Utilities Company Analytical Summary - Example

Name: Professor: Institution: Course: Date: 1.0 HR implications on CEO announcement to lay off 120 workers The CEO’s announcement to lay off 120 workers came as a shock to all the employees of the company. Besides affecting the employees of the company, the announcement had an impact on the projects that were ongoing as well as on the future course of the business. This is because all employees felt that their jobs were at stake and therefore they could not work as expected. The decision had an overall impact on the operations of the company as well as on the morale of the employees. The CEO’s announcement affected the communication system in the company. Both the formal and informal communication networks were affected by the CEO’s announcement of lay off the workers. The employees were not sure about what was being discussed behind the closed door as they continued to feel that their job security was at stake. The employees had difficulties finding information about the current operations and knowing who was responsible for the tasks of those who had voluntarily agreed to take the redundancy packages (Allen, 2001). The CEO announcement also led to employee stress. The jobs of the employees were at stake and this made the employees despondent. The employees started to compare themselves unfavorably with their colleagues and consequently lost confidence in their skills and abilities. In extreme cases, employees became very aggressive with their colleagues. With the announcement, the psychiatric illnesses such as depression and anxiety disorders had increased and the OHS consultants were overwhelmed by the increasing number of employees with these illnesses. The level of anxiety in the company’s employees is anything but functional. There is a mistaken belief by CEO’s like that one of Utilities Company that keeping employees anxious about their job will make them to work harder. However, great stress has caused the employees to concentrate on their insubstantial situation rather than focus on the doing the job well. Fear of losing their jobs made the employees of Utilities to nearly paralyze work. This will only lead to reduced productivity and reduced profit which will only make the bad financial situation worse for Utilities Company. Also as a result of the CEO’s announcement Utilities Company suffered negative corporate image from the members of the public. Although the layoff announcement may have been received positively received by the company owners and stock holders, this announcement gave Utilities Company a negative corporate image for the potential employees as well as potential and existing customers. This negative corporate image can destroy Utilities Company ability to hire and even retain top talent that might be needed in future for the growth of business. The potential and existing customers may decide to go to competitors of Utilities Company especially now that the layoff announcement has adversely affected the delivery of customer services. Immediately after the announcement, the employees were not at ease anymore and as such, they were not motivated to work. Soon, the customer complaints started streaming in and it was very difficult to acquire new customers especially due to the negative publicity by the press. The announcement of the CEO may lead to loss of skills and knowledge. When the CEO asked employees to apply for the redundancy packages, most of the employees who expressed interest in these packages were the expert staff in project teams and highly educated staff. Eliminating these employees would be loss of skills and knowledge in terms of customer preferences, problem solving techniques and operational approaches. This will be a loss to the company. The announcement of the employee may have a negative impact of Utilities Company to creditors and vendors. The creditors may not be willing to extend credit services since layoffs may send a message that Utilities Company is experiencing financial problems. On the other hand, the vendors that the company conducts business with may begin to have questions about the stability of the company and may even start withdrawing from the business (Allen, 2001). 2.0 OHS concerns that arose in response to the announcement 2.1 To staff Job loss is usually an unsettling and traumatic event for an employee and especially if the chances of getting another job are very small. With the announcement of laying off 120 workers by the CEO, the stress of becoming jobless is building up even more which is a health concern for the OHS consultants. Loss of job and especially for the old employees would mean change of daily routine, loss of contact with the working mates and even changing how they used to view themselves. For some employees, losing their job might be as overwhelming as having a divorce or losing a loved one. For this reason, many employees of Utilities Company are at the risk of experiencing a depression. According to research conducted, loss of jobs can bring depression to an employee not only because it brings financial burden but because it affects the employee’s social status, their self esteem, their ability to use their skills, their physical and mental activity. Another OHS concern for the staff is that announcement for will affect the physical as well as the mental health of the employees. As a result of the announcement, many employees of Utilities Company have been experiencing high levels of anxiety, stress, loss of identity and loss of self esteem. The OHS consultants concede that they are overwhelmed by the increasing number of psychiatric illness including stress and anxiety as a result of the CEO’s announcement to lay off workers. The employees have also experience physical health problems due to the anticipation. The OHS consultants indicate that in one extreme case, an employee was violent to their colleague. Researches indicate that such a layoff announcement could lead to increased likelihood of diseases such as peptic ulcer, coronary disease, gout, hypertension, diabetes and arthritis (Jimmieson, Terry & Callan, 2004). 