In response to a previous article about motivating employees, TechRepublic member Am_I_IT posted a question about how to motivate his staff during troubled times. He works in an organization that has been experiencing regular layoffs for two years, and morale has taken a big hit.

“Some of my team members are unable to complete tasks and seem to have lost hope of keeping their jobs or having a future with the company. How can I motivate team members through these challenging times?”

The effect of downsizing on morale
Many companies, large and small, have downsized during the last few years in response to the slumping economy, technological advances, and shifts in corporate priorities. Downsizing—and even the threat of downsizing—has placed considerable stress on work environments. Most business and organizational researchers believe that cycles of downsizing—also called resizing, depending on your perspective—are not a short-term phenomenon but a reality that is here to stay.

As Am_I_IT noted, employees can be traumatized by layoffs, their own or those of coworkers. The loss of work can have a devastating impact on people’s lives and can also damage, if not destroy, the relationship an organization has with the people who remain. He is in the unenviable position of having to motivate and energize staff members who are as concerned about their future with the organization as they are with the work.

Before determining what can be done to motivate employees in a downsizing environment, it is important to understand why employees are so upset. It is clear that security issues, such as loss of income and benefits, are important factors to consider. However, a significant part of the stress people feel in these situations rests with the sense of being betrayed by the organization.

One useful concept that has relevance to the issue of layoffs is known as the “psychological contract” that exists between employees and their employer. In contrast to formal contracts that spell out in writing expectations between employees and the organization, psychological contracts are more informal and address, in large part, the beliefs that employees have about their relationship with their employer. Much of the psychological contract involves trust, commitment, and respect that can develop only over time.

Downsizing and the resulting layoffs often violate this psychological contract and can create intense feelings in employees who believe that they or their coworkers have been wronged. These emotions may be demonstrated through angry outbursts or other overt acts or by withdrawal and lack of motivation to work.

Dealing with employee resentment over psychological contract breaches is a challenge for any manager. Front-line managers are particularly challenged because of their inability to control what happens at the top. It is not practical for managers to believe or to communicate that they can keep layoffs from occurring or to assure people their jobs are safe. However, managers can do a few things to help employees remain motivated to do good work.

Communicate with your team
Often, rumors can be more debilitating than the truth. Be sensitive to the issues that are being discussed by your team and help them filter fact from fiction. If word gets out about a possible layoff, approach your supervisor or an accessible senior manager and try to find out if something is coming. Attempt to persuade a senior manager or someone such as a human resources management director to meet with your staff and provide feedback about the future plans of the organization. Although the news may not be good, employees will appreciate receiving information from a credible source.

Help your employees stay focused
It is certainly appropriate for managers to acknowledge the frustrations and concerns of employees, but they must avoid being sucked into a negative environment. One very important role for managers to play is to help employees remain focused on the importance of their work. Employees may feel betrayed and undervalued by the organization but continue to feel positive about the LAN they maintain or the customers they help.

Find ways to show employees the positive impact of their quality work on others as well as the negative impact of substandard work efforts. It is also important to maintain employees’ confidence in the team and other team members. A downsizing atmosphere is a shared problem, not one for employees to deal with individually.

Support those who choose to leave
Some employees will not be able to overcome their negative feelings toward the organization for breaching the psychological contract. For many of these employees, separation may be the best option. If you have a trusting relationship with an employee who wants to leave, work on a plan that will, ideally, lead to new employment opportunities. It may also be useful to provide training opportunities, if available, for employees who want to learn new skills to qualify for other jobs within the organization or a job outside the organization.

It may be painful to lose good employees. However, if you can hire good replacements who have a fresh perspective, the team may benefit in the long run.

An example
This scenario illustrates some of these interventions. Tim is a LAN administrator for a small organization. He has three technical staff members on his team who are responsible for maintaining a LAN for about 30 people. During the past eight months, there have been several layoffs in the organization. His team lost one technical position, and he fears that one or more positions may also be eliminated.

Resentment runs deep within his staff and the organization as a whole. Tim believes that something needs to be done to provide support for his staff and ensure that the quality of the LAN support remains high. Since he is not totally sure what is going to happen with regard to the layoffs, he approaches the team’s human resource coordinator to ask for her help in dispelling the layoff rumors. Unfortunately, he learns that additional layoffs are a possibility but not a certainty.

Tim expresses his concern about the negative impact the downsizing process is having on morale and asks the coordinator for help in getting some solid information to his team members. To his surprise, the coordinator offers to talk to the human resource management director about addressing the concerns of line staff.

Two weeks later, a meeting is scheduled between the director and nonmanagerial staff to talk about reasons for downsizing, potential layoffs, and what the organization is doing to reduce the impact on employees. Although it is clear to employees that the problems are not going away anytime soon, they do receive credible information about issues that the organization is addressing and a feeling that their concerns are important to senior management.

The moral of this story is that front-line managers can have a positive impact on team morale by establishing good communications channels, where accurate information can be shared and the impact of rumors diminished.

Final thoughts
Layoffs, or even the threat of layoffs, may severely damage the morale of employees. If you’re a front-line manager, you can help team members handle the stress found in a downsizing environment. Don’t allow employees to become isolated so that they feel they’re dealing with issues alone. Encourage team members to support one another and to focus on providing quality service to customers.

Accurate information is essential, so make every effort to establish good communications channels between your employees and senior management or the human resource management department. Also, remember to take care of yourself in these situations. Chances are, you are dealing with the same stressful environment as your employees. Find someone with whom you can share your concerns and frustrations and who understands the important role you play in motivating employees in such difficult times.

If you would like to learn more about how downsizing and layoffs impact the psychological contracts employees have with their employer, read “The Effects of Organizational Resizing on the Nature of the Psychological Contract and Employee Perceptions of Contract Fulfillment” by Scott W. Lester et al in Resizing the Organization, Managing Layoffs, Divestitures, and Closings: Maximizing Gain While Minimizing Pain, edited by Kenneth P. De Meuse and Mitchell Lee Marks (2003).

New manager questions

Steven Watson has 10 years of IT management and consulting experience and has developed an understanding of how the issues faced by IT managers differ from those of their nontechnical colleagues. As a new tech manager, do you have a question you’d like him to address? Send it to us via e-mail, or post it in the discussion below.