Professional Documents
Culture Documents
TABLE OF CONTENTS
1. INTRODUCTION
2. LITERATURE REVIEW
Conceptual approach to employee downsizing
Downsizing and employee attitude
Employee morale during downsizing
Organizational climate also affects employee retention rate
and positively affects employee downsizing rate
Tips for creating an effective organizational climate for
minimum employee down sizing
Organizational vital signs-a leading indicator of satisfaction
measuring Of employees
Organizational climate-employee satisfaction survey
Employee down sizing & employee motivation are closely
knitted
Employee down-sizing & employee engagement
Diagnostic tool
3. RESEARCH OBJECTIVES
4. RESEARCH METHODOLOGY
Methodology
Research design
Nature of data
Data collection
Sample size
1
Sampling technique
Sampling procedure actually employed
Analytical tools
5. DATA ANALYSIS
6. CONCLUSION & IMPLICATIONS
7. RECOMMENDATIONS
8. BIBLIOGRAPHY
9. APPENDIX
2
INTRODUCTION
What Is Employee Down Sizing
Employee downsizing is a nightmare feared by most of the employees working in the corporate
world. A downsizing strategy reduces the scale (size) and scope of a business to improve its
financial performance
In management parlance, the term downsizing refers to pruning (including layoffs and
retrenchments) of the size of workforce for a variety of reasons:
⇒ Outsourcing;
⇒ Modernizing,
Employees, nowadays, will have to reconcile with the ugly realities of the corporate world and they
may have to be prepared for alternative employment as the axe may fall on anyone at any time.
Due to the globalization of business, organizations are able to develop a number of approaches by
which to employ human resources, technology, and capital to implement innovative projects in
different parts of the world. They are able to derive maximum advantage due to these possibilities.
While the larger goals appear justifiable and in the interest of most stakeholders, they lead to
At the organizational level, such changes can lead to closure of businesses, off-shoring, merging
with another organization, outsourcing, restructuring, etc. At the functional level, it can imply
rendered redundant, or let go within a very short span, without adequate preparation for these
changes. Such changes take their toll in terms of organizational productivity, nature of employer-
employee relationships and the associated social costs. People who contribute to the organizational
goals are the organization's assets. These assets are turned into liabilities due to reasons mentioned
earlier. The challenge is to what is morale manage employee exit without disrupting the
organization's functioning. Those individuals who lose jobs are the hardest hit. For the affected
employee, the emotional trauma of losing a job is very difficult to cope with. Aside from the financial
implications of a job loss, they have to reconcile with the loss of self-esteem, self-confidence, and a
breach of trust between the employer and the employee. Along with the individual, his/her family
also gets deeply affected with the involuntary job loss of a family member. The pain is not limited to
the individual alone but affects a number of others. The effect is also felt by other employees who
remain in the organization as they suffer from the guilt and are also faced with the fear of job
insecurity.
The fundamental reason to resize the organization is to improve organizational performance and to
reduce costs of operation. While these changes are expected to fetch significant gains for the
companies in the long run, an analysis of corporate experiences of downsizing shows that such
measures are not always implemented with careful consideration of all the implications. Downsizing
also brings, in its wake, a number of associated hidden costs, which companies tend to overlook in
pursuit of short-term gains. The flip side of downsizing is that the organizations lose expertise, skills,
knowledge, experience and valuable relationships, which walk out of the door every time somebody
leaves. A number of alternative approaches can be implemented to achieve the over- riding goal of
enhancing business performance. At the same time, it is true that downsizing in many cases is an
inevitable option. However, downsizing should be considered not as the first but the last option. If the
axe has to fall, it should be preceded by a careful consideration of the consequences of such a
drastic action.
4
Need to reduce
Costs
Alternatives
To Layoffs
Voluntary
Quits
Involuntary
Separations
Early
Retirements
Voluntary
Workforce
Reductions
Layoffs
Outplacement
5
What is Morale
Morale, also known as esprit de corps, is an intangible term used for the capacity of
people to maintain belief in an institution or a goal, or even in oneself and others.
According to Alexander H. Leighton, "morale is the capacity of a group of people to pull
together persistently and consistently in pursuit of a common purpose".
Morale in the workplace
Workplace events play a large part in changing employee morale, such as heavy layoffs,
the cancellation of overtime, cancelling benefits programs, and the lack of union
representation. Other events can also influence workplace morale, such as sick building
Job security.
•
Management style.
•
The perceived social or economic value of the work being done by the
organization as a whole.
•
The perceived status of the work being done by the organization as a whole.
•
Team composition.
•
The work culture.
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associated costs are a burden that used to be just the cost of doing business. But more and more
companies are investing time and effort in making better hiring decisions and doing more to keep the
employees they do hire. Employee retention is now a buzz word in today’s business world.
Over two-thirds (70%) of HR managers state that employee retention is a primary business concern.
changes, such as the retiring Baby Boomer population have the potential to aggravate this issue. All
companies, regardless of size, are struggling with how to keep employees from leaving for more
money or better opportunities. Studies consistently show that even though employees may say they
are leaving for more money, when those same employees are asked several months later why they
really left, the money factor is about 5th or 6th on the list. The first few reasons include lack of
recognition, disagreement with the culture or direction of the company, poor treatment by their boss,
lack of excitement about their growth prospects, and poor relationships with co-workers. ?
How much? When you add the costs of finding an employee, training the new employee, lost
productivity and filling in for the employee who leaves, the cost can easily equal 150% of the base
salary of the person who left. So, if you are paying someone $50,000, the cost to replace that person
will be approximately $75,000. This money comes out of your hard-earned profits.
This is one of the key reasons that companies are focusing so much effort on keeping their current
employees. Some of the steps taken by companies to retain their work force are:
•
Ensure you offer basic health care benefits at reasonable rates. Consider adding
lifestyle benefits that are cost effective (read easy on the cash flow).
7
•
Find out what employees want from their career and do what you can to provide
for their needs.
•
Be as flexible as possible as to when and where the work gets done. Can it be OK for an
employee to take a few hours off to attend to a family or personal matter if they can accomplish the
Take a real and genuine interest in people’s career aspirations and personal lives.
•
news, major customer or sales activities on a regular basis. Follow up on your commitments to
Have regular (bi-weekly or monthly) meetings with all employees where they can ask you
questions about your plans, company progress, new developments to look for, etc. Be accessible to
them so you can learn their needs. If you can respond to their needs before they become real
Ask former employees why they resigned. Even if they left six months ago, they
still have a valid perspective.
•
Routinely ask employees what you can do to make the company a better place to work. Set
boundaries if necessary as to what items are not negotiable; such as ownership in the company or
According to Theo Blackwell of The Work Foundation, in 1980s and 1990s many companies
resorted to downsizing their human resources in order to cope with economic pressures. But what
most of these companies do not realize is that downsizing does not always lead to savings in reality
or increase in the market worth of the company. On the contrary, the downsizing companies may be
branded anti-people. It usually leads to repetitive downsizing and results in the loss of employee
morale and loyalty and thereby affects overall productivity levels. However, they can adopt
alternative approaches to cope with economic uncertainties. Wayne Cascio had proposed a new
strategy termed as "reflective restructuring", which enables companies to offer a range of smarter
options to employees. The article explains the significance of this new concept and provides
examples of companies in the US and UK which have adopted the strategy. It also explains that
while companies in the US are at a greater liberty to downsize, the UK business environment is not
and in the aftermath of the economic liberalization (post-1991). Against this backdrop, the author
analyses the performance of the Indian Public Sector Undertakings (PSUs). He outlines the causes
that resulted in surplus manpower among PSUs. However, after India opened up its economy, most
PSUs were compelled to streamline their operations to increase their efficiency. One of the major
steps taken to achieve this goal was to shed the excess staff on their payrolls through the "golden
handshake," by floating Voluntary Retirement Schemes (VRS) and Compulsory Retirement Scheme
(CRS). The other major step was to outsource non-core activities and focus on their core
competencies. The
9
article provides a snapshot of the Indian experience of downsizing and also discusses
the
social implications of these drastic measures.
Barbara L Davison
explains, in "The Difference Between Rightsizing and
Wrongsizing",the differences among the terms used in conjunction with downsizing,
i.e., rightsizing, resizing, upsizing, sidesizing, and wrongsizing. The author clarifies that rightsizing
need not imply reduction of personnel. In certain cases, it can also mean increase in the numbers.
