The utilization of Furlough days to combat budget issues - Research Paper Example

?Running Head: USE OF FURLOUGH DAYS Topic: Human Resource Managers use of Furlough Days to Combat Budget Issues Lecturer: Presentation: Introduction Human resource management is an organizational practice that involves dealing with employees to ensure that their full potential is utilized. An organization engages in strategic human resources management to ensure that the employees’ needs are satisfied and also to facilitate them to use their skills to accomplish organizational goals. The practice involves forecasting and determining the major drawbacks that may hinder effective performance of employees and finding a lasting solution. Human resource management entails measures for improving the workplace environment, recruitment, performance and reward management among other activities that enhance the productivity of employees. Organizations maintain competitiveness through inventiveness and uniqueness in their operations. These are accomplished through maintenance of a committed and competent work force. High commitment among employees is important in ensuring customer satisfaction. When an organization succeeds in maintaining competence and satisfaction among employees, it is able to maintain strong customer relationships as well as a strong brand image. These are among the aspects that determine an organization’s productivity since happy employees are satisfied employees, who are able to own the organizational goal. Strategic human resource management involves supporting the employees to help in establishing organizational goals. Organizations that engage in employee training and supporting innovative ideas are usually competitive in the market. Strategic human resource management helps in accomplishing employee satisfaction. More over, it helps in maintaining skilled workers in the organization. However, an organization may be faced with budget issues that may hinder the accomplishment of human resource management strategies. This paper presents a critique of the utilization of Furlough days to combat budget issues. Utilization of Furlough Days Furlough days negatively affect the morale of employees due to the breaks in their day to day activities as they are ordered to take compulsory unpaid leaves. Even though employees maintain permanent employment in an organization, the practice may be frustrating to many since it decreases their income. Depending on the nature of the budget deficit, furlough days may be scheduled for a number of days per month or one day per week until the financial shortfall is dealt with. While an organization focuses on the shortfalls in its budget, the workload increases and employees have to be overworked to cover the days that they do not work (Whitfield & Poole, 1997). Schrader & Lawless (2004) observe that while losing the job completely may be more frustrating to the employees, the regular loss of income and employment benefits through furlough days may cause resentment and the urge to look for an alternative job and hence a high employee turn over. High employee turn over is detrimental to an organization’s productivity and reputation. It is usually costly to hire and train new employees to become competent in the workplace. The organization looses skilled employees to competitors, and more so, skills attained from the organization (Buller & McEvoy, 2012). It may be a great loss to the organization especially when an employee exposes company information to competitors (Luthans & Stajkovic, 1999). The future projections may not be realized if the organization relied on training an employee to attain a particular goal in future. Customers may loose confidence in the organization due to disruption in service delivery especially when the departing employees were at strategic positions of service delivery. Other customers build their trust on particular employees especially for the services that require one-on-one relationships (Huselid & Becker, 2011). Human resource managers need to ensure that the employee turn over is not contagious. When workers leave organizations, it is likely that their workmates realize that they too may fall in to the same problem. High employees turn over lowers the confidence and morale in the work place (Schrader & Lawless, 2004). When an organization is capable of retaining skilled employee through worker satisfaction, skilled employees join the organization, thereby improving its productivity. Strategic human resources is therefore important in maintaining employee competency through setting up employee satisfaction objectives such as work life balance, flexible work practices, allowing personal and career development among other practices that can help in retaining skilled employees in the organization (Whitfield & Poole, 1997). Job security The use of furlough days has a negative impact on the perception of job security among employees even when the organization may not be intending to retrench its human resources in the long run. Employees need to be guaranteed of their security in employment for maximum productivity. Furlough days generate anxiety among employees especially since they may not be aware of the duration which the tactic may be used or if it will end in permanent lay off. Lack of job security leads to low morale and engagement in search of opportunities by employees outside the organization (Luthans & Stajkovic, 1999). They can not dedicate their efforts fully to the organizational activities. Job security is significant in maintaining confidence among employees so that they are not easily lured out of the organization