In tough economic times such as now, leaders and employees are constantly being tested. Staff often succumb to worry and anxiety that can erode morale and productivity across an organization. Frederic stresses the importance of an “egoless” culture, in which staff feel comfortable engaging with senior management to discuss their concerns, as well as regular and open communication to ensure staff understand the Big Picture and appreciate the reasons behind the tough decisions. He touches on the calibre of leadership that is required to maintain morale and ensure a company “stays the course” in challenging times.

Of course, basic human nature makes it impossible to create a workforce comprised solely of happy and loyal model employees. But there are clear strategies one can employ to bring out the best in the individual, to ensure accountability and a clear understanding of duties and responsibilities, and fit the right person to the right job.

These best practices can be broken down into three broad themes:

1) Establish clear goals and communicate them, not only to your team, but to yourself

What are the objectives your organization is trying to achieve? What does success look like? How do you define it? What will it take to get there? And most importantly, what role does each individual have to play in helping the organization achieve these objectives? Your staff need to both understand their roles and feel that what they do is a valued and necessary contribution.

Even as a sole proprietor, taking yourself through this process of objective self-examination is vital. Defining your vision and your objectives for other people you trust will clarify them in your own mind and keep you accountable to accomplish what you said you would. This audience can range from suppliers and clients, to peers in your professional network and those individuals whom you look to as mentors. Soliciting this outside input can keep you on track or put you back on track.

2) Be a sharp instrument, not a blunt one.

Few companies have ever failed for every trying to do too little. Don’t spread yourself too thin. If you focus your resources and the energies of your team on a few key goals, you are much more likely to achieve them. Having staff running in too many directions at once can create undue stress and anxiety that will erode productivity and morale.

A recession can offer the ideal opportunity to hone your business. It demands that you cut the fat and focus on what’s really important. In good times, it’s easy to let things slide and still get by –but recessions are less forgiving.

3) Decide how work is going to be delegated, measured.

Identify who will be responsible for specific aspects or tasks of a project. Provide a challenge you know is within the individual’s capabilities that will help them stretch and grow. Communicate to the individual that a task is being assigned to them because of the trust you have in them to deliver. The idea is to get them to commit and buy in to the process, take ownership and be accountable.

Consistent measurement

To ensure the project is on track, measure in progress by breaking the project down into milestone objectives. Engage in an active dialogue with regular meetings and other forms of communication in which your team is encouraged to share their thoughts, concerns and successes.

Measure the output once the project is complete. Did everyone hit target … or not? What lessons were learned that can be applied next time to achieve better results?

Evaluation and correction

Regardless of how diligently you apply these principles, staff will fail to fulfill their commitments. This may be a function of poor work ethic, but often it is an avoidable consequence of poor planning and communication at the outset. In other circumstances, a person may simply be the wrong fit for the job, but may bloom and excel in another position if given the opportunity.

No prescription needed

Often, managers start things off on the wrong foot when they assign work by prescribing what is to be done without taking the time to discuss with staff HOW it will be done. Again, it comes back to instilling the confidence and understanding that will lead staff to step up and take ownership. Let them volunteer ideas about how a project can be completed or an objective achieved. If you just hand work AND the process to do it to people, they can feel like drones and lose engagement. They must feel motivated by a Big Picture understanding of the positive contribution they are making to the organization as a whole, rather than by fear of being sacked if they fail to deliver.

Develop an action plan and have it centrally available to ensure everyone is on the same page and provide a benchmark against which progress can be measured. This can identify any problems early on that members of your team may very well work together to resolve themselves without involving senior management.

Make a clean break

On the other hand, we’ve often heard managers and executives say “The biggest mistake I made was not letting that person go sooner.”

Sometimes, organizations will take too long to let go of someone who is clearly a poor fit. The negative impact of a poor employee becomes that much more acute in tough times when the best is needed from everyone. But it is much better for the organization to cut the cord and fill the position with a stronger candidate sooner rather than later. It may also be better for the individual since it will free them to pursue an opportunity for which they are better suited.

