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Managing People Out

We all know that people are the key factor in every organization, especially the technology-based ones; such as the Internet-based services, where it’s the people who create technologies, where there is a contact with a customer, where there is customer service, where the technical side of product development is less important, but the face-to-face relationship with the customer or the man-developed technology is crucial to the whole enterprise. People not only constitute the theoretical but also the practical value of a company. The technological companies and the internet-based ones do not own real estates, factories, assets or raw materials and such. Actually, their main asset is – the people.

So in this type of companies and, very much more so, in the ones where the technological or physical resources matter, it’s the human resources that define the company, and it’s the people who decide whether the business generated around the organization translates into the value both for its customers and for the individuals involved in the company itself – its employees, its owners and its investors.

Obvious as it sounds, not everyone may realize that maintaining the satisfaction levels in the company crew is key to a range of aspects of its functioning. This does not only concern company social events or such perks as salary bonuses, med care, sports club vouchers, free lunches or delicious coffee. It’s about the employees’ self-actualization as well as their getting on harmoniously as a team. As I have said many times before: we spend too long at work not to enjoy it.

A lot can be said about the essence of good employment policies and conscious team-building. However, it happens once in a while, that someone, for various reasons, does not fit in the team. This is what I’d like to focus on today: the management of the people who leave the team – the employee attrition.

Why this topic? It has emerged a few times during the SAUNAGROW business mentoring sessions. I‘ve also witnessed employee loss in the places I’ve worked at, in AIRHELP, MORIZON and GRATKA, where the negative events and reactions, mostly linked both with soft and hard competencies, were usually diagnosed too late. Therefore, the termination decision came as a surprise to everyone involved with that employee and, to the dismissed person in the first place.

In retrospect, I know this practice is wrong, yet it is so frequently observed that it’s somehow regarded as quite natural. Nearly two years ago, I had a chance to attend a workshop organized for the management board of AIRHELP. We met in New York and the workshop topic was leadership and management. Among other people there, we met Jason Gore, who coined a phrase “Managing People Out” and he also recorded a great podcast on the subject, a very practical one, called “Managing People Out”.

Today, looking back on several processes of parting with staff members that I have carried out along the lines of Jason’s “Managing People Out” procedure, I know it’s a good practice. Therefore, understanding how it works and spreading it is really worthwhile. Hence today’s podcast.

In a number of fast-growing companies there is a strong pressure on growth in its every aspect so as to best tap on its resources. As I have mentioned, in the Internet-based, technological or commerce organizations, it’s the people, the team, who make their largest cost as well as their largest resource. It’s them who generate the product. There are no factories, no raw materials to buy, but there are people, who both constitute the largest asset and the largest expense. Therefore, a lot of energy is invested in hiring the right staff and in keeping them committed. Despite a range of benefits and incentives used here, it may turn out that a company grows so rapidly that a person that was good enough in January, isn’t good enough in December. It’s not because the hiring decision was wrong or that person’s performance has got worse. I mean the organizations where the speed of the growth process exceeds the employee’s natural capacity of self-development. For instance, an HR manager in a firm with a crew of 50 may have the same title as their counterpart in a 300-people organization, but the expectations may be altogether different, in order to meet a different set of company needs. As a result, there may emerge a complete change in the requirements that they face as people and as job performers, while their skills development can’t keep up. Situations may occur that the people whose performance doesn’t match the expectations hinder the whole company and demotivate the team. So, while it is often wisely and rightly said that an employee mustn’t be laid off too hastily, we should be aware such caution might predictably lead to delayed firing decisions. In other words, although there might have been good reasons to dismiss a person earlier, we defer the termination, out of our natural unwillingness to hurt them. No good heart feels any happier sacking people. Still, putting off the dismissal decision, thinking it’s empathic and it’s for someone’s benefit, we’re not doing any good to the person, the team and the whole organization. It is a misconception of what’s good to everybody involved in the situation. If the group performance is hampered by one person, everyone else is affected and becomes a victim of the malfunction in a team, an operation area or a company.

Therefore, on one hand, I strongly oppose the traditional corporate practice of periodical dismissals of the 10 worst performing percent of the staff. This is absolutely wrong – it may lead to a rat race and I wouldn’t recommend it. On the other hand, a cyclic consideration is advisable of how our employees cope meeting the needs currently faced by their position; perhaps more importantly than monitoring the tasks initially described in their scope of duties.

This particularly concerns the fast-growing entities. For example, AIRHELP has grown over 3 years from 50 to 700 employees. This IS a rapid growth and a lot of such jobs as an HR or a PR manager looked different at the beginning and now. In the light of what I have learnt in such situations, I can say that too many times I’ve had the displeasure of dismissing people too late. Saying this, I don’t mean I had failed to prepare them for being fired. I mean both – the ability to work together with them to either help them catch up with the new reality or mutually understand that their current position is not their best career option. I have made lots of mistakes leaving people without sufficient feedback or failing to present the recovery plan. In lots of managers, the recovery plan hardly ever occurs or is implemented. It mostly comes much too late, as a cover up for a firing decision, already made deep inside.

