MID TERM HUMAN RESORCE

WEEK 1 AND 2

ROLE OF ETHICS IN HUMAN RESOURCE FMANAGEMENT

The role of ethics in human resource management is simply the fact that ethics is
the chief cornerstone of the entire human resource management practice.
Indeed, human resources (HR) deals with the personal aspects of the business
enterprise, and it touches on many issues that require the application of ethical
standards. Some of the areas that demonstrate this include the hiring of employees
and issues of promotion, discrimination, sexual harassment, and privacy, as well
as the practice of stated occupational safety and health standards.
Ethics is the chief cornerstone of the entire human resource management
practice.
One of the primary functions in the human resources department is the hiring of
workers. This is an important responsibility that has many ramifications for the
prospective employees who may either benefit from getting the job or remain
unemployed. The human resource manager, who often has the final say when it
comes to the decision regarding whom to hire, must be truly ethical in the hiring
process. He or she must ensure that people are hired based on merit, not any
personal or professional bias, preferences, or inclinations. For instance, if a male
human resource manager is faced with the decision of hiring one out of two
females, he must ethically base his final decision on the more qualified of the pair
and not the more attractive.
Human resource managers should not abuse their positions.
Human resources managers and other employment decision makers must not abuse
their position by trying to use it as a means for sexually harassing prospective or
current employees. For instance, the application of ethics demands that the human
resources manager must not demand sexual favors from desperate applicants in
return for promises of employment. Managers must not demand sexual or any
other favors from workers in return for keeping their jobs or continuing to receive
certain benefits.

It is illegal for human resource managers to discriminate against prospective

employees on the basis of gender.
Of course, the role of ethics in human resource management would not be
complete without the important issue of discrimination, such as those based on
religion, sex, handicap, race, physical attributes, sexual orientation, political
affiliations, or even something as trivial as the sports team a prospective employee
supports. Sometimes, the decision about whom to employ depends more on the
inclinations of the human resources manager than on the needs of the organization.
Any organization where the HR processes are not firmly rooted in ethics will
eventually suffer in terms of incompetent employees and a reduction or lack of
fulfillment in production capacity.

RIGHTSIZING AND DOWNSIZING IN A COMPANY

The process of making a company or organization a more effective

size, especially by reducing the number of people working for it is
called rightsizing.
Rightsizing is a process of bringing an organization to an optimal
size. The main purpose of rightsizing is to minimize the company’s
cost to optimize its profits.
Downsizing gives a chance to the company for scaling its operations
down to a more realistic and manageable size.
During periods of growth, companies tend to add personnel and
equipment that serves immediate business purpose. Downsizing
should be looked upon as a business decision and not as a personal
decision.

Rightsizing and Downsizing of an Organization or

Company

Rightsizing – Meaning, Significance, Methods,

Challenges and Suggestions
Meaning:
In today’s constantly changing world, corporate are often forced to
take tough decision, which may at times include closing down a
particular business process. This poses an equally challenging
situation where top manager has to right size the organization as well
as handle survivor’s syndrome. The process of corporation
reorganizing or restructuring their business by cost cutting, reduction
of workforce or reorganizing upper level management is called
rightsizing.
The primary goal of rightsizing is to get the company moulded
properly to achieve the maximum profit. Although the word
rightsizing is used in some organizations as a euphemism for
downsizing as it sounds less drastic. Rightsizing is a proactive and
needs to be a constant part of the process of managing an
organization. It is basically related to the business strategy of
downsizing or trimming redundancy in a workforce through layoffs.
The main purpose of rightsizing is to minimize the company’s cost to
optimize its profits. In the process of rightsizing, the organization
should first look at market needs and trends in technologies,
alternative approaches and new ideas.
According to Cambridge Dictionary, “The process of making a
company or organization a more effective size, especially by reducing
the number of people working for it is called rightsizing.”
According to the Free Dictionary, “Rightsizing is a process of bringing
an organization to an optimal size.”
ADVERTISEMENTS:

