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BATAAN PENINSULA STATE UNIVERSITY

MAIN CAMPUS
Graduate School
bpsugraduateschool@gmail.com
City of Balanga, 2100 Bataan www.bpsu.edu.ph

IMPORTANCE OF RIGHT SIZING OF POSITIONS IN THE


GOVERNMENT AND HOW IT WILL CONTRIBUTE TO THE WORK
EFFICIENCY OF PERSONNEL

_____________________________

A Research Paper

_____________________________

In Partial Fulfillment

of the Requirements for the Subject

MPA 201

The Philippine Administrative System

_____________________________

Submitted By

Henry L. Habal

To

Prof. Raul V. De Guzman, MPA

September 2019
BATAAN PENINSULA STATE UNIVERSITY

MAIN CAMPUS
Graduate School
bpsugraduateschool@gmail.com
City of Balanga, 2100 Bataan www.bpsu.edu.ph

IMPORTANCE OF RIGHT SIZING OF POSITIONS IN THE


GOVERNMENT AND HOW IT WILL CONTRIBUTE TO THE WORK
EFFICIENCY OF PERSONNEL

I. Introduction and Content

The process for a Corporation reorganizing or restructuring their business by cost-


cutting, reduction of workforce or reorganizing upper level management. The goal is to mold
the company properly to achieve maximum profit. Rightsizing often leads to job insecurity
among existing employees, which causes high attrition. Managing rightsizing well is all the
more important as attrition in profit making areas can hit the top line directly.

Based on the Department of Budget and Management Staffing Summary, the number
of government personnel has grown from 1,108, 856 in 2005 to 1,244, 931 in 2015 or a
growth of 12.27%. For the same period, the total number of permanent positions in
government has increased from 1,150,681 in 2005 to 1,433,186 by 2015, or a growth of
24.55%. The corresponding expenditures have also ballooned: the actual expenditures of the
government for personal services (PS) have expanded from P295.18 billion in 2005 to
P682.62 billion in 2015, or an equivalent of 131.26%.

Studies have shown that the existing governmental organization is bloated and
overstaffed, with redundant offices and overlapping or fragmented or ambiguous functions.
The situation calls for the rightsizing of the bureaucracy to promote effectiveness, efficiency
and economy in the delivery of services to the people. Streamlining the operations of
departments/agencies is needed to achieve the government’s goal of maintaining a well-
functioning system of governance. There is a need to rationalize the existing machinery,
reconfigure the organization, contain the costs and expenditures, and streamline operations in
order to fulfill the constitutional mandate of the civil service and maximize the role of the
public sector in national development.
BATAAN PENINSULA STATE UNIVERSITY

MAIN CAMPUS
Graduate School
bpsugraduateschool@gmail.com
City of Balanga, 2100 Bataan www.bpsu.edu.ph

House Bill No. 5707 was filed this 17th Congress to improve public service delivery
and minimize, if not totally eliminate redundancies, overlaps and duplication in government
operations as well as to simplify rules and regulations, systems and procedures.

II. Significance and Approaches

Restructuring and Rightsizing: A Proactive Approach to a Management


Challenge

Organizational change strategies such as rightsizing and restructuring are designed to


transform companies into more efficient, agile, customer-driven organizations. However,
these processes have both short-term and long-term consequences. Before undertaking a
rightsizing/restructuring program, senior management should take pains to communicate the
vision, process, expectations, and intended goals.

Restructuring/rightsizing is a proactive approach to boosting profitability,


streamlining operations and maximizing returns on investment within an organization. The
process involves evaluating all aspects of a business to determine whether the cost allotted to
each area is appropriate and is generating appropriate returns for the company.

Focus on core competencies

The primary revenue generating engines of a business are its core competencies or
core capabilities. Eliminating non-core aspects of a business may involve closing plants or
offices, selling off non-core operations, consolidating sites or stores, revamping internal
structures, eliminating non-essential or redundant tasks, as well as eliminating layers of
management. Sometimes the restructuring process results in adding or growing sites,
expanding certain operations (often either upstream or downstream operations) or investing
in new lines of business which are expected to become profitable in the future. Many times
internal processes such as sourcing and purchasing are examined and overhauled too.
BATAAN PENINSULA STATE UNIVERSITY

MAIN CAMPUS
Graduate School
bpsugraduateschool@gmail.com
City of Balanga, 2100 Bataan www.bpsu.edu.ph

Since labor is the largest expense for most companies, costs related to headcount and
workforce management get careful scrutiny, and restructuring/rightsizing initiatives typically
result in staff reductions, reassignments or realignments.

