Work Redesign and Performance Management in Times Od Downsizing

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The decade of the 1990s yielded a false sense of

security among management and employees that the economy was boundless. However, the topic in many copy rooms, cubicles, and break areas today isdownsizing, or the inevitability of more corporate blood-letting. Executives are rallying back to the lines to re-engage, where they sense little time for streamlining,reevaluating, or reallocating business processes, tasks, andactivities. The reality of the present corporate situation isthat many downsizing firms face the immediate challengeof keeping operations going with a minimum number of staff, at least for a short term until the outlook becomesmore stable. With layoffs occurring across many indus-tries—the tech sector, retailing, entertainment, manufac-

turing, and air travel, to name a few—the situation pres-ents an opportunity to address associated issues of down-sizing for sensible recovery.

Although management literature has focused on certainaspects of downsizing, such as communication strategies,employee cynicism, stress, potential litigation, morale,retention, and survivor support, one area remains essen-tially untouched: the effect of reductions in force onemployee workloads and the troubling ripple effect onthe integrity of performance management systems. Eventhough the topics of downsizing and performance man-agement each boasts an established practitioner literature

base, research at the intersection of these topics remainsscant.

Thus, it is our purpose here to help organizations andmanagers who are operating “in extremis”—doing asmuch or more but with fewer people—reconfigure work duties and establish a fair performance management process for surviving employees. The framework proposedhere is targeted for solution-hungry managers caught inthe throes of downsizing organizations who need a solidrecipe for work redesign.

Reductions in force can havea serious impact on employeeworkloads, as well as a troublingripple effect on the integrity of performance management systems.Organizations and managers who are

operating “in extremis”—doing as much ormore as before but with fewer people—need help

with reconceptualizing tasks and managing

performance during downscalings. Coupled with

specific illustrations, this proposed operational

framework can help them reconfigure work duties

and establish a fair performance management

process for those employees who remain.

71

A.S. EvangelistaParticipant, Manager Leadership Program, Home Depot,

Shreveport, Louisiana ([email protected])

Lisa A. BurkeAssociate Professor of Management and Marketing,Louisiana State University–Shreveport ([email protected])

Work redesign andperformance managementin times of downsizing



Productivity in downsizing

Arecent article in HR Focus that summarized datagathered by the Families and Work Institute(“Focus resources now…” 2001) reported that

corporate downsizings often mean extended hours and a

heavier workload for surviving employees. The effects of the resulting stress vary from making more errors to feel-ing bitter toward coworkers to simply leaving the job alto-gether. Assuming that companies keep their best em-ployees and managers during downsizing, organizationsshould theoretically be in a position to perform better.But case studies have shown that productivity often de-clines. In The People Side, by Richard Koonce (1991), Dr.Jackie Greaner refers to the productivity paradox as asource of regression:

Let’s say a corporation decides, for financial rea-sons, to undertake a downsizing or restructuring toimprove its bottom-line profitability and productiv-ity. If it doesn’t deal with the “people factors” asso-ciated with change—that is, effectively manage thehuman resources issues that are part of any corpo-rate reorganization—its productivity and profitabil-ity will suffer anyway. This is the so-called “produc-tivity paradox.” It’s quite common in organizationsgoing through transition today.

Such an observation highlights the inadequate attentionpaid to the “people aspects” of previous organizationalrestructurings. Clearly, one goal of these types of corpo-rate change must be to provide indubitable improvement in productivity and profitability so that surviving employ-

ees remain viable stakeholders in corporate progress. But as Slavin (1994) suggests, “If you eliminate people, theones who remain will make choices about how to react. The best often leave the company—the brain drain. Therest either work longer or harder, or they just don’t do cer-tain tasks.”

Many more authors also point out that in corporatedownsizings the survivors end up working longer and areheavily taxed with a bigger workload. As a result, moraleoften goes into the proverbial dumpster. Place the per-formance management process against this backdrop andit is easy to discern potential problems.

