Management Articles

How do you manage the layoff of your company during the economic recession as a CEO?

We have heard about massive layoff from many companies across various industries around the globe in facing or preparing the worst scenario of our global economic recession in particular since the later of this year.

Economic contraction could mean decreasing demand of the products or services from any company that the income received is not enough to support the salary and related expenses for all the staff concerned. Any reduction of the gross income with the tight financing facilities can easily turn the “red” bottom line of the company.

It is the same workforce who has helped the company to maintain and expand the income and growth of the company in the past. What have really changed? How can we adjust the change to ensure the survival of the business?

1) ANALYZE THE CONDITIONS: identify what the current conditions of the company and its business environment are, revise the strategies as needed but still be able to achieve the goals and purposes of the company unless there is a sharp change of the company’s goals and purposes for a entirely new set of strategies and actions. In other words, don’t loss the missions or dreams of the company.

2) KNOW YOUR STAFF: understand your staff very well including their production record, personality, motivation and knowledge. Our online tests can be useful not only for recruitment purpose but also internal staff evaluation to help any company really knowing their staff. Please This e-mail address is being protected from spambots. You need JavaScript enabled to view it us for our special Performia Direct Executive Evaluation Package; which will help you remove any subjective bias and unveil the social masks of your staff. It is highly recommended to keep a good record file like our online test results for each staff of your company at all times as only knowing your people can contribute the success of your company.

3) KNOW YOUR PRODUCTS: Any company can survive because they can produce and deliver the products or services with exchangeable values to the customers. Do your company and your staff know very well on the company’s valuable final products? Are the product or services still valuable and in demand in the current market conditions? Any of your staff that you would like to keep in the company should be well aware of what their individual products are and how they can contribute to the valuable final products or services that your company can exchange with your customers satisfactorily. So if any of your staff do not know their products and do not have proven production record even at the good economic times, they may not produce well at the tough time too.

4) DIFFERENTIATE YOUR STAFF: Don’t layoff the performers of your company as it is hard to get them back later on as this 20% of your staff could contribute 80% result of your company. If you let them go, your company can easily go bankruptcy as now you are going to depend on the rest of the staff for only 20% or less result. Please read this article for more information on this. You can easily differentiate your staff with certainty by employing our Performia evaluation testing tool.

5) INTERVIEW YOUR STAFF: For those with proven production record, you can conduct interviews to ask your performers and doers some of the below suggested questions:

a) Does he or she know the valuable final product of the company? If so, what is it?

b) How can your company modify the existing products or services (including sub-products)? How can your company add new products or services that are wanted by your customers even at the time of economic recession? How can the company expand the existing or new market? (Because people are still spending money during the economic recession though they would be more careful and selective)

c) How can they improve on their individual posts that can help to bring the valuable final products to the customers?

d) What kind of exchange can they bring to the customers and the company?

e)How can they utilize the existing resources of the company more effectively without waste to reduce the overhead?

For any company who takes advantage of our Performia Direct Executive Evaluation Package, we offer a free webcast online staff training : “How can you make sure yourself being paid abundantly? (Alternative approach to guarantee beyond “Minimum Wage”) that each staff can learn the concepts of “exchange” (there are four types of exchange) and do some exercises for application regardless how many staff of your company will do the course. Otherwise, it’s sold at a special rate of HK$69 per person.

6) NEW SALARY AND BONUS SCHEME: If necessary, your company may consider a better salary scheme based on production record by cutting the basic salary with bonus structure linked with the individual production statistics; which can help those with production record to feel secured. If any staff actually thinks his or her product from the company as a “big paycheck” only, they will object and complain about this new scheme and will not perform well when continuing to stay with the company. If your company rewards non-production, you will get non-production. At the same time, it does not mean that the company is trying to underpay their staff as only when the company is willing to put good exchange with their staff according to the production record, the company can do well. If your company rewards production, you will get production.

Any staff who can think with solutions, is able to put his or her ideas into valuable products with proven production record in the company; and is willing to stay through the conditions of the company can be recommended to stay if the company needs to make the choice for the survival of the business though the implementation and handling of such is not easy for all possible human misemotion involved.

If you really know how to identify the performers, doers, non-producing or destructive personnel of your company, your layoff policy and management can be more effective to improve the overall people management of your company; as “layoff” contains the same essence of knowing people correctly like your “hiring” decision.

