His assignment says we have to Visit and identify a company website that has undergone Human Resource downsizing. Identify the cause of downsizing and describe its processes.
Honestly, I don't know if I misunderstood the topic or what.However I came with this understanding.So, this article is subject to corrections and editions...
Beforehand, let’s first define the terms Human Resource (HR) and downsizing.
HR is simply defined as the discipline of managing people in an organization, the people themselves, the personnel and the employees in the organization.
DOWNSIZING
Downsizing (rightsizing for a more optimistic approach) I a technical name for the shrinkage cycle of the organizational growth, layoffs (human jetsam) and the reduction in force. (Church, Allan).
It is part of the rationalization process or organizational restructuring which involves the reduction of levels within the organizational hierarchy or closure of other departments in the company, replacement of permanent staff with contract employees or even laying off staffs.
Its primary goal is for the organization to be more flexible, efficient and responsive to its environment as a consequence of the organization’s strategic review.
In the current situation, this process is somewhat a trend in the organizations. It has become so widespread that even the giant industries and corporations go with its flow. This strategy was adopted by almost all major industries such as banking, automobiles, chemical, information technology, FMCG, air transportation and petroleum.
Some of the firms that has undergone HR downsizing are:
• Sears- “our dramatic downsizing certainly attracted a lot of attention over the last 18 months”
• IBM- “to right size the company as quickly as we could”
• Boeing- “to take the steps necessary to adjust to the market downturn”
- due to its merger with the McDonnell Douglas (1994, April, TIME, 143(16))
• Kodak-“ to reduce cost base”
• GE-“to increase productivity and efficiency, optimize resources and survive competition and eliminate duplication of work”
• Mobil- due to the acquisition of Exxon
• Deutsche Bank- due to its merger with Bankers Trust
• Hoescht AG- due to its merger with Rhone- Doulenc
• WedTech USA- “to reduce operating costs because the business ha not expected revenue levels ” (Tulsa World, Okla, Business Brief Column, Part 2)
• AT & T
And several others;
THE HEIGHT OF DOWNSIZING
During the 1980s, there are only limited firms that adopted the concept of downsizing but it dramatically changed in the early 1990s.
By the mid-1990s, the need for downsizing decreases as factors such as increased investor, awareness, stronger economies and decreases in level of unemployment were met.
Its trend seemed to grow in the late 1990s. the study of the US government found that the formulation and communication of a proper planning and downsizing strategy , the support of the senior leader, incentives and compensation, and planning and effective monitoring systems were the key factors for a successful downsizing.
During the early 21st century, many firms is in advent of having flexible work arrangement to their employees to avoid negative impact of downsizing. Flexible work results to an increased morale and productivity, decreased absenteeism and employee turnover and retain supervisor quality employees improved service to clients.
CAUSES
To sum it up, the aforementioned companies including those several that have not mentioned but also having the downsizing strategy, falls to some of the following causes which forces them to adopt the concept:
• Cut costs
• Optimize resources
• Survive slumps
• Survive the downturns of economy
• Threatened by imminent collapse
• Manage short term profits
• ‘me-too’ strategy- just go with the flow even if not really needed
• Compensation system- the bigger the department, the more the manager makes
• Increase global competitiveness
• Pervasive management that is shattering the confidence and heightening the fears of the workers.
EFFECTS
Analyst commented that downsizing results to more damage than good to the companies as it results in:
• Increased centralization of decision making
• the adoption of a short-term, crisis mentality
• loss of innovations
• increased resistance to change
• decreased employee morale, commitment and loyalty
• the escalation of politicized special interest groups and political infighting
• risk-aversion and conservatism in decision making,
• loss of trust among customers and employees,
• increased interpersonal conflict,
• restricted communication flows and less information sharing
• lack of teamwork, and
• loss of accessible, forward-thinking, aggressive leaders
PROCESSES
In Case of IBM;
“In IBM, HR is right there at the table whatever the issues are- shutting a plant down, hiring workers, downsizing, we work with the management on the decision, help craft the action plan, and then implement it with the line management,” says Laura Russell, program director, resource program at IBM Headquarters in Armonk, New York.
In Case of Boeing Commercial Airplane;
Boeing downsized its air traffic business unit, ATM, etc. In agreement with QinetiQ, it decided to join with the R&D collaboration. Also, the company plans to cut more jobs through attrition and lay offs.