Downsizing and performancemanagement dilemmas

Consider the following: Caroline has escaped a recent vol-ley of layoffs at her manufacturing firm. The company’sdreary situation will likely continue into the foreseeablefuture and she is concerned about her job security. She hasbeen a superior performer who takes pride in being able tocomplete all assigned duties well and on time. When thelatest cuts trimmed several people from her department and management divided up the work among those who

were left, Caroline took over much of the workload of oneof the terminated employees. The stress of the current work environment is taking a toll on her and her peersand is beginning to affect her work. Caroline knows that her annual performance appraisal is around the corner and that she has not performed up to her usual potential,

although she has tried. There is just too much to do andtoo little time to get it all done; some tasks never get touched and others are only half-heartedly completed. This once exemplary employee now actually feels she isaverage, and she is distressed about it. She fears not only that she will be appraised unfairly because she has beenasked to do so much more and has done all that shecould, but that others might actually get away with task avoidance, something she does not feel comfortable doing.

Michael, Caroline’s supervisor, is also under a great dealof stress. Not only is he responsible for his own perform-ance but that of the Quality Assurance Department as well. The department has consistently produced above averageperformance. But lately Michael has noticed that severalof his key employees—employees that he urged be savedfrom the corporate chopping block—are performing mar-ginally. Several work assignments that absolutely must bedone are either late or inadequate. Even employees herelies on the most, such as Caroline, are turning in weaker performances. He also senses they are on the verge of amorale slump as a result of the burgeoning workloads.Performance appraisals are due in six months andMichael prides himself on being fair and accurate. Giventhat the departmental workload has increased, however,he feels there will be several challenges to confront.

This scenario illustrates some of the complexities sur-rounding the fallout from corporate downsizing, espe-cially concerning employee workloads and performancemanagement. Before the company cut heads, Caroline was working at or near her effective capacity—she had thetime, opportunity, ability, and energy to be a superior per-former. She completed all of her duties and did so in anoutstanding manner; plus, she enjoyed her work. Michaelregards Caroline as one of his best employees. But left with additional duties to distribute among his remaining employees after the layoffs, he effectively gave her the work of at least two people. He sees her performance fal-tering, sees her turning in relatively lackluster work andeven failing to complete a couple of tasks.

Michael realizes he must now get his group focused ap-propriately (and quickly) on their new work reality if heis to maintain the unit’s performance. He also wants todeliver fair and accurate performance appraisals in thepost-downsizing environment. Stepping back, he realizeshe needs to first review departmental tasks in this envi-ronment to maximize his unit’s productivity; then he willbe in a better position to evaluate employee performancefairly. Our framework can help him do just that.

72 Business Horizons / March-April 2003



Work redesign

In downsizing situations, it is vital for managers to assess business unit obli-gations and internal tasks to effectively

and fairly manage and balance workloads

among remaining employees. Typicalproblems they may face during employeereductions are: (1) the failure or inability to identify and categorize duties andassignments, (2) the failure to identify when they have over-tasked an employee,and (3) the failure to see when a businessunit’s demands exceed its capacity.

When a firm enters the downsizing mode,the top managers need to redefine their goals for the restructured company inorder to meet the demands of their busi-ness environment. According to Slavin,this process also involves examining andidentifying the more essential operationaltasks. Maintaining that certain tasks aremore strategically important than othersis consistent with Wright, McMahan,McCormick, and Sherman (1998), whodemonstrated that a focus on the most strategically important tasks in a perform-ance management system will enhancecompany performance. As such, we pro-pose a process for this important task cate-gorization duty, as shown in Figure 1.

To proceed in this new corporate direc-tion, managers need to identify and cate-gorize all projects and tasks to determine which activities are to be retained and which are to be eliminated. Critical tasksare those that enable a company toaccomplish its primary organizationalobjectives; they are essential to maintain-ing the firm’s strategic intent, and must be performed tocompletion at the highest quality standard. One examplefrom Michael’s department is the task of quality control, a vital function that is performed on incoming parts to thedepartment and that requires certain sample inspectionsto ensure that those parts meet or exceed standards. Thereis no wiggle room in this function—failure to identify problems could lead to catastrophic results.