by competitors who are likely to guarantee prolonged tenure in employment. In other words, employees need to be convinced that they can not loose their job overnight. They also desire attention with regards to the financial difficulties created by the application of furlough days and hence the need for effective communication regarding the challenges facing the organization resulting in the change of human resource strategy (Whitfield, & Poole, 1997). Human Resource Planning The utilization of furlough days may result from insufficient human resource planning. This is a process that involves the identification of the prevailing conditions and the future human resource needs to help in the realization of the overall organizational goal. The process of human resource planning serves as a connection between human resource management and the organization’s strategic plan. According to Luthans & Stajkovic (1999), an organization evaluates the targets for a particular time period as well as the number and nature of human resources required to accomplish the strategic business objectives. The process involves conducting a job analysis to determine the number of employees needed, the desired competences as well as when they are supposed to be hired. A job analysis helps human resource managers to develop job descriptions for each vacant position in the organization that aid in successful recruitment and selection. According to Whitfield & Poole (1997), job descriptions should illustrate the tasks, responsibilities and roles associated with a particular job. The necessary qualifications, significant contributions and expected outcomes of a particular position as well as workplace relations with other employees for a particular job are also specified in the job descriptions. They also contain essential information regarding the working environment and the growth potential. In this perspective, future training and career development activities to a great extent are based on the job description. Sanwong (2008) suggests that human resource planning is fundamental to effective recruitment and selection as well as performance management. Recruitment and Selection The application of furlough days may be an indication of failure in recruitment and selection. These are the most significant practices that link people with organizations. They form the basis of strategic human resources management. The human resource managers have to ensure that they recruit the desired number and the most competent employees in the organization to enhance the realization of organizational goals (Viswesvaran & Ones, 2000). This is accomplished through job analysis. Recruitment and selection processes need to be conducted in a cautious manner to ensure that the new recruits possess the core capabilities needed for accomplishment of organizational competitiveness. Human resource managers are important in helping the organization to determine whether the candidate satisfies the core competences needed. Through recruitment and selection, organizations search talents from candidates, which may be useful for organizational success (Huselid & Becker, 2011). Effective recruitment and selection helps in the engagement of qualified employees who are enthusiastic about the tasks they will be assigned in the organization. Without engaging competent employees in the organization through this process, the wrong applicants may be selected, which may lead to low morale in the workplace especially amongst the experienced workers. The unqualified employees usually leave the organization before accomplishing the assigned tasks, mainly due to stress associated with failures due to incompetence. The management may also be compelled to get rid of such employees later on after realizing that they are incapable of accomplishing tasks effectively (Sanwong, 2008). Employee recruitment and selection allows the human resource managers to conduct aptitude tests, which are important in recruitment and assessment to acquire information regarding the applicant’s intelligence and astuteness (Buller & McEvoy, 2012). The candidates are also taken through on-the-job tests to determine their competence in handling the tasks. Recruitment and selection also involves interviews that evaluate the applicant’s knowledge in regard to the desired competences identified for the position to be filled (Huselid & Becker, 2011). Only the candidates who present the desired competences are selected, which saves the organization unnecessary costs associated with replacing incompetent employees. Performance Management Furlough days can be effectively used where an organization has established a successful performance management system that can help the employees to ignore the furlough days and focus on their gains with consideration of the tasks they are involved in. Employee performance is significant to the organization’s success. When an organization is able to maintain high performance among its workers, it is capable of accomplishing organizational goals. Effective human resource management motivates the employees to accomplish tasks through setting performance standards. Performance management is important in ensuring that the employees’ out put corresponds to the salary that they earn from the organization (Viswesvaran & Ones, 2000). In essence, employees work to get paid. What they accomplish in their work needs to be reflected in their salary and vise versa. This means that the employer and employee need to get satisfied. The performance based pay programs used by organizations are significant in maintaining competence and high commitment among employees. They