DOWNSIZING

Downsizing

Professional Business Development Management

Introduction

The assumption which is true that bigger thing signifies better. Experiencing a decline in sales, companies routinely downsize their employee base like cutting costs to boost profitability. Fro cost reduction, downsizing is a valuable thing. In order to survive in the business environment, significant change has been the practice in many organizations. Previously, organizations used to have vertical integration that was control over the suppliers and buyers in an uncertain environment. However, today organizations are going for hierarchical structure change as they want to create organizations that are flexible, adaptable and innovative. Therefore, the practice of downsizing has become pervasive (Mont J., 2011).

Discussion

Downsizing

The term downsizing considered being the intentional and organized reduction of human capital in an attempt to bring about a change in the company's structure. This done to developed a positive impact on the company's performance. Over the course of time, downsizing has evolved in reputation from being a negatively perceived movement to a strategic human resource management decision. Multinationals such as GM, Dell, Cisco and the like been known to implement downsizing at numerous times in their history. This paper will attempt to shed light on a broad range of issues that come forth when downsizing perceived from the perspective of human resource management (Checkler & Jeffrey 2011).

HR Role in Downsizing Process

Employees should be informed regarding the need of downsizing. Costs to be cut, duration of downsizing and strategies planned to pursue. Human resource plays a crucial role in downsizing that is the right way to communicate the message to employees. In the human resource perspective, downsizing is significantly different. Downsizing often brought about on account of the organization's choice to improve performance by not serving the downsized employees. Furthermore, human resource management principles dictate that a downsized employee does not necessarily have to be at fault in any manner, and it is entirely the organization's discretion to ascertain whether an employee has to be made part of a downsizing campaign or not.

Studies based on human resource management have been shedding light on the intricacies of downsizing for quite some time now, and one of the issues that come up almost every time downsizing studied in the realm of human resource management is that of survivor's guilt. Downsizing carried out to improve the organization's performance by maximizing the utility of the employees the organization chooses to keep on board; survivor's guilt can cause this essential purpose of downsizing to experience a backlash. It is because of this reason that downsizing often supplemented with other organization level strategies such as the careful planning and dispersion of severance packages and likewise (Vivian, 2011).

In this light, human resource theorists recommend that downsizing carried out only after careful consideration and planning. In this area, the organization's decision making bodies need to interact extensively with the human resource department in order to address all the issues pertaining to the downsizing move. The human resource management plays a crucial role in ascertaining the precise number of individuals that ...