Downsizing can be disruptive to on-going operations because people

need to spend time undoing and redoing things that used to work.
Even though employees going through it feel like they have failed
somehow but downsizing is not at all personally related to any
employee.
Further downsizing has nothing to do with how well the employees
have done or how smart they are. The best way to respond to forced
downsizing is usually to just live through it and get it over with as
quickly and completely as employees possible can.
Downsizing should be looked upon as a business decision and not as a
personal decision.
Downsizing gives a chance to the company for scaling its operations
down to a more realistic and manageable size. During periods of
growth, companies tend to add personnel and equipment that serves
immediate business purpose.
So it is natural that a company business model or customer base will
shift during the organization’s evolution and downsizing provides the
chance to the company to bring its size down to something that can
more efficiently serve its customers and remain profitable. It forces an
organization to re-evaluate its business processes and rewrite its
business plan accurately according to the current business status.
Downsizing also suffers from certain limitations or has some adverse
effects on the organizations like, with downsizing misses out on the
collective experience of the staff members that are let go. The company
decision making is affected because the opinions and input of those
departing employees will be missed.
If downsizing is due to outsourcing, then disgruntled former
employees can be a source of public relations issues for the company.
They can damage the company’s public reputation and that can lead to
a drop in revenue.
On the other hand, the process of rightsizing is not immune to the
external forces and like downsizing it does not wait for things to
happen to the organization. Rightsizing is thus a proactive action and
not the reaction to the external forces. Thus, rightsizing is a broader
mix of cost cutting strategies whereas downsizing focus is on labor
reduction.
Further with rightsizing several maneuvers are used for creating
synergy like reducing operation costs, removing unnecessary jobs and
reorganizing management structures. Rightsizing focus more on the
performance of employees involved directly in production whereas
downsizing typically centers on high earning employees in the middle
level management.
Significance of Rightsizing:
1. Rightsizing managers know where things are probably headed,
which help them in making more effective hiring decisions and
provides direction for training/retraining current employees who want
to learn new skills to prepare for the future.
2. Rightsizing help the managers to know their priorities and provides
them a better chance to create an organization structure that is
conducive to success.
3. Rightsizing help the management in taking the decision in relation
to how many people and efforts are required for any set of activities. It
provides the staff profile and resource plan as an outcome i.e. the
information regarding how many personnel are required in each area
in organization is provided by the rightsizing.

Methods/Techniques of Rightsizing:
There are four basic analytical techniques available with the
organizations for rightsizing:
ADVERTISEMENTS:
1. Ratio Analysis:
Ratio analysis is a very common technique, which is used by most of
the organizations for rightsizing. It is a set of comparison. Ratio is
used for the calculation of span of control for each position in the
organization. It gives the organization, a clear picture of how many
persons are required as per the workload of each department.
2. Activity Analysis:
It is a study of the amount of time that each person spends on their
main activities. What people actually do and what their job description
say they do, which are gathering dust in a drawer somewhere. Job
titles are of little additional help. So the observation method can be
used for calculating time spend by the personnel on their job. This will
provide the information in relation to the requirement of optimum
number of personnel in the organization.
3. Driver Analysis:
Driver analysis is an extension of ratio and activity analysis. This
method studies the reasons or drivers behind the efforts of personnel.
Because any change in these factors will lead to the change in the
efforts of personnel. For example drivers for a call centre are the
number of calls, flow of calls, service levels demanded, skill needed
etc. These drivers will provide the details of number of personnel
actually needed in the system.
4. Mathematical Modeling:
This technique is the complex of all the above techniques. Under this,
mathematical models are developed for the calculation of exact and
accurate number of personnel required in the organization.
Challenges in Rightsizing:
1. High Attrition:
Rightsizing most of the times leads to job insecurity among existing
employees, which results in high attrition. Managing rightsizing well is
all the more important as attrition of employees from high profit area
or department is harmful for organization. So it is necessary for the
management to ensure that rightsizing should not lead to the high
attrition in the organization.

2. Offer Drop Out:

In case the news of rightsizing is communicated to media or posted on
social sites, it may affect the decisions of candidates who are offered to
join and can also lead to offer drop out. Further the clients can also
cancel their project as organization secures several projects on the
grounds that they have professionals.
3. Increase in Recruitment Cycle Time:
Rightsizing negatively affects the brand image of the organization. It
poses lot of challenges on employer in recruitment and selection of
new resources as candidates resist joining an organization which goes
through such exercise.
4. Breach of Physical Security:
Affected employees also sometime show their resentment by causing
physical damage to the organization. They resort to the activities like
destruction of the organization’s asset or property.

5. Breach of Data Security:

Information is an important asset for all organization without which
one cannot operate. Affected employees sometime leak out the
important information to the competitors, which can lead to a further
loss to the organization. Thus employee resentment often poses threat
to data security as well.

6. Legal Suite:
Rightsizing, if not managed in a proper manner can pose a potential
threat from legal perspective also.

7. Existing Clients:
Since all the employees are customer facing, another challenge is to
ensure that no wrong message or miscommunication goes to the
existing clients which could affect business relation with them.

