Information and Guidelines for Deans, Heads of School and Other Supervisory Staff

Contents

1.   Purpose

2.   Background

3.   Your Role as a Manager or Supervisor of Staff

Attachment 1 — The 'Downsizing' Dilemma

Attachment 2 — Outplacement Services

Attachment 3 — Effective Management of Those Who Stay: Countering 'Survivor Syndrome' (from Littler 1997)

1.   Purpose

The following information offers assistance to those charged with the management of staff where redundancies have been required. Most of the information you will require is is included in this package.

While heads of school and supervisors are responsible for ensuring that redundancies are managed in a proper and responsible manner, affected staff need to actively participate in developing career strategy options to help them decide about their futures.

2.   Background

Whenever heads of school or other supervisors are required to cope with budget reductions, particularly those which require staff reductions, there is potential for a wide range of unintended consequences. These can lead to a significant loss of productivity for the organisation and distress both for those who leave and those who remain.

These guidelines have been prepared to assist those with responsibility for managing staff reductions to do it in such a way that

• all the people involved can say that the process was conducted fairly, openly and with integrity;
• the strategic objectives of the University continue to be met; and
• productivity is maintained to the optimal extent possible throughout the reduction process.

3.   Your Role as a Manager or Supervisor of Staff

It is extremely important that all staff within the University with responsibility for managing staff reductions handle these with the utmost care and attention. The task is four-fold:

• reviewing the needs of the organisational area and planning for change;
• reducing the number of staff, where that is the outcome of (1), in a way which that is consistent with the ethical values of the institution and in accordance with the relevant University agreements to notify them about change
• supporting the staff remaining1 (see below) after such changes to ensure that they remain productive members of the University community; and
• rebuilding for the future.

Figure 1, adapted from Littler and Blackman, illustrates the so-called 'downsizing' process. The text which that follows amplifies each of the headings within the diagram.

A.   Drivers for Redundancy

• Staff redundancy may arise for a number of reasons. While budget restrictions as a consequence of the reduction in the Commonwealth Government's operating grants to Universities have put financial pressures on all higher education institutions within Australia, changes are also arising from the introduction of new technology, from changes in student demand in particular disciplines, or a wish to divert resources from one area to another in accord with strategic objectives
• These changes can occur in any functional unit within the University, either academic or administrative, and will impact on how they plan, organise and carry out their work. There will be, therefore, a need to restructure the activities of the work area to accord with the reduced resources available.
• It is quite possible that in some areas of the University, such changes may require a reduction in staff numbers.

B. Review of Cost Reduction Alternatives

• It is highly likely that many of the changes requiring a restructuring of work activities will be associated with budget reductions. Before any decisions are taken about how such reductions will be managed, therefore, it is important for the budget unit, whether faculty, school, unit or centre to have available full budget information. This should include all liabilities and forward commitments such as agreed salary increases.
• In general there are three ways of dealing with budget reductions:
  • reductions in expenditures;
  • increases in revenues via outside funding or some other; or
  • a combination of the two

  It is important that these possibilities are assessed realistically.

• A preparedness to be open about the problems facing the work area is essential throughout the process. It is also the case that members of staff may have some excellent suggestions about how to better manage commitments within the new budget allocation.

C.   Planning for Reductions

• If staff reductions are to be part of a budget reduction strategy, it is important to be clear on what basis decisions will be made . What will be the criteria used to identify those positions that are 'surplus to requirements'? Staff are likely to be more cooperative when they believe that decisions will be made according to some clear principles established in the best interests of the University rather than what is 'easiest' at the time (eg a contract due to expire). Consistency in application of these criteria is essential.

• In whatever part of the University you are located, three key assumptions should underpin your planning strategy.