A sub-critical task is one that needs to be performed, but an average standard of quality will suffice. An examplemight be a job that is perceived as critical in the near future once the company restabilizes, thus requiring that it be maintained to ensure proficiency when reinstated. All sub-critical duties contribute to the achievement of organizational goals but are just as effective when a bare-

bones approach to completion is taken. One example inMichael’s department that fits this category is a specific quality monthly report. Prior to the downsizing the report was a work of art. The responsible team member had theopportunity to produce a visually stimulating presenta-

tion reporting certain quality assurance data. The datacould have been presented just as accurately in a straight-forward, “no-frills” report and still would have met theneeds of the recipients while taking less than half thetime. Another sub-critical example could be maintenanceon a piece of test equipment that is not used at current production levels but is likely to become critical whenproduction rebounds.

A minor task is one that adds value to the firm but will not hinder operations or organizational goals if left undone. An example would be maintaining workplace tidiness. And

Figure 1 Work redesign process

Reformulated company strategy

Identify company-wide objectivesthat pertain to specified business unit

Identify all projects and tasks to be retained or eliminated

EliminatedRetained

Categorize remaining tasks as:*Critical, sub-critical,

minor, or unnecessary

Eliminated tasks/processesshould be documented

and eliminated in adeliberate fashion.

Critical, sub-critical, minor

Unnecessary

Identify complementary tasks in eachcategory, which can create positive

synergy when grouped together

Ensure retained tasks donot exceed unit capacity

Assign tasks to employees

Monitor and evaluate

*Task categories:Critical – Must be completed

at an above average quality standard.

Sub-critical – Must be done,

but an average quality standard will suffice Minor – Should be done

only when time permits;average quality standard will suffice

Unnecessary – Eliminate

73 Work redesign and performance management in times of downsizing



an unnecessary task is one that can bediscarded because it most likely drains needed resources away fromthe critical or sub-critical tasks—for example, quality inspections of prod-ucts that have been temporarily

ceased until demand picks up again.Denoting such tasks is particularly rel-evant in a restructured firm, as busi-ness goals may have changed. Taking the time to document discarded tasksand the lessons learned may prevent future mistakes and yield valuableinformation if the company decidesto resurrect similar projects.

In most cases, an employee does not need to stop performing critical or sub-critical tasks to advance workplaceaesthetics. Because the opportunity todo each task will vary daily, regardlessof category, time management skills will be ever-important. Some taskscomplement each other and may bemore effective when assigned together. This may seem intuitive, but synergy can lead to greater efficiency and pro-ductivity. Examples are tasks that re-quire close coordination with another department or specific areas withinanother department. If Michael’s unit has a critical task and some sub-criti-

cal and minor ones that all requirecoordination with the marketing department, then these tasks shouldbe assigned together.

After formulating the work redesignprocess outlined in Figure 1, wemodified our model in response toan interview with Steven Finch, asupervisor at Philips Broadband Net- works of Manlius, New York. Mr. Finch said that when hiscompany began to downsize, he knew his department would need to do a task assessment in order to pare downthe workload into “necessary ” and “unnecessary ” compo-nents. He requested that each member of his department brainstorm and produce a task list, including all stepsnecessary to accomplish assigned duties. Then he com-pared their lists with departmental functions, as conceivedin the company ’s new focus. If certain functions were nolonger necessary, he removed them and their correspon-ding tasks. Finally, he allocated the downsized employees’duties to remaining members to ensure that necessary functions were completed. This approach to task catego-rization is consistent with Figure 1 and provides somesemblance of face validity verification.

