Managing Emotions After Restructuring Processes

Managing emotions after restructuring processes

1. Introduction

Sometimes it is unavoidable for a company to make decisions that cause toxic emotions among the employees, for example job-cuttings during restructuring processes. Such decisions, despite of being necessary, can trigger fear and anger on employees’ side. Without handling such situations appropriately and recognizing the existence of toxic emotions, the organization is often not able to realize the planned gains and manage the implementation effectively. Organizations that understand this and care about its employees’ emotions will create less emotional pain and will be more successful in the end in implementing also painful decisions. (Hдrtel, Zerbe & Ashkanasy, 2005)

Doubtlessly there exist situations in which a corporate structure has become outdated or in which a company has to cut jobs in order to stay competitive. This paper therefore does not want to criticize these kind of management decisions in general but wants to contribute to a more successful implementation of restructuring by a better management of remaining employees’ emotions.

The paper first discusses which emotions can be involved in restructuring processes and how these emotions may affect a company’s performance and the whole success of the process. Thereby the paper focuses on the emotions of the people who implement the downsizing decision and who keep their jobs. The emotional consequences for the ones who lose their jobs are not part of this paper, although this is definitely a very important topic within this whole research area.

In the second part, it is shown how companies can prevent or at least reduce the negative emotions caused by restructuring processes on employees’ side. In other words: What can be done from the management side to reduce toxic emotions caused by the restructuring and to reduce the decrease in motivation among employees in the months after.

The paper therefore delivers a valuable, practical contribution to successful management of corporate restructurings by showing means to reduce the “often forgotten costs” of these processes. There has been written a lot in science about emotions in the context of organizational change but little about this special issue of restructuring changes. The topic is also from great practical relevance as emotions are of central importance to work performance (Flam, 1993, p. 68). So it is not only from an ethical perspective but also from a rational-strategic perspective, that a company and its management should care about the emotional side of the employees.

One reason for choosing the topic is a personal experience I had during an internship I did at Kraft Foods Germany. When I started working there in March 2006, the company had just undergone a restructuring time after a consultancy proposed to cut some jobs and to reorganize the European structure of the American based company because of profitability problems. Especially during my first weeks at work, I experienced the emotions that were caused by the restructuring among employees quite well. During the next pages, I will use my experiences at Kraft Foods to illustrate theoretical findings as far as possible.

2. Management of emotions after restructuring processes

2.1 Emotions: The forgotten costs in restructuring processes

In the past, organizational research and management studies based on the assumption, that organizations and their members are rational and that irrational elements like emotions disturb a productive work-life (Hдrtel, Zerbe & Ashkanasy, 2005). The organization was seen as a machine that works best in a rational, scientific way and without accepting the irrational side. With the beginning of the 90s of the last century, this view started to change when authors like Pekrun and Frese (1992) and Fineman (1993) triggered the discussion and the following paradigm shift. (Eide, 2005)

Today one would think that managers know and understand the influence emotions have on employees’ behaviour and on the success of the whole firm. But as it is difficult to demonstrate this influence with numbers and powerpoint slides, emotions are still often forgotten, for example when a cost-benefit analysis of a corporate restructuring project is done. This may explain why many restructurings do not bring the success and savings that were estimated by consultants and top management. Clark and Koonce (1995) quote a study that showed that very often, the intended gains from job-cutting are not realized due to decreased employee morale and a decline in productivity and that nearly 68% of these projects are not very successful