  • The key resource units in the University are the individual staff members and their particular skills and knowledge, not the functional groupings in which they may be located at the moment. In theory these 'resource units' can then be arranged in a variety of ways to meet the University's needs. Schools, for example, may disappear and members of the staff re-assigned to another location without loss of the individual contribution they can make. It is clear, for example, that small schools carry high overhead costs and reduce flexibility. Part of the review and planning process should be to consider other functional arrangements that can achieve the desired outcomes for the University.
  • All decisions regarding staff should be made strategically, that is, in the best long-term interests of the University. What outcomes are being sought? This will require an assessment of the existing profile of staff skills within the area and some conclusions about what skills will be required in the future. A strategic perspective would also suggest that using natural attrition to deal with staff reduction requirements is not always appropriate when viewed in the context of preferred outcomes.
  • Attempt to ensure maximum flexibility when negotiating within the wider organisational unit (eg faculty) and with individual staff. For example, this may mean that faculties centrally fund the salaries of staff awaiting redeployment or while schools are engaged in restructuring processes. It may also mean establishing a budget for retraining purposes to support such people. It may mean negotiating departure dates for individuals in keeping with their personal needs. Under existing current industrial legislation and our current agreements there is a requirement that the University make every attempt to redeploy staff where that is their preferred option. In seeking redeployment opportunities Human Resources will examine all positions put forward for advertising (to be negotiated with SDVC). In circumstances where there are redeployees who are suitable to perform the duties of vacant positions such redeployees may be placed in those positions. Positions will not be advertised until it is established that there is no suitable redeployee.
• Be aware that in an environment of 'downsizing', (see Attachment 1) rumours will abound. These leave unintended, usually negative, organisational messages. Unless countered openly, clearly and often with all the facts, they will contribute to unnecessary anxiety and a loss of productivity while staff magnify their worries and engage in rumour and gossip. Remember also that staff who have been made redundant will talk to their friends and neighbours about how the process has been handled and this will reflect, either positively or negatively, on both the head of school or supervisor involved and the University as a whole. The University needs to be seen as an institution of quality in all aspects of its operation.

D.   Communication with Staff — The Need for Ongoing Consultation

• During the process in which it is determined how restructuring and any budget cuts will are to be introduced, it is absolutely critical that you, as a supervisor, communicate early and often with your staff. Once this process has commenced, use every means of communication available to you — verbal, hardcopy memo, email, fax, newsletters — to keep staff informed of progress. While staff may be angry and fearful about the implications of change, they are more likely to be cooperative when information is regularly available to them. Be open about the thinking processes you have engaged in when attempting to consider how to best (in the interests of the University) implement the reductions. Enlist the assistance of staff where appropriate and possible.
• Avoid secrecy. It just feeds the rumour mill. Having regular meetings with staff in the area may be a helpful way to keep them informed. Be open to their questions and suggestions.
• Enlist the aid of others outside the area in your consultative approach. This may include inviting senior members of the University, officers from Human Resources and representatives of your choice to talk with staff.

• As soon as it is clear from the budget review and discussions in the broader University what the reduction strategy will be, there are two requirements, – likely to occur at much the same time. Firstly, you will need to advise ERMS of your proposed strategy to ensure that the relevant parties are notified. This is essential under the 'notification of change' clause in the agreement2.  (see below) Secondly, communicate the news to staff. Identify as much information as possible including:

  • the financial targets;
  • what they will mean in terms of staff numbers;
  • what processes will be in place to implement the changes including support for staff who leave and staff who stay; and
  • any organisation restructures to follow and related timelines.

E.   Implementation of Staff Reductions

Implementation of staff reductions requires two parallel activities. On the one hand individual staff members occupying positions identified as 'surplus to requirements' need to made aware of their options and assisted to their new futures. On the other hand there is an important rebuilding function which requires the support and cooperation of those who remain. There is a considerable body of literature on this issue and some of this is referred to in Attachment 3.

F.   The Change Process for Functional Units

Any organisational unit of the University that has reduced its staffing (a school, centre or other) is unlikely to be able to carry on with 'business as usual' with fewer people. This merely increases the workload for those who remain and is likely to ensure that, over time, they become tired, frustrated and resentful — and less productive. A change process taking some time is required. This process requires the three steps of Review, Restructure, and Renewal.

