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1998 April Report of the Auditor General of Canada
Exhibit 2.1—Expenditure and Work Force Reduction Best Practices
Leadership
Expenditure and work force reductions require sustained, active and visible leadership. It is essential that managers and employees alike know the reasons for the reductions, the challenges facing the organization, and that the situation can and will be managed with a continuing sense of purpose and direction.
Strategic planning
If lasting expenditure reduction is to be achieved, attention needs to be paid to fundamentally rethinking the organization, its role, objectives, delivery mechanisms, structure, operational capabilities and processes.
Selecting the best approach to work force reduction
Once an organization decides to reduce its work force, a cost/benefit analysis of alternatives is needed to determine the degree to which employee departure incentives should be used. When incentives are used, consideration should be given to: targeting incentives to areas or jobs where cuts are needed most; identifying the extent to which individuals will be targeted or volunteers will be called for; and limiting the duration of the incentive offer.
Implementation
Most organizations create a special structure, team or committee, free from operational distraction, to focus reduction decisions and co-ordinate implementation activities. These structures are usually under the direction of a senior manager and composed of people with the line and staff knowledge and competencies to ensure progress over a short time frame.
Communications
Reduction initiatives require clear and effective lines of communication between management and staff as well as with other key stakeholders (the Minister, employee representatives, the media and external parties). Information provided and received should be clear, accurate, consistent, and timely.
Treating employees in a humane and sensitive manner
It is essential that management minimize the negative effects of work force reduction on both employees departing and those remaining. Employees departing should be informed as early as possible of their employment termination status, their options and their legal rights. In addition, they should receive necessary transition assistance such as career and financial counselling, training and other personnel services. Managers and employees remaining will need to understand the impact of reduction on their work and workload, and the adjustments planned to address these changes.
Monitoring and measuring progress
Monitoring and evaluation mechanisms are needed to ensure that reduction is progressing as planned; the desired results are achieved in a timely and cost-effective manner; and there is compliance with approved policies and guidelines.