Takeaways From Laridae’s Seminar on “Change Management in the Non-Profit Sector”

By Alnis Dickson

Experts in the fields of law, human resources and organizational management came to Peterborough to deliver practical and engaging presentations on how organizations can best manage change in an the ever-shifting non-profit landscape.

The room was filled with non-profit directors, executives and managers who were able to ask questions and discuss their own challenges with their peers. Feedback from the event has been fantastic!

This post collects some of the key takeaways from each of the presentations:

• Presentation 1: “Employment Law Considerations in Times of Change“
• Presentation 2: “Change Management from an HR Perspective“
• Presentation 3: “Key Principles and Communications Strategies for Change Management“

I’ve also included some photos from the event at the bottom of this post.

Presentation 1: Employment Law Considerations in Times of Change

I should note that these reflections do not constitute legal advice. If you need legal help, please seek it from a good lawyer (like Kalen Ingram with Cunningham Swan Carty Little & Bonham LLP).

Kalen Ingram’s presentation focussed on some common considerations that employers may face during times of restructuring. Many of these considerations surround issues of employee termination or resignation.

What should employers look out for?

Termination Without Cause: Provide Reasonable Notice (or Pay In Lieu)

If you are terminating an employee’s contract without cause, you are legally obligated to provide a reasonable amount of notice to the employee or the equivalent amount of pay.

The question, then, is what is a “reasonable” amount of notice? The minimum notice is defined and guaranteed by the Employment Standards Act. Additional notice may also be required, depending on what is specified in the employment contract or what has been clarified via case law.

How to Recognize and Avoid Potential “Constructive Dismissal” Claims

The term “constructive dismissal” describes a situation where an employer unilaterally and substantially alters a fundamental term or condition of employment OR where the employer’s conduct demonstrates an intention to no longer be bound by the employment contract. In such situations, the employee may refuse to continue working and claim that they have been terminated and entitled to damages (i.e. pay in lieu of reasonable notice).

Common types of changes that can lead to constructive dismissal claims include

• Demotion
• Reduced compensation/hours
• Changes to schedule
• Changes to reporting relationship
• Poisoned workplace
• Change of work location
• Or more likely, a combination of the above

Examples of Successful Claims of Constructive Dismissal

In one example given by Kalen (Robinson v. H. J. Heinz Company (2018 – ONSC)), as a result of a corporate merger, the successful claimant lost her payroll functions, job title and position in the corporate hierarchy. The Court determined that she was constructively dismissed and entitled to 15 months’ pay in lieu of notice.

In another example (Hagholm v Coreico Inc. (2018 – ONCA)), the 59-year-old employee had worked from home for three days per week for the last twenty years. After a merger, the successor employer revoked the “working from home privilege,”. The Court determined this to be a constructive dismissal and awarded the claimant 20.5 months’ pay in lieu of notice.

Examples of Unsuccessful Claims of Constructive Dismissal

In Peternel v. Custom Granite (2018 – ONSC), on return from maternity leave, the employee requested a start time of 8:30 am, which the employee resisted due to child care needs. The Court determined this was not a constructive dismissal because it did not represent a substantial change to a fundamental term of employment.

Likewise, in Lancia v. Park Dentistry (2018 – ONSC), the employee agreed in writing to new terms and conditions of employment that altered, among other things, vacation pay entitlements. When the employee later claimed constructive dismissal, the Court ruled against her because the change was not unilateral.

Managing the Risk of Constructive Dismissal

Kalen concluded with three recommendations for avoiding constructive dismissal claims (or limiting the damages) when you are wanting to implement changes to the terms and conditions of employment for existing employees:

• Notice: If you provide adequate notice, you can terminate the existing terms and conditions of employment and rehire the employees under new terms and conditions.
• Consideration: In order to implement more immediate changes to fundamental terms and conditions of employment, you should offer your employees consideration (something of value) in exchange for agreeing to the new terms and conditions.
• Offer to re-employ: After a claim of constructive dismissal is made, you may consider re-offering employment to the disgruntled employee. This can potentially diminish the quantum of damages to which you would be liable.

Interested in Learning More?

As I said above, this post does not constitute legal advice. If you are facing restructuring, or are otherwise looking for legal assistance, we recommend you get in touch with Kalen and her firm, Cunningham Swan Carty Little & Bonham LLP.

Presentation 2: Change Management from an HR Perspective

Next up, Matthew Savino tackled the topic of change management from a human resource perspective.

Avoid Overly-Detailed Job Classifications

Changes at an organizational level can result in changes to the roles and responsibilities of individual employees. The question for the employer is: “Have the terms or conditions of their employment substantially changed?” This could include changes to the required skills, responsibilities, effort, and working conditions.

If a reasonable person would judge that they have substantially changed, then the job classifications themselves may need to be renegotiated and updated (see, e.g. Kalen’s discussion of constructive dismissal above).

Matthew’s key tip here was to avoid overly-detailed job classifications in the first place.

Communicate Frequently

Matthew recommends using frequent communication, feedback and goal-setting to clarify and reinforce the new organizational structure and to recognize performance and achievement.

• Regularly communicating how organizational objectives are linked to employees’ day-to-day activities help to increase employees’ motivation, insofar as it helps employees better understand the importance and effects of their work
• Setting clear goals – and corresponding methods for measuring performance – help to develop employees’ potential, insofar as it clarifies a target for which the employees can aim

Separate “Performance Development” from “Performance Corrections”

“Performance Development” and “Performance Correction” both lead to improvements in employee performance. The difference between them is one of scope and focus.

Communication about “Performance Corrections” should be done regularly and involve real-time constructive feedback about specific issues or gaps.

Communication about “Performance Development” are conducted less frequently and involve large-picture goal-setting (see below) within the context of the growth of the employee and the organization.

