Group 6

In recent years, many organizations downsize and lay off their employees. The remaining employees often have increased workloads. What are the possible negative reactions that he remaining employees may have? What can managers do to minimize the negative effects of downsizing?

Business Demand Reasons (Demand decreases, supply Decreases)

Disaster/Safety Reasons (Financial Crisis, Financial Tsunami)

Financial Reasons (Lay off to reduce cost and increases cash flow)

Organizational Reasons (Change in structure) Production Reasons (e.g., automation and technological

advances) Seasonal Reasons (demand is affected by season - e.g.,

agriculture)

PCCW

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• Increased absence rates • Due to increased workload and reduced time for rest• Each worker will take up more task which may not be

of their strength• Greater number of occupational diseases• Leads to higher number of sick leaves or even

absenteeism

• Lowered work effort• due to job insecurity• less likely to innovate and take risks

• Worsened Relationships

• During layoffs, relationships between employees tend to be less "familial" and more competitive than in the past

• Reduced Commitment• Reduced Job satisfaction

• Reduced job insecurity• Employees are afraid of making mistakes and be

subject to next round of layoff• Increased turnover intentions

Low self-

esteem

Disillusioned

and guilty

Worry and

stressed

Demoralization and

unfairness

Demoralization layoffs are disheartening lower work performance lower commitment lower productive lower profit

Unfairness Remaining employees may doubt about the way of choosing

who should be fired Managers should rebuild trust in company's management

and direction.

Worry Reduction on salary Another lay-off Prospect of the job

Stress Facing an increased workload Maintaining high work quality Workers may suffer from high pressure

Disillusioned lay-off shows the company is facing financial

problem Remaining employees worry about the

company’s future and the prospect of their job

Guilty The remaining employees lost good

friends and coworkers in company's recent layoffs

Decision of layoff is issued by company

Employees has no right to say

Lack of contribution

1. Implementation of downsizing

2. Communication

3. Maintain the morale in the company

4. Provide supports to the current employees

5. Re-motivate the employees

1. Be fair in implementing layoffs; spread layoffs throughout the organizational ranks, not just among lower-level employees. Use weighed totem pole

2. Allow employees to leave with dignity; if possible, allow them. to leave of their own accord.

3. Help those displaced find new jobs.

4. Avoid belittling laid-off employees.

5. Be cautious when hiring outside executives as they may not be sufficiently knowledgeable of the industry to help the company.

6. Keep employees informed about the company's goals and expectations.

7. Set realistic expectations; executives must be optimistic but realistic.

8. Use ceremonies to reduce anger and confusion - to convey to employees what is going on.

1. Implementation of downsizing

2. Communication

3. Maintain the morale in the company

4. Provide supports to the current employees

5. Re-motivate the employees

After downsizing, employees spend significantamounts of time gossiping and worrying about theuncertainties in the future.

By communicating with employees, it can make themfeel part of the organization and restore their loyalty.

Communication will help to curb the worry and re-direct employee energies to the job at hand(Fisher, 1988).

The communication should cover the following topics:

1. Point out weakness, room for improvement of the lay-off employee2. Admit the fact of downsizing individually and confidentially.3. The fact that changes are coming.4. The purpose of the downsizing.5. The need for growth and profitability.6. Explain future plans.7. Describe what effect is expected on the organization.8. Emphasize that laid-off employees will be treated with respect and

dignity and will receive appropriate severance pay.9. Listen to employee concerns.

• Long after downsizing is completed, make employeesfeel they are valued.

• To emphasize this point, talk about where the companyis headed, and describe any plans for growth.

1. Communications

2. Maintain the morale in the company

3. Provide supports to the current employees

4. Re-motivate the employees

• After downsizing, maintaining the morale is ofparamount importance.

• There are three common aspects to a strategy forinfluencing morale. They were the ability to:

1. Anticipate employee response.

2. Identify interventions to impact morale.

3. Monitor and evaluate morale and the impact ofactions taken.

1. Convince the workforce that job reductions werenecessary.

2. Apparent clarity or fairness in deciding on individualredundancies.

3. Care over redundant staff.

4. Managers should be willing or able to provideadequate time and support to individuals.

• Communicate throughout the period of change, notjust at the beginning.

• It will be seen as insensitive to deny the reality of thepainful aspects of the change.

• Communication has to be honest.

Giving direct support to the ‘survivors’ as well as the‘victims’ of downsizing.

Provide supports in the fields of Stress Managementand Careers Counseling.

Rebuild relationships through team building activitiesto between and within groups and departments.

Provide training to help staffs adjust to new jobdemands.

Make them clear about what they are expected in thenew working environment.

Adopt reward strategies to boost morale.

Use regular forums for managers to share theirconcerns with their peers throughout the changeperiod, and avoid them feeling isolated.

• Organizations are using a range of measures to monitor some of the outcomes of morale.

• For example, staff turnover, absence from work and performance indicators is often monitored numerically.

Employee Attitude SurveysThrough the increasing use of employee attitude surveys,

attitudes and perceptions of employees are obtained.

These can be used both to identify variations in responsewithin the workforce, and track changing perceptionsover time.

Upward feedbackUpward feedback is another way of collecting

information on employee morale and response toinitiatives.

1. Communications

2. Maintain the morale in the company

3. Provide supports to the current employees

4. Re-motivate the employees

Provide a timeframe.

Provide psychological and career counseling.

Provide training to the staffs.

1. Communications

2. Maintain the morale in the company

3. Provide supports to the current employees

4. Re-motivate the employees

Employee Commitment

1. Focus

Establish clear goals, expectations, and values.

2. Involvement

Employees have input into planning, problemsolving, and decision making that affect their job.

3. Gratitude

Recognition and appreciation are shown for employeeefforts and accomplishments.

4. Accountability

Responsibility is given and producing results at highstandards expected and upheld.

Clear explanationOutplacement

Financial assistance

Loyalty

Morale

Job satisfaction

Organizational commitment

Physical and mental health

Work quality

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