If you and your company don't take the proper steps when laying off employees, it can have a lasting effect on the productivity and morale of your remaining workforce. In fact, mishandling layoffs can even lead to violence.

When a company decides layoffs are necessary to meet its changing business needs, the process of how management decides to navigate this change is critical to the company's future.

As management you must first understand and acknowledge the predictable and normal reactions that your employees will experience. Some common reactions include:

The severity of reactions will vary for each employee. Management should be aware that these reactions are normal and predictable and likewise should educate their employees.

There are three steps companies can take to minimize the negative effects of layoffs:

1. Communicate!

There are many forms of communication, and you can use whatever form that fits your corporate culture. It is extremely important to let your employees know what the company is doing, why the company is doing it and what the employees should expect. This holds true for the laid off employees as well as the survivors. Communicate to your remaining employees that the layoffs were necessary and why. Emphasize that laid off employees will be treated with respect and dignity. You don't need to give specifics about severance packages, but let them know if they will be compensated in some way. Part of the communication process should be debriefing sessions for your surviving employees. These debriefings should be conducted by an outside source so that the employees are willing to provide feedback.

During the debriefing sessions, groups of employees can express their concerns and provide valuable feedback to the company. which in turn can be given (without disclosing employee names) to the company.

Finally, debriefings can also be used as an important tool to identify employees that might be capable of violence.

It is also important to make debriefing sessions mandatory for the departments that will be directly impacted by the layoffs. Put yourself in your employees shoes--would you give up "productive" time if you thought your job was on the line?

2. Value your employees

Making your remaining employees feel that they have a stake in the company's future will help them regain a sense of control. For instance, provide opportunities for surviving employees to give input into new workflows and processes that will effect their jobs.

3. Rebuild loyalty

Even after the dust settles, continue to communicate with employees to rebuild their sense of security and trust. Management should not assume that remaining employees are merely grateful to still have jobs.

For more information and other related articles, visit our website at www.cmiatl.com.

CMI Receives 95 % Client Satisfaction Rating

During 2001, CMI's Quality Management program implemented several initiatives for the purpose of gathering data from clients. We would like to thank you for your participation in providing us with your feedback. It has enabled CMI to assess your perception of the quality of CMI services, and how well we met your expectations. It has also given us the opportunity to continuously improve CMI services to you.

Results gathered from our satisfaction surveys provided a good source of feedback from our clients in 2001. The "PRN" satisfaction survey is designed to capture immediate feedback following a crisis response intervention or threat-of-violence consultation. The survey captures information related to response time, reporting , quality of services and assigned CMI consultant. CMI is proud to announce an average rating of 95% for 2001 from this satisfaction survey.

We look forward to your participation with our quality initiatives. Our goal is to provide you with the highest quality of service at all times.

The Financial Impact of Catastrophe
by Grace Burley

A study was released by Oxford University and the Sedgwick Group that analyzed the impact of catastrophes on shareholder value. The study compared fifteen companies that experienced a serious man-made disaster.

Some of the companies in the study included Exxon after the Valdez oil spill, PanAm after the Lockerbie terrorist attack and Occidental after the Piper Alpha explosion. The study followed the stock value and trading volume with somewhat surprising results.

The study showed that after a sharp initial negative decline of almost 8% of shareholder value, there is a full recovery in an average of just over fifty trading days. The results of the study also indicated an initial spike of more than four times the normal trading volumes in the days immediately following the incident. However, trading volume returned to normal in an average of just twenty days.

Although shares initially recovered after only fifty days, the final outcome of the companies were not always as positive. A year after the event some stock prices had actually increased while other companies lost millions or went out of business entirely.

The study reports that there are two elements to the catastrophic impact, "The first is the immediate estimate of the associated economic loss. The second hinges on management's ability to deal with the aftermath."

Two distinct groups emerged in the study – the "recoverers" and the "non-recoverers". The essential factors that appeared to distinguish the two groups are not necessarily obvious. In most cases, the companies had insurance to cover the initial losses – as did most of the large corporations located in the World Trade Center. This did not seem to be the deciding factor.

The more important factors were the number of casualties, the initial negative response of over 10% of market capitalization and how the company's management reacted.

Crisis has a tendency to magnify your strengths and your weaknesses. A comprehensive crisis preparedness plan can help you and your company react to crisis effectively so that you do not end up as a negative example in a similar study someday.

For more information about the study, visit the Templeton College, Oxford University website at www.templeton.ox.ac.uk.

Blythe to Speak at the Disaster Recovery Journal Conference

Bruce Blythe, CEO of Crisis Management International, Inc. will be speaking at the Disaster Recovery Journal Conference in San Diego, California on March 10th, 2002.

His presentation will be on the Crisis Management Lessons Learned from the September 11th attacks.