Matthew recommends that performance development discussions do not include performance corrections.

Stick to Objective Data when Reviewing Performance or Making Decisions

Subjective perspectives can often stay at the forefront of our minds. However, they can often lead us astray or cause frustration in the employees, who feel they are being treated unfairly.

Some examples of common subjective fallacies include:

• Personal bias for or against an employee
• The “Halo” Effect, where an employee’s exceptional performance in one area leads you to disregard poor performance in other areas
• Lack of differentiation, where managers are inclined to consider all employees equally good
• The recency effect, where more recent incidents can be given more weight

How To Set Good Goals

As mentioned above, effective goal-setting is a key component of performance development as it helps to focus and motivate an employee’s performance.

A good goal will:

• Be agreed to by the employee
• Not be a simple description of regular tasks
• Stretch employee performance while still being reasonably attainable
• Be measurable, with a clear deadline and outcome

Furthermore, a smaller set of two or three goals per year is preferable, as five or more goals can be difficult to focus on.

“Constructive” Feedback

Constructive feedback has gotten a bit of a bad reputation, but Matthew emphasized that it could be very effective if conducted properly. Perhaps the first step might be to use different words, e.g. “Helpful feedback.”

In any case, the key components of constructive feedback include:

• Provide the feedback immediately
• Focus on the conduct or issue, not the person
• Be specific and objective about what you’ve observed
• Make sure that you have a constructive purpose
• Start by asking the employee for suggestions for improvement, rather than beginning you’re your own suggestions

Interested in Learning More?

If you would like to learn more, we recommend Matthew Savino’s book “Creating The Ultimate Workplace Performance Management System: Why Traditional Performance Appraisals Don’t Work”. You can also learn more about how his company may be able to help you on the SHRP Website.

Presentation 3: Key Principles and Communications Strategies for Change Management

Laridae’s Matthew Ditchfield concluded the day by looking at change management from an organizational perspective, answering the question “How can you create a climate for improvement through change?”

Step 1: Make Decisions Based on Evidence

Avoid relying solely on your gut, doing what you feel might be right or depending on emotionally persuasive speeches.

Instead, make sure that the change is based on objective evidence that the change will improve outcomes.

Step 2: Identify the “Alpha” Change(s) That Will Make the Greatest Difference

Don’t get distracted by a long laundry list of small changes that you may hear from disgruntled employees. Continue to drill down – asking “Why?” – to identify a short list of core issues.

If you can identify and fix these core issues, it will have a positive “ripple effect” across the organization, which can be orders of magnitude larger than the small things and free up resources throughout the system. This is the “Alpha Project”.

Step 3: Calculate the Cost of Getting it Wrong

The cost of poor quality (COPQ) is “the lifetime cost avoided in the system if the avoidable deficiency is removed.”

Matthew pointed out that the COPQ is:

• Rarely calculated
• Often grossly underestimated

In fact, defects that arise early in a process tend to have a very high COPQ. Why focus on identifying and fixing these defects as soon as possible?

• Fixing early defects at a later date is both expensive and disappointing
• The return on investment of defect reduction is frequently of the order of x100

Step 4: Apply a benchmark – What does good look like?

Vague personal convictions have at best a 20% success rate. Rather than relying on simply “doing better”, instead:

• Determine an evidence-based benchmark
• Return to this goal regularly, in order to adapt as things change and reapply your analysis to new contexts.

Interestingly, this echoes the  emphasis on clear goal setting, a point made earlier by Matthew Savino.

Step 5: Getting People on Board – Start with the Innovators

It can be very challenging to get buy-in during the change process:

• We are inclined toward an unconscious rejection of external evidence
• The bigger the claimed improvement, the less likely we are to believe it
• 80% of people — a conservative estimate — on hearing about new method, will instinctively respond by being strongly convinced that it is either a) not true or b) not applicable to them

On the other hand, approximately 10% of people are “innovators” who are hungry for new ideas and willing to take risks and try them out (“nature’s expendables”). If you can identify innovators within your organization, you can work with them to more easily pilot new changes.

During the piloting period, enable closely-linked detractors to observe the pilot and ensure exposure of observers to the whole process. You can also create opportunities for the presentation of case studies by the individuals involved.

Those who were not originally convinced of the value of the change – and who are observing the pilot with the goal of validating their belief that it won’t work – may not ever be 100% convinced. However, their exposure to the experiment will help them be more open to some or all of the changes. They may even become empowered to try to do things even better!

Step 6: Keep up the Momentum

Without continued effort, the law of entropy tells us that order will decline and chaos will grow. Things are no different with change management.

Once the change has been implemented, and success has begun to be achieved, it is critical to continue to monitor and adjust in order to avoid a drift back to the previous status quo (or worse).

Step 7: Implement systems to keep the focus on improvement and change

Further to step 6, it is important to implement structural adjustments that will support change and improvement.

The agenda overrules everything else, and there is an ever-present danger that the agenda will be driven by short-term priorities. Remember to incorporate change and improvement into your day-to-day operations.

Bonus Tip #1: You Can’t Skip the Dip!

You may be encouraged at first by the success and buy-in from your team, however almost all organizations experience a “dip” during the process. If you are experiencing difficulties several weeks after starting, do not be discouraged.

Bonus Tip #2: Think Critically About Where to Locate the Solution

It is often the case that the solution in a different quadrant than where the problem was originally found. What may appear to be an HR issues, for example, may actually be the result of poor or inaccurate communications.

Interested in Learning More?

If you are facing issues surrounding the implantation of change at your organization — or you are interested in identifying and prioritizing changes that will cause the most benefit (the “alpha changes”) – we are here to help. You can learn more in the “Services” section of our website and feel free to get in touch via our contact page or contact Matthew Ditchield directly.

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