Employee Downsizing.docx
- 文档编号:26285317
- 上传时间:2023-06-17
- 格式:DOCX
- 页数:15
- 大小:25.20KB
Employee Downsizing.docx
《Employee Downsizing.docx》由会员分享,可在线阅读,更多相关《Employee Downsizing.docx(15页珍藏版)》请在冰豆网上搜索。
EmployeeDownsizing
EmployeeDownsizing
DownsizingBluesAllOvertheWorld
Thejobmarketsacrosstheworldlookedverygloomyintheearly21stcentury,withmanycompanieshavingdownsizedaconsiderablepartoftheiremployeebaseandmanymorerevealingplanstodosointhenearfuture.CompaniesontheForbes500andForbesInternational800listshadlaidoffover460,000employees'altogether,duringearly2001itself.
Thistrendcreatedhavocinthelivesofmillionsofemployeesacrosstheworld,Manypeoplelosttheirjobsataveryshortornoadvancenotice,andmanyotherslivedinastateofuncertaintyregardingtheirjobs.Companiesclaimedthatworldwideeconomicslowdownduringthelate-1990shadhadforcedthemtodownsize,cutcosts,optimizeresourcesandsurvivetheslump.Thoughtheconceptofdownsizinghadexistedforalongtime,itsusehadincreasedonlyrecently,sincethelate-1990s.(ReferTableIforinformationondownsizingbymajorcompanies).
Analystscommentedthatdownsizingdidmoredamagethangoodtothecompaniesasitresultedinlowmoraleofretainedemployees,lossofemployeeloyaltyandlossofexpertiseaskeypersonnel/expertslefttofindmoresecurejobs.Moreover,theuncertainjobenvironmentcreatedbydownsizingnegativelyeffectedthequalityoftheworkproduced.Analystsalsofeltthatmostcompaniesadopteddownsizingjustasa'me-too'strategyevenwhenitwasnotrequired.However,despitetheseconcerns,thenumberofcompaniesthatchosetodownsizetheiremployeebaseincreasedintheearly21stcentury.Downsizingstrategywasadoptedbyalmostallmajorindustriessuchasbanking,automobiles,chemical,informationtechnology,fabrics,FMCG,airtransportationandpetroleum.
Inmid-2002,someofthemajorcompaniesthatannounceddownsizingplansinvolvingalargenumberofemployeesincludedJaguar(UK),Boeing(US),CharlesSchwab(US),Alactel(France),Dresdner(Germany),LucentTechnologies(US),CienaCorp.(US)andGoldmanSachsGroup(US).Evenincompanies'developingcountriessuchasIndia,Indonesia,Thailand,MalaysiaandSouthKoreaweregoinginfordownsizing.
TABLEI
DOWNSIZINGBYMAJORCOMPANIES(1998-2001)
YEAR
COMPANY
INDUSTRY
NO.OFEMPLOYEESDOWNSIZED
1998
Boeing
Aerospace
20,000
1998
CitiCorp
Banking
7,500
1998
ChaseManhattanBank
Banking
2,250
1998
Kellogs
FMCG
1,00
1998
BFGoodrich
Tyres
1,200
1998
Deere&Company
FarmEquipment
2,400
1998
AT&T
Telecommunications
18,000
1998
Compaq
IT
6,500
1998
Intel
IT
3,000
1998
Seagate
IT
10,000
1999
ChaseManhattanBank
Banking
2,250
1999
Boeing
Aerospace
28,000
1999
Exxon-Mobil
Petroleum
9,000
2000
LucentTechnologies
IT
68,000
2000
CharlesSchwab
IT
2,000
2001
Xerox
Copiers
4,000
2001
HewlettPackard
IT
3,000
2001
AOLTimeWarner
Entertainment
2,400
TheDownsizingPhenomenonWorldwide
DownsizingasamanagementtoolwasfirstintroducedintheUSduringthemid-20thcentury.Itreferstotheprocessofreducingthenumberofemployeesontheoperatingpayrollbywayofterminations,retirementsorspin-offs.Theprocessessentiallyinvolvesthedismissalofalargeportionofacompany'sworkforcewithinaveryshortspanoftime.Fromthemanagement'spointofview,downsizingcanbedefinedas'asetoforganizationalactivitiesundertakenbythemanagement,designedtoimproveorganizationalefficiency,productivity,and/orcompetitiveness.'
Thisdefinitionplacesdownsizinginthecategoryofmanagementtoolssuchasreengineeringandrightsizing.Downsizingisnotthesameastraditionallayoffs.Intraditionallayoffs,employeesareaskedtoleavetemporarilyandreturnwhenthemarketsituationimproves.Butindownsizing,employeesareaskedtoleavepermanently.
Bothstrategiesshareonecommonfeature:
employeesaredismissednotforincompetencebutbecausemanagementdecidedtoreducetheoverallworkforce.Inlate1990sandearly2000s,differentorganizationsadopteddifferentkindsofdownsizingtechniquesandstrategies(ReferTableII).
TABLEII
MAJORTECHNIQUESANDSTRATEGIESOFDOWNSIZING
-Attrition:
Naturalreductionofworkforcethatoccurswhenemployeesleavetheorganizationduetoretirement,deathorresignation.ItisanormalHumanResources(HR)practiceofadownsizingcompanytofreezehiringtotally/partially.
-Voluntaryretirementandbuyoutbenefits:
Voluntaryretirementbenefitsencourageemployeestoretireearlywithfullorreducedpensionbenefitsbeforethestipulatedretirementage.Buyoutisasimilartechniquethatincludesofferinglumpsumpaymenttoencourageemployees(eligible/noteligibleforvoluntaryretirementorregularretirement)tovoluntarilyleavetheorganization.Bothoftheseareconsideredtobeveryeffectivedownsizingtechniquesandareusedacrosstheworld.
