BY: SR. PATRICIA A. TALONE, RSM, Ph.D.
Dr. Talone is senior director, ethics, Catholic Health Association, St.
Louis.
A recent article in The New York Times observed
that "Layoffs . . . are becoming part of the landscape in good
times and in bad, as companies strive to create what amounts
to a just-in-time work force."1 The author maintained
that "layoffs are being spread more even-handedly than in the
past, hitting women as often as men, top executives as well
as clerks and production workers, good performers as well as
bad." The current wave of layoffs affects health care as surely
as it does other sectors of the American workforce. "Downsized"
employees need to be flexible enough to realistically assess
their careers, examine their options, and move forward with
their lives. But a Catholic health care organization must be
directed by Christian values in dealing with the inevitable
need for change in its workforce.
Unity Health, a subsidiary of the Sisters of Mercy Health System (SMHS), St.
Louis, was a regional integrated delivery network comprising six hospitals;
six long-term care or skilled nursing facilities; a medical group; and a health
services corporation that operated home care, hospice, durable medical equipment,
and other specialized medical services. Unity was the third largest employer
in its metropolitan area. However, in June 2000, two member hospitals decided
to withdraw from the system, an action that eventually caused SMHS to dissolve
the system. The facility withdrawals required the system to reassign some Unity
employees to sister institutions and to lay others off. Unity's leaders promised
to orchestrate these changes in a manner consistent with the system's stated
values of dignity, justice, service, excellence, and stewardship.
Because workforce reductions are difficult for everyone involved,
administrators and managers have a tendency to "get it over
with"—an attitude akin to that of a patient visiting a dentist
for a necessary root canal. The problem with such an approach,
as ethicist Leonard Weber observes, is that "getting the downsizing
over quickly is not nearly as important as attending to all
aspects and ramifications well."2 Weber believes
that an administration concerned about its ethical integrity
must pay attention to four considerations:
- The decision to downsize
- The criteria according to which employees are selected for downsizing
- The process in which employees are "let go"
- The rebuilding of morale among remaining employees
SMHS and Unity leaders had no choice but to downsize, given their commitment
to the stewardship of resources. In a system cut by one third, job restructuring
and downsizing is inevitable. Unity's challenge lay in involving employees in
the establishment of selection criteria and in ensuring that the process was
just, equitable, and respectful of all involved. In even the best-planned, best-executed
downsizing, some people are hurt and others feel resentment, distrust, and anger.
At Unity, however, the fact that administrators and managers were careful in
the downsizing may have helped to mitigate the usual bad feeling.
Selection
Although acknowledging the absence of clear-cut criteria for
determining which employees to keep and which to let go, Weber
argues that a just organization must bear certain necessary
considerations in mind.3 Leaders of downsizing organizations
should:
- Identify the criteria for downsizing clearly and make them public throughout
the organization
- Refrain from making "across the board" job cuts
- Remember that downsizing is not the same as performance review
- Retain diversity goals
- Remember that seniority is relevant but not always decisive
Unity's human resources (HR) leadership team believed that employees selected
for downsizing should be allowed to apply for jobs at the two departing institutions,
if they wished to do so. In making their decisions, these employees considered
their previous work experience, the geographic location of the new job, the
time required to travel to and from it, and the work teams they would be assigned
to. They did not need to consider salary and benefits because those had been
negotiated as part of the dissolution agreement, thereby ensuring a smooth transition
for the employees involved.
Communication
A clear process of communication does not remove all the anxiety
associated with workforce restructuring, but it certainly can
make it more bearable for all involved. Because of Unity's stated
commitment to justice, its restructuring extended throughout
the organization and included employees at administrative and
management levels. SMHS and Unity leaders, conferring with their
HR specialists, decided that a gradual process would be debilitating
for all involved and might vitiate productivity. Therefore,
they set a date for the announcement and determined to follow
a careful step-by-step process of communication.
The actual process, which lasted from May 17 to June 30, 2000, began with
the issuance of a general communiqué by SMHS's CEO announcing that:
- The two hospitals were leaving the system
- Various SMHS institutions had positions open
- Some Unity employees might receive job offers from these facilities
- These positions would be posted (the communiqué also specified where the
positions would be posted and how long employees would have to consider offers
for them)
Unity's dissolution necessitated not only a shift of jobs to the other system
facilities but also some actual layoffs. Managers received information to guide
them, including a script to guide their conversation with affected employees.
