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Managing Morale, Productivity Amid Looming Change

Microsoft’s announcement of major job cuts spotlights a challenge for HR when companies announce pending changes — how to manage productivity and morale throughout the process.

August 8, 2014
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Morale August 2014

When news broke in mid-July that technology giant Microsoft Corp. planned to cut roughly 18,000 jobs — or 14 percent of its workforce — in the next year, one can only imagine the sinking feeling many of the company’s employees must have felt.

The prospect of organizational change is rarely comfortable, especially when it entails massive job loss. And Microsoft is just one example of a company that has worked to remake itself in the wake of the recession and economic recovery — a period synonymous with layoffs and restructuring.

As a result, talent managers have to walk a fine line: help communicate the change while maintaining the productivity and morale of employees throughout the process, especially those whose jobs are not threatened.

“Any large destabilizing change inside an organization, whether it’s layoffs or major change in strategy, can have a real impact on employee experience and employee engagement and performance,” said Adam Zuckerman, global practice leader for employee surveys at human resources consulting and research firm Towers Watson & Co. “We always tell our clients that it’s really important to stay in touch with employees and to listen and to make sure you’re monitoring their views as you’re going through change.”

Communication is one of the most valuable tools for dealing with sweeping change. In the case of Microsoft, CEO Satya Nadella foreshadowed the cuts in memos he sent to all employees.

Still, the critical communication channels are those on a grassroots level. To a large extent, a responsibility rests on department and unit managers to share information regarding the change. This is something experts say talent managers might need to push unit managers to do.

“The very best thing I could do if I were leading a unit is pull them all in the room and give them all the info I know,” said Kim Cameron, professor of management and organizations at the University of Michigan’s Ross School of Business. “Say, ‘Let’s together problem solve.’ ”

According to Zuckerman, the uncertainty that comes with announced job cuts doesn’t just hurt morale. Innovation is also likely to take a hit.

One option talent managers can take to ensure innovation and creativity continues is to frame the change as an opportunity to move forward, Zuckerman said. This goes both for the employees likely in the clear and those with hints that they may be on their way out.

For employees in the clear, frame the looming change as a means to take on new projects. For those likely leaving, provide support like outplacement services to help get in front of a potential job search with career counseling and support.

Even giving soon-to-be-displaced employees the opportunity to continue to follow through and contribute to projects in the interim can help employees feel engaged and valued, Cameron said.

“I would suggest providing an opportunity to keep making a valuable contribution to the company, rather than coasting to a halt,” he said. “Identify projects, like new innovative activities, and find a way to make a contribution people care about.”

This story originally appeared in Workforce's sister publication, Talent Management.

Luke Siuty is a Workforce editorial intern. Comment below or email editors@workforce.com. Follow Siuty on Twitter at @LukeShooty.

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