Human Resources Implications to Lay Off Staff Utilities Co - Case Study Example

Name: Tutor: Course: Date: HR implications to lay off staff A Case Study of Utilities Co There are several implications which relate to the CEO’s announcement to lay off 120 staff. Carrying out the exercise of lay off is not an easy task because the HR department will evaluate several issues in order to make an informed decision. The HR department must consider the implication on a legal perspective as well as on a personal perspective. The most stressing issue for the Utilities Co. HR department is the fact that the company’s CEO had not made a thorough consultation before making this big decision (Stone 589). It is evident from the analysis that the HR manager Maree was kept in dark regarding this development by the CEO. The decision to lay off employees without the informed knowledge of the HR department has far reaching implications on the management of the company. The first implication is that the HR department will have to deal with the legal actions that might be taken against the company by the employees who think undergoing voluntary redundancy is an infringement of the rights (Stone 589). An action that will need a legal action from the HR department would be costly for the company compared to lay off the staff under an informed and thorough consultation with all relevant departments and stakeholders. The company can be compelled to compensate the employees who institute a legal action against their lay off, a procedure that would cost Utilities Co. and give headache to the HR department. The HR department at Utilities CO. would have to create ways of dealing with the negative image created by the CEO through the uninformed decision to lay off 120 staff. The fact that the CEO did not make a thorough consultation with the responsible department in reference to sustaining employees, there is the possibility that the company would suffer public ridicule from such a decision. In such a situation, the HR department has to come up with ways to cover up the gap left by the sacked staff (Stone 589). This would entail reorganizing the remaining members of staff to fill gaps left even if they do not have the relevant qualifications with a view of shielding the image of the company. This is very difficult task for the HR department led by the Manger since they are not sure what would be the response of the remaining members of staff. The manager might receive a cold reception from the members of the staff because they would think that the decision by the CEO of the company to lay off 120 of their members was informed by the HR department. This kind of decision is not surprising at all because that has been the trend by many organizations in cases of tough economic times. Many CEO’s think that this is the best policy to deal with challenging economic strains and situations whereby the company is experiencing declining in profit marginalization (Stone 589). However, the CEO should not have capitalized on this assertion without proper consultation from the HR department. Instead, the CEO should have asked the HR department to draft methods on how the employees could be used to enhance the company’s competitive advantage in a tough economic climate. This would have helped the company in shielding its public image and retention of the best brains for the company. Nonetheless, many CEO’s think that the management of the company is personal property and they can mange it they way they want provided it suits their personal goals. OHS (Occupational Health and Safety) concerns The remaining members of staff were significantly affected by the developments within the organization. This was coupled with shortage of OHS consultants who were unable or probably unwilling to deal and handle the onslaught of distressed staff members. The main concern of the OHS team in the HR department was the fact there was evidence of increasing psychiatric illness which included anxiety disorders and depression (Stone 589). This was affirmed after one of the staff members resulted in to physical demonstration of how stressed a member could have been, given the prevailing situations. The most difficult thing in an organization is dealing or trying to achieve a given target when the employees are stressed and the stress is from within the top management of the organization. This is the case for the Utilities CO. which was plunged into this mess by the unitary decision of the CEO to lay off 120 members of staff. The HR manager Maree, suffered from psychological trauma after being given unplanned task by the CEO to deal with gaps left by the laid off staff. This was the most difficult task she could endure because she had not been consulted even if she had worked in the company for one year. From the analysis, is it evident that Maree had sleepless nights trying to pounder on how she can bring the company back on track after the CEO decision (Stone 589). She also had to deal with abusive emails sent to her and to the entire HR staff because she bore the brunt as the leader of the team. Being given a position and the your boss taking your for a ride as it is the case for Maree is the most distressing thing an employee can go through. This is in the sense that the CEO did not deem it necessary to consult Maree as her HR consultation in making decision that directly affects her department. Utilities CO. dealt with the impact of distressed staff through restructuring the work plan of the organization. However, it is important to note that this plan received setbacks due to the unwillingness of the employees to adapt to the new ways of performing their duties. This led to deteriorating relations between the top management and the remaining members of staff (Stone 589). The used arbitrary ways in restructuring the departments among employees in order to save customer service delivery which was significantly affected by the CEO decision. Maree used all the available means to help her staff recover from the stress and helped in setting the organization back on track. Because Maree, had divergent opinions with those held by the CEO, she ended up quitting her job as the HR manager through a resignation letter, the best way she could deal with the stress she had experienced from the company. Equity Issues and Risk Implications for Utilities CO The first equity issue is the fact that younger staff and women had taken redundancies. The second equity issue is the fact that there is no gender balance because women think it is inappropriate