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 Assignment 5 (Due: August 17, 2009, 13:00hrs)

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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Tue Aug 18, 2009 12:20 am

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Downsizing
In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff, with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired.
Downsizing also refers to the process of reducing costs within an organization by reducing the workforce. Re-engineering or restructuring might involve other processes, including cost cutting by changing the way in which people work, but downsizing almost always has a reduction in workforce component. Typically, executives in organizations which undergo downsizing programs emphasize the need to save money and to take the painful step of laying off employees.
There are immediate local economic effects when a company downsizes; the larger the company and the greater its relative importance to an area, the greater these effects. Initially, the short-term effects are to reduce the amount of disposable income in the local area. This has a direct effect on retailers and those providing services. Home loans may be put in jeopardy, which affects the amount of capital available to the community. If a plant is the single largest employer in a small town, closing it in the name of downsizing can ruin the town's economy
.

Downsizing to Increase Profits
A contemporary business practice is known as downsizing, or the effort by a company to reduce the size of its workforce in order to increase profitability. Such a quest for profits is often seen as detrimental to the worker, creating a new sense of insecurity, reducing decades-old relationships between worker and management, and assuring corporate profits while undercutting the ability of workers to make a living. The corporate manager in such a situation has determined that his responsibility lies with the company and not with the community, at least in some ways, and he or she may even have a rationale as to why their effort benefits the community in some way.
There are internal signals that warn of wasted effort and expense, such as slow decision making, excessive monitoring, and complaints of too many reports and meetings. If properly managed, overhead restructuring can be a positive move for the organization.


Common characteristics that improve the effectiveness of overhead programs include:
1) maintaining consistency with the firm's strategy;
2) examining functions with a plant to corporate 'vertical slice' perspective;
3) focusing on the underlying factors of cost and staffing;
4) eliminating low value work;
5) reallocating resources;
6) simplifying management processes; and
7) considering automation enhancements

Loss of Jobs
Companies refer to the process by many names: "downsizing," "rightsizing," "cutting back," "trimming the fat," "working smarter" and "re-engineering" are just a few of the ways the process is described. Regardless of what companies call the process, the end result is that employees, sometimes hundreds or thousands, lose their jobs and incomes, and entire communities are sometimes plunged into chaos as a result. For some companies, reducing their labor force by such drastic measures is a necessity if any part of the company is to survive. These companies are in severe financial straits and may not survive even after severe labor cutbacks. For other companies, such measures are undertaken in order to improve their "bottom line" and increase their attractiveness to investors, some of whom are likely to be senior managers of the corporation.


Downsizing at AT&T
When businesses face short-term downturns, they can engage in short-term austerity measures that range from hiring freezes to minimizing purchasing office supplies, and that include many measures in between. When the downturns become long-term, however, companies must engage in cost reductions that may be severe, and could make the difference between the company surviving or not. This analysis considers the issue of downsizing--laying off workers--and examines the benefits to an organization that may make downsizing a difficult, but ultimately beneficial.


There are typically three reasons that companies engage in downsizing:
• immediate financial crisis;
• short-term improvement of financial statements;
• and long-term strategic decision

Immediate financial crisis occurs when a company faces a severe financial problem, perhaps because a major customer has withdrawn business or because an anticipated contract does not come through.
In recent years, much attention has been given to downsizing, rightsizing, trimming the fat and other euphemisms for laying off workers. Generally, companies suggest that they are "forced" to lay off workers in order to cut costs and remain competitive. The financial community likes downsizing because it reduces the short term labor costs that companies must bear. Management likes downsizing for the same reason.
We will take AT &T as an example. “ In 1992, AT &T downsized to remain competitive in the global market. They released 18,000 human operators and replaced them with automated machines.”
During the 1990s, threats have emerged in AT&T's external environment in the form of likely new laws, probable competition new rivals, and rapid changes in technology (Arnst, Spiro, & Burrows, 1995). The company also faces a threat within its in its internal environment in what AT&T management view as laggard performance in comparison with the company's major competitors ("AT&T's Three-Way Split," 1995). These factors were major motivations for the company's decision to initiate a downsizing strategy. AT&T management was beginning to become aware of some of the symptoms of decline that precede the collapse of major corporate institutions (Luffman, Lea, Sanderson, & Kenny, 1996).
The performance problem by human resource management is simply poor planning. Management did not realize the potential problems that lay ahead for the company as a whole. If downsizing is not effectively planned, managed or implemented it can cause a number of consequences. The consequences up for discussion are:

1. Downsizing causes resentment and resistance in surviving employees
2. Downsizing if not handled carefully will cause financial set backs

HR management must handle employees, both survivors and former, with kid gloves. Downsizing means more than passing out pink slips. Steps must be taken to ensure that the remaining staff feels comfortable so that performance levels do not drop. It is also important to keep the loyalty of former employees simply because they now have become potential customers.
Remaining employees may show signs of inadequacy. They are faced with new responsibilities and positions. They may feel as though they are next to be fired if they can not perfectly done their job well.
Closely examine the impact that downsizing will have on the employees, on the competition, and on the costs and the future profitability of the company. Top management support, communication and commitment are critical for the successful development and implementation of the downsizing plan and for the smooth integration of HR planning into the company’s strategic and operational plans.
Reiterate communication throughout the downsizing process. Termination announcements should be made to the entire group, however no employee should be named specifically. HRM should communicate on a private and personal level each employee’s situation.
To minimize the trauma of separation, various programs to assist displaced employees should be put into place, such as counseling seminars, job search workshops, and placement services.
The performance to outcome expectancy area, an employee may have an idea of the outcome of poor task performance. They may feel that either they will be fired for doing poorly on the job. On the other hand the employee that does well at a task may expect to keep his or her job as long as they do well. Either way they are unsure of the outcome, yet they perform the task to their ability. Employees may do the task according to what they feel the outcome will be at the time. The valence level will depend on the outcome. If a survivor realizes that after a few weeks of training they can accomplish the job then their valence will be of a positive nature. A feeling of security may come over them. Losing their jobs doesn’t seem like reality anymore. Most companies just announce downsizing, they never tell you why they are downsizing. So a person my feel insecure because in his or her mind the people let go were downsized because of poor work performance. The more confident they feel on the task at hand the more confident they will feel to continue on and expect better thing from themselves. This gives motivation to keep moving. It all boils down to having the right attitude about your job once downsizing has occurred. That attitude can be influenced by what management does to enhance it.


The lack of motivation is one of the dysfunctional employee behaviors. “The expectancy theory is a process motivation theory based on the idea that work effort is directed toward behaviors that people believe will lead to desired outcomes.”5 Employees feel that their level of performance depends on their past experience. If they have never encountered a particular task before than they might experience a slight decrease in self-confidence where the task is concerned. The individual’s effort is the key element in this theory. The effort level depends on effort to performance expectancy, performance to outcome expectancy and outcome valences. Employee motivation is influenced by all three of these and if one of them weakens then motivation is weakened. In the effort to performance expectancy area, an employee may feel that even their best efforts to learn a new job, position or task, may not be good enough after downsizing. The employees have a low expectation of their own ability to do the job. In the
Affected employees are dealt with in a humane and equitable manner. Reassurance of surviving employees and control of all information is necessary to keep peace.



http://www.referenceforbusiness.com/management/De-Ele/Downsizing-and-Rightsizing.html
http://sbaer.uca.edu/research/sbida/1994/pdf/26.pdf
http://www.humax.net/econ.html
http://www.wisegeek.com/what-is-downsizing.htm

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PostSubject: Assignment 5   Tue Aug 18, 2009 12:36 am

Introduction

What is Downsizing?

Downsizing is a commonly used euphemism which refers to reducing the overall size and operating costs of a company, most directly through a reduction in the total number of employees. When the market is tight, downsizing is extremely common, as companies fight to survive in a hostile climate while competing with other companies in the same sector. For employees, downsizing can be very unnerving and upsetting.

There are several reasons to engage in downsizing. The primary reason is to make the daily operations of a business more efficient. For example, a company may be able to replace assembly line employees with machines which will be quicker and less prone to error. In addition, downsizing increases profits by reducing the overall overhead of a business. In other instances, a company may decide to shut down an entire division; a car company, for example, might decide to stop making sedans altogether, thus cutting an entire department.

In some cases, it becomes apparent that a business has too many employees. This may be because there has been a decline in demand for the company's services, or because a company is running more smoothly and efficiently than it once was. Many offices are heavily bloated with support staff and redundant departments, and these businesses may refer to downsizing as “trimming the fat.”

Numerous terms accompany downsizing. Employees may be terminated, fired, laid off, made redundant, or released. A business may be optimized, rightsized, or experiencing a reduction in workforce. Some of these terms have different legal meanings depending on where one is in the world; a layoff, for example, may refer to a mass temporary release of employees who will brought back in once business picks up, while a redundant employee is one who is asked to leave permanently.

Numerous consulting firms offer assistance with downsizing, often with the use of specialists who visit a business to evaluate it. Since profit is an important bottom line for companies, downsizing measures should be expected by employees, especially when they observe a troubled market or they are working for a struggling company.

For employees, the process can be stressful, because they may feel uncertain about whether or not they will continue to employed. Sometimes, downsizing is very abrupt, with a huge batch of employees being released from employment on the same day, while in other cases it may be a more drawn out and nervewracking process in which employees are slowly let go. Employers should remember that downsizing is very upsetting and stressful, and they should take steps to make it run smoothly while assuring valued employees that their jobs are secure.

Downsizing refers to a process where a company or a firm simply reduces its work force in order to cut the operating costs and improve efficiency. It has become a legitimate option for business growth strategies, especially after the 1980s. It is in fact, the most preferred option of companies to sustain operating costs and comply with the existing scope of the business. It is an important management venture and requires large assistance from the human resource management team.

There are a number of reasons why a company downsizes its employee base.

* Merging of two or more firms: When a certain firm combines its operations with another firm and operates as a single entity, in order to stay in profit or expand the market reach, it is called a merger. In case of a merger, certain positions become redundant. The same work is done by two different staff members. Usually in such a case, the company cuts staff to eliminate redundancy in work. It is characterized by some employees leaving an organization voluntarily, or by lay-offs, especially in case of higher management positions.
* Acquisition: If one organization purchases another one, there is a definite change in the management and the acquired company staff has to face unemployment. The reason for this is the same as the earlier case, viz to cut costs and and increase the revenues.
* Change in management: The change in the top brass of a company can also result in downsizing. The working methods and procedures vary with the management. Therefore, a significant change in the management roles may drastically affect the employee size to suit a particular style of working.
* Economic crisis: This is the single biggest cause of downsizing. Often, it consists of huge lay-offs by a number of organizations across various domains. The recent economic recession facing the world, has triggered a number of lay-offs in many reputed and popular firms in the world. According to a survey conducted by the US Bureau of the Census, organizations consisting of higher percentage of managerial staff downsize more than the ones with higher percentage of production process employees.
* Strategy changes: Some companies may reduce certain areas of operation and focus on other areas. For example, if a company is working on a project in which there are no assured returns, it may downsize it's employees working on that particular project. It focuses its resources on specific projects, which could be profitable ventures.
* Excessive workforce: In a period of high growth, a company hires excess staff, to meet the needs of a growing business. However, in times of recession the business opportunities dwindle, leading to downsizing of the surplus staff that was hired.
* Increase in efficient work flow and computerized services: If an organization work process is extremely fast and easily meets the requirements of the market, it may downsize some of its workforce. Similarly, if manual work can be done by a machine, in a much better and cost-efficient way, it also results in the reduction in the number of employees.
* Outsourcing practice:Organizations catering to international markets require a huge and efficient employee base. If this labor can be obtained by 'exporting' the job to other countries, a huge downsizing takes place in the parent country. For instance, if a certain job can be done more effectively in India and is more viable economically there, than in the United States, the business is operated from that country.

Downsizing, rightsizing, resizing, layoff. A downsizing by any other name is still traumatic for both displaced and remaining employees alike. No matter what label a company gives the process, there is the task of implementing the reduction in workforce while impacting the production and morale of theremaining employees. According to the most recent AMA study, U.S. companies planned to implement downsizing at an unprecedented rate. The objectives of the downsizing range from a
decrease in direct company cost to improving the competitive position of the company. However, a poorly executed downsizing can actually add to a company's woes and never achieve the desired results. This paper is not intended to analyze whether a company should or should not implement downsizing procedures. Rather, its focus is on how to downsize while preserving the long run productivity of the remaining employees. Based on the collection of secondary research and interviews with downsizing and outplacement experts, there is enough information available to piece together the tasks which should be implemented in order to successfully implement a downsizing
which will reduce the shock to the displaced employees while establishing a healthy groundwork for the remaining employees to return to normal and productive work.

Why Downsize?

Companies large and small implement downsizings for various reasons. Greenberg established that the majority of businesses (54.9%) implement downsizings due to a downturn in business. Productivity gains was second (23.2%) which was followed by mergers and acquisition (9.2%). In every case, upper management was attempting to improve operating profits by reducing the direct cost of personnel. By eliminating some employees from the payroll, company costs are immediately cut,
creating a financial boost and providing company shareholders with tangible evidence of the company's commitment to competitiveness. In addition, upper management expected to either improve or maintain the current level of productivity. As Harari points out, "Isn't it extraordinary
how management can sincerely believe that people who are jerked around like pieces of meat will show commitment and loyalty to the firm."

The Effects of a Downsizing

The downsizing is traumatic for both displaced and retained employees alike. Once the decision is made to downsize the company, the objective of upper management is to execute the downsizing in a manner which will impact the remaining employees as little as possible. Even if the downsizing is executed perfectly, management can expect to experience several responses from the remainingemployees.

Jones discussed the fact that remaining employees will go through a mourning period and likened it to a life event such as marriage or death. "If survivors aren't allowed to mourn, their grief might come out in unhealthy ways. They might idealize the company's past and sabotage new strategic
initiatives." Moskal also added, "Just like some Vietnam veterans, survivors of downsizing may feel guilty that they made it through while some of their friends didn't. They also feel anger, frustration and job insecurity."

Decreased productivity can be anticipated for a number of reasons. Fagiano discussed the "Noah's Ark Effect" in which employees "hunker down and concentrate not on the job but on looking for signs of stormy weather." This concept has merit since the remaining employees do not have any guarantees that the process will not be repeated. Barkley and Green also concluded that the days preceding and following a downsizing are unproductive or counterproductive. "Some employees who survived
the layoffs and continued employment with the company were anxious and uncertain." The survivors are looking for reassurance and/or reasons to convince themselves that the company is worth staying with. What reassurances do they have to continue a career here? "Downsizing is like a relationship that has ended and it has similar rules. You hold back f rom total commitment for a while until you are sure it's safe again."

There is always the possibility of a mass exodus of people from the company. This exodus would usually come from the top performers since they usually have the most opportunities in the job market. In addition, a company can expect the top performers to leave due to their need for a growing and challenging environment. Unfortunately, a company in the process of downsizing does not fit the needs of most top performers. Solomon quoted Newman as stating, "Bright people want to be where things are happening and where there's the most resources and opportunity for their future. They want to be in a winning place and land on their feet at all times. If they see that a company is in trouble, there's no reason for them to stay if things are falling apart."




Sources:
http://www.wisegeek.com/what-is-downsizing.htm

http://sbaer.uca.edu/research/sbida/1994/pdf/26.pdf

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http://neilreyniere.blogspot.com


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PostSubject: HRM Assignment # 5 !!!   Tue Aug 18, 2009 6:43 pm

We are task to Visit and identify a company website that has undergone HR downsizing and Identify the cause of downsizing and describe its processes. But before stating example of company which undergone downsizing let me first define and discuss its parameters and meaning.