The article explains the need for tying rightsizing efforts with the overall strategy, identifying critical
growth areas as well as those needing consolidation, analyzing the effects of rightsizing on all
functional areas, evaluating the financial implications, and ensuring that each department and
employee adds measurable value. The author illustrates how to carry out a rightsizing exercise with
the help of a process example, which describes the most important steps. In this connection, it cites
the examples of a few companies, such as Ernst & Young, Cisco, Agilent Technologies, and
Schwab, which have implemented rightsizing. The article also illustrates a few alternatives to
downsizing and highlights new workforce concepts, i.e., "Just-in-time" workforce and the "Portfolio"
Rick Maurer of Maurer & Associates emphasizes the need for organizations to act swiftly to cope
with changing business conditions and on their requirement of human resources. Business leaders
need to continuously assess the mix of skills required as well as the number of employees required
for the present and the future. In addition, they should engage in a process of benchmarking with
companies in the same industry. The article explains that downsizing may prove to be a risky
strategy that may not always bring about much improvement in terms of the productivity or revenues
to the organizations. Hence, to cope with changing requirements of staff, companies should consider
Employment Opportunity (EEO) guidelines, legal counsel, etc. The article also suggests the use of
objective data to formulate the downsizing plan. In conclusion, it points to a few indicators to assess
Carlton Becker of ORC enumerates a number of lessons from the collective experience of layoffs by
companies across the globe. These lessons largely pertain to the need to remain lean and mean in a
fast-changing global business environment, rightsizing the right way, considering scientific
alternatives to downsizing, paying attention to the after- effects of downsizing, and being aware of
the legal implications of downsizing. The author points out those mass layoffs should be viewed as a
change process to be implemented by adopting a systems approach. It explains the strategic role of
HR executives during the whole process, especially during the initial stages of rightsizing. It further
explains the step-by-step guidelines that HR executives can adopt in the downsizing process. The
article shares the experiences of a few companies such as MacMillan Bloedel, Canada,
Ann E Feyerherm of Graziado School of Business and Management, Pepperdine University, CA,
USA, also provides guidelines based on the first-hand experience of a manager involved in a
downsizing effort in a company in South California. Although, her team of management consultants
explored several alternatives to avoid downsizing, they had to face the inevitable reality of the
downsizing spectre. Since the axe had to fall, the best approach adopted was to downsize with
dignity and to ensure that those who were let to go were equipped with new skills to enhance their
career prospects. Also, the author describes specific measures undertaken to achieve these twin
goals and enumerates the lessons learnt through these difficult times. She concludes that during
these difficult times, she had no other principle to live by other than the one she had within.
Many organizations are beginning to realize the adverse effects of employee downsizing and are
employee morale. Such organizations give due attention to each of the three phases of downsizing,
i.e., planning, its implementation, and managing the results. The author adds a few essential aspects
participative downsizing, managing the rumor mill, providing continual and frequent communication,
and paying special attention to the results. The article concludes by saying that those organizations,
which have been active in managing the human side of downsizing would find that they have laid the
Seymour Siegel focuses on the need for organizations to take care of two things in order to gain
competitive advantage in the 21st century. The first pertains to the management of knowledge
workers and the second to the appropriate management of knowledge itself. In an era of downsizing,
organizations need to pay special attention to the fact that with downsizing, organizations also stand
to lose on the vital and tacit knowledge inherent in the outgoing employees. Managers are always
confronted with the challenge of capturing and codifying explicit and tacit knowledge and then
converting it into innovative products and services. The article describes a number of organizational
practices, which, if managed on an ongoing basis, can offset the loss that can occur as a result of
the aftermath of downsizing - Pink Slip Parties. It describes how Pink Slip Parties came into practice
and the reason for using the term `Pink Slip'. The article elucidates the special features of these
parties with respect to attendees, the kind of music played during these parties, the colour of
wristbands or badges, message boards, and activities. Pink Slip Parties offer a number of benefits to
both job seekers, who had lost jobs on account of downsizing, as well as the recruiters. The
effectiveness of these parties are analysed vis-à-vis the nature of support gained by laid-off workers
in restarting their careers. The article also points to new developments in this area, such as Layoff
Lounges.
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Mika Kivimäki, Jussi Vahtera, Jaana Pentti, and Jane E Ferrie reports the results of a study
conducted to investigate the effect of the psychosocial work environment on employee health. This
study was conducted among 1,110 municipal staff in Raisio, Finland, between 1990 and 1995. It
encompasses the period prior to downsizing, during downsizing, and when downsizing had slowed
down. The downsizing exercise was a reactive one, conducted through retirement and hiring
freezes, and letting go the temporary employees. Some of the significant findings of the study are:
downsizing results in changes in work, social relationships, and health-related behaviours that lead
to increase in certificated sickness due to increases in physical demands, job insecurity, and
reduction in job control; sickness absence increases twofold in a major downsizing as compared with
sickness absence during a minor downsizing; downsizing was associated with negative changes in
work, impaired support from spouse, increased prevalence of smoking, and sickness absence. It has
been found that this study was unique in the area of employee downsizing and employee health as it
Jonathan Kelley explains that the significance of downsizing depends on its long-term impact on
workers. It presents a model to study the probability of re-employment among workers shed by
downsizing firms as compared with those departing from stable or growing firms. This model can
also be used to examine the impact of downsizing on the duration of jobless spells, continuity or
change in occupation, on earnings, and on job satisfaction among workers who obtain employment.
The model combines three factors: re-employment by age, gender, and education. Some of the
significant findings of the study are: downsizing is not a disaster for most of the workers; 75% of the
downsized employees find jobs, and most of them do so quickly; workless spells between jobs are
short or non-existent; and the most serious grounds for concern relate to groups of vulnerable
Carl Van Horn, William M Rodgers III, Neil Ridley, and Laurie M Harrington of Rutgers, offers
glimpses of the consequences of involuntary job loss for workers and their employers. It describes
the evident patterns of worker dislocation: it affects both blue-collar and white-collar employees,
workers of all races, ages, education levels, occupations and industries; and it happens at very short
individuals and their families, the most significant being emotional distress and financial hardship. It
delineates the differences in approaches by small and large firms. Large firms offer more assistance
and better severance pay as compared with smaller firms. It also provides guidelines for employers,
employees and policymakers to deal with the consequences of job dislocation. The experience of
downsizing employees during the last few years points to the need for employees to be prepared for
a job loss at any point of time in their career. This report also includes examples of effective
downsizing. However, this everyday event in the business world is a unique (hopefully) event for you
and your employees. It is important to remember that this event affects not only the "downsized," but
many other factors, many employers and employees no longer believe in the concept of lifetime
employment. As a result, employers often underestimate the need to provide support to employees,
both those who are being released and the 'survivors.' Many employers feel that the only support
The decision to downsize is made for strategic and financial reasons. The expectation is that the
expense reduction will lead to a positive impact on the bottom line and will ultimately be reflected in
improved profitability and productivity. However, many organizations neglect to factor in the
improperly, the problems it was designed to correct may be intensified due to the impact on the
to work on employee attitudes was examined by Brockner and his colleagues in 1992. In this study,
Brockner decided to use work effort as a measure of job attitudes. The study found that high job
insecurity coupled with high need to work, resulted in increased work effort following a layoff. High
job insecurity, coupled with low need to work resulted in no change in the level of work effort. This
seems to indicate that when there are high levels of job insecurity, as would be expected during
downsizing, employees with a high need to work will increase their work effort, while those with a low
observed relationship. Specifically, Brockner found that the remaining employees' perception of the
fairness of the lay-off process and their attachment to the lay-off victims colored their views. This
issue of fairness has been found to be related to a number of other work-related variables and has
outcomes as well as to the end result in determining "fairness." For example, as Brockner's study
reported, the remaining employees considered the way in which their co-workers were treated during
the downsizing process as well as the outcome (i.e., losing their jobs). From this perspective, layoff
survivors can be expected to exhibit the most negative reactions when they identify with the layoff
victims, and feel the victims have not been well compensated.
"When survivors perceived that those laid off had been dismissed with little or no compensation, they
reacted more negatively (from an organizational perspective) to the extent that they felt some prior
sense of psychological kinship with the laid-off parties." (Brockner et al., 1987).
What Brockner's study would indicate is that employees are affected by more than just the fact of
layoffs. They are affected by how the layoffs are managed and by what is done for the individuals in
those positions. Brockner found that negative attitudinal changes were reflected in survivors'
reduced work performance and lowered commitment to the organization. Conversely, the study
showed that employee commitment can actually increase during a layoff process when the company
The post-layoff setting provides organizations with a rather unique...situation in which to express
their commitment to employees; that is, if organizations show commitment to their dismissed
workers (through caretaking activities of providing severance pay and outplacement counseling,)—
Brockner's study indicates organizations can proactively affect surviving employees' attitudes during
periods of downsizing. The next section describes some steps that can be taken to minimize the
eight factors affecting employee loyalty. They are, in descending order: equity, security, good
(McKenna, 1991).
