12-1 Jean Phillips & Stanley Gully Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall.

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Jean Phillips & Stanley Gully

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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Many organizations invest more money in hiring new employees than in helping them acclimate and become productive.

Most new hires want to get off to a good start, but need help doing so.

It takes mid-level managers an average of six months to get up to speed in a new job.

Even in restaurants and hotels it can take about 90 days for a new employee to attain the productivity level of an existing employee.

On average, the time for new external hires to achieve full productivity is eight weeks for clerical jobs, 20 weeks for professionals, and more than 26 weeks for executives.


Unsettling or jarring experience resulting from wide disparity between what was expected and what the real situation turns out to be, such as the first day on a new job.

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Orientation (or onboarding): the process of completing new hires’ employment-related paperwork, and familiarizing them with their jobs, coworkers, work spaces, work tools, and the company’s policies and benefits

Socialization: a long-term process of planned and unplanned, formal and informal activities and experiences through which an individual acquires the attitudes, behaviors, and knowledge needed to successfully participate as an organizational member◦ The primary goal of socialization is to get new

employees up to speed on their jobs and familiarize them with the organization’s culture, or the norms, values, behavior patterns, rituals, language, and traditions that provide a framework that helps employees interpret and understand everyday experiences


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Can speed up the time it takes new hires to reach the point at which they start generating a return on the company’s investment in them.

Can improve employee retention and employee engagement, lessen the impact of reality shock, and facilitate new hire adjustment and integration.

People who are well socialized in their organizational roles tend to have higher incomes, be more satisfied, more involved with their careers and more adaptable, and have a better sense of personal identity than those who are less socialized.

Socialization prepares employees to perform their jobs effectively, fit into the organization, and establish productive work relationships.


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Should actively involve new employees, ◦ encourage them to ask questions, ◦ and clarify their role in business strategy execution.

Helpful managers and peers can enhance employees’ learning of the new job.

The nature and the quality of new employees’ relationship with their managers have a significant effect on socialization.

Research suggests that socializing new employees as a group, ◦ using formal activities and materials in a predetermined

order ◦ within a specified time frame, ◦ giving them access to role models or mentors, ◦ and providing social support enhance newcomer loyalty, reduce turnover, and increase commitment, job satisfaction, task mastery, and values congruence.


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Having the right people in the right jobs to execute business strategy requires effectively managing ◦ turnover and retention, ◦ succession management, ◦ redeployment, ◦ and separations.


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Exit interviews: asking departing employees why they are leaving to acquire information that can be used to improve conditions for current employees

Employee satisfaction surveys can identify problems that can be addressed to prevent additional turnover


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Create financial agreements with key talent that serve as golden handcuffs and create mobility barriers.

Financial incentive packages such as retention bonuses or stock options that mature over time can retain essential employees, and increase their commitment to making the merger successful.

Companies can also increase the value of severance packages offered to workers who stay until a merger or acquisition is completed to keep important talent from leaving prematurely. ◦ These types of agreements are typically solidified in a

written contract that specifies the financial incentives that the employee will receive if they stay with the company for a specified time.


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Succession management should integrate talent management with the organization’s strategic plan. ◦ Succession plans need to support the organization’s

long-term direction, growth, and planned change,

◦ and should enable an organization to have the right people in the right place at the right time to execute the business strategy.

◦ Career planning and succession management are often integrated to ensure that employees are motivated to accept the higher-level positions.

Mobility policies: specify the rules by which people move between jobs within an organization and clearly document the rules for opening notification, eligibility qualification, compensation and advancement, and benefit changes related to advancement. ◦ Mobility policies should be well developed, clearly

communicated, and perceived as fair by employees.


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Workforce redeployment: the movement of employees to other parts of the company or to other jobs the company needs filled to match its workforce with its talent needs. ◦ Workforce redeployment software and services help

organizations match their talent to specific business needs in the most profitable way.

◦ Matching employees’ expertise and knowledge to customers’ needs and deploying the right people is the same way a supply chain deploys assets.

◦ For firms trying to maximize the efficiency of their workforce, which is particularly important for companies pursuing a low-cost strategy, workforce optimization is critical.


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Downsizing: the intentional reduction of employees intended to improve the efficiency or effectiveness of the firm. ◦ Can improve the financial standing of a firm by reducing

and changing the workforce structure in a way that improves operational results.

◦ Downsizing is usually done in response to a merger or acquisition, revenue or market share loss, technological and industrial change, new organizational structures, and inaccurate labor demand forecasting.

◦ Downsizing is a popular intervention for organizations looking to improve flexibility, reduce bureaucratic structure, increase decision-making efficiency, and improve communication.

◦ Private sector employers often downsize to reduce costs to maximize shareholder returns, and to remain competitive in an increasingly global economy.

◦ Public sector downsizings are driven by budget reductions and technology improvements that allow fewer workers to do the same amount of work.


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Fully planning the downsizing is important to reduce the negative consequences the downsizing has on employees and the company.

Unintended outcomes of a downsizing include:◦ Increased costs from voluntary turnover, training, and

consultants◦ Reduced shareholder value◦ Decreased efficiency due to the loss of expertise◦ Reduced morale and motivation (waves of downsizing are the

worst)◦ Increased absenteeism and turnover of desirable employees

due to stress and uncertainty◦ Lower employee trust in the company◦ A damaged reputation as an employer◦ When a company’s employees take advantage of

unemployment insurance, the company’s future premiums rise◦ Higher cost of attracting top talent after a downsizing

Given that downsizing is a traumatic event, no matter how well prepared the workforce is for the impending change, the process should be carried out in the most expedient manner possible.


