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Workforce reduction & HR competencies: an exploratory study.

Importance of Competency

Designed to help an organization meet its strategic objectives through building human resources capability, competency modeling has been in existence since the 1970's. An approach to competencies gained momentum by McClelland's (1973) research. There is a growing level of interest in managerial competencies and managerial performance with a wealth of literature (Boyatizs 1982, Spencer & Spencer 1993).

The dictionary (Oxford) meaning of "competence" is the ability or the state of being competent ("competent" meaning adequately qualified or capable). However, research literature in HR has brought out differences between the two terms "competence" and "competency". As per Rowe (1995), "competence" means a skill and the standard of performance while "competency" refers to behaviour by which it was achieved. Thus, competence describes what people do and competency describes how people do it.

Whiddett and Hollyforde (2004) viewed that all aspects of competency framework should be behaviour-based. According to Boyatzis (1982), "A job competency is an underlying characteristic of a person in that it may be a motive, a trait, a skill, an aspect of one's self-image or social role, or a body of knowledge which s/he uses". Referring to competency of a HR professional, Chanda and Kabra (2000) were of the view that 'the competency of a professional is determined through his/her level of knowledge, capacity to utilize skills and personal attitudes and values towards the HR function'. Spencer and Spencer (2008) defined competency as "an underlying characteristic of an individual that is causally related to criterion-referenced effective and/or superior performance in a job".

Workforce Reduction Scenario

During economic slowdowns, workforce reductions have become common, though it should be ideally seen as a last resort. The ultimate purpose of downsizing boils down to lowering the operating expenses by employee elimination to achieve greater profits for the company (Nair 2008). But the hidden costs are often ignored. It is not only the victims who are affected but the survivors are equally affected.

A downsizing exercise can be said to be successful only when it can be seen that the survivors are adapting to the situation comfortably. It has been suggested that layoff survivors experience stress that is as great, or even greater than, the stress felt by those who have been laid off (Kaufman 1982). Studies have shown that downsizing can have profound effects on survivors' behaviour including trust and morale (Fisher 1991), job involvement (Allen et al 2001), withdrawal (Brockner 1990), work effort, productivity (Brockner et al 1992), and organizational attachment (Spreitzer & Mishra 2002).

Research has suggested that that the role of HR, whilst crucial in sustaining a well motivated workforce has become very wide-ranging. If organizations are serious about achieving the envisaged benefits of downsizing, the implementation of effective people-management strategies is very important. The role calls for a range of skills (of HR professionals), competencies and knowledge and understanding of organizational development, employee development, new forms of employee relations, and enhanced methods of using competencies to include behaviours such as managing ambiguity, insecurity and uncertainty (Kochanski 1996). Since downsizing is going to continue due to global changes and no organisation can predict as to when it might have to go for the same, it is important to realise that the right way to handle survivors is a challenge for which organisations should be geared up. In this scenario it has increasingly been felt that along with the corporate changes, HR competencies should also take shape in order to be able to contribute as a value added function.

Rationale & Objective of the Study

In a workforce reduction scenario it becomes a bigger challenge for HR professionals as to how to smoothen the exit process of the victims and keep the survivors motivated. Since decades, competencies have been used in the context of selection, performance appraisal, training and development. The present authors have tried to look into competencies (of HR professionals) in a workforce reduction scenario. The research was conducted keeping in mind the suggestions given by senior managers from the industry during interactions for a larger study related to workforce reduction. Majority of the practitioners, especially non-HR, pointed out that HR needs to play a more active role in a workforce reduction scenario. Keeping this in mind it was felt that it would be crucial to explore the competencies expected of HR professionals in order to manage the situation effectively.

As pointed out by Spencer and Spencer (2008), "Competencies identified by the competency process are context sensitive". Similarly, the current competency study describes what successful managers in a scenario specific to workforce reduction should do to deal with the survivors. Will the characteristics that predict superior performance in 1990 still predict superior performance in 2001? Similarly, will the characteristics that predict superior performance for HR professionals in a normal situation be able to predict superior performance when changes are taking place in the organization along with the compulsion to operate with a lean strength? Are certain competencies especially important a workforce reduction scenario?