Description

In the face of slowing or declining sales, companies often downsize their employee base as a means of cutting costs to boost profitability. In 2007, nearly 1 million employees lost their jobs in a mass layoff (50-plus employees) in the United States (an average of 180 workers in approximately 5,300 separate events, according to the Bureau of Labor Statistics). The number of layoff events in the United States in September 2008 was the highest since September 2001. Although downsizing is effective for significant cost reduction, it often produces unintended side effects, such as damaged employee morale, poor public relations, future rightsizing hiring costs and an inability to quickly capitalize on opportunities when the economy improves. Skillful downsizing should help a company emerge from challenging economic conditions in stronger shape. Creative efforts to avoid downsizing include hiring freezes, salary cuts or freezes, shortened work weeks, restricted overtime hours, unpaid vacations and temporary plant closures. When downsizing proves unavoidable, the ultimate goal should be to eliminate nonessential company resources while minimizing the negative impact on the remaining organization.

Methodology


Downsizing can be effective if implemented appropriately. Companies must be careful to avoid sending the wrong messages to employees, shareholders and the media. Successful downsizing requires managers to:

• Evaluate the overall impact of downsizing. The total cost of downsizing-including both financial and non-financial costs-must be taken into account. Managers must calculate the present value of all costs and benefits associated with the cuts, including severance packages, lower employee productivity due to disorder or talent loss, eventual rehiring expenses, future rightsizing costs and the lost opportunity costs associated with not having the appropriate manpower to accelerate out of the downturn. Investing in areas customers care about-while competitors are cutting back-helps position the company to take or sustain the lead once conditions improve. The value created from downsizing should exceed the cost of lower employee morale and potential damage to the company's reputation;
• Develop a smooth downsizing process. It is crucial that managers invest aggressively in upfront planning for the job cuts. A company typically forms a committee to determine the appropriate level of downsizing and creates a process that takes into account the best interests of the company and the shareholders. Other important activities are training managers to conduct layoffs and assisting former employees in their job searches.
Common Uses

Companies use downsizing to:
• Reduce costs;
• Rightsize resources relative to market demand;
• Signal that the company is taking proactive steps to adjust to changing business needs;
• Take advantage of cost synergies after a merger;
• Release the least-productive resources.


5 Ways To Survive Your Company's Reorganization, Takeover, Downsizing, or Other Major Change.

By Morton C. Orman, M.D. Copyright ©️ 1995-2002 M.C. Orman, MD, FLP

Many companies today are under intense economic pressure. Reorganizations, takeovers, mergers, downsizings, joint ventures, and other major changes are extremely common, as companies try to grow and survive.
These changes present new challenges and demands for everyone, from the C.E.O to the telephone receptionist. All members of the organization must therefore learn to cope with change or suffer consequences.
When change is not handled well, additional loss of jobs can occur. In addition, demoralization of the work force; increased worker turnover; decreased cooperation and teamwork; and increased levels of stress, anxiety, absenteeism, illness, and mistakes can follow.
The purpose of this Special Report is to highlight eighteen principles that are useful for coping with organizational change. While all eighteen of these principles may not apply to your situation, please read through the entire list to find those that do appeal to you.

1. BE PREPARED FOR CHANGE

Change is--and always has been--an inevitable part of life. In today's business climate, however, the pace of change has definitely increased.
Since most people normally hate to go through change, you can easily understand how today's pace of change can be stressful for many employees.
Most of us prefer established routines. We like to feel secure, stable, and familiar with our responsibilities. The one thing we hate most is uncertainty--uncertainty about our jobs, our future, our status in the organization, the role we are expected to play, and what other changes might be coming down the pike.
Unfortunately, most businesses are forced to make changes today just to survive. Global transformations require speedy adjustments. Local and national economic forces must be recognized and responded to promptly. New sources of competition and new technologies suddenly appear out of nowhere.
Like successful professional athletic teams, most businesses today must continually make changes to remain competitive.
Thus, instead of fearing change, resisting it, or hoping it won't ever happen to you, it's much better to prepare yourself mentally for the inevitable changes that are likely to occur.
Start today by imagining how you could cope with sudden, massive change. Think about likely scenarios and then brainstorm, on your own or with others, about how you might best respond.
Assume that the "rug could get pulled from beneath you" at any time. Then, if this happens, you won't be caught off guard. You'll already be psychologically and emotionally ready.
If the changes never come, you'll still be better off. Having prepared yourself in advance will enable you to feel much more confident and secure in your normal day- to-day activities.

2. EXPRESS SADNESS, LOSS, ANXIETY ABOUT THE FUTURE

When change does occur, don't pretend it isn't painful. Yes, change can bring new opportunities for personal growth, accomplishment, and organizational success. But it also causes feelings of sadness, loss, and anxiety about the future. These are normal human responses.
When people get laid off or fired, everybody hurts. We feel for our friends and coworkers. We empathize with their pain, anger, and sadness. In fact, we may have our own similar feelings to deal with, as new demands and responsibilities suddenly come our way.
When people get promoted, when organizational relationships change, or when our own job responsibilities become altered, there is a normal reaction of sadness, anxiety, and loss.
One of the worst things you can do when this happens is to pretend everything is "just fine." Even if you agree intellectually that the changes are necessary, emotionally you still may have some painful, negative reactions to deal with.
Unfortunately, today's business culture has little regard for honest human emotions. Expressing or even acknowledging negative feelings is considered "inappropriate." Workers are expected to be upbeat, positive, and "team players" all the time. While this is a laudable goal, there should also be room for people to express heart-felt negativity as well.
Truly enlightened business leaders know this. During times of significant change, they actively solicit negative feelings from their workers. They know that denying these feelings or trying to suppress their expression will only make things worse.

3. WATCH OUT FOR UNREALISTIC EXPECTATIONS
Unrealistic expectations can be a tremendous source of stress and unnecessary suffering. Unfortunately, when organizations undergo downsizings, restructurings, or other major changes, a whole host of unhealthy, unreasonable expectations frequently arise.
Upper management may expect, for example, that increased productivity will quickly occur, even though the work force has been seriously reduced. Or, management may expect they can impose any changes they want, without consider-ing how employees feel about them.
Employees, on the other hand, might expect that management should always act in a caring and compassionate manner. They might expect better communication from company leaders; more sensitivity to their feelings and needs; or more respect for their health, well-being, and family responsibilities.
While all of these things may be important for good employer-employee relationships, to expect them to be forthcoming from management (without encouragement from the rank-and-file) is to invite disappointment, resentment, and low morale.

4. DON'T LET YOURSELF OR OTHERS BE ABUSED

During times of change, it is common to let yourself and others be easily abused. When workers have been fired or laid off, there is a natural tendency to wonder if you might be next. This climate of fear might prevent you from speaking up forcefully when excessive or unreasonable demands are placed upon you. Anxiety quickly spreads throughout the entire workforce, making it even more difficult to obtain support for questioning unreasonable company policies.
But sometimes, questioning policies is healthy and appropriate. If you feel that you or fellow workers are being unfairly abused, try to tactfully broach this subject with your immediate superiors. Try to do this in a way that isn't offensive or that doesn't make you appear to be lazy, uncooperative, or unwilling to do your share. Yes, there is always a risk when you make such a move. You could easily get fired or be branded as a troublemaker. But if you truly have your company's interests at heart, you may be able to negotiate a more fair and humane work environment for all concerned.
After all, if the remaining workforce is angry and demoralized, how could this possibly be good for business?

5. ACKNOWLEDGE ANY INCREASED PRESSURES, DEMANDS, OR WORKLOADS
One of the biggest mistakes most companies make when they downsize or restructure is they fail to acknowledge the increased pressures, demands, and workloads that temporarily fall upon remaining employees.
Sometimes, retained workers are asked to do the work of two or three individuals with little appreciation or acknowledgement. Their salaries are not increased commensurately or perhaps even at all. The resources made available to them are often very lean or nonexistent. While at the very same time, the demands on their productivity might be significantly increased!
All of this could occur without even a word of thanks or gratitude from the company leaders who ultimately benefit from such an arrangement.
Whether your company realizes how short-sighted this failure of recognition is, you don't have to compound this mistake. Be sure to regularly acknowledge to yourself and to your coworkers if your responsibilities have been substantially increased. While it may take time for you to successfully readjust, always strive to acknowledge whatever is true for you at the moment.
Discuss your feelings with your family, friends, and loved ones. Consider discussing them with your superiors, if you think this would be appropriate. Just don't make the mistake of suppressing your feelings, denying them, or pretending they aren't really there.


This is an example of Company which undergone downsizing:

AtheroGenics (AGIX) Cuts Headcount by 40%; to Record One-Time Charge of $400K in Q3:

September 23, 2008 4:47 PM EDT

In a Form 8-K, AtheroGenics, Inc. (Nasdaq: AGIX) announced that on September 19, the company reduced its employee headcount by approximately 40% to a current staff of 30 employees. In addition, the Company has also eliminated approximately 20 open positions as a result of the downsizing. The Company is providing severance to employees affected by the workforce reduction, resulting in a one-time charge of approximately $400,000 related to the severance benefits, which will be paid in Q308.


Source:

http://www.bain.com/management_tools/tools_downsizing.asp?groupcode=2
http://financepub.blogspot.com/2008/10/list-of-companies-that-are-downsizing.html
http://www.streetinsider.com/Corporate+News/AtheroGenics+



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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Tue Aug 18, 2009 8:32 pm

DOWNSIZING! The very term strikes fear in the heart of many. But given today’s financial crisis, downsizing has become a nightmare turns to reality for many organizations.

What is Downsizing?

According to the common source which is the http://en.wikipedia.org/wiki/Layoff, downsizing is the ‘conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness’ (Budros 1999, p. 70).
Another definition of downsizing by Huber & Glick, (1993) is "a set of activities ... undertaken on the part of management, designed to improve organizational efficiency, productivity, and/or competitiveness. It represents a strategy that affects the size of the firm's workforce and its work processes"(p.24).

Huber & Glick (1993) sites key attributes of downsizing :

(1) downsizing is intentional;
(2) downsizing usually involves, although is not limited to, reductions in personnel;
(3) downsizing is focused on improving the efficiency of the organization; and
(4) downsizing affects work processes knowingly or unknowingly.

In the corporate world or business enterprise, downsizing is reducing the number of employees on the operating payroll. It only means a loss of one’s job and workforce reduction of an organization. And there are number of corporations that undergone downsizing process. One to be named is the Colgate-Palmolive Company.


What is a Colgate-Palmolive Company?
http://www.colgate.com



Colgate-Palmolive Company is an American diversified multinational corporation focused on the production, distribution and provision of household, health care and personal products, such as soaps, detergents, and oral hygiene products (including toothpaste and toothbrushes). Under its "Hill's" brand, it is also a manufacturer of veterinary products. The company's corporate offices are on Park Avenue in New York City, across from the Waldorf Astoria.

Causes / Reasons of downsizing

Their aimed is to improve global competitiveness through cutting costs and improving efficiencies. During this time, 24 of Colgate's 112 global factories will be closed or reconfigured. Some 3,000 workers worldwide, which are 8.5 percent of their 36,000 workforce, will lose their jobs. For these restructuring and administrative changes, Colgate will take a $369 million after tax charge in the third quarter. The main reasons for Colgate's recent restructuring are:

(1) Reduced trade barriers in Europe and Latin America;
(2) The need for new technology in manufacturing to improve competitiveness;
(3) The trend toward more concentrated products such as laundry detergent, which requires less production; and
(4) Acquisitions that result in adding more plants.

Cameron and Associates found three implementation strategies: workforce reduction, organizational redesign, and a systematic strategy focused on changing the attitudes, values, and culture of the organization (Huber & Glick, 1993).


Workforce Reduction

The focus is mainly on headcount reduction and employs such tactics as early retirement, transfers and out-placement, buy-out packages, golden parachutes, attrition, job banks, and layoffs or firings. It is most often done by top-down directives, and almost always implemented across-the-board since the goal is to reduce headcount numbers quickly.
The disadvantages of this method are it is difficult to predict who will be eliminated and who will remain, and impossible to determine what knowledge and critical skills will be lost to the organization. The advantages are it provides immediate reduction, captures the attention of members of the organization to the seriousness of conditions, motivates cost savings, and creates readiness in the organization for further change (Cole, 1995).


Organizational Redesign

This approach aims at cutting out work in addition to or in place of eliminating workers. Strategies include eliminating functions, hierarchical levels, divisions, or products; consolidating and merging units; and reducing work hours. These are medium-term strategies that require advanced analysis of the areas that should be consolidated or redesigned. The focus is on work reduction over manpower reduction (Cole, 1995).

Systemic Strategies

This approach focuses on changing the organization's systems, culture and attitudes of employees, not just the size of the workforce, configuration of the structure, or the magnitude of the work. It focuses on systems in two ways. First, on internal systems, values, communication, etc. and on external systems, i.e. the production chain including upstream suppliers and downstream customers.

This strategy involves redefining downsizing as a way of life, as an ongoing process, as a basis for continuous improvement instead of a program or target. Downsizing is equated with simplification of all aspects of the organization. Instead of being the first target for elimination, employees are defined as resources to help generate and implement downsizing ideas in other areas. All employees are held accountable for reducing costs and finding improvements. Serving customers, meeting their needs, and exceeding their expectations remain a core goal of downsizing activity, not just size reduction. This strategy is the most compatible with principles of Total Quality Management (Cole, 1995).


Common Outcomes of Downsizing

Positive:

Downsizing announcements usually lead to positive reactions at least for some surveys. Favorable reactions occurred because of a promise of cost savings, reduced expenses, and increased competitiveness. Stockholders and analysts continue to assume that downsizing produces desirable financial results. But it should be noted that this positive outcome of downsizing ( e.g increase in stock value), does not always occur at least in the short-term.

Most of the companies felt they did a good job handling the change process and sufficiently attended to the needs of the remaining employees. Many also thought they did a good job in communicating with employees. However, in open-ended questions, communication was cited again and again as the greatest challenge during reorganization. (Right Associates, 1995).


Negative:

It is said that nearly 68% of all downsizing, restructuring, and reengineering efforts are not very successful (Clark & Koonce, 1995). In many cases, companies that downsized and restructured to become more profitable and efficient have not achieved either. Instead they have experienced tremendous fallout, especially in the areas of decreasing employee productivity and morale, and increasing levels of absenteeism, cynicism, and turnover. A look at the reasons for diminished productivity and morale in downsized organizations reveals a changing corporate machine.

CRITICISM OF DOWNSIZING


While companies frequently implement downsizing plans to increase profitability and productivity, downsizing does not always yield these results. Although critics of downsizing do not rule out the benefits in all cases, they contend that downsizing is over-applied and often used as a quick fix without sufficient planning to bring about long-term benefits. Moreover, downsizing can lead to additional problems, such as poor customer service, low employee morale, and bad employee attitudes. Laying workers off to improve competitiveness often fails to produce the intended results because downsizing can lead to the following unforeseen problems and difficulties:

• The loss of highly-skilled and reliable workers and the added expense of finding new workers.
• An increase in overtime wages.
• A decline in customer service because workers feel they lack job security after layoffs.
• Employee attitudes that may change for the worse, possibly leading to tardiness, absenteeism, and reduced productivity.
• An increase in the number of lawsuits and disability claims, which tends to occur after downsizing episodes.
• Restructuring programs sometimes take years to bear fruit because of ensuing employee confusion and the amount of time it takes for employees to adjust to their new roles and responsibilities.

Instead of laying employees off, critics recommend that companies eliminate jobs only as a last resort; not as a quick fix when profits fail to meet quarterly projections. Suggested alternatives to downsizing include early retirement packages and voluntary severance programs. Furthermore, some analysts suggest that companies can improve their efficiency, productivity, and competitiveness through quality initiatives such as Six Sigma, empowering employees through progressive human resource strategies that encourage employee loyalty and stability, and other such techniques.

