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Staff response to improvement when job losses are mentioned

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Roger Athlon

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Posted 17 March 2005 - 04:00 PM

Hello everyone, I'm not a prolific letter writer but I need some advice.

Our CEO has communicated to the workforce a mission briefing on the vision for the company for the next few years. Although it was long overdue I thought this was a step in the right direction. An essential part of the vision relates to continuous improvement, productivity and efficiency. In my role as Quality Manager I am a lot more focused with regard to the part I can play in helping the CEO to realise his vision. I thought that highlighting continuous improvement rather than our usual, short-term focus, of getting as many items out through the door. The path would be smoothed over, resulting in more co-operation from the workforce on ‘quality' projects.

Whilst the briefing was a long awaited step forward the CEO stated that in our quest to be ‘lean and mean' we would lose 20% of the workforce over the next few years. He did make it clear however that the reduction would be from natural wastage and definitely not forced redundancies. Personally I wish he had not mentioned the reduction in staff. The problem I am finding now is that rather than concentrating on the 99% of positive things relating to the future the workforce have concentrated on the job reductions. This week when I tried to start a couple of factory based projects I got an even worse response than before, the concern and suspicion was clear. I tried explaining that around 6 people a year leave of their own accord and this would amount to 30 people within five years, I made some headway but still I know some mistrust remains.

Like it or not improvement is often equated with job losses by the shop floor personnel and although the threat is not real, it is what they believe. I know that I'm an old dog and rose up from the shop floor and I would be feeling exactly the same way.

The business is very profitable but with a vibrant continuous improvement policy, it could achieve even higher profits so there is no immediate threat to people's jobs. If anyone has been through a similar situation I would appreciate some advice on getting over this sticky problem.

P.S. I think I require a good thick book for this case. An organisational psychology one would be good, I could hit a couple of people over the head with it.

Have a Good Day.

Roger


Roger Athlon

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Posted 17 March 2005 - 09:52 PM

Hi Roger, it's been a while since you've been around here. Do you know you joined the forums way back on 13-December 02 and were one of our very first members. Anyway welcome back and thanks for a great topic to get our teeth into.

I wonder how did the CEO formulate his vision, was it discussed with the management team (and you)? I suppose he was just being honest about the downsizing, which in some ways is admirable, but possibly a little naïve. If you have a communication line with the CEO tell him about what's happening at ground level I'm sure you can get over this problem with some more communication. Perhaps he could have a walk around the shop floor with you.

P.S. I think I require a good thick book for this case. An organisational psychology one would be good, I could hit a couple of people over the head with it.

Yeah you certainly could. You're right you do deserve a book, take your pick from the ones listed at the link below. The two Norman Bodek books have gone:

http://www.saferpak....ounce&f=65&id=1

By the way don't get two disheartened, yes the communication of the vision may not have been perfect, but a less than perfect vision is much better than none at all. :thumbup:

Regards,
Simon

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Franco

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Posted 18 March 2005 - 08:14 AM

A less than perfect vision is much better than none at all


:clap:

I was into a 9001:94 training session involving all employees, twice a week for a couple of months. I had to train the colleagues and the whole thing was pretty funny for all of us.

One evening I came back home and heard of personnel cut in MY COMPANY at the evening radio news. :angry:

You can easily imagine the workforce next morning in the training room.
It was very hard, you can't buy trust at the supermarket.
Eventually they trusted me.
Don't buy books, just keep in mind we're all human beings and act accordingly.

An ancient Chinese proverb teaches that the person who waits for a roast duck to fly into their mouth must wait a very long time.

Simon

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Posted 18 March 2005 - 09:02 PM

One evening I came back home and heard of personnel cut in MY COMPANY at the evening radio news.  :angry:

<{POST_SNAPBACK}>

Must have been in the days before email. :lol2:

Read the text below it's a short extract from a paper titled "Overcoming the Improvement Paradox.' You can read the full article (38 pages) here: Overcoming the Improvement Paradox.

The Iron Law of Layoffs
As the previous examples show, successful quality programs, by increasing yield and slashing scrap, defects, and cycle time, can lead to rapid growth in capacity. Unless demand grows rapidly as well, the result is excess capacity and pressure for layoffs. Excess capacity is common since processes with low complexity and short improvement half-lives (e.g. scrap and cycle time reduction) tend to be capacity-augmenting, while demand-generating activities (e.g. new product development, customer needs assessment, and supply chain integration) have long improvement half-lives and involve long delays. The labor requirements of any firm are given by sales divided by labor productivity. Productivity improvement greater than the rate of sales growth plus the labor attrition rate necessarily creates excess capacity.

The more successfully an organization improves its manufacturing operations, the more intense the pressure for layoffs. The Iron Law of Layoffs provides several policy insights. Deming (1986) exhorts management to 'drive out fear' by guaranteeing job security to workers who participate in improvement programs. But the Iron Law of Layoffs means that such commitments are often not credible. In mature, slow growth industries, or times of recession when voluntary attrition is low, it can be difficult to sustain commitment to improvement. Yet slow demand growth and weak economic conditions motivate firms to undertake ambitious improvement programs. Many firms launch improvement initiatives precisely when they are least able to absorb productivity gains without downsizing.

There are several policies a firm can use to resolve this dilemma. First, firms can sometimes convince workers that while improvement may cost some jobs, failure to improve will cost all jobs. This strategy, reversing Deming to 'Drive in Fear', enables firms to credibly demonstrate that participation in improvement programs is in the employees' best interests despite the threat of job losses. Second, improvement efforts can be directed at the slow improving processes first, so that the rate of improvement in demand and capacity is more balanced.

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Roger Athlon

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Posted 23 March 2005 - 11:06 AM

Hi,

Thanks for the info. I think it shows the benefit of contributing to Forums. They can be an excellent source of information

Thanks

Roger

:thumbup:


Roger Athlon

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Posted 23 March 2005 - 09:13 PM

Let us know how you get on Roger. ;)

Regards,
Simon


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