THE COMMITMENT OF STAFF DURING RECESSIONARY TIMES

The Commitment of Staff during Recessionary Times

The Commitment of Staff during Recessionary Times

Introduction

Cost-cutting efforts could be the reality for some time to come. One dimension of cost-cutting is often disregarded—the critical require to ensure cost cuts occurs in ways that obtain positive emotional firm promise inside the context of the culture. Employees require to somehow seeming positively motivated to support decisions and to consign to behavioral change that reduces costs. This is the “tall order,” especially when layoffs are at the center of the cuts. However, in our know-how, cost-cutting and layoffs fail when executives simply trial to mandate attitudes and behaviors. These efforts will more probable succeed when companies make positive worker motivation an integral part of the process. The first step is for executives to take on the responsibility of ensuring that front-line leaders' actions appeal to employees' hearts and minds. Positive motivation cannot be delegated or mandated. In this commentary part we discover how productive cost decrease capitalizes on and reinforces company culture—and integrates emotional firm promise of the workforce with the strategic imperatives for the business. While easily said, some companies have finished this. (Yukl, 2002, 147)

Under tremendous recessionary pressures, executives in the range of industries are actually considering, launching, or already grappling with cost decrease programs.

A widespread difficulty is that companies unwittingly put themselves into the suboptimal cycle of cost decrease that is both short-term and shortsighted. The cycle begins when managers launch an initiative to recognise and apply cost reductions in distinct functions.(Anderson, 2004, 472) The first difficulty is that many of these cost savings are “phantom”—the organization does not sustain the savings one time the initiative goes away and many of the savings are not anything more than deferred expenditures.

 

Fundamentals Are Not Addressed

The second difficulty is that the initiative does not address fundamentals. Productivity does not advance, leadership systems are unchanged, and “cost-accommodating” behaviors persist. As the result, headcount savings in functions creep back in the pattern of higher expenditures with vendors, potentially impacting SG&A or cost of goods sold. Moreover, additional chartering occurs (often at higher cost) as “new” needs emerge. The diagram underneath illustrates the problem:

 

 

 

 

The Sub-Optimal Cycle of Cost Reduction

 

It is highly improbable that companies in the 2008 recession will avoid these two parallel pitfalls. Simply put, the hasty introduction of cost savings programs that recessions punctual makes the prospect of short-sighted efforts even greater. (Yukl, 2002, 147)

 

“Mandating” vs. “Motivating” Cost Reduction

So what should companies embarking on cost decrease do? They should probably start by asking themselves if “quick and dirty” costs reductions are all they want or need. If not, they should gaze honestly at the ultimate impact of any earlier cost decrease efforts. Important savings commitments may not have been implemented. Examples encompass purchasing commitments not pursued, or new departments put in place to replace others that were downsized.(Anderson, 2004, 472) Pull out the PowerPoint presentations from several years before and ask what happened, separating justified and unacceptable reasons for ...