• Review: Review is largely a planning function as described in Part C. Planning is essential before any final decisions are made about the budget. First and foremost, identify what outcomes are wanted and which activities are essential to achieve them. Are there things that could be done as effectively using different, less costly, approaches? Are there some that are not required at all? Are there cooperative arrangements with other areas that would be helpful? Is it time to acknowledge that the existing size of your area is a weakness that can be overcome only with some sort of merger or amalgamation? The review and planning period is the most critical part of the process as it will set the parameters for all that follows and its effects are long lasting. Try to involve staff as much as possible in these discussions.
• Restructure: The review will have answered a range of questions and put forward a number of options. In the restructuring effort, decisions must be made and implemented. It is in this phase that effective communication strategies becomes paramount. Once some consensus has arisen about the directions identified in the review process, careful attention must be paid to process to ensure minimal 'leakage' of goodwill and support. It is at this point that those staff whose positions are identified as 'surplus' should be approached and their options discussed with them (see Part H). Dependent upon decisions taken as a consequence of the review process, there may well be new but different positions available to be filled. Management of the tensions likely to emerge during this period will be difficult but essential if one is to make a successful transition to the next stage.

• Renewal: Once the restructure is complete, there follows an extended period of renewal or rebuilding. Successful renewal requires:

  • a continuing strategic focus on those activities which result in improved outcomes;
  • an approach which ensures that the staff who remain are adequately supported; and
  • a flexibility which enables new skills and talents to enter they are needed.

  See Part I for further detail.

G. Options for Staff Whose Positions are Identified as Surplus – the 4 Rs

It is very important to remember that although their particular job roles may no longer be required, a person's value to the University through the skills and knowledge they have developed over the years, is important and may well still be required. Therefore, when a job is declared 'surplus', it is desirable in most circumstances to begin with the premise that it may be possible to retain the services of that person in some way. The full range of options for these staff should be considered in a 'cascade' fashion, that is, examine the feasibility of the first alternative in meeting the strategic goals, before moving to the next. These options can be described as the '4 Rs'.

• Redeploy: While the position of the staff member may be surplus to the requirements in your area, there may be opportunities elsewhere within the University to continue to use his/her skills. Particularly with general staff, Human Resources can assist in identifying redeployment possibilities. Please refer to Schedule E of the General Staff Agreement 2009 and Schedule E of the Academic Staff Agreement 2009. Where a decision is taken to redeploy an individual this can be done on a short term trial period in which the receiving and relinquishing schools share the costs.
• Retrain: Either within the functional unit or in the wider University, someone who is currently 'surplus to requirements' may be effective in a new role with some retraining or other development assistance. Such assistance would normally be in the form of short courses or 'on the job'. For example, an academic may be teaching in one particular area which is in decline but have developed a research interest elsewhere where there are possibilities of growth. With a period of preparation that staff member might be able to perform a full teaching role. A general staff member with a previously technical role, with appropriate training, could well meet the requirements of a clerical role within the University. Where schools have determined that this strategy is appropriate in individual cases, faculties should ensure that there is sufficient support to assist. This support may be established by funding the salary and training requirements centrally within the faculty (or equivalent central administration unit). Criteria need to be developed for determining who should be offered retraining. It is inappropriate as a universal panacea.
• Reduce: Restructuring may actually present opportunities for individuals who have been considering other work alternatives. Part time positions may be attractive for some people, and arrangements for maintenance of full time superannuation contributions may be possible.

• Release: While releasing someone is usually the last option, where it has been determined to be the most appropriate mechanism, it is should done as quickly as possible. Wherever possible, however, natural attrition should be used. There are a number of ways to 'release' people.