Downsizing is a stressful time for employees, and is a time in which they will question each of the
eight factors mentioned in the above quote by McKenna. By communicating with employees, making
them feel part of the organization, and working to restore loyalty, it is possible to avoid some of the
compounded by the complexity of the layoff process. For example, the rumor mill that develops, or
intensifies, during the preliminary planning stages results in employees spending significant amounts
of time gossiping and worrying about what may happen. Unfortunately, many managers in the
position of being "in the know" are guided by a policy in which they are to avoid talking about rumors
with employees. While this policy may seem appropriate, the associated costs, in terms of lost
productivity and employee loyalty, may be significant. Communication will help to curb the worry and
"If you don't know something, or you do know but SEC rules or other legal constraints have
momentarily sealed your lips, come out and say that. Silence is the worst policy" (Fisher, 1988).
The most preferred method of communication is personal appearances from upper
management; however, any communication at all will be helpful.
17
Ensure that communications cover the following topics:
Talk about the fact that changes are coming; employees already know, but it will increase
explain the need for growth and profitability (which can be perceived as legitimate
reasons when presented in an appropriate manner);
•
if possible, explain future plans including detailed plans for restructuring, upgraded
technology, or some processes to increase efficiency;
•
communicate, whenever possible, that though employee downsizing is necessary, each employee
who is let go will receive appropriate severance pay and (if you intend to offer it) job placement
assistance;
•
emphasize that laid-off employees will be treated with respect and dignity; this is important for
Most importantly, listen carefully to employee concerns and adequately address each concern to
whatever degree possible. This must be done with sincerity and no sense of condescension, such as
In addition, justification for the layoffs is extremely important, especially if times are good and the
downsizing is a part of strategic growth and profitability. Employees need to understand that you
outside the company. When these employees see some top managers leave voluntarily, they may
question the long-term prospects for the company and consider an immediate job change. This is
something to watch out for, as the people who leave under these circumstances are generally those
for an article in Fortune: "If you let people get the idea that the company is not just cutting back but is
sinking into mediocrity, morale really goes to hell" (Fisher, 1988). This quotation highlights the
importance of managing perceptions with "positive press" and communication from upper
management. Discuss the downsizing as a step towards a more efficient and profitable business
trust. Do not allow management to assume remaining employees are merely grateful to still have
jobs. Employees need to feel they are valued, that they have a place in the company, and that
management believes that they are an important part of the success of the organization. To
emphasize this point, talk about where the company is headed, and describe any plans for growth
and prosperity.
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Employee Morale During Downsizing
Why Morale Matters
Of course employees will feel unsettled during downsizing. However, just accepting loss of morale
as an inevitable consequence may undermine the very productivity gains intended by the change.
So employers should seek to minimize the unwanted impact of downsizing. They also need to
recognize the extent to which the manner of managing such change affects how employees feel
about the change and their future relationship with the company.
Downsizing can threaten employees’ sense of well being in several ways. They may see the
company as having behaved unjustly or unfairly. They obviously feel less secure. They may also
lose the belief that their contribution to the business will be rewarded in future. These responses
may easily threaten business performance. Survivors of downsizing can become unduly risk averse
and narrowly focused, and therefore less creative and open to change.
But ‘morale’ is not a simple concept. It consists of many facets and may be manifest in
many outcomes. These outcomes include:
•
whether they are able to adopt new working practices and learn new skills
•
changes which leave survivors unclear of what is expected of them, or how they will
acquire the new skills they may need
•
Managers who are unwilling or unable to provide adequate time and support to
individuals.
Anticipating impact also means understanding that individuals in different job groups or career
stages may respond differently to downsizing. Although it is often difficult to address interventions to
particular workforce groups, they can sometimes be tailored with varying needs in mind.
Interventions To Build Morale
It is difficult to target interventions with any precision to influence morale. However, the participating
organizations identified several broad kinds of action which they saw as particularly relevant.
Communicating with employees during downsizing is vital. Conveying the reasons for such a painful
change is central. Employees need to understand the business reason for reducing headcount, and
how the change will be managed. Breaks in communication are seen as sinister, and lead to rumors.
Attempts to deny the reality of the painful aspects of the change are seen as insensitive. So
communication has to be honest in dealing with the negative feelings of employees. It is important to
Giving direct support to the ‘survivors’ as well as the ‘victims’ of downsizing leads to other types of
intervention. They may address such areas as Stress Management and Careers Counselling.
21
Organization Development initiatives may be used to try and improve the effectiveness of the
emergent organization. They may include work to rebuild relationships between and within groups
and departments, often through team building activities. Enhanced access to training and work
Performance Management often needs attention to ensure that staff feels that the new demands are
realistic in terms of the reduced staff resource. They also need to be clear what is expected of them
in the new organization. Reward strategies may also need realigning, but there is a lack of clarity at
present about the link between alternative reward strategies and morale.
The employee’s relationship with their line manager may have a significant effect on how well they
cope with downsizing. For line managers to support staff effectively at a time of difficult change, they
in turn have to feel as though they know how to handle queries and problems. It can help for
managers to share their concerns with their peers and discuss how to deal with staff issues. Some
companies use regular forums for managers to do this throughout the change period, and avoid
natural tendency not to want to ask people how they are feeling when you expect negative
responses. Also we know relatively little about cause and effect in the area of morale. Ownership of
the issue may be difficult to establish — senior management itself often being in a state of flux
Many managers believe — or like to believe — that the general level of staff morale is outside their
control. There are indeed many limitations to controlling morale including the variation in individual
response, the impact on individuals of what they see happening to other employees, and the
variation in response over time. Separating the impact of different interventions can be difficult, and
downsizing is seldom the only organizational change going on. In spite of the difficulties of
evaluating the impact of specific responses on morale, organizations are using a range of measures
to monitor some of the outcomes of morale. For example, staff turnover, absence from work and
of employee attitude surveys. These can be used both to identify variations in response within the
workforce, and track changing perceptions over time. Managers need to understand how employees
are feeling in their part of the organization as well as in aggregate. Upward feedback is another way
of collecting information on employee morale and response to initiatives. It can also be used as a
starting point for improving relationships within teams in the wake of downsizing.
23
ORGANIZATIONAL CLIMATE ALSO AFFECTS EMPLOYEE
RETENTION RATE AND POSITIVELY AFFECTS EMPLOYEE
DOWNSIZING RATE
Organizational Climate
Litwin and Stringer define organizational climate as 'a set of measurable properties of the work
environment, perceived directly or indirectly by people who live and work in this environment and
assumed to influence their motivation and behaviour'. Traditionally, organizational climate alms to
capture a snapshot of an organization at one point in time. Organizational climate research has had
a long and active history, with much of its foundation drawn from psychology. Because of space
constraints and the availability of excellent articles which review the extensive history of the
organizational climate literature, we will only briefly review the organizational climate literature here.
Organizational climate is largely based on Lewinian field theory, which is a result of Lewin's work on
experimentally-created social climates This work was advanced by several early key studies
including Litwin and Stringer and Tagiuri and Litwin. Litwi n and Stringer investigated how
organizational climate affects individual motivation. They also suggested that organizational climate
was comprised of nine dimensions: structure, responsibility, reward, risk, warmth, support,
standards, conflict, and identity. Taguiri and Litwin's book was comprised of a series of essays that
objective set of organizational characteristics. Other early studies were aimed at identifying the
After the 1960s and early 1970s, the focus of the organizational climate field became more clearly
defined. More recently, organizational climate researchers have begun to consider how
organizational climates develop. Three schools of thought have developed: the subjectivist,
objectivist, and interactionalist perspectives. Probably the most troubling issue that the
organizational climate literature continues to face is defining the appropriate dimensions that
comprise organizational climate. Organizational climate is a fairly general term which refers to a
class of dimensions which can be critiqued for being too diverse . In addition, the multidimensional
nature24
of organizational climate makes it more difficult to define sharp borders. Organizational climate
organizational climate from various other const ructs, such as structure and individual satisfaction.
While these and other efforts have been helpful, some fuzziness around the borders and
Research on organizational climate has continued more recently, including Joyce and Slocum's
study of person and organizational fit, Joyce and Slocum's investigation of the extent to which
organization members agree about their organizational climate, Glick's discussion of the difficulties
organizational climate and performance, and Koyes and DeCotis's work on measuring organizational
climate. Even more recently, Denison has investigated the difference between organizational culture
and organizational climate, and Griffin and Mathieu have looked at how perceptions of organizational
climate vary with the hierarchical level in an organization. Anderson and West contributed to the
environment. Generally, these perceptions are descriptively based rather than value based. For
example, the phrase, "I have more work to do than I can possibly finish" is a description of a
person’s workload, while the phrase "I like my job" is a positive evaluation of one’s job. Thus,
organizational climate is more than simply a summary of employee likes and dislikes.