Sources:
http://www.enotes.com/management-encyclopedia/downsizing-rightsizing
http://en.wikipedia.org/wiki/Layoff
http://en.wikipedia.org/wiki/Colgate-Palmolive

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PostSubject: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Wed Aug 19, 2009 1:05 am

DOWNSIZING...


downsizing?

In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people.
G
Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect.


bounce bounce bounce



According to Armando Gomez, a career adviser,
No matter how successful a company might become or how many employees attend the company picnic, there is always room for resizing in a workplace that grows very quickly. This doesn't necessarily mean that employees will lose their jobs, but they would be wise to prepare for the worst possible scenario.

Here are instances of firms that had undergone downsizing...





○ Motorola is cutting 1,900 jobs at 29 U.S. and international locations in an effort to improve operating efficiency. Among the sites affected is an Elgin distribution and service center being sold to Communications Test Design of Pennsylvania.

○ Motorola set to downsize at 30 sites. This according to the Motorola Inc., Schaumberg, Ill which has has embarked on an effort to replace its IBM (International Business Machines Corporation) mainframes running CICS or Customer Information Control System (is a transaction server that runs primarily on IBM mainframe systems) manufacturing applications with its own Unix-based 8000 midrange computers within a year.






○ Philippine Airlines, Inc. (abbreviated PAL), also known historically as Philippine Air Lines, is the national airline of the Philippines.

○ PAL was severely affected by the 1997 Asian Financial Crisis. In what was believed to be one of the Philippines' biggest corporate failures, PAL was forced to downsize its international operations by completely cutting operations to Europe and eventually Southwest Asia, cutting virtually all domestic services excluding routes operated from Manila, reducing the size of its fleet and terminating the jobs of thousands of employees. The airline was placed under receivership in 1998, gradually restoring operations to many of the destinations it formerly serviced. PAL exited receivership in 2007 with ambitious plans to further restore services to its previously-serviced destinations, as well as diversify its fleet. By March 31, 1997, at the end of the 1996-1997 fiscal year, PAL had reported its largest annual loss of P8.08 billion

○ PAL's financial difficulties were compounded by a series of labor disputes that began when the pilots' union staged a three-week strike in June 1998. This was followed by a strike by the ground personnel union on July 22, which ended four days later with the signing of a deal between the union and management.








○ As it was posted by Marziah Karch, About.com Guide to Google last January 14, 2009, Wednesday.
Google made two back-to-back posts in the Official Google Blog explaining some recent cutbacks at the company.
"Our strong desire is to keep as many of these 70 engineering employees at Google as possible. However, we do recognize the upheaval and heartache that these changes may have on Google families, and that we may not be able to keep 100% of these exceptional employees."

○ Google doesn't have a lot of practice with layoffs or spending cuts, and the recent moves have caused quite a stir.


king king Companies cannot carry on constant growth without proper management. What this means is that at some point, companies must take time out of their hectic schedules and start crossing out names of employees they can do without.

king king prepare, protect, prevent! this is advised by Armando Gomez, a career adviser, at http://www.askmen.com/money/career/13_career.html

He emphasizes that this incedence are enevitable... So better:

Get involved in the company
: Be versatile; take initiative and show interest in the success of the company along with what it does. An employee should be proud of what he does for an average of forty hours per week. A career is like marriage; if you don't put any thought and effort into it, you may be left with nothing one day.

Stay Calm: If the resizing has already occurred or is in the midst of occurring, stay focused and concentrate on your career. This way, there's a better chance that your superior will relocate you or offer you a different position if you discuss your situation with him. Storming into his office will surely not help your cause, especially if there are other employees waiting to do the same.

Look on the bright side: Losing your job does not mean the end of the world, as it can open doors to better opportunities that might have been left untapped if never given the challenge. Now is the time to look into all those dream jobs that you once yearned for.

Save your silver dollars(money): This piece of advice is on a more personal level if any of you were ever involved in such a situation. Piggy bank savings will make your life a whole lot easier if you suddenly find yourself jobless. You will have to plan your future career moves, which should be something of dire importance to you; more than just a means to an end.


_FIN_


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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Wed Aug 19, 2009 2:00 pm

A Company Website that has Undergone Downsizing

What does Downsizing means anyway?? Well, in a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff, with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people.
Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumb sizing is downsizing that, in retrospect, failed to achieve the desired effect.
It sounds like a memorable line from one of the Godfather movies — “It’s business, it’s not personal.” This, it turns out, is one of the most important things for those who have been downsized to remember. A veteran human resources professional, Kennedy stresses this element to those who have been laid off: It always hurts, and for the one being downsized there’s a feeling that “you don’t need me anymore.” That’s not the message, she says. “But that’s how people feel.”
She explains that months of preparation and difficult decisions go into a restructuring, with human resources professionals working closely with management, looking at what the business needs — but not, she stresses, looking at the people.
Although the global economic meltdown has roots in the United States, virtually every developed or developing economy across the globe is now caught up in this unprecedented crisis. While nauseated watchers of the NASDAQ, Hang Seng, BSE and other indexes experience the highs and lows of the daily tumult, the stakes are higher and more painful for employees who have been laid off or fear for their future prospects. For the Asian economies which have enjoyed rapid growth in recent years, particularly China and India, the crisis has been hard-felt. Today, nearly every industry has been affected in some way. Although specific details can be hard to come by, reasonable estimates indicate that literally thousands of Chinese factories have been closed, scattering displaced workers throughout the country. For many of those that remain open, layoffs are inevitable. In India, the fear of a global slowdown affecting India is worrying. People have not been exposed to an environment of global repercussions.
What does this mean to the employees that remain behind? If engaged workers are the key to a variety of important business outcomes, what sort of a toll do downsizings have on the morale of its survivors? We will take a look at layoff survivors in Asia to see how they view the workplace. What can organizations do to re-engage the survivors of layoffs, strengthening their workforce for the eventual but inevitable economic revival?
The walking wounded
Whether we use the term layoff, downsizing, or right-sizing, the outcome and the pain for workers is the same. Although still employed, employees who have survived layoffs could be described as the walking wounded. Survivors can carry a heavy burden, having to cover for lost friends and colleagues while wondering about their own security and possibly a loss of trust in senior leaders. Amidst this bleak scenario, managers must rally the remaining troops while dealing with similar issues.
To discover the effects of layoffs on employee engagement and turnover intent, and to identify the work characteristics most important to layoff survivors’ engagement with work, and to the organization—the most effective way to emerge from downsizing unscathed, the Kenexa Research Institute (KRI) utilized the WorkTrends™️ data to explore employee opinions and engagement drivers in Asia, specifically Australia, China (including Hong Kong), and India. For the sake of data robustness, we combined the data for the countries, though we acknowledge that there are differences between countries in terms of the drivers of engagement and absolute magnitude of favorability scores.
The negative impact of downsizing
As the graph clearly shows, members of organizations that have undergone layoffs in the past 12 months are less positive on every WorkTrends dimension, most notably with regard to confidence and security (i.e. confidence in the organization’s future) by a difference of 16 percentage points. Perhaps this explains Trevor and Nyberg’s (2008) finding that voluntary turnover rates increase within the calendar year of, and 24 months following the downsizing event.
Maintaining engagement
Conventional wisdom maintains that initial layoffs target poor performers and redundant positions while subsequent events more often result in regrettable losses. Regardless of whether your organization is into the first or second round, WorkTrends can provide some insight into the key factors that promote engagement among layoff survivors. By focusing on these areas, organizations should be better positioned to rebound with the economy but perhaps more importantly, retain those key employees who will be so critical to your organization’s future.
A key driver analysis conducted on layoff survivors reveals the following as the key drivers of employee engagement:
• Confidence in the future of my company
• A promising future for me at my company
• All employees have equal opportunities for advancement, regardless of gender, ethnicity, religion, sexual orientation and culture
• Satisfaction with recognition for the work I do
• Excitement about my work
Taken together, these five items explain roughly 40% of the reasons for layoff survivors’ engagement, and therefore leaders can start here in their efforts to improve employee engagement and retain key personnel. While these are also drivers of engagement in organizations that have not downsized, they take on greater importance in the aftermath of layoffs. Scores on all of these items are significantly lower for layoff survivors than employees whose organization has not downsized, suggesting that the need to respond is much greater. In addition, the order of importance of the drivers is different for layoff survivors. For example, feeling that there is a promising future is much more important to layoff survivors suggesting that organizational efforts to improve confidence and the sense of security would be time well spent in a post-layoff environment; a finding which is substantiated by the 15-point difference on the confidence and security dimension between the groups.
Finally, the top drivers for layoff survivors show a greater preponderance of layoff survivors on employee-centric questions. In other words, items that have to do with “my experience” and “how I feel” move up in rank compared with employees in non-layoff organizations. Drivers of engagement in non-layoff organizations include items that ask about innovation, ethics, social responsibility. For layoff survivors, these issues are further down the list of engagement drivers and take a back-seat to the more personal matters.
Turning survive into thrive
If your organization has undergone trauma in the form of layoffs as a result of economic conditions or other reasons (e.g. M&A-induced redundancies), what should HR practitioners and organizational managers and leaders do? The WorkTrends results suggest a number of important steps that can be taken to enhance future levels of engagement and mitigate the potential of regrettable turnover.
• Confidence is key—Perhaps one of the most important first steps in any post-layoff environment is to regain employees’ confidence in the organization and particularly the future role that they play. While this may seem obvious, a crisis situation may cloud that. Confidence can be instilled in a variety of ways, but organizational leaders should communicate the strategy going forward, translate the strategy into what it means for workgroups, listen to employee concerns, and make clear how the future will be bright for individual employees. Give them a ‘light at the end of the tunnel.’
• Recognition and opportunity—In the midst of crisis, individuals still make their way the best they can. Life goes on, despite the turmoil. Managers need to consider this while the organization struggles; employees need to know that they are doing their job well and that there will be again opportunities from them at the organization, especially in times after crisis. In other words, give them a reason to hang in there.
• Turn ‘me’ into ‘we’—In a post layoff environment, employees may turn inward and worry more about matters that are personally relevant or give them a sense of security. Naturally, in times of uncertainty, employees and managers will be more concerned with their own work and livelihood. This tendency towards protectionism can threaten to break down the social ties that bind an organization together. Reinforcing messages such as ‘We are all in this together,’ and reiterating that group is stronger than individuals will encourage employees to bond together and increase organizational loyalty.
• Prepare for the rebound—Finally, while there are things that can and should be done now for your layoff survivors, it is also important to take a long-term perspective. The economy will eventually rebound, customers will return, and hopefully your company will return to its upward path to prosperity. How your layoff survivors are treated will become part of the organization’s history. If it is done well, that can help attract and retain new employees. If it is done poorly, it will have the opposite effect.
Summary
Downsizing is tough on employees, managers and leaders alike. When headcount cuts are deep, no one emerges unscathed. In times past, layoffs were a once or twice in a lifetime event; now, seemingly, they are becoming ‘business as usual.’ To emerge from these events ready for an economic recovery, organizational leaders and HR practitioners need to ensure that they’ve avoided a despondent, disassociated workforce; rather, their employees are ready and raring to go.

You may also visit my site at :
http://deshai08.blogspot.com/
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PostSubject: Assignment 5   Thu Aug 20, 2009 12:02 am


Downsizing

What is Downsizing?

For better understanding let us define first downsizing. Here are some definitions of downsizing:
Quote :
•“Downsizing is a commonly used euphemism which refers to reducing the overall size and operating costs of a company, most directly through a reduction in the total number of employees. When the market is tight, downsizing is extremely common, as companies fight to survive in a hostile climate while competing with other companies in the same sector. For employees, downsizing can be very unnerving and upsetting.”
http://www.wisegeek.com/what-is-downsizing.htm


Quote :
•“Layoff is the temporary suspension or permanent termination of employment of an employee or (more commonly) a group of employees for business reasons, such as the decision that certain positions are no longer necessary or a business slow-down or interruption in work. Originally the term "layoff" referred exclusively to a temporary interruption in work, as when factory work cyclically falls off. However, in recent times the term can also refer to the permanent elimination of a position.
Downsizing is the ‘conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness’ (Budros 1999, p. 70). Since the 1980s, downsizing has gained strategic legitimacy. Indeed, recent research on downsizing in the US (Baumol et al. 2003, see also the American Management Association annual surveys since 1990), UK (Sahdev et al. 1999; Chorely 2002; Mason 2002; Rogers 2002), and Japan (Mroczkowski and Hanaoka 1997; Ahmakjian and Robinson 2001) suggests that downsizing is being regarded by management as one of the preferred routes to turning around declining organizations, cutting cost and improving organizational performance (Mellahi and Wilkinson 2004 )most often as a cost-cutting measure.”
http://en.wikipedia.org/wiki/Downsizing



As what I’ve understand from the definitions, downsizing means doing lay-off or reducing the numbers of employees. Organizations do this for the purpose of also reducing the company’s costs and operating expenses. This maybe of for the purpose I have mentioned but sometimes it would not turn out well. So much of having lay-offs could destroy an organization’s effectiveness. One thing that may be considered on downsizing is how could the company choose who will stay and who will remain. I think it would be hard for the company who will they discharge from the company especially if they have excellent employees. How downsized employees are treated directly affects the confidence and preservation of valued, high-performing employees who are not downsized. One outcome of downsizing must be to preserve the organization's intellectual capital.

AT&T is a communication company based in the U.S... And as I surfed the web, I found out that they to had undergone HR downsizing. This made them took off more than 18,000 jobs. That is really big.