  • Resignations: Some people may see other work opportunities outside the University. Resignations frequently occur where outplacement services3 (see below) have been used to assist staff whose positions have been identified as 'surplus' to find alternative employment. The cost of outplacement services should be a matter of negotiation between the faculty and school. See Attachment 2 to find out more about outplacement services.
  • Leave Without Pay or Secondment: Alternatively, there may be opportunities for placement outside the organisation on a seconded basis or leave without pay. This may suit people who have worked with organisations outside the University and who have been considering such options . Such a placement may provide an ideal opportunity for the individual to develop new skills and networks that are helpful in making a voluntary departure in the longer term. While Human Resources can facilitate a move of this nature, the individual must identify the opportunity.
  • Retirement: Early retirement is possible and could be considered by anyone over the age of aged 55 and over. Through individual negotiation it may be linked to voluntary severance (see 4.4 below). In some circumstances early retirement for academic staff can also be associated with honorary positions (Visiting and Honorary Appointments, for Senior Honorary (Research) Fellows). After retirement and a break in service there may also be opportunities for casual teaching or for work with postgraduate students. Where individuals have committed their lives to their University work, such arrangements be may essential to the success of any early retirement negotiations. It should be noted that early retirement as detailed here is treated the same as retirement for taxation purposes.
  • Separation (Voluntary): In accordance with the provisions of the relevant Collective Agreements there may be financial incentives for staff members who wish to consider voluntary separation. This is, however, subject to negotiation between the head of school and the Senior Deputy Vice-Chancellor. A decision of this nature is significant for an individual and should always be accompanied by considerable support such as that provided by the head of school and Human Resources. Consideration should also be given to the use of outplacement agencies. With any financial incentive, however, it is important to ensure that decisions about who receives a payment are in accord with the strategic directions arising from the review and planning process. Once again, voluntary separation is not a universal panacea.
  • Redundancy (Involuntary): Involuntary redundancy is a final alternative and it is hoped that such decisions would not be required. If necessary, however, there are circumstances in which it can be invoked and these are outlined in the Universities and Post Compulsory Academic Conditions Award 1995 Clause 21- Redundancy Provisions. It is possible that, where the skills are similar, an individual whose current position has been made redundant may, with the approval of the University, be able to swap positions with someone interested in receiving a redundancy package. Persons interested in job swaps should contact Human Resources for further information.

H.   The Process for Staff Whose Positions are Declared Redundant

• Ongoing guidance and support of staff whose positions are identified as surplus is important to assist a smooth transition to a new structure. It is important that all information and personal support mechanisms are in place. The following steps are suggested:

  • The staffing implications of the restructured activities must be communicated to Human Resources so that the relevant parties can be notified. This is required as part of the 'notification of change' clause within existing Agreements.
  • Each staff member whose position has been declared surplus must be informed of this at an initial interview. The immediate and future implications for the individual's current position will be discussed, documentation relating to redundancy will be provided, and a time for a second interview arranged. Recognise that many people need some time to think about the implications on their lives. Make sure that counselling support is available at that stage if required. Employees are invited to use the University's confidential Employee Assistance Programme by contacting Davidson Trahaire Corpsych on 1300 360 364 or University Counselling Services on 6488 2423.
• At the second interview it is assumed that the staff member will have read the package of support materials. He/she should prepare a preliminary action plan that identifies a preferred option (see Part G). The individual is then requested to follow-up as required with assistance from the head of school or supervisor. It is highly recommended that staff avail themselves of outplacement and counselling services as part of this process.
• Set further interview times, if applicable.
• At any time supervisors may seek further information and advice from staff in Human Resources In the best interests of the individual and the University it is important that redundant staff are assisted with career transition as quickly as possible. Schedule E of the General Staff Agreement requires that employees who have been notified that their positions are redundant be given a minimum period of four weeks to notify the University, in writing, whether or not they wish to be considered for redeployment. Clause 2.5 of Schedule E of the Academic Staff Agreement 2009 provides that a staff member who has been informed that the position they occupy is redundant shall be invited to apply for voluntary severance within eight weeks of the notification.