The assessment of organizational climate typically occurs via an off-the-shelf or customized survey
containing questions about he work environment. Although administration procedures used when
conducting a survey can vary, ideally employees are asked to report to a designated work site at a
survey to use. Although not a comprehensive list, the following factors may be helpful in reducing the
Determine the scope of information included in the survey. As might be imagined, there are a large
number of organizational climate areas that exist. Recent research has identified more than 460
different types of work environment characteristics that have been measured. Many of these
characteristics can be classified into the following major areas: job, role, leader, organization and
work group. In many companies there are particular areas where employee feedback would be
useful. For example, a company concerned about the impact of recent managerial downsizing may
Make sure the number of climate areas included is kept to a manageable level. Not only will
including too many areas on the survey increase the time and effort needed to administer the
survey, but it also can make the interpretation process more difficult. On a related issue, many users
of organizational surveys find it useful to add a few customized items to the survey. Although adding
items does not always add to the scientific value of a survey, it can go a long way in generating
For example, some companies may require the ability to administer the assessment using a paper-
and-pencil format, while others may prefer an intranet format. Factors such as employee
demographics can be important, also. Some companies may require both an English and Spanish
Finally, identify some general pieces of information you would like to see in a report once the survey
responses have been analyzed. For example, some companies may have an interest in only
In addition, some companies may want to have results broken down department-by- department or
item-by-item while others may want one set of analyses based on the entire set of employee
responses. In any event, the publisher/director of an organizational survey should assist a company
opportunity to be involved in the company at a different level than is typically defined in their job
descriptions. Research has shown that employees who are more involved in the company also may
be more satisfied with their job, miss fewer days of work, stay with a company longer, and perform
•Positive work outcomes- In the last 30 years, a significant amount of evidence has been accumulated
general, research has shown that factors in the work environment are related to outcomes such as
employee motivation, job satisfaction, intentions to quit, job performance and even organizational
productivity. In addition, an emerging area of research has indicated that organizational climate can
•Communication forum- In many companies it can be very difficult to communicate with the majority of
employees. Recent trends such as organizational restructuring and/or merging of companies has
resulted in "flat" organizational responsibility charts, which increases the number of employees for
which each manager is accountable. As a result, some managers only have limited amounts of time
environment can fall to the wayside, and in some instances, never take place.
27
Organizational surveys that occur on a scheduled basis (e.g., annually, biannually,
etc.) can be a more efficient way for managers to gather important information.
•Industry comparisons- Organizations often look to other companies when determining organizational
policies and procedures. It is quite common for companies to "explore the market" or conduct
benchmark studies when considering issues such as new product development, salary or employee
benefit policies, marketing strategies, etc. A common question is "How do we compare to others?"
compare the company’s work environment to that of other companies. Many surveys offer a national
normative database that can be used to facilitate comparisons across a variety of conditions and
industries.
more proactive in managing their employees and work environments. When used on a scheduled
basis, organizational surveys can help pinpoint problem areas within the work environment before
they grow into a crisis needing immediate attention. Problems that require a reactive posture
interrupt the normal workflow, and typically cause delays in providing products or services to
customers.
28
TIPS FOR CREATING AN EFFECTIVE ORGANIZATIONAL
CLIMATE FOR MINIMUM EMPLOYEE DOWN SIZING
•
Listen to the entire organization with ease.
•
Collect perceptions in real-time.
•
Reduce organizational bias.
•
Validate the questions and thus improve the results.
•
Facilitate candid and open feedback from employees who respond anonymously.
•
Identifying areas of inefficiency or performance gaps.
•
Identify root causes for poor productivity (such as poor communication or poor
process efficiency).
•
Reduce transition time during changes in the organization (such as reorganization,
relocation, a change in ownership, new products/services, or rapid growth).
•
Inform leaders with the information needed to make the best decisions.
•
Give employees an organized voice to assist leaders in taking actions.
•
Gain a fresh perspective of the organization.
•
Facilitate, track and execute informed action steps in one system.
•
Increase productivity.
29
ORGANIZATIONAL VITAL SIGNS-A LEADING
INDICATOR OF SATISFACTION MEASURING OF
EMPLOYEES
Organizational Vital Signs:
•
identifies the readiness for, commitment for, and skills for change;
•
identifies the values, emotional competencies, and behaviors needed for success;
•
organization-wide with specific departmental demographic separation and analysis. Each category
has been designed to assess one of the key categories, which affect employee performance. This
more people to protect the identities of respondents. Every precaution should be taken to insure
confidentiality in order that respondents will feel comfortable sharing their true opinions and
perspectives
The objective of performing an employee climate assessment is to identify the key areas which are
hindering production, reducing effectiveness and which might generate unexpected costs in the near
future. The idea and approach is for the organization not to simply perform an academic exercise,
simply because they ‘do it at this time every year’, but to critically examine themselves to see where
the company and it’s employees might be finely tuned to generate higher levels of performance.
Once identified, opportunities to strengthen existing approaches, which are working well, as well as
select appropriate interventions for addressing the weakest areas, should be aggressively pursued
are cared for, and the right environment is created where there are no barriers to performance, their
well as self-actualization. The extent to which these and other human needs are fulfilled lead to
higher levels of commitment, initiative and performance. Organizations, who include an emphasis on
fulfilling the needs of their employees to some extent, will enjoy a more productive and stable
workforce.
Full Understanding Of The Realities Of Business
This assessment is written with full realization of the realities of business, and not an unrealistic
utopian view of an idealized work environment. The factors emphasized and measured in this
assessment are the important levers to optimizing employee workplace performance, not just
are a way of life, and these factors are given appropriate emphasis in this assessment because they
represent an ever present dynamic with which every employee must deal.
Keys To Motivation And Commitment
Rather than only identifying potential problem areas to be avoided, this assessment focuses on
areas where human behavior can be leveraged more positively to create employees with higher
with optimal efficiency and effectiveness. One of the most critical and vexing concerns of
management and supervisory personnel in any organization understands of motivation and its role in
performance. Motivation is the desire within an individual that stimulates him or her to action. Higher
behavior,
particularly the ways in which people respond to the action of those around them and to other stimuli
in their environment. Today, we no longer have a socially simple world. The powerful forces are
making it more complex all the times. People are products of experiences they have never
relinquished. Personal history will always make its claim even though it operates silently and usually
One of the earliest approaches to motivation was Frederick Taylor Theory that the employer
essentially bought or exchanged the purchasing power of his wage dollars for the worker’s time,
interest, effort and contribution. This was the first widely accepted motivation theory. At that time, it
become clear that monitory rewards, including the plethora of incentive wage and bonus plans, did
not by themselves buy interest, commitment and motivation. In post World War II ear, new
motivation theories evolved by behavioral sciences in response to the changing environment of time.
Especially noteworthy were the conceptual contributions of Douglas Mc Gregor, Abraham Maslow,
“hygiene” in the sense that they are considered maintenance factors that are necessary to avoid
dissatisfaction but that by themselves do not provide satisfaction. Herzberg reasoned that because
the factors causing satisfaction are different from those causing dissatisfaction, the two feelings
To the question “HOW do you motivate employees? “ Hertzberg has but one answer “the only way to
motive the capable employees is to give him challenging work for which he can assume
responsibility” (and thus drive at least partial satisfaction of his higher need). Hertzberg’s concept
organization having tasks and people more appropriate to Mc Gregor’s Theory ‘Y’. In spite of
deliver for a particular return from their employer. On the other side employer has no choice but to
satisfy his employees by identifying and fulfilling his wants, the employer has to use the motivation
theories as these provide a good idea of how and in what way they will get motivated and satisfied.
The above logic applies to every industry whether it is politics, economics, technology or society. For
instance, in a society the same person who is an employee plays a role of a member of the family.
His duties are to control his children so that they do not get into a bad company and they should
concentrate on their studies. Now the same question comes How to motivate them to study? Here
the employee acts as an employer and the children act as his employees.
What Do Workers Want?
