Effect of Layoff on Remaining Workers - Assignment Example

Human resources Test 2 of Human resources Test 2 Q a Message being sent to workers in an unhealthy layoff procedure: The layoff procedure outlined in the assignment indicates a lack of caring and empathy towards the mindset of the employees. Any organization especially those formed for the purpose of profit has different stakeholders (like shareholders, owners, the top management, employees, creditors etc). it could be said that workers have conflicting interests with the management and or stakeholders and owners. The former seek to hold a secure job with maximum compensation and other benefits while the latter group is focused on cutting costs and developing a lean organization able to cope up the increasingly global business environment. If the economy is healthy, a fine balance can be achieved between these two conflicts. But factors beyond the control of an organization like competition and more severely recession on a national and global scale can force the management to bring down expenses through such procedures like layoffs. While the management generally goes about this procedure with a level of cold and inhuman attitude, it is the workers that bear the blunt (economic and social) of being left without a job. This section deals with the attitude of the workers subject to layoffs. There could be genuine reasons why such an action is taken by the management. For example, a worker or a group of employees may not be up to the mark of performance criteria set up by the organization. According to a business article, such actions can even extend to acts of insubordination. These can be justified that workers have gone against the common good of that organization. But in other instances, layoffs occur due to no fault of the employee. In such cases, the mindset of those affected can be encapsulated as follows – “No matter the cause for dismissal, telling a worker that his or her services are no longer required is a difficult statement to make. You may cushion the blow with praise, you may justify it with numbers, or you may cite the workers poor performance as the reason, but no matter what you say to the fired employee and no matter how you explain it, the end result can be devastating to both parties involved” (Davis, 2009). In this instance, if a worker genuinely feels that his or her contribution to the organization is below par, such a fate would be accepted and the person will be forced to look at other avenues of employment. This in general can be stated to be the reaction of employees laid off due to external factors. Another factor that motivates employees to sabotage or reveal information could be an after effect of a poorly managed layoff. But in this case, it would indicate that such instances occur in cases where employees have the technical; ability to manipulate databases of companies. This is especially true in the case of employees who have the access and technical ability to manipulate or hack the IT systems of an organization. This is a factor that needs to be considered when laying off employees. The management need not give into such potential threats, but should take precautions so that laid off employees do not have access to the organizational data base in the future. This again could be a reason why the management takes drastic and quick steps with regard to a laid off employee leaving the premises as soon as possible without taking any valuable documents with them. Q. 1 (b): Effect of layoff on remaining workers: Review of literature on the above area of actual layoff seems to indicate that those employees still (temporarily safe) within the payroll could also be negatively affected. The first of this possible layoff category would be the poor performers (Mejia, Balkin & Cardy, 2010). First in and first out is another area of concern for employees. It would be based on the assumption that new employees have incurred the least cost to the organization in terms of training and employee performance. So it is only logical that this category be targeted for a future layoff. Older employees have already contributed to the performance of the company especially where it requires physical exertion. On an economic point of view, these employees are no longer valuable to the company. There are other factors to be considered here. Apart from the parameters mentioned above, which is about the least performing workers, in terms of capability and age, each and every employee especially in the non-managerial capacity could be subject to future layoffs, either due to internal or external factors. Q 1. (c) Customer oriented approach towards layoff: A customer need not be concerned with the laying off a staff member or employee. As a person who may have the same experience of being left with no employment opportunities, there could be a certain level of sympathy or empathy. But otherwise, there is no apparent concern. As a customer, this stakeholder apparently requires the best prices in purchasing. It only matters to him or her whether such competitive prices are provided due to any management cost cutting processes whether it is through lay off or not. But modern management practices can develop a customer driven human resources policy or practice which can benefit both employees and the organization as a whole (Mejia, Balkin & Cardy, 2010, 219). In other words, a customer centric HR policy can help to create a highly efficient work force. “Customer focused employees require less supervision and produce better work when they are performing for customers” (Taylor, 2009, 204). If customer satisfaction can be directly linked to employee performance, they can contribute to performance evaluation. This in turn will help the management to create a list of valuable employees across all levels in the organization. In such a situation, a particular customer will seek the services of a customer centric employee and will be supportive of his or her role in the organization. Q. 2 (a). Evaluation criteria of employees in the event of a competitive threat (like Wal-Mart): Wal-Mart can be seen as a global icon of competitive threat to small retailers. There have been instances where many small retail organizations have gone out of business due to the presence of such large retail chains that provide customers with products of the same quality and quantity at a much lower price. But smaller organizations need not necessarily be afraid and close down their business just because of such retail juggernauts. Mejia et al provides a list of criteria that can be used to evaluate employee performance that can provide quality and customer centric service. According to the authors, employee job security is one of the best policies that can be implemented. Other HR strategies are given below. Screening of job applicants