I.   Managing the 'New Workforce' – Dealing with Transition

• Restructuring of a work area — whether it arises because of budget reductions or because of a decision to change direction — has implications for staff. This is the case regardless of whether or not staff numbers actually reduce or, if they do, those reductions are managed by non-renewal of contracts. Both carry the possibility of negative impacts on the work environment.
• Unless work practices also change, it is possible that the staff who remain will have inequitable workloads. In addition to the possibility of creating resentment, inequitable workloads may have implications for meeting other important goals in the school. Therefore it becomes important, for example, to ensure that the teaching programme is as efficient as possible, that there is limited overlap and no duplication. There should be an opportunity to discuss different ways of doing things. If something in your programme is also taught elsewhere in the faculty or the University (albeit from a somewhat different perspective), is there capacity for sharing resources? Are there two or more smallish schools with some overlap in teaching and research interests that could share administrative and technical staff? Are there other ways of supporting academic staff in their teaching and research? Is there, for example, the capacity to bring in external funding (costed out at a market rate) which might provide for tutorial and marking assistance to create increased staff research time and support for conference attendance? Should you analyse administrative work processes to see whether there is any double handling that could be eliminated?
• When budget reductions must include staff losses, there may be additional problems. Depending upon the severity of the staff reductions, you may discover examples of 'survivor syndrome' amongst those who remain — people wondering 'why me' and 'will I be next?' (see Attachment 3 below). While some of this is to be expected, it can become highly unproductive for the individual and for the institution. It is important to acknowledge that those who remain, as well as those who have left, experience grief about how things were. But unless appropriately acknowledged, it can become all too easy for them to see the past as a 'golden age' and the present with unhealthy cynicism. Such people need support that acknowledges the loss; but helps it should also help them to realise there are also new opportunities within the newly restructured area, and that there can be a very positive future for them. Often a conversation with someone external to the organisation can be helpful in creating new perspectives. Outplacement services (see Attachment 2 below) are recommended and you are asked to contact Human Resources for further information. On request the Centre for Staff Development can also offer specific programmes to groups of staff who need this sort of support.
• Unless the change process is handled appropriately, reduced organisational effectiveness may result. Firstly, there can be decreased productivity as staff withdraw, turn inwards and become risk averse. The innovation essential to improvement cannot flourish in this environment. Secondly, unless arrested quickly, this decline can spiral into increased labour turnover as some individuals become increasingly uncomfortable in their work environment and seek to leave. Well-planned and supported change processes will counter these consequences.
• One successful strategy (probably at faculty level) is to identify one person to act as a change agent to work with heads of school and other supervisory staff during the implementation period. Throughout the change process it is important that senior management in the organisation are visible and available to talk to staff.

J.   Rebuilding and Renewal — The Importance of Symbols

Any restructure, whether or not it has required staff reductions, presents a difficult task for all those involved. It is helpful to use symbols and rituals to mark key dates and successful transitions. For example, the creation of a change agent role will mark the commencement of the process and the elimination of the same role would mark completion (notwithstanding that change is always with us). You may wish to celebrate the first anniversary of the new structure and pay public tribute to key participants. Sending formal messages of appreciation to people who have been instrumental in the change and ensuring that copies are placed on their personal files might be considered. Make sure your work unit (school, centre,) also celebrates special occasions such as the Melbourne Cup or the commencement of the Christmas season. Give people opportunities to tell their own stories about how they overcame particular hurdles to achieve their successes. This may be a time to consider some team building activities. Once again the Centre for Staff Development can assist in designing helpful processes.

Attachment 1 — The 'Downsizing' Dilemma

"Downsizing" is a term which that has entered common language in recent years as a euphemism for staff reductions. "Downsizing" has become a feature of the employment landscape in Australia and has had particular impact in public employment as a consequence of changed political views about the role of government in the economy.

The 'downsizing' literature is very clear that, unless managed sensitively and strategically, staff reductions can have a negative impact on an organisation beyond the 'savings' generated in the first instance.

The implications of 'downsizing' for staff are considerable, particularly those above the age of about thirty-five who entered the workforce with certain expectations about employment. Such people, perhaps particularly those in Australian universities, are likely to see themselves as having a 'psychological contract' with their employer. In simple terms this contract provides job security in return for loyalty. "Downsizing" exercises throughout the nation have challenged the idea of the psychological contract, not only for those staff who are made redundant but also potentially for those who stay.

At a national level the costs of downsizing and the disappearance of the psychological contract are significant. They include the so-called 'survivor syndrome' (see Attachment 3 below) which can be defined by increased levels of job dissatisfaction, reduced motivation, perceptions of reduced promotion opportunities, decreased morale, reduced institutional commitment and increased concerns about job security.

Where 'downsizing' is unavoidable it is useful to ensure that it is done in such as way as to minimise the negative impacts. Professor Craig Littler has drawn up a succinct list of Do's and Don'ts for those engaged in a process of staff reduction.

Guidelines For 'How Not To Implement Downsizing':-

Positive Guidelines

Rule 1: If at all possible, avoid downsizing. Easy to say, but difficult to do in the present context.

Rule 2: If downsizing cannot be avoided, adopt a systemic approach. i.e. plan the process across the whole organisation. Such an approach is contrary to a simple headcount approach.

Rule 3: Focus on the link to strategy. Be clear about future business directions. Do not get into the "Honey I've shrunk the company, now what do I do?" fix.

Rule 4: Over-communicate. Communicate with forewarning and clarity of information. Unanticipated major cuts create high stress. This includes (flowing out of Rule 3 above) communicating strategic directions to all staff.