-InvoluntarySeparation/Layoff:
Alayoffmaybedefinedastheseparationofanemployeefromserviceforinvoluntaryreasonsotherthanresignation,notreflectinganydiscreditontheemployee.Itwasalsodefinedasterminationofanemployee'semploymentforreasonsbeyondthecontrolofanemployeeandwhichdonotreflectdiscreditontheemployee.
-Leavewithoutpay:
Leavewithoutpayisgrantedtoemployeeswithreducedbenefits,butwiththeguaranteeofjobwhentheyreturnattheendoftheirleaveperiod.Thisstrategywasusefulforfirms,whichdownsizedtocutcostsratherthantoreducetheworkforcebyacertainnumber.
Inthe1980s,downsizingwasmostlyresortedtobyweakcompaniesfacinghighdemanderosionfortheirproductsorfacingseverecompetitionfromothercompanies.Duetothesefactors,thesecompaniesfounditunviabletomaintainahugeworkforceandhencedownsizedalargenumberofemployees.Soon,downsizingcametobeseenasatooladoptedbyweakcompanies,andinvestorsbegansellingstocksofsuchcompaniesinanticipationoftheirdecreasedfutureprofitability.However,bythe1990s,asevenfinanciallysoundcompaniesbegandownsizing,investorsbeganconsideringthepracticeasameanstoreducecosts,improveproductivityandincreaseprofitability.Thisnewdevelopmentwentagainstconventionalmicroeconomictheory,accordingtowhichaweakfirmlaidoffworkersinanticipationofaslumpindemand,andastrongfirmhiredmoreworkerstoincreaseproductionanticipatinganincreaseindemand.
Inthe1990s,mostfirmsweredownsizinginspiteofaneconomicboom;laborcostswerenotrisinginrelationtoproductivityandthecompaniesanticipatedgreaterdemandfortheirproducts.However,thisphenomenonisnotverydifficulttounderstand.
Duringtheearly1990s,organizationsresortedtodownsizingonaccountofvariousreasons:
toeliminateduplicationofworkaftermergersandacquisitions(M&As),tooptimizeresourcesandcutcosts,andtoincreaseproductivityandefficiencybyeliminatingunnecessaryintermediarychannels.
Companiesexpectedtheproductivityofemployeesremainingafterdownsizingtoincreaseastheythoughtitwouldbeeasiertotrainandmanageasmallerworkforce.
However,accordingtoHickok,anindustryanalyst,downsizingresultedinvastculturalchanges(mostlynegative)intheorganizationinsteadofanincreaseincostsavingsorproductivity.Hickokobservedthefollowingchangesinorganizationalcultureafterdownsizing:
powershiftfrommiddlemanagementtotopmanagement/owners;shiftinfocusfromthewelfareiftheindividualemployeetothewelfareoftheorganizationasawhole;changeinworkingrelationships(frombeingfamilialtocompetitive);andchangeinemployer-employeerelationship(frombeinglong-termandstabletobeingshort-termandcontingent).
Othernegativeeffectsofdownsizingincludeddepression,anxiety,frustration,angerandbitternessinthedownsizedemployees.Theharmfuleffectsofdownsizingcouldbeseenin'survivors'aswell.Theyexperiencedlowmoraleandhighstressandhadtocopewithanincreaseinworkload.Inaddition,theyfeltanddownsizingsyndromemarkedwithfrustration,anger,depression,envyandguilt.Theverythoughtofdownsizingcreatedanxietyinboththedownsizedemployeesandthosewhosurvived.Theywereconcernedaboutpossiblejobloss,relationswithnewsuperiors,revisedperformanceexpectationsanduncertaintiesregardingcareeradvancement(ReferExhibitIforguidelinestotideoverthedownsizingphase).
TheFirstPhase
Tillthelate-1980s,thenumberoffirmsthatadopteddownsizingwasratherlimited,butthesituationchangedintheearly-1990s.CompaniessuchasGeneralElectric(GE)andGeneralMotors(GM)downsizedtoincreaseproductivityandefficiency,optimizeresourcesandsurvivecompetitionandeliminateduplicationofworkafterM&As.
SomeotherorganizationsthatmademajorjobcutsduringthisperiodwereBoeing(duetoitsmergerwithMcDonnellDouglas),Mobil(duetotheacquisitionofExxon),DeutscheBank(duetoitsmergerwithBankersTrust)andHoechstAG(duetoitsmergerwithRhone-PoulencSA).Accordingtoanalysts,mostofthesesuccessfulcompaniesundertookdownsizingasapurposefulandproactivestrategy.
Thesecompaniesnotonlyreducedtheirworkforce,theyalsoredesignedtheirorganizationsandimplementedqualityimprovementprograms.Duringtheearlyandmid-1990s,companiesacrosstheworld(andespeciallyintheUS),beganfocusingonenhancingthevalueoftheorganizationasawhole.AccordingtoJackWelch,thethenGECEO,"Theultimatetestofleadershipisenhancingthelong-termvalueoftheorganization.Forleadersofapubliclyheldcorporation,thismeanslong-termshareholdervalue."Inlinewiththisapproachtoleadership,GEabandonedpolicyoflifetimeemploymentandintroducedtheconceptofcontingentemployment.Simultaneo
- 配套讲稿:
如PPT文件的首页显示word图标,表示该PPT已包含配套word讲稿。双击word图标可打开word文档。
- 特殊限制:
部分文档作品中含有的国旗、国徽等图片,仅作为作品整体效果示例展示,禁止商用。设计者仅对作品中独创性部分享有著作权。
- 关 键 词:
- Employee Downsizing