"Supervisors generally ranked good wages, job security, promotion and good , working conditions as
the things workers want from their jobs. While workers felt they want most is full appreciation for
work done, felling "in" on things, and sympathetic understandings of personal problems -all
incentives that seem to be related to affiliation and recognition motives. It’s not only good money but
there is lot of other needs, which an employee wants to fulfill for being satisfied and committed
towards the job. These needs vary from one employee to another, workers needs are totally different
Employee engagement goes beyond the employees’ intent to leave. It includes the employees’
creating a workforce that is passionately involved with the company, the organization can create a
sustainable competitive advantage for itself. This article throws light on the issues to be addressed
Talking about the engagement and commitment of an employee to an organization, most companies
are of the opinion that they do have a few, but they still want more. Why? It is merely because these
companies have come to the realization that their organization’s long-term success relies on
employee performance, which is directly impacted by the level of employee engagement and
commitment to an organization. Well, some organizations think that simply making people happy
and paying them handsome pay packets is the solution. But it is not so. These are things which an
organization need to consider to attract and retain the most qualified individuals, however, when it
comes to engaging employees in their work, there are definitely some more issues that need to be
worked out. Engagement requires engaging not only the employees’ minds but their hearts as well
and this is something that the organizations can neither force not buy in order to succeed in the
marketplace.
What is employee engagement?
An engaged employee is a person who is fully involved in and is enthusiastic about, his or her work.
Such employees are attracted to, and inspired, committed and fascinated by their work. In a recent
research by Hewitt Associates, it was found that engaged employees are not only intellectually
committed to the organization but are also emotionally attached to it, as is measured by three
The age old business dictum goes that “satisfied employees create satisfied customers” by
constantly striving for the best, contributing to the bottom line of the company success by their
motivation and enhanced performance. It is believed that an engaged employee always acts
positively in the interest of the company and takes unconcealed pride in the success and prosperity
of his employer. The engaged employees and the organizations go that extra mile for each other,
thereby realizing the benefits that flow through an investment in such a relationship.
36
Does Engagement Really Make a Difference?
According to the former GE Chairman and CEO, Jack Welch, a company’s health is determined
through it’s energized workforce who not only realize the mission of the organization and have an
understanding of how to achieve it, help the organization win in the long run. Engaged employees
care about the future of the company and are willing to study entitled, The War for talent, reported
that a shortage of skilled employees was an emerging trend and it was more so due to the fact that
the organizations fail in their attempts to create a workforce that is not only cognitively vigilant but
Research has proven that wholly engaged employees tend to be more self-motivated, reliable, and
have higher levels of organizational loyalty. They are capable of delivering sustained affecting the
key results areas such as employee turnover, sales, innovation and customer satisfaction, engaged
employees in customer facing roles are more likely to treat customer is ways that positively influence
customer satisfaction and are more than twice as likely to be company advocates. They share
information with colleagues and pass on ideas that speak up for the organization. Engaged
employees are much more likely to feel secure and stable in their position and are in fact the
ambassadors for the company, singing its praises to everyone, and taking the best foot forward to
identifying the root causes of workplace attitudes. They also help in developing an understanding of
the extent to which employees are passionate about their work and emotionally committed to their
There are several standardized tests, toolkits and instruments available which can help determine
the level of employee engagement in an organization. survey of the Gallup Organization Identifies
strong feelings of employee engagement in four key areas – customer satisfaction / loyalty,
profitability, productivity and employee turnover. The questionnaire has been administered to a
multitude of companies across the world. Results from the survey show a strong correlation between
level of their employees. Standard Chartered, for example, introduced annual survey to measure
improvement in the engagement of teams. The results are used to develop action plan and
continually monitor the follow-through of the teams. This focus has seen a continuous rise in both
the number of engaged teams and extent to which the employees are engaged at Standard
Chartered.
Many organization use employee satisfaction survey to identify the root causes of job issues and
create solutions for improvements with due consideration given to the viewpoints of employees.
Certain employee opinion surveys are also in practice that offers accurate identification of employee
behaviors, feelings, and thoughts for improved organizational development. The other ways used to
measure the employee engagement levels is through tracking changes in the attrition rate and
growth in productivity and business. The data collected from these surveys can furnish information
The surveys must also be integrated with the culture survey s and since the culture varies within the
organization, the companies must aim at measuring the engagement at work group level. The
organization also needs to keep in mind that it is not just about the surveys; whatever follows is of
great importance. After evaluating the results from these surveys it is imperative for the management
to work out the problem areas and take an appropriate action. Many a times it so happens that the
good news is communicated expeditiously to all concerned but the key challenges tend to be
The survey findings must aim at behavioral changes required to improve desired outcomes at the
organizational, team and individual levels. While HR plays an instrumental role in the survey
process, the extent to which the change program can be successful is the responsibility of an
organization’s leaders.
39
DIAGNOSTIC TOOL
The diagnostic tool
Current studies suggest that employee engagement will be influenced by:
1. Employee perceptions of job importance. This study has found that “…an employees
attitude toward the job [‘s importance] and the company had the greatest impact on
loyalty and customer service then all other employee factors combined.”
2. Employee clarity of job expectations. “If expectations are not clear and basic
materials
and equipment not provided, negative emotions such as boredom or resentment may result, and the
employee may then become focused on surviving more than thinking about how he can help the
organization succeed.”
40
3. Career advancement/improvement opportunities. “Plant supervisors and managers
indicated that many plant improvements were being made outside the suggestion system, where
employees initiated changes in order to reap the bonuses generated by the subsequent cost
savings.”
4. Regular feedback and dialogue with superiors. “Feedback is the key to giving
employees a sense of where they’re going, but many organizations are remarkably
bad at giving it.”
5. Quality of working relationships with peers, superiors, and subordinates. “…if
employee’s relationship with their managers is fractured, then no amount of perks will persuade the
employees to perform at top levels. Employee engagement is a direct reflection of how employees
the most important of the six drivers in our Engaged Performance model. Inspirational leadership is
which necessitates having a clear understanding of the levers required to improve the key employee
There can be more than one way to improve the level of employee engagement in a company. In
fact, there are many different things that companies not only can do, but also need to do. Most
organization have a range of practices to improve the engagement level of their employees. Best
practice recommends starting right at the selection or recruitment stage by having the right
employees working in the right jobs and having a strong induction and orientation program in place.
Besides giving the employees clarity on the vision and goals of the organization, it is essential for
organizations to put into place regular technical / soft – skill training and development programs and
the
41
certification programs to drive people towards excellent performance as it so happens
at
HCL info systems.
Once the employees become a part of the system, efforts have to be put into place to engage
employees to their highest level. This includes giving emphasis on certain areas which go a long
what is going on within the company outside their immediate team. They also help to create an
environment of trust and openness within the organizations where they are able to talk openly.
Employees who feel they are listened to are able to express dissatisfaction and work together to
The initiative must be taken by the leaders at the top as it happens at the Sum Microsystems where
the CEO interacts with Sun employees through WSUN, a forum on Sun’s intranet. He uses this to
The organizations must work towards implementing the communication forums to provide regular
feedback to all people, including team meetings and conferences. 3M for example encourages
employees to bring forward their questions or concerns through such programs as let’s talk It Over,
Besides using the regular employee opinion and satisfaction surveys, an update on the various
organizational issues can be tracked by the organizations through the usage of in-house magazines
and online communications, including discussion boards by company personnel including the senior
management.
•
Reward Schemes: These form an important part of a company’s overall employee
engagement program. Studies have long shown that while money in itself is not a motivating factor
the absence of financial reward can be a significant demotivator. Thus the role of reward schemes in
boosting. Thus the roles of reward schemes in boosting employee engagement are? To remove
barriers to satisfaction in the organization and provide a framework for rewarding everyone in the
organization for their performance. This may be achieved through right compensation and benefit
42
programs, stock ownership and profit sharing plans and recognition programs. People want to know
if their input matters and that they are contributing to the organization’s success in a meaningful way,
In fact, organizations must have flexible benefit schemes, as Hewitt Associates does, to attract and
retain their talent, which provides employees with the freedom to choose how they receive their
policies and take initiatives to maintain the quality of work life of its employees. Opportunities must
be provided for social interaction such as family gathering barbeques, and trips to the cinema or
picnics. At HCL Info systems, a balance between personal / professional lives of employees is
maintained through recreational activities like festivities @ HCL, get-togethers @HCL, sport@HCL.
The company also encourages an open and transparent culture to empower its people and develop
entrepreneurs.
opportunities for career advancement and be developing a safe, clean and inspiring work
environment for their all-round growth. The employees must be provided with enough resources to
solve their day-to-day problems or to do a job well. Culture – building activities are great for
a thriving organization that people feel committed to and others want to join.