Suggestions for Effective Rightsizing:

1. Establishing the Bridge:
The Connector – The organization can establish a stronger
communication bridge. It should ensure proper communication with
the employee about the business situation and keep them aware of
what is happening. The rightsizing manager should explain the
affected employees about the business situation and keep them aware
of what is happening.
The organization should explain them the rationale and kind of
support they will provide if things change. The communication with
the affected employee can be made through their leaders whom they
respect and trust.

2. Internal Redeployment:
Some of the affected employees can be placed to the other department
where there are vacancies. It will bring the feeling of concern among
the employees.

3. Outplacement:
ADVERTISEMENTS:

Once the organization decides for the rightsizing, it should put all
efforts to provide outplacement opportunities to the affected
employees. It should reach out to the organizations with similar
operations and should invite them to come to their premises for
placements. This entire activity is purely driven by the networks and
linkages of HR team and leadership.

4. Exit Operational Activities:

The rightsizing manager should ensure that its employees face no
problems in terms of settlement and their queries are duly resolved.
He should also ensure that end to end exit formalities and associated
activities of separation of employees should complete within stipulated
time.

5. Before the Day of Exit:

Prior to the day of exit, company should plan the entire exit day. Not
only it should satisfy its employees by redeployment or outplacements,
it should make their exit as painless as possible.

6. Exit Day:
On the exit day of affected employees, the company should conduct
one on one with each and every employee to make them understand
the situation, help them with their settlement and address their
queries as smoothly as possible. The company should try to achieve
zero forced attrition.

While corporate organizations have been facing rightsizing from a

time immemorial, there has been little innovation in handling it. Most
of the organizations perceive rightsizing as a threat and do it in the
most forceful way it could be done. While doing it that way not only
brings a major hit to the brand image of the organization, it also acts
as a major blow to the organization’s people vision and mission. Thus
creating a distrust among the survivors and society at large.