Recognizing that downsized persons can take in only so much information after
receiving the bad news, the HR staff made sure that each affected employee received
a comprehensive severance packet. The packet contained:
- A letter from the CEO
- A letter from the HR department providing legal requirements about the
separation process and benefits
- Information regarding severance and/or salary continuation
- An employee data sheet reminding affected employees of their current salary
and benefit statuses
- Rehire rights data
- Job postings at sister institutions
- Job postings at the two separating facilities
- Transfer forms
The packet also contained information about an employee assistance hotline
and an abbreviated question-and-answer sheet concerning matters that commonly
affect people who have lost their jobs because of downsizing.
Process
Out of respect for their dignity and to maintain their trust in the organization,
Unity's CEO spoke directly to system employees on the day of the downsizing.
Employees gathered in meeting rooms at three facilities so that the CEO could
address them personally. His comments were brief, compassionate, and to the
point, and he answered questions candidly.
Managers then spoke to affected employees, giving them either the severance
packet or a job offer from the separating institutions and directing them to
a special Transition and Transfer Center, where they could confer with HR personnel.
Those employees who preferred to put some distance between themselves and the
downsizing were encouraged to go home and break the news to their families.
Then, after a few days, they could return to meet with HR staff, gather their
belongings, and say goodbye to coworkers.
In any large corporation—even those with clear, uniform guidelines—some managers
will be less skilled than others in handling layoffs with grace, manner, and
compassion. At Unity, however, clarity of process helped to allay managers'
fears and enabled them to respond to downsized employees with dignity and respect.
Transition and Transfer Center
Unity's leaders set up the Transition and Transfer Center at
the system office on the day of the downsizing. At the center—created
to provide downsized employees with compassionate and skilled
counseling during a 30-day transition period—HR staff considered
some downsized employees' transfers to other Unity entities,
encouraged others to transfer to one of the two seceding institutions,
and helped still others seek other jobs. In the week after the
downsizing, the center operated from 6 am to 6 pm Monday through
Saturday, offering employees as much flexibility as possible.
A telephone hotline was installed for those coworkers who preferred
to call.
The HR department provided downsized employees with employment
specialists to guide them through the transfer process, benefits
specialists to answer questions (including questions about the
severance packet), and employee assistance specialists to give
guidance and emotional assistance. A consulting firm offered
free career counseling, resume-preparation guidance, and seminars.
Personnel from Unity's Mission Services (MS) Department were involved in all
stages of the downsizing process, from establishing selection criteria to communicating
with downsized workers to following up with those workers who remained with
the system. MS personnel provided both spiritual and emotional support for those
being downsized and critical analysis for those conducting the process. MS leaders
joined HR staff in running the Transition and Transfer Center during the week
following the downsizing.
SMHS prizes hospitality. Mindful of that fact, the HR staff made sure that
the Transition and Transfer Center was equipped with comfortable chairs; telephones;
computers; pens and writing paper; lists of downsized employees, regularly updated
job opportunities, services, and contacts; and boxes of tissues, coffee, tea,
Danish pastry, and cookies. Those who staffed the center were encouraged to
make downsized workers as comfortable as possible during the process.
Leadership Presence
Once top leaders have agreed on a decision to downsize, criteria
for selection, and the steps involved in the process, they may
be tempted to let the managers (who, after all, are familiar
with the employees selected) handle the situation themselves.
Top leaders may want to retire to the administrative suite,
answering questions from the media, board members, and other
stakeholders. But such an approach would neither honor the dignity
of downsized employees nor assuage the anxiety and anger felt
by those remaining with the organization.
In the case of Unity, its top leaders committed themselves
to attending each of the three meetings at which the CEO announced
the downsizing. The fact that they were visibly present all
day—in the cafeteria, the hallways, and the Transition and Transfer
Center—helped to support managers, reassure remaining employees,
and recognize the loss of their departing colleagues.
Rebuilding Morale
Maintaining the respect of surviving employees is a hallmark
of downsizing done in the right way, Weber observes.4 Any
company that has downsized employees must rebuild trust before
it can move forward. And any Catholic health care organization—which,
as a caregiver, has committed itself to helping patients' families
work through their grieving process—must attend to the grief
felt by surviving employees when their companions are downsized.