Salaries/wages, benefits, overtime costs, and other aspects of labor are all evaluated
on a cost/return basis. Jobs and responsibilities that are not part of the firm’s primary
revenue-generating functions may be outsourced or allocated to outside consultants on a
contractual basis. Part-time and temporary workers may handle tasks previously performed
by full-time workers in order to reduce payroll costs.

It is incumbent upon management to explore all possible means of reducing labor


costs before resorting to layoffs. Options can include offering early retirement and optional
release packages, internal lateral moves, job sharing and hiring freezes.

In addition, before implementing drastic reductions due to rightsizing or restructuring,


it is important to consider other possible ways of improving efficiency, productivity, and
competitiveness, such as Six Sigma quality initiatives, HR strategies that empower
employees, and other techniques that encourage employee loyalty, productivity and stability.

Cost-benefit analysis

It often takes years to realize cost benefits from rightsizing/restructuring. In the short
term unemployment claims, severance payouts, and quality or service issues caused by
restructuring can bleed away cost savings. The time and resources dedicated to the
restructuring process itself are often significant. Plus there are costs associated with
retraining, retooling, reorganizing, relocating functions, exiting facilities and terminating
operations.

Moreover, the process takes an emotional toll and impacts productivity as employees
adjust to changes in their locations, roles and responsibilities. Top performing employees
often leave—sometimes taking valuable institutional knowledge and important customer
relationships with them, while those who stay may underperform for a period of time due to
stress, frustration, or lack of skill, knowledge or experience.
BATAAN PENINSULA STATE UNIVERSITY

MAIN CAMPUS
Graduate School
bpsugraduateschool@gmail.com
City of Balanga, 2100 Bataan www.bpsu.edu.ph

Leading and managing the process

Major restructuring initiatives can involve re-financing debt, negotiating bridge loans,
securing new sources of investment, reorganizing departments and reassigning
responsibilities or tasks, combining or eliminating operations, closing facilities, spinning off
subsidiaries or branches, forming partnerships or joint ventures, and various other types of
strategic initiatives.

For senior management, rightsizing/restructuring is generally viewed as a painful but


necessary task, one that ultimately benefits the company and saves jobs that would be lost if
the company went out of business. Inevitably, the aftermath of such a process places greater
demands on managers to make adjustments, to motivate their teams, and do more with less
within the changing landscape of their own responsibilities and departments.

Executives who are responsible for making strategic rightsizing/restructuring


decisions face a conundrum. On today’s global economic stage, a firm’s failure to perform at
a peak level puts it a severe competitive disadvantage. At the same time, the process of
restructuring/rightsizing is clearly fraught with potential negative effects on employees,
customers and communities. Finding the right balance between these outcomes is the primary
challenge facing corporate leaders today.

III. Conclusion

Successful organizational change drives greater productivity, revenue, profits, and,


ultimately, shareholder value. Balanced against these gains are required investments in
engineering and implementing the changes required. Companies considering a path toward
rightsizing or restructuring should include the following in their due diligence, planning and
implementation processes:

 New directions and changes should be compared to and aligned with a company’s
core competencies when making contraction and expansion decisions.
BATAAN PENINSULA STATE UNIVERSITY

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Graduate School
bpsugraduateschool@gmail.com
City of Balanga, 2100 Bataan www.bpsu.edu.ph

 Well-planned reorganizations generate mid- and long-term efficiencies, cost savings


and revenue, but short-term costs can be significant. Build in a thorough cost-benefit
analysis.
 Major changes bring both benefits and downsides. Executives and managers must be
prepared to adjust, lead and motivate in ways that help employees, customers and
communities join in and support the new path.

Because there are many difficult and controversial decisions to be made—and


because these decisions impact a wide variety of financial areas—companies should consider
hiring an outside financial services resource with a proven track record in rightsizing,
repositioning and restructuring organizations.

***

References:

https://www.nasscom.in/sites/default/files/uploads/events2012/hr_summit/The%20Right%20Way%2
0of%20Rightsizing.pdf

http://cpbrd.congress.gov.ph/cpbrd.congress.gov.ph/index.php?option=com_content&view=article&la
yout=edit&id=797

https://www.cfoedge.com/blog/operations-management/operational-improvements/restructuring-and-
rightsizing-a-proactive-approach-to-a-management-challenge/