Human Resource Implications to undo Furloughs - Coursework Example

Report on “Human Resource Implications to undo Furloughs” Introduction: This paper critically analyses the news article “Federal worker unions seek flexibility on furloughs in United States of America”. The human resources perspective for the federal union workers especially in performance management and wellbeing in created. The entire paper focuses on the distress furloughs have on the employees. The purpose of this paper is to undo furloughs to the employees by using HR implications. Following is the online news article on Furloughs in Reuters.com – Federal worker unions seek flexibility on furloughs in United States of America Labor unions are bargaining with federal government agencies in an attempt to soften the financial blow on federal employees as $85 billion in spending cuts kick in. Hundreds of thousands of federal workers may be forced to take several unpaid days off work, after Congress and President Barack Obama reached Fridays deadline without clinching a budget deal that would have averted the across-the-board federal spending cuts known as "sequestration". Even before the deadline, the Pentagon and agencies such as Customs and Border Protection, the Internal Revenue Service and the Environmental Protection Agency had warned their rattled workers that they could be facing furloughs. Unions for these workers say they have little negotiating power to stop the cuts, but they have been bargaining with the agencies to give their employees flexibility. They want employees to have the right to select which days they take unpaid leave, a system in which volunteers can offer to shoulder more of the burden and the ability to seek outside employment, among other concessions. The National Federation of Federal Employees, National Treasury Employee Union and American Federation of Government Employees say the furloughs will hurt workers ability to pay their bills, especially if taken over consecutive days. The American Federation of Government Employees, which represents about 600,000 workers, said its talking with several government agencies but hasnt reached any agreements yet. Members of the treasury employees union spent several days this week in Washington pleading with lawmakers to prevent what they said would cause them a lot of distress. Philip Yamalis, an Internal Revenue Service tax specialist from Pittsburgh, Pennsylvania, was among those who lobbied Congress. He has worked for the government for 22 years and says he feels anxious about the future. "When they say a sequester cuts across the board, they dont realize the fear they place in an ordinary middle-class citizen trying to do his job," he said. While unions still hope that lawmakers will reach a budget deal that will undo sequester after the fact, they have geared up to bargain to mitigate the effects. The National Federation of Federal Employees has also sent its members bargaining guidelines. The union wants federal employers to provide more than the required 30 days advance notice to furloughed employees. It wants agencies to first solicit volunteers if not all employees are required to take unpaid days off. The union also wants employers to allow workers to request specific furlough days when possible. The Office of Management and Budget this week instructed agency heads to cooperate with the unions. The best-case scenario, the union leaders said, would be if Congress reaches a budget deal in coming weeks before furloughs start. A federal union has the ability to file a complaint through the Federal Labor Relations Authority, which would then investigate the complaint. (Source: Reuters.com, Washington, Fri March 1, 2013 7: 24pm EST, Reporting by Elvina Nawaguna, with additional reporting by Anna Yukhananov and Patrick Temple-West; Editing by Karey Wutkowski, Kenneth Barry and Tim Dobbyn) Many changes in the compensation system, terms and conditions of employees, nature of contracting are seen in most of the organizations whether private or government as a result of various Financial blows and other reasons of organizational instability. Many business firms have been trying hard to survive after a financial blow or an event of losses to the firm by opting retention strategies. This may reduce the burden of the organization to some extent, but is not a solution for all the forfeiture suffered. There are many Business organizations that have reduced the work force at the time of financial crisis and financial blow. In other terms furloughs have changed the face of the performance management system in the organizations. Financial blows and crisis result in many challenges in Human resource management. According to Prerna (2012), some of the challenges include less number of recruitments and reduced bench strengths, hike in performance measuring standards, reduction in salaries, furloughs, delay in regular increments, cut or delay in perks, bonus and allowances, and tightness in general working environment. These are the basic issues that are seen at the time of financial issues faced by organization and have an impact on the performance management system of the organization. The changes can be described as there would be increase in the performance measures, pay would be less compared to performance, high level of attrition due to non-performance and the criteria for survival would be high level performance (Prerna, 2012, p. 12). The most ultimate solution that has been identified in performance is the evaluation process that helps is retaining high performers and talented people in the organization and termination and removal of the low performance people. The market economy and the entrepreneurial culture have focused its attention on attaining competitive advantage and getting added value from the better use of the resources (Armstrong, 2009, p. 26). The management considers its workforce as essential resource and tries to make out most profits with limited number. Armstrong (2009, p. 26) asserts that performance orientation has become important, especially in the face of global competition and recession; and the rise of Human resource management has also contributed to performance management. According to Sparrow, this rise was accompanied by a shift in focus from appraisal to a broader agenda of improving performance (cited in Armstrong, 2009, p. 26). Sparrow discusses the three developments that reinforced the shift in focus. They are: Talent management: the systematic identification and development of talented people Employee segmentation: Identifying those segments of employees whose performance really drives the business results and treating them accordingly. The concept of total rewards: The recognition that the reward system should embrace non-financial as well as financial rewards and that non-financial reward such as recognition and growth opportunities could be provided through performance management process (cited in Armstrong, 2009, p. 26). The organization whenever meets the issue or crisis in finance its certain to face a big hit in which the morale are effected. It is the responsibility of the organization to handle the recession as professionally as possible with implementation of best practices. HR department along with financial consideration should implement effective and reliable strategies that help in getting out and lowering the financial blows reducing the furloughs. The HR department and management should take care to present and keep up good appearances (Khan, 2010, p. 156). According to Candrilli et al. (2009, p. 7), the negative economic impact varies from business to business, and region to region reducing the ability of people to freely change jobs. Employees are more willing to accept job security over increases in compensation. Therefore, the economic authenticities require compensation streamlining and adjustments. Organizations have been introducing performance based pay systems during recession, which help them in reducing the financial burden and helps in cost cutting. According to Agarwal (2013), the employees’ salaries are utmost threat at the time of financial blows and face furloughs and cuttings. But this is not a solution and cannot be done for long period of time. Instead strategically approach of performance based pay is opted where there would be mutual cooperation between the employers and employees and link between the performance and reward is established. The organizations in this way can have close control and cost supervision. This type of performance based reward system increases the potential, morale and competencies of the employees and is mutually beneficial to both of them, Agarwal (2013). Employee well-being, ethics, having positive influence and less stressful environment at work place are the important concerns of HR department beside other important functions. At the time of contracts, recruitments all these aspects are to be included in the agreements and contracts made by the HR department. The employee morale, values and ethics are utmost importance at any business organization. For employee well-being following approaches should be considered at the time of financial blows: Development of ownership mentality in work force: In the present economic conditions, an ownership mind-set fills the employees and individuals in achieving the goals and objectives of the organization. This reduces the stress at the work environment and effective performance is seen in the employees. The rewards are shares in the organization, career advancements and financial investments in the interest of workforce or employees. Build a value statement in work force: Employees from their employers pursue the financial rewards for their work, fulfilments of basic requirement and needs, improvement in standard of living and security for their job. Employers should build a value statement that helps the employees which summarizes the projects forward, the total value of company and the term of relationship or job opportunity (vladvisors.com). Minimize business expenses then reducing incentives at the end: Under economic pressures and economic conditions, organizations must not make hasty decisions of firing of employees or furloughs and any other actions. There must be a possible consideration on long tern effects of employment engagement, motivation, and performance. It is better to choose retention strategies, cut down business expenses and other cost cut downs before reducing salaries, Incentives of the employees (vladvisors.com). Development of an Environment of Faith and Trust: Employees must have faith in their respective managers during times of furloughs. Since employees lead the shop floor, their efforts on improvements in processes, suggestions on better cost management, increasing productivity and