Why Cutting Staff to Improve Finacial Results Usually makes the Problem Worse

Attempting to improve a company’s financial results by cutting staff usually makes the situation worse for a number of reasons. First of all, cutting staff does not get at the root cause as to why the company is experiencing poor financial results. This is what needs to be dealt with if a company expects to turn things around. Second, cutting staff deals a serious blow to company morale which causes huge reductions in productivity, innovation and customer service. This, in turn, results in lower sales which makes the financial problem even worse. A good example of this is the J. C. Penney situation that is going on right now: http://online.wsj.com/article/SB10001424127887324345804578423081955213990.html

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About Ross Reck

Who am I? I am the author of The Engagement Formula, Turning Your Customers into Your Sales Force, The X-Factor and my popular weekly newsletter: Ross Reck’s Weekly Reminder. I'm also the coauthor of Instant Turnaround!, REVVED! and the best selling The Win-Win Negotiator. I've also spoken at hundreds of meetings, conferences and conventions throughout the United States, Canada, Latin America, Europe and Asia. My consulting clients include Hewlett-Packard, John Deere, American Express, Janssen-Ortho, Inc., Shire Pharmaceuticals, Philip Morris International, the Chicago Cubs, Rolls-Royce and Xerox. I received my Ph.D. from Michigan State University in 1977. From 1975 to 1985 I served a Professor of Management at Arizona State University. During my career at ASU I was the only two-time recipient of the prestigious “Teaching Excellence in Continuing Education” award and was identified by the university as an “Outstanding Teacher.” In 1985 I left my position at ASU to search full-time for a new "Management Model" to replace the current model with it's emphasis on authority, control and formal communication channels. Last February, I found it (it's actually a leadership model) and it's featured in my new book, The Engagement Formula: Three Simple Steps that Guarantee Full Employee Engagement.

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