Work redesign and performance management in times of downsizing

A.S. Evangelista
Participant, Manager Leadership Program, Home Depot, Shreveport, Louisiana (AirForce96@aol.com)

Lisa A. Burke
Associate Professor of Management and Marketing, Louisiana State UniversityShreveport (lburke@pilot.lsus.edu)

he decade of the 1990s yielded a false sense of security among management and employees that the economy was boundless. However, the topic in many copy rooms, cubicles, and break areas today is downsizing, or the inevitability of more corporate bloodletting. Executives are rallying back to the lines to reengage, where they sense little time for streamlining, reevaluating, or reallocating business processes, tasks, and activities. The reality of the present corporate situation is that many downsizing firms face the immediate challenge of keeping operations going with a minimum number of staff, at least for a short term until the outlook becomes more stable. With layoffs occurring across many industriesthe tech sector, retailing, entertainment, manufacturing, and air travel, to name a fewthe situation presents an opportunity to address associated issues of downsizing for sensible recovery. Although management literature has focused on certain aspects of downsizing, such as communication strategies, employee cynicism, stress, potential litigation, morale, retention, and survivor support, one area remains essentially untouched: the effect of reductions in force on employee workloads and the troubling ripple effect on the integrity of performance management systems. Even though the topics of downsizing and performance management each boasts an established practitioner literature base, research at the intersection of these topics remains scant. Thus, it is our purpose here to help organizations and managers who are operating in extremisdoing as much or more but with fewer peoplereconfigure work duties and establish a fair performance management process for surviving employees. The framework proposed here is targeted for solution-hungry managers caught in the throes of downsizing organizations who need a solid recipe for work redesign.

Reductions in force can have

a serious impact on employee
workloads, as well as a troubling
ripple effect on the integrity of
performance management systems.
Organizations and managers who are
operating in extremisdoing as much or
more as before but with fewer peopleneed help with reconceptualizing tasks and managing performance during downscalings. Coupled with specific illustrations, this proposed operational framework can help them reconfigure work duties and establish a fair performance management process for those employees who remain.

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Productivity in downsizing

recent article in HR Focus that summarized data gathered by the Families and Work Institute (Focus resources now 2001) reported that corporate downsizings often mean extended hours and a heavier workload for surviving employees. The effects of the resulting stress vary from making more errors to feeling bitter toward coworkers to simply leaving the job altogether. Assuming that companies keep their best employees and managers during downsizing, organizations should theoretically be in a position to perform better. But case studies have shown that productivity often declines. In The People Side, by Richard Koonce (1991), Dr. Jackie Greaner refers to the productivity paradox as a source of regression: Lets say a corporation decides, for financial reasons, to undertake a downsizing or restructuring to improve its bottom-line profitability and productivity. If it doesnt deal with the people factors associated with changethat is, effectively manage the human resources issues that are part of any corporate reorganizationits productivity and profitability will suffer anyway. This is the so-called productivity paradox. Its quite common in organizations going through transition today. Such an observation highlights the inadequate attention paid to the people aspects of previous organizational restructurings. Clearly, one goal of these types of corporate change must be to provide indubitable improvement in productivity and profitability so that surviving employees remain viable stakeholders in corporate progress. But as Slavin (1994) suggests, If you eliminate people, the ones who remain will make choices about how to react. The best often leave the companythe brain drain. The rest either work longer or harder, or they just dont do certain tasks. Many more authors also point out that in corporate downsizings the survivors end up working longer and are heavily taxed with a bigger workload. As a result, morale often goes into the proverbial dumpster. Place the performance management process against this backdrop and it is easy to discern potential problems.

