Cushioning the Blow

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How to conduct staff reductions in the least hurtful way

For anyone who's ever been on either end of a retrenchment, it's a rotten experience. But managers can take steps to help preserve victims' dignity and assist survivors in coping. Here are 10 tips from Amy Wrzesniewski, associate professor of organizational management at the Yale University School of Management, and Batia Wiesenfeld, an associate professor at New York University's Stern School of Management.

1. Be candid. Research shows that open and ongoing communication with employees about the need to cut costs and the various options being weighed is the best approach for all involved.

2. Provide advance notice whenever possible. This helps make retrenchment victims feel in control and lets survivors know what's coming.

3. Be fair. Research shows that retrenchment victims and survivors fare better if they perceive that procedures have been just.

4. Communicate with employees as frequently, simply and meaningfully as possible during retrenchments.

5. Explain the rationale for the retrenchments to victims and survivors. If additional retrenchments are unlikely, it will help survivors settle down.

6. Insert yourself into the process if your direct reports are being let go. Retrenchment victims find it particularly troubling to be let go by someone at a higher level than their supervisor.

7. Treat people with dignity and respect. Try to see the retrenchment from the perspective of the person who's being let go.

8. Avoid bias. Create a representative group of employees who can provide input on the retrenchment process to prevent even unintentional bias.

9. Take care of people financially. Following industry norms on severance pay signals respect. It also helps prevent sabotage, stealing and anger among survivors.

10. Provide nonfinancial benefits such as notifying laid-off workers about internally posted positions and informing area employers that talented people are available.