"The economy is lagging, people aren’t flying, carriers aren’t buying, so we’re losing jobs,” says Mark Blondin, president of Machinists Union District 75.
“Boeing is reducing its staff so much; it’s jeopardizing the company’s ability to develop its proposed new jet, the 707.” “We don’t think they know what they are doing,” says Bill Dugovich, spokesman for the society of Professional Engineering employees in Aerospace.
Because of downsize, the company’s management, organized labor, the local community, multiple levels of government, and community colleges collectively worked together to develop Reemployment Centers to assist transition of their specialized workforce into alternative forms of employment.
If downsizing becomes really necessary, there are many options to choose from:
• Voluntary plans that offer incentives for employees who choose to leave or retire : (considered as the best option)
• Strategic cuts that eliminate less important products, branches or services
• Involuntary departures based on the competence
• Or hybrid of the above mentioned options
We have to know the truth that we are in a paradigm shift which means that employees are all ‘temps’ or temporary in an organization. You can’t have the lifetime assurance in the company. The company cannot afford to offer their employees such as 40-50 years of being with them.
PERSPECTIVES
By Kim Cameron,
professor of Organizational Behavior and Human Resource Management in the Graduate School of Business Administration at the University of Michigan,
o Approach
• Approach downsizing as a long-term strategy and a way of life rather than as a single program or target to be completed and abandoned.
• Approach downsizing as an opportunity for improvement rather than as merely a reaction to a threat or crisis.
• Approach the human resources in the organization as assets rather than as liabilities, and plan to invest in their development and ideas.
o Involvement
• Involve employees in identifying what needs to change through downsizing and in implementing those changes rather than driving downsizing from the top down.
• Hold everyone accountable for downsizing goals rather than treating it as only top management's responsibility.
• Involve customers and suppliers in designing and suggesting improvements in downsizing strategies rather than focusing entirely internally.
o Leadership
• Ensure that the leader(s) is visible, accessible, and interacting freely with those affected by the downsizing instead of succumbing to the temptation to avoid confrontation, pain, and discomfort associated with managing downsizing.
• Associate downsizing with a clearly articulated vision of a desired future for the organization, not merely as an escape from the past.
• Project positive energy and initiative from the leader(s) in order to motivate the workforce in a downsizing organization instead of adopting a defensive or paranoid perspective.
o Communication
• Ensure that everyone is fully informed of the purposes of downsizing, the strategies to be pursued, the costs involved, the time frame, and so on, rather than revealing only "need to know" information and keeping sensitive information at the top.
• Overcommunicate as the downsizing process unfolds so that information is provided frequently, consistently, and honestly to all employees on the progress and processes in downsizing rather than reporting only decisions and results or allowing rumors and ambiguity to flourish.
• Generate on-going analyses and feedback from participants in the downsizing process rather than completing the process before an evaluation is done.
o Preparation
• Prepare for the downsizing before it is mandated or crucial for survival rather than waiting until time for advanced analysis is gone and a "ready- fire-aim" approach is required.
• Identify the future mission of the organization, its core competencies, and an organizational structure that will most effectively accomplish the mission via the core competencies as the way to develop downsizing strategies, as opposed to formulating strategy based merely on headcount targets.
• . Establish targets, deadlines, and objectives for downsizing independent of the mandated downsizing goals from parent organizations in order to prepare the organization to view downsizing as an improvement strategy rather than as the cause of a loss of discretion.
o Support
• Provide equal attention to and support for those who stay in the organization and those who leave the organization rather than focusing all benefits on leavers.
• . Provide safety nets (adequate lead time, financial benefits, counseling, retraining, outplacement services, etc.) for those who leave the organization in order to smooth the transition to another position, rather than letting people go without the required severance pay and advanced notice.
• . Provide training, cross-training, and retraining in advance of downsizing in order to help individuals adapt to downsizing rather than relying merely on post hoc on-the-job training.
o Cost Cutting
• Institute a variety of cost-cutting activities (such as restricting overtime, providing leave without pay, eliminating redundancies) rather than limiting downsizing to headcount reductions.
• Focus on attacking sources of fat in the organization that often go unnoticed and unmeasured, such as data fat (excess information), procedure fat (excess meetings), time fat (excess response time), and launch fat (excess new programs) rather than on cutting only the noticeable and measured features of the organization.
