People Management

I’m going to go off topic here, but this is a blog so I’m getting down my thoughts as they arrive. The reason behind this blog is yet another article on how to let people go. Ok, so it’s about alternatives first, but it is about letting people go, and there are many commentaries and opinions on this topic appearing at the moment. Of course there are. It’s a fact of the present economic situation that cost-cutting is occurring and therefore people are being ‘let go’.

I find these articles to be somewhat of an exercise in rationalisation, much like buying an expensive pair of shoes then presenting yourself with reasons why you had to have them. I’ve made some people redundant, and here’re all the reasons I had to. They weren’t pulling their weight, they’d got stuck in a rut, they were overpriced compared to their peer group average, they weren’t right for the job. The articles themselves are presenting post-activity excuses that can be used in defending a hard decision.

Who cut the rut?

What is never explained in articles about the right way to let people go is why those people were there in the first place. It is not only a management decision to fit a person to a position, but also to create the position in the first place. The litmus test of whether a position should exist should be whether that position is of benefit to the company in the worst of economic situations. Can we survive without this position? Then, and only then, can we achieve without this position? It’s a hierarchy of needs, but the same one that should be used when making positions redundant. If you create a ‘luxury’ position, then expect to make that position redundant when the time comes. Moreover, when you appoint a person into that position, let them know what they are getting themselves into, otherwise you will have a very disgruntled employee when the bad times come along. Don’t create luxury positions in the first place – don’t respond to large budgets by using them – and you won’t need to release people.

Use it or lose it!

Inflated budgets lead to inflated spending measures, included inflated teams to massage inflated egos. Any company that has a use it or lose it attitude to budgets is lining themselves up for a fall, or a number of falls, when budgets have to be tightened. It is a bureaucratic insistence on reporting on spending that leads to this use it or lose it situation. Alfred P. Sloan ran General Motors as separate divisions each responsible for its own budget whilst he asked for a simple return. As long as he received that return from the division, the division was not required to report in detail how it got there. The divisions were responsible for their own accounts. This may be one of the factors that kept GM above Ford from the 1930s for over 70 years. Autonomy.

Why not allow divisions that don’t spend all of their budgets on their business to spend the remains, the ‘profits’, on themselves, their people. This provides a greater incentive to streamline the division and yet produce the optimum profit. Spurious positions will not be created, and filled with people who will have to be moved on in hard times.

Imagine that, a company with everyone bought in, and no need to lay-off when the going outside gets tough.