understanding their frustrations and personal challenges faced by these employees can assist the HR to keep the employee morale high and increase profitability (Messah, Gekara, & Obuba, p. 66). Labour and worker unions, employee federations have been seen to be negotiating and bargaining with the employers at the time of financial blows and crisis resulting in furloughs, firing of employees and cutting down of salaries. But this negotiation and bargaining had very less impact on the employers and organizations. Bargaining could reduce the furlough days but could not undo furloughs. Long Furloughs for the federal union workers may bring those psychological shocks as well as the financial crisis in the employees’ families. It is proposed that employees with higher levels of organizational job embeddedness will perceive shocks a being psychologically brief and perceive episodes of economic instability as likewise being psychologically brief (Wheeler & Rampersad, 2012, p. 335). Harter says that in times of stress like financial crisis, it’s natural for managers to push harder, to want more from employees. But to get more with less, managers need to bring clarity to the situation and engage the employees (cited in Robison, p.1) Cook (2013) says that the threat of these furloughs and their effect on local economies arrives just as states are beginning to recover from the recession. According to Macroeconomic Advisers, this sequestration will slow economic growth by 0.6 percent in 2013, while the furloughs won’t cost federal workers their jobs or drag the country back into a recession (cited in Cook, 2013). Conclusions/Recommendations Down Turn and its Impact: With the effects of financial downturns, human resource management should be managed well by analysing all the effects and impacts caused. After the measurement of the impact financial crisis has on the employer and organization, prevention should be taken such that furloughs do not occur. It is the duty of the HR department to unite the organization instead of expelling the employees for unpaid leave. Communication: Importance must be given to administering the open communication in the organization to remove the anxiety level of employees and to have an increased cooperation from the employees. Restructure the Organization with low hire costs: The organization should be restructured such that the employee doesn’t suffer morale. The employer could pay the employees with a cut down in the payments instead of unpaid leave. Conclusion: Sending the federal workers on furloughs would be more distress to the employees when compared to receiving lower payments during the financial crisis in the organization. This could be until the furlough time lasts. Later rewards and the balance payments could be given to the employees for their performance in tough times. References Agarwal, A 2013, Compensation management during recession, Project Guru: Get your projects done, India, viewed 6 March 2013, http://www.projectguru.in/publications/compensation-management-during-recession/ Armstrong, M 2009, Armstrong’s Handbook of Performance Management: An evidence-based guide to delivering high performance, Armstrong Michael, London, UK, p. 26. Candrilli, AJ, Cole, C, Heck, B, Klemm, A, Manny, B & Schroeder, G 2009, ‘Compensation Guidelines in a Recessionary Environment’, WorldatWork journal, Fourth Quarter 2009, viewed 6 March 2013, http://www.organizationalconsultinggroup.com/Portals/87149/docs/Compensation%20Guidelines%20in%20a%20Recessionary%20Enviroment.pdf Cook, N 2013, Furloughs Come to Main Street: Automatic spending cuts will affect federal workers wherever they live – even thousands of miles from Washington, NationalJournal, viewed 6 March 2013, http://www.nationaljournal.com/magazine/furloughs-come-to-main-street-20130228 Khan, NA 2010, ‘A Study on Performance Management through Recession Metrics during Downturn’, Asia Pacific Journal of Social Sciences, vol. II, no. 2, July-December 2010, pp. 155-165, viewed 5 March 2013, http://www.socialsciences-ejournal.org/4.9.Nafees%20%20A.%20Khan.pdf Messah, BO, Gekara, MG & Obuba, RO n.d., ‘Role of Human Resource Management in Global Recession’, Pacific Business Review – A Quarterly Refereed Journal, pp. 62-69, viewed 6 March 2013, http://www.pbr.co.in/vol3iss4/chapter%206.pdf Navaguna, E 2013, Federal worker unions seek flexibility on furloughs, Reuters, Washington, viewed 3 March 2013, http://www.reuters.com/article/2013/03/02/us-usa-fiscal-unions-idUSBRE9200ZQ20130302 Perrewe, PL, Halbesleben, JRB & Rosen, CC (eds.) 2012, Research in Occupational Stress and Well Being: The Role of the Economic Crisis on Occupational Stress and Well Being, Emerald Group Publishing Limited, UK, pp. 335. Prerna 2012, ‘Performance Management – Crisis, Faces and Approaches at the time of Recession’, International Journal of Management and Social Sciences Research (IJMSSR), vol. 1, no. 2, November 2012, Pehowa, viewed 5 March 2013, http://www.irjcjournals.org/ijmssr/Nov2012/3.pdf Robison, J 2013, What if the Recession Endures? Gallup Business Journal, US, viewed 5 March 2013, http://businessjournal.gallup.com/content/117226/recession-endures.aspx#1 The Seven Imperatives – Human Capital and Compensation Planning for the Recession and Beyond 2013, The VisionLink Advisory Group, Irvine, CA, viewed 6 March 2013, http://www.vladvisors.com/compensation-information/article-detail.aspx?ID=21 Read More