were left, Caroline took over much of the workload of one of the terminated employees. The stress of the current work environment is taking a toll on her and her peers and is beginning to affect her work. Caroline knows that her annual performance appraisal is around the corner and that she has not performed up to her usual potential, although she has tried. There is just too much to do and too little time to get it all done; some tasks never get touched and others are only half-heartedly completed. This once exemplary employee now actually feels she is average, and she is distressed about it. She fears not only that she will be appraised unfairly because she has been asked to do so much more and has done all that she could, but that others might actually get away with task avoidance, something she does not feel comfortable doing. Michael, Carolines supervisor, is also under a great deal of stress. Not only is he responsible for his own performance but that of the Quality Assurance Department as well. The department has consistently produced above average performance. But lately Michael has noticed that several of his key employeesemployees that he urged be saved from the corporate chopping blockare performing marginally. Several work assignments that absolutely must be done are either late or inadequate. Even employees he relies on the most, such as Caroline, are turning in weaker performances. He also senses they are on the verge of a morale slump as a result of the burgeoning workloads. Performance appraisals are due in six months and Michael prides himself on being fair and accurate. Given that the departmental workload has increased, however, he feels there will be several challenges to confront. This scenario illustrates some of the complexities surrounding the fallout from corporate downsizing, especially concerning employee workloads and performance management. Before the company cut heads, Caroline was working at or near her effective capacityshe had the time, opportunity, ability, and energy to be a superior performer. She completed all of her duties and did so in an outstanding manner; plus, she enjoyed her work. Michael regards Caroline as one of his best employees. But left with additional duties to distribute among his remaining employees after the layoffs, he effectively gave her the work of at least two people. He sees her performance faltering, sees her turning in relatively lackluster work and even failing to complete a couple of tasks. Michael realizes he must now get his group focused appropriately (and quickly) on their new work reality if he is to maintain the units performance. He also wants to deliver fair and accurate performance appraisals in the post-downsizing environment. Stepping back, he realizes he needs to first review departmental tasks in this environment to maximize his units productivity; then he will be in a better position to evaluate employee performance fairly. Our framework can help him do just that.
Business Horizons / March-April 2003

Downsizing and performance management dilemmas

Consider the following: Caroline has escaped a recent volley of layoffs at her manufacturing firm. The companys dreary situation will likely continue into the foreseeable future and she is concerned about her job security. She has been a superior performer who takes pride in being able to complete all assigned duties well and on time. When the latest cuts trimmed several people from her department and management divided up the work among those who
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Work redesign

n downsizing situations, it is vital for managers to assess business unit obligations and internal tasks to effectively and fairly manage and balance workloads among remaining employees. Typical problems they may face during employee reductions are: (1) the failure or inability to identify and categorize duties and assignments, (2) the failure to identify when they have over-tasked an employee, and (3) the failure to see when a business units demands exceed its capacity. When a firm enters the downsizing mode, the top managers need to redefine their goals for the restructured company in order to meet the demands of their business environment. According to Slavin, this process also involves examining and identifying the more essential operational tasks. Maintaining that certain tasks are more strategically important than others is consistent with Wright, McMahan, McCormick, and Sherman (1998), who demonstrated that a focus on the most strategically important tasks in a performance management system will enhance company performance. As such, we propose a process for this important task categorization duty, as shown in Figure 1.

Figure 1 Work redesign process

Reformulated company strategy

Identify company-wide objectives that pertain to specified business unit

Identify all projects and tasks to be retained or eliminated Retained Eliminated

Categorize remaining tasks as:* Critical, sub-critical, minor, or unnecessary

Eliminated tasks/processes should be documented and eliminated in a deliberate fashion.

Critical, subcritical, minor

Unnecessary

Identify complementary tasks in each category, which can create positive synergy when grouped together Ensure retained tasks do not exceed unit capacity

To proceed in this new corporate direction, managers need to identify and cateAssign tasks to employees gorize all projects and tasks to determine which activities are to be retained and Monitor and evaluate which are to be eliminated. Critical tasks are those that enable a company to accomplish its primary organizational objectives; they are essential to maintainbones approach to completion is taken. One example in ing the firms strategic intent, and must be performed to Michaels department that fits this category is a specific completion at the highest quality standard. One example quality monthly report. Prior to the downsizing the report from Michaels department is the task of quality control, a was a work of art. The responsible team member had the vital function that is performed on incoming parts to the opportunity to produce a visually stimulating presentadepartment and that requires certain sample inspections tion reporting certain quality assurance data. The data to ensure that those parts meet or exceed standards. There could have been presented just as accurately in a straightis no wiggle room in this functionfailure to identify forward, no-frills report and still would have met the problems could lead to catastrophic results. needs of the recipients while taking less than half the time. Another sub-critical example could be maintenance A sub-critical task is one that needs to be performed, but on a piece of test equipment that is not used at current an average standard of quality will suffice. An example production levels but is likely to become critical when might be a job that is perceived as critical in the near production rebounds. future once the company restabilizes, thus requiring that it be maintained to ensure proficiency when reinstated. All sub-critical duties contribute to the achievement of organizational goals but are just as effective when a bareWork redesign and performance management in times of downsizing

*Task categories: Critical Must be completed at an above average quality standard. Sub-critical Must be done, but an average quality standard will suffice Minor Should be done only when time permits; average quality standard will suffice Unnecessary Eliminate

A minor task is one that adds value to the firm but will not hinder operations or organizational goals if left undone. An example would be maintaining workplace tidiness. And
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an unnecessary task is one that can be discarded because it most likely drains needed resources away from the critical or sub-critical tasksfor example, quality inspections of products that have been temporarily ceased until demand picks up again. Denoting such tasks is particularly relevant in a restructured firm, as business goals may have changed. Taking the time to document discarded tasks and the lessons learned may prevent future mistakes and yield valuable information if the company decides to resurrect similar projects. In most cases, an employee does not need to stop performing critical or sub-critical tasks to advance workplace aesthetics. Because the opportunity to do each task will vary daily, regardless of category, time management skills will be ever-important. Some tasks complement each other and may be more effective when assigned together. This may seem intuitive, but synergy can lead to greater efficiency and productivity. Examples are tasks that require close coordination with another department or specific areas within another department. If Michaels unit has a critical task and some sub-critical and minor ones that all require coordination with the marketing department, then these tasks should be assigned together.