2.2 To Maree To the HR manager Maree, there is also an OHS concern as the announcement also caught her by surprise. The HR manager was hoping that the CEO could have given her time to prepare the employees for this big announcement as well as come up with a good strategy of implementing this big change. To begin with, the HR manager had only stayed in the company for just a year and already found out that the company was understaffed in some areas and therefore deriving a list of an additional 120 workers to be laid off was not an easy task. When the HR manager made the announcement, the employees were shocked and this affected their morale and distracted them from working. This was followed by Trade Union letters against their planned action. Maree did not know how to go about it and this gave her some sleepless nights. This situation exposed Maree to Stress just like the other employees. At last, Maree could not take any more and she decided to resign (Jimmieson, Terry & Callan, 2004). 2.3 How did the organization, and Maree, deal with these concerns The organization’s OHS consultants were able to deal with the issues search as stress and anxiety by giving medical attention to the employees. However, as they conceded, at one time the issues became too overwhelming for them to handle. The organization also tried to deal with the situation by asking the employees to voluntarily take the redundancy packages which would mean that those who were willing to leave could do so willingly without being forced to do so. However, only 52 employees expressed their interest in these redundancy packages which means that this strategy did not do much to reduce the OHS issues. Maree on the other hand tried to talk to the CEO to show him that this plan would not work given that the employees had not been given time to prepare for it and also because it had equity issues and it faced resistance from the trade unions (Zacharis n.d). 3.0What are the equity issues that were raised by the redundancies? Under employment at will doctrine, an employer may decide to lay off a worker for a particular reason or for no reason. However, an employer cannot layoff a worker for reasons that are discriminating. According to the report by the Equity officers that were looking at the layoff issues, majority of the workers on the layoff list were above the age of 50 which the Equity officials found to be an age discrimination issue. The Age Discrimination in Employment Act usually protects all workers who are above the age of 40 years from being discriminated on the basis their age. According to this act, it is unlawful to discriminate an employee on the basis of their age in regards to firing, promotion, hiring, compensation, training, job assignment and even layoff. Before deciding to who to lay off, the CEO of Utilities Company should have thought about all the discriminatory issues because even if the reason for laying off the workers was not because of their age but because of the redundancy of their skills, it may seem like a discriminatory issue since the majority of the workers were above 40 years. The CEO will have to prove beyond reasonable doubts that the reason behind the layoffs was other reasons other than age discrimination (McKinley, Zhao & Rust, 2000). 3.1 What are the risk implications for the organization? The organization risk being sued in a court of law and compensate the aggrieved party. The ADEA allows all the following legal remedies as may be appropriate to for the act: reinstatement of the laid off workers pay the employees for the lost benefits award the employees for emotional distress Payment of future pension benefits. From the above remedies, Utilities stands the risk of losing financially if it a law suit is filed against them(McKinley, Zhao & Rust, 2000) . 4.0 How should the decision to lay off a significant number of staff have been communicated to staff and managers? When confronted with a need to downsize, the CEO was reluctant to give information about the decision fearing that the employees may decide to leave the company even before the company is ready for it. However, such a move has very adverse effects when the employees realize that the management had withheld very crucial information for a long time and they will end up mistrusting the management and may decide not to support the plan. This is what happened in Utilities Company after the CEO failed to communicate about the redundancy plan. When employees are not given the necessary information, they employees may engage in gossip and listen to grapevine. There is need for the CEO should have engaged the workers in a continuous communication network. The CEO needed to have given the employees a clear message about the situation while avoiding double speaking, business clichés while avoiding to leave the employee to read between the lines. The CEO should that have explained clearly in details the next steps to the employees since if this is not done, the employees may interpret unclear information negatively (Paulsen et al, 2005). The communication by the CEO to the employee ought to have the following characteristics: Honest: the information given to the employees should be direct, accurate and complete. The CEO should have conveyed all the information to the employees even if the news was not going to be pleasant. The CEO should not try to sugar coat the information to avoid a difficult situation later on. Authoritative: the information should be delivered by the CEO an employee that the other employees trust to give accurate information. Inclusive: the information should include all levels of the company. All employees whether old or young must not feel left out when the information is conveyed. Timely: the information that is delivered should be received as first hand information and not as a grapevine. Responsive: the communication plan should give the employees room to ask questions, give comments and even give their contributions (Paulsen et al, 2005). The CEO should also tailor the communication plan to suit the prevailing circumstances. The company needs to lay off 120 employees and the communication plan should be tailored to explain the decision of lying off 120 workers. The communication plan needs to be able to explain to the employees why there is need to lay them off and it should also aim at helping the employees to find employment elsewhere. In the case of Utilities Company, the CEO feels that most of the old employees’ skills have become redundant and yet they have become too expensive to maintain owing to their large salaries. The CEO should explain these reasons in the communication plan without sugar coating it (Kevin, 1998). When the CEO is about to make significant lay off like the one in Utilities Company, the employees are bound to be anxious about their job security and will be looking up to the management to give them concrete information about what they expect. The CEO in this case should share as much information with the employees about the layoff process as much as he possibly can so that the employees will not feel left out. In the absence of this information, there will be grapevine which will end up disrupting the organization. The employees of Utilities Company should have been made aware of the lay off as soon as the management had thought about it. The employees who were likely to be affected by the layoff ought to know in advance about how the decision to determine who to eliminate were made. The CEO should have considered using group meetings where the affected employees trust each other and even get along well. However, if the groups have a history of conflict and are not cohesive, the CEO should consider meeting individually with each employee so that they will feel free to air their concerns. Employees will also need to know how performance and service expectation will be adjusted after the significant layoff. The CEO should have communicated to the employees about what he had planned to make the much needed adjustments to the service expectations. The CEO should also share this information with all the customers who will be affected by the layoff. If the workers feel that management has not developed a concrete plan on how to deal the adjustment, they may feel that the burden of laid off workers is falling on their shoulders. Finally, the CEO Communication plan ought to have prepared for the employee response as different employees will react differently to such information that will impact on their jobs unfavorably. Some workers may start arranging for another job while others may be intimidated by the challenges that they face including shock, grief, depression, fear and feeling of helplessness (Wayne & Peg, 2004). 4.1 How should it have been implemented? As indicated above, a communication plan is very essential in a layoff process. Informing the employees that they will be a layoff is a stressful and difficult task for both the HR manager and the CEO. The layoff process to go smoothly, there is need for Utilities Company to implement the communication plan than they designed above. The best way to do this is by concerning a notification meeting with the aim of: Informing employees that some of the jobs will be scrapped off and that 120employees will be leaving the company To inform the employees about this decision in the most dignified and respectful manner so that the person is left feeling positive about Utilities company (William et al,1995) 4.1.1 Pre-Meeting Preparation Before convening the notification meeting CEO should Familiarize with all the circumstances that have led to the decision of laying off 120 workers. In this case. The tough economic times and increased competition have led to the CEO’s decision to layoff Have a written guide which will ensure that all the necessary information is transmitted. Consider whether the employees to be laid off will leave immediately or they will continue to work to the end of the notification period. Determine how the workload will be handled once the 120 workers have left. Have some recommendations of how employees should do after the layoff (Cameron, 2006). 4.1.2 The Notification Meeting The employee’s immediate supervisors should be the ones to conduct the notification meetings which should be conducted in person. The supervisors should ensure that: they are straight forward and give explanations that are clear They deliver the message compassionately and directly and also allow the employees to read the layoff notice. They give the workers background information as to why the decision of laying off 120 workers was made They avoid any comments and discussions that might compromise the decision They are firm and direct with the situation while empathizing with the employee’s situation but also making them understanding that the decision is not negotiable Offer encouragement to all the employees who will be affected by the layoff. Ask the employee to contact the resource centre for Employment Assistance program and other benefits (Cameron, 2006). 