Background on Downsizing.ppt

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1、Downsizing,Rightsizing,Workforce reduction,Delayering,Redundancy elimination,Re-engineering,Restructuring,Brightsizing,Rethinking,Timesizing,Laid Off,Trimming the fat,Outplacing,Background on Downsizing,1800s-1930s emphasis on individual, self reliance, and laissez faire government1930s New Deal Leg

2、islation & regulation of employer dominated workplaceHealthy post-WWII economyKorea, Viet Nam, Middle East Oil Embargo, 1987 Stock crash, S&L debacle, global competition,80% Self-employment,Age of Welfare Americaunemployment compensationSocial Securitywelfare workplace standards (FLSA),employer-empl

3、oyee long term commitmentinsurance & health benefitsworkers compensation & disabilityretirement planseducation & trainingsalary steps & promotion,90% employees,Fiscal Stress & Immediacy of Downsizing,Duration,Short,Long,Stress,Low,High,Fiscal Crisis,Fiscal Crush,Fiscal Crunch,Fiscal Squeeze,Short-te

4、rm budget balancing: reduce over time, freeze hiring & expenditures, defer maintenance, stall payments,Anticipate budget cuts & plan appropriate action: change operations management, change size & mission,All tactics, including layoffs, termination of programs, cancellation of equipment replacement,

5、 etc.,Great change: redefine mission, shed functions, temporary employees & volunteers,Downsizing,Change DriversMergers & AcquisitionsAvoid bankrupcyPrepare for privatizationReduce costs to remain competitive,GoalsReduce expenses (46%)Increase profits (32%)Improve cash flow (24%)Increase productivit

6、y (22%)Increase ROI (21%)Increase competitive advantage (19%)Reduce bureaucracy (17%)Improve decision making (14%)Increase customer satisfaction (14%)Increase sales (13%)Increase market share (12%)Improve product quality (9%)Advance technology (9%)Increase motivation (7%)Avoid takeover (6%),Wall Str

7、eet Journal, 6-6-91,Checking the Numbers in Downsizing,Percent of First Day Stock Change,US News & World Report, 12-20-93,Personal Modifiers on Downsizing Effectsagegenderfinancial positionsocial supportlength of employmentlevel of educationprevious occupational leveldegree of satisfaction with term

8、inated jobcareer statusindividual stress-coping ability,Downsizing Effects,Organizational Modifiersmethod of termination*advance noticechannels usedoutplacement counselingretraining availabilityextended benefitsseverance pay,Organizational Changeschanged job responsibilitiesmodified reporting relati

9、onshipsnew co-workersnew policies & proceduresfewer personnel for jobexpanded role responsibilitiesAdditional (re)training,Survivor Reactionslower job satisfactionlower commitmentlower job involvementincreased intention to turnoverdecreased moralemistrust (35% credibility drop)anxietysurvivor guilt

10、(depression),About 68% of all downsizing, restructuring, & reengineering efforts are not successful,The Dirty Dozen Attitudes Associated with Downsizing,Resistance to change- threat rigidity Loss of trust- loss of confidence both waysDecreasing morale- infighting & mean moodLack of teamwork- focus o

11、n individual protectionNon-priorized cutbacks- across-the-board cutsCentralization-top down deicsions, less power sharingPoliticized special interest groups- fragmentationLoss of innovation- less creativity, low tolerance for riskShort-term crisis mentality- neglect long term strategyIncreasing conf

12、lict- competition for scarce resourcesRestricted communication- only good news sharedLack of leadership- scapegoating, unclear priorities, siege mentality,Cameron, Whetten, & Kim (1987).,1,2,3,Downsizing Strategies,Workforce Reductionearly retirementtransfersoutplacementbuy-out packagesgolden parach

13、utesattritionlay-offs,Organizational Redesigneliminate functionscut hierarchical levelsdrop divisions or productsconsolidate or merge unitsreduce work hourslengthen shifts,Systemic Strategies (TQM): Redefine change as-as a way of lifeongoing processcontinual improvementsimplificationenroll employees

14、 to generate and implement accountability,Legal Risks in Downsizing,Age discrimination- Age Discrimination in Employment Act (over 40)Race benefits improperly terminated or withheldTort claims- Intentional infliction of emotional distress, defamation, contract interference, invasion of privacy, frau

15、d,Effective Downsizing: Best Practices,Top-down include suppliers, customers, distributors in planning & implementationSmall semi-autonomous & large well-integrated structuresMeans to end and end in itself- improve productivity and enhance competitiveness,Huber & Glick, (1993),Three Questions-1. For

16、 a company in or approaching a crisis, what should they consider in viewing downsizing as an option (what questions to decide go/no go)?2. If downsizing is decided on, how can it best be implemented (how select, prepare, and transition people out)?3. Following downsizing, what should be done to regain survivors as an effective work force?,