Downsizing, rightsizing, layoffs, furloughs and terminations: Whatever name you use, all the actions conclude with the same result. You end up with fewer resources, particularly human capital, to perform the same amount of work and sometimes more. Unfortunately, financial realities occasionally force you to take actions that may reduce the number of people you employ. What can you do?

The fastest and easiest move is to divide a worker's responsibilities among those who remain. However, this has both positive and negative outcomes.

Motivational gurus often say that additional duties can initially motivate workers because it gives them a challenge, they will receive recognition for it, and most importantly, they will feel a strong sense of achievement.

The latter two factors, recognition and achievement, are widely regarded as key motivators of just about everyone in most cultures around the world. Best of all for the beleaguered owner or manager, the work will get done, productivity will continue and, ideally, revenues will continue to stream in. Under the new arrangement, the profits being generated actually cost you less because of the lower payroll expense.

While this seems like a win-win situation for the manager and the employee, it has definite drawbacks. First, some employees may begin to feel overloaded and overwhelmed. This can cause unnecessary tension and pressure. In these circumstances, many people begin to make mistakes, become irritable and often are less productive.

Even worse, they may gripe to other employees, criticize management and put forth less effort. Over the long haul, negative outcomes occur, such as decreased morale, motivation and productivity. This is the exact opposite effect you probably intended and wanted.

Why do employees feel this way?
A number of factors enter into employees' thinking, including possible grief over the loss of colleagues--friends, peers and even managers. This is very natural and should be anticipated.

Another outcome might be that your employees may feel you do not care about them or understand their plight; additionally, they may feel that you terminated some key employees, perhaps in error. Their survivors' guilt may cause them to be angry that their colleagues were let go, and despite fiscal realities, they may blame you for being "unfair or hardhearted."

So what can you do?
You might consider doing nothing because you hope and believe the situation will get better soon. If you choose this path, you would not be alone. Many leaders use this approach, but it is not very effective.

Those leaders erroneously believe that hiding things under the desk is an appropriate way to deal with difficult issues. They think that the employees who remain in their jobs are lucky to be employed, so if they are given additional responsibilities, they must simply accept them or risk being terminated. While this may technically be true, it is also an insensitive reaction.

Sometimes employees shut up for fear of being laid off. And sometimes they actually work harder for a while--again, out of fear. But emotionally, they usually succumb to feelings of hostility, frustration and disappointment with the organization. The result is that motivation, morale and productivity inevitably decrease because the real issues are not being addressed.

Given the potential for declining employee morale and motivation described above, I propose a better way to deal with this very troubling situation. Knowing that the realities of the economy and the financial health of your company put you in the position you are in, clearly you had to take what could be interpreted as drastic steps when you laid off some of your staff.

Still, this is the real world. As painful as this process may have been, you know you had to follow the path you did for the sake of the overall health and survival of the organization. Nevertheless, you need to completely and clearly explain it to your employees.

Here are some steps to do that:

  1. Meet with small groups of employees. Fully explain the current situation, the short-term outlook and the need for the action that you took.
  2. Demonstrate sincere empathy. Be genuine and understanding toward the people who were let go and for the added responsibilities for those who remain. Ask individuals how they feel about the events that occurred. The key here is to allow them to vent their thoughts and emotions. This is the appropriate forum in which to do it, not behind your back, spreading rumors and ill will.
  3. Recognize the powerful impact of your actions. Explain that you understand the additional responsibilities some employees will have to assume and the added stress some will have to endure. Describe how you will attempt to help them prioritize and deal with the changes, looking forward to success and accomplishment. Make every attempt where possible to eliminate unnecessary duties among the responsibilities other employees have had to assume.
  4. Focus on positive action. Discuss how the difficult short-term steps will positively affect the future. With the changes you have made, you look forward to brighter, more secure prospects. When business improves, hopefully you will be able to rehire some of the terminated employees. Again, encourage them to share their feelings and try to empathize with them.
  5. Let them know that leadership is on board. Explain that you and other management-level people will be available to discuss job questions, uncertainties and performance, gearing your comments to how to overcome obstacles in the way of success.
  6. Be gracious. Sincerely thank everyone for trying to understand the difficult steps you have taken and for their attention, concern and willingness to put forth additional effort to get through these difficult times.

I recognize that this effort will neither satisfy all your employees nor eliminate the pain many of the remaining staff feel. However, there is no question that your honesty and frankness will go a long way toward smoothing out the situation.