Rule 5: Adopt participative processes.

Rule 6: Do not adopt a 'salami-slice approach'. High frequency is high problem. Avoid the necessity for frequent downsizing.

Rule 7: Support those who are cut. It is a fallacy to suppose that the 'victims' remain insulated from the 'survivors'.

Rule 8: Do not ignore the 'survivors'. High insecurity does not promote productivity; it promotes 'presentee behaviour'- that is making a show of working hard while looking out of the office window and worrying about the future.

Rule 9: Redesign & restructure. Existing jobs cannot just be expanded to soak up workloads: this is the route to 'burnout'.

Rule 10: Capture the learning. This has two aspects: first, a skills and knowledge management strategy is necessary to avoid/minimise the drainage of organisational knowledge ('corporate amnesia'). Second, learn from the process. Otherwise, the organisation goes around in a circuit endlessly.

(Littler, 1997).

Attachment 2 — Outplacement Services

There are is a range of outplacement services available in Perth and further information can be obtained from Human Resources. In general outplacement services are offered to staff who are made redundant to assist them in their career transition. Outplacement programmes usually offer some or all of the following services:

• psychological appraisal, where deemed appropriate
• financial counselling
• health assessment
• use of private office at the premises of the outplacement service
• secretarial facilities
• research library
• access to computer facilities
• involvement of partner, if desired
• one to one counselling
• investigation of career alternatives
• Job Search materials

In general outplacement programmes include three phases: counselling, career assessment and job search support.

Attachment 3 — Effective Management of Those Who Stay: Countering 'Survivor Syndrome'
(from Littler 1997)

What is 'survivor syndrome'? It is normally defined as the mixed set of emotions and behaviours exhibited by employees who remain in the organisation after the process of downsizing. Little attention was paid to the downsizing survivors in organisational research until Joel Brockner and colleagues conducted studies on the subject in the mid-1980s. Prior to such research, the emphasis was on the problems of the downsizing victims – the unemployed.

Brockner's early work consisted of laboratory studies. And in these specific settings it was found that subjects increased work effort under certain circumstances when co-workers were dismissed. Specifically the subjects increased work effort when they interpreted their co-workers' dismissal as decided by random process instead of decisions made by merit and past work performance. However, the laboratory-based research may not reflect the true reactions of downsizing survivors in organisations. In fact, most field studies have found that work effort is reduced as a result of layoffs or job insecurity.

Further validation of Brockner's laboratory studies was attempted in l987 when Brockner, Grover, Reed, DeWitt & O'Malley (1987) conducted a study which included both a laboratory experiment and field-measured components. Brockner believed that the strongest negative reactions would be displayed by survivors who identified with the victims. Moreover, Brockner claimed that these reactions would be intensified if the casualties were not adequately treated and compensated by the organisation. These hypotheses were supported by the study. Specifically, negative survivor reactions were illustrated by reduced commitment in the field study, and decreased work performance in the laboratory study. Overall, Brockner's work demonstrates the critical conclusion that the reactions and productivity levels of survivors specifically depend upon their perception of how the victims are treated. This has significant managerial implications.

Survivors are the people left behind in the organization when the others are swept away in a wave of downsizing. They should think of themselves as the lucky ones – they still have jobs. But the opposite can happen. One middle manager in an Australian national bank said:

"I feel the bank shed too many staff. Why are so many of the redundant staff back working on a contract basis. I feel that this is unfair to the loyal staff who decided to stay with the bank only to have redundant staff rewarded with not only a generous payout and as much as they want. It is very hard to pledge loyalty when the bank continues to flaunt these staff in our faces! How about rewarding the staff they already have." (Australian case study data).

Frequently, survivors start to feel that they are the unlucky ones, required to continue with reduced resources. This complex of damaged morale and crisis mentality has been labelled 'survivor syndrome' or 'anxiety intensification through downsizing' (AIDS).

Despite the widespread use of the term survivor syndrome, it has not been adequately or operationally defined. Littler defined it in terms of six key HRM variables and measured each of these across the organizations:-

• Job dissatisfaction; (increased levels)
• Staff motivation; (decreased levels)
• Perceived promotion opportunities; (decreased expectations)
• Staff commitment; (decreased levels)
• Morale among staff; (decreased levels)
• Concern about job security;(increased levels).