Reconceptualizingperformance management

As Figure 1 shows, then, redesigning work aroundcritical, sub-critical, and minor tasks while elimi-nating unnecessary ones forms the foundation for

performance appraisal content. Using this framework,managers can assess the completion of each type of task,as well as the specified level of quality for each. The out-put from the work categorization process must be shared with all employees so they have a list of the critical, sub-critical, and minor tasks they are accountable for. Thesesame tasks are then used to drive the performance man-agement process. Employee communication and under-


Critical task #1: ___/5Critical task #2: ___/5Critical task #3: ___/5

Sub-critical task #1: ___/3Sub-critical task #2: ___/3Sub-critical task #3: ___/3

Minor task #1: ___/1Minor task #2: ___/1Minor task #3: ___/1

Overload limit: -------------------------------------

Critical Task #4: ___/+

Sub-critical task #4: ___+Sub-critical task #5: ___+

Minor task #4: ___+

Figure 2Performance management in task overload situations

Tasking Assessment Template

Normal workloadtasks:

Overloadtasks:

Total points earned: ___ /____

Percentage of points earned: ___

Performance categories:

Excellent 85–100%Good 70–85%Satisfactory 50–70%Poor 30–50%Unacceptable 0–30%

27*

RATING SCALES

Performance oncritical tasks:

Excellent Good 3Satisfactory Poor 0Unacceptable –3

Performance on sub-critical tasks:

Excellent 3Good 2Satisfactory 1Poor 0Unacceptable –2

Performance onminor tasks:

Complete: 1Not complete: 0

*Note: The workload denominator will likely vary across employees because it is task- and job-specific.

%

5

1



standing will be vital to the success of this effort becausethe manager will formally evaluate the three types of duties as performed by that group of employees.

The manager must evaluate the level of work that wasassigned to employees and then assess whether they areperforming those duties at the appropriate levels. Because

each task has been categorized, the manager can ensurethat critical tasks are all being performed to the highest standards, sub-critical tasks to adequate levels for func-tional requirements to be met, and minor tasks only when possible or as needed. Each employee is then in amuch better position to receive a fair and accurate per-formance appraisal, further removed from problems that occur due to ineffective task assignment after downsizing.

Figure 2 outlines a proposed method for effectively andfairly dealing with employee overload in the performancemanagement process. A generic example of translating re-engineered workloads for performance management pur-

poses is illustrated, with the goal of assigning each newly sorted task a proper weight. It is essentially a weightedevaluation system, in which managers translate eachmember ’s workload into numerical values so that they can evaluate each task and obtain an overall percentagefor each employee. More specifically, the manager createsa task assessment, including both normal workload andoverload tasks. Various tasks of all types exist, both aboveand below the “overload limit line,” each with a different rating scale because of varying importance. For example, while critical tasks are rated on a scale of 5 (excellent) to–3 (unacceptable), sub-critical tasks are on a 3 to –2 scale,and minor tasks are either complete (1) or incomplete

(0). These varying endpoints communicate to employeesthe relative importance across the task types in the thrust of their daily efforts.

The “total points earned” ratio comprises a numerator (the employee’s total earned points across all tasks) and adenominator (the manager ’s determination of a fair work-load). Note that this workload denominator, being task-and job-specific, will likely vary across employees andorganizations. Regardless, an employee’s total earnedpoints divided by his workload denominator gives a per-centage of points earned and places his performance in acategory of excellent, good, satisfactory, poor, or unaccept-

able. Of course, firms can tailor these ratings and cate-gories for their particular needs.

Our suggested process requires managers to acknowledge when employees are overloaded, while subordinates must acknowledge that the manager values the completion of various tasks differently. Examining employee overloadbased on the importance of tasks, and then explaining tothe employees what level of performance is expected onthe various tasks and how the appraisal process will work,allows a manager to more fairly administer periodic for-mal evaluations. For example, it may be tempting to give

a high performance rating when an employee is over-loaded; however, based on our approach, the rating would depend on the employee’s performance and not simply on emotional appeal. In addition, downsizing firms can more closely tie any merit bonuses to deserving performances in order to keep a “pay for performance”

mentality foremost in employees’ minds and ensure cor-porate dollars are wisely distributed.

