Of employee engagement and the 'survivor syndrome'

Employee engagement has been one of the key themes that we have been exploring in this blog (see Employee engagement and the story of the Sky Maiden, Passion for work and anasakti, The curious case of the object and subject of employee engagement, Appropriate measures for organizational commitment , The series on salary negotiations and psychological contract , Architects of meaning & Of owning and belonging for some of the examples). In this post, let’s look at employee engagement in the case of survivors of corporate restructuring/downsizing exercises(who often suffer from the so called ‘workplace survivor syndrome’ with symptoms like anxiety, depression, decrease in performance, poor morale and increased propensity to leave)  

At the heart of the survivor syndrome lies two emotions- guilt (“I didn't deserve to survive when my friends didn't”) and fear (“Next time, it could be my turn”). So, when it comes to employee engagement, the organization's best response is to help the survivors to deal with these emotions so that while the scars can't be erased, productivity can be restored to a great extent.

Guilt can be reduced by convincing the survivors that they deserved to survive (e.g. by following a transparent process for restructuring and for identifying the employees to be separated) and by ensuring that the employees who were separated have been well taken care of(e g. by providing a generous separation package & adequate transition support).

Fear can be addressed to some extent by publicly communicating (if possible) that the staff cuts have been completed and there is no such possibility in the foreseeable future. Providing the survivors the opportunity to receive psychological counseling/ stress management training with a focus on coping  strategies can also help. Of course, constant communication with the employees at all levels that addresses the stated and unstated concerns has to be continued. Another type of fear is regarding increased workloads and new skill sets required. This can be addressed through careful work planning and capability building. People managers can be trained to look for signs of stress in the employees and to manage the employees in a supportive manner. Of course, any tendency among the people manages to use the residual fear to drive productivity ('blackmailing' employees to work harder) should be curbed.

What is perhaps irreversible from the employee engagement point of view (especially for the next few years) is that the employer- employee relationship moves to a purely rational plane (whereas most definitions of employee engagement include the aspect of deep emotional connect that the employees have to the organization). This is because, layoffs are often perceived as a breach of the psychological contract. This would be more so in those organizations that have been communicating messages like ‘our company is one big family’ to the employees.

This would mean that, after the restructuring, companies would have to rely more heavily on rational means to retain and motivate employees (e.g. highly competitive salaries & performance-linked incentives, gain sharing schemes etc.) as well as investment in capability building to ensure 'employability'. Yes, the emotional connect can drive discretionary effort and lead to remarkable (business) results. But, organizations should engage the emotions of the employees only if they are willing to look at employee engagement as a relationship (and not as a tool) and are willing to reciprocate (in terms of going out of the way to care for the employees, beyond what the employment contract requires)!

In a way, the way out of the survivor syndrome is through a psychological transition process. So, actions that can facilitate the transition process like clearly explaining the need for restructuring and the process that would be followed, helping the employees to acknowledge and deal with their feelings of fear and guilt (as detailed above), clearly articulating the new vision for the organization and the possibilities it creates for the survivors and getting the survivors actively involved in rebuilding the organization and the social networks within the organization(that would have suffered because of the loss of social capital) are perhaps the highest leverage actions that organizations can focus on!

Social capital, restructuring and attrition

Social capital in an organization refers to the collective value of all social networks (connections among the individuals) in that organization. These connections have 'value' for both the organization and the employees.

A significant portion of the 'work' in organizations gets done through these connections (often referred to as the 'informal organization') rather than through the 'formal structure' in the organization. These 'connections' motivate employees to do things for one another beyond what is specified in the job descriptions. Hence social capital has a positive influence on productivity. The importance of social capital in the creation of intellectual capital has also been recognised. Since these 'connections' are difficult to copy, social capital could be a source of sustainable competitive advantage for the organization.

These 'connections' (social capital) could also help in addressing 'relatedness' needs of the employees. So in addition to enabling the employees to get their work done faster/easier/better, these 'connections' contribute in meeting their their social/'connectedness' needs. Thus social capital could add to 'personal effectiveness at work' and the 'total employee deal' as perceived by the employees and hence it could have a positive influence on employee engagement and retention.

Organization restructuring is one of the popular ways of responding to a dynamic business environment. While the business case for restructuring is quite compelling in many contexts, the hidden costs of restructuring in terms of loss of social capital often gets overlooked. Restructuring breaks up the human networks/connections in organizations and dilutes the social capital in the organization. Since (as mentioned above) these connections are valuable for both the organization and the employees, there could be adverse impact on the organization (in the form of reduced productivity, reduction in the rate of intellectual capital creation, increased employee turnover/ attrition etc.) and on the employees (in terms of reduced engagement, work effectiveness, satisfaction etc.). Of course, many of these factors are interrelated and hence the adverse effects could get amplified.

As we have seen above, organization restructuring and the consequent loss of social capital could reduce the 'value' that the employees derive from organization and hence this could lead to employee turnover/attrition. The social networks bind the employees to one another and hence to the organization. It can also be said that one of the reasons that the employees don't want to leave an organization (to join another organization) is the reluctance to 'start all over again' (in terms of having to build new networks/connections). Thus if a restructuring breaks up their existing connections, employees might have less reason to stay on in an organization. Costs of attrition are well known. Apart from these costs attrition also leads to a further erosion in human capital as more social networks/connections get broken when employees leave. When 'key' employees (with a large number of strong connections) leave the impact on social capital would be more. It is also possible that employees might leave in groups if these groups have a large number of strong connections within them (especially if another organization offers an opportunity to maintain these connections).

Thus one of the key hidden cost of restructuring could be in terms of loss of social capital and its ripple effects. Loss of connections/social capital could lead to attrition which in turn leads to a further erosion of social capital. This could lead to a vicious cycle and organizations should be careful about this. When an 'impact assessment' is done for the proposed restructuring exercise, the impact on social networks/connections/social capital should also be factored in. Since these social networks also serve as communication channels, the communication strategy for restructuring requires even more emphasis (as the restructuring could have broken up some of the existing communication channels). The overall change management plan should give specific attention to retain key people (people with a large number of strong connections) so as to reduce the erosion of social capital. The plan should also focus on creating an environment that would facilitate building of new connections to replace the old ones hence to restore and enhance the social capital in the organization.

See a related post here.