A great reference for business owners and managers on the importance of building the right team and “getting the right people on the bus” is Good to Great by Jim Collins. Though Collins focuses on larger organizations, his core principles apply just as well to smaller enterprises.

But while you may have plenty of reasons to be distracted, never lose sight of the fact that your people are your most important asset. Here are some suggestions on how to create a framework for retaining top talent in your business.

Leadership

Demonstrating strong leadership instils confidence in your team and bolsters morale. This builds loyalty and drives the productivity and performance you business needs to survive and thrive.

But what are the traits of good leadership?

Good leaders have, and can communicate, a clear and compelling vision of the future that inspires people. They maintain their focus on the Big Picture regardless of the immediate challenges the organization may be facing. Vision plays a key role in supporting employees as the organization endures tough times. Creating a strong vision will help employees focus their efforts and understand how they contribute to a common goal.

Good leaders:

• Have courage and will acknowledge fear and the risks of the unknown.
• Maintain a positive vision of the future that motivates and inspires without ignoring the challenges of the present. Don’t dump any negativity or anxiety you may feel on staff. It’s caustic to the entire organization.
• Have passion.
• Are disciplined.
• Demonstrate commitment and establish priorities for both the business and the individuals involved.
• Engender trust through open communication and by encouraging feedback from staff.
• Are active listeners

Focus on people

People need to understand and know just how important they are:

• Listen to your staff.
• Solicit and value their feedback.
• Invest in programs that your people value. This could be as simple as a suggestion box for new ideas, to providing flexible work schedules and on-site day-care options.
• Be receptive of new ideas and creative solutions and provide incentives or rewards for ideas that do provide tangible benefits to the organization. Make staff feel that they are making a valued contribution.
• Take time to invest in developing your people – consider a mentorship program.
• Enable cross training and development –encourage people to share at “lunch and learns.”
• Find out what your staff like about the organization and why they stay. Often, why they joined your business is different from the reasons why they stay.
• Create an opportunity for your employees to re-engage or participate in change – a special project, a special role or responsibility can boost morale and interest.
• Team building – have some fun through activities that break the routine and change the scenery. It may be time for a field trip.

Provide options, build a community

Managers can consider any number of options to boost employee loyalty and ease the challenges of balancing work and family without putting undo stress on the organization:

• Offer flexible work hours – 7-3 or 8-4 or 9-5.
• Offer a compressed work week, such as working four 10-hour days and taking Monday or Friday off.
• Offer lieu time for vacation instead of paying overtime.
• Manage by Walking Around – make sure staff understand that you are there to help and WILL help if they need it.
• Have regular staff meetings; stay in touch with progress on projects and be able to pull resources to assist if required.
• Celebrate milestones, such as birthdays, anniversaries, end of projects – have a potluck every other Friday, or go as a team for breakfast once a week.
• Have less formal staff meetings – talk one-on-one with your staff.
• Deal with performance issues as they arise. Other employees will see you taking action and their morale will be stronger if they know you are on top of problems.
• Be time sensitive but not time oriented. An employee will notice if you watch the clock. Allow them some flexibility in terms of how they manage their time, but make sure they know deadlines. Clearly explain how big their “sandbox” is and what is expected of them, then give them the freedom they need to complete the task.

Remember, people need to feel that they are making a valued contribution to remain engaged and deliver their best effort. They want to be inspired by an individual who warrants their respect and conveys a vision and direction for the organization that builds morale and a positive team environment. On the other hand, they need the flexibility to balance the demands of work and family to remain fresh and focused. Take the time to know your staff and understand what motivates each individual to stay and you will find yourself spending fewer weekends reviewing resumes.

Changing the terms of employment and constructive dismissal

If the employer has sufficient authority, for example under the employment contract or letter of offer, the employer may be permitted to change some of the terms of employment unilaterally. Depending on the nature of the change, however, this type of action may give rise to a claim of constructive dismissal by the employee and result in damages equal to reasonable notice payable by the employer.    
 
