Downsizing Kinshuk

8/3/2019 Downsizing Kinshuk

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Contemporary Issues In

Human Resource Management


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DOWNSIZING

the planned elimination of positionsor jobs.

A downsizing strategy reduces the

scale (size)and/or scope of a business to

improve its financialperformance.

-(Robbins & Pearce, 1992).

A REDUCTION OF THE WORKFORCE ISONLY ONE OF THE SEVERAL POSSIBLEWAYS OF IMPROVING PROFITABILITY

OR REDUCING COSTS.


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Why do Firms Downsize?

Reduce costs.

Reduce layers of management to increase

decision making speed and get closer to the

customer.

Sharpen focus on core competencies of the firm,

and outsource peripheral activities.

Generate positive reactions from shareholders in

order to improve valuation of stock price. Increase productivity.


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DOWNSIZING: The Aftermaths

Mixed effects on firm performance:

some short- term costs savings, but

long-term profitability & valuation not

strongly affected.

Firms reputation as a good employer

suffers. Apple Computers reputationas good employer declined after

several layoffs in 1990s.

Downsizing forces re-thinking of

Employment Strategy.

Lifelong employment policies notcredible after a downsizing. Example:

IBM abandoned lifelong employment

policy after several layoffs in early

1990s.


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DOWNSIZING: The Aftermaths

cont.

Employee motivation disrupted: increase in political behaviours,

anger, fear - which is likely to negatively impact quality of customer

service.

Violation of psychological contract, leads to cynicism, lowered work

commitment, fewer random acts of good will

Survivors experience more stress due to longer work hours with

re-designed jobs, and increased uncertainty regarding futuredownsizings


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IN QOUTES

Education is a process not a

place. Security is still an

important concept for

employees. However, employee

security should be developed bymoving away from reward for

lifetime employmentand towards

concepts which invest in lifetime

employabilityof employees.

THE WORLD IS FLAT T. L.

FRIEDMAN


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HARDNUTS TO CRACK!!!

SENIORITY VS RECENT PERFORMANCES

PREPARING THE WORKFORCE TO ADAPT TOUNCERTAINTY.

ALTERNATIVES TO DOWNSIZING

Wage Reductions

Redeployment


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HARDNUTS TO CRACK!!!

.cont

Are downsized organizations

really lean and fit, or is

downsizing risking understaffing?

Does downsizing reallycontribute to competitive

advantage, or is it a trade-off?

Can downsizing snowball into an

avalanche, or is not predictable?

Is it downsizing, or desperate

dumb-sizing?


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ISSUES

Vulnerability of technology to attack or disaster.

Work intensification as employers try to increase

productivity with fewer employees.

Rise in number of individuals and families withouthealth insurance.

Increased demand for work/life balance.

Increased use of outsourcing (off-shoring) of jobs

to other countries.

Rising health care costs.


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ISSUES

Growth in number of employees who have both

eldercare and childcare responsibilities at the

same time (sandwich generation).

Privacy concerns of employeesGreater demand for flex time

A continued change in negotiating strategies,

tactics and processes used by labour and

management caused by business pressure to

remain competitive.

Outsourcing of HR functions.


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REFERENCES

RESEARCHES

Garfield, A. (1999) Barclay shares soar as city

welcomes job cuts. The Independent, 21 May

Greengard, S. and FilipowskI, D. (1993) Dont

rush downsizin: plan, plan, plan, Personnel

Journal, 72(11): 64-73

Dougherty D. and Bowman, E. (1995) The effectsof organizational downsizing on product

innovation, California Management Review, 37

(4): 28-44


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REFERENCES

BOOKS

Contemporary Human Resource

Management Text and Cases, by Tom

Redman and Adrian Wilkinson

The World Is Flat, by Thomas L. Friedman

Ethics and Human Resource Management,

by Amanda Rose

Downsizing Kinshuk

Documents

Transcript of Downsizing Kinshuk