is important. It is better to provide employment to people who are productive rather than concentrate on cheap labor. This is one of the policies that employers like Wal-Mart follow and is one area where a small business organization can compete with such global giants. Making employees part shareholders of the organization is another policy that can be implemented. Communication between the owners/top management is important. Employees should be made aware of the competitive challenges and should be provided with the authority to develop their own practices and methods of effectively dealing with customer requirements. This could also be termed as employee involvement in decision making at their respective levels. Another aspect that could be effectively developed in smaller organizations is effective team work. This will result in better all round performance. Smaller organizations may not look at employee training as a solution to external threats. Effective training programs can boost the quality of employees and in turn result in a continued and satisfied customer base. Stretching the capabilities of employees is another technique that can be implemented. Studies have shown that challenges and responsibilities coupled with the necessary authority and power can result in a highly effective work-force. Career advancement even though limited is another option that can be provided. This will result in developing the managerial and leadership qualities of individual employees. Such persons are ideal candidates for middle and top management positions and can effectively manage shop and retail level employees. In short, companies like Wal-Mart need not necessarily be a business threat. The quality, commitment and service of the employees can be a force to counter such threats. Wal-Mart (according to an internet search) does have a lumber division among many other and diverse consumer products. The company does not have core competency in this area and this is where a personal relationship with customers can be developed. Literature on the area of customer relationships indicates that this is one of the most important aspects of retaining and developing customer loyalty. “Customers prefer to buy products tailored to their specific needs” (Lahiri & Ghosh, 2012, 295). Lumber requirements will vary in size and weight from customer to customer. Apart from this, hardware items related to this particular industry can also be added as a part of the product range in the company. Being a medium sized firm, it will be easier to anticipate and satisfy customer needs. The company cannot compete in terms of prices with an organization like Wal-Mart. Hence criteria like personal service, satisfying individual customer needs, and a person to person relationship between customers and employees are the major factors that need to be considered here. If employees are attuned to meeting specific needs of customers, then it is possible to stay in business in spite of the presence of such retail giants. Such organizations do not specialize in a particular product or service; hence it is possible for a small firm that does business in one area (like lumber) to develop a core competency that will be able to provide superior quality of service. Q. 2 (b). Procedures or behaviors emphasized with your supervisors who actually complete the appraisals? Unbiased and balanced performance appraisal is seen as a necessary element in employee behavior, effectiveness and motivation. From an employer’s point of view an effective appraisals program “includes the identification, measurement and management of human performance in organizations” (Mejia, Balkin & Cardy, 2010, p. 223). Performance appraisal should benefit both the employer and the employee. From the latter’s point of view an appraisal program is a right to know how he or she is being viewed in terms of the quality of work done (Boice & Kleiner, 1997, 197). This becomes important in case of employees who are efficient. It is also very relevant when the organization is planning to lay off workers for whatever reason. If a particular employee feels that his or her work is being effectively appraised by superiors, then a decision on the part of the management will be accepted in a rational manner. The authors mentioned above goes on to provide other parameters on which employees will accept a particular appraisal system conducted by superiors. They have to be trained to implement and conduct scientific appraisal methods. This is also relevant from the employee point of view. Another factor is periodic appraisal which may vary from organization to organization. The frequency may be more in highly competitive industries. If a company only conducts an appraisal prior to a lay off, employees may resent such a move as an excuse on the part of the management (to find reasons for termination). Employees also expect written records of the appraisal and access to them if they feel so. If an employee has more than one supervisor, the appraisal should involve all of them so that any potential bias by one supervisor will be avoided. Again this will also help the management to identify the strengths and weaknesses an employee has for performing different types of duties. The actual measurement system should be designed to accurately measure performance. It should also be uniform for assessing the rating of a particular job. All employees expect to be measured under a uniform system. In other words, using different measurement systems to evaluate a particular task should not be done. Superiors should not have bias towards employees in terms of gender, race or nationality. Most importantly, employees expect guidance and support of supervisors to improve areas of their performance. The one factor to be considered here is that employees should be willing to be coached and trained. Employees also expect their superiors to comply with all the legal requirements and company policies regarding appraisal. Finally any reward (for example, pay for performance) should be given as soon as possible after the appraisal. Q. 3. (1). Return on investment calculation for training employees: Return on investment (ROI) is a management evaluation system that measures the cost versus benefit of an activity or strategy. this is applicable in the area of employee training also. Most organizational activity especially involving specialized skills and knowledge require initial and periodic training. This is an area of expenditure and any organization has to justify the costs involved. In other words, the benefits from the actual work (after training) should cover the costs that have been incurred. This is a logical and practical strategy that should be followed by any forward looking organization. So, if a particular training program is directly linked to productivity, using ROI is