• Map and analyze all processes in the organization to eliminate inefficiencies, redundancies, non-value-added steps and resources, and to redesign work, rather than assuming that old processes must be maintained.
o Measurement
• Measure speed and time use in the organization, not merely headcount, in looking for ways to downsize.
• Develop specific measures of all activities and processes that directly relate to the key products and services provided by the organization in order to determine how improvements can be made, rather than measuring only outputs.
• Assess the skills, experience, and relevant attributes of all human resources to help improve decision making regarding personnel and assignments when downsizing and restructuring occur.
Implementation
• Implement a broad array of downsizing strategies, including redesign strategies and systemic strategies (e.g., culture change), instead of relying narrowly on headcount reduction strategies.
• Administer downsizing equitably and fairly by ensuring that adverse impacts are not experienced unevenly by unempowered people (e.g., minorities, certain age groups) rather than implementing strategies based on power.
• Provide opportunities for personal growth and development for individuals in the midst of downsizing rather than ignoring everything except profits and the financial bottom line.
• Form cross-level and cross-functional teams to plan and implement downsizing with no required hand-offs, rather than implementing downsizing using only a chain of command.
• Change the appraisal, reward, selection, development, and communication systems to reflect the new goals and objectives of the downsized organization rather than keeping those systems that reflect the old, larger organizational form. Implement downsizing by beginning with small wins--i.e., changing things that can be changed quickly and easily--that, when celebrated, create inertia toward desired results rather than attacking downsizing as a large, complex, indivisible task."
REFERENCES:
Honestly, I don't know if I misunderstood the topic or what.However I came with this understanding.So, this article is subject to corrections and editions...
Beforehand, let’s first define the terms Human Resource (HR) and downsizing.
HR is simply defined as the discipline of managing people in an organization, the people themselves, the personnel and the employees in the organization.
DOWNSIZING
Downsizing (rightsizing for a more optimistic approach) I a technical name for the shrinkage cycle of the organizational growth, layoffs (human jetsam) and the reduction in force. (Church, Allan).
It is part of the rationalization process or organizational restructuring which involves the reduction of levels within the organizational hierarchy or closure of other departments in the company, replacement of permanent staff with contract employees or even laying off staffs.
Its primary goal is for the organization to be more flexible, efficient and responsive to its environment as a consequence of the organization’s strategic review.
In the current situation, this process is somewhat a trend in the organizations. It has become so widespread that even the giant industries and corporations go with its flow. This strategy was adopted by almost all major industries such as banking, automobiles, chemical, information technology, FMCG, air transportation and petroleum.
Some of the firms that has undergone HR downsizing are:
• Sears- “our dramatic downsizing certainly attracted a lot of attention over the last 18 months”
• IBM- “to right size the company as quickly as we could”
• Boeing- “to take the steps necessary to adjust to the market downturn”
- due to its merger with the McDonnell Douglas (1994, April, TIME, 143(16))
• Kodak-“ to reduce cost base”
• GE-“to increase productivity and efficiency, optimize resources and survive competition and eliminate duplication of work”
• Mobil- due to the acquisition of Exxon
• Deutsche Bank- due to its merger with Bankers Trust
• Hoescht AG- due to its merger with Rhone- Doulenc
• WedTech USA- “to reduce operating costs because the business ha not expected revenue levels ” (Tulsa World, Okla, Business Brief Column, Part 2)
• AT & T
And several others;
THE HEIGHT OF DOWNSIZING
During the 1980s, there are only limited firms that adopted the concept of downsizing but it dramatically changed in the early 1990s.
By the mid-1990s, the need for downsizing decreases as factors such as increased investor, awareness, stronger economies and decreases in level of unemployment were met.
Its trend seemed to grow in the late 1990s. the study of the US government found that the formulation and communication of a proper planning and downsizing strategy , the support of the senior leader, incentives and compensation, and planning and effective monitoring systems were the key factors for a successful downsizing.
During the early 21st century, many firms is in advent of having flexible work arrangement to their employees to avoid negative impact of downsizing. Flexible work results to an increased morale and productivity, decreased absenteeism and employee turnover and retain supervisor quality employees improved service to clients.