to work for a company that has low regards for its staff. From these equity issues, the company is likely to face several risk implications as it endeavors to regain its damaged pubic image. The first risk implication is the fact that the company does not have a younger generation for continuation purposes. It is also important to note that company’s empress the younger in general in managerial cycles to enhance fresh ideas which lead to the growth of the company (Stone 589). The fact that Utilities Co. will have minimal number of the younger staff is an indication that the company is not advocating for generational change. This also means that the company is likely to be short of employees when the older generation retires from work, a challenging task for the Hr department (Stone 589). The company can also suffer from public ridicule and be labeled as a company for the older generation, an assertion that can lead to reduced profit marginalization. The risk implication of the company having an imbalanced gender in its workforce is a negative approach by the company to develop its workers. The company can be seen in the eyes of the public as gender biased and its customer service to women can significantly deteriorate. This would affect its performance resulting in reduced revenue generation. A company that does not empress gender balance as it is the case for Utilities Co. can be marginalized by the media if it requires promotional favors from the institutions. Impact of Industrial action on Utilities Co Any industrial action against a company has negative effects on the company’s performance and how the company’s is seen in the public eyes. Industrial action against Utilities Co. would lead to lack of competiveness in the execution of duties and lack of morale from the management. Industrial action would lead to wastage of time and resources for the company, resources which could have been used to generate more revenue for the company during the tough economic climates (Stone 589). The company would suffer irreparable loss if the industrial action is successful because it will have to compensate the staff despite the fact that they have not worked for the company at the time of industrial action. Industrial action would lead to auditing of the company by external auditors and even the suspension of the top management. The CEO would be suspended to allow for investigations as to why it was necessary to lay off 120 employees without proper consultation of the HR department (Stone 589). Then the auditors, who would be unplanned expense for the company, would establish if d the lay off staff would have helped the company in dealing with tough economic times. This means that the company is taken aback by the uninformed decision of the CEO to lay off staff without due procedures. However, the industrial could not be the only option for the union. The union could lead negotiations to have the CEO withdraw decision to lay off workers. The union should come up with valid grounds as to why the CEO must withdraw the decision (Stone 589). Such reasons would include: the company is likely to lose customers if the decision is implemented fully, the company would lose public confidence given the fact that the company was one time a public property, restructuring the company to accommodate the laid staff would be a big task for the HR department and that there is no surety that the remaining number of employees would be responsive to the restructuring of the company. The company could valuable employees through the voluntary redundancies and this is something that the company should not want to go through. Implementing the Decision to lay off Staff The CEO of the company should have instituted dialogue through the HR department to all members of staff and the rest of managers of the company. The HR department would then create forums for the staff to discuss issues relating to the performance of the company (Stone 589). The Hr department would need to show the reasons why the company has to undertake the said decision and how important it is to the welfare of the company. There are several issues which should have been put into consideration before implementing the decision. The educational background of the employees coupled with years of experience should have informed the decision by the CEO. However, the HR department led by its manager should clearly investigate the needs of each department of the company and how voluntary redundancy of certain employees from that department would affect the overall performance of the company. Age factor should also constitute a big chunk in determining the procedure to use in determining the criterion to use in implementing the decision to lay off employees. The younger generation with proper educational backgrounds should be given preferences for generational development of the company and fresh ideas. The gender parity in the organization should be clearly examined before thinking to implement the decision (Stone 589). The management must make informed decision regarding the effects of having an imbalanced gender in its work force. This is a sensitive issue that can to negative public perception if it is handled wrongly. The previous year appraisals of the workers should complement all the above factors in determining the workers to be laid off. Employees with generally good performance should be given priority in employee retention. This would ensure that the company has the best brains in place which can help the company wither in the difficult economic climates coupled with a competitive industry. Maree’s Resignation Mare had the right to resign as the HR manager because of the CEO attitudes towards the management of the company. There was no need for her to continue working as the HR manager when it was all clear that CEO did not respect her views or those of her support team. No advice could the CEO take from Maree irrespective of how important that decision was. For instance, the decision to lay off 120 staff was not properly communicated to the HR department which she led as required. The CEO thought it was wise to inform her of the decision through an email despite the move would affect her and her department (Stone 589). The fact that CEO did not see the sense of reliving duties of experienced people is enough reason for her to quit since she will have a team with no valuable skills to move the company forward. Work Cited Stone, Raymond. Managing Human Resources, 3rd ed. John Wiley & Sons Australia, 2007 pg.589-590 Read More