Employee Downsizing at Optus - Essay Example

Employee Downsizing at Optus Media Reports: I. Sen, S., 2012, ‘Optus to Slash 750 jobs for greater efficiencies’, The Business Times, May 03, 2012 II. Mann, T., 2012, Optus job cuts could affect services, Retrieved on May 20, 2012 from Introduction In this essay, I will critically discuss employee motivation and change management with reference to media reports by Sen (2012) and Mann (2012) on Optus employee downsizing and its implications. Additionally, I will discuss the implications of Optus’ strategy on the organisation, the company’s CEO, staff and competitors in this market. Recently, Optus Pty Limited has been at the center of several media reports due to controversies relating to its plan to slash 750 jobs. In a restructuring exercise, the company intends to lay off 750 employees, this is about 8% of its overall workforce in Australia. This move has been subjected to much debate and controversy by stakeholders. It has been welcomed and at the same time criticized by stakeholders, the media and the general public. This downsizing is set to affect back-office staff, support staff, operations staff and some managers. The management of the company has defended its move to lay off 750 employees by arguing that this employee downsizing will give way to a new structure that will help to cut down costs, bring about greater efficiencies, give consumers a greater voice and boost profits (Sen 2012). On the other hand, critics have pointed out that this move could result to poorer customer service and could result to jobs being sent offshore (Mann 2012). Based on these media reports, it has become apparent that in order for Optus to survive in a competitive business environment and boost its profits, the company needs to focus on motivating its workforce and managing change. Employee Motivation Optus strategy to restructure its workforce by slashing 750 jobs can bring about major detrimental effects to the company particularly with regards to the performance of its employees. Although, the company’s management predicts that these redundancies would make the company’s performance more efficient and competitive, the company is bound to experience several challenges. According to Mann (2012), Optus move to lay off 8% of its workforce in Australia could impede on the company’s ability to effectively provide quality services to its existing customers and also make it difficult for the company to grow and expand their business. A critical look at the Mann’s sentiments on Optus employee downsizing strategy, one can deduce that, following employee layoffs at Optus, there are several underlying factors that could negatively impact on the company’s ability to deliver services. The lack of motivation or morale among the remnant employees is one of the key underlying factors that may impact on the company’s ability to deliver quality services, after the layoffs. A study conducted by Iverson and Zatzick (2011) established that employee layoffs in an organisation can lead to the loss of morale and motivation among the remaining staff. The findings of this study also illustrated that employee downsizing diminishes human capital in the organisation and interferes with work relationships in the organisation. Consequently, this can reduce employee morale and productivity at work. Iverson and Zatzick (2011) further recommend that in order for an organisation maintain the productivity of its employees or survive after a significant employee downsizing , it is essential for the management of the organisation to focus on motivating the remaining employee or building their morale (Iverson & Zatzick 2011). Similarly, Datta et al (2010) established that employee downsizing may cause a lack of motivation among the remaining employees. Basically, following layoffs in an organisation, employees who remain, may feel that their job is unstable or that they are not valued. They may develop trust issues or feel overwhelmed by the increase in workload and responsibilities at work. This may in turn affect their morale and productivity at work (Heathfield 2012). Therefore, following the layoff of 750 jobs at Optus, it is essential for the company to focus on motivating the remaining employees. In this case, motivating employees is important because it will help the company to boost the morale of the remaining employee and enhance their productivity at work. As a result, the company can be able to enhance the efficiencies of its services in the market, maintain its competitive edge in the market and boost its profitability. In order for the company to realise positive outcomes after the layoffs, it is foremost of essential for the company to identify and implement effective employee motivation strategies. Abraham Maslow’s theory on “Hierarchy of human needs’ (1943) provides a suitable model that the company can use to identify and implement effective employee motivation strategy. According to Maslow, there are five levels of human needs, these levels of needs include; psychological needs, safety and security needs, love and belonging needs, self-esteem needs and self-actualisations needs respectively. Maslow accentuates that an individual can only move to the next