There are times when management has no other option but to proceed with downsizing their current number of staff members. There are several facts that force staff reductions. These include changes in funding, new laws or regulations that limit profits for the organization, as well as mergers and many other operational setbacks. Most often mergers bring along consolidation of positions and cutbacks in the workforce because the number of employees regarded as necessary to accomplish the position tasks has changed (Fallon & McConnell, 2007).The process is different in every organization; however, many share the same reasoning for laying off a portion of their staff.
Moreover, during a merger, managers are recurrently dismissed because the acquiring
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If we do not follow the process, correctly there will be a risk of lawsuits. First, we must start by freezing all hiring, releasing all temporary employees, and then employees who are considered part-time (twenty –hours or less). The part-time employees are excluded from The Federal Worker Adjustment and Retraining Notification Act, and this will simply the daunting process (Plant Closings & Layoffs, n.d.). Next, will begin looking at seniority this is one of the safest ways to proceed in the layoff process and reduce any discrimination accusations (Fallon & McConnell, 2007). While some new younger employees may have needed skills, we must stick to policy. However, we will also consider attendance, performance reviews, and behavior. Each department manager will complete a list of employee that have the least seniority or meet the guidelines set for layoffs. Once the lists are completed by each department manager, operation managers, and human resource managers will review the list and provide feedback. The administration will calculate the number of full-time employees that will be laid off after temporary and part-time employees has been subtracted from the fifteen percent.
Also, Human Resources will review the select employee files and give any and all necessary feedback to department
Today, many health care organizations have been forced to reduce their workforce due to the downturn of the economy. Marshall and Broas (2009) state that whenever health care organizations conduct a reduction in force (RIF); there is the potential for legal risk. However, with proper planning and implementing, employers can minimize the risk of litigation (Marshall & Broas, 2009; Segal, 2001). Hence, before carrying out a 10% reduction in workforce, there are a number of steps that need to be taken to ensure it is successful.
The Personnel staff of the human resource department must be able coordinate and oversee employment and selection processes, including the vacancy announcement program and the scheduling, conducting, and processing of entrance and in-service examinations.
The downsizing process can generally be broken down into three distinct stages. The first stage is called the diagnostic stage. In this stage, management staff pulls together and determines the amount of costs and expenses that need to be reduced, and how much can come out of layoffs (Moore 49). This stage usually takes about two to three months to complete. During this time, the upper management reviews all financial records in order to determine how much must be cut from salary expenditures (Moore 50). This stage is concluded when the senior management has a detailed plan on who will be let go, and who will remain with the company. During this stage, there is one common mistake many companies make: lack of communication. The middle management is usually left out of all downsizing plans. This is wrong and creates a big mistake. Middle management should be looked upon as a valuable tool for giving input where cuts should be made (Moore 51).
Companies who downsize through attrition and buyouts, those companies that work to help downsized employees find new jobs, and companies that are willing to provide outplacement services to those individuals often end up in positions that are much better than companies that simply fire workers due to downsizing (Brockner, Konovsky, Cooper-Schneider, Folger, Martin, & Bies, 1994). These companies who show that they care about the workers that they have to remove through downsizing have a much greater chance of retaining a lot of the loyalty originally given to them by the workers that survived the downsizing (Brockner, Konovsky, Cooper-Schneider, Folger, Martin, & Bies, 1994).