•
Leadership: Effective leaders who help in setting the tone for creating an engaged
workforce can really differentiate an organization from its competitors. Everyone in the organization
with leadership responsibility must have the emotional intelligence and leadership skills needed to
switch and employees on they must act as role models, demonstrate and set high standards to
which others can aspire. Good practices include effective performance management and a fair
evaluation of performance. The leaders must act as coaches and mentors and must give an honest
exercise a degree of discretion during service delivery E.g., allowing employees to spend up to a
certain amount to correct a customer’s problem or handle a complaint. The success of Microsoft, for
example, stems in part from Bill gates’ belief that smart people anywhere in the company should
have the4 power to drive an initiative. Initiatives such as Six Sigma are dependent, in part on the
For great managements, the path towards engaging employees and keeping them engaged beings
with asking them what they want and what is important in order to be effective in their roles. Effective
leaders don’t wait to get the resignation to know that an employee is dissatisfied.
therefore, becomes, imperative for the organizations to identify the level of engagement in their
organization, strive to eliminate the reasons behind the disengaged workforce and implement
strategies to make them fully engaged. Employee engagement is something that is very difficult to
accomplish but if efforts are made on an ongoing basis, it can shrivel with relative ease.
44
RESEARCH OBJECTIVES
The objective of the study is:-
1.To make a conceptual study of Employee Down-Sizing
2. To study as to what cause this Employee Down-Sizing
3. To study the impact of Employee Down-Sizing on the employee’s morale
4.To study as to how Employee Down-Sizing, Employee Retention and employee
commitment are inter related
45
RESEARCH METHODOLOGY
A Research Methodology defines the purpose of the research, how it proceeds, how to measure
progress and what constitute success with respect to the objectives determined for carrying out the
Exploratory research: this kind of research has the primary objective of development of insights into
the problem. It studies the main area where the problem lies and also tries to evaluate some
The research methodology for the present study has been adopted to reflect these realties and help
reach the logical conclusion in an objective and scientific manner. The present study contemplated
an exploratory research
Research Design
The research design is the basic framework, which provides guidelines for the rest of the research
process. The present research can be said to be exploratory. The research design determines the
direction of the study throughout and the procedures to be followed. It determines the data collection
Sample unit:Employees of many BIG companies in Nehru Place (Delhi), these people
were requested to fill in the questionnaires during the lunch intervals at the Nehru Place
premises
SECONDARY DATA:
Secondary data has been used which is collected through
⇒ A r t i c l e s ,
⇒ R e p o r t s ,
⇒ J o u r n a l s ,
⇒ M a g a z i n e s ,
⇒ N e w s p a p e r s a n d
⇒ I n t e r n e t
Sampling Technique
Random sampling technique has been employed to extract the fruitful results. This includes the
overall design, the sampling procedure, the data collection methods, the field methods and the
analysis procedures
Sampling Procedure Actually Employed:
The process employed to select the sample was simple random sampling. Simple random sampling
refers to that sampling technique in which each and every unit of the population has an equal and
same opportunity of being on the sample. In simple random sampling, which item gets selected is
collected from the field. The study has used percentiles method and the data are presented in the
3. Job Training
4. My Boss
5. My Co-Workers
6. My Compensation
10. Relocation
12. Other
55
0%
5%
10%
15%
20%
25%
my performance evaluation
and the outcome
myrole,responsibilityand/or
title
jobtraining
mybos s
myco-workers
my compensation
changein compensation
package
company savingsplan
medical benefits and
insurance
relocation
vacation time
other
myperformance
evaluationandthe
outcome
25%
my role,
responsibility
and/or title
10%
job training
5%
my boss
10%
myco-workers
10%
mycompensation
2%
changein
compensation
package
8%
companysavings
plan
5%
medicalbenefits
and insurance
10%
relocation
5%
vacat
i
ontime
5%
56
6. How Flexible Is The Company With Respect To Your Family Responsibilities?
1. Very Inflexible
2. Somewhat Inflexible
3. Neither
4. Somewhat Flexible
5. Very Flexible
0%
5%
10%
15%
20%
25%
very inflexible
somewhat inflexible
neither
somewhat flexible
very flexible
veryinf lexible
25%
somew hatinf lexible
25%
neither
10%
somew hatf lexible
25%
veryflexible
15%
57
7. Do You Have A Clear Path For Career Advancement?
1. Strongly Disagree
2. Somewhat Disagree
3. Neither Agree or Disagree
4. Somewhat Agree
5. Strongly Agree
0%
5%
10%
15%
20%
25%
30%
strongly disagree
somewhat disagree
neitheragreeor disagree
somewhatagree
strongly agree
stronglydisagree
25%
somew hatdisagree
10%
neitheragreeor
disagree
10%
somew hatagree
25%
stronglyagree
30%
58
8. How Satisfied Are You With Your Position At This Company?
1. Very Satisfied
2. Somewhat Dissatisfied
3. Not Satisfied nor Dissatisfied
4. Somewhat Satisfied
5. Very Satisfied
0%
5%
10%
15%
20%
25%
30%
35%
very satisfied
somewhat dissatisfied
not satisfied nor dissatisfied
somewhat satisfied
very dissatisfied
very satisfied
20%
somew hat
dissatisf ied
30%
notsatisf iednor
dissatisf ied
10%
somew hatsatisf ied
5%
verydissatisf ied
35%
59
9. What Part Of Pay Play In Your Decision To Leave The Organization?
1. 20-40%
2. 40-60%
3. 60-80%
4. 80-100%
0%
5%
10%
15%
20%
25%
30%
60
10. Does Working Conditions Affect You To Leave Your Job?
1. Yes
2. No
0%
10%
20%
30%
40%
50%
60%
70%
yes
no
yes
65%
no
35%
61
11. How Would You Rate The Morale In Your Company?
1. Low
2. Very Low
3. High
4. Very High
0%
5%
10%
15%
20%
25%
30%
35%
low
verylow
high
veryhigh
low
35%
verylow
20%
high
25%
veryhigh
20%
62
12. Could This Company Have Done Anything To Encourage You To Stay?
1. Yes
2. No
0%
10%
20%
30%
40%
50%
60%
yes
no
yes
40%
no
60%
63
CONCLUSION & IMPLICATIONS
The present report indicates that the following features:-
1. Better job opportunities in outer market & pay are the main reasons for increasing
attrition rate.
3. The working environment in the company also make them to leave their job.
4. Performance Appraisals are not given at regular intervals so that the Employee
However an effective retention policy could be followed to make the employees stay in
the company starting form recruitment and selection of employees, providing an effective
pay packages and compensation, outlining an efficient career development path for
employees and most importantly catering to their emotional, mental and family needs.
Also practices should be followed to bring the ex-employees back in the company.
64
RECOMMENDATIONS
65
BIBLIOGRAPHY
1. Charles R. Greer, Strategic Human Resource Management: A General Managerial
Approach, Second Edition, Person Education, 2004
2. Tyson, S., Lawrence, P., Poirson P, Manzolini, L., and Seferi, S.V., Human Resource Management –
5. Brockner, J., Grover, S., Reed, T., & Dewitt, R.L. (1992). Layoffs, job insecurity, and survivors'
work effort: evidence of an inverted-U relationship. The Academy of Management Journal, 35, 413-
425.
6. Brockner, J., Grover, S., Reed, T., Dewitt, R.L., & O'Malley, M. (1987). Survivors' reactions to
layoffs: We get by with a little help for our friends. Administrative Science Quarterly, 32, pp. 526-541.
7. Fisher, A.B. (1988, May 23). The downside of downsizing. Industry Week, pp.
42-51.
66
APPENDIX
QUESTIONNAIRE
NAME:
-
JOB TITLE:
-
ORGANIZATION: -
CELL NO. :
-
AGE GROUP:
-
1. What Is Your Primary Reason For Leaving The Company?
1. Benefits
7. Better Job Opportunity
2. Commute
8. Conflict with Other Employees
3. Conflict with Manager
9. Family Reasons
4. Job Expectation
10 Not Challenging
5. Pay
11 Personal Reasons
6. Reallocation/Move
12. Working Condition
2. How Long Have You Been Thinking About Leaving The Company?
1. One Month Or Less
2. One To 5 Months
3. More Than 5 Months
3. How Satisfied Are You With The Company You Work For?
1. Extremely Dissatisfied
2.Very Dissatisfied
3. Neither Satisfied nor Dissatisfied
4. Very Satisfied
67
5. Extremely Satisfied
4. How Was Your Working Experience?
3. Job Training
4. My Boss
5. My Co-Workers
6. My Compensation
10. Relocation
12. Other
6. How Flexible Is The Company With Respect To Your Family Responsibilities?
1. Very Inflexible
2. Somewhat Inflexible
3. Neither
4. Somewhat Flexible
5. Very Flexible
68
7. Do You Have A Clear Path For Career Advancement?
1. Strongly Disagree
2. Somewhat Disagree
3. Neither Agree or Disagree
4. Somewhat Agree
5. Strongly Agree
8. How Satisfied Are You With Your Position At This Company?
1. Very Satisfied
2. Somewhat Dissatisfied
3. Not Satisfied nor Dissatisfied
4. Somewhat Satisfied
5. Very Satisfied
9. What Part Of Pay Play In Your Decision To Leave The Organization?
1. 20-40%
2. 40-60%
3. 60-80%
4. 80-100%
10. Does Working Conditions Affect You To Leave Your Job?
1. Yes
2. No
11. How Would You Rate The Morale In Your Company?
1. Low
2. Very Low
3. High
4. Very High
69
Practices To Reduce Employee Down-Sizing
Many companies face the challenge of employee turnover, and incur heavy losses. The employers
provide several attractive packages in order to retain the employee. Reasons for employee turnover
Good economic time’s means lowered unemployment, increased productivity, and better prospects for
growth in all sectors. However, economic prosperity also means increased job- hopping among the job
seekers. Opportunities abound everywhere with increasing competition for talent among companies.