The Sample

This study had taken into account only the top management (comprising directors, general managers, vice presidents, department heads) from four organizations (in Delhi, NCR) from the manufacturing sector, where workforce reduction had taken place in the recent past. These top level managers were from both HR as well as non-HR backgrounds. They comprised 34 managers (14 managers belonging to the HR function and 20 managers belonging to non- HR functions. The sampling was purposive where the respondents volunteered for the study.

The Measure

Extensive meetings were held with 15 senior level managers randomly selected across organizations and across functions, who had experience in workforce reduction scenario. Each of the managers was asked to make a list of competencies that they would expect of HR professionals in a workforce reduction scenario. Their views contributed towards the emergence of a list of 76 competencies required in a workforce reduction scenario, in order to deal with the survivors effectively. Out of the 76 competencies listed, an attempt was made to consolidate these into a smaller number, e g. by clubbing similar or repetitive competencies, dropping infrequently mentioned competencies and those which were not context specific. In the process only ten competencies were retained for the purpose of the study. The competencies were written randomly along with their meanings in the current context. The respondents were requested to rank only 5 of the 10 competencies, in order of importance - assigning 5 to the most important and 1 to the least important. The demographic variables included age, marital status, qualification, department of these managers.

Results & Analysis

We consider here each of the competencies, based on the rankings given by managers, (Table 1).

* Business Acumen (# 1): Everyone seems to be talking of HR working as a business partner, in line with the expectation of the top management. If two HR Directors--Alex Wilson of BT and Tim Miller of Standard Chartered Bank (Pickard 2005)--have their way, the one thing HR professionals would not be is "business partner". Wilson says, "The term worries me to death. HR has to be an integral and fundamental part of developing strategy of the business. I don't even like the term "business partner", it implies we are working alongside without line management colleagues, but on a separate tract, rather than people management being an integral part of the business". It is important for HR professionals to understand the existing business situation as well as the future direction of the company. By doing so, HR will be in a position to deal with all the queries of the survivors as well as help them in understanding the entire scenario.

* Interpersonal Understanding (# 2): This competency is better understood in being empathetic and sensitive to employees' behaviour, being a good listener and communicator and displaying respect for employees. Besides, reaching out to the employees' families not only develops a strong emotional bonding but also instils a sense of belong-ingness among the employees. Saha (2008) is of the view that HR is the mouthpiece of any vibrant organization as well as the custodian of its conscience. Therefore, the challenges that this community faces, in tough times are to empathise with employee concerns and play the role of a humane employer, in such situations.

As explained by Spencer and Spencer (2008), in the context of generic competency model of managers, Interpersonal Understanding appears most often as:

* Understanding the attitudes, interests, needs and perspectives of others.

* Interpreting non-verbal behaviours, understanding the moods and feelings of others.

* Knowing what motivates others.

* Understanding both the strengths and limitations of others.

* Understanding the reasons for others' behaviour.

Thus, awareness of differences in interpersonal needs can help the HR managers to enhance their relationships.

* Credibiltiy (# 3) is important that HR professionals be perceived as fair in dealing with the situation and creating an impression of credibility. They have to ensure that every aspect is being handled honestly and fairly. Covey (1989) uses the metaphor of an "emotional bank account" to describe the amount of trust that has been built up in a relationship. As trust builds in our emotional bank account, it becomes the foundation of regenerative relationships with others. Then people learn to put all their cards on the table to deal with issues and solve problems without wasting energy focused on differences in personality or position.

* Communication Skills (# 4.5): More important than simply possessing good communication skills is how the same is being utilized for reducing the heartburn of the victims as well as the survivors. How well and how much in advance the victims were communicated has quite an impact on the psyche of the survivors. Following a downsizing exercise, employees' concerns about the organizations future and their own jobs get aggravated. Here it is important for the HR managers to talk to employees on an ongoing basis as well as create a culture in the organization where the senior management meets people, keeping at bay the fears of the employees. As observed by Bhattacharya (2009), communication is the key to tackle increasing stress levels and uncertainty at workplaces. When the downturn caught up with Maruti Suzuki India during the festive season of 2008, the company put its communication strategy into top gear, helping change the entire work environment for the better rather than yielding to it. The HR head sat with employees to explain the global crisis. Without this stress on clear communication, 7,000 people could have 7,000 different perceptions.

