I just returned from facilitating a workshop at a hotel in Lake Las Vegas in Henderson, about 30 miles from the strip. The scars of the economic environment were everywhere – abandoned construction, vacant shops, and a casino with only four other customers at three in the afternoon. A security guard told me they now close at 10:30 PM. That’s a sign of the times!
One of the participants, the owner of a small manufacturing business, didn’t buy my advocacy of giving people who were targeted for layoffs as much advance notice as possible.
“They will act out – not work hard – steal our customer lists – and possibly sabotage some of our equipment.” he argued. “Far better to not tell them, and when the time comes, escort them out the door quickly.”
It was his business, his money, and he was a customer, but I could not disagree more. There is probably some very small degree of risk that some of these things could happen but that needs to be weighed against a far greater risk of mistrust, alienation, and anger. I know of no research that concludes that withholding information from those who will be downsized is beneficial. There is, on the contrary, there is a lot of evidence that employees can not only handle this information, but that it gives them a sense of control which leads to a better adjustment and no decrease in productivity. There is significant evidence that control is a key variable in a time of uncertainty. If we have control we can handle almost anything and if we don’t have it, we get worse.
Then, there is the ethical issue. If we have information that will greatly effect an employees life – like if she or he will have a job in a few months – how ethical is it to not tell them or even, by our silence, give them the impression that they will keep their jobs? For me it boils down to our belief in the nature of people. To go way back to Douglas McGregor, do we have theory X assumptions that we can’t trust people and, unless they are carefully monitored, they will “get” us, or do we have theory Y assumptions that people can be trusted and, when empowered, will do the “right” things. When it comes to downsizing, I think there is great power in being straight with employees and establishing a theory Y culture. That will not only help those who will be leaving but also those who remain and, ultimately, the organization itself when things turn around.
