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Surviving the Downsizing: Ethical And Economic Considerations

Gerri Perreault NASSP Bulletin 1997 81: 62 DOI: 10.1177/019263659708158810 The online version of this article can be found at: http://bul.sagepub.com/content/81/588/62

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F E A T U R E S

Surviving the Downsizing: Ethical

And Economic Considerations
By
Gerri Perreault

Administrators of schools that must downsize need to attend to the

people who remain after the layoffs have occurred as well as the people who are terminated. What are the ethical considerations of fairness and honesty in this situation, as well as the economic considerations of cost effectiveness in the delivery of services to students?
reduction in force (RIF) is necessary, tough decisions. The education joura fair amount of discussion to this issue, yet the nals devote V V focus tends to be on the people being terminated. The trauma that termination brings to those terminated is well-recognized and documented (e.g., Costello, 1991). Less noticed is the trauma and stress that results for those who remain, although Oehm (1991) notes this issue.

hen downsizing through

~~J~~

school administrators face

Defining
The
terms

the Terms
&dquo;reduction in force&dquo;

&dquo;downsizing,&dquo;

(RIF), and &dquo;layoffs&dquo;

are not

reducing the synonymous. Downsizing has to do with smaller intensize of ones organization. Downsizing &dquo;getting tionally&dquo; and &dquo;can be seen as part of a continuous corporate improvement philosophy&dquo; (Singer, 1994, p. 7). Reduction in force refers to reducing the
numbers of ones staff.
means to

is the broadest term and refers to

Layoffs

permanently terminating
downsize.
an

have to do with temporarily laying off or members of ones staff. Layoffs are only one

Once

organization downsizes by laying off staff members, the

process may result in a number of responses in the Whether the layoffs occur in education or business, a be
as

people who remain. typical scenario may

Nelson, 1983; Dahlberg, 1991; Oehm, 1991; Cox, 1992; Noer, 1993; Byrne, 1994a; Smith, 1994). People fear they may be next,
of the Leadership
Studies Program at the

follows (Collins and

Gerri Perreault is director Cedar Falls.

University of Northern Iowa,

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62

especially if they have

not

been told how the decisions

were

made

or

if

they

perceive the process as unfair. Morale goes down. Some feel relief but also feel guilty for having been spared. Some feel a sense of loss and grief over the loss
of co-workers, friends, and a pre-downsizing identity as a safe family. People scramble to do the work of their co-workers and struggle to find information they need in the files of laid off co-workers. Backstabbing increases as people try to position themselves to avoid being cut in the next wave of layoffs. Blame-shifting increases and risk taking goes down. Stress levels increase because of loss and increased workloads. Company loyalty and commitment decrease. This pattern of responses is common enough that the term &dquo;survivor sickness&dquo; Employees who remain has been coined to describe it (Noer, 1993, p. 1).
In addition to these
costs

psychological

and social

may have low morale

economic costs

have
warn

experienced by survivors, the institution incurs as well. Employees who remain may low morale and less loyalty and therefore be

and less

loyalty

and

therefore be less
effective workers.

less effective workers. Collins and Nelson (1983) that school employees who receive notices may

make increased use of sick and other short-term leave before their final work day. Depending on the terms of the union contract, unemployment compensation may begin as early as spring of the layoff year. In addition, layoffs may create insecurity in the minds of parents and students.

What Can the

What
you do broad modes: One
can
as a

Principal

do?

will do in

an

school administrator? You can think in terms of two anticipates what might happen, the other plans what you actual reduction in force.

Anticipatory Mode Careful planning

situation
or

you position your school to avoid a crisis handle any downsizing that may be necessary. Your policies and procedures prior to RIF will be the major determinant in the effectiveness of the RIF should you decide layoffs are necessary. Following are some considerations:
can

help

be better able

to

policy covering the bases and the process for any 1 potential RIF. The bases for layoffs could be seniority, low-valued work, inessential positions or functions, merit, or voluntary. The process should specify who is to do the notification and the minimum period for notification. sure the policy is communicated to all staff members and also during the interview process with potential hires (Winter, 1994).

