Case Study 2: Employee Relations and Performance Management Assignment
Case Study 2: Employee Relations and Performance Management Assignment
The best mix of the cost reduction strategies is early retirement and redeployment. These two strategies will not reduce employee morale in the event the business revenue earnings return to normalcy. Under the two strategies, fairness will have been achieved because it is only the senior employees that will be let go and they will be given an attractive severance package. Redeployment will assist the organization retrain employees to focus more on shared storage rather than tape drives.
The advantages of the voluntary leave of absence are that it increases the loyalty of the workers towards the organization. The organization can tailor it to meet the specific needs of the employees. It makes employees feel appreciated. Its disadvantages are: it is harder to make profits once employees are absent. Redeployment will help the employees develop different skills. It reduces boredom. It helps in employee allocation where they are needed. From the perspective of the employer, it is quite costly.
RIF gives organizations the power to possess what is generally known as a workforce where the number of employees should not exceed a certain number. It is an efficient cost reduction strategy. However, it reduces employee morale, stress, and uncertainty on whether they will be able to find another job. It is also not that cheap, an organization has to contend with potential lawsuits and need to pay up a higher severance package. The standardized Unit Cost Reduction helps the business in the proper allocation of its resources. However, it is not the best option since it leads to low morale and the potential for making errors among organizational managers.
Early retirement is one of the best options where the motivation and morale of the employees are boosted. In the long term, this will increase employee productivity and profits. It gives the employees a chance to get retirement benefits (Lister, 2017). The organization will qualify for tax cuts given by the government. One disadvantage is that the plan is costly.
Additional strategies include: putting employees who were previously on a full-time basis on a part-time basis and drawing up a roster that efficiently utilizes key organizational resources. The RIF is a constant cost reduction strategy but its spiral effects of uncertainty, loss of morale, and uncertainty creation make it not a long term strategy to pursue in the organization (Lewis, 2019).
When you use the performance as criteria for laying off workers you benefit from the possibility of retaining some of the best workers in the organization. However, you run the risk of victimizing and being viewed as unfair if you lack proper documentation. The time in a job gives preference to the younger employees who are skilled and need a career progression to move forward and occupy the top jobs in the organization (Ryan, 2020). However, senior employees may question the strategy if loyal members with a wealth of experience are laid off. Also, the firm risks losing key members of staff that are highly knowledgeable and experienced in the organization.
When pay is the determining factor, the organization will save a lot of money and it can recruit other talented employees who will mostly accept less. However the risks are as follows: high wage earners are mostly the good employees and as an organization, you risk losing this important segment of the workforce that will take time to retrain (Lister, 2017).
When you focus on the skills needed going forward, you will attain relevance and meet certain business goals and financial goals of the firm. However, one risk is you must ensure you don't need that skill at all in the organization. Otherwise, it will come to haunt you. Project positions eliminated and the employee head account is temporary strategies but they can also save the firm some resources. Other methods include seniority-based hiring and selection process, the merit-based and skill-based. The best method to use is pay and time in a job because it will encourage some employees to go for early retirement while saving money and coming up with a small salary structure for employees.
The specific performance data that could be obtained is as follows: The number of sales that the employee has contributed to the organization over the years. Whether the employee has been on the Performance Improvement Plan PIP and if so what are the chances of success at the job after that did her performance improves. Other key performances include specific reasons as to why the employee is posting poor results i.e you look at the root cause of poor performance. Parameters that employees have been able to achieve based on their job expectations are also useful data. The performance improvement plan documentation can be obtained from the Human Resources Office specifically by looking at the employee file. Specific documentation on why the employee is performing badly can readily be obtained by studying the employee himself on a personal level i.e. through interviews
To minimize the risk of wrongful termination, an employer could perform the following: She could look at the past strategies that were employed by the organization in the previous retrenchment processes. She should ensure that sufficient reasons are provided as to why she is doing that action. Failure to give a reason for an employment termination can be an avenue in which the employees allege certain discrimination and retaliation (Pine, 2014). Some of the legal issues that need consideration include the following: the existing discrimination laws that are found in the nation, what the country says about the practices of wrongful employee termination. Legally there exists a group of people that routinely fall under the protection status for instance the law provides that an organization cannot wrongfully terminate an employee who belongs to the protected minorities (Pine, 2014). The Human Resource manager needs to consider whether there was in existence some laws or regulations governing the employment agreements and in the case of a unionized workforce, the need to have a common bargaining agreement in the event the salary increment or decrease.
The drafting party to the letter should have been more specific in stating the reasons for the budgetary constraints. Just stating that budgetary constraints are the course for the termination of a contract for an employee is not enough. The Human Resource manager should have given the employees more time to prepare before they are placed on a working notice period. It is unfair to give the employee and then state that, "starting today," you will be placed on a working period notice. Employees need more time to get used to the situation so they are not so much impact on a psychological basis (Pine, 2014). The letter to all the employees of the organization noticing the changes was correctly drafted since the employer, first of all, begins addressing that it is a difficult process and they understand that many employees will get affected by the decision. However, in this case, also, the reasons that have been advanced for a reduction in force e.g the need to remain competitive and to come up with a better product road map are not that convincing. As an individual, I would draft a more specific reason for instance; the company experienced a reduction in sales by an X % percentage hence it will not be able to pay all the salaries owed by the employees.
The negative morale within the organization can be reduced by providing better remuneration packages for the remaining employees. They should be given high salaries to motivate them to continue working with the organization (Duncan, Skaw & Kiriago, 2013). The company should come up with an Employee Assistance Programme to help the employees cope with a situation of there being a few employees and the aspect of there being an increased workload in the organization. The whole employee laying off strategies should be open so that the workers do not think that they are next on the chopping board if their performance does not reach a certain organizational level. The HR should foster a closer working relationship and improvement of the employee culture now that the is a lean workforce in place in the organization.
To ensure the high performance of the remaining team members, anyone who is lacking in skills should be properly trained by the organization. This will ensure that only employees with relevant skills are selected to remain (Duncan, Sakwa & Kiriago, 2013). The company can now embark on setting new goals and getting personal commitments from the employees on the steps they will take in ensuring that they achieve goals. A company can also increase the compensation and specifically the performance-based compensation scheme.
Pine, B. (2014). 10 things to consider when terminating an employee. Retrieved 4 August 2020, from https://www.bizjournals.com/bizjournals/how-to/human-resources/2014/10/10things-to-consider-when-terminating-an-employee.html
Duncan, N., Sakwa, D., & Kiriago, A. (2013). Effects of retrenchment on the motivation and loyalty of surviving employees of Telkom Kenya Limited. International Journal Of Academic Research In Business And Social Sciences, 3(9). DOI: 10.6007/ijarbss/v3i9/185
Lister, J. (2017). What Are the Advantages & Disadvantages of Layoffs based on
Seniority?Retrieved 4 August 2020, from https://smallbusiness.chron.com/advantagesdisadvantages-layoffs-basis-seniority-15446.html
Lewis, M. (2019). How to Reduce Labor Costs in Your Business. Retrieved 4 August 2020, from https://www.moneycrashers.com/reduce-labor-costs-business/
Ryan, L. (2020). Ten Reasons Good Employees Get Fired. Retrieved 4 August 2020, from https://www.forbes.com/sites/lizryan/2017/11/02/ten-reasons-good-employees-getfired/#c5456236b187