The only asset to make or break your company is human capital.So it deserves the most attention of your company by using workable tools and solution to ensure getting the right people management decision and policies for your company at all times.

NOT KNOWING YOUR PEOPLE=FAILURE IN YOUR COMPANY

HOW MUCH DO YOU KNOW ABOUT YOUR EXECUTIVE TEAM TO GUARANTEE THE SURVIVAL OF YOUR BUSINESS OVER THE FINANCIAL TSUNAMI?

"Financial Tsunami" has finally exposed the weakness of our leadership and management in many sectors of the world. We have heard a lot of such shocking stories from many businesses with no exception in Hong Kong, like we hardly perceive how a few key executives from a public company: Citi Pacific Ltd can cause the company for the loss of over HK$150 billion (half of the total assets of the company) via some derivative tools without downside risk protection within a few months. And even worse, as of today, the Chairman of the company still could not identify the real source of the problems as a leader but superficially passed the responsibilities to his some management staff.

During this financial tsunami and its subsequent impact to the bankruptcy and layoff from many companies, you may wonder what had brought to this condition.

We may simply attribute this bad economic condition to the unpredictable nature of the market in stocks, commodities, currencies, etc as our economy works in a cycle that up and down is inevitable. Yet, such answer leads us no solution to the problem. The answer is always the question itself. So what are the questions that can open the door for solution?

The valid questions are "Who had brought us into this bad condition? Who have competence, leadership and insight that can protect us from such bad condition, lead us to play fair and safe game and the business can continue to survive even during economic downturn?"

If you really dig and look at the root of any bad condition that any company may have experienced, you will probably find some destructive executive personalities at work or some incompetent executives possibly also under the bad influence of destructive personalities to make wild and unbelievable mistakes. That's why the management of the business should be very careful whom they select to work with or promote to some key senior decision making executive positions.

Human capital can be the most important asset or the biggest liability to any company, depending on how the company hires, retains and develops its management and executive team so to achieve the goals and purposes of the business together.

In this troubled time, Performia Hong Kong would like to offer a very special Performia Direct Introductory Executive Evaluation Package(up to 10 candidate or staff) especially if your company is actively looking for good staff that you don’t want to commit any catastrophic hiring errors. You can rely on our online tests for your recruitment and internal staff evaluation that our consultant will provide you written report as well as recommendation and evaluation over the phone. If used in the internal staff evaluation, much more information and time are needed and therefore the service fee is higher.

We take the three major online tests (out of our eight tests) for this introductory package, that is: executive personality test, IQ test, and aptitude test. Unless in certain circumstance, we need to use more other tests for the person concerned, a special 50% discount is applied to other tests. Please call us at 21599191 to get more information of our introductory offer to minimize your risk of employing wrong staff.

Effective executive evaluation tools necessary for your "bottom line"

What is the most important factor to determine the “profit and loss” of any company?

If you review any profit and loss statement from any company, it apparently gives you the breakdown of income and expense.To make more profit of the company, it needs to know how to make more income with the least expense as much as possible.

We know that the right or wrong people we hire for the company should be related with the profit or loss of the company. However, one cannot track down precisely who contribute the income, expense and therefore profit or loss of the company; as the only item related with people directly is “salary expense”.“Human Resources Asset” is not even listed as the asset item of the company from the balance sheet statement. “Loss” due to hiring the wrong people cannot be tracked it down for the loss of income and the incurred expenses.Such type of “loss” cannot be simply written off or adjusted according to any accounting principle as we do not have the accurate tools in booking the right people in our statement in the first place. The estimate of loss is about 2 months pay for a entry level, a year's salary for a professional person and several years salary for senior executive position. The actual amount of loss varies with different type of company.

It may well say that the source of such loss is due to the fact that we have no exact technologies and methodologies to predict the performance of new recruits or unable to prevent destructive people from working in your company. Probably you may have experienced that kind of loss or have heard a lot of stories regarding this.

Is there anything missing when we select our people to work for our company in the first place that cannot insure us against any loss but stable profit? The apparent missing element is that we don’t really know the person sitting in traditional interviews but without enough data and information to make any evaluation and prediction.

If you do not have any proven means of recruitment selection and tools to protect the company from potential loss in hiring errors, it is time to review to make sure you have necessary and workable personnel assessment and evaluation tools to make your "bottom line" growing.