* Ability to Realign HR Practices and Policies (# 4.5): Sitting on the 'once framed' practices and policies will not work in a changing scenario. HR professionals should be able to realign HR practices and policies as the situation demands. Business is prone to cyclical fluctuations. In different stages of the cycle, organizations adopt different business strategies and accordingly HR has to realign practices and policies, e.g., HR strategy depends upon the business strategy and on the HR strategy, depends, the compensation strategy. HR managers need to understand and accordingly design appropriate motivational and other strategies.

* Personal Conviction & Courage (# 6): When an organization downsizes, HR professionals must possess adequate mental strength. As put by Reardon (2007), "those who act courageously in business settings have an instinct for opportunity. They read situations quickly, but they are never reckless. Choosing the right time is the most difficult part of the courage calculation; it takes a deep sensitivity to one's surroundings and a great deal of patience". In essence, the HR manager must be personally convinced about the transition, its necessity and the consequences following the change. HR professionals must have the grit and determination to help people see through the change.

* Counselling Skills (# 7): For victims is counselling any help when their bread and butter has been snatched? For survivors is counselling any good when insecurity and instability is looming large and the question 'maybe I will be the next one' is haunting their minds? Yes, even in such a scenario counselling helps prepare both the victims and survivors. HR has to take the lead to ensure that in this atmosphere of uncertainty all managers are ready to take the initiative for counselling the employees. This could reduce the bitter feeling among the victims as well as the survivors to a great extent. In Waraich and Bhardwaj's (2009) study, 93% of the non-HR professionals felt that counselling works only if done much before workforce reduction and not just prior to the time of workforce reduction. According to them, HR's role in counselling is very crucial which is quite often being overlooked.

* Proactive Orientation (# 8): Instead of fire-fighting measures, what is needed is, HR with vision during these tumultuous times to prepare the employees as well as apprise the top management about the same (Waraich and Bhardwaj 2007). HR professionals need special skills and experience to guide anxious employees, keep their motivation levels high, provide the right leadership and show the right roadmap, at the same time, tell people in advance about the possible pitfalls.

In the Lancaster Model of Managerial Competencies, developed by Burgyone and Stuart (1976), one of the 11 qualities is 'proactivity'. According to this, at times managers must respond to the needs of the instant situation, but whilst making such a response, the successful manager considers the longer-term goals and the impact of the immediate decision. This includes abilities such as dedication and commitment, having a sense of mission and taking responsibility.

* Emotional Self Control/Maturity (# 9): It is important for HR professionals to possess high levels of emotional maturity in order to handle the survivors who are confused. With reference to personal effectiveness competencies, Spencer and Spencer (2008) have defined self-control as, 'the ability to keep emotions under control and to restrain negative actions when tempted, when faced with opposition or hostility from others, or when working under conditions of stress.' By managing their emotions well they would be able to perform better because they are in a position to think clearly.

* Networking Skills (# 10): As defined by Spencer and Spencer (2008), relationship building, which has been also, differently called networking, is working to building or maintain friendly, warm relationships with people who are or might someday be useful in achieving work-related goals. This may be expressed either within one's own organization or with people from other organizations. While leaving the organization, HR managers through their network could help the victims explore different opportunities. But in the current context, this skill is not very important, hence the lowest ranking.

As seen in Table 2, business acumen is considered as a very important competency across all the age groups - topmost priority given by the youngest, the middle age groups and second most important for the elder groups. This could be attributed possibly to the fact that without business acumen it would be difficult for HR managers to plan and understand the situation better. Further, this will also help carry out the process more effectively i.e. having all the answers ready to the volley of questions posed by anxious survivors.

Interpersonal Understanding occupies the next most important position after business acumen across all the age groups--with the youngest and middle age group ranking it second and the eldest group ranking the most important. Interpersonal understanding is required to a great extent while bidding adieu to the victims as well as handling survivors especially during such times when the industry is plagued by unrest and uncertainty. The maturity and past experience of the eldest group of managers could have contributed in ranking IPU as the most important competency during such times.