Figure 2 Performance management in task overload situations

Tasking Assessment Template Critical task #1: ___/5 Critical task #2: ___/5 Critical task #3: ___/5 Normal workload tasks: Sub-critical task #1: ___/3 Sub-critical task #2: ___/3 Sub-critical task #3: ___/3 Minor task #1: ___/1 Minor task #2: ___/1 Minor task #3: ___/1 Overload limit: ------------------------------------Critical Task #4: ___/+ Overload tasks: Sub-critical task #4: ___+ Sub-critical task #5: ___+ Minor task #4: ___+ 27* Total points earned: ___ /____ Percentage of points earned: ___ %

Performance categories: Excellent 85100% Good 7085% Satisfactory 5070% Poor 3050% Unacceptable 030%

RATING SCALES Performance on critical tasks: Excellent 5 Good 3 Satisfactory 1 Poor 0 Unacceptable 3 Performance on sub-critical tasks: Excellent 3 Good 2 Satisfactory 1 Poor 0 Unacceptable 2 Performance on minor tasks: Complete: 1 Not complete: 0

After formulating the work redesign process outlined in Figure 1, we *Note: The workload denominator will likely vary across employees because it is task- and job-specific. modified our model in response to an interview with Steven Finch, a supervisor at Philips Broadband Networks of Manlius, New York. Mr. Finch said that when his company began to downsize, he knew his department would need to do a task assessment in order to pare down the workload into necessary and unnecessary compos Figure 1 shows, then, redesigning work around nents. He requested that each member of his department critical, sub-critical, and minor tasks while elimibrainstorm and produce a task list, including all steps nating unnecessary ones forms the foundation for necessary to accomplish assigned duties. Then he comperformance appraisal content. Using this framework, pared their lists with departmental functions, as conceived managers can assess the completion of each type of task, in the companys new focus. If certain functions were no as well as the specified level of quality for each. The outlonger necessary, he removed them and their corresponput from the work categorization process must be shared ding tasks. Finally, he allocated the downsized employees with all employees so they have a list of the critical, subduties to remaining members to ensure that necessary critical, and minor tasks they are accountable for. These functions were completed. This approach to task categosame tasks are then used to drive the performance manrization is consistent with Figure 1 and provides some agement process. Employee communication and undersemblance of face validity verification.

Reconceptualizing performance management

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standing will be vital to the success of this effort because the manager will formally evaluate the three types of duties as performed by that group of employees. The manager must evaluate the level of work that was assigned to employees and then assess whether they are performing those duties at the appropriate levels. Because each task has been categorized, the manager can ensure that critical tasks are all being performed to the highest standards, sub-critical tasks to adequate levels for functional requirements to be met, and minor tasks only when possible or as needed. Each employee is then in a much better position to receive a fair and accurate performance appraisal, further removed from problems that occur due to ineffective task assignment after downsizing. Figure 2 outlines a proposed method for effectively and fairly dealing with employee overload in the performance management process. A generic example of translating reengineered workloads for performance management purposes is illustrated, with the goal of assigning each newly sorted task a proper weight. It is essentially a weighted evaluation system, in which managers translate each members workload into numerical values so that they can evaluate each task and obtain an overall percentage for each employee. More specifically, the manager creates a task assessment, including both normal workload and overload tasks. Various tasks of all types exist, both above and below the overload limit line, each with a different rating scale because of varying importance. For example, while critical tasks are rated on a scale of 5 (excellent) to 3 (unacceptable), sub-critical tasks are on a 3 to 2 scale, and minor tasks are either complete (1) or incomplete (0). These varying endpoints communicate to employees the relative importance across the task types in the thrust of their daily efforts. The total points earned ratio comprises a numerator (the employees total earned points across all tasks) and a denominator (the managers determination of a fair workload). Note that this workload denominator, being taskand job-specific, will likely vary across employees and organizations. Regardless, an employees total earned points divided by his workload denominator gives a percentage of points earned and places his performance in a category of excellent, good, satisfactory, poor, or unacceptable. Of course, firms can tailor these ratings and categories for their particular needs. Our suggested process requires managers to acknowledge when employees are overloaded, while subordinates must acknowledge that the manager values the completion of various tasks differently. Examining employee overload based on the importance of tasks, and then explaining to the employees what level of performance is expected on the various tasks and how the appraisal process will work, allows a manager to more fairly administer periodic formal evaluations. For example, it may be tempting to give
Work redesign and performance management in times of downsizing

