Management to Layoff Employees at Utilities Co - Case Study Example

Table of Contents Introduction 2 Issues in Utilities Co 2 Implication of CEO’s announcement to lay off staff 4 OHS concern with regard to general staff 5 OHS concern with regard to Maree 5 Ways in which Maree & the organization dealt with it 6 Equity issues raised by redundancies 7 Risk implications for the organization 7 Impact of industrial actions 9 Alternative approach for the union 9 Manner in which the lay off should have been communicated 10 Ways in which layoff decision should be implemented 11 Reason for Maree to resign the job 12 My Views 12 Conclusion 13 References 14 Introduction The Utilities Co. case highlights the manner in which the changing external environment and the economy moving into a downward recession have been affected. Businesses all around the world has to continuously face the changing and evolving external environment and has to mould the manner they work so that the best results can be achieved. Recession is an economic condition which results in job losses and companies looking for alternatives through which they are able to reduce their cost. Utilities Co. presents an example in this direction where due to recessionary conditions the management had to decide slashing off 120 jobs. The management previously looked towards voluntary redundancies but when it didn’t work the company had to resort towards slashing jobs. This resulted in resistance from all quarters including the unions and created a situation where the human resource manager Maree had to resign. This report thereby looks into the issues that Utilities Co. were presented with and looks towards identifying the manner better decisions could have been taken and the manner in which it could have been communicated so that a basic framework regarding the manner in which the task was executed and the manner in which it could have been executed looked into. Issues in Utilities Co Utilities Co. faces a major problem which is to deal with the changing business environment which has made the economy move into recession. This has increased the cost burden and has made the management look towards taking decision where they look towards laying off the employees so that the organization is able to ensure cost reduction techniques and survive in the difficult times. Utilities Co. has a mix of staff where certain departments have more staff than required and certain department has less staff then required. This has resulted in a problem for the management as certain section of the employees are showing efficiency while dealing with things whereas the other section is looking just to work and not looking towards innovation to improve the quality of work. This has made the management look towards laying off the under performing employees so that the organization is able to cut off cost (Tang, 2003). The management has looked towards voluntary redundancies as the first step during which the organization looks towards ensuring that employees who are new and underperforming leave the organization. Instead, the management has found that employees who are experienced and contribute towards the organization are leaving. This has multiplied the problems as the organization instead of laying of employees who are not contributing are laying off employees who are working. Also, the fact that the planned number of 120 employees are not looking towards voluntary redundancies has made the company is slashing jobs. The overall effect has been severe and has raised resistance from unions and others people associated with the company. The management also didn’t provide the required time to the human resource manager to plan the lay off and just pushing it o the human resource manager Maree has also resulted in her resigning from the job which has further aggravated the matter for the organization. Implication of CEO’s announcement to lay off staff The CEO’s announcement to lay off employees will create tension among the employees as the fear that they will loose their job will haunt them. This will make the employees loose focus on the actual work in hand and will always be seeking towards a fear of loosing their job. The entire process of formal communication which the organization has will be in turmoil as informal communication will take place and the topic of discussion will be laying off employees. This will thereby make the employees move away from their main aim and will look towards finding ways to save their job. The overall condition will be such that the employees will feel dejected and demotivated. This will also make the employees look for opportunities and employees who are even hard working and are contributing towards the organization will find id difficult to cope with the situation and will result in demotivation and employees looking for alternatives to save their job (Ralston, Hallinger, Egri & Naothinsuhk, 2005). The CEO’s decision will thereby spread like fire in the organization and will also result in resistance from human resource departments, unions and people working for the community (Yukl, 2009). This will also result in affecting the brand name of the organization and the overall effect will be so severe that the organization will find it difficult to deal with the situation in a manner which will help them to grow over a longer period of time OHS concern with regard to general staff The OHS concern towards the general staff is that the fear of loss of jobs is making the employees loose control over themselves and are becoming violent. This has made the stress level of employees increase and has reduced their focus on the work. This has also affected the peace and harmony that existed within the organization and has made them look at ways of achieving their aim without looking to be ethical. The overall effect has been so severe that those employees from all areas are feeling increased level of anxiety (Daiyun, 2008). The OHS is concerned as the present attitude of the employees will affect the overall business of Utilities Co. and will make the employees to treat their customer in an ill way. This will also result in increase in complaints and if the mechanism continues for a period of time than the entire team will find it difficult to control the situation and will result in a loss for the organization as it will loose both its valuable customers and employees making it difficult to perform when the economic situation stabilizes OHS concern with regard to Maree The OHS concern towards Maree is that the human resource manager is new and has joined the firm recently and giving her no time to implement the changes and cutting