Weber proposes three guidelines for the ethical treatment of
survivors. Downsizing organizations should:
- Communicate information about organizational issues honestly and frequently
- Avoid making promises that managers may not be able to keep
- Not expect remaining employees to take on significantly increased responsibilities
because of the reduced workforce
Unity's administrators and managers consciously worked to rebuild workforce
morale. On the day of the downsizing, one employee asked the CEO if other layoffs
were to follow. The CEO said the system had no plan for further downsizing.
However, the CEO also said, one cannot predict all the exigencies of the market
and the system must, therefore, remain vigilant and flexible in the months ahead.
In the month following the downsizing, Unity kept managers informed about
the various jobs posted and filled so that they could communicate to their staffs
the whereabouts of former colleagues. Meanwhile, although they had to restructure
the remaining positions, they made a concerted effort to ensure that this was
done in an equitable manner so that no one employee would be expected to do
the job of two persons.
Pastoral/Spiritual Reality
During the days and weeks following the downsizing, MS, HR, and employee-assistance
team members regularly walked Unity's halls and cafeteria, offering employees
encouragement, assistance, and (when needed) information. These informal counseling
and encouragement sessions provided tangible evidence that SMHS's and Unity's
administrations truly viewed coworkers as the system's greatest resource and
treasure.
The formal separation of the two hospitals occurred on June 30, 2001, the
end of the fiscal year. SMHS's mission leaders, knowing that it is never wise
to ignore the difficult and painful reality of an identity shift (including
the loss of daily contact with former colleagues) and intending to ritualize
this difficult passage, conducted a prayer service for all involved. In this
brief service, the system's remaining employees asked for God's blessings and
thanked God for the privilege of working with such wonderful and talented colleagues,
both those who had departed and those who remained. Each participant received
a card bearing a symbol of the Holy Spirit and inscribed with either a gift
or fruit of the Spirit. Employees were encouraged to pray for and exercise that
spiritual attribute in the coming weeks. The fact that many employees posted
these cards in their cubicles was evidence of their desire to make the service
a part of their daily lives.
Refusing to Deny Complexity
At the end of each day after the downsizing, MS, HR, and employee-assistance
staff met to review that day's events. Some participants shared statistical
information (Who had a job interview? Who had a job offer?). But others—and
this was perhaps more important—relayed personal stories they had heard.
For example, a nurse had said that, although she understood the need for the
layoff, her job at Unity had been the best and most fulfilling she had ever
had. An information systems employee had reported that his son had an appointment
that afternoon with an orthodontist; he wondered if he would be able to pay
for the boy's braces. A young Finance Department executive who had just completed
his first semester in pursuit of an MBA wondered whether he would be able to
complete his education. A clerical worker asked for assistance in finding a
new job because, she said, she was the primary caretaker for an elderly parent.
These stories served to underscore the fact that people's identities and sense
of contribution to family and society are directly connected to the work they
do. The stories also showed that workers view their jobs not merely as a weekly
salary but as an entire package of accomplishment, a source of benefits, and
an expression of self.
To do the difficult job of downsizing well, one must first
start with the fact that Catholic health care is a community
of people gathered to give a service to humankind.5
Keeping that in mind, leaders and managers cannot help but focus
on respect and justice as well as stewardship when they are
making and executing difficult decisions involving their workforce.
To do less would be to compromise their moral integrity. Weber,
writing in this journal in 1994, said, "How downsizing is handled
says a lot about the nature of an organization and its leadership.
Ethical downsizing is, first of all, a refusal to deny the complexity
of the issues and evidence of the organization's commitment
to justice and human dignity."6 The downsizing process
at Unity gave evidence, both to the public and to its employees,
of the organization's values and its commitment to its mission.
NOTES
- Louis Uchitelle, "Pink Slip? Now, It's All in a Day's Work," The New
York Times, August 5, 2001.
- Leonard Weber, "Ethics and Downsizing," Business Ethics in Healthcare:
Beyond Compliance, Indiana University Press, Bloomington, IN, 2001, pp.
82-90.
- Weber, pp. 84-85.
- Weber, p. 89.
- U.S. Conference of Catholic Bishops, Directive 1, Ethical and Religious
Directives for Catholic Health Care Services, Washington, DC, 2001, p.
9.
- Leonard Weber, "Ethical Downsizing," Health Progress, July-August
1994, pp. 24-26.
Copyright © 2002 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.