Company Website: www.att.com

Here is an article I found on the net talking about AT&T’s downsizing problem.
AT&T: A Leaner Company without a Crash Diet
February 8, 1998
By SETH SCHIESEL

As the AT&T Corp. prepares to follow through on last month's announcement that it would cut its payroll by up to 18,000 jobs, it has an underappreciated tool at its disposal: practice.
Since 1993, AT&T has announced job cuts five times, introducing plans to eliminate a total of as many as 85,500 positions at a cost of billions of dollars. As the company, the nation's largest long-distance telephone carrier, has struggled to remake itself amid heavy turbulence in the telecommunications industry, it continues to find that thousands of its employees are superfluous.
In preparing for this latest round of cuts, the company seems to be taking lessons not only from its own experience in encouraging employee exits but also from those of the variety of companies that have made white-collar layoffs one of the decade's corporate vogues.
A result may be a kinder, gentler sort of downsizing. Compared with AT&T's previous efforts at shrinkage, this one relies less on layoffs and more on generous provisions intended to attract volunteers.
One advantage of such treatment is better workplace morale. Less acknowledged, however, is a potential disadvantage: Often, companies lose more of their most talented people than they would like.
Still, the push toward gentler severance has been picked up nationally. In 1996, companies tracked by Challenger, Gray & Christmas, an outplacement firm based in Chicago, gave workers who were being laid off severance pay worth an average of 12.75 weeks' salary. Last year, that figure soared to 21.75 weeks.
Certainly, many large companies can afford to be more generous these days than they could a few years ago, and tax rules are making largess more attractive. But at a company like AT&T, where downsizing announcements have become almost as regular as annual reports, enhancing buyout packages can be vital to shoring up shaky employee morale.
"Companies are recognizing that they run a real risk of losing the good will of the employees who remain, who are friends with the people who leave," said John A. Challenger, executive vice president at the Challenger company. "They run the risk that the people who remain, who are being asked to work longer and harder, are going to resent that, especially since they no longer feel they necessarily have lifetime job security.
"The companies have got to put together packages to show that this is a no-fault situation."
When AT&T said in January 1996 that it intended to eliminate 40,000 of its 301,000 jobs, the announcement seemed like the crest of a mounting wave of corporate cutbacks.
Of those 40,000 jobs, 30,000 were to be cut by involuntary layoffs. Another 4,000 workers were to leave as the company sold their divisions; only 6,500 were to leave after accepting a voluntary buyout package that had expired the week before the layoffs were announced.
Morale at the company was crippled; Robert E. Allen, then AT&T's chairman, found his picture on the cover of Newsweek magazine, in a police-style lineup under the headline "Corporate Killers."
By contrast, last month's announcement elicited hardly a yawn. At AT&T's headquarters in Basking Ridge, N.J., some midlevel managers -- the group that is the cuts' target -- were almost giddy.
That may have been because this time about two-thirds of the cuts will come through voluntary retirements, part of the richest buyout plan in AT&T's history, and one that will be made available to most AT&T managers. About a third of the staff cuts will be achieved through attrition and layoffs.
"We want to send the right message to our employees," said Adele Ambrose, an AT&T spokeswoman, "that we need to get cost-competitive but we wanted to be generous to them and express that we care about them."
Many companies care about their employees, but managing a work-force reduction is rarely as simple as paying enough.
Management experts say that weighting cuts toward voluntary buyouts, as AT&T has done, avoids many morale-destroying effects of involuntary layoffs, but gives a company less control over which and how many employees depart.
"Very often you lose the wrong people," said Jeffrey Pfeffer, a professor at Stanford University's business school who has contended that downsizing hurts companies at least as often as it helps them. "You often wind up hiring people back as temps, and oftentimes you've lost so much in morale and productivity that you don't really cut costs."
AT&T said senior executives would be able to offer incentives to especially productive groups of employees to induce them to stay.
But the tight labor market and the relatively good prospects for employment elsewhere could entice some AT&T workers who would stay with the company in more difficult economic times, said Lee Miller, an employment consultant and author of "Get More Money on Your Next Job" (McGraw-Hill).
"Since we really haven't seen this kind of job market in a while, companies are likely to underestimate the number and type of people who take these offers," he said.
AT&T is offering managers a choice of buyouts. They can take a 20 percent bonus to their pensions, or they can choose an addition to the cash they can take in lieu of a pension -- by an amount equal to 5 percent of their 1997 salary for each year of service to the company, up to 100 percent.
For buyout participants, AT&T also intends to lower the age and experience requirements for post-employment medical coverage.
The buyout will be offered to most of AT&T's roughly 60,000 managers. Managers make up almost half of the company's 128,000 employees.
A convergence of federal tax law and the current bull market may have played a role in the buyout's design. The tax code allows companies to deduct from their taxable revenue the contributions that they make to employee pension funds, as long as the total size of the fund does not exceed 150 percent of the company's pension obligations.
As the stock market has swelled, some companies' pension funds have exceeded that 150 percent limit, encouraging the companies to spend some of that money in buyout programs to allow them to continue deducting their fund contributions.
AT&T denied that such circumstances were driving the terms of this buyout, saying that its $12.5 billion pension fund for management is only 125 percent of its obligations and that the last time the company made a contribution to the fund was in 1995.
For all of its downsizing efforts, AT&T has not become much smaller in recent years.
The company has almost completely offset the cut jobs with new hires in growth areas of the company, like Internet and wireless telephone service. And AT&T has made no commitment that the buyout will result in any net reductions in its work force.
That fits with the views of James E. Schrager, a clinical professor of strategy at the University of Chicago's business school.
"What have companies learned from downsizing?" he asked. "They've learned that it's very hard to fire too many people."
http://www.mty.itesm.mx/dhcs/deptos/ri/ri95-801/jcobian/economia/downsizing/att.html

Causes of Downsizing

What really causes downsizing? These are the possible causes of downsizing based on my own understanding. LOL
• Company status – depending on the company’s production prices, reallocating resources and simplifying management processes. Also some changes like reengineering or reinventing initiatives could cause discharging of employees.
• Automation enhancements – This could be a possible cause of downsizing because technology-based growth could lead to less numbers of human works.
• Economy – the economic status could also affect businesses and could cause downsizing because of economic change. (reduction in innovation in the industry)
• Eliminating low value work – This may happen if the work force in a company is not effective enough for the company.
• Immediate financial crisis
• short-term improvement of financial statements
• and long-term strategic decision



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PostSubject: Human Resource Downsizing   Fri Aug 21, 2009 2:05 pm

HUMAN RESOURCE DOWNSIZING



Human Resource Downsizing is a way of life in organizations today. Yet these performance improvement initiatives create feelings of anger, apathy, resentment and stress in the surviving workforce which leads to low productivity. This low productivity often works against the gains the leaders often anticipate. Human resource leaders know the importance and value of employees; therefore, HR leaders are presented with an opportunity to add value by taking an early leadership role before, during and after downsizing initiatives to address the healing of the surviving workforce. This healing begins with a holistic approach in establishing and implementing strategies that will increase the likelihood of a healthier, productive workforce after downsizing. Human resource leaders need to ensure that downsizing plans include strategies that focus on six major areas: 1) employee involvement, 2) communication, 3) support programs, 4) selection processes, 5) human resource management tools and systems alignment and 6) training and development.

Call it layoffs, downsizing, early retirement or "corporate rightsizing." It's no secret that pressures to improve profit levels have turned massive workforce reductions into a way of life for many American companies. But with this recent trend has come concern and a demand for higher levels of assistance to discharged workers. Companies have explored many different downsizing options, but one pharmaceutical firm s unique solution to this often difficult situation should be of interest to HR professionals caught in the corporate rightsizing struggle. When the downsizing effort began in December 1991, the company established an in-house Temporary Secretarial Department (TSD). Similar to a temporary employment agency, secretaries and administrative assistants who had met acceptable performance standards registered with the TSD by filling out forms listing their various skills. As departmental managers had temporary job openings due to sickness or vacation leaves, they were required to fill the opening through the TSD. Management could only use an outside agency if an in-house temp was unavailable. To help counter any trauma caused by the downsizing, there was a set up for an Employee Assistance Program support group for the displaced workers. "It's really helped them knowing that they could go and talk with others who were in the same position," says Gebhard. "The company also set up a secretarial savvy course that covered skills like networking and resume writing."

The Need to Tie Downsizing to Strategic Plans

Why are these downsizings likely to continue? The answer in part is that most companies fail to tie downsizing solutions to the longer-term strategic needs of the organization. Even for companies that have a history of enlightened human resource policies and practices, such as IBM, have had great difficulty in forecasting the "right" level of employees needed in the future due to the unforeseen changes discussed earlier. Due to severe declines in their strategic markets, IBM has been forced to rescind their lifetime employment policy recently because the employee cutbacks required could no longer be handled through attrition or early-retirement programs. Employees who are critical to the long-term survival of the organization may take advantage of early-retirement programs or even be summarily dismissed. What's needed is to view these adverse situations as opportunities and not solely as threats.

In addition, downsizing companies often understate the "hidden" costs of laying off employees with years of experience, training and education, most at company's expense. Jac Fitz-enz, president of Saratoga Institute, has estimated the average direct cost per employee to be $7,140 when dismissing employees with five years service and an average salary of $30,000. To that must be added indirect costs such as declines in quality as people learn new jobs and a possible loss in sales due to short staffing. Hiring replacement workers costs about $5000 per employee. When all layoff related costs are totaled, Dow Chemical estimates that laying off technical and managerial employees can cost $30,000 to $100,000 per employee (Faltermayer, 1992).

Technological advances, related to both product and information processes, have also strongly affected the requirements of a firm's labor force. Many firms recruit and select individuals with advanced degrees because it is essential to have people with advanced or technical preparation, and also because these people are perceived to have the flexibility appropriate to rapid technological changes. The latter assumes the ability often to undertake preparation in an unrelated discipline, master cross-training and/or display adaptability to new situations. The overall effects of increased technology are yet to be determined as most vital streams of technology are still in their infancy. By historical standards, both computers and robotics are relatively young industries.

One of the greatest challenges presented to human resource planners during the 1990's and beyond will be the necessity to find ways of attracting and developing new employees from a more diverse labor pool. Of equal importance is the organization's need to develop and retain a stable core labor group during rapidly changing conditions that otherwise would result in wide fluctuations in labor demand. As downsizing efforts continue, firms have discovered that much executive time can be saved by concentrating on critical activities while increasingly outsourcing less critical jobs to organizations specializing in those areas. Any work to which a company can't bring a special set of skills should be outsourced or spun off. Thus, AT&T, IBM and Shell Oil are in the process of spinning off legal, public relations, billing, payroll, and other services (Dumaine, 1992). In addition, the Big Three U.S. auto manufacturers are scrambling to catch up to Japanese companies who have depended much more on their suppliers to meet their assembly needs "just-in-time." By thoughtfully using outside suppliers of various human resources many firms have become increasingly flexible while reducing benefit and recruitment costs through downsizing.

Phased and Early Retirement. From the "have your cake and eat it" category, several firms have purposely made early retirement programs more attractive, although some important limitations are attached to these. Not only does this open employment opportunities for younger (often lower salaried) individuals but also it serves to reduce benefit costs especially in the area of health care. Increasingly, phased retirement programs are being established to prepare people for retirement, while also shifting responsibilities to younger, high potential employees. In some cases, early "retirees" continue with their "old" organization in either a consulting or project management role. This satisfies their need to make a gradual transition from full-time work to a reduced work week or full retirement lifestyle. At the same time organizations reduce their labor overhead and better match their need for specific expertise.

As established earlier, firms need to determine whether the benefits received by staffing with younger employees outweigh the "complete" loss of skilled expertise. DuPont discovered this in the mid-1980's when an early retirement offer was so widely available too many key employees took advantage of it. It is using a much more selective approach in its latest announced drive to eliminate positions in support functions such as accounting and public relations (Faltermayer, 1992).

Shared Services. Many companies are "sharing" the services of employees or firms whose talents or skills are in short supply or quite costly. By "pooling" or centralizing such services as secretaries, programmers, or scientists, a reduction may be realized in both initial cost expenditures and in the permanent work force required. Care should be taken when designing these organizational arrangements to avoid situations that can result in loss of control and accountability or reduced reliability (Dumaine, 1992). Failing to set priorities or having poorly defined reporting relationships can offset the benefits of these approaches.

Entrepreneurial start-ups often are primary beneficiaries of this strategy. In fact, many newly built office buildings have been designed specifically for small start-up firms. Companies share receptionists, secretarial and clerical help, and (legal) research. This helps to reduce start-up costs while permitting the entrepreneur to respond quickly to unforeseen consumer demands.



http://humanresources.about.com/od/layoffsdownsizing/Downsizing_and_Layoff_Strategies.htm

http://findarticles.com/p/articles/mi_m3495/is_n9_v37/ai_13590989/

http://en.allexperts.com/q/Human-Resources-2866/Downsizing.htm

http://findarticles.com/p/articles/mi_qa5427/is_200107/ai_n21475892/


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PostSubject: Assignment 5   Fri Aug 21, 2009 10:29 pm

What is DOWNSIZING?
In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people.Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect.

News on a company downsizing:
Downsizing In America

- INTRODUCTION - Downsizing, restructuring, rightsizing, even a term as obscure as census readjustment has been used to describe the plague that has been affecting corporate America for years and has left many of its hardest working employees without work. In the 1980’s, twenty-five percent of middle management was eliminated in the United States (Greenberg/Baron 582). In the 1990’s, one million managers of American corporations with salaries over $40,000 also lost their jobs (Greenberg/Baron 582). In total, Fortune 500 companies have eliminated 4.4 million positions since 1979 (Greenberg/Baron 627). Although this downsizing of companies can have many reasons behind it and cannot be avoided at times, there are simple measures a company can take to make the process easier on the laid-off employees and those who survive with the company. - STAGES OF DOWNSIZING - The downsizing process can generally be broken down into three distinct stages. The first stage is called the diagnostic stage. In this stage, management staff pulls together and determines the amount of costs and expenses that need to be reduced, and how much can come out of layoffs (Moore 49). This stage usually takes about two to three months to complete. During this time, the upper management reviews all financial records in order to determine how much must be cut from salary expenditures (Moore 50). This stage is concluded when the senior management has a detailed plan on who will be let go, and who will remain with the company. During this stage, there is one common mistake many companies make: lack of communication. The middle management is usually left out of all downsizing plans. This is wrong and creates a big mistake. Middle management should be looked upon as a valuable tool for giving input where cuts should be made (Moore 51). The next stage of downsizing is the implementation stage. During this stage the employees are laid off. The time between an announcement and the actual layoff should be as short as possible. This will almost insure that a panic will be avoided, and give a clear view of the situation at hand without causing mass-hysteria. In a managerial position, it is difficult to explain to an employee that he or she is being laid off, but Terrence Moore gives a guideline on how it should be done. Small talk should be avoided. Management should clearly explain that the employee is being laid off and be prepared to answer questions directly; avoid beating around the bush. It is extremely important to detail all employee benefits and severance pay, also the employee should be encouraged to come back with any questions that he or she may have (Moore 52). An important note is that the employee should not be given false hope. It should be made clear, from the start that the employee is being laid off and doesn’t have a chance of being rehired. Finally, you should not lie to the employee stating that you know how they may feel if you don’t. The final stage is the post-implementation stage. This is dealing with the survivor syndrome and helping displaced employees find jobs throughout placement sources. Sadly, management usually expects the remaining employees to return to their jobs as if nothing had happened. However, this is not usually the case. Survivors suffer with negative feelings of resentment, frustration, irritability, fatigue and burnout. They may also undergo feelings of insecurity with their company. A way to help survivors deal with their problems is to offer personnel workshops (or programs) that offer support to help cope with the anxiety that adjustment brings (Moore 53). - REASONS FOR AND EFFECTS OF DOWNSIZING - There are many reasons why a company might need to downsize. In today’s corporate America, it is a plain fact that far fewer employees are necessary to maintain a successful operation. Many times, it is the case where a technological advance or breakthrough makes it possible to replace a previously human job. It is also an all-too-common scenario that outside influences such as sudden shifts in the market or changed government policies force corporate executives to make coinciding decisions regarding their staff and these external changes. Another one of the major problems in today’s business world are the salaries being paid to the workers. Since employers are not paying their workers high wages, the workers have little to put back into the economy. This causes the system to plummet and forces companies to downsize to keep from going under. The downsizing of a company can affect employees before, during and after it occurs. Employees usually know of a possible downsizing (care of the almighty grapevine) months before it is supposed to happen. Thus, employees may become paranoid and self-absorbed, and their top priority is their own career rather than the bottom line of their employer. This causes them to be unfocused and prevents them from performing their jobs efficiently. Many workers would also be perfectly willing to stab their peer(s) in the back in hopes of keeping their job. Usually when a downsizing is complete, the company is at an all-time low. This is due to the fact that in almost every merger, acquisition or downsize, employees are faced with uncertainty about their jobs before and after the restructure. After a large percentage of downsizes, ten percent of the remaining workforce will easily adapt to the change, while another ten percent will never adapt (Hollreiser 27). Workers who survive the downsize often have feelings of anger, fear or distrust. Further internal problems result from employees who survive with the company, but cannot adapt to their new settings and expectations, and eventually quit their job. Many steps can be taken to ease the transition of the employees after downsizing occurs. For the employees who were let go from the company, reasonable severance packages should be offered to help the person until a new job is found. Downsizing not only affects workers that have been terminated, but also affects the survivors. This is commonly referred to as the survivor syndrome. Many people who survive as a result of downsizing often live with the fear that they too will be terminated. They are often shell shocked and distrustful. They are mentally scared survivors of an economic restructuring that they have never seen before. In this constant climate of economic insecurity, their jobs are constantly being redefined. They are forced to meet new levels of production criteria requiring them to do more work in less time and the notion of job security (because of expandability) is obsolete (Caudren 52). As for the remaining employees, simple means of communication can be very important. One of the major reasons for employee problems after a downsizing is the mistrust in the management and lack of knowledge regarding their own job status. If the employees are informed of what is transpiring within their company, they might not be fearful of losing their job, or so quick to stab a fellow employee in the back. This problem has affected millions of families in America and has forced good, decent workers to settle for lower wages and little or no benefits in exchange for supposed higher job security. I also have some personal experience with this subject. My father currently works for AT&T and survived the recent downsize and split the company underwent. However, he was not so lucky with his previous employer, Nabisco, Inc.. In 1988 Nabisco, Inc. and RJ Reynolds, Inc. Merged and downsized, laying off thousands of employees of which my father was one. - POSITIVE EFFECTS OF DOWNSIZING - Although downsizing can have devastating effects on those people on the negative side, the remaining employees can have tremendous opportunities for growth and skill development. After a restructure, there are many ways an employee can grow vertically and horizontally within their company. Since so many positions are eliminated in such a process, the remaining employees sometimes need to learn new skills and adapt to handling greater amounts of work than ever before. While this may be an inconvenience at first, these skills and abilities can assist these people in future job searches. - CONCLUSION - The downsizing process is a fact of life. It affects all people from managers to laid off employees and their families as well as those who remain with the company. It is something that will continue to occur with no end in sight. As long as our world market continues to grow, so too will the concept of downsizing grow. This process can lead to psychological problems, and creates anxiety and frustration for those of both ends of it. This is a problem that most likely will not have an easy solution, or at least not any time soon. It is something that we all must deal with in one way or another, and as for the victims of downsizing, the only thing they can do is try to piece their lives back together and hope for the best.