down jobs will increase the burden on her. The fact that the management hasn’t given time to develop a stratgey through which the message needs to be communicated and has only looked towards slashing jobs will make it difficult for Maree to make her employees understand the reason for it. This will also result in resistance from different quarters and since the lack of time will make it difficult for Maree to ensure the timely changes. This might result in a situation where Maree resigns from the job as the additional pressure which the management has put on her will make it difficult for her to accomplish her task and this will thereby result in a loss of focus and temperament. This will thereby affect the organization as Utilities Co. without their human resource manager will find it difficult to ensure that the jobs are slashed and will thereby make it difficult for the management to cut jobs and will increase the overall pressure on the business. Ways in which Maree & the organization dealt with it The organization looked towards enforcing the decision of layoff on the human resource department and provided them with a list of selected people who has to be laid off. The list consisted of people who were aged and were not performing as per the requirements of the organization. Laying off the employees would have resulted in partiality and would have brought people from human resource commission as the report looked at people of one age and sex. This could have further multiplied the problem but the organization wanted it at all cost and looked towards self redundancies but when it was not accepted looked towards imposing it on the human resource department and employees Maree on the other hand wasn’t provided time to plan a way in which the lay off will be communicated. This made her look towards laying off the employees and passing on the decision of the management regarding the voluntary redundancies without any planning. This created chaos within the organization and made employees doubt with suspicion the manner the management was looking at things. When the required people didn’t resign through voluntary redundancies Maree had no option but to sack the employees which would raise questions and doubts from all quarters (Deresky, 2011). This made Maree resign from the job and made the entire department and the organization in a fix regarding the manner in which the matter will be dealt further. Equity issues raised by redundancies The manner in which Utilities Co. is looking towards voluntary redundancies raises the issue of equity as there are employees who have equity representation in the company. This creates doubt about the manner the company deals with things and also raises questions on the manner the organization looks towards making rules through which there is fairness in the process of hiring. This also creates doubt in the manner the organization deals with employees and raises concern in the way the management is looking towards fairness in the organization. The issue of equity strengthens by the fact that adopting a mechanism through which the organization is looking towards ensuring a way to laying employees will make the organization doubt the credibility and manner in which the performance is being evaluated. This will thereby create doubt in the manner the organization perceives the working of the employee and will requires ways to deal with it in a better way so that there is effectiveness in the organization. Risk implications for the organization The manner in which Utilities Co. looked towards laying employees raises questions and doubts about the manner the management worked. It increases various risk for the business as looking towards a policy of sacing employees could result in the following risk Utilities Co. could face obstructions from the union department as laying off 120 employees at a time without prior communication raises question about the recruitment policy and will make the trade unions raise their voice against it which will make it difficult for the organization to carry out their daily functions and duties with the employees they have Utilities Co. could also face problems from the Human Rights Commission as the person they were laying off was aged and under performing. This could lead to a situation which could result in the management looking towards differentiation between the work force and looking to sack the old people. This could raise questions on the credibility and the authenticity with which the company was performing Utilities Co. brand image could be affected as it could lead towards people away from the company as an ill treatment on the part of the organization will make people look at the company with doubts and will thereby make it difficult for the management to ensure that proper steps are taken to ensure growth in the brand (Hale, 2003) This will also make it difficult for the organization to find fresh talent especially when the economic situation improves as candidates looking towards the organization will have a fear in the back of their mind that during times of distress the management will look towards firing them and will thereby make it difficult for Utilities Co. to find new and fresh talent in the future (Jay, 2010). Impact of industrial actions The impact will make the industry be against the manner in which Utilities Co. is performing as the steps taken by the management of the company to sack 120 employees will make many players in the industry to be against it. This will make Utilities Co. face problems and obstacle from the different players in the industry. This will have a bearing on the reputation level of the organization and the different players like suppliers, creditors and customers will doubt the manner in which the decisions are taken at the individual level. This will also raise questions on the manner Utilities Co. looks towards dealing with employees. On the whole a step which looks towards sacking employees will result in spoiling the brand image of Utilities Co. and will thereby have an impact on the industry and will create a situation where other players in industry will be finding it difficult to match with. His will result in differences and create a stance where all the players are against the decision taken by Utilities Co. with regard to the employees. Alternative approach for the union The union could have looked towards increased bargaining with the management of Utilities Co. They should have looked towards protecting the employees and ensuring that minimum harm could have been done. The union could have been hard on their stance and looking towards ensuring that no employees were