Separating from employees with a positive effect – is that possible?

Two measures and the use of the sociocratic moderation method

Having to dismiss one’s own employees is one of the worst things that can happen to a company. There is anger, there is sadness, and all the trust that has been built up in people seems to be lost. The employees may be angry; they are certainly despondent. The situation seems hopeless, doesn’t it?

Examples are known from the environment of sociocratically managed companies where layoffs also had to occur, but these could be approached differently and produced different results: Namely, fewer layoffs. The trick is to consider whether there are alternatives.

What is sociocracy? The basic principles

Let’s make it very short, there are 4 basic principles: A division into largely self-determined task-related circles, the linking of circles across hierarchies by delegates, the election of team members and the very special moderated decision-making technique. For a redundancy case, the last two principles play a special role here.

Measure #1: Boost your own career reflection

In a recently examined concrete case of a medium-sized service company, all employees were forced to face a new election due to corona, with the aim of reducing the total number of employees. More, however, was involved. The management – which itself had also made a reduction – explicitly called on everyone to think about their own career planning and then decide whether they wanted to stay with the company. This is a first difference to conventional top-down decisions. A reflection period of several months was granted, where no dismissals took place yet, but only the individual decision to stay or to leave had to be made. Note: This gives the individual dignity and self-determination.

Measure #2: The question of alternatives

At the same time, all teams were asked to consider whether there would be alternatives to staff reductions. In other words, other ways to add business value that can support the personnel costs. Here there were results such as internal chargeable services, the move is cheaper rental locations and others.

In this upstream phase, a maturation and reflection process was lived in the company, so that ready alternatives and variants to the planned redundancies had emerged. These included taking unpaid leave, which was offered in solidarity by employees to get through the financial downturn.

The interim status: Fewer layoffs

In the elections that were finally held, it became apparent that fewer positions had to be eliminated. With the new combination of job percentages and reduced appointments, there was an additional effect here. Finally, the election process was carried out and the teams voted – the heads had a certain pre-election right as to who should be included in the newly formed teams.

The effects

Effects on employees

Even employees who leave the company retain their dignity with this procedure, because they have – without first being dismissed – themselves examined their careers and possibly already made changes that they would have made sooner or later anyway. Thus, it was an accelerating effect of some turnover, but also their own career reflection that had taken place, which the employer had called for. This was appreciated. Even though the entire process was perceived as anxiety-provoking and stressful. The overarching effect was striking: a significant proportion fewer resignations had to be issued. And: it was noticeable that even employees who left were still constructively responsive to the company overall.

Effect for the company

Not only did fewer layoffs have to be issued: there was also a noticeable participation and energizing effect, because the teams had reformed and made decisions together. Some team leaders spoke of team development.

In addition, there was a clear added value in that when the market picked up again, the company still “had” employees who did not have to be newly sought. And: the bond with the employees was strong.

The conditions

What sounds easy, of course, required careful and time-consuming preparation and cooperation of the management. Such an approach cannot be had quickly and for free. The company had already lived a good and low-threshold participation culture with its employees for many years. There was a tradition of courses in Nonviolent Communication (NVC) and there was an owner-managed flat hierarchy. A lot was spent on cultural work; it had been carefully cultivated for many years. And last but not least, the employment conditions were extremely attractive; not first and foremost in terms of pay, but flexibility. There was a choice of full- or part-time models and plenty of unpaid leave, some of which could be used for personal training.

And finally, the commitment of the top management itself was very special: not only did it itself reduce its number as a body, it also had a role in moderating the elections in the teams, which represented a major time commitment. The appreciation of this effort and its credibility was recognized. The downsizing process was thus conducted in a credible, compassionate, and structured manner, ultimately resulting in a still loyal relationship with the employer.

As some of the team leaders reported, the whole process was also seen as team building. Shared experience welds people together. It fits in with this that the company had always attached importance to its own values. It also took advantage of opportunities to create identity, for example, in the form of “branding” and commonality. Storytelling allowed it to cultivate a “founding myth” and repeatedly refer to its own special features.

Other consequences: Transparency and communication

Last but not least, the transformation into a changed structure succeeded through good and open communication and high transparency. The language from superiors to the CEO was also a personal and human one that did not deny the deeply upsetting aspect of such a difficult process. Transparency about the current situation of the company and access to as much knowledge and – learning as possible are indispensable and belong lived.

So there are alternatives to simple “mass layoffs”; but the way to get there is through many years of credible cultural work and an honest basic attitude between management and the team members.

Besser Zusammenarbeiten - besseres Onboarding mit Wissenstransfers - unlösbar scheinende Probleme mit Moderation zu einer Lösung führen - Speaker - Inspirationsquelle für Geschäftsleitungen

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