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HR issues in downsizing
In-placement and Out-placement Dealing survivors of downsizing Effective downsizing strategies HR issues in mergers and acquisitions.
From 1990s organizations became obsessed with reducing the workforce and operating in a
Lean and Mean fashion
Before 1990s the focus was on growth and bigger is better the syndrome of firms.
Definition
Downsizing is the set of activities undertaken on the part of management and designed to improve organizational efficiency , productivity , and / or competitiveness.
Kim Cameron
Synonyms of Downsizing
Streamlined Derecruitment Reduction in force Re-engineered
Rightsizing Resizing
Building-down
De-hiring
Retrenched down
Perceived benefits.
Low over-head costs, Better communications Improved decision-making
Increased innovation
Higher productivity
Studies proved that these are only the perceived ones and hardly find in reality.
HR ISSUE IN DOWNSIZING
Determining how many people will lose their jobs Determining who will be let go. Parameters like seniority, performance, potential. Determining how the reduction will be carried out. (use of attrition, early retirement, layoffs, termination etc) Determining legal consequences (employment laws, trade union laws, human rights, equal employment law)
Cont.
Determining current and future work plans. Implementing the decisions (severance payments, outplacement counseling, communication of the termination, timing of the decision, security issues, communication with remaining employees. Performing follow-up evaluation and assessment. (ignore many a times)
Workforce reduction
Short-term strategy aimed at cutting the number of workers through such programs like attrition, early retirement or Voluntary severance packages, layoffs, terminations etc.
Work redesign
Medium-term strategy wherein organizations focus on work processes and assess whether specific functions, products, services should be changed or eliminated. Elimination of certain functions, redesign of tasks through proper HRP. This leads to categorization of work.
Competitive advantage of work (core work processes) Strategic support work, which assists in completing competitive advantage work
Systematic change
Long-term strategy characterized by changing the organizations culture and attitudes and values of employees with ongoing goal of cost reduction and quality promotion. This leads to process improvements through innovation also.
Some firms felt that cutting back the no of people in the firm was not sufficient to achieve organization goals and so emphasis be laid on rightsizing or restructuring the workplace.
Compensation
Performance Appraisal Training and Development
Labor Relation
Revision Question:
1. What is Downsizing and Restructuring ? 2. What are HR issues in downsizing?