A constructive dismissal claim may arise where the employer makes a unilateral, fundamental change to an essential term of the employment contract, such that the original employment contract is terminated. Significant changes to the following terms may constitute constructive dismissal:

• hours of work
• compensation and/or bonuses
• benefits and disability plans
• duties and responsibilities
• location of work

An employer may avoid constructive dismissal claims by providing the employee notice of the change equal to the amount of notice that the employee would be entitled to in the event of a termination. The employer must clearly state that the employment will be terminated if the change is not accepted. The employer therefore terminates the current employment with notice, and offers new employment under the changed terms.  

Work-share programs

As an alternative to downsizing, organizations may consider the Work-Share adjustment program administered by Service Canada. This program helps organizations avoid temporary layoffs when there is a prolonged reduction in the level of business activity. Subject to the eligibility criteria, an employer and employee may agree to enter a Work-Share Agreement. The employee’s work week is reduced by one to three days and the employer pays reduced wages accordingly. Service Canada arranges for Employment Insurance benefits to compensate the employee for the reduction in wages. Find out more about Service Canada’s Work-Share Program.

Temporary lay-offs

The Ontario Employment Standards Act 2000 (“ESA”) permits an employer to lay-off employees for 13 out of 20 weeks without triggering termination. Where certain conditions are met, such as where the employee continues to receive benefits, the employer may be permitted to lay off employees for 35 out of 52 weeks. Organizations should be aware that unless they have an express or implied right to lay-off, or unless lay-offs are common practice in their particular industry, temporary lay-offs may give rise to a claim of constructive dismissal by the employee.

Termination

Employers that terminate employment must provide notice to the employee. The ESA provides the minimum entitlement of one week notice per year of service up to a maximum of eight weeks.  The employment contract may provide for a greater notice period than the ESA, and if so, the employer will be required to provide the contractual notice period. If the employment contract is silent in respect of the notice period, the employee is entitled to common law notice. Common law notice is usually substantially longer than the statutory minimum, and is determined by various factors including the character of employment, the length of service, the age of the employee, and the availability of similar employment. During economic downturns this last factor in particular may operate to increase notice periods, since in most cases it will take employees longer to find alternate similar employment.

In addition to the statutory notice periods, some Ontario employers may be required to provide severance pay upon an employee’s dismissal. Similar to the statutory notice periods, the amount of severance required under the ESA is based on the number of years of service. Ontario employers are required to provide severance pay if they have an annual payroll greater than $2.5 million, or if they are terminating more than 50 employees in a six-month period as a result of a “permanent discontinuance of all or part of the business.” In order for an employee to qualify for severance pay, the employee must have five years of service. The severance pay is equal to one week’s pay for each year of service up to a maximum of 26 weeks.

Mass terminations

The ESA also provides for notice requirements in the event of mass terminations. An employer must provide eight weeks of notice if it terminates 50 to 199 employees; 12 weeks of notice if it terminates 200 to 499 employees; and 16 weeks if it terminates more than 500 employees. In order to trigger these ESA requirements, the terminations must occur within a four-week period. As a result, where employers have advance knowledge of the mass termination, they may stagger the terminations over a period longer than four weeks in order to avoid the numerical and time thresholds that will trigger the ESA notice requirements.

In our view

Employees are also aware of the current economic climate and are often willing to work with employers to cut labour costs to avoid downsizing and restructuring. Chrysler’s recent agreement with its Canadian workforce, in which various benefits were reduced but hourly wages remained the same, is an example of this. Organizations may seek to reduce compensation or benefits, hours of work, or perks such as paid parking or company cars, by renegotiating the terms of employment with employees. Once again, however, the risk of constructive dismissal claims may arise. In order to mitigate this risk, employers must seek the agreement of the employees and should attempt to apply the changes uniformly across the workforce.