Question

Question 2 (Total 50 marks)
Workforce planning manages the flow of people into, through, and out of the organization.
The acquisition and deployment of talent has been focused by many organisations as critical
aspects of workforce planning. However, in the situation of an organisation restructuring
where headcount downsizing and employee terminations need to take place due to change in
business strategies and economic outlook, workforce planning becomes a critical and
sensitive process.
Conduct a research on a company which has recently undergone downsizing in the reduction
of employee headcount in a specific business unit or across the organisation. Answer the
following questions pertaining to the company that you have researched on and base on the
information and insights that you have gathered from credible sources on the company.
(a) Examine the rationale that the company took to use downsizing as an organization
restructure move and discuss how the communication (if any) to its employees was
carried out.

(b) Analyse the downsizing method(s) that the company has adopted and its effects to the
morale of the employees.

(c) If you are appointed as a human resource consultant to conduct the downsizing
exercise, what would you have done differently (or not) in adopting the downsizing
method and its employee communication method?

(d) In addition to part (c), you are required to recommend appropriate retention strategies
to ensure the high-performing individuals are retained and not adversely affected by the
downsizing event.

Kindly note that additional 10 marks will be allocated for overall presentation and structure
of answers.

will there be any referencing?

Answer 1

A. Economic downtowns and recession periods generally result in Downsizing which is also known as layoffs. It is a strategic decision taken by the companies to cut down the jobs which is the result of reasons like economic downtown or corporate restructuring of healthy organisations. Sometimes for cost cutting, employees are the last resort for the company while sometimes they need change in business strategies. It depends on the situation and company performance whether to go for downsizing or not. If the decision is taken for downsizing, the employee should be clearly communicated and will be given enough time to search for another job. Job cancellation should not be sudden, as it will disturb employee financial as well as family needs. Proper reason for downsizing should be communicated to the employees to avoid employee’s anger and frustration.

B. There are various downsizing approaches adopted by the companies and it depends on the reason why the firm is going for downsizing.

1. Retrenchment- It is a strategy used by firms for centralizing their operations to improve the productivity and profit. It may be removal of unnecessary jobs or re-engineering process. It sometimes result is freezing hiring and reducing the salaries of existing employees which disturb them financially and tension increases in their minds.

2. Downscaling- It is permanent alteration of employees as well as tangible resource capacity. It is adopted when company is facing high competition in the market and working to improve their efficiency through workforce changes. As it leads to severe culture changes, the informal networks are effected which is bad for employee’s morale.

3. Down scoping- It is done when firm divests its operations and remove the employees who are no longer matching requirements of new business operations profile. It put bad impact on employees as they feel they are not worthy and feel morally detached. Other retained employees also, live in the fear of anytime job loss.

C. If I would have been the Human resource consultant, my decision of downsizing will be based on choice between efficient and in efficient employees. Those who have good track records and are beneficial for the company should be retained. Also, the in efficient employees should be communicated with due respect and proper reasoning for their job loss. I would prefer that no doubt will remain in the minds of employees which will tarnish the company’s image outside on employee benefits.

D. It is important to retain high performing individuals and for that retrenchment is one of the best suitable policy as it removes unnecessary jobs only. However, in retrenchment, it should be taken care that high performing employees will not suffer by cutting of salaries as will result in down morale.