Contemporary Issues In Human Resource Management

DOWNSIZING
the planned elimination of positions or jobs.

A downsizing strategy reduces the scale (size) and/or scope of a business to improve its financial performance. -(Robbins & Pearce, 1992).
A REDUCTION OF THE WORKFORCE IS ONLY ONE OF THE SEVERAL POSSIBLE WAYS OF IMPROVING PROFITABILITY OR REDUCING COSTS.

Why do Firms Downsize?

Reduce costs. Reduce layers of management to increase decision making speed and get closer to the customer. Sharpen focus on core competencies of the firm, and outsource peripheral activities. Generate positive reactions from shareholders in order to improve valuation of stock price. Increase productivity.

DOWNSIZING: The Aftermaths

Mixed effects on firm performance: some short- term costs savings, but long-term profitability & valuation not strongly affected. Firm s reputation as a good employer suffers. Apple Computers reputation as good employer declined after several layoffs in 1990s. Downsizing forces re-thinking of Employment Strategy. Lifelong employment policies not credible after a downsizing. Example: IBM abandoned lifelong employment policy after several layoffs in early 1990s.

DOWNSIZING: The Aftermaths cont.

Employee motivation disrupted: increase in political behaviours, anger, fear - which is likely to negatively impact quality of customer service. Violation of psychological contract, leads to cynicism, lowered work commitment, fewer random acts of good will Survivors experience more stress due to longer work hours with re-designed jobs, and increased uncertainty regarding future downsizings

IN QOUTES
Education is a process not a place. Security is still an important concept for employees. However, employee security should be developed by moving away from reward for lifetime employment and towards concepts which invest in lifetime employability of employees.

THE WORLD IS FLAT T. L. FRIEDMAN

HARD NUTS TO CRACK!!!

SENIORITY VS RECENT PERFORMANCES PREPARING THE WORKFORCE TO ADAPT TO UNCERTAINTY. ALTERNATIVES TO DOWNSIZING
Wage Reductions Redeployment

HARD NUTS TO CRACK!!! .cont

Are downsized organizations really lean and fit, or is downsizing risking understaffing? Does downsizing really contribute to competitive advantage, or is it a trade-off? Can downsizing snowball into an avalanche, or is not predictable? Is it downsizing, or desperate dumb-sizing?

OTHER EMERGING TRENDS IN HUMAN RESOURCES MANAGEMENT

ISSUES
Vulnerability of technology to attack or disaster. Work intensification as employers try to increase productivity with fewer employees. Rise in number of individuals and families without health insurance. Increased demand for work/life balance. Increased use of outsourcing (off-shoring) of jobs to other countries. Rising health care costs.

ISSUES
Growth in number of employees who have both eldercare and childcare responsibilities at the same time ( sandwich generation ). Privacy concerns of employees Greater demand for flex time A continued change in negotiating strategies, tactics and processes used by labour and management caused by business pressure to remain competitive. Outsourcing of HR functions.

REFERENCES
RESEARCHES
Garfield, A. (1999) Barclay shares soar as city welcomes job cuts. The Independent, 21 May Greengard, S. and FilipowskI, D. (1993) Don t rush downsizin: plan, plan, plan, Personnel Journal, 72(11): 64-73 Dougherty D. and Bowman, E. (1995) The effects of organizational downsizing on product innovation, California Management Review, 37 (4): 28-44

REFERENCES
BOOKS Contemporary Human Resource Management Text and Cases, by Tom Redman and Adrian Wilkinson The World Is Flat, by Thomas L. Friedman Ethics and Human Resource Management, by Amanda Rose