a high performance rating when an employee is overloaded; however, based on our approach, the rating would depend on the employees performance and not simply on emotional appeal. In addition, downsizing firms can more closely tie any merit bonuses to deserving performances in order to keep a pay for performance mentality foremost in employees minds and ensure corporate dollars are wisely distributed. To illustrate our point, we apply our task assessment framework to Carolines situation. As shown in Figure 3, Caroline has made a concerted attempt over the last four or five months to complete work assigned in Michaels task categorization system. Even though she is only producing mostly good results, she is performing consistently across assigned tasks, both old and new. Adding up her task scores, we see that she has produced a value of 22, resulting in an 81 percent of points earned and a good rating. As such, her performance appraisal reflects her results across the various tasks. Carolines normal workload was broken down by task type to encourage appropriate focusall complete with clear performance standards. Michael assigned what he determined to be a fair workload in the employees restructured work reality and a fair division of departmental work responsibilities. But performance appraisal results

Figure 3 Example of performance management in task overload situation

Carolines Tasking Assessment Critical task #1: ___/5 3 Critical task #2: ___/5 3 Critical task #3: ___/5 3 Normal workload tasks: Sub-critical task #1: ___/3 2 Sub-critical task #2: ___/3 1 Sub-critical task #3: ___/3 2 0 Minor task #1: ___/1 1 Minor task #2: ___/1 Minor task #3: ___/1 1 Overload limit: ------------------------------------Critical Task #4: ___/+ 1 Overload tasks: 1 Sub-critical task #4: ___+ Sub-critical task #5: ___+ 2 Minor task #4: ___+ 0 22 27* Total points earned: ___ /____ 81 Percentage of points earned: ___ %

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are based on the types of tasks that were assigned and, more important, on the level at which those tasks were performed. Caroline is not an average performer, as she has lately felt; instead, she has exhibited quite good performance over the last several months. Michael gives her clear direction on which tasks are valued the most, and with continued coaching and experience, Caroline will likely make it to the excellent category soon. Ultimately, Michael is confident that his departments task load has been fairly and accurately distributed and that employees will become more comfortable and proficient with the new system over time.

References and selected bibliography

Appelbaum, Steven H. 1991. How to slim successfully and ethically: Two case studies of downsizing. Leadership & Organization Development Journal 12: 11-17. Beam, Henry H. 1997. Survivors: How to keep your best people on board after downsizing. Academy of Management Executive 11: 9294. Feldman, Daniel C., and Carrie R. Leana. 1994. Better practices in managing layoffs. Human Resource Management 33 (Summer): 239-261. Finch, Steven. 2001. Supervisor, Philips Broadband Networks, Manlius, New York, phone interview (17 November). Focus resources now on retained employees. 2001. HR Focus 78/10: 11-16. Gutknecht, John E., and J. Bernard Keys. 1993. Mergers, acquisitions and takeovers: Maintaining morale of survivors and protecting employees. Academy of Management Executive 7/3: 26-37. Koonce, Richard. 1991. The people side of organizational change. Credit Magazine 17/6: 22-25. The negative effects of overwork and related stress. 2001. HR Focus 78/11 (November): 9+. Siriginidi, Subba Rao. 2000. Enterprise resource planning in reengineering business. Business Process Management Journal 6: 376. Slavin, Roy H. 1994. Re-engineering: A productivity paradox. Quality 33/6 (June): 18. Wright, Patrick M., Gary C. McMahan, B. McCormick, and W.S. Sherman. 1998. Strategy, core competence, and HR involvement as determinants of HR effectiveness and refinery performance. Human Resource Management 37/1 (Spring): 17-29.

erhaps organizations other than downsized firms could benefit from considering our outlined approach as well. When a firm becomes mature and duties become routine, this method could be useful in revitalizing itto do some housecleaning by identifying critical, sub-critical, and minor tasks and eliminating unnecessary ones. Nevertheless, it is crucial in a downsized environment for managers and supervisors to reexamine workloads, prioritize duties, and communicate how the task hierarchy will be reflected during the performance appraisal process. The effort must be made to ensure that employees who are retained are being used effectively, treated fairly, and rewarded appropriately for their contribution to the organization.

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