“Less Is Not Always More” 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. When it was announced that Nevamar Distributors, a division of International Paper located in Cerritos, California, was in trouble, no one in the company could deny it. Everyone that worked in the building, from office personnel to warehouse personnel, knew that the business was changing: incoming and outgoing order volumes were slowly decreasing; sales were at an all-time low; and the profit margins for our division of the company were plummeting. When the facility manager had announced in a company meeting that downsizing was inevitable, or we may have to close our branch, a deafening silence immediately filled the room. Even though several of the employees knew that it might happen, it was still a big pill to swallow. Gary Dessler, author of Management: Leading People and Organizations in the 21st Century, defines downsizing as “Dramatically reducing the size of a company’s workforce.” (Dessler, 2001). All of the supervisors and managers held a separate meeting on the downsizing concern, and included me in the meeting since I was a candidate for the open supervisor position. They assured me that my job was not in jeopardy, but also took the time to explain why they could not promote me due to the downsizing efforts that were going to be implemented. Although I still had numerous concerns in regards to what the cutbacks would involve and whom it would affect, I have to honestly admit that I felt more relaxed. I was not going to be one of the people that lost their job in this downsizing attempt. I now realize how blinded I was by my moment of selfishness. Our division consisted of 59 employees before downsizing began. The cutbacks began in May of this year, and were completed by the end of September. We are now a crew of 22 employees, almost one-third of our original figure. One of ... ... middle of paper ... ...sp; Two heads are always better than one. · Group decisions fosters acceptance. · A group may work harder to implement decisions if they are part of making them. · There is pressure for consensus. · Group decisions are more time-consuming to make. · Only one person is ultimately responsible. · Harmony will not be achieved with one individual making a decision. · A group may have to revise an original decision made by an individual. I have come to understand over the last few months that downsizing is sometimes unavoidable in the working world. Any small company or large corporation may utilize this option for various reasons – some only for financial gain, and some for continued existence. What the decision makers need to realize is that how the action is carried out is as important as the action itself. Reference Dessler. G. (2001). Management – Leading People and Organizations in the 21st Century. (2nd Edition). New Jersey: Prentice Hall, Inc.
Layoffs and early retirement is a normal occurrence in the corporate world. However, there is a problem when there is no plan for the layoffs. This was the situation with Westwood Publishing as discussed in Argenti (2013) (p. 192-194). The company was lacking in many ways prior to the layoffs with the CEO not actively involved with the employees, an outside person brought in whom took over Communications within the company, as well as no communication between the leadership and the employees. With such little communication the plan to lay off employees was to be established and completed by one person. There is little evidence that layoffs will increase a company’s worth or even help to increase profits. The employees laid off
Tsai, C. & Yen, Y. (2008). A model to explore the mystery between organizations' downsizing strategies and firm performance: Integrating the perspectives of organizational change, strategy and strategic human resource management. Journal of Organizational Change Management, 21(3), 367-384. from ABI/INFORM Global.
One of the biggest reasons to downsize is a change in organizational structure or procedures. This can come internally from the company or it can come from mergers and buyouts. While many factors greatly influence downsizing at a gr...
In 2007, Circuit City, an electronics retailer who took pride in providing excellent customer service, fired 3,400 employees nationwide (Seitel, 2011, p.217). The company needed to reduce expenses and decided the termination of loyal employees was the only option. The workers were laid-off simply because they were “being 'overpaid”” (Seitel, 2011, p.217). However, according to Seitel (2011) they were paid the average hourly wage of a retail sales associate (p.217). Circuit City’s poor communication with employees proved detrimental and led to the company filing for bankruptcy protection the following year (Seitel, 2011, p.218).
Taking cue from Darwinian concept of “Survival of the fittest”, companies are downsizing their product portfolios.
Seniority is a common selection criterion used by many companies in determining which employees remain.”Of all the criteria, seniority is the most objective” (Segal, 2001, p.199). Under seniority-based layoffs, the most recently hired employees are the first to be laid off. Both Fallon and McConnell (2007) and Personnel Policy Service Inc (n.d) state that using seniority is advantageous because it is a fair and safe means of determining who to layoff. Personnel Policy Service Inc (n.d) argues that it is also very easy to implement seniority as a selection criterion. However, using seniority as the sole selection criterion has it disadvantages. Companies that use seniority as their sole selection criterion run the risk of losing employees that have expertise, initiative, and leader...
Decisions made by managers can also have the effect of paradoxically moving an organization backwards. Downsizing can lead to increased competitiveness, which is a hindrance to productivity. Competitiveness can also undermine collaborative efforts and thereby affect a company’s economic prosperity.
Seniority is a common selection criteria used by many companies in determining which employees leave and who remain. Under seniority-based layoffs, the most recently hired employees are the first to be laid off. Both Fallon and McConnell (2007) and Personnel policy service inc (n.d) state that the advantage of using seniority is that it is a fair and the safest means of determining who employees to layoff. Personnel policy service inc (n.d) argues that it is also very easy to implement seniority as the selection criteria. However, using seniority as the sole selection criteria has it disadvantages. According to Personnel policy service inc (n.d),companies that use seniority as their sole selection cri...
Robbins, Stephen P., David A. DeCenzo, and Mary K. Coulter. Fundamentals of Management: Essential Concepts and Applications. 7th ed. Upper Saddle River, NJ:
Lewis, J. 2014. Causes of Employee Downsizing. [online] Available at: http://smallbusiness.chron.com/causes-employee-downsizing-38647.html [Accessed: 25 March 2014].
Over the past hundred years management has continuously been evolving. There have been a wide range of approaches in how to deal with management or better yet how to improve management functions in our ever changing environment. From as early as 1100 B.C managers have been struggling with the same issues and problems that manager’s face today. Modern managers use many of the practices, principles, and techniques developed from earlier concepts and experiences.
Robbins, S.P., & Coulter, M. (2009). Management (10th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
It cannot go back and undo the damage that was done to employee morale and loyalty during the downsizing phase. They can, however, learn from this mistake to establish positive programs that would strengthen employee-company relationships and commitment.
While cutbacks, downsizing and dismissals are the most used tools for “fixing the problem”, there is evidence to show that, rather than working out a solution, these methods only hide the core of the issue, which seems to be present in an even greater number of organizations.
keeping least amount of employees. Failing to streamline will come up with great losses and may