practical. An example would be a production line where new machinery and technical knowledge required. If productivity which can be measured actually increases, then ROI has been achieved. Q. 3 (2) Measures of training other than ROI: Mejia et al states that while ROI is a practical tool to measure training costs, the new trend is moving towards achieving overall and specific strategies rather than productivity. This is especially true in case of customer service where they come into direct contact with employees. There are apparently two factors that need to be considered. One is that it would be difficult to measure productivity in the area of customer service at least in the short term. A more practical approach would be to study and form a strategy or method to evaluate employee behavior. If such behavior is acceptable to customers, the possibility of repeat visits (orders) and referrals will result. Its result may not be apparent in the short term. But over a period of time, return of old customers and business provided by new ones can be measured and understood. This customer centric behavior and training to achieve it will pay off in the long term which is a requirement for the survival and growth of an organization. Q. 3 (3). Ensuring behavioral measurement: Training to implement a particular behavior can be done by an organization. But actual behavior exists outside of the training program and that which should be measured. This can be achieved only with shop level supervisors and managers who are in constant contact with employees directly dealing with customers. But they may not take an active role in this regard. strategies like the critical-incident method can be implemented whereby supervisors can rate specific actions or behaviors that can be judged as being positive or negative in terms of customer satisfaction (Noe, 2007, 260). An example is provided by the authors regarding this. A service employee was required to call on a customer whose refrigerator was giving problems. He diagnosed the problem after talking to the customer over the phone. He made sure that all the necessary replacement parts were available so that the customer could have the problem solved with the first visit. This is a positive customer centric behavior and can be rated as such. If evaluation forms are given to supervisors, the management can ensure that they are being effectively filled ensuring behavior measurement. Q. 4 (1). Compensation issues at Mountain States University: The first and primary complaint especially by senior faculty members is that they are not paid according to their qualification, seniority and experience. The second complaint is that new faculty member is compensated at much higher levels when compared to their own. In other words, there is an imbalance between salaries paid to senior and junior faculty members. The third complaint is that senior faculty members are not paid according to market standards. Q. 4 (2). Dean’s explanation on the compensation issue: The dean’s explanation is justifiable in the case of paying market rates to new faculty. Otherwise the university will not be able to attract competent staff. But the second explanation that the university does not have the funds for equitable compensation is not satisfactory. He could be helpless in this regard, because it has resulted in underutilization of senior faculty services. Eventually senior faculty members may even leave the university in search of better prospects. Q. 4 (3). Dean’s future dealing regarding the compensation issue: It is obvious that the dean has no power to increase compensation levels because of lack of funds. One option would be downsize the senior work-force thereby making available more funds that can be used to increase compensation. The dean could also resort to non-monetary methods of motivation like recognition, praise etc targeted at senior faculty members. Q. 5 (1). Team based incentive issues at Lakeside Utility Company: Team based compensation plans do not evaluate individual performances. This has led to some of the lazier staff members to become loafers. They know that payment of incentive is assured if their team performs well even without their contribution. Another drawback of team based incentives (especially in this case) is that all types of work are evaluated on common criteria. But in an organization like Lakeside, teams have to perform diverse tasks some of which requires more time to complete. This will naturally lead to dissatisfaction of staff undertaking such tasks because their performance rating will naturally be lower thereby eliminating chances of receiving incentives. Q. 5. (2). Appropriateness of team based incentives at Lakeside Utility” It is apparent that the current team based incentive system is not appropriate. An electric utility company requires diverse tasks as a part of their activities. Tasks like routine maintenance may take a shorter period to complete when compared to such tasks like new installations or major repairs. Q. 5 (3). A strategy for implementing both team and individual performance based incentive: It will be a practical necessity to combine both team and individual based incentive plans. In the case of team based incentive, the required time taken to complete a particular task has to be calculated. Tasks that take more time have to be given some points (weights) that will result in a more equitable compensation plan. For example, new installations can be awarded incentive points for every half hour while routine maintenance teams can be awarded points for every hour worked. Since all the tasks in the company are team based, it could be difficult to develop an individual compensation plan. But this can be done with the help of the team leader who will be in a position to identify the hard worker and the loafer. The only factor to be considered is that evaluation of individual performance should be unbiased. It should be based on actual hands on contribution of each worker. References Boice, D. F., & Kleiner, B. H. (1997). Designing effective performance appraisal systems. Work Study, 46(6), 197-201. Retrieved 29 July 2012 from http://www.ctu.edu.vn/centers/cfl/learningresource/ebooks/1.pdf Davis, M. (2009). How to lay off staff. Retrieved 28 July 2012 from http://www.investopedia.com/articles/pf/09/lay-off-staff.asp Goldman, R (2009). Recession turns IT workers into hackers, ABC News, Retrieved 29 July 2012 from http://abcnews.go.com/Business/story?id=7027145&page=1#.UBRcWqBRBbk Lahiri, G. & Ghosh, S.K. (2012). Principles of marketing and e-commerce, Dorling Kindersley Mejia, G. L. R., Balkin, D. B., & Cardy, R. L. (2010). Managing human resources. Prentice Hall. Noe, R.A. (2007). Fundamental of human resource management, McGraw-Hill Taylor, B (2009). Customer driven change. Brown Books Publishing Read More