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It is perplexing to see that some organizations treat people as disposable assets. We may have seen only the tip of the iceberg in this challenging environment; layoffs might continue and worsen. Research says that once companies start using this as a strategy, it continues in waves.

Wayne Cascio, author of “Responsible Restructuring,” investigated the methods used by various companies – large and small, public and private – to restructure. He found that they separated themselves into two distinct groups.

One group of firms, by far the larger of the two, perceived employees as costs to be cut. (What is the minimum number of employees needed to implement our strategies?) The other viewed employees as assets to be developed. (How can we change the way we do business so that we can utilize people more effectively?)

There are times when downsizing makes sense. According to Cascio, when companies have nonperforming assets or unprofitable subsidiaries, they should consider selling them to buyers who can make better use of those resources. Employees associated with those assets or subsidiaries often go with them to new buyers.

“Where a layoff doesn’t make good sense is when companies do it only because their competitors are doing it or they’re trying to reassure investors that they’re taking some tangible action,” Cascio wrote. “Unfortunately, it happens a lot.”

The paradox is that the employees who “survive” become more risk-averse. Based on his research, Cascio said the first casualty in downsizing is employee morale; lower morale directly causes lower productivity.

Speaking at a national higher education conference, a college president once said that one of her most difficult challenges was cutting the budget by millions of dollars; she admitted she did not know how to do that. So she involved her employees and the larger community in making the decisions. People from various disciplines used their expertise to come up with cost-saving measures:

The engineers recommended turning down the temperature of the school’s hot water system.

The custodians suggested using cloth towels instead of disposable in all bathrooms on campus.

The botanists discovered they could obtain unhealthy plants from nurseries for free, revive them, and then plant them on campus.

Relatively small ideas resulted in saving millions of dollars when implemented on a large scale. Because of these innovative decisions, she did not have to lay off people.

All industries seem to be facing major problems, and the solutions most likely will require innovation and creativity. People can’t be creative if they are wondering if they will be the next ones to be cut.

Jann Freed holds the Mark and Kay De Cook Endowed Chair in Leadership and Character Development at Central College in Pella.