Length of service should play a role in making decisions for a reduction-in-force in a non-union organization but it should be taken into consideration along with skill level. An employee should not keep his or her job simply because they have been with the organization for several years. Each employee would need to be reviewed not only on how long they have been with the organization, but on his or her performance as well.
that personnel’s action concerning any employee or applicant for hiring will be taken on the
Corporate Downsizing Organizations in every segment of business, industry, government, and education are downsizing. Downsizing is and has been a controversial phenomenon in the last few years. The controversy that surrounds downsizing may be better described as a debate in organizational theory about whether change is adaptive or disruptive. The issues which establish the outcome of the controversy include why the downsizing is taking affect, how it is implemented, and what steps are taken to enhance its effects on organizational performance. The reasons for corporate downsizing are presented in many forms. Some companies downsize due to technological changes such as automation, which brings about the need for a reduction in the production workforce. Others may feel that competitiveness with other companies warrants the need for a reduction in the workforce. Financial setbacks due to customer demand, market shares, and loss of revenue could also initiate the need for downsizing. When will it end? Experts say it won't. For instance, the North American Free Trade Agreement (NAFTA) was established as a universal trade agreement between the US, Cannada, and Mexico to allow free imports and exports.
If asked to lay off 15% of my employee population, my first task would be selecting those that will be laid off. Determining who will stay and who will go would result in examination of criteria such as seniority, performance, job classification, and job knowledge and skills (Society for Human Resource Management, 2016). Using seniority alone is not a simple process. Sonority may be the totality of time an employee has worked for an organization, or could be the time spent in a specific department performing a specific job (Fallon & McClennon, 2006). Next, the employees selected for layoff must be reviewed to assure an adverse (disparate) impact does not exist for any protected class (Society for Human Resource Management, 2016).
The willingness of companies to swiftly lay off workers to cope with changing business environments.
Layoffs are one means by which an organization can reduce expenses with the intent of improving its bottom line. Despite being typically performed as a last resort, layoffs often have a negative impact on the remaining workforce. As a manager, there are numerous areas for concern in managing the workforce going forward. The human costs related to downsizing are “immense and far-reaching” with one of the most profound being survivor syndrome according to Hanson (2015, p. 187). Also known as survivor’s guilt, this condition relates to the emotions felt by those still employed and some of the effects include decreased motivation, moral, and job satisfaction, as well as an increased proclivity to search for other employment. This volunteer turnover being another grave concern for managers, and retention of the remaining workforce is usually dependent on their existing perception of the organization and its culture (Sitlington & Marshall, 2011). Also relayed by
Voluntary and involuntary turnover have an effect on organizations. Rapid changes in job descriptions, organizational structures, and inter-organizational competitiveness increase the importance of studying turnover and its relationship with organizational change. According to Leana and Van Buren (1999), "the loss of key network members can severely damage an organization 's social fabric and perhaps eradicate its social capital altogether." When businesses lose a high number of employees, problems can occur, costing the company time and money. Some of the costs incurred are associated with training, drug testing, physicals, and orientations to hire replacements that may take several months to learn the job and to achieve competency. There is a saying, “Good help is hard to find---and harder to keep”. This saying refers to good organizations trying to reduce turnover when the competition for retaining good employees is intense.
Downsizing; everyone has heard about it, talked about it, been a victim of it, or even had to implement it. Reports of downsizing occur frequently. I have repeatedly read the newspaper, watched the news on television, or listened to the radio and heard about mass lay-offs. There have been times that I have felt pity for the various people who lost their jobs, and there have been instances that I have not given it a moment’s consideration. I just thought, “I’m so glad it is not happening where I work!” Fate, it seems, is not without a sense of irony.
Strain, M. 2014. Examples of Downsizing in the Business World. [online] Available at: http://smallbusiness.chron.com/examples-downsizing-business-world-22506.html [Accessed: 25 March 2014].
...sector may cause them to lose these, and even worse, retrenchment is highly possible. As a profit-maximising enterprise, cutting costs will be its main concern. So, services of employees who are considered to be not performing are most likely to be discontinued.
Focus on the Remaining Employees: Managers must make sure the remaining employees are reassured that the situation is not negative. Prepare emails or memos for the remaining employees explaining the termination. Be honest and upfront about the reasons and consequences of terminations. If the termination is for absenteeism, then state that. If the company is experience financial problems, it is also a good idea to get that out in the open to avoid gossip and fear mongering. Implement a transition of responsibilities and assign duties to other associates.