Downsizing – Objectives, Process, Areas and Impacts

Objectives of Downsizing:
The usual objectives of downsizing are:
i. Reducing overheads.
ii. Altering the organisational structure. In other words, to reduce the
number of levels, so that decision-making takes less time and
bureaucracy is reduced.
iii. Reducing organisational politics. Troublemakers can be removed
during downsizing.
iv. Outsourcing a certain activity.
v. When a firm wants to concentrate on its core activity, it may cut the
number of employees.
Process of Downsizing:
Once the organisation decides to downsize, it is important to make the
process structured and sequential. If downsizing is linked to a broad
organisational change and re-engineering strategy, the possibility of
its acceptance by employees is high and the adverse effects can also be
minimised. There are certain rules which, if followed, will make
downsizing a smooth exercise.
Rule 1 – There is a greater need for communication and co-ordination
during downsizing. Various tools of communication such as letters,
memos, notices, etc. can be used so that the message reaches
everyone. Care should be taken to see that communication is
personalised. According to a survey conducted by Watson Wyatt,
impersonal communication in the form of letters and memos was
ineffective in 79 per cent of the downsizing companies.
Rule 2 – Think laterally and search for various alternatives to
downsizing. Every effort should be made to try other options. The
employees must be convinced that the organisation is downsizing as a
last resort, after having tried out all other possibilities.
Rule 3 – Organisations have to be generous and justified in their
action. They have to involve employees in the downsizing process and
explain to them the rationale behind the exercise. The criteria for
removing people should be fair and justified. Employees should also
have the right to appeal against the decision.
Rule 4 – Organisations have to take care of people who are leaving the
organisation. They should be provided outplacement services along
with severance benefits. The employees should be notified well in
advance and if possible, personally by the HR manager.
Rule 5 – After the downsizing exercise, make the required changes in
the positions and redirect the employees’ efforts. Organisations have
to help survivors to adapt and move on. After a small pause following
downsizing, employees have to be briefed on what is expected from
them. Their roles can be modified, if needed.
The resulting changes in the firm’s business environment should be
explained to the survivors. Quality improvements are only possible
when downsizing is followed by training. Hence, it is important to
invest in employee training and development.
Areas Affected by Downsizing:
Following are some of the areas that are affected mostly by
downsizing:
i. Employee’s attitude and morale
ii. Quality
iii. Profitability
iv. Society
v. Customer service
i. Effect on Employee’s Attitude and Morale:
Downsizing has considerable impact on the morale of the employees.
It leads to distrust and dissatisfaction and employees feel stressed and
demotivated. In a study conducted by the American Management
Association, it was found out 69% of firms reported that their
employee’s morale was down, 42% firms had registered increased
resignations and voluntary retirement, 36% said they had a marked
increase in turnover and 13% reported increase in disability claims. In
all the cases, the negative impact was seen to last for more than one
year.
When firms decide to cut down their manpower, employees who are
not axed perceive an increase in workload and long working hours.
Improper or lack of training prior to downsising makes the workers
feel demoralised and stressed out.
ii. Effect on Quality:
When firms downsize, some of the best employees in the organisation
also axed. The reason can be linked to the downsizing process. During
a downsizing exercise, one of the first steps is voluntary attrition.
During this period, some of the best minds may leave the organisation
because they are confident of getting better jobs elsewhere.
In some cases, downsizing has become more of a ritual, which preys
on the minds of even the best employees. Employees in order to play
safe may grab the first available opportunity for voluntary attrition.
Finally, the severance terms offered by some companies are extremely
attractive that even the best of employees are tempted to leave the
organisation.
iii. Effect on Profitability:
According to some researchers, the effect of downsizing on the firm’s
profitability, have been mixed. In most of the companies, the objective
of increase in profit was not met, though there was a decrease in
expenses.
Watson Wyatt reported that out of 1000 firms which had downsized,
only one-third reported an increase in profits, whereas only a small
number of firms reported increase in the return to shareholders. A
study by AMA, concluded that there was no direct relationship
between downsizing and profitability in the long run. In fact, it has
been found that downsizing reduces the creativity of the employees by
disrupting the working relationships between the members.
iv. Downsizing and Society:
Experts in the field of human resources and other social sciences hold
different views on the effects of downsizing on the society. One view is
that downsizing has adverse effects not only on employees’ morale and
attitude but also on their families and society as a whole. An empirical
relationship has been established between downsizing and social evils
like drug abuse, criminality and alcoholism.
It is also believed that downsizing results in health disorders,
depression and suicides. On the other hand, some people think there
is a positive side to downsizing. They argue that the society benefits in
the long run due to downsizing, the rationale being that it helps in
better matching of jobs and job-seekers. It fuels economic growth by
making people take more risks. Proponents of downsizing are against
the protectionist approach of the Government because they feel it will
prove to be a disaster in the long run not just for one company but for
the industry as a whole.
v. Effect on Customer Service:
Downsizing affects customer service because it decreases worker
participation. Customer service executives may adopt an indifferent
attitude towards work in the post-downsizing period. In a study
conducted in an Australian bank, by Professor, Stephen Deery, it was
found that quality of customer service was better at banks which gave
more autonomy to its employees, and where decision-making was
decentralised and work stress was low.
In the post-downsizing scenario, it was noticed that these attributes at
workplace were considerably lower and there was greater frustration
and absenteeism among the retained employees. Eventually, the cost
saving due to downsizing was offset by the decrease in employee
motivation, job satisfaction and the subsequent decrease in
productivity.
Impacts of Downsizing on Employers:
Positive Impacts of Downsizing on Employers:
(a) Organizations improve their profitability by downsizing the
workforce as the fixed expenses related to the workforce get reduced.
(b) Lean operations give more efficiency to the organization. The
organization can concentrate on few existing projects and improve
their market share rather than dividing their attention among many
projects.
(c) In times of economic crisis and intense competition, downsizing
helps organization in cutting costs at every level.
On Employees:
(a) Though downsizing is bad for all employees yet it allows them to
think of learning new skills and getting better placements than the
existing one.
(b) Some employees may think of starting their own small enterprise
with the help of financial support from government or financial
institutions.
On Society:
(a) Under employed labour which yields very low output is laid off and
put to other good uses. This resource can produce better output in
other ventures.
(b) Only the fittest employees survive, therefore, the economic
resources used by not-so-fit are saved. The fittest organizations keep
the fittest employees for economic gains and the non-performers are
made to exit and learn more skills for other jobs.
(c) Lean organizations are better because they can offer better
professional services to their customers. It has been noticed that no
customer is dissatisfied with middle and small sized organizations.
Negative Impacts of Downsizing on Employers:
(a) It is very hard for employers to lay-off employees who have been
trained by them. If these employees are required after a couple of
years, they may never join their old employer in spite of an attractive
package.
(b) Employer cannot boost up the morale of the existing workforce
when he downsizes. The workforce which is retained by him also starts
to mistrust him and stops being loyal to him.
On Employees:
(a) Workers lose their jobs and feel frustrated about it. The
interpersonal relations with the company take a big hit. Workers
always feel that they are paying price for incompetent management.
They and their families both suffer.
(b) Employees also stop trusting the management and keep looking for
jobs outside.
(c) There is lack of self confidence in new as well as old employees and
they go risk averse. They do not take any initiative in the organization
and project a defensive attitude always.
On Society:
(a) Society faces unemployment of skilled as well as unskilled
workforce. This can be very injurious to the civic life.
(b) Government is overburdened by corporate downsizing because it
has to take care of unemployed people. It may have to absorb them in
some ventures or train them for others or allow them loans at
marginal rate to start some enterprise on their own. Social welfare
expenses of government get greatly increased.
(c) Jobless employees may resort to unrest in the industry. They may
go so destructive that at times very harsh measures may have to be
taken to control situation of strikes, lockouts etc.
(d) There is a general fall in the standard of living of people in the
society because of workforce downsizing. Jobless workforce does not
have enough resource left for even necessities of life. They, therefore,
cannot think about comforts and luxuries in life.