Frequent job changes are no longer a stigma, but they are becoming norm. The issue of employee
turnover is so pronounced in today’s world, that even in Japan, where life-time employment and high
employee loyalty are the norms, workers are becoming increasingly mobile. Even survival will become
questionable, if the company witnesses higher turnover among the top performer. With the increasing
mobility among the workers, “employee retention” poses a distinct challenge to any company.
Companies that are inflexible, or whose organizational culture is characterized by domination and
autocracy are likely to have dissatisfied employees no matter how good the incentives to stay may be Or,
at the very least, the tenure of their employees is likely to be highly sensitive to changes in specific
(usually monetary) incentives: small changes in compensation may lead to numerous departures. There
are however other aspects of the work environment or particular jobs that can act as strong ‘de-
motivators’ that can cause people to leave their employment. These include
Lack of control over one’s work
•
While remuneration and other types of benefits continue to be an important factor in the retention
equation, it is important to note that the current HR literature treats them as only one potential area for
retention, and not always in and of themselves, sufficient to ensure strong employee commitment. Over
the past 10 or 15 years, the business literature dealing with employee participation, workplace wellness,
Setting aside list of retention policies and programs, it is clear that there is broad agreement in the HR
literature about the general features of any potential HR program that contributes to good retention. Most
of these are directly related to creating a satisfactory work environment for employees and thus, in turn, to
A stimulating work environment that makes effective use of people’s skills and knowledge, allows
them a degree of autonomy on the job, provides an avenue for them to contribute ideas, and allows them
participation in decisions that affect them, an understanding of what is happening in the organization and
Recognition on the part of the employer that employees need to strike a good
balance between their lives at work and outside of work.
Respect and support from peers and supervisors.
71
1. What are the reasons for employee downsizing?
Obsolescence of skills
Outsourcing;
Modernizing,
changes which leave survivors unclear of what is expected of them, or how they will
acquire the new skills they may need
•
Managers who are unwilling to provide adequate time and support to individuals.
9. What helps to build the morale of the employees during downsizing?
Effective communication
Psychological support
Counseling
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activities, etc. As a sequel to these developments, employees can be redeployed, transferred,
rendered redundant, or let go within a very short span, without adequate preparation for these
changes. Such changes take their toll in terms of organizational productivity, nature of employer-
employee relationships and the associated social costs. People who contribute to the organizational
goals are the organization's assets. These assets are turned into liabilities due to reasons mentioned
earlier. The challenge is to what is morale manage employee exit without disrupting the
organization's functioning. Those individuals who lose jobs are the hardest hit. For the affected
employee, the emotional trauma of losing a job is very difficult to cope with. Aside from the financial
implications of a job loss, they have to reconcile with the loss of self-esteem, self-confidence, and a
breach of trust between the employer and the employee. Along with the individual, his/her family
also gets deeply affected with the involuntary job loss of a family member. The pain is not limited to
the individual alone but affects a number of others. The effect is also felt by other employees who
remain in the organization as they suffer from the guilt and are also faced with the fear of job
insecurity.
The fundamental reason to resize the organization is to improve organizational performance and to
reduce costs of operation. While these changes are expected to fetch significant gains for the
companies in the long run, an analysis of corporate experiences of downsizing shows that such
measures are not always implemented with careful consideration of all the implications. Downsizing
also brings, in its wake, a number of associated hidden costs, which companies tend to overlook in
pursuit of short-term gains. The flip side of downsizing is that the organizations lose expertise, skills,
knowledge, experience and valuable relationships, which walk out of the door every time somebody
leaves. A number of alternative approaches can be implemented to achieve the over- riding goal of
enhancing business performance. At the same time, it is true that downsizing in many cases is an
inevitable option. However, downsizing should be considered not as the first but the last option. If the
axe has to fall, it should be preceded by a careful consideration of the consequences of such a
drastic action.
4
Need to reduce
Costs
Alternatives
To Layoffs
Voluntary
Quits
Involuntary
Separations
Early
Retirements
Voluntary
Workforce
Reductions
Layoffs
Outplacement
5
What is Morale
Morale, also known as esprit de corps, is an intangible term used for the capacity of
people to maintain belief in an institution or a goal, or even in oneself and others.
According to Alexander H. Leighton, "morale is the capacity of a group of people to pull
together persistently and consistently in pursuit of a common purpose".
Morale in the workplace
Workplace events play a large part in changing employee morale, such as heavy layoffs,
the cancellation of overtime, cancelling benefits programs, and the lack of union
representation. Other events can also influence workplace morale, such as sick building
Job security.
•
Management style.
•
The perceived social or economic value of the work being done by the
organization as a whole.
•
The perceived status of the work being done by the organization as a whole.
•
Team composition.
•
associated costs are a burden that used to be just the cost of doing business. But more and more
companies are investing time and effort in making better hiring decisions and doing more to keep the
employees they do hire. Employee retention is now a buzz word in today’s business world.
Over two-thirds (70%) of HR managers state that employee retention is a primary business concern.
changes, such as the retiring Baby Boomer population have the potential to aggravate this issue. All
companies, regardless of size, are struggling with how to keep employees from leaving for more
money or better opportunities. Studies consistently show that even though employees may say they
are leaving for more money, when those same employees are asked several months later why they
really left, the money factor is about 5th or 6th on the list. The first few reasons include lack of
recognition, disagreement with the culture or direction of the company, poor treatment by their boss,
lack of excitement about their growth prospects, and poor relationships with co-workers. ?
How much? When you add the costs of finding an employee, training the new employee, lost
productivity and filling in for the employee who leaves, the cost can easily equal 150% of the base
salary of the person who left. So, if you are paying someone $50,000, the cost to replace that person
will be approximately $75,000. This money comes out of your hard-earned profits.
This is one of the key reasons that companies are focusing so much effort on keeping their current
employees. Some of the steps taken by companies to retain their work force are:
•
Ensure you offer basic health care benefits at reasonable rates. Consider adding
lifestyle benefits that are cost effective (read easy on the cash flow).
7
•
Find out what employees want from their career and do what you can to provide
for their needs.
•
Be as flexible as possible as to when and where the work gets done. Can it be OK for an
employee to take a few hours off to attend to a family or personal matter if they can accomplish the
Take a real and genuine interest in people’s career aspirations and personal lives.
•
news, major customer or sales activities on a regular basis. Follow up on your commitments to
Have regular (bi-weekly or monthly) meetings with all employees where they can ask you
questions about your plans, company progress, new developments to look for, etc. Be accessible to
them so you can learn their needs. If you can respond to their needs before they become real
Ask former employees why they resigned. Even if they left six months ago, they
still have a valid perspective.
•
Routinely ask employees what you can do to make the company a better place to work. Set
boundaries if necessary as to what items are not negotiable; such as ownership in the company or
According to Theo Blackwell of The Work Foundation, in 1980s and 1990s many companies
resorted to downsizing their human resources in order to cope with economic pressures. But what
most of these companies do not realize is that downsizing does not always lead to savings in reality
or increase in the market worth of the company. On the contrary, the downsizing companies may be
branded anti-people. It usually leads to repetitive downsizing and results in the loss of employee
morale and loyalty and thereby affects overall productivity levels. However, they can adopt
alternative approaches to cope with economic uncertainties. Wayne Cascio had proposed a new
strategy termed as "reflective restructuring", which enables companies to offer a range of smarter
options to employees. The article explains the significance of this new concept and provides
examples of companies in the US and UK which have adopted the strategy. It also explains that
while companies in the US are at a greater liberty to downsize, the UK business environment is not
and in the aftermath of the economic liberalization (post-1991). Against this backdrop, the author
analyses the performance of the Indian Public Sector Undertakings (PSUs). He outlines the causes
that resulted in surplus manpower among PSUs. However, after India opened up its economy, most
PSUs were compelled to streamline their operations to increase their efficiency. One of the major
steps taken to achieve this goal was to shed the excess staff on their payrolls through the "golden
handshake," by floating Voluntary Retirement Schemes (VRS) and Compulsory Retirement Scheme
(CRS). The other major step was to outsource non-core activities and focus on their core
competencies. The
9
article provides a snapshot of the Indian experience of downsizing and also discusses
the
social implications of these drastic measures.
