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A tough choice

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in Leaders & Managers,Management Training

Gus, a director at a natural gas utility firm in the Northeast, discusses his attempt to preserve morale amid a series of companywide reorganizations.

We’ve reached a pivotal point in this reorg. We need to decide whether to resort to layoffs or ask everyone to make some sacrifices.

In previous reorgs, we didn’t give people much choice. Management huddled together and made judgment calls. This time, we’re trying to make the process more transparent and factoring in what employees think we should do.

We’ve crunched the numbers and it’s clear we need to either eliminate about five positions or make 35 employees dial back their hours. Temporarily pruning compensation by about 15 percent across the board should give us the financial flexibility to weather the next quarter or two and rebound strongly as the recovery accelerates.

Of course, trying to reach consensus on such a sensitive issue is going to be tough. Everyone has an opinion. This hits directly at their pocketbook and I understand that.

My hunch is we’re going to find a way to avoid layoffs. We’re working on a proposal in which even if people agree to lesser pay for a few months, we may find seasonal surges in activity allow us to give those workers some extra hours to make them whole.

Most importantly, we’re involving everyone. In town hall meetings, we present the financials and explain the consequences of declining sales. No one’s happy, but at least we’ve forged a level of trust throughout the organization that makes this reorg a bit easier than past ones to swallow.

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