Organizations that have survived over time have had to reinvent themselves over and over with the changes in the environment. These Business Transformations almost always include Cost Reduction that tend to lean towards Headcount Reduction. Headcount Reduction is typically achieved using 2 approaches:
Downsizing keeps the fundamentals of the roles same with only fewer people performing those roles. Whereas, Restructuring creates new roles, as well as modify existing roles, requiring a new mix of skills or altogether new resources to perform them.
Restructuring presents a more challenging task in that a new mix of skills has to be identified for each role, an Assessment Process has to be set up to assess existing employees against new competencies, and Redeployment after Restructuring (or new recruitment) done.
The important question in both scenarios is: Who should we eliminate and who should stay?
The question can be answered by devising and using key criteria to evaluate and then choose the most relevant assessment method.
Assessment of employees is key in both Downsizing as well as Restructuring. The Assessment Process has to be vigorous enough to identify the right employees to keep and lay off. A broader assessment process ensures coverage of more aspects of a new role which in turn makes the assessment process fairer. Measures, in this regard, may include:
- Covering a broad range of competencies in the interview process rather than concentrating on a few specific competencies.
- Using a mix of relevant performance data from the last role as well as some elements of future-oriented assessment, such as role plays or OPQs.
- Taking input from Line managers.
Linkage of the entire assessment process to the requirements of the job is the crucial part of this phase.
As with any assessment system, the content and design will be settled through consideration of various factors, some practical like cost, logistics and some more about safeguarding the output like instrument validity. When taking into account assessment tools for incorporation in the process it is beneficial to examine them against following criteria:
- Coverage of range
- Freedom from bias
The tools, based on the above criteria, help in various assessment methods that gather information on different aspects pertaining to the elements of the new roles. The most widely used Assessment methods include:
- Existing Performance Management Data
- Line Manager Performance Ratings
- Competency Based / Behavioral Interviews
- Personality Measures (OPQ) Linked to Competencies
- Simulation Exercises
- Pertinent Employee Data
Let us examine the methods in a little more detail.
Existing Performance Management Data
There are various benefits of using this employee assessment method, such as:
- No additional data gathering is required since the data is already in place.
- Such existing data can be obtained speedily and effortlessly.
- Existing performance data is perceived as pertinent.
There are some drawbacks associated with the existing Performance Management data method that executives should be mindful of:
- The data is often inconsistent and may vary in quality.
- Does not provide clear distinction between people.
- Does not reflect behavior therefore difficult to base decisions on.
- Usefulness depends on extent of overlap with the new role.
Such data although convenient and easy to obtain, has to be augmented from other sources—and through other assessment methods—for a complete picture to base the employee selection decision on.
Interested in learning more about Redeployment Assessment Process & Methods? You can download an editable PowerPoint on Restructuring: Redeployment Assessment Process & Methods here on the Flevy documents marketplace.
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"If you don't transform your company, you're stuck." - Ursula Burns, Chairperson and CEO of VEON; former Chairperson and CEO of Xerox
Business Transformation is the process of fundamentally changing the systems, processes, people, and technology across an entire organization, business unit, or corporate function with the intention of achieving significant improvements in Revenue Growth, Cost Reduction, and/or Customer Satisfaction.
Transformation is pervasive across industries, particularly during times of disruption, as we are witnessing now as a result of COVID-19. However, despite how common these large scale efforts are, research shows that about 75% of these initiatives fail.
Leverage our frameworks to increase your chances of a successful Transformation by following best practices and avoiding failure-causing "Transformation Traps."
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