Jason Gore’s plan of how to manage people out, which is our topic today, offers something much deeper and more effective than you could possibly have encountered before. For the first thing, I see this process of managing people’s dismissal more humane and simply healthier for the dismissed person, the manager’s mind and for the team affected. I am going to present the five steps of this process.

First, we must give feedback. It cannot be only looked at as part of the dismissal process. Feedback must be offered on a regular basis, preferably more often than once a month, to keep the person informed if we are satisfied with the direction they are developing. This helps avoid surprising employees with sudden criticism with no earlier notification. Such feedback must be given regularly because people are capable of change and must get a chance to improve before being considered inapt. During the feedback talks, the FUEL method, which I presented in the previous episode, proves very useful. Also, in the course of the feedback conversations, it is wise to anticipate the listener’s good intentions. It’s never easy to convey negative feedback but, assuming the listener’s positive intent, there’s a chance that the message will be accepted.  There’s a chance that processing of positive and negative information will be easier and more fruitful.

The second measure, if regular feedback does not work, is to name “the elephant in the room”. Without circumnavigation or euphemisms, we must firmly state what the company expects, regarding the listener’s job. If our expectations have evolved, the company has expanded and the situation was different in January, and now, half-year through, we are facing different challenges – this has to be clearly communicated.

All along, we should bear in mind it must be a two-way communication. We should not only instruct our employee how things must work.  It is equally important to listen from their perspective because, if we fail to do so, defective communication will affect our employee’s performance and a following crisis might be the manager’s fault. The double-sided feedback approach can be used to come up with ideas how to improve things. Here again we may refer to the FUEL method which tells us about exploring and considering options. It is not about imposing solutions, but about jointly finding out how to tackle new problems. Forcing ready solutions would be counterproductive, so we must think together how to meet these new expectations, maybe verbalized for the first time; or rather what to do, in order to give the person a chance to face up to new challenges.

For the third thing, it is useful to write down the commitments – what must happen, who is to do it and until when, so as to achieve performance benchmarks in a given area. Such commitments have to be recorded and their fulfilment regularly monitored. It’s not just glancing at them once in a while, but, especially since we have launched the “Managing People Out” procedure, a plain message has to be given as to what and when must be delivered. This process may take a few weeks and should not last for months. It is indispensable – the alternative is wasted time. If not realistically organized, our recovery plan may turn out to be an expensive illusion.

It often happens that working out a clear list of tasks, job expectations and commitments, is sufficient to repair the situation. The employee may catch up and understand the difference between the initial and the updated scope of duties. Still, at other times, the measures we have taken might not work.

Then, we have to meet and talk again. As before, it cannot be an announcement, the communication has to go both directions. The aim for both sides is to make sure they have tried. They have tried to arrive at a common understanding of the role that post plays in the organization, that certain tasks have been set and haven’t been completed and that it’s probably a suitable time to think of a different way out.  This is one of the hardest moments. It is advisable to pause here, no matter how awkward the silence may feel, and give the floor to the employee, let them come up with an answer. I don’t mean the obvious “I’m leaving” response here, because the person may just as well ask to be moved to another position. They might realize they do not want to continue the career path of a manager, for example, but wants to stay in the organization. They may have an idea how to keep their competencies useful to the company. Let the person have their say, because their solution may prove beneficial both to them and the organization. This is about time we must decide which way is optimal for the organization and the person.

Eventually – and this is our fifth step – it may turn out that the person does not wait to be laid off and leaves of their own accord, feeling the job they agreed on when joining the company is no longer the same and finding their new duties incompatible. Hardly anyone with a sane mind can bear long-term criticism, learning he/she has failed to step up to the mark. Being unable to catch up and meet the expectations, they either stay having found a different place, or leave. Such a voluntary termination will benefit the leaver, the team and the organization.

As a final remark, I must say I wouldn’t recommend using the “Managing People Out” procedure to carry out reductions when a company is forced to cut expenses. As a process that takes some time, it can’t be used in emergency situations. To yield sensible results, the process must take a few weeks or maybe a couple of months so that the employee is given a fair chance to catch up and fulfil the pending expectations. My second observation here is that we must have faith that there is a chance our employee will catch up on work and face the new challenges. Otherwise, if we do not hope so, it is just a waste of ours and the employee’s time, deluding ourselves into thinking we have a recovery plan. If we do not harbour the hope that such a chance exists, it is easier and better for everyone to let that person go. It doesn’t feel nice but if we do not believe we can help that person find themselves in the situation, why waste the time.

I hope I have helped you organize your thoughts on supporting employees in their leaving process or redefining their role in your organization.

I highly recommend Jason Gore’s podcast. I hope, having heard both Jason’s and my presentation, you will find it easier to apply these strategies more consciously and less intuitively.

Be good to your team, help everybody in your team grow, inside and outside your organization, with and without it. It’s your duty as a manager and a good leader. Have a nice day. Thank you.

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