To illustrate our point, we apply our task assessment framework to Caroline’s situation. As shown in Figure 3,Caroline has made a concerted attempt over the last four or five months to complete work assigned in Michael’stask categorization system. Even though she is only pro-ducing mostly “good” results, she is performing consis-tently across assigned tasks, both old and new. Adding upher task scores, we see that she has produced a value of 22, resulting in an 81 percent of points earned and a goodrating. As such, her performance appraisal reflects her results across the various tasks.

Caroline’s normal workload was broken down by task type to encourage appropriate focus—all complete withclear performance standards. Michael assigned what hedetermined to be a fair workload in the employees’ re-structured work reality and a fair division of departmental work responsibilities. But performance appraisal results

75 Work redesign and performance management in times of downsizing

Critical task #1: ___/5Critical task #2: ___/5Critical task #3: ___/5

Sub-critical task #1: ___/3Sub-critical task #2: ___/3Sub-critical task #3: ___/3

Minor task #1: ___/1Minor task #2: ___/1Minor task #3: ___/1

Overload limit: -------------------------------------

Critical Task #4: ___/+

Sub-critical task #4: ___+Sub-critical task #5: ___+

Minor task #4: ___+

Figure 3Example of performance management in taskoverload situation

Caroline’s Tasking Assessment

Normal workloadtasks:

Overloadtasks:

Total points earned: ___ /____

Percentage of points earned: ___

27*

333

212

011

1

12

0

22

81 %



are based on the types of tasks that were assigned and,more important, on the level at which those tasks wereperformed. Caroline is not an average performer, as shehas lately felt; instead, she has exhibited quite good per-formance over the last several months. Michael gives her clear direction on which tasks are valued the most, and

with continued coaching and experience, Caroline willlikely make it to the excellent category soon. Ultimately,Michael is confident that his department ’s task load hasbeen fairly and accurately distributed and that employees will become more comfortable and proficient with thenew system over time.

P erhaps organizations other than downsized firmscould benefit from considering our outlinedapproach as well. When a firm becomes mature

and duties become routine, this method could be usefulin revitalizing it —to do some housecleaning by identify-

ing critical, sub-critical, and minor tasks and eliminating unnecessary ones. Nevertheless, it is crucial in a down-sized environment for managers and supervisors to reex-amine workloads, prioritize duties, and communicatehow the task hierarchy will be reflected during the per-formance appraisal process. The effort must be made toensure that employees who are retained are being usedeffectively, treated fairly, and rewarded appropriately for their contribution to the organization. ❍

References and selected bibliography

Appelbaum, Steven H. 1991. How to slim successfully and ethi-cally: Two case studies of “downsizing.” Leadership & Organiza-tion Development Journal 12: 11-17.

Beam, Henry H. 1997. Survivors: How to keep your best peopleon board after downsizing. Academy of Management Executive

11: 92–94.Feldman, Daniel C., and Carrie R. Leana. 1994. Better practices

in managing layoffs. Human Resource Management 33 (Sum-mer): 239-261.

Finch, Steven. 2001. Supervisor, Philips Broadband Networks,Manlius, New York, phone interview (17 November).

Focus resources now on retained employees. 2001. HR Focus78/10: 11-16.

Gutknecht, John E., and J. Bernard Keys. 1993. Mergers, acquisi-tions and takeovers: Maintaining morale of survivors and pro-tecting employees. Academy of Management Executive 7/3: 26-37.

Koonce, Richard. 1991. The “people side” of organizationalchange. Credit Magazine 17/6: 22-25.

The negative effects of overwork and related stress. 2001. HR

Focus 78/11 (November): 9+.Siriginidi, Subba Rao. 2000. Enterprise resource planning in

reengineering business. Business Process Management Journal 6:376.

Slavin, Roy H. 1994. Re-engineering: A productivity paradox.Quality 33/6 (June): 18.

Wright, Patrick M., Gary C. McMahan, B. McCormick, and W.S.Sherman. 1998. Strategy, core competence, and HR involve-ment as determinants of HR effectiveness and refinery per-formance. Human Resource Management 37/1 (Spring): 17-29.


Work Redesign and Performance Management in Times Od Downsizing

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