sacked and could have made the management understand the fact that recessionary conditions were a passing fad and with time the situation could have improved which would have ensured that the employees could have been used for the future (Heathfield, 2010). The union should have looked towards ensuring that they develop a structure where the perks and other facilities being enjoyed by the management and the top level employees could have been curtailed and the organization should have looked towards ensuring that the talent was not hived off. There stance could have ensured that Utilities Co. would be able to ensure effectiveness and ensure that the employees were kept with the organization. Manner in which the lay off should have been communicated Utilities Co. should have ensured that a proper strategy should have been prepared where the employees should have been communicated clearly and properly the reason for cutting down employees. Utilities Co. should have ensured that the management had taken a role of a mentor and made the employees understand the situation the business was in and after identifying the manner in which these changes will benefit the employees over a longer period of time (Fizel, 1999). Utilities Co. have to look towards making the employees that the laying off process is a temporary one and is done to deal with the current economic crisis that the business is facing and once the problem gets sorted out then the organization will look towards hiring the employees. Utilities Co. needs to make the employees understand the difficult situation and after ensuring that the employees are satisfied with the manner in which the situation will benefit them in the future the changes should be made and proper communication for the same should be provided (Franco, 2009). Ways in which layoff decision should be implemented Utilities Co. have to look towards ensuring that the business looks to develop strategies where the layoff process is implemented in a manner that ensures maximum efficiency and minimum obstacle from the employees and others. Utilities Co. have to look towards ensuring that they provide the employees with a proper communication which states the reason for layoff. The management has to ensure that a correct method is adopted and the employees are provided some time to look for a better job (Frambach, Prabhu & Verhallen, 2003). It should also be ensured that the employees are provided with sufficient time to deal with the changes. Utilities Co. also has to ensure that they assure the employees that the company will look towards recruiting them if the company looks towards recruiting people in the near future when the economic situation improves (Yamamura, Birk & Cossitt, 2010). This will make the employees have faith in the decision of the management and will act as a guide through which the company will be able to ensure layoffs. Further, Utilities Co. should also look towards ensuring that the management provides complete details of people being laid off and also provide an example by showing the manner in which the perks and special facilities which people at the upper level used to enjoy has been removed. This will act as a sound process to ensure that the management is able to abide by the decision to lay off people. Reason for Maree to resign the job Maree had resigned from the job because the decisions to sack the employees were put on her head by the top management and the problems were not discussed by the management with them. Also the fact that Maree was not provided with the required time which would ensure that the decision could have been properly communicated and strategies drawn through which Maree could have made the employees understand the reason for doing so. The fact that the management didn’t give any role to Maree and sacking people would further make the issue complex so Maree instead looked towards resigning as it would pass on the burden to some one else and it would also make the employees understand that it was not her decision but the decision of the top management in which she had no role. This would thereby justify her role in the organization and would ensure that no blame could be put on her regarding the manner in which Utilities Co. was looking towards layoff. My Views I would have also taken the same decision that was taken by Maree because the manner in which the management of Utilities Co. looking towards accomplishing the layoff was not fair. They had not provided the required time which could have ensured that the situation didn’t worsen much and would have provided an opportunity to at least make a strategy and communicate with the employees regarding the same. Providing time and allowing to deal with the matter on one self would have ensured that a different decision could have been taken. The adamant attitude of the management to enforce a layoff through sacking employees who have been picked would have been unfair. If given a chance and if the management has provided the authority and time to deal with the matter then my decision could have been different but given the constraint that the management has put me in I would have also resigned from the job. Conclusion Utilities Co. thereby faces different obstacle which has made it difficult for the management to layoff employees. The fact that the management looks towards laying off employees at all cost and not providing time to the human resource manager to deal with the situation has raised concerns for the management in different departments. This has raised the issue with the human right commission, the union, the industry and the employees itself. This makes it important that the management plans the manner in which they look to lay off their employees in a proper way so that the organization is able to ensure a strategy through which the changes can be easily implemented and steps taken to reduce the number of employees that the organization has. References Deresky, H. 2011. International Management: Managing Across Borders and Cultures (7th Edition) Pearson Daiyun, Y. 2008. Some Characteristics of Culture and Its Possible Contributions to the World. Pecking University, China Franco, G. 2009. Training and development in an era of downsizing. Journal of Management Research, 9 (1), pp. 37 Frambach, R., Prabhu, J. and Verhallen, T. 2003. The influence of business strategy on new product development: the role of market orientation. International Journal of Research in Marketing, 20 (4), pp. 143-153 Fizel, J. 1999. Does efficiency matters in managers. Journal of Management, 25 (4), pp. 567-585 Heathfield, S. 2010. 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