Next, credibility, as a competency has been ranked as important across all the age groups--third and fifth by the youngest and middle age groups respectively. However, it has been ranked as important as business acumen by the eldest age group. Personal conviction and courage which has not been looked at by the two younger age groups has been given importance by the eldest age group managers. Though it is a characteristic/trait and not a skill or knowledge it becomes an important requirement during such turbulent times.

Emotional self control has got equal importance as personal conviction and courage in the eldest age group. Though, Spencer and Spencer (2008) have been of the view that emotional self- control at a senior level is not mentioned because it has been ingrained. But the eldest age group still feels that it is an important requisite for managers to possess in the post workforce reduction scenario. Communication has been ranked as the fourth important competency by the youngest age group whereas for the eldest age group communication does not feature among the top five competencies. Counseling skills have not been looked at among the top five competencies by the youngest age group whereas the same have been ranked fifth and fourth by the middle and the eldest age groups respectively. Probably the youngest age group felt that the uncertainty and insecurity factors are so high that survivors will not take the counseling seriously. Whereas, the other two age groups feel that it could be of great help in smoothening the transition.

Aligning HR practices and policies have been ranked as a fairly important competency by all the three age groups. The HR practices and policies which worked fine, prior to the workforce reduction need to be re-looked now.

As seen in Table 3, while the non-HR professionals gave priority to the humane angle the HR professionals felt that understanding the organizational direction, business challenges, culture etc. would be most important. Communication occupied third place for HR professionals, whereas for the non-HR professionals it is credibility. Communication, as a competency, would help the HR professionals in bringing a lot of clarity and transparency during the post workforce reduction scenario and thus lessening the anxiety of the survivors. At the same time, credibility of the HR professionals is more important. The 'communication' part would be more effective if the survivors look up to the HR professionals as credible - perceived as fair in their intentions, it helps them in becoming effective communicators.

Ability to realign HR practices and policies is considered an important competency for HR professionals--ranked fourth and fifth by HR professionals and non-HR professionals respectively. In order to be able to do this, HR professionals need to analyse the current situation as well as industry benchmarks and work on aligning the HR practices and policies here there would be no room for rigidity. Pro-activity has been ranked as the fifth competency by the HR professionals which would help prevent knee-jerk reactions, leaving an unpleasant taste in the mouths of the victims as well as the survivors. This would require a lot of planning, thinking and commitment, on the part of the HR professionals.

It is quite surprising to find that instead of the HR professionals, non-HR professionals have given importance to personal courage and conviction. As explained by Sanghi (2007), 'courage of convictions is a belief in one's own capability as expressed in increasingly challenging circumstances and confidence in one's decision or opinions, within the framework of public interest, ethics, values and organizational integrity. It may include providing leadership, direction and inspiration to others by making difficult decision and taking actions that may not be popular, but are in the best interest of the organization and its clients'. Without personal courage and conviction, it might become difficult leading to a rise in stress levels for the HR professionals, to operate during such turbulent times.


Among all the competencies explored in the study business acumen occupied the most important position for managers across different age groups and functions. By understanding the business scenario it will help the HR professionals plan out the entire exercise more rationally. HR will be in a better position to answer the queries of anxious survivors as well as remain answerable to the top bosses. HR professionals can use this acumen in order to bring about a shade of understanding about the problem. By doing this, the HR manager will not have to regret later for any wrong decisions taken.

Neck to neck, competing with business acumen, was interpersonal understanding. While the former was more to do with the knowledge aspect the latter involves/encourages interaction--be it with the survivors or the victims. More of interaction would lead to better understanding or relationship. As said by one of the respondents in the study, "HR managers should not become inaccessible to other employees especially during such crucial times". Even if the survivors are aware of the turbulent scenario good interpersonal understanding goes a long way in keeping their morale, motivation levels high.

Credibility and communication have been going hand-in-hand which could imply that survivors will receive information effectively or believe the HR managers only if they are looked up to as trustworthy. The people at the receiving end will naturally doubt the intentions of the communicator in such a scenario. But if the HR manager, who otherwise might be a great communicator, has a tarnished reputation--whatever s/ he communicates will not be taken in the right sense. Moreover, communication should mean conveying the accurate and relevant information instead of concealing or distorting truthful information. Substantial effort is required by HR managers to establish this trust.