level of needs after they have attained the subsequent need in the hierarchy. For instance, an individual can only reach the self-actualisation level of need after attaining their physiological needs, safety and security needs, love and belonging needs and self-esteem needs (Maslow & Frager 1987). Based on Maslow’s theory, Optus can motivate its remaining employee after the layoffs by trying to meet their safety or security needs and self-esteem needs. In this case, the safety needs of employees working at Optus may include employment or income security. Following layoffs at the company, the staff in the company may feel insecure and uncertain about the security of their employment at the company. Therefore, it is important for the company to boost the morale of its remnant staff by demonstrating and reassuring the staff of their value and importance to the organisation. In order to demonstrate this, the management of the organisation should communicate with the staff as a department or even as individuals to let them know how and why they are valued by the organisation. Optus should communicate to its staff regarding their contribution to the organisation. This will make the company’s staff feel appreciated and valued thus boosting their morale to work for the company (Heathfield 2012). Moreover, Optus can motivate its employees by meeting their self-esteem needs through instituting career development programs. Heathfield (2012) notes that employees who survive layoffs may feel worried or overwhelmed due to increased workload or additional responsibilities. Some employees are bound to feel that they do not have sufficient knowledge or skill set needed so as to take on new responsibilities or roles. Therefore, it is essential for Optus to institute or implement effective career development programs that will motivate employees and effectively equip them to take on additional or new work roles following the layoffs. Optus career development programs should incorporate training and educational programs on customer service that will equip its staff with additional knowledge and skills that will make them feel competent to take on additional or new work roles (Heathfield 2012). In addition to this, the equity theory provides a suitable approach that Optus can use to motivate its staff following the layoffs. According to this theory, an individual’s level of motivation is determined by their perception of how the management practices fairness, justice and equity. Therefore, the higher an individual’s perception of fairness or equity, the greater their level of motivation and vice versa (Koontz & Weihrich 2006; Pride, Hughes & Kapoor 2011). In reference to this theory, Optus can motivate its employees by demonstrating ethical and fair practices especially when it comes to employee remuneration and compensation. Following the layoffs, some employees are bound to take on new or additional work roles, therefore, the company should ensure that employee’s input in terms of time and effort should be proportionate to the outcomes they get, in terms of job assignment or salary. This will help to uphold equity in the company and it may in turn motivate employees to enhance their performance and productivity. Change Management Based on the findings of various media reports on Optus’ plan to downsize 8% of its workforce, it is evident that the company will have to effectively manage change in order to implement an effective restructuring process. Basically, through this move Optus hopes to reinvent itself from a stodgy telco image to a hip technology provider. In addition to this, the company hopes to cut back its costs, bring about greater efficiencies, give consumers a greater voice and boost profits (Sen 2012). On the other hand, this downsizing may bring about various implications to the company. For instance, this downsizing is set to affect back-office staff, support staff, operations staff and some managers. These retrenchments will mean that 1 out of every 12 employee working at Optus will loose their job. Generally this downsizing is bound to affect some aspects of the company’s organizational structure, some functions and work roles in the company. These are major changes that have to be managed effectively in order for the company to realise its objectives. Beecroft et al (2003), observes that when companies fail to respond to changes or implement changes as quickly as it is required, the company is bound to stagnate. Moreover, Abrahamson (2000) notes that many companies are faced with situations in which they have to change or perish. Thus, implementing an effective change management process can help Optus realise positive outcomes and maintain its competitive edge in the market. In the book, “Contemporary Management” Waddell et al (2007), provides suitable approaches that the management of Optus can adapt in order to effectively manage change. Waddell et al recommends that in order for an organisation to effectively manage change foremost, it is important to efficiently assess the need for change in the company. In the case of Optus, it is important that following the layoffs, the company should assess areas that require change. The company should identify areas in the company’s