Management Decisions Can Have a Devastating Impact on Engagement
Management does it all the time. They make strategic, cost cutting decisions, but fail to recognize the devastating long-term impact that these decisions can have on their most important assets – their people. These are difficult times – there is no doubt about this. But, what makes them more difficult is the unwillingness of management to be transparent about the rationale for their decisions and the impact that these decisions will have on their employees and on levels of engagement.I had a very interesting discussion last week with an individual who works at a leading HR consulting and outsourcing firm. Our discussion focused on a recent decision by management to outsource a significant amount of its processing work to India.
What is interesting about this conversation was not the decision to send the work to India, but the apparent reluctance of management to be upfront and clear about the rationale for the decision. The result of management’s inability to be clear, to answer questions and clearly articulate how it will impact employees has had a devastating impact on morale within the organization.
What could the organization have done differently?
- Be transparent about the rationale for the decision. According to the individual the “company line” is that they are sending processing work to India to free up time for analysts to conduct more analysis which will translate into better quality work for the client. When asked how this would work, management was unable to clearly articulate “the how” which left employees feeling that this was really only about saving costs. As the individual rightly points out – if it is about cost savings – just be upfront about it.
- Be able to answer questions from employees. Management needs to remember that any decisions they make have a direct impact on their employees. While the rationale for a decision may make perfect business sense to them - it will not be obvious to employees who have had very little time to research, think about, or understand the decisions taken. Management must anticipate answers to questions and must be prepared with well-thought out responses. Failure to do this will only fuel feelings in employees that the decision is not well thought out or rational.
- Understand the emotional response to outsourcing. We find it extraordinary that so many companies still haven’t got the outsourcing “thing” right. Management still fails to recognize the impact that these types of decisions have on employees. They fail to understand the emotional impact that sending “their” jobs to India really has. As well, in tough economic times these types of decisions can only fuel more emotional responses in employees. Management must sit back and think about the impact that sending jobs to India really has. They must help their employees understand what it will mean to them and how it will impact them personally. It’s that simple. Failing to do this not only threatens to destroy trust, but to dramatically increase employee disengagement levels.
- Actions speak stronger than words. One of the concerns expressed by this individual was the discrepancy between what management was saying and doing. They were saying that quality was important, yet they were ignoring the fact that the Indian firm was having difficulty processing the work to the quality levels done previously. As well, while they stated that the move to India was about quality, they put an end to raises and bonuses which only told people that it wasn’t about quality at all – it was about cost savings in tough economic times.
- Remember that poor decisions can foster cynicism amongst your best employees. We all know it. When management makes poor decisions, the best people leave. Firms are then left with resources, which are either unproductive or not marketable enough to find new employment. According to the individual that I was speaking to – the company has already lost five key people in the past month. Losing the best people should never be the result of a well-thought out and implemented strategic decision.
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Comments
Hi I loved this article. Some recent experiences of mine; I took over the role of finance manager for a $200M revenue division. The previous manager had a breakdown and left, I stayed there for 7 months stabilished the situation and left. The person I handed over to subsequently had a heart attack and left. Why was the job so hard ? - a slow consistent drip of offshoring as mandated by management decimated my headcount and left me with only the dumb and unemployable. Quality took a nose dive. In my new role I have just repatriated a load of work from India back to the UK - fealt good and I hope its a trend that continues. What is the cost of poor quality ? What is the cost of a decimated headcount that leaves you with no succesion planning and no aspiring new managers ? - well its certainly not factored into most decision making around offshoring.
Posted by: Robin | April 16, 2008 02:43 AM