CAUSES
To sum it up, the aforementioned companies including those several that have not mentioned but also having the downsizing strategy, falls to some of the following causes which forces them to adopt the concept:
• Cut costs
• Optimize resources
• Survive slumps
• Survive the downturns of economy
• Threatened by imminent collapse
• Manage short term profits
• ‘me-too’ strategy- just go with the flow even if not really needed
• Compensation system- the bigger the department, the more the manager makes
• Increase global competitiveness
• Pervasive management that is shattering the confidence and heightening the fears of the workers.
EFFECTS
Analyst commented that downsizing results to more damage than good to the companies as it results in:
• Increased centralization of decision making
• the adoption of a short-term, crisis mentality
• loss of innovations
• increased resistance to change
• decreased employee morale, commitment and loyalty
• the escalation of politicized special interest groups and political infighting
• risk-aversion and conservatism in decision making,
• loss of trust among customers and employees,
• increased interpersonal conflict,
• restricted communication flows and less information sharing
• lack of teamwork, and
• loss of accessible, forward-thinking, aggressive leaders
PROCESSES
In Case of IBM;
“In IBM, HR is right there at the table whatever the issues are- shutting a plant down, hiring workers, downsizing, we work with the management on the decision, help craft the action plan, and then implement it with the line management,” says Laura Russell, program director, resource program at IBM Headquarters in Armonk, New York.
In Case of Boeing Commercial Airplane;
Boeing downsized its air traffic business unit, ATM, etc. In agreement with QinetiQ, it decided to join with the R&D collaboration. Also, the company plans to cut more jobs through attrition and lay offs.
"The economy is lagging, people aren’t flying, carriers aren’t buying, so we’re losing jobs,” says Mark Blondin, president of Machinists Union District 75.
“Boeing is reducing its staff so much; it’s jeopardizing the company’s ability to develop its proposed new jet, the 707.” “We don’t think they know what they are doing,” says Bill Dugovich, spokesman for the society of Professional Engineering employees in Aerospace.
Because of downsize, the company’s management, organized labor, the local community, multiple levels of government, and community colleges collectively worked together to develop Reemployment Centers to assist transition of their specialized workforce into alternative forms of employment.
If downsizing becomes really necessary, there are many options to choose from:
• Voluntary plans that offer incentives for employees who choose to leave or retire : (considered as the best option)
• Strategic cuts that eliminate less important products, branches or services
• Involuntary departures based on the competence
• Or hybrid of the above mentioned options
We have to know the truth that we are in a paradigm shift which means that employees are all ‘temps’ or temporary in an organization. You can’t have the lifetime assurance in the company. The company cannot afford to offer their employees such as 40-50 years of being with them.
PERSPECTIVES
By Kim Cameron,
professor of Organizational Behavior and Human Resource Management in the Graduate School of Business Administration at the University of Michigan,
o Approach
• Approach downsizing as a long-term strategy and a way of life rather than as a single program or target to be completed and abandoned.
• Approach downsizing as an opportunity for improvement rather than as merely a reaction to a threat or crisis.
• Approach the human resources in the organization as assets rather than as liabilities, and plan to invest in their development and ideas.
o Involvement
• Involve employees in identifying what needs to change through downsizing and in implementing those changes rather than driving downsizing from the top down.
• Hold everyone accountable for downsizing goals rather than treating it as only top management's responsibility.
• Involve customers and suppliers in designing and suggesting improvements in downsizing strategies rather than focusing entirely internally.
o Leadership
• Ensure that the leader(s) is visible, accessible, and interacting freely with those affected by the downsizing instead of succumbing to the temptation to avoid confrontation, pain, and discomfort associated with managing downsizing.
• Associate downsizing with a clearly articulated vision of a desired future for the organization, not merely as an escape from the past.
• Project positive energy and initiative from the leader(s) in order to motivate the workforce in a downsizing organization instead of adopting a defensive or paranoid perspective.
o Communication
• Ensure that everyone is fully informed of the purposes of downsizing, the strategies to be pursued, the costs involved, the time frame, and so on, rather than revealing only "need to know" information and keeping sensitive information at the top.
• Overcommunicate as the downsizing process unfolds so that information is provided frequently, consistently, and honestly to all employees on the progress and processes in downsizing rather than reporting only decisions and results or allowing rumors and ambiguity to flourish.
• Generate on-going analyses and feedback from participants in the downsizing process rather than completing the process before an evaluation is done.
o Preparation
• Prepare for the downsizing before it is mandated or crucial for survival rather than waiting until time for advanced analysis is gone and a "ready- fire-aim" approach is required.
