Are less eective to respond to economic vicissitudes

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Unformatted text preview: duced for reduced work hours 16 79 31 25 Fixed-term contracts are not extended 2 38 Processes are streamlined The number of hierarchies is reduced 9 5 30 9 72 61 34 9 75 1 61 29 62 27 Subcontracted activities are insourced 10 66 40 Work is offshored 6 19 43 Tasks are centralized in shared service centers Work is outsourced –1 71 Hiring criteria are tightened Work organization 4 53 Job mobility is reinforced Head count Effectiveness in comparison with the average (%) 79 14 The workweek is shortened temporarily Work time Actions to be maintained in the future (%) 65 19 9 0 –4 1 46 61 –5 Less effective More effective Sources: Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA analysis. T B C G • W F P M A Companies should take the time, for example, to put the right layoff processes in place, always with an eye to the future. Talk to the top performers, explaining the steps required to move forward and ensuring them that their jobs are not in danger. Furthermore, choose which people to lay off on the basis of performance rather than on less significant criteria such as longevity. Doing so allows a company to keep its best people, regardless of length of service, and therefore protects the future as much as possible while the company navigates the current crisis. Of course, leaders should not wait for a crisis-induced restructuring to confront poor performers; that should be part of their ongoing role. an even larger percentage adopted measures such as cutting back company events and cutting back recruiting. (See Exhibits 13 and 14.) Despite the prevalence of cutback measures as a quick reaction to crises, most of these measures turn out to be notably ineffective and demoralizing—and therefore act as barriers to building lean, flexible workforces. Cutting back training, a m easure adopted by almost half of respondents in 2009, is the least effective in this category, with negative effects rippling out across companies. Tempering Harsh Measures with UpFront Honesty In 2009, more than 50 percent of respondents took steps to ensure that top performers were actively retained. That measure was perceived as 12 percent more effective than the average measure, and three-quarters of the companies using this measure said they planned to retain it. The large share of companies that intend to carry forward Honest communication, transparency, and fairness lessen the damage inflicted by any workforce measure. How a measure is implemented matters. Exhibit 13. Cutback Measures Tend to Be Less Effective Actions performed in 2009 (%) Company events are cut back 64 Actions to be maintained in the future (%) Training is cut back Compensation and benefits –10 30 47 19 Bonus payments are cut back or postponed 44 23 29 Fringe benefits are cut back or postponed Overtime is no longer paid out –24 –9 19 The nonmonetary component of compensation is increased –7 28 9 Work time Unpaid leaves are increased Employ...
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