work hard to receive the benefits attached to a higher level of output (Najmi et al. 2005). When an organization engages new employees, it uses the performance based pay motivates them to work hard to get the bonuses. This enables the management to identify the talented employees. More over, human resource managers are in charge of maintaining satisfaction among employees by offering unique benefits that other organizations do not offer. When potential employees in the job market identify such opportunities in the organization, they desire to offer their services to acquire the benefits. It is always important to clearly state what the employees will gain from their engagement with the organization. This gives them an opportunity to compare with the other organizations to determine which offer they are going to accept (Whitfield & Poole, 1997). Such human resource management strategies help organizations to maintain competence. Health benefits usually indicate the employer’s commitment to maintain good health among the workers. It is a show of concern regarding the employees, and it is a strong strategy to motivate them for improved performance. When organizations hire workers, they usually expect them to accomplish tasks according to the strategic plan. Performance evaluation is a human resource management practice that helps in ensuring that the employees are following the right track in their activities (Luthans & Stajkovic, 1999). In many situations, it is usually important to conduct the performance evaluation to ensure that weaknesses do not develop as the employees accomplish their objectives (Buller & McEvoy, 2012). Employee Motivation The desire by employees to enhance their skills is indisputable. Even though an organization must apply furlough days due to budget issues, it is important to set motivation strategies that can help to enhance competence. William (2004) observes that employees are motivated and are likely to stay in an organization where they are offered the opportunity to continue growing and developing their career and as well as their knowledge. Buller & McEvoy (2012) share this opinion and observes that when the employer expands the job description of employees to integrate greater and challenging responsibilities, they are motivated to ensure that they are best suited for the job. This promotes workplace learning as they strive to acquire greater skills to accomplish their new responsibilities. Employee motivation can also be accomplished through ensuring that there are hopes to for career development. The morale of employees decreases when they work in the same position over a long period of time. Employees work harder to move up the ladder through promotions, hence the human resource managers need to ensure that promotions are awarded for good performance (Najmi et al. 2005). Multinational companies use this strategy especially when identifying the employees who are competent to be given the privilege of heading departments in foreign subsidiaries. The strategy is useful in determining the workers who are self driven and who can represent the organization with minimum supervision. Additional responsibilities act as indicators of trust in employees, which is likely to improve their commitment (Viswesvaran & Ones, 2000). The goal theory postulates that people are motivated when they realize the expectations of the organization (William, 2004). It requires that goals are set and employees adequately informed regarding the cause of action and also receive feedback appropriately. However, the question that arises is whether motivating the employees through goal setting is actually on humanistic basis or it is for the benefit of the organization (Buller & McEvoy, 2012). In essence, the goal of venturing in business is to generate profits for the organization. Employees are facilitators of the accomplishment of organizational goals (Buller & McEvoy, 2012). Their skills and commitment are required for the organization to remain competent in the operating environment. It is therefore prudent for managers to ensure that they promote a shared vision, which encourages the employees to own organizational goals (Sanwong, 2008). Once they own the goals and increase productivity, the organization gains in terms of profitability and therefore it is capable of offering better compensation packages. From this perspective, the employees are also portrayed as beneficiaries of motivation. In essence, there is usually a reciprocal relationship between the employer and the employees. If the organization does not perform well in the market, there can not be enough finances to cater for employees’ needs (Viswesvaran & Ones, 2000). Even though furlough days are applied when an organization is experiencing financial difficulties, employees can be motivated through reward schemes when the budgetary issues are resolved. Motivation through rewards is a significant technique applied by many organizations. Rewards are usually offered to the employees as an encouragement for them to continue with good performance in a particular field (Schrader & Lawless, 2004). In other words, the management offers rewards to an employee so that he/she can do a particular task in the same way that it was done earlier. Such an action must have had some benefits to the organization. It is a give and take strategy to ensure that high performance is maintained. The reward does not have to involve a huge sum of money. Rather, an organization can offer a tangible or intangible incentive that demonstrates appreciation to the employee. As Najmi et al. (2005) observe, rewards are targeted on influencing