In the Lean movement, organizations are often wise to have some variation on a “no layoffs due to Lean” policy, as I’ve written about before. Many healthcare organizations, including ThedaCare, have made this commitment quite publicly. Since Lean is about engaging everybody in system redesign and process improvement, it’s understandable that people won’t participate if they fear for their jobs. But what about other possible changes to specific jobs and pay grades?
Here is a question from a blog reader, used with permission and without identifying information:
We had an interesting discussion today regarding making a commitment to employees about no layoffs related to lean.
We are making some changes to coding processes in a department and, once the improvement is in place, a portion of an employee’s work will be eliminated. This employee works two positions – one lower paid position and one with a higher pay. The higher pay is for the coding work, which will be eliminated. As we move forward, we recognize that we will need to deal with these types of situations.
In this case, we can find other work for the employee, but it may be at a lower paid job. I can foresee in the future improvements resulting in changes to work schedules, etc. as work is changed.
In our challenging economic environment, other forces might mandate a reduction in workforce at some point.
Any advice on how and when to define our philosophy in this area? In other organizations, does “no layoff” mean no change in schedule, salary, etc.?
How do other organizations using lean address the need for workforce changes that may not be a direct result of improvements?
We recognize the importance of not laying off staff as a result of improvement, but want to be cautious to not make commitments that we can keep.
Appreciate any suggestions for networking as we explore this challenge.
My initial thoughts (and I’d like to hear yours — so post a comment):
There’s more room for judgment calls than easy answers here. I appreciate it when people don’t want to make promises they can’t keep.
Beyond “no layoffs” comes the grey area. We have to do what’s right for the patients and the organization, but we also need to maintain morale. I’ve seen organizations make tough calls about schedule changes or even moving people to another department. People aren’t always going to be 100% happy.
I think a demotion or a pay cut is probably nearly as demotivating as layoffs. I’d be really careful with that. Easier said than done (especially easier said by me, since I’m on the outside).
A CEO at another healthcare organization said, in regards to their Lean approach and their “no layoffs philosophy” that the job of an individual may have to change, but the organization will protect that person’s career.
I’m just an outside observer and consultant. It’s easy for me to pontificate. What are your experiences with this, either in manufacturing or in healthcare?
About LeanBlog.org: Mark Graban is a consultant, author, and speaker in the “lean healthcare” methodology. Mark is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. Mark is also the VP of Customer Success for the technology company KaiNexus.