Ability to realign HR policies and practices also emerged as an important competency for HR professionals. This would involve a great amount of flexibility--keeping in mind the basic constraints of the organization on the one hand and the need of the time and the survivors on the other. Especially, aspects like, the reward system, training and development, assigning of responsibilities and chalking out career paths of the survivors should be aligned keeping the situation and the industry standards in mind.

There were certain other competencies which did not come into the picture during the overall assessment of the competencies but were highlighted only by the eldest age group of respondents. These competencies were personal conviction and courage, emotional self-control and counselling skills. Of course, personal conviction and courage was also pointed out by the non-HR managers as one of the important competencies. It could be said that sensing the vulnerability of the situation this group must have felt that the situation demands emotional self-control combined with personal courage and conviction of the HR professionals. The eldest groups' maturity level has made them feel that some amount of counselling would help the survivors in alleviating the anxiety.

Implications of the Study

The current study has a lot to contribute to the world of work when it comes to a workforce reduction scenario. Isabella (1989) has noted that while organizations are usually prepared to meet the needs of those being laid off, they are often unprepared for the strong emotions, lengthy adjustment periods, diminished morale and lower productivity often experienced and expressed by survivors. Thus, it could be said that the above identified competencies would have greater implications for the HR fraternity, especially in a workforce reduction scenario for managing the survivors as well as handling the situation effectively.

Limitations and Suggestions for Future Research

* Managers who agreed to share their experiences were very few. A bigger sample from more organizations could be considered.

* The number of competencies explored in the current study were very limited which could be further increased.

* For this study only the manufacturing sector has been considered. But for future research organizations across sectors could be studied.

* The same competency enquiry list, if used again, it would be better to ask the respondents to rank all the competencies in order of priority, for better result interpretation.

* The competencies could be further broken down into 'clusters'.


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Sushmita Biswal Waraich (E-mail: Sushmita@ is a Doctoral Student in Delhi University. Gopa Bhardwaj is Professor, (Department of Psychology), Delhi University
Table 1: Mean of the Ranking Preferences of Competencies

Sl. Competencies Ranking Mean Rank
No. Total

1 Business Acumen (BAC) 91 2.68 1
2 Interpersonal Understanding (IPU) 85 2.50 2
3 Credibility (CRE) 58 1.71 3
4 Communication (COM) 56 1.65 4.5
5 Ability to Realign HR Policies 56 1.65 4.5
 and Practices (HRP)
6 Personal Conviction and Courage 45 1.32 6
7 Counseling Skills (CLS) 42 1.24 7
8 Proactive Orientation (PRO) 33 0.97 8
9 Emotional Self Control (ESC) 26 0.76 9
10 Networking Skills (NWS) 18 0.53 10

Table 2: Mean of the Ranking Preferences of Competencies of HR
Professionals in a Post Workforce Reduction Scenario across Respondents
belonging to Different Age Groups

Age N Competencies in order of Priority

33-40 yrs 14 BAC(2.7) IPU(2.4) CRE(1.9) COM(1.7) HRP(1.6)
41-48 yrs 12 BAC(3.1) IPU(2.2) HRP(2.1) COM(2.0) CRE(1.3)
49-56 yrs 8 IPU(3.1) BAC(2.0) PCC(1.5) CLS(1.3) HRP(1.1)
 CRE(2.0) ESC(1.5)

Note: The figures in parentheses indicate the mean of the rankings
given by the respondents

Table 3: Mean of the Ranking Preferences of Competencies of HR
Professionals in a Post Workforce Reduction Scenario among HR and Non-
HR Professionals

Deptt. N Competencies in order of Priority

HR 14 BAC(2.7) IPU(2.2) COM(1.9) HRP(1.7) PRO(1.6)
Non- HR 20 IPU(2.7) BAC(2.6) CRE(2.1) PCC(1.7) HRP(1.6)

Note: The figures in parentheses indicate the mean of the rankings
given by the respondents
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Author:Waraich, Sushmita Biswal; Bhardwaj, Gopa
Publication:Indian Journal of Industrial Relations
Geographic Code:9INDI
Date:Jul 1, 2010
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