Have in

place

clear

Be

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63

Develop clear performance standards and evaluation criteria so any merit3 based layoffs can be more objective and be perceived as fair. Inadequate standards and poor evaluation procedures leave a school district with no basis on which to make layoff decisions. Under such circumstances, layoffs may appear arbitrary to employees who remain. This can produce divisiveness as
well

generate grievances (Collins and Nelson, 1983). Establish an employee development policy and plan. Encourage employto keep current in their field and develop networks, and provide opportunities for them to do this. The more employees have developed their abilities and are able to see other possibilities, the less they will feel stuck and
as

~*ees

hopeless during a layoff. Consider carefully whether layoffs are the only answer if a RIF is necesscary. Byrne (1994b) warns that &dquo;healthy companies that slash payrolls instead of devising new game plans for growth are sending a demoralizing message to employees&dquo; (p. 69). About five years ago a study of corporate downsizing by the American Management Association indicated that 83 percent said layoffs were the only alternative chosen (Singer, 1994, p. 8). One could expect similar results if a study were done of school districts.
number of alternatives (Jacobs, 1982; Thomas, 1982; Collins and Nelson, 1983; Costello, 1991; Mutter and Nichols, 1991). These options have included early retirement, unpaid or partially paid leaves, alternative employment leaves, Educators have used
a

To

keep

costs down and

decrease the need for future

layoffs,

some

giveback negotiations (benefit reductions), reassign-

educators have sought ments, and dual certification hires. To keep costs down and decrease the need creative solutions. for future layoffs, some educators have sought creative solutions. For example, Kendrick (1991) made use of corporate executive volunteers for the ongoing training of school administrators, a strategy that had the added benefit of informing the business community about the schools. Participating executives often became public school advocates.
7be Layoff
The survive you have in place prior to a RIF will have an impact on crisis your institution will experience and on your ability to crisis. The suggestions below are embedded in the considerations
a

Mode plan

how much of
a

discussed above. The more professionally prepared all your employees feel, the less threatened they will be during the layoff process. This is not to say feelings of fear and anxiety will vanish during this traumatic time, but they
will be lessened.
1.

those

After the layoff decisions have been made, give careful consideration to being laid off. Carry out the layoffs in a manner that is fair to everyDownloaded from bul.sagepub.com at SIMON FRASER LIBRARY on March 7, 2014

64

involved. How the layoff is done will be watched carefully by all staff members and will affect the views and reactions of those who remain. It is critical to provide an adequate notice period to those being laid off, even if it is greater than the one required by the union contract. The delivery of this
one

notice

can

be humane

or

it

can

be

impersonal
an an

with personal will generate reactions quite different from sheriff to deliver notices (Winter, 1994).
istrator who makes
contact

terminated administrator who sends the

demeaning. employee being

and

An admin-

are possible for those laid off. and severance pay. Provide outProvide continuation of health benefits placement assistance or money for career search workshops or conferences where terminated employees could make job contacts. Give laid off staff members a list of resources in the area, and allow use of office space and a phone until a new position is found.

A number of other considerations

Fairness is not
nomic
one as

only

an

ethical issue but

an eco-

How the

layoff is
all staff

may appear costbut include the cost savings calculation should ly, any that will result from better performance by those who
survive the RIF. 2. Communicate

well. These

suggestions

done will be watched

carefully by

clearly to everyone the criteria and procedures that were used for the RIF Layoff survivors &dquo;have an unquenchable need for information-before, during,
and after reduction&dquo;

members and will

affect the views and

(Noer, 1993, p. 2). The survivors for watching any indication of lack of equity and fairness in the process and calculating how they may be
will be treated later. If

reactions of those
who remain.

notice was provided to those who were laid off, this as an issue of fairness that might affect them also. Anxiety will be fueled if they believe they can be laid off on a moments notice and have little time to plan for a new position. The less fair the process, the more anxiety that will be generated by the RIF survivors because they will feel their future is unpredictable.

inadequate
see

the survivors will

3. Avoid inequitable policies. Cutting only lower level employees, increasing the workload of those who remain, and giving bonuses only to top-level executives is guaranteed to breed employee resentment and lower morale. If surviving employees are being asked to make sacrifices, the burden
should be shared. 4. Communicate the status of those who remain. Lack of information from the top will result in creation of false information from below (rumors). If another layoff is expected, state the criteria and procedures that will be used at that time. Under conditions of uncertainty, which lack of communication generates, staff may remain in what Oehm (1991) aptly titles an &dquo;unproductive limbo&dquo; (p. 23).
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5.