Barbara L Davison
explains, in "The Difference Between Rightsizing and
Wrongsizing",the differences among the terms used in conjunction with downsizing,
i.e., rightsizing, resizing, upsizing, sidesizing, and wrongsizing. The author clarifies that rightsizing
need not imply reduction of personnel. In certain cases, it can also mean increase in the numbers.
The article explains the need for tying rightsizing efforts with the overall strategy, identifying critical
growth areas as well as those needing consolidation, analyzing the effects of rightsizing on all
functional areas, evaluating the financial implications, and ensuring that each department and
employee adds measurable value. The author illustrates how to carry out a rightsizing exercise with
the help of a process example, which describes the most important steps. In this connection, it cites
the examples of a few companies, such as Ernst & Young, Cisco, Agilent Technologies, and
Schwab, which have implemented rightsizing. The article also illustrates a few alternatives to
downsizing and highlights new workforce concepts, i.e., "Just-in-time" workforce and the "Portfolio"
Rick Maurer of Maurer & Associates emphasizes the need for organizations to act swiftly to cope
with changing business conditions and on their requirement of human resources. Business leaders
need to continuously assess the mix of skills required as well as the number of employees required
for the present and the future. In addition, they should engage in a process of benchmarking with
companies in the same industry. The article explains that downsizing may prove to be a risky
strategy that may not always bring about much improvement in terms of the productivity or revenues
to the organizations. Hence, to cope with changing requirements of staff, companies should consider
Employment Opportunity (EEO) guidelines, legal counsel, etc. The article also suggests the use of
objective data to formulate the downsizing plan. In conclusion, it points to a few indicators to assess
Carlton Becker of ORC enumerates a number of lessons from the collective experience of layoffs by
companies across the globe. These lessons largely pertain to the need to remain lean and mean in a
fast-changing global business environment, rightsizing the right way, considering scientific
alternatives to downsizing, paying attention to the after- effects of downsizing, and being aware of
the legal implications of downsizing. The author points out those mass layoffs should be viewed as a
change process to be implemented by adopting a systems approach. It explains the strategic role of
HR executives during the whole process, especially during the initial stages of rightsizing. It further
explains the step-by-step guidelines that HR executives can adopt in the downsizing process. The
article shares the experiences of a few companies such as MacMillan Bloedel, Canada,
Ann E Feyerherm of Graziado School of Business and Management, Pepperdine University, CA,
USA, also provides guidelines based on the first-hand experience of a manager involved in a
downsizing effort in a company in South California. Although, her team of management consultants
explored several alternatives to avoid downsizing, they had to face the inevitable reality of the
downsizing spectre. Since the axe had to fall, the best approach adopted was to downsize with
dignity and to ensure that those who were let to go were equipped with new skills to enhance their
career prospects. Also, the author describes specific measures undertaken to achieve these twin
goals and enumerates the lessons learnt through these difficult times. She concludes that during
these difficult times, she had no other principle to live by other than the one she had within.
Many organizations are beginning to realize the adverse effects of employee downsizing and are
employee morale. Such organizations give due attention to each of the three phases of downsizing,
i.e., planning, its implementation, and managing the results. The author adds a few essential aspects
participative downsizing, managing the rumor mill, providing continual and frequent communication,
and paying special attention to the results. The article concludes by saying that those organizations,
which have been active in managing the human side of downsizing would find that they have laid the
Seymour Siegel focuses on the need for organizations to take care of two things in order to gain
competitive advantage in the 21st century. The first pertains to the management of knowledge
workers and the second to the appropriate management of knowledge itself. In an era of downsizing,
organizations need to pay special attention to the fact that with downsizing, organizations also stand
to lose on the vital and tacit knowledge inherent in the outgoing employees. Managers are always
confronted with the challenge of capturing and codifying explicit and tacit knowledge and then
converting it into innovative products and services. The article describes a number of organizational
practices, which, if managed on an ongoing basis, can offset the loss that can occur as a result of
the aftermath of downsizing - Pink Slip Parties. It describes how Pink Slip Parties came into practice
and the reason for using the term `Pink Slip'. The article elucidates the special features of these
parties with respect to attendees, the kind of music played during these parties, the colour of
wristbands or badges, message boards, and activities. Pink Slip Parties offer a number of benefits to
both job seekers, who had lost jobs on account of downsizing, as well as the recruiters. The
effectiveness of these parties are analysed vis-à-vis the nature of support gained by laid-off workers
in restarting their careers. The article also points to new developments in this area, such as Layoff
Lounges.
12
Mika Kivimäki, Jussi Vahtera, Jaana Pentti, and Jane E Ferrie reports the results of a study
conducted to investigate the effect of the psychosocial work environment on employee health. This
study was conducted among 1,110 municipal staff in Raisio, Finland, between 1990 and 1995. It
encompasses the period prior to downsizing, during downsizing, and when downsizing had slowed
down. The downsizing exercise was a reactive one, conducted through retirement and hiring
freezes, and letting go the temporary employees. Some of the significant findings of the study are:
downsizing results in changes in work, social relationships, and health-related behaviours that lead
to increase in certificated sickness due to increases in physical demands, job insecurity, and
reduction in job control; sickness absence increases twofold in a major downsizing as compared with
sickness absence during a minor downsizing; downsizing was associated with negative changes in
work, impaired support from spouse, increased prevalence of smoking, and sickness absence. It has
been found that this study was unique in the area of employee downsizing and employee health as it
Jonathan Kelley explains that the significance of downsizing depends on its long-term impact on
workers. It presents a model to study the probability of re-employment among workers shed by
downsizing firms as compared with those departing from stable or growing firms. This model can
also be used to examine the impact of downsizing on the duration of jobless spells, continuity or
change in occupation, on earnings, and on job satisfaction among workers who obtain employment.
The model combines three factors: re-employment by age, gender, and education. Some of the
significant findings of the study are: downsizing is not a disaster for most of the workers; 75% of the
downsized employees find jobs, and most of them do so quickly; workless spells between jobs are
short or non-existent; and the most serious grounds for concern relate to groups of vulnerable
Carl Van Horn, William M Rodgers III, Neil Ridley, and Laurie M Harrington of Rutgers, offers
glimpses of the consequences of involuntary job loss for workers and their employers. It describes
the evident patterns of worker dislocation: it affects both blue-collar and white-collar employees,
workers of all races, ages, education levels, occupations and industries; and it happens at very short
individuals and their families, the most significant being emotional distress and financial hardship. It
delineates the differences in approaches by small and large firms. Large firms offer more assistance
and better severance pay as compared with smaller firms. It also provides guidelines for employers,
employees and policymakers to deal with the consequences of job dislocation. The experience of
downsizing employees during the last few years points to the need for employees to be prepared for
a job loss at any point of time in their career. This report also includes examples of effective
downsizing. However, this everyday event in the business world is a unique (hopefully) event for you
and your employees. It is important to remember that this event affects not only the "downsized," but
many other factors, many employers and employees no longer believe in the concept of lifetime
employment. As a result, employers often underestimate the need to provide support to employees,
both those who are being released and the 'survivors.' Many employers feel that the only support
The decision to downsize is made for strategic and financial reasons. The expectation is that the
expense reduction will lead to a positive impact on the bottom line and will ultimately be reflected in
improved profitability and productivity. However, many organizations neglect to factor in the
improperly, the problems it was designed to correct may be intensified due to the impact on the
to work on employee attitudes was examined by Brockner and his colleagues in 1992. In this study,
Brockner decided to use work effort as a measure of job attitudes. The study found that high job
insecurity coupled with high need to work, resulted in increased work effort following a layoff. High
job insecurity, coupled with low need to work resulted in no change in the level of work effort. This
seems to indicate that when there are high levels of job insecurity, as would be expected during
downsizing, employees with a high need to work will increase their work effort, while those with a low
observed relationship. Specifically, Brockner found that the remaining employees' perception of the