References:
http://www.wowessays.com/dbase/aa5/mts251.shtml



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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Sat Aug 22, 2009 7:13 pm

DOWNSIZING

In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people.

Downsizing refers to a process where a company or a firm simply reduces its work force in order to cut the operating costs and improve efficiency. It has become a legitimate option for business growth strategies, especially after the 1980s. It is in fact, the most preferred option of companies to sustain operating costs and comply with the existing scope of the business. It is an important management venture and requires large assistance from the human resource management team.


Slimming down: Acquisition sparks big downsizing; Newly named Columbia Management Group cuts funds and staff, including some investment professionals, after Liberty Asset buy.(Brief Article)

Pensions & Investments, April, 2002 by Kovaleski, Dave
Content provided in partnership with HighBeam Research

BOSTON - FleetBoston Financial is reducing staff by 430 employees in its asset management unit, now called Columbia Management Group. The firm, which acquired Liberty Asset Management last year, also is eliminating 14 mutual funds, liquidating three funds and consolidating 11 others. Charles Salmans, Columbia spokesman, said the firm anticipated the downsizing after the acquisition of Liberty Asset last year.

The staff cuts will be completed by the end of 2002, Mr. Salmans said, with some of the reductions coming through attrition. The firm also is considering additional fund mergers and liquidations as it works on bringing its total number of funds closer to 100. After the most recent changes, Columbia now has 109 mutual funds; the next round of fund mergers...


New Sony Structure Taking Shape Around The Globe

As Sony Music Entertainment (SME) continues its global restructuring, a new, streamlined entity is beginning to emerge.

The $100 million cost-cutting initiative started March 28, with the still-unfolding layoffs of approximately 1,000 of SME's 10,000 worldwide staffers. The breakdown, according to sources, is more than 300 employees from SME's corporate, label, and distribution divisions in the U.S.; an additional 300 from Sony manufacturing in the U.S.; and another 350 staffers outside the U.S.

The cuts were continuing at press time. On April 2, the manufacturing division was hit hard when Sony announced it was closing its plant in Springfield, Ore. The company said in a statement that the shuttering affected 277 employees. The manufacturing activities will be shifted to Sony's facilities in Pitman, N.J., and Terre Haute, Ind.

The SME cuts have come at all levels, with many veterans departing. Worldwide, the most senior employee to be cut so far has been Paul Burger, president of Sony Music Europe. He is among several veterans with more than 20 years' service who were let go. As previously reported, Sony Music Distribution (SMD) (U.S) chairman Danny Yarbrough, senior VP of sales and distribution John Murphy, senior VP of sales and new technologies Craig Applequist, senior VP of urban sales Jimi Starks, VP of national accounts/Western region Jerry Pitti, and Southwest regional VP Jack Chase are all either retiring or otherwise departing the company. Sources indicate that apart from the restructuring, SME vice chairman Mel Ilberman and Epic Records Group chairman Dave Glew are expected to retire this year. Sony declined to comment.



Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect.


In tough times, it’s not unusual for an HR downsizing to occur in many organizations. Cost pressures, lack of profitability, competitiveness issues, and organizations restructurings happen every single day and impacts thousands of people. And HR is not exempt from this ax.

Losing your job in an HR downsizing can be a traumatic experience. If the ax does drop on you, you’re likely to feel angry, discouraged and disoriented. And while these emotions are natural, it’s important that you don’t stay in that place for long.

Losing your job is just like any loss — your body and your emotions need some time to adjust to this new type of change that you’ve just experienced. It’s important that you take time to work through your thoughts and feeling and then get back on track quickly.

If you’ve lost your job or about to lose it, here’s what you can do right now, in order to get back on track quickly….

1. Realize that downsizing isn’t personal. There is a great possibility that the downsizing happened for reasons outside of your control If that’s the case then it’s important to understand that it’s not your fault or a reflection on you. You’re just getting caught in the middle of business fact of life that impacts just about everyone at some point in their career. There no one to blame.

2. Don’t take the victim mindset. Adopt the perspective that you are the same great HR person that you were before downsizing. It’s important that you take on the frame of mind that you as a person, are always bigger and more important than any job or career that you’ll ever have….and that your unique set of HR skills and experience are valuable.

3. Reach out and spend time with others in your organization, especially other HR folks, who have also been downsized. You’ll get job and career ideas from them if you stick together, network and support each other. Resist the urge to think that you’re in competition with each other. There is power in numbers.

4. Stay in touch with your HR colleagues who are still working at the company. Candidly, some may uncomfortable talking with you since you’re now moving on. However, don’t let them feel awkward and be sure to bury your own ego. The next job opening or career opportunity usually comes from someone you already know, not from an ad or a headhunter. If you’ve done a great job of building relationships and networking, don’t be surprised if you get a call from a former colleague or boss about a different opportunity.

5. Form your own Career Advisory Board of your 5-7 smartest friends and family members who know you well. Why not use this as an opportunity for getting input from people around you who care? Get together twice a week to toss around ideas for how to handle the current situation and let them challenge you to look beyond the problem and consider new possibilities. They may know you better than you do and may provide options you’ve not thought about.

6. If you need to, reduce your spending right away to give you extra time to sort things out. Don’t assume that you’ll land the right HR job immediately. Cut your personal expenses by at least 40-70%, if needed. Don’t be afraid to take brutal, even radical steps. Often, this type of self-imposed ‘jolt’ will encourage a different type of thinking, which is critical during this time for you. And, frankly, who needs the stress of worrying about money? You need to be thinking clearly at this time about your next career steps.

7. Start thinking about the kind of work that is personally rewarding to you. You may find out it’s not HR work. If you’re an HR generalist, do you want to stay a generalist? If you’re doing labor relations work, are you tired of wrestling with unions or do you want to chance your career direction entirely. Too many people are not in jobs or careers which fulfill or satisfy them. And life’s too short to suffer in silence. So, use this break as an excuse to get real selfish and discover what makes you the happiest. When you’re happy doing what you’re doing, the money will usually take care of itself.

8. Invest in strengthening your towering skills. No one else will. The HR job market is hungry for highly skilled individuals in any field – generalists, specialists, consultants, coaches, mentors, part-timers, or contractors. If you’ve got a specialized skill or natural aptitude, invest in expanding that skill and making it even stronger. The best skills take time to develop into a well-paid profession, career or business. It’s never too late to invest in your self.

9. Treat the downsizing experience like a treasure hunt where getting your next job is the prize. Get out paper and pen or jump on your laptop and begin creating a plan for yourself. Identify where you are. What resources and skills you have. Who you know who can help – consider doing anything you can do keep yourself motivated until you land the next job. Turn it into a game.

10. Get some coaching and counseling. Many firms who are downsizing provide outplacement counseling and resources. Take full advantage of this benefit.



There are a number of reasons why a company downsizes its employee base.

* Merging of two or more firms: When a certain firm combines its operations with another firm and operates as a single entity, in order to stay in profit or expand the market reach, it is called a merger. In case of a merger, certain positions become redundant. The same work is done by two different staff members. Usually in such a case, the company cuts staff to eliminate redundancy in work. It is characterized by some employees leaving an organization voluntarily, or by lay-offs, especially in case of higher management positions.
* Acquisition: If one organization purchases another one, there is a definite change in the management and the acquired company staff has to face unemployment. The reason for this is the same as the earlier case, viz to cut costs and and increase the revenues.
* Change in management: The change in the top brass of a company can also result in downsizing. The working methods and procedures vary with the management. Therefore, a significant change in the management roles may drastically affect the employee size to suit a particular style of working.
* Economic crisis: This is the single biggest cause of downsizing. Often, it consists of huge lay-offs by a number of organizations across various domains. The recent economic recession facing the world, has triggered a number of lay-offs in many reputed and popular firms in the world. According to a survey conducted by the US Bureau of the Census, organizations consisting of higher percentage of managerial staff downsize more than the ones with higher percentage of production process employees.
* Strategy changes: Some companies may reduce certain areas of operation and focus on other areas. For example, if a company is working on a project in which there are no assured returns, it may downsize it's employees working on that particular project. It focuses its resources on specific projects, which could be profitable ventures.
* Excessive workforce: In a period of high growth, a company hires excess staff, to meet the needs of a growing business. However, in times of recession the business opportunities dwindle, leading to downsizing of the surplus staff that was hired.
* Increase in efficient work flow and computerized services: If an organization work process is extremely fast and easily meets the requirements of the market, it may downsize some of its workforce. Similarly, if manual work can be done by a machine, in a much better and cost-efficient way, it also results in the reduction in the number of employees.
* Outsourcing practice:Organizations catering to international markets require a huge and efficient employee base. If this labor can be obtained by 'exporting' the job to other countries, a huge downsizing takes place in the parent country. For instance, if a certain job can be done more effectively in India and is more viable economically there, than in the United States, the business is operated from that country.

These practices result in downsizing, which is a rampant practice prevalent these days. Efficient management of the existing skill set and constantly acquiring new skills and education is a sure way to beat the effects of downsizing.

The Downsizing Process

The Downsizing Process

A. Making the Decision
B. Strategic Plan for Future of Company
C. Assessing the Workforce
D. Deciding Who Should Leave
E. Carrying Out the Downsizing


REFERENCE:

http://www.successinhr.com/human-resources-downsizing

http://whatis.techtarget.com/definition/0,,sid9_gci759501,00.html

http://www.allbusiness.com/retail-trade/miscellaneous-retail-retail-stores-not/4639866-1.html

http://www.buzzle.com/articles/reasons-for-downsizing.html

http://www.powertransitions.net/resources/articles/downsizing_layoffs_resources.aspx#TDP
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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Tue Aug 25, 2009 12:30 pm

Downsizing Definition


> Reducing the total number of employees at a company through terminations, retirements, or spinoffs.

> In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people. Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect.



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PostSubject: HR Downsizing   Fri Aug 28, 2009 4:22 am

Visit and identify a company website that has undergone HR downsizing. Identify the cause of downsizing and describe its processes.

Downsizing is an extremely relevant issue to organizations today in that it has become the most prevalent dilemma in recent years. The current tendency of organizations to restructure and ultimately to downsize has a major negative impact on the organizations themselves, on their surviving and terminated employees, on the government, and on society as a whole. In fact, it is everyone's problem, and it seems to have become more the rule than the exception that it used to be in the not too distant past. The current adverse economic climate has been persistent and long-lasting. As a result, many organizations that were operating inefficiently have been driven out of business, and most of those that have survived were forced to restructure in order to streamline their operations and achieve operating cost savings that would ensure their continued competitiveness both on the local and global markets. More often than not, this meant downsizing the organization and, in many cases, the downsizing was conducted in multiple phases or on an on-going basis. The direct result on the organization was a marked drop in employee morale and productivity which prevented organizations from realizing their strategic objectives.

What is Downsizing?

 A downsizing strategy reduces the scale (size) and scope of a business to improve its financial performance (Robbins & Pearce, 1992).

 A reduction of the workforce is one of only several possible ways of improving profitability or reducing costs.


Why do Firms Downsize?

 Reduce costs

 Reduce layers of management to increase decision making speed and get closer to the customer

 Sharpen focus on core competencies of the firm, and outsource peripheral activities

 Generate positive reactions from shareholders in order to improve valuation of stock price

 Increase productivity



Downsizing effects:

 Mixed effects on firm performance: some short-term costs savings, but long-term profitability & valuation not strongly affected.

 Firm’s reputation as a good employer suffers. Example: Apple Computer’s reputation as good employer declined after several layoffs in 1990s.

 Downsizing forces re-thinking of Employment Strategy. Lifelong employment policies not credible after a downsizing. Example: IBM abandoned lifelong policy after several layoffs in early 1990s.

 Employee motivation disrupted: increase in political behaviors, anger, fear - which is likely to negatively impact quality of customer service

 Violation of psychological contract, leads to cynicism, lowered work commitment, fewer random acts of “good will”

 “Survivors” experience more stress due to longer work hours with re-designed jobs, and increased uncertainty regarding future downsizings

 Many senior employees leave due to application of early retirement incentives: result is loss of institutional memory.

 The use of voluntary workforce reductions (buyouts) results in the most marketable employees leaving (“stars”) -- difficult to control since all employees must be legally eligible to qualify.

 Early retirements & voluntary reductions often result in too many people quitting, and some are hired back as consultants at higher cost to firm.


Downsizing Works Best When:

 Changes in Strategy, Organization structure and Culture accompany job cuts of downsizing

 Weak business units and plant closures are used as basis of reductions, rather than across the board cuts affecting all units (including healthy ones).


Critical Thinking Questions:

 1. Which is a better criterion to use as the basis for downsizing employees: seniority or performance? State your reason.

 2. Should employers give future notice to downsized employees, or tell them on the day they are expected to leave the firm?

 3. Separation pay is voluntary. What benefits do firms get when they give separation pay to employees in a downsizing?

 4. Is there a set of “best practices” to let an employee know she/he has been downsized?

 5. Under what circumstances might a company’s managers prefer to use layoffs instead of early retirements or voluntary severance plans as a way to downsize the workforce?



Some Local Companies Undergone Downsizing:

It is said that the only thing that is constant in this world is change. This particular maxim is clearly manifested in the ever-changing business organizations we have today. While some companies choose to be conservative and follow the same boring traditional procedures, many of the companies that emerge as leaders in business industries choose to reengineer itself and adapt to global trends scenarios.

Hammer and Champy, as cited by Rafael Rodriquez and Jasmin Acuña in the article entitled “Reengineering: A Path to Change”, talk about two companies, namely Hallmark and Ford Motors that undergone the reengineering process. For Hallmark, before a greeting card is perfected it has to pass through several segments of the company. Any revisions, no matter how small it seems, create a huge delay for the company’s processes. The management, after recognizing the problem, then decided to put up independent teams that will be focus in the creation of a new greeting card. In Management Accounting, they refer to such teams as a Responsibility Center. The reengineering procedure that was adapted by the Hallmark’s management worked perfectly as reflected by a more efficient and cost-effective means of production. The same reengineering procedure was also adapted in the For Motors Company thereby increasing its efficiency.

San Miguel Corporation, a local example of a company that has reengineered itself was pictured by Rodriguez and Acuña as an entity that was able to down size the number of its employees by adapting its own reengineering procedures. An example that was given would be that of a particular bottling department in San Miguel that was able to downsize its employees from 300 to only 24 upon the acquisition of new equipments that would speed up its operation and the adoption of new procedures. Another example that was given was the implementation of a “pull system” in San Miguel where many functions that require many employees before is now single handedly operated by only one salesman whom the company provided a lap top with a data base management software and a van to take orders from independent customers. Such procedure reduced the need for warehouses and redundant employees since the software was able to create an optimized route for the delivery of the ordered goods.

Edgar Schein on the other hand, talks about six procedures to achieve organizational effectiveness. They are 1) sensing the external and internal environment, 2) Importing information, 3) changing processes and procedures, 4) stabilizing internal change, 5) exporting products and services and 6) getting feedbacks. Following Schein’s procedures, a company would be able to adapt to global trends.

Colgate-Palmolive in terms of restructuring itself was able to promote a lower hierarchy structure for its employee. Ms. Annette Santiago, the HR head of SMART is also proud to say that they were able to do the same since a lower hierarchy structure promotes openness to its employees. A lower hierarchy also promotes transparency since the gap between management and employees are bridged and the employees can easily open up questions pertaining to the company.

The IBM Sales Executive for the Asia-Pacific Region announce the bold move IBM is about to under take by instituting a new procedure in database storage, this is in line with their own reengineering schemes. Thus, most companies now are open to change, those that are not maybe gone by now or maybe inexistent by tomorrow.

References:

http://www.tigweb.org/express/panorama/article.html?ContentID=2096
http://www.questia.com/googleScholar.qst;jsessionid=KWWM2XgGdwLVmQpy03yLMrknyG7Y0hSkgydPPJMnkN0JqNMXTh1L!-2050619229!766828861?docId=5001676706
http://www.authorstream.com/presentation/edwinlee-111819-downsizing-hr-business-finance-ppt-powerpoint/
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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Fri Aug 28, 2009 12:22 pm

<<<<<<UNDER CONSTRUCTION>>>>>
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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Mon Sep 07, 2009 12:13 pm

Google in Downsizing Fever: 10,000 Jobs Cut and Counting
Nov 24th, 2008 | Category: Featured Articles, News
By Jimmy Vu



The first sign of the downsizing fever was seen last week when Google announced to shut down 5-month old service: Lively. Now it is said that Google may be preparing to cut thousands of jobs. Probably as much as 10,000 workers (and counting) will no longer enjoy the air of Googleplex.

In fact, according to internal source, Google has been quietly fired hundreds of employees in the past few months without reporting to Securities and Exchange Commission (SEC) or publicizing the layoffs that appears being required by law.

Google has managed to avoid the legal requirement by classifying a number of the employees as “temporary operational expenses,” which means their positions are not official and could be eliminated without public notification. These employees were hired without full time benefits such as health coverage and insurance too, yet ironically many of them have been working there for five or even seven years.

“Google has hundreds of lawyers figuring out how not to get caught,” said Daya Baran, WebGuild President. “One of them is by moving workers from job to job every few months so that their status remains temporary. That is why you probably have never spoken to the same person twice at Google and that is also why there is somebody new on the job and most times you know more about their job than they do,” he supposed.

Google’s most recent filling with SEC shows only 20,123 employees being officially hired. But if counting the contractors the number comes out closer to 30,000, and this means the layoffs would cut about 33 percent of its staff in comparison to 10 percent cut by Yahoo announced recently when Yang planned to step down.

Without doubt, the economic downturn is hitting Google hard and with the slowdown in online advertising, the downsizing fever seems just begin getting heat.

Source:
http://www.techmacro.com/2008/11/google-in-downsizing-fever/

Corporate downsizing as a change management strategy has been adopted for more than two decades (Williams, 2004). Back in the 1980s and 1990s, it was implemented primarily by firms experiencing difficult economic times (Gandolfini, 2006). The prime impetus of most downsizing effort is the desire for an immediate reduction of costs and increased levels of efficiency, productivity, profitability, and competitiveness (Farrell and Mavondo, 2004). Over the years, this strategy has generated a great deal on interest among business scholars, managers, and the popular press.

The controversy that surrounds downsizing may be better described as a debate in organizational theory about whether change is adaptive or disruptive. The issues which establish the outcome of the controversy include why the downsizing is taking affect, how it is implemented, and what steps are taken to enhance its effects on organizational performance. The reasons for corporate downsizing are presented in many forms. Some companies downsize due to technological changes such as automation, which brings about the need for a reduction in the production workforce. Others may feel that competitiveness with other companies warrants the need for a reduction in the workforce. Financial setbacks due to customer demand, market shares, and loss of revenue could also initiate the need for downsizing. When will it end? Experts say it won't.



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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Thu Sep 17, 2009 5:27 pm

Downsizing is a commonly used euphemism which refers to reducing the overall size and operating costs of a company, most directly through a reduction in the total number of employees. When the market is tight, downsizing is extremely common, as companies fight to survive in a hostile climate while competing with other companies in the same sector. For employees, downsizing can be very unnerving and upsetting.

Donwsizing discussion....


ANSUICO COMPANY

ANSUICO, INC. is a trucking company based in Davao City, Philippines. From its humble
beginning in 1953, servicing only the cities of Davao and Cagayan de Oro, ANSUICO INC.
has expanded significantly into a nationwide network and has in fact been awarded as
the Most Outstanding Trucker in Mindanao, Philippines.
.
It is a successful family-owned trucking company with over 50 years of trucking
experience, providing a reliable, dependable & quality service at competitive prices
and maintaining high standards for service & customers satisfaction, throughout the
Philippines.

-->Our trucking company started in 1953 when IRINEO S. ANSALDO and his brother in-law PEDRO C. SUICO bought the first truck with a price of one peso (Php 1.00) to Smith Bell & Co. Ltd, which was their former employer. The truck was partially damaged by a fire and it was being rebuilt and completed with conglomeration of American and Japanese parts assembly. Our first client was the former owner of the truck itself (Smith Bell & Co., Ltd) at Daliao, Toril, Davao City.

-->Barely a year we acquired the third unit a heavier capacity model which was equipped with a Buda Diesel Engine (which was later replaced with Cummins Engine). With only one unit delegated to Coca-Cola Bottling to deliver their products to Cotabato area, we observed that our operation was not to be as promising, than if we operate more bigger units.

http://www.ansuico.com/

LGU OF TAGUM CITY


Tagum City, the capital of the province of Davao del Norte was officially created into a component city on March 7, 1998. Situated 55 kilometers north of Davao City, it is one of the fastest growing cities in Region XI. It has a total land area of 19,580 hectares. In a study conducted by the Asian Institute of Management, Tagum was ranked among the 20 most viable component cities to do business in the country.

-->The real property taxation in the Philippines was formerly instituted in the year 1901 during the American regime. Consequently, on January 31,1901, Act No. 82 (Municipal Code) was enacted by the Philippines Commission to organize and authorize the Municipal Government of the Philippines to levy ad valorem tax. It is where real property taxation in the Philippines was first formally implemented.

-->Series of assessment laws was legislated and amended to improve the taxation system until the enactment of the New Society on September 21, 1972 when Pres. Marcos issued Proclamation 1081 "Proclaiming a State of Martial Law in the Philippines". Several changes and reforms in the Real Property Tax Administration were instituted under PD#76, which was promulgated on December 6,1972 to correct the defects in real property assessment and taxation in the Philippines.

On May 20,1974, PD 464 was promulgated to upgrade the assessment techniques, procedures and practices in order to:

a) Bring about equitable distribution of the real tax burden among real property owners through out the country.
b) Fully tap the income potentialities of the real property tax, to make local government:

Financially self-reliant;
Capable of contributing their proportionate shares to the barangay, municipal and province;
Underwrite basic essential public services within their area of responsibility.

Consequently, due to the enactment of Republic Act 7160, otherwise known as " The Local Government Code of 1991", PD 464 was superseded by the new provisions and fundamental principles of the said code. All laws governing Real Property Tax Administration is now governed by the aforementioned Republic Act.

http://www.tagumcity.gov.ph/

-->Lacking of financial support
If there is a shortage of financial assesstments causes are:
*delayed of task and work.
*services will breakdown.
*possible problems may happen.
*etc.

lol! lol!


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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Wed Sep 30, 2009 6:19 am

Downsizing, restructuring, rightsizing, even a term as obscure as census readjustment has been used to describe the plague that has been affecting corporate America for years and has left many of its hardest working employees without work. In the 1980’s, twenty-five percent of middle management was eliminated in the United States (Greenberg/Baron 582). In the 1990’s, one million managers of American corporations with salaries over $40,000 also lost their jobs (Greenberg/Baron 582). In total, Fortune 500 companies have eliminated 4.4 million positions since 1979 (Greenberg/Baron 627). Although this downsizing of companies can have many reasons behind it and cannot be avoided at times, there are simple measures a company can take to make the process easier on the laid-off employees and those who survive with the company.

STAGES OF DOWNSIZING

The downsizing process can generally be broken down into three distinct stages. The first stage is called the diagnostic stage. In this stage, management staff pulls together and determines the amount of costs and expenses that need to be reduced, and how much can come out of layoffs (Moore 49). This stage usually takes about two to three months to complete. During this time, the upper management reviews all financial records in order to determine how much must be cut from salary expenditures (Moore 50). This stage is concluded when the senior management has a detailed plan on who will be let go, and who will remain with the company. During this stage, there is one common mistake many companies make: lack of communication. The middle management is usually left out of all downsizing plans. This is wrong and creates a big mistake. Middle management should be looked upon as a valuable tool for giving input where cuts should be made (Moore 51). The next stage of downsizing is the implementation stage. During this stage the employees are laid off. The time between an announcement and the actual layoff should be as short as possible. This will almost insure that a panic will be avoided, and give a clear view of the situation at hand without causing mass-hysteria. In a managerial position, it is difficult to explain to an employee that he or she is being laid off, but Terrence Moore gives a guideline on how it should be done. Small talk should be avoided. Management should clearly explain that the employee is being laid off and be prepared to answer questions directly; avoid beating around the bush. It is extremely important to detail all employee benefits and severance pay, also the employee should be encouraged to come back with any questions that he or she may have (Moore 52). An important note is that the employee should not be given false hope. It should be made clear, from the start that the employee is being laid off and doesn’t have a chance of being rehired. Finally, you should not lie to the employee stating that you know how they may feel if you don’t. The final stage is the post-implementation stage. This is dealing with the survivor syndrome and helping displaced employees find jobs throughout placement sources. Sadly, management usually expects the remaining employees to return to their jobs as if nothing had happened. However, this is not usually the case. Survivors suffer with negative feelings of resentment, frustration, irritability, fatigue and burnout. They may also undergo feelings of insecurity with their company. A way to help survivors deal with their problems is to offer personnel workshops (or programs) that offer support to help cope with the anxiety that adjustment brings (Moore 53).

REASONS FOR AND EFFECTS OF DOWNSIZING

There are many reasons why a company might need to downsize. In today’s corporate America, it is a plain fact that far fewer employees are necessary to maintain a successful operation. Many times, it is the case where a technological advance or breakthrough makes it possible to replace a previously human job. It is also an all-too-common scenario that outside influences such as sudden shifts in the market or changed government policies force corporate executives to make coinciding decisions regarding their staff and these external changes. Another one of the major problems in today’s business world are the salaries being paid to the workers. Since employers are not paying their workers high wages, the workers have little to put back into the economy. This causes the system to plummet and forces companies to downsize to keep from going under. The downsizing of a company can affect employees before, during and after it occurs. Employees usually know of a possible downsizing (care of the almighty grapevine) months before it is supposed to happen. Thus, employees may become paranoid and self-absorbed, and their top priority is their own career rather than the bottom line of their employer. This causes them to be unfocused and prevents them from performing their jobs efficiently. Many workers would also be perfectly willing to stab their peer(s) in the back in hopes of keeping their job. Usually when a downsizing is complete, the company is at an all-time low. This is due to the fact that in almost every merger, acquisition or downsize, employees are faced with uncertainty about their jobs before and after the restructure. After a large percentage of downsizes, ten percent of the remaining workforce will easily adapt to the change, while another ten percent will never adapt (Hollreiser 27). Workers who survive the downsize often have feelings of anger, fear or distrust. Further internal problems result from employees who survive with the company, but cannot adapt to their new settings and expectations, and eventually quit their job. Many steps can be taken to ease the transition of the employees after downsizing occurs. For the employees who were let go from the company, reasonable severance packages should be offered to help the person until a new job is found. Downsizing not only affects workers that have been terminated, but also affects the survivors. This is commonly referred to as the survivor syndrome. Many people who survive as a result of downsizing often live with the fear that they too will be terminated. They are often shell shocked and distrustful. They are mentally scared survivors of an economic restructuring that they have never seen before. In this constant climate of economic insecurity, their jobs are constantly being redefined. They are forced to meet new levels of production criteria requiring them to do more work in less time and the notion of job security (because of expandability) is obsolete (Caudren 52). As for the remaining employees, simple means of communication can be very important. One of the major reasons for employee problems after a downsizing is the mistrust in the management and lack of knowledge regarding their own job status. If the employees are informed of what is transpiring within their company, they might not be fearful of losing their job, or so quick to stab a fellow employee in the back. This problem has affected millions of families in America and has forced good, decent workers to settle for lower wages and little or no benefits in exchange for supposed higher job security. I also have some personal experience with this subject. My father currently works for AT&T and survived the recent downsize and split the company underwent. However, he was not so lucky with his previous employer, Nabisco, Inc.. In 1988 Nabisco, Inc. and RJ Reynolds, Inc. Merged and downsized, laying off thousands of employees of which my father was one. -

POSITIVE EFFECTS OF DOWNSIZING


Although downsizing can have devastating effects on those people on the negative side, the remaining employees can have tremendous opportunities for growth and skill development. After a restructure, there are many ways an employee can grow vertically and horizontally within their company. Since so many positions are eliminated in such a process, the remaining employees sometimes need to learn new skills and adapt to handling greater amounts of work than ever before. While this may be an inconvenience at first, these skills and abilities can assist these people in future job searches.

CONCLUSION

The downsizing process is a fact of life. It affects all people from managers to laid off employees and their families as well as those who remain with the company. It is something that will continue to occur with no end in sight. As long as our world market continues to grow, so too will the concept of downsizing grow. This process can lead to psychological problems, and creates anxiety and frustration for those of both ends of it. This is a problem that most likely will not have an easy solution, or at least not any time soon. It is something that we all must deal with in one way or another, and as for the victims of downsizing, the only thing they can do is try to piece their lives back together and hope for the best.


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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Thu Oct 01, 2009 5:47 am




DOWNSIZING.. Shocked Shocked


Downsizing is the ‘conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness’ (Budros 1999, p. 70). Since the 1980s, downsizing has gained strategic legitimacy. Indeed, recent research on downsizing in the US (Baumol et al. 2003, see also the American Management Association annual surveys since 1990), UK (Sahdev et al. 1999; Chorely 2002; Mason 2002; Rogers 2002), and Japan (Mroczkowski and Hanaoka 1997; Ahmakjian and Robinson 2001) suggests that downsizing is being regarded by management as one of the preferred routes to turning around declining organisations, cutting cost and improving organisational performance (Mellahi and Wilkinson 2004 )most often as a cost-cutting measure.
In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people.
Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect.
What is the impact of downsizing? As the studies below indicate, layoffs have a number of negative effects not only on workers in different industries, but also on their communities and the market as a whole. Although it has been said that downsizing can be economically beneficial to companies, the following shows that there are two sides to this issue.
Over the past decade, the workplace has altered considerably in terms of job stability. People have either experienced layoffs firsthand or directly known someone else who was impacted by re-engineering, downsizing, outsourcing or acquisition. For employees adversely affected by these changes or for those who do not completely understand why these changes are occurring, the effects can be very disturbing and impact both their personal and job life.
A variety of different industries have been impacted by layoffs, not only manufacturing. For example, hospitals like other companies and nonprofit organizations have experienced downsizing that has negatively impacted healthcare employees with varying degrees of psychological distress and poor health.

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PostSubject: HRM Assignment 5   Tue Oct 13, 2009 4:38 am

Visit and identify a company website that has undergone HR downsizing. Identify the cause of downsizing and describe its processes. (1500words)

Downsizing is an extremely relevant issue to organizations today in that it has become the most prevalent dilemma in recent years. The current tendency of organizations to restructure and ultimately to downsize has a major negative impact on the organizations themselves, on their surviving and terminated employees, on the government, and on society as a whole. In fact, it is everyone's problem, and it seems to have become more the rule than the exception that it used to be in the not too distant past. The current adverse economic climate has been persistent and long-lasting. As a result, many organizations that were operating inefficiently have been driven out of business, and most of those that have survived were forced to restructure in order to streamline their operations and achieve operating cost savings that would ensure their continued competitiveness both on the local and global markets.

There are many reasons why an organization may need to lay off employees in the current business environment that includes mergers and acquisitions, outsourcing key operations, and eliminating less-than-optimal business lines are just a few. However, at the heart of any layoff decision is the need to remain financially viable and competitive both now and in the future. It can therefore be tempting to continue the cost-saving measures as you select an outplacement services provider for your downsized employees. However, the choices you make can seriously impact your company’s reputation and profitability in the future.

One company that has undergone HR downsizing was Motorola Inc.
Motorola Inc. is laying off 2,600 employees across the company, resultingin a pretax charge of $104 million for the first quarter, the Schaumburg-basedtelecommunications equipment-maker disclosed in a regulatory filing Thursday.

In a separate statement, Motorola said the layoffs are part of a previouslyannounced plan to cut costs by $500 million this year. Executives haddisclosed the cost-reducing program at the beginning of 2008 and warned thatit could mean job losses. Motorola’s employee head count totaled 66,000 at theend of 2007, according to the annual report it filed in February.
The company reports second-quarter earnings on April 24 and is expecting afurther decline in sales and global market share for its cell phone unit.Motorola previously announced that it also is planning to split the handsetdivision into an independent, publicly traded company with a new chiefexecutive who has yet to be hired.
A sizable portion of the 2,600 lost jobs will come from Singapore, where the company is planning to halt cell phone manufacturing by the end of thisyear. The shuttering of those operations will result in the loss of 700 jobs.Motorola said in its 2007 annual report that Singapore, along with China andBrazil, are the company’s largest cell phone manufacturing facilities, and thelion’s share of its handsets are made in Asia.

Other major reductions are to take place in Plantation, Fla., where Motorola will let go of 354 employees, and in a Birmingham, England, facilitythat will lose 120 jobs.

Motorola said the reductions were made across all three of its business units, as well as on the corporate level. Since becoming chief executive in January, Greg Brown has seen significant turnover in senior executives. In February he took direct control of the cell phone unit from Stu Reed, who subsequently left Motorola, and later hired new heads of finance and human resources. Brown also restructured marketing operations, with the chief marketing officer leaving the company.

Crisis of any kind is always an opportunity for change. Anytime ever are people more willing to accept new solutions than when they become necessary. Beyond the spectrum of this crisis, solutions streamline the costs of personnel are always much needed. Processes related to these solutions are delicate and requires attention: for example the right sizing of staff can not do than without a systematic analysis of staffing needs for a longer time span.

When:
• The company goes through a period of crisis (financial, etc) more difficult than usual;
• It is necessary to reorganize and streamline the current activity, for optimal use of available resources;
• It is necessary to restructure the company by the waiver of certain activities or by reducing a significant
amount of their share in total activities;
• There are conflicts between employees and management that has to be resolved;
• Downsizing is necessary.


Methodology

Downsizing can be effective if implemented appropriately. Companies must be careful to avoid sending the wrong messages to employees, shareholders and the media. Successful downsizing requires managers to:

• Evaluate the overall impact of downsizing. The total cost of downsizing-including both financial and non-financial costs-must be taken into account. Managers must calculate the present value of all costs and benefits associated with the cuts, including severance packages, lower employee productivity due to disorder or talent loss, eventual rehiring expenses, future rightsizing costs and the lost opportunity costs associated with not having the appropriate manpower to accelerate out of the downturn. Investing in areas customers care about-while competitors are cutting back-helps position the company to take or sustain the lead once conditions improve. The value created from downsizing should exceed the cost of lower employee morale and potential damage to the company's reputation;
• Develop a smooth downsizing process. It is crucial that managers invest aggressively in upfront planning for the job cuts. A company typically forms a committee to determine the appropriate level of downsizing and creates a process that takes into account the best interests of the company and the shareholders. Other important activities are training managers to conduct layoffs and assisting former employees in their job searches.


Companies use downsizing to:

• Reduce costs;
• Rightsize resources relative to market demand;
• Signal that the company is taking proactive steps to adjust to changing business needs;
• Take advantage of cost synergies after a merger;
• Release the least-productive resources.

References:
http://archives.chicagotribune.com/2008/apr/04/business/chi-fri-motorola-8k-jobcuts-motapr04
http://en.allexperts.com/q/Human-Resources-2866/Downsizing.htm
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PostSubject: Assignment#5: Downsizing   Tue Oct 13, 2009 11:59 am

Assignment#5: Visit and identify a company website that has undergone HR downsizing. Identify the cause of downsizing and describe its processes.

DOWNSIZING- in a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff, with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people.

Company that has undergone HR downsizing…..

IBM lay-off another 1,500 workers

BOSTON - IBM Corp. laid off 1,570 people Wednesday, primarily from an ongoing overhaul of operations in its giant technology services unit.
The Armonk, N.Y.-based Company carried out a similar level of job cuts at the beginning of the month, for a total of 3,023 in this quarter and 3,720 for the year, according to IBM spokesman Edward Barbini.
That amounts to roughly 1 percent of the company, which employed 355,000 people at the beginning of the year. But even these small numbers reflect a big project inside IBM to transform its business.
Services is IBM’s biggest division by revenue, but the advent of lower-cost competition overseas has forced IBM to work harder to improve the unit’s profit margins. In the first quarter, pretax income for IBM’s tech services fell 19 percent, even as revenue rose 7 percent.
Wednesday’s job cuts were largely part of the company’s response. Although IBM did not disclose where the layoffs were being made, the company had blamed the first-quarter profit shortfall on problems in its U.S. outsourcing business.
IBM executives say they expect no more layoffs this quarter. But other shifts like this — IBM calls it “rebalancing” — figure to follow from time to time.
That’s because IBM’s services overhaul not only involves cheaper labor — IBM’s work force in India rose from 9,000 in 2003 to 52,000 last year — but also a quest to use less labor. That means rethinking and sometimes automating the ways that services contracts are carried out. Last year, IBM adopted a business-retooling system known as Lean last year to find such opportunities.
Robert Moffat, the IBM executive overseeing Lean, acknowledges it will reduce the need for some services labor, but he contends that it will also create new work for the company overall because customers will be getting more for their money.
To some degree, that dynamic could explain another figure disclosed Wednesday: that even as it has laid off 3,700 people this year, IBM has hired 19,000 others. Barbini would not provide a geographic breakdown.
IBM shares were up 74 cents at $106.65 in Wednesday afternoon trading.

Cause of downsizing…..
First posible cause, many firms that claim to have downsized may not really have done so. Instead, they may have simply altered the compositions of their workforces more than their sizes. For example, some companies may have first reduced the number of less educated or older workers or middle managers. Then, after a suitable interval required for retooling and reorganization, they may have replaced most of their former employees with others deemed more appropriate to the company’s current needs. “Downsizing” of this sort is more accurately labeled “restructuring.” That relabeling does not make the consequent churning of the labor force any less important for those who pay the costs. After all, large-scale restructurings are apt to have substantial effects on productivity and can have devastating effects on the displaced workers (on the latter, see Gordon 1996; Leana and Feldman 1992; Rudolph 1998). But it does indicate that the firm in question is doing something other than shrinking.

A second possibility is that what is popularly known as downsizing may consist of reductions in the size of the typical firm accompanied by offsetting increases in the number of enterprises—leaving total industry employment largely unaffected. Such a scenario, like large-scale restructuring, is consistent with a large number of job terminations— lots of labor market churning, but no decrease in overall employment. In fact, as we have indicated earlier and will show in the following chapters, the evidence does not reject either of these two scenarios, neither of which should really be called downsizing (unless there is net job loss). We proceed now to the discussion of our six hypotheses, beginning with one that certainly relates directly to genuine downsizing—that is, reductions in firm size.

Describe the process of downsizing….
Develop a smooth downsizing process. It is crucial that managers invest aggressively in upfront planning for the job cuts. A company typically forms a committee to determine the appropriate level of downsizing and creates a process that takes into account the best interests of the company and the shareholders. Other important activities are training managers to conduct layoffs and assisting former employees in their job searches.

References:
http://www.msnbc.msn.com/id/18938937/
https://www.russellsage.org/publications/books/0-87154-094-0/chapter1_pdf



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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   Wed Oct 14, 2009 5:20 pm

Visit and identify a company website that has undergone HR downsizing. Identify the cause of downsizing and describe its processes. (1500words)
Due: August 17, 2009, 13:00hrs

Upon searching over the net, I have found this interesting company that goes downsizing – IBM. Let’s find out the reasons.

IBM labor group sees growth, challenges
Organizers say interest increasing
By Craig Wolf
Poughkeepsie Journal

Some say it's a union; some say it's not. Whatever it is or isn't, the labor movement that popped up five years ago among workers at IBM Corp. is still there.
IBM's downsizing of its U.S. pension plan lit a fuse of frustration among many of the company's American employees, who totaled about 145,000 at the time, after years of massive job eliminations and benefits cuts.
One consequence was that red T-shirts began appearing in the halls of Big Blue. The shirts touted the Communications Workers of America. It was an unlikely sight, given IBMers had never gone for the communications workers' union nor any other union to represent them in collective bargaining.
They still haven't done that, but the alliance hasn't quit. Nor has it limited itself to that classic model of the bargaining unit.
''We are, even without a union contract, a voice for IBM employees inside the company,'' said Lee Conrad, a national organizer for the mailto:Alliance@IBM
''Our membership continues to grow,'' said Linda Guyer, president of Alliance@ IBM, and an IBMer at the Endicott site in Broome County. ''We've got over 6,000 members now. The good thing this year is we're starting to open new chapters,'' including one in Arizona.
Alliance organizer Bill Costine, an employee of IBM East Fishkill, said interest picked up this year.
''At the beginning of the year, there was interest when medical costs were shifted to
employees in a big way,'' he said. ''One person's costs went up in the ballpark of $500 a month.'' Many with family plans saw boosts in the $300 range, he said.
''That generated a lot of sign-ups,'' Costine said. ''We had the biggest jump this year that we've had in a long time because of the jump in the cost of the benefits.''
To call an election, the communications union would need to find enough committed members to form a potential bargaining unit.
Organizers say that usually is more readily done within a site than across a wide geography and typically involves people who have similar sorts of jobs. IBM's jobs run the gamut from factory line workers to scientists with doctoral degrees.
So IBM remains a tough one, Guyer acknowledges. ''I think we're doing well. I think it's slow and it's difficult. IBM's such a big company with so many sites.''
Organizer Tom Steed of the Communications Workers of America's Poughkeepsie office said, ''What I find at IBM is that people, basically, they're hyperindividuals. ... They don't understand what unions are. They say, here I am with my master's degree and I'm not suitable for a union.''
An IBM spokeswoman de-clined to comment on the state of union activities. The management's consistent stance has formerly been that they don't think unions would serve the interests of the company and that competitors are mostly non-union.
A sign of management's stance emerged last week with news the National Labor Relations Board upheld the company in a 3-2 vote on whether a nonunionized employee enjoys the right to have someone come along to a meeting with management where disciplinary action may be discussed.
Fired workers complain
This ''Weingarten right," IBM argued, doesn't apply to three employees at its Raleigh, N.C., site, who tried to invoke it for investigatory interviews. They were later fired, and complained to the board.
They were not involved with a union, the board said, and thus lacked the rule's protection.
Ironically, the decision is being turned by organized labor to its advantage.
''Weingarten will remind people even more, that without a union, you don't have a voice in the workplace,'' said Candace Johnson, a Communications Workers of America spokeswoman in Washington.
The alliance has found other things to do while it tries to build its ranks. It publishes "Thinktwice!", a newsletter with a name that is a takeoff on founder Thomas Watson's motto, ''Think.''
It backs stockholder resolutions at IBM's annual meetings. One, by Donald Parry of Florida, called for excluding accounting gains in the pension funds from executive compensation. It got 37.5 percent of the votes, the alliance said.
Another consequence of that move by IBM to shift to a cash-balance pension in the summer of 1999 was a federal lawsuit against IBM by workers -- who have prevailed so far. Plaintiffs proposed a formula for how IBM should pay the thousands of workers affected. The sum of $6 billion was provided by IBM as an interpretation of the plaintiffs' remedy.
''We will appeal once the judge rules,'' IBM spokeswoman Kendra Collins said.
The case wasn't brought by the alliance, but it claims a piece of the credit for IBM's partial rollback of the 1999 pension plan changes to let more workers keep the old plan.
''IBM would never have done that if there wasn't a lot of mobilizing around the pension issue and bringing it here to Capitol Hill,'' said Johnson, the communications union spokeswoman in Washington.
New wrinkles keep popping up. The alliance is mobilizing politically on the issue of offshoring, or moving work from American workers to people overseas.
A campaign is developing nationally with a mid-Hudson contingent among retirees, many of whom now face higher payments for health benefits they still get from IBM. A new group, Benefits Restoration Inc., formed of IBM retirees, is organizing and pressing IBM for mercy and government for legal reform. A flyer from the group accuses IBM of breaking its promises of cradle-to-grave coverage.
Dutchess County Legislator Joel Tyner, D-Clinton, has picked up that issue and is sponsoring a public meeting at 5:30 p.m. Wednesday at Rhinebeck Town Hall, with Art Richter of Benefits Restoration as speaker.
''We're working jointly with them on retiree issues,'' said the alliance's Conrad. ''We're separate organizations but we have the same concerns.''
You can read this full text at http://www.endicottalliance.org/PoughkeepsieJournal_com%20-%20IBM%20labor%20group%20sees%20growth,%20challenges.htm
After reading it, I have found some sources on how to survive downsizing. Let’s find out what are those.
18 Ways to Survive Your Company's Reorganization, Takeover, Downsizing, or Other Major Change.
By Morton C. Orman, M.D. Copyright ©️ 1995-2002 M.C. Orman, MD, FLP
Many companies today are under intense economic pressure. Reorganizations, takeovers, mergers, downsizings, joint ventures, and other major changes are extremely common, as companies try to grow and survive.
These changes present new challenges and demands for everyone, from the C.E.O to the telephone receptionist. All members of the organization must therefore learn to cope with change or suffer consequences.
When change is not handled well, additional loss of jobs can occur. In addition, demoralization of the work force; increased worker turnover; decreased cooperation and teamwork; and increased levels of stress, anxiety, absenteeism, illness, and mistakes can follow.
The purpose of this Special Report is to highlight eighteen principles that are useful for coping with organizational change. While all eighteen of these principles may not apply to your situation, please read through the entire list to find those that do appeal to you.
1. BE PREPARED FOR CHANGE
Change is--and always has been--an inevitable part of life. In today's business climate, however, the pace of change has definitely increased.
Since most people normally hate to go through change, you can easily understand how today's pace of change can be stressful for many employees.
Most of us prefer established routines. We like to feel secure, stable, and familiar with our responsibilities. The one thing we hate most is uncertainty--uncertainty about our jobs, our future, our status in the organization, the role we are expected to play, and what other changes might be coming down the pike.
Unfortunately, most businesses are forced to make changes today just to survive. Global transformations require speedy adjustments. Local and national economic forces must be recognized and responded to promptly. New sources of competition and new technologies suddenly appear out of nowhere.
Like successful professional athletic teams, most businesses today must continually make changes to remain competitive.
Thus, instead of fearing change, resisting it, or hoping it won't ever happen to you, it's much better to prepare yourself mentally for the inevitable changes that are likely to occur.
Start today by imagining how you could cope with sudden, massive change. Think about likely scenarios and then brainstorm, on your own or with others, about how you might best respond.
Assume that the "rug could get pulled from beneath you" at any time. Then, if this happens, you won't be caught off guard. You'll already be psychologically and emotionally ready.
If the changes never come, you'll still be better off. Having prepared yourself in advance will enable you to feel much more confident and secure in your normal day- to-day activities.
2. EXPRESS SADNESS, LOSS, ANXIETY ABOUT THE FUTURE
When change does occur, don't pretend it isn't painful. Yes, change can bring new opportunities for personal growth, accomplishment, and organizational success. But it also causes feelings of sadness, loss, and anxiety about the future. These are normal human responses.
When people get laid off or fired, everybody hurts. We feel for our friends and coworkers. We empathize with their pain, anger, and sadness. In fact, we may have our own similar feelings to deal with, as new demands and responsibilities suddenly come our way.
When people get promoted, when organizational relationships change, or when our own job responsibilities become altered, there is a normal reaction of sadness, anxiety, and loss.
One of the worst things you can do when this happens is to pretend everything is "just fine." Even if you agree intellectually that the changes are necessary, emotionally you still may have some painful, negative reactions to deal with.
Unfortunately, today's business culture has little regard for honest human emotions. Expressing or even acknowledging negative feelings is considered "inappropriate." Workers are expected to be upbeat, positive, and "team players" all the time. While this is a laudable goal, there should also be room for people to express heart-felt negativity as well.
Truly enlightened business leaders know this. During times of significant change, they actively solicit negative feelings from their workers. They know that denying these feelings or trying to suppress their expression will only make things worse.
3. WATCH OUT FOR UNREALISTIC EXPECTATIONS
Unrealistic expectations can be a tremendous source of stress and unnecessary suffering. Unfortunately, when organizations undergo downsizings, restructurings, or other major changes, a whole host of unhealthy, unreasonable expectations frequently arise.
Upper management may expect, for example, that increased productivity will quickly occur, even though the work force has been seriously reduced. Or, management may expect they can impose any changes they want, without consider-ing how employees feel about them.
Employees, on the other hand, might expect that management should always act in a caring and compassionate manner. They might expect better communication from company leaders; more sensitivity to their feelings and needs; or more respect for their health, well-being, and family responsibilities.
While all of these things may be important for good employer-employee relationships, to expect them to be forthcoming from management (without encouragement from the rank-and-file) is to invite disappointment, resentment, and low morale.
4. DON'T LET YOURSELF OR OTHERS BE ABUSED
During times of change, it is common to let yourself and others be easily abused. When workers have been fired or laid off, there is a natural tendency to wonder if you might be next. This climate of fear might prevent you from speaking up forcefully when excessive or unreasonable demands are placed upon you. Anxiety quickly spreads throughout the entire workforce, making it even more difficult to obtain support for questioning unreasonable company policies.
But sometimes, questioning policies is healthy and appropriate. If you feel that you or fellow workers are being unfairly abused, try to tactfully broach this subject with your immediate superiors. Try to do this in a way that isn't offensive or that doesn't make you appear to be lazy, uncooperative, or unwilling to do your share. Yes, there is always a risk when you make such a move. You could easily get fired or be branded as a troublemaker. But if you truly have your company's interests at heart, you may be able to negotiate a more fair and humane work environment for all concerned.
After all, if the remaining workforce is angry and demoralized, how could this possibly be good for business?
5. ACKNOWLEDGE ANY INCREASED PRESSURES, DEMANDS, OR WORKLOADS
One of the biggest mistakes most companies make when they downsize or restructure is they fail to acknowledge the increased pressures, demands, and workloads that temporarily fall upon remaining employees.
Sometimes, retained workers are asked to do the work of two or three individuals with little appreciation or acknowledgement. Their salaries are not increased commensurately or perhaps even at all. The resources made available to them are often very lean or nonexistent. While at the very same time, the demands on their productivity might be significantly increased!
All of this could occur without even a word of thanks or gratitude from the company leaders who ultimately benefit from such an arrangement.
Whether your company realizes how short-sighted this failure of recognition is, you don't have to compound this mistake. Be sure to regularly acknowledge to yourself and to your coworkers if your responsibilities have been substantially increased. While it may take time for you to successfully readjust, always strive to acknowledge whatever is true for you at the moment.
Discuss your feelings with your family, friends, and loved ones. Consider discussing them with your superiors, if you think this would be appropriate. Just don't make the mistake of suppressing your feelings, denying them, or pretending they aren't really there.
6. PROTECT YOUR LEISURE TIME
When companies undergo change, there is usually plenty of extra work to be done. Suddenly, people begin working through their lunch times. They can't find time to play golf, take a vacation, or even travel to their local fitness club. They begin to come home later and later in the evening, and they often find themselves back in the office on weekends and holidays.
This is a very dangerous pattern to fall into. It can easily grow into a generally accepted mentality. Remember, just because everybody else in your organization starts acting insane, you don't have to go along.
Fight against this common trend by protecting your leisure time, as best you can. Realize that during times of change and increased stress, it's actually more important to get away from your job and have some time each day for yourself. That way, you'll be refreshed, energetic, and much more productive than all those people who spend all their time on the job.
7. DON'T IGNORE YOUR FAMILY
In addition to maintaining time for yourself, it's also important not to forget your family. Spouses, children, and other family members can be excellent sources of emotional support when times are tough at work. But they won't be in a very loving or supportive mood, if all you do is neglect them in favor of your job.
Sure work often takes priority, but you family should be elevated to an equal priority as well. If you put too much emphasis on just one of these areas, and neglect the other, you're eventually going to find yourself in trouble.
8. DON'T TURN TO ALCOHOL, DRUGS, FOOD OR OTHER CHEMICAL COPING STRATEGIES
During times of increased stress, people often look for rapid and easy means of symptom relief. Headaches, muscle aches, nervousness, irritability, and sleep disturbances can all be very disturbing.
Please avoid the temptation to use alcohol, drugs, or other chemical coping methods to obtain relief from these common symptoms. Also watch out for tendencies to overeat, skip meals, or drastically alter your diet in response to increased pressures or an expanded work load.
While most of these coping strategies can make you feel better in the short run, they each have serious (sometimes even fatal) long-term consequences.
It's always better to use natural, non-chemical coping methods. Try to exercise more, communicate more, and set time aside each day to relax. Don't deprive your body of sleep or proper nutrition. You'll need both of these to cope with the many new demands that you might face.
If your symptoms don't respond to these natural measures, or if you feel yourself turning toward alcohol, drugs, or other harmful behaviors, DON'T GIVE IN. Pick up the phone and make an appointment with your doctor or other trusted health professional. Be totally honest about your problems and listen carefully to what they recommend. If you don't have a family doctor, get one. Whatever you do, don't succumb to taking the easy way out.
9. REMAIN UPBEAT AND POSITIVE
Even though you may be feeling stressed, angry, or scared about your future, you still need to remain upbeat and positive in most things you do. When organiza-tions change, the climate should remain positive, even though individual members of the organization may be having all sorts of negative or uncertain feelings.
I know this sounds contradictory, but it's not. Acknowledging any negative feelings you might be harboring actually improves your ability to remain upbeat and optimistic! When you're willing to look at all sides of your company's reorganization or change, your ability to notice the positives, as well as the negatives, improves. Then you can choose to focus on the positives, rather than dwell on the negatives.
Please be clear about this very important point. I am not saying you should "pretend" you are upbeat when you are really feeling down. What I am saying is that if you force yourself to tell the whole truth, you'll see both the positive and negative aspects of any major change. This expanded perspective alone will almost always help you feel more positive and upbeat, without having to deny your feelings to the contrary.
You can then use your powers as a creative human being to focus on just the positives (and help others in your organization to do the same) because you know from past experiences that this is a wise thing to do.
If a few key people in each organization or department take on this role as a positive emotional leader, it will quickly spread to other employees as well. If nobody steps forward to remind people of the truth, it's easy for company employees to remain stuck in a chronic state of negativity.
10. GET CREATIVE
One of the best ways to cope with organizational change is to "rev up" your natural powers for creative intervention.
Most problems are amenable to creative, innovative solutions. The only thing that usually keeps these solutions from arising is our own internal barriers and self- imposed restrictions.
Creative problem solving always involves risks. Proposing a new idea invites criticism from others. What if the idea fails? What if business losses occur? What if things end up worse than before?
You've got to be willing to accept such risks if you're going to be free to think creatively. Trust yourself and others around you to recognize any really horrible idea before it gets implemented. Then give yourself permission to swing out and think creatively--allowing any and all ideas to come to mind. Many companies have regular "brainstorming" sessions for just this purpose. During times of reorganization and change, these creative sessions are very important. Time should be set aside to make them a common occurrence.
11. EXPAND YOUR VALUE TO THE COMPANY
When times get tough and people are being laid off, remaining workers become very fearful. Instead of worrying or losing sleep over the possibility you might be let go, why don't you go into action and stack the deck in your favor.
How? Very simple. Just make yourself incredibly valuable to your company. Offer to take charge of some problem or project that isn't working. Contribute creative ideas to appropriate people in the chain of command. Become very interested in the problems your boss and company owners are facing, and see how you can help them out. Stop worrying about yourself and your future and get busy helping your company grow and prosper.
What's the worst that can happen? You might still might lose your job, but look at the bright side. You can take all that energy, drive, commitment, and creativity to your next place of employment.
Who wouldn't be delighted to find an employee like that? It's a win-win situation for you, no matter what happens.
NOTE: Give serious thought to using this strategy even if times aren't tough and your company isn't downsizing. Then, when the first wave of employee cut backs occurs, hopefully you won't be among those let go.
12. CELEBRATE YOUR ACCOMPLISHMENTS
In the business world today, most people tend to focus primarily on problems, mistakes, and obstacles to future company goals. We rarely take time to celebrate our accomplishments.
Sure, there's the Christmas party in December and the annual company picnic in the summer. But do we "throw a party" every time a new client is landed, a new deal is secured, or we reach one of our interim team or departmental goals?
Do we take time to celebrate the tremendous effort everyone is putting in? You'd be surprised how much of a difference this can make. You don't have to spend a lot of money or hold a gala event. You can have small, spontaneous celebrations any time you choose.
If you are creative, you can find all sorts of ways to acknowledge and uplift your co-workers. You could even throw a "party" every once in a while to celebrate and acknowledge your boss!
13. SEEK APPROPRIATE COMPENSATION OR RISK SHARE ARRANGEMENTS
This is a delicate subject, but it's an important one to consider. When companies downsize or reorganize, the overall payroll, including costs of employee benefits and other intangibles, are drastically reduced. At the same time, pressures on the remaining workers are significantly increased.
It is very tempting for company leaders to keep all these financial savings for themselves or for the future needs of the company. In so doing, however, they may be perceived as taking unfair advantage of their employees.
Employees know when they are being financially mistreated. They know they are doing the work of two or three people, yet they are only being paid as one. They know this and they tend to resent it.
If you feel this way, try to negotiate a more favorable system of remuneration for yourself and other employees. See if you can come up with a creative formula to earn more money for the increased work you are doing. Consider some type of bonus arrangement, or perhaps a salary increases that gets activated if the temporary manpower shortage lasts beyond a reasonable period of time. Or consider lobbying for a company-wide incentive program, so that if everybody works hard to turn things around, they share financially in the success of the entire company.
While it may be risky to propose such ideas, you should at least consider doing so.
14. IMPROVE LINES OF COMMUNICATION
In general, the more "crazy" and chaotic your work situation becomes, the more you need good lines of communication. In fact, much of this "craziness" is directly caused by ineffective communication.
Everyone must communicate more actively when organizations undergo change. This includes the boss, the CEO, and even the Board of Directors. It also includes middle managers, clerical staff, and other agents and employees.
More meetings, not fewer, will probably be needed. When employees and managers are nervous, worried, and pressured, they have increased information needs. They deserve to know what's really going on and what is being planned for the future. If you don't supply these answers to them, they will make up ones on their own. Often, they will imagine the worst, when in fact, there may be very good reasons for hope and optimism.
Evaluate your organization's communications needs and game plan. Talk to employees to see what communication needs they have. Find out what forms of communication they would find most helpful. Above all, realize how important and necessary good communication is in coping with the stress of major organizational change. But make sure communications are honest, sincere, respectful, and open- ended.
15. BECOME MORE EFFICIENT
In addition to increasing your value to the company, you'll need to find ways to become more efficient. As organizations change and evolve over time, improvements in efficiency almost always coincide.
After all, if you're going to take a leadership role, if you're going to handle bigger responsibilities, and if, at the same time, you're going to look for added ways to increase your value to your company, you are going to have to get more efficient or suffer a nervous breakdown.
Fortunately, efficiency can be learned. There's an almost endless capacity for human beings to improve upon the way they do things. Whoever said "necessity is the mother of invention" spoke the truth. When you have so much work to do that you can't handle it anymore by using your present strategies and routines, you will quickly become an innovator.
16. LEARN FROM THE EXPERIENCES OF OTHERS
Two very common mistakes people make when undergoing organizational change are: 1) they try to cope on their own; and 2) they fail to benefit from the experiences of others.
With the rapid pace of organizational change today, thousands of people have faced circumstances similar to yours. Some of your friends, relatives, and other acquaintances have probably struggled with similar difficulties.
Talk to these experienced people. Pick their brains. Find out what other people in similar companies are doing to deal with downsizings or expansions. Read books and articles. Listen to audiotapes on coping with organizational change. Attend lectures and workshops given by prominent people locally or around the country.
Get involved. Get creative. Learn from others' mistakes and successful solutions. Don't just sit there and suffer quietly. Reach out for support and you will eventually find it.
17. RISE TO THE CHALLENGE
Instead of viewing your particular situation as a problem, see if you can view it as an exciting challenge instead. Remember, change is inevitable, but being stressed by change is not. It all depends on how you look at change and how you choose to respond to it.
In every organization undergoing change, some people rise to the challenge, while others don't and get left behind. Which group do you want to be in? Think about it seriously. You've got the power and ability to end up in either one.
18. NEVER BECOME COMPLACENT
Once you've survived and successfully adjusted to a major organizational change, avoid the trap of becoming complacent. Future changes will probably occur, and you should be prepared for them--emotionally, physically, and also financially.
Keep developing your skills and enhancing your value to the company. Learn to do as many jobs as you can. Take on a leadership role in having your company be successful. Take pride in helping others below you. And always let your superiors know you are ready and willing to help out whenever the need might arise.
If you try to follow most of these 18 steps and still lose your job, so be it. You will have gained many useful skills and derived much personal satisfaction in the process. Your next employer will certainly be grateful to add someone like you to their team.
http://www.stresscure.com/jobstress/reorg.html
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PostSubject: Re: Assignment 5 (Due: August 17, 2009, 13:00hrs)   

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