• Identify the future mission of the organization, its core competencies, and an organizational structure that will most effectively accomplish the mission via the core competencies as the way to develop downsizing strategies, as opposed to formulating strategy based merely on headcount targets.
• . Establish targets, deadlines, and objectives for downsizing independent of the mandated downsizing goals from parent organizations in order to prepare the organization to view downsizing as an improvement strategy rather than as the cause of a loss of discretion.
o Support
• Provide equal attention to and support for those who stay in the organization and those who leave the organization rather than focusing all benefits on leavers.
• . Provide safety nets (adequate lead time, financial benefits, counseling, retraining, outplacement services, etc.) for those who leave the organization in order to smooth the transition to another position, rather than letting people go without the required severance pay and advanced notice.
• . Provide training, cross-training, and retraining in advance of downsizing in order to help individuals adapt to downsizing rather than relying merely on post hoc on-the-job training.
o Cost Cutting
• Institute a variety of cost-cutting activities (such as restricting overtime, providing leave without pay, eliminating redundancies) rather than limiting downsizing to headcount reductions.
• Focus on attacking sources of fat in the organization that often go unnoticed and unmeasured, such as data fat (excess information), procedure fat (excess meetings), time fat (excess response time), and launch fat (excess new programs) rather than on cutting only the noticeable and measured features of the organization.
• Map and analyze all processes in the organization to eliminate inefficiencies, redundancies, non-value-added steps and resources, and to redesign work, rather than assuming that old processes must be maintained.
o Measurement
• Measure speed and time use in the organization, not merely headcount, in looking for ways to downsize.
• Develop specific measures of all activities and processes that directly relate to the key products and services provided by the organization in order to determine how improvements can be made, rather than measuring only outputs.
• Assess the skills, experience, and relevant attributes of all human resources to help improve decision making regarding personnel and assignments when downsizing and restructuring occur.
Implementation
• Implement a broad array of downsizing strategies, including redesign strategies and systemic strategies (e.g., culture change), instead of relying narrowly on headcount reduction strategies.
• Administer downsizing equitably and fairly by ensuring that adverse impacts are not experienced unevenly by unempowered people (e.g., minorities, certain age groups) rather than implementing strategies based on power.
• Provide opportunities for personal growth and development for individuals in the midst of downsizing rather than ignoring everything except profits and the financial bottom line.
• Form cross-level and cross-functional teams to plan and implement downsizing with no required hand-offs, rather than implementing downsizing using only a chain of command.
• Change the appraisal, reward, selection, development, and communication systems to reflect the new goals and objectives of the downsized organization rather than keeping those systems that reflect the old, larger organizational form. Implement downsizing by beginning with small wins--i.e., changing things that can be changed quickly and easily--that, when celebrated, create inertia toward desired results rather than attacking downsizing as a large, complex, indivisible task."
REFERENCES:
http://dictionary.bnet.com/definition/Human+Resources.html?tag=col1;rbDictionary
http://www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and%20Organization%20Behavior/Employee%20Downsizing-HRM-Case%20Studies.htm
http://www.questia.com/googleScholar.qst;jsessionid=KQhQgRMdrgB2vpJ4chJvpr6qpTVvfCVrHFHry1GQxTl2vLLL24GX!1506827602!456235400?docId=5001503240
http://resources.bnet.com/topic/boeing+co.+and+downsizing.html
http://faculty.css.edu/dswenson/web/dnsize5.htm
http://findarticles.com/p/articles/mi_hb6671/is_200405/ai_n26139051/
http://www.allbusiness.com/human-resources/workforce-management-hiring/555511-1.html
http://www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and%20Organization%20Behavior/Employee%20Downsizing-HRM-Case%20Studies.htm
http://www.questia.com/googleScholar.qst;jsessionid=KQhQgRMdrgB2vpJ4chJvpr6qpTVvfCVrHFHry1GQxTl2vLLL24GX!1506827602!456235400?docId=5001503240
http://resources.bnet.com/topic/boeing+co.+and+downsizing.html
http://faculty.css.edu/dswenson/web/dnsize5.htm
http://findarticles.com/p/articles/mi_hb6671/is_200405/ai_n26139051/
http://www.allbusiness.com/human-resources/workforce-management-hiring/555511-1.html
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