5.0 What is the impact of industrial action on the company? Is there an alternative approach the union could have adopted to protect jobs? When an employee decides to take an industrial action, this is because there is breach of employment contract. The call for industrial action by the trade union will have several impacts for utilities Company. To begin with, the industrial action will separate the employers and the employees. One of the main negative impacts of any industrial action is that it works to separate employers and employees. The industrial action will put the employees against the employers. In the Enterprise Bargaining Agreement (EBA), the negotiations always aim at getting what is best for the employee which is to help the employees to retain their jobs while the company tries to keep as much money as possible. These activities of the labor union are counterproductive to the operations of the company. Lying off a significant number of workers is of interest to the labour union and it is for this reason that they have called for industrial action. This has lead to tension between the employers and employees (Peter, 1997). Industrial action called for by the labour unions also has a negative impact on Utilities Company and the economy as well. A labour union basically refers to a group of workers who come together to determine the price of labour. This means that they form a monopoly. This eventually affects the prices that the company will charge for their products. Another negative impact of the industrial action that has been called for by the labour Union to Utilities Company is that it will create more complexity in the layoff process. Before the company decides to layoff a worker, the company will have to adhere to rules that have been set forth by the Enterprise Bargaining Agreement. The company did not consult with the labour union before arriving at this decision and hence the call by the labour union for a strike. The call by the labour union for industrial action may halt the progress of the business eventually. This is because where collective bargaining and labour unions are involved there stands the threat of having a strike. The talks for signing of a new Enterprise Bargaining Agreement collapsed and the next thing will probably be a strike. When a strike occurs, the employees will stop working and the delivery of products and services will ultimately stop. This will mean that the operations of the businesses will have to be stopped until this disagreement is resolved. Meanwhile, customers of Utilities may start moving to competitors of Utilities Company for delivery of services. A strike may set back the growth of Utilities Company and make it difficult to attract new and customers who have already left the company (Littler, 2004). 5.1 Is there an alternative approach the union could have adopted to protect jobs? Instead of calling for an industrial action, trade union may decide to use a third party to resolve the dispute between the employers and the employees using an arbitrator. The process of arbitration will allow the employer and the employee to resolve the layoff issue. The arbitration will use a neutral party known as an outsider to resolve the dispute. The arbitrator usually act a judge in coming up with a decision about the dispute. The two sides of the dispute, in this case Utilities Company and the labour union on behalf of the employees should agree beforehand whether the decision of the arbitrator will be legally binding which means they will take the decision of the arbitrator or whether it will not be legally binding which means that they can still decide to go to court or go to an Employment Tribunal if they feel that the decision that was made was not fair to both party. Alternatively, the labor union may engage Utilities Company in negotiations whereby they will reach at a fair ground for both parties (McKinley, Zhao & Rust, 2000). 6.0 Why did Maree resign from her job as HR manager? Would you have done the same? Maree the HR may have resigned for several reasons: The CEO did not give the HR manager to prepare the employees for the layoff decision which made it impossible for her to make the layoff plan possible There was a lot of pressure that was piling on the HR manager. To begin with the CEO wanted the layoffs to be done as soon as possible not considering that a lot of issues needed to look at before arriving at that decision. There was also the pressure from the labour union and the Equity officers. All of this parties needed Maree’s attention Maree’s felt that the decision to lay off 120 workers was a hasty one and most of the people who were being laid off were old employees which mean that the layoff was age discriminative. However, the CEO could have none of this. He insisted on proceeding with the layoff despite the fact that it was discriminative. Finally, the layoff process was ruining the image of the HR manager as many people sent emails to her to express their disagreement with the idea (McKinley, Zhao & Rust, 2000). I would have done the same as Maree. 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