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Survivor syndrome refers to the emotional effects of the downsizing on surviving employees, during and after a downsizing. ◦ These effects include fear, anger, frustration, anxiety, and

mistrust, which can threaten the organization’s survival. Survivors often are preoccupied with whether

additional layoffs will occur, and feel guilty about retaining their jobs while separated coworkers are struggling. ◦ Can lead to a variety of adverse effects including higher

turnover, lower commitment and loyalty, and less flexibility among surviving employees.

Although some studies suggest that “survivor’s guilt” leads to increased effort, other studies suggest that job insecurity reduces productivity.


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Help in locating listings of vacant jobs and central pools of displaced workers for whom the employer attempts to find positions.

Many large organizations help employees find employment elsewhere in the organization through central processing points that bring together displaced employees and vacant positions.

Employers frequently provide résumé coaching, job fairs, and access to office equipment to facilitate employee transitions out of the company.


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1. A workforce demographics review including retirement and other loss projections and assessments of the age, diversity, and skills of the workforce;

2. Assessment of available options to avoid involuntary separations, such as a hiring freeze, buyouts, early retirement, retraining, and relocations;

3. Detailing full-time employee reductions by year, location, program, occupation, position, and person;

4. Conducting the downsizing or reduction in force;

5. Providing career transition/job placement assistance;

6. Providing assistance for survivors of downsizing; and

7. Ensuring that an adequate retraining program is in place.


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Layoff: temporary end to employment. Employers tend to dislike layoffs compared to other downsizing

methods, in part because they are forced by law (in the case of most public sector employees) or by bargaining agreements to employ seniority-based criteria in deciding which employees to separate during layoffs. ◦ This does not guarantee that the right competencies will remain in the

company to allow it to execute its business strategy and emerge from the downsizing in a more competitive position, and often means the retention of the most expensive employees.

Layoffs also increase employee health problems and withdrawal behaviors.

Layoffs often have a negative impact on employee diversity, since women and minorities tend to be disproportionately affected by seniority-based layoff policies.

During a layoff, career transition assistance is usually provided to employees along with job placement and training assistance, severance pay, and continuation of benefits such as health insurance for a period of time.

Layoffs have a negative impact on a firm’s reputation that is significantly stronger for newer than for older firms.


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Attrition due to retirement, death, or resignation Hiring freeze: not hiring any new employees Early retirement incentives: allow retirement with full or

reduced pension benefits at an earlier age than normal Buyout incentives: a lump sum payment to encourage

employees to leave voluntarily Leave without pay Flexible work arrangements Workforce redeployment Cross training and retraining Reducing work hours and/or pay Sharing company ownership with workers in exchange for

lower pay Increasing the use of temporary or contract employees who

are let go rather than laying off core workers


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Senior leadership should play a vital role Frequent two-way communication Involve the right people in downsizing planning Identify work processes that will not be

needed in the future organization Incentives such as early retirement and buyouts

work well and are popular with employees Using multiple strategies and techniques to

accomplish goals for downsizing helps to leverage the outcome

Provide career transition assistance to both separated and surviving employees

Monitor progress Successful downsizing depends on the survivors’

trust, fairness perceptions, and belief in firm’s future


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Meeting authorized full-time employee headcount goals

Increase in the ratio of supervisors to employees Employee loss due to attrition versus personnel

loss due to incentive programs Demographics of buyout recipients Impact on diversity goals Ability to meet budgetary limits Productivity changes Reduction in total cost of wages and salaries Number of grievances, appeals, or lawsuits filed Number of voluntary participants in incentive and

career transition programs


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May happen immediately after a policy violation or other job misconduct (e.g., a safety violation, failure to renew a professional license, etc.), or after a long pattern of poor performance

Rather than separating multiple people from the company as happens with downsizing, terminations focus on individual employees


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Even in an age of employment at will, it is important to document the termination and keep thorough and accurate records regarding the cause of the termination.

Having terminated (or laid off) employees sign a severance agreement that includes a release stating that the departing employee gives up some or all rights to sue you can reduce the risk of future litigation. ◦ Employee releases are most often used when a company

does not have proper documentation to fire an employee but wants to end the employment relationship and reduce the possibility of a lawsuit.

◦ To be most effective, the release needs to involve some sort of consideration, usually money beyond any standard severance agreement; the employee needs to be given appropriate time to consider the offer and even change his or her mind after signing it; and the employee should be able to negotiate some of its contents to show that it was willingly signed.


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Doing it publicly Writing a positive letter of reference after a

termination for cause (this opens the company to charges of negligent referral)

Trying to document a termination for a just cause case that doesn’t exist

Firing an employee after a merit raise or favorable performance review

Stating that the person conducting the termination meeting disagrees with the termination

Juries have also looked unfavorably at terminations that were done at end of a work day or work week, after the employee returns from a business trip, or at beginning of holiday


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Remain impartial, calm, and in control of the conversation; be respectful at all times

Listen to employee requests for severance terms, but reserve final decisions for a later time; being heard and considered will increase the employee’s perceptions of fairness

Be clear and don’t send mixed messages The shock of being fired can prevent the

employee from listening to all of what you are saying; repeat yourself if you feel your message is not being heard

Don’t give career advice to someone you’ve just fired

If the person is being terminated, don’t say “laid off” because it implies the possibility of return

Hold the meeting in a private, neutral location


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Deliver information without engaging in an argument; use prepared notes if necessary. Do not ramble, make promises, or say a mistake is being made

Discuss the effective termination date, any severance package, etc.; have the details of the termination and any severance package in writing so the employee can take them with him or her along with the details of the termination

Be aware of legal compliance issues Write up an accurate record of the termination

interview and provide a copy to the employee Cover matters such as returning identification cards,

keys, and how to receive final paycheck Involve company security, if needed Notify all relevant parties after discharge that the

employee has been terminated


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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.


12-1 Jean Phillips & Stanley Gully Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall.

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