Acknowledge the pain. Trying to paint a rosy picture can result in people not feeling free to voice their negative feelings (Smith, 1994, p. 52). Noer points out the importance of acknowledging emotional reactions and permitting grieving. Repressed anger and other emotions such as fear, uncertainty, guilt, betrayal, and distrust are widespread (1993, p. 3). Communicate your understanding that it is normal for people who
remain to express

them

or

specify

range of emotions. Offer assistance; offer help that is available.

a

to meet

with

Depending on your workforce, you may want to try to &dquo;counseling,&dquo; which some may perceive negatively as being needed only by those who are weak or mentally ill. 6. Assess workloads carefully. Take time to assess priorities regarding the work that must be done. Cut back on unnecessary work. If employees are to assume tasks of laid off co-workers, provide training when it is needed. 7. Whenever possible, involve employees in I21F decision making so they feel they have some control. For example, they could be involved in deciding what work to cut and how to reDepending on your
Caution:

avoid the word

allocate other work.

A related
concern are

mid-level managers who are for the layoffs. Smith indicates

the consequences for given the responsibility

workforce, you may

want to

try

to avoid

clearly

that the toll

those who are weak or that top administrators explain clearly the reasons for the cutbacks, demonstrating that the necessary cuts mentally ill. are not the result of inadequacies of the manager. Winter (1995) points out the usefulness of explaining that the RIF procedure
is

described for employees applies also to the managers given the task of firing subordinates. An additional factor he discusses is that having to dismiss someone &dquo;assaults the ego of the person wielding the ax&dquo; (1994, p. 50). To have to let someone go is felt as a failure and defeat by some managers. Smith suggests

the word

&dquo;counseling,&dquo;
may per-

which ceive

some

negatively as
needed

being

only by

being

followed.
to

Similar

suggests that the

advice given above for survivors in general, Smith (1994) pain mid-level managers might feel should be acknowlis

presented positively as an opportunity for the organization, but this positive emphasis may create &dquo;a taboo against talking about the other side of the restructuring. It doesnt give people permission to say, This is hell&dquo; (p. 52). Implementing a fair layoff and survivor process is both ethical and practical. Helping your employees survive a RIF will help the school thrive. -B

edged. Usually restructuring

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66

References
Byrne, John
—.
—.

A.

"Belt-Tightening
an

the Smart Way." Business

Week/Enterprise, 1993.

Week, May 9, 1994a, pp. 60-68. Week, May 9, 1994b, p. 69. Upside Downsizing." Collins, Philip, and Nelson, Dorothy Q. "Reducing the Teacher Workforce: A of Law Education, April 1983. Management Perspective." Journal & Costello, Donna Marie. "The Human Cost of Cuts." American School Board Journal, September 1991. Cox, Craig. "On the Firing Line." Business Ethics, May/June 1992. Dahlberg, David. Presenter of workshop on downsizing, College of St. Catherine, St. Paul, Minn., Spring 1991. Jacobs, Jan W. "A Review of the Facts: The Challenges of Reduction in Force." NASSP Bulletin, December 1982. Kendrick, William. "In This District, Its All Business." The School Administrator,
"The Pain of Downsizing." Business
to

"There Is

Business

October 1991.

Mutter, Davida W., and Nichols,

American School Board

Randolph. "When Journal, August 1991.

W.

To Offer

an

Early

Out."

—.

Noer, David M. "Healing the Wounds." Executive Book Summaries, January 1994. "Leadership in an Age of Layoffs." Issues and Observations 3(1993): 1-6.

"Enhancing Productivity: A Structured Approach to Downsizing." September 1991. W. Andrew "Downsizing and Layoffs: A Comparative Analysis." Ethikos, Singer, January/February 1994. Smith, Lee. "Burned-Out Bosses." Fortune, July 25, 1994. Thomas, Richard E. "Staff Reassignments/Reductions as an Alternative to Layoffs." School Business Affairs, September 1982. Winter, Floyd. Conversations with author. November 22, 1994, and January 9, 1995.
Oehm, J.
Kent.

School Business Affairs,

So Much Effort, So Little

Change

How can we spend so much time, money, and rhetoric on public education with so little to show for it? Why do taxpayers feel disenchanted with the nations schools? And, why do policymakers continually promise to find the cure for the ailing education system while making relatively little

progress? Quality Counts, the first condition of public education

sible
answers.

annual Education Week/Pew report on the in the 50 states, suggests a number of pos-

Quality Counts is

available from Education Week; calt

(202)

467-8344.

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67