the employees’ behavior. In most cases, the organization reaps higher benefits than the employee through reward schemes. They are similar to performance based compensation because without the employees undertaking the predetermined actions, they may not be entitled to rewards. Workplace Diversity Issues Furlough days may raise serious implications with regards to diversity matters. This is mainly manifested when determining which workers will be affected if the organization does not close shop completely on the days when the furlough days are applied. The managers have a difficult and essential task of managing diverse characteristics such as gender and racial differences. Religious beliefs are also diverse and work may be affected by dogmatic religious holidays internationally (William, 2004). Managers therefore have to be highly capable and informed individuals to cope with the demands of the workforce thereby maintaining effective employment relations. Effective diversity management calls for equitable treatment of employees and therefore furlough days should be applied to all unless if there are some people who would wish to take voluntary furlough days. Factors such as gender, race and special needs should be taken in to consideration to ensure no particular group feels discriminated against (Schrader & Lawless, 2004). Alternative to Furlough Days Rather than applying furlough days that may lower employee morale thereby causing incompetence and high staff turn over, flexible work practices can be applied by the organization to maximize labor productivity (Edwards et al. 2007). Such practices include; non standard work whereby the organization employs workers on contract, temporary or part time among other non permanent employment. When employees are allowed to work at their most convenient time, they are motivated to work harder. These increase the willingness of employees to accomplish organizational goals. Part time employment allows people to accomplish a work-life balance. Employees are able to attend to family matters and expediently undertake their workplace responsibilities. However, as much as the flexible work practices are appreciated by employees, they deny them the benefits that are entitled to permanent employees while the organization benefits from increased productivity and reduced cost of labor. The humane aspect of such motivational strategies is therefore debatable even though they might be attributed to the success of organizations in employee satisfaction and retention (Whitfield & Poole, 1997). For example, non-standard work involves employees who do not belong to the permanent workforce. In other words, they are engaged and shed as often as the management deems necessary. They might be casual labourers who are employed to supplement the permanent workers, part time employees whose services are needed only at a particular time in the organization, and temporary employees who either work part time or full time but whose benefits are different from the permanent employees (Buller & McEvoy, 2012). They apply in the industries that experience seasonal variations in demand by the consumers such as in the tourism and fresh produce firms that have low and high seasons in one trading period. The business hires a large number of temporary staff during the high season when the sales are high, and may experience losses if such employees are maintained during the low season. Organizational behaviour that engages non-standard employees is takes advantage of avoidance of tax and other benefits that the permanent employees are entitled to (Huselid & Becker, 2011). Non-standard work is also characterized by a relationship whereby the employer firm is not the actual place where the employees work (Edwards et al. 2007). For example, many banks in the UK operate with hired security personnel. The security companies are the direct employers but the employees work in the banks. Under such flexible arrangements, the banks avoid the costs associated with directly employing security personnel, such as health insurance, retirement schemes and paid leave among other benefits. The firms may also make arrangements with professionals for on-call services to avoid employing permanent technicians for services such as computer repair, electrical and building repairs among other occasional services (Whitfield & Poole, 1997). Conclusion The application of furlough days may significantly affect the morale of employees and can lead to high employee turnover. The strategy decreases the confidence of job security among employees and hence a decline in commitment. The use of furlough days may result from ineffective human resource planning whereby the organization’s personnel needs are not confirmed before engaging in recruitment and selection. Job analysis and the development of clear job descriptions for the vacant positions can help organizations to minimize the need for furlough days. Effective recruitment and selection helps in the identification of the most appropriate candidates for the job. With a good performance management system, furlough days can be effectively applied. Strategic human resource practices can help an organization to curtail the prominence of the impact of furlough days on the welfare of employees. These include appreciation of diversity in the workplace, career development and employee motivation. An organization can avoid the use of furlough days through engaging in flexible human resource practices such as non standard work which includes; contract, temporary and part time employment. References Buller, P. 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