Cutting jobs is wilting hopes

But while it’s almost a decade that white-collar recession first exposed American managers to the hazards of downsizing, Indian executives are finding themselves floundering in the job whirlpool only of late. They have yet to acquire the adaptive skills of their foreign counterparts to survive in a vicious new world where job security and the attendant prestige areno more a given. No wonder, it’s that much more painful.

“A dehired manager goes through the very same stages of mental turmoil as a terminally ill patient,” informs organisation analyst Dr Achal Bhagat. Beginning with the phase of denial and shock (How can the company do this to me?), the victim moves to the rather prolonged bargaining phase (Please, give me some time, I’ll prove myself), but, finding no solace, stumbles into the sadness phase which culminates in the phase of acceptance.

Naturally then, white-collar layoffs have played havoc with corporate morale; loyalty has often been corroded beyond repair. “It has been seen that the sympathy factor is far more prominent in Indian conditions. A virtual sympathy wave for the dehired lot sweeps those who have been spared the axe,” says Dr Y V Verma, vice-president (HRD), L G Electronics. Little wonder then that dehirings have often been promptly followed by substantial desertions by the remaining managers who are deemed to be better.

“The currentsituation is particularly in those industries which are severely affected by domestic and global recession, such as financial services, capital goods, commodities etc. The top management is not doing it arbitrarily. The more competent managers are being retained,” explains management philosopher M B Athreya.

Moreover, the affected executives find it hard to believe that dehiring is the only alternative and that they deserve to be shown the door.

Management’s lack of foresight, apathy towards ever changing technology and patently wrong decisions by a coterie at the top or just two-three persons in case of family-managed businesses have brought down mighty companies and caused mass layoffs.

However, Eicher Consultancy managing director Anil Sachdev is emphatic that dehirings have not taken place on a big scale, at least not in the 30 odd companies which are his clients. “Yes, people have been encouraged to leave as there i not enough business. But the impact has been rather unexpected in the sense that,overtaken by the anxiety thus generated, even the good ones have started leaving. Managements have been insensitive to anxieties,” Sachdev stated.

So the major concern of corporates removing managers boils down to retaining those they prefer. Ironically enough, this task should begin not after dehiring has taken place, as many believe, but much before that. After all, the managers who remain behind witness how their less fortunate peers were dealt with by the company, and they do not expect the same company to acquire an ideal HR ethos overnight in their case. Sachdev holds bad communication and lack of transparency on part of the management as the culprit.

Downsizing to impress shareholders, warns Sachdev, does not work in India; it may only damage the company’s image and bottom line. A manager on the firing line may be willing to take the pain provided he feels that his removal is not malafide and will really help the company. The top people should be seen taking pain themselves. Eicher consultancy hada tough time when the CEO of a client company bought the latest model of Mercedes even while battling the union over demand for wage hike.

Dehiring and competence need not be linked. “Just because a company is not doing well doesn’t mean that its employees are bad. The same managers could do well in a company with the ability to face competition strongly. Some companies can take short term losses for long term gains,” Sachdev explains. He gives examples of dehiring in a major textiles group because it got into information technology and, in the process, lost focus and competitiveness even in its basic business. A FMCG company faced a similar fate by blundering into infrastructure which entailed large capital and long cycle times. Change in technology or process improvement – the classic examples being AT&T and IBM – have demolished many’s dream of job for a lifetime.

But retraining can do wonders. “Whole departments need not be abolished. The incompetent should be identified. The competent ones canalways be adjusted in other departments with new training and skills. But they should have a learning attitude,” Verma observes. But for this a very good performance appraisal system should have already been in place.

However, if it comes to the crunch then dehiring should be a compassionate process. When Enfield was bought over with the Eicher group, the latter had sought the help of the Madras School of Social Work which dealt with the VRS optees and their families. Jobs with company dealers were arranged and assistance was provided for setting up small businesses. Even a finance company was engaged for safe investment of VRS monies. Full time counselors were pressed into service again when Ramon and Demm, a BIFR company, was taken over by the Eicher group. A large electrical engineering company and a consumer goods MNC also made good use of trained consultants and psychologists when dehiring managers recently. Outplacement consultants were hired by the companies to arrange jobs for the dehiredstaff.

Tisco’s enlightened VRS for executives is still talked about. Those below 40 years of age were offered their last drawn salary till retirement age and those above 50 one and a half times. The icing on the cake: a Rs 3-lakh interest free loan. But such examples are rare in India; even fabled MNCs are known to have acted inhumanly.

However, once dehiring is over, it’s time for team-building based on sound need assessment and tested HR exercises. The remaining ones need to be told the new agenda in very unambiguous terms. This is not the time to be shifty, inconsistent or unpredictable. “Nor is it the time to be threatening. Don’t tell them that if they don’t fall in line then they have had it. Positive feedback and encouragement work much better than punishment,” says Dr Bhagat.

As such, firings are known to be followed by lowered motivation and abnormal increase in absenteeism, turnout and stress related illnesses. All this is the stuff of “people issues” which continue to populate the pagesof all modern management tomes. Even top consultancies are known to view the human factor as a mere add-on when recommending dehirings. “People issues” need to reside in the hearts of people who hold the reins of business.

And the sooner the better.