WEEK8&9

Describing human resource planning as a source of information for decision making.

Discuss strategy as a source of information for making human resource decisions.
Discuss economic conditions as a source of information for making human resource
decisions. Describe job analysis as a source of information for making human resource
decisions.
.

Strategy as a Source of Information l Implications ¡ Need of a growth strategy: to hire

new employees l Implications of a stability strategy: Implement training to upgrade
employee skills ¡ Implement programs to help reduce turnover ¡ l Implications ¡ of a
reduction strategy: Find ways to reduce workforce Normal attrition processes l
Retirement (including early retirement) l Layoffs l
Economic Conditions as a Source of Information Rate of unemployment is calculated by
the Bureau of Labor Statistics as the percentage of individuals looking for and available
for work who are not presently employed. l Market wage rate is the prevailing wage rate
for a given job in a given labor market. l
What Does a Job Analysis Provide? l It provides fundamental input to the HR manager
such as knowledge, skills, and abilities (KSA) which are the fundamental requirements
necessary to perform a job. l Job families are groups of jobs with similar task and KSA
requirements.
The Job Analysis Process l Job Analyst: the individual who performs job analysis in an
organization l Subject matter experts (SMEs): An individual presumed to be highly
knowledgeable about a job and who provides data for job analysis. ¡ S/he may be an
existing job incumbent, supervisor, or other knowledgeable employee. Copyright ©
2012 by Cengage Learning. All rights reserved. 9
Specific Job Analysis Techniques Narrative job analysis: the most commonly used
method is to have one or more SMEs prepare a written narrative or text description of
the job l The Fleishman job-analysis system: procedure that defines abilities as the
enduring attributes of individuals that account for differences in performance; it relies
on the taxonomy of abilities that presumably represents all the dimensions relevant to
work
Specific Job Analysis Techniques (con’t) Task Analysis Inventory: a family of job
analysis methods, each with unique characteristics; each focuses on analyzing all the
tasks performed in the focal job. l Functional job analysis: attempt to have a single job
analysis instrument that can be used with a wide variety of jobs. l
Specific Job Analysis Techniques (con’t) The Position Analysis Questionnaire:
standardized job analysis instrument consisting of 194 items reflecting work behavior,
working conditions, or job characteristics that are assumed to be generalizable across
jobs l Management Position Description Questionnaire (MPDQ): a standardized job
analysis instrument, similar in approach to the PAQ, which also contains 197 items. The
focus is on managerial jobs and the analysis is done in terms of 13 essential
components of all managerial jobs. l
Specific Job Analysis Techniques (con’t) l Critical Incidents Approach: focus is on
critical behaviors that distinguish between effective and ineffective performers
What are the four steps of ethical decision making?
● Assessment: Make sure you have all the facts about the assessment. ...
● Alternatives: Consider your choices. ...
● Analysis: Identify your candidate decision and test its validity. ...
● Application: Apply ethical principles to your candidate decision. ...
● Action: Make a decision. ...

Job description vs job specification

Job description and job specification are two very important tools that are developed as an
outcome of job analysis. An important part is played by these tools in the hiring process as they
are needed for every position within the organization. The process of recruitment is quite
complex, and requires a series of activities. The foremost step in this regard is carrying out a job
analysis. Following this, a statement known as the job description is developed to list down the
basic requirements of the job. Job description is essentially a document that presents basic
information about the job. After creating job description, the job specification is determined. Job
specification is the document used to present the eligibility criteria for a certain job. It presents
the requirements that individuals need to fulfill to be able to apply for the job. The right
candidates for the job are selected in accordance with the job specifications.
Hence, job description and job specification are both very important for organizations and it is
vital to understand them clearly so as to not use the two terms interchangeably.