The document discusses strategies for managing talent during an economic downturn. It presents a "4-buckets" exercise for sorting employees based on their performance and fit with the company culture. Employees are placed into categories of Stay/Protect, Mentor/Coach, Transition/Teach, and Exit/Outplacement/Lay-off depending on the assessment. It recommends protecting top performers, mentoring underperformers, transitioning others to new roles, and laying off those in the last category. The document also discusses alternatives to layoffs like voluntary phased reductions or pay cuts to keep the workforce intact during difficult times.

1. Presented June 4, 2009 Strategies for Talent Management in a Downturn EA 34

2. State of the Art in your companies… Best of the Worst Preserving your culture in a downturn Why lay-offs are the first thing you do, and the last thing to do 4-Buckets exercise for talent sorting The message: People treated differently, tend to act differently www.pappasdelaney.com

3. What has your company done in a downturn? What is the overall strategy Who is responsible for “carrying it out” Scale of 1 to 10-high rate the effectiveness compared to the overall strategy How would you like to be treated? www.pappasdelaney.com

4. Major Milwaukee company: 5 th round of layoffs in 2009 (Cutting the dog’s tail off an inch at a time) The “waiting room” and paging system Let’s not let them get out of their cars Escort 18 of our 30 year+ veterans out the door—a Christian based organization Major bank fires a 51-person department, pays 52 weeks of severance, hires 36 back in the next 60 days (still paying the severance) Fortune 100 CEO says “no more layoffs” 30 days later cuts 2,500 www.pappasdelaney.com

5. Productivity declines rapidly in layoff culture Studies (Dr. J. Harvey, 2001-2002) suggests productivity takes years to rebound to pre-layoff levels Ripple “effect”--layoffs=good staff leave (5% to 8% more) talented staff more interested in recruiter calls Layoffs tear at the teamwork fabric (everyone for themselves) www.pappasdelaney.com

6. When the CEO wants a 10% reduction in staff, it really means the “value of a 10% reduction in staff—lesson is to question the method Calculate the break even cost of an executive before letting someone go that you’d rather not www.pappasdelaney.com

7. The cost of letting go the executive; severance+outplacement+benefits+legal fees+time+turnover plus the costs of acquiring the talent when the economy rebounds + 20% of the base pay Most calculations indicate that layoffs are not worth it if the economy rebounds in the next 12 to 15 months. www.pappasdelaney.com

8. Purpose : Provide you with a confidential quick assessment of your Executive Leadership Team Please review your Executive Leadership Team and based on the criteria assign each member to one of the “buckets” on the following two pages You may find that your Executive Leadership Team is as near to perfect as you could hope for or you may determine one or more members may become more valuable to the company with some Mentoring or Coaching You may determine that the company and the individual may benefit by ending the employment relationship Being candid and honest with your assessment is best for you, your Executive Leaders, and your company www.pappasdelaney.com

9. www.pappasdelaney.com Stay/Protect (Opportunities) Employee is performing at or above expectations and fits the culture and is respected by other staff I would hire this employee in their current role from the outside—upgrading would be difficult This employee has potential beyond current position and understands the goals of the business This employee is at the core of our competencies and needs to be retained to the extent possible This employee is adaptable and willingly to take on new challenges Names of Staff in this bucket _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ My Action Plan _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ Mentor/Coach (Retain to tackle problems) Fits the culture in general and is respected/trusted in the organization but potential may be yet unproven When in over head he/she knows it and is likely to ask for help Manager can reassign to another problem/opportunity These employees have a self deprecating personality (not overly egotistical) and are generally well liked Manager /Employee will frame and speak positively about fulfilling a new and/or different role in the company We have little or no documentation of inadequate performance Names of Staff in this bucket _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ My Action Plan _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________

10. www.pappasdelaney.com Exit/Outplacement/Lay-off (Leave NOW) We have strong documentation /cause to support an exit This employee is causing other good employees to leave or they are hurting morale This employee cannot be closely monitored or is not generally trusted The relationship between the employee and Manager/Staff is damaged or lacking trust This employee can negatively influence current employees and customers This employee may be motivated to do harm to others or the company Names of Staff in this bucket _____________________________________________ _____________________________________________ _____________________________________________ My Action Plan _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ Transition/Teach (Move out when upgrade is possible) Does not fit the culture but is reasonably liked in the organization or has significant technical expertise Is in over his/her head—but does not know it or ask for help Manager cannot easily reassign to another problem/ opportunity, but others may learn from him/her Employee is trustworthy or can be closely monitored Manager can frame and speak about the person to others outside the company positively & enthusiastically This employee has skills/abilities/knowledge not easily found or duplicated We have a range of documentation for exit from very little to ample Names of Staff in this bucket _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ My Action Plan _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________

11. Layoff ALL in the 4 th Bucket at the first sign of a downturn. State: No more layoffs under this financial criteria (sales, profit, EBIT) Search for Upgrades for Bucket 3/Use transitions instead of firing Protect Buckets 1 & 2-they are core to financial performance www.pappasdelaney.com

12. Transition while still employed in bucket #3 Use a coach to keep them moving along the plan to exit (Paraclete) in a time line Positions where the person can be trusted or monitored No SEVERANCE or OUTPLACEMENT ! (It is actually counterproductive) If you treat people differently, even in a tough time, they tend to act differently www.pappasdelaney.com

13. Voluntary Phased Layoffs/Early Retirements Subscribe them (we need 17 people, i.e.) Timed to meet the needs of the organization Use the phased layoffs/retirements to train Not allowed for certain core employees (sales, i.e.) Cut salaries (3 rd bucket first), but always cut hours Rotating hourly cuts, unpaid vacation, shutdowns for non-core positions Cuts of up to 40% (short term)in a scary economy can be maintained if coupled with the right message. 20% cuts for up to a year if perceived as fair Message: “Keep the Team Together” www.pappasdelaney.com

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