asked to “sell” or “present” to a customer, and customer service people should be asked to “resolve” a tough customer problem. Again, don’t look to training to develop your simulations. A training simulation is intended to enhance skill through practice. A measurement simulation is a test that has uniform set up, uniform administration, uniform trained role players, and uniform scoring methods. If the job has significant mental components, you might even want to use a job-relevant written exercise or two. The objective of simulations and exercises is they give an accurate measure of the “peak performance” the organization will need going forward. Armed with this kind of information, reducing your workforce won’t be any more pleasant, but it will result in better people, better morale and fewer legal challenges. That’s Work! Like I said. In all parts of the world, if you do not care about retaining highly skilled people, you can always flip a coin! In the U.S., you can also spend some of the money you save on lawyers.