organisational structure, organisational culture, functions or employee work roles that require changes. Secondly, it is essential for the company to decide on the changes to make so as to realise greater efficiencies, give consumers a greater voice and boost profits following the layoffs. For instance, it is necessary for Optus to implement changes relating to work roles and functions of employees since the company intends to reinvent itself from a stodgy telco image to a hip technology provider. Thirdly, Optus should implement these changes by deciding whether these changes should occur from top down or bottom up. Lastly, it is important for the company to put into place measures that will help to evaluate the effectiveness of the implemented changes. For instance, Optus can use benchmarking as an approach of assessing the changes that it has implemented (Waddell et al, 2007). It is worth noting that, not all changes in the organisation can be implemented in the same way. For instance Dunphy and Stace proposed a situational model of change management that puts into account the scale and scope of change. Based on this model of change management Optus should put into account the scale of changes required in the company and the leadership or management style required in order to effectively manage change. Rather than using a dictatorial transformation that may result to increased workload and stress for the remnant staff, the company should use a participative approach to change that will ensure that employees progressively adopt to change in the organisation in a more convenient manner (Dunphy & Stace 1990). Implications Although the media reports used in this essay do not point out the specific implications that the planned employee downsizing at Optus will have on the company’s CEO and staff, it is possible to easily deduce some implications that these changes may bring about to the company, its staff and its competition in the market. As mentioned earlier in this paper, employee layoffs at Optus will require the company to motivate its remaining employees and effectively manage change in order for the company to realise positive outcomes. As a result of the implemented changes, it is plausible to conclude that some aspects of the company’s organisational structure are bound to change particularly with regards to some functions and work roles in the company. Due to these changes, some employee in Optus may have to take up new or additional work roles in order compensate for the layoff. Moreover, it is apparent that the implemented changes may affect the company’s staff particularly those working in the human resource department. Since the changes introduced encompass human resource issues, this will imply that HR staff in the company will have additional roles. For instance, HR staff at Optus will be responsible for monitoring the effectiveness of the implemented changes. Conclusion This essay has critically discussed employee motivation and change management with reference to media reports by Sen (2012) and Mann (2012) on Optus employee downsizing and its implications. The findings of this essay depict that in a restructuring exercise, Optus intends to lay off 750 employees The management of the company defends this move by arguing that this employee downsizing will give way to a new structure that will help to cut down costs, bring about greater efficiencies, give consumers a greater voice and boost profits (Sen 2012). Nevertheless, critics have pointed out that this move could result to poorer customer service and could result to jobs being sent offshore (Mann 2012). However, it is apparent that in order for Optus to survive in a competitive business environment and boost its profits, the company needs to focus on motivating its workforce and effectively managing change. References Abrahamson, E., 2000, Change without Pain. Harvard Business Review. July-August 2000 Beecroft, G., Duffy, G. & Moran, J., 2003, The executive guide to improvement and change. ASQ Quality Press, New York. Datta, D., Guthrie, J., Basuil, D. & Pandey, A. (2010). ‘Causes and effects of employee downsizing: A review and synthesis’. Journal of Management 36(1), pp. 281-348. Dunphy, D. & Stace, D., 1990, Under new management: Australian organisations in transition, McGraw-Hill, Sydney. Heathfield, S., 2012, Downsizing survivors: Motivating the employee who remain after layoffs, Retrieved on May 20, 2012 from Iverson, R. & Zatzick, C. 2011, ‘The effects of downsizing on labour productivity: The value of showing consideration for employee’s morale and welfare in high-performance work systems.’ Human Resource Management 50 (1), pp. 29-44. Koontz, H. & Weihrich, H. (2006). Essentials of Management. Tata McGraw-Hill, New York. Mann, T., 2012, Optus job cuts could affect services, Retrieved on May 20, 2012 from Maslow, A. & Frager, R., 1987, Motivation and Personality. University of Michigan Press, Michigan. Pride, W., Hughes, R. & Kapoor, J., 2011, Business, Cengage Learning, London. Sen, S., 2012, ‘Optus to Slash 750 jobs for greater efficiencies’, The Business Times, May 03, 2012 Waddell, D., Devine, J., Jones, G. & George, J., 2007, Contemporary Management (2nd edition) McGraw-Hill, NSW. Read More