Why Do Firms Downsize? - A study by Artur Victoria

Some of the downsizing craze may be pure herd behavior; if everyone else seems to be doing it, you should also. Some of this herd behavior may be induced by the financial markets In other cases, downsizing is a managerial response to inane incentives - for example, a division chief is told that her performance will be assessed based on per capita sales or earnings, where the denominator in the per capita calculation is full-time equivalent regular employees. Thus, the manager is given an incentive to cut regular employees and replace them with outsourced labor, even if the outsourced labor is (not too much) more expensive. leia todo o artigo

The Effects Of Downsizing Human Resources - A study by Artur Victoria

A process issue that deserves careful thought in contemplating a downsizing concerns the choice between dramatic, swift cuts versus a more gradual, less wrenching approach. The advantages of a gradual approach are apparent: The firm may be unsure how deeply to cut and a onetime massacre runs the risk of cutting too much. Of course, the psychological costs may be attenuated by a gradual approach. Local labor markets may be better able to absorb the discharged workers if they are discharged gradually, which in turn may ameliorate the adverse impact on the local economy and community. On balance, however, those who have suffered through downsizing tend to believe that a "get it over with in one fell swoop" approach is superior (at least, for the firm) to a process that drags on. leia todo o artigo

Layoff Of Senior Human Resources - A study by Artur Victoria

To the extent that senior workers are, by virtue of their seniority, more highly paid, the firm gets more economic bang by terminating more senior employees. In settings where the knowledge base and technology change rapidly, recent hires may be more in tune with important new developments, giving another reason to discharge more senior workers. But potential claims of age discrimination (in locations where there are laws against age discrimination) must be attended to. Consequently, when a firm decides it would prefer to prune selectively from its more senior workers, early retirement programs, carefully crafted to avoid any adverse selection and appearance of age discrimination, may be more desirable. Layoffs targeted at older workers are also unlikely to appear distributive just. Organizations with a culture that emphasizes loyalty will obviously have an especially difficult time with targeting senior workers, as will organizations that depend on slowly developed firm-specific human capital. leia todo o artigo

How to Downsize Human Resources - A study by Artur Victoria

You should consider ways in which you can attenuate (or might unwittingly exacerbate) the psychological costs for workers and reputation costs for your organization. Indeed, you should be thinking about these things as you debate whether to downsize at all. The key here is the process of downsizing.

Perhaps the most important way to attenuate the psychological costs is implicit in what we said above about the "moral from the data": By tying downsizing to a broader and sensible change initiative, a firm gives its workforce a sensible and credible reason for why this pain must be inflicted, a vision of what sort of better future beckons after the suffering is over, and a broader purpose around which the survivors can rally. The research literature, as well as assessments from practitioners who have lived through downsizing, suggest some further conditions that can help minimize the adverse effects of layoffs on the attitudes and work performance of those that stays: leia todo o artigo