Ford: How Layoffs Can Improve Performance, Not Just Cut Costs

Jeff Cooper, Senior Business Consultant for Authoria, Offers Five Suggestions on How Large Organizations Can Cut Staff Strategically

WALTHAM, Mass., Jan. 23 -- Today, Ford announced that it will eliminate up to 30,000 jobs and close as many as 14 factories in North America to overhaul the company's culture and create a more competitive organization.

Jeff Cooper is senior business consultant at Authoria, a talent management software company. Cooper works with Fortune 500 companies to help them implement succession and performance best practices and strategies before they automate these processes.

Here are five suggestions from Cooper on how Ford and companies facing a similar situation can ensure that the layoff makes the company stronger.

  * Elevate HR to a strategic position, not just a tactical function: The
    U.S. Bureau of Labor Statistics projects that this decade's job growth
    is 3% larger than labor market growth, and that the number of skilled
    workers in key demographics will actually shrink by 2012. HR should not
    be spending most of its time pushing paper, but rather developing
    strategies to build a high-performing workforce that will withstand the
    labor shortage to come.
  * Establish a centralized system for identifying high-performers: In the
    14 locations set to be idled, there are certain to be talented
    employees with valuable skills. These employees must be identified and
    retained. In 1981, for example, Solomon Brothers eliminated 62
    positions to prepare for a merger. Michael Bloomberg was among those
    who slipped away, and he went on to found Bloomberg News. Today, of
    course, he is mayor of the largest city in the nation.
  * Set up a deep succession plan that's linked to performance management:
    Most people view succession planning as a document that establishes
    immediate replacement for the CEO and other C-level executive
    positions. Today, technology allows even the largest companies to push
    succession plans deep into the rank-and-file. If deep succession
    planning is coupled with performance management, HR can identify talent
    that otherwise might have gone overlooked for crucial positions long
    before layoffs occur.
  * Line-managers should not have to make layoffs all alone: Line managers
    cannot be expected to determine who should be cut based only on their
    own, individual experience. For instance, an employee's skills in
    Detroit could be desperately needed on the West Coast. Without a
    centralized system, the line manager is in the dark.
  * Use the layoff as an opportunity to improve overall performance: With a
    strategic HR plan, deep succession planning and a centralized
    performance system, organizations can eliminate underperforming workers
    in profitable units and product lines and replace them with high
    performers that had been stuck in unprofitable business units.

    About Authoria

Authoria, which is based in Waltham, Mass., is the leading provider of talent management software solutions to more than 300 large employers, representing more than 10 million employees. Customer companies include Boeing, Pfizer, Reuters and Unocal.

PRNewswire -- Jan. 23