A manager writes an open letter to superiors, asking them why layoffs are continuing and salary cuts are not being restored despite the company declaring a second quarter profit in crores
To the management, Last week was euphoric. The company results rose significantly higher than market expectations. Company morale after the Town Hall was at an all-time-high. Naturally, my team too was jubilant and we ended the week celebrating this collective success. But on Monday morning as I logged in to work, I was in for a rude shock.
I was informed on email that our organisation is looking at pruning the headcount and that the PIP (personal improvement plans) numbers, which have been "institutionalised" around the 5% range, have increased to 20%. While the email indicates a target date to complete the exercise, it provides no further explanations and I am genuinely baffled. Quite honestly, it seems to me a veiled form of RIF-ing (reduction in force). In the backdrop of extraordinary results how am I to justify this fourfold increase to myself and to my team?
Further, there is no mention of rolling back the salary reductions or paying out last year’s variable performance bonus, which was held back. In fact, the email adds that the mid-year bonus payout, due in October, is being discontinued.
In my last appraisal you tasked me with growing my team, which I successfully did. But now you are asking me to retrench. The contradiction is stark if not arbitrary. It would be great to understand the reasoning rather than just receive a “bald" letter.
What is the rationale behind this mis-timed exercise? Does it fit into the Business Unit strategy for the months to come? Have the global business scenario or the local context or even the market conditions been taken into consideration before arriving at these decisions? What are the criteria for deciding who will be retrenched and by how much salaries are slashed? Such decisions can’t be ad hoc or communicated so poorly.
These are careers and livelihoods of my team members. I know there are companies that ostensibly do not follow “bell curves" and yet expect managers to force fit employees into ranks, thereby retrenching those in the “non-performing" group. But that, I’m afraid, is off the cuff. If I, as a manager, need to take ownership of this decision, it is crucial that I am armed with meticulous data to make this decision a fair, objective, transparent and data-centric one.
I would like a detailed discussion with my HR business partner, along with data on utilisation and performance of the last three years to gauge who in my team needs coaching, upskilling or reskilling, and finally, who needs a PIP. Furthermore, don’t you think we should undertake this exercise in view of future market skills and assess employees based on their ability to build those skills? This will also ensure that we have a redundancy plan to keep the “lights on", so to say.
While I understand that layoffs and pay cuts are an economic reality, my focus is on the way it will be executed. May I know if further rounds of layoffs or further pay cuts are planned? If we prolong this exercise, it will lead to fear, low morale, mental health issues and reduced engagement within the team. Especially in current times, it will have huge ramifications.
My team is spread across countries, and we have not yet communicated clearly with any of the employees. Has HR put in place emotional support mechanisms/helplines for employees? Ours is a manufacturing unit as well. Does HR know the specific laws applicable to the blue-collar and white-collar workforce and the role the trade unions as stakeholders play?
Are they equipped from a compliance standpoint? Or will they tell me “I need to check with Legal and get back?"
Let me also tell you that I am ill-prepared to give this devastating news. Even though I have been a people manager for over a decade, I have not seen a downturn, told people their work will not be rewarded, or worse, retrenched people before.
This exercise is not an easy one by any standards. I hope you can trust me to take a decision on when I need to follow the “script" and when I should improvise. I want to express my gratitude to the affected team members for their loyalty and dedication to the company. I want to listen patiently and to allow them to experience the emotions as I break the news to them. I am acutely aware that this conversation will trigger different stages of grief—sadness, anxiety or even aggression—and I want to be able to anticipate the worst-case scenarios and be prepared to deal with them. Most importantly, I want the dignity of my team members to be retained.
Finally, I want to check on the channels that are there for me to take stock and recharge from an emotionally draining conversation. Do I, as a manager, have a safe space to express myself freely in the organisation?
I thought it was crucial that I pose these questions and clarify my doubts. This exercise requires a strong collaboration between leadership, HR and Legal to enable us (managers), who are finally the ones delivering the bad news. And it’s important that HR carries us with them, equipping us with data and rationale so that all processes are consistent, and are based on fair and informed decisions.
Companies around the world, successful and unsuccessful, are going through this angst. But please remember that the way we, as an organisation, manage this exercise will speak volumes about our culture and values and will be directly linked to the morale of those who remain with us.
Awaiting your reply, Your loyal, harried, confused manager.
Hema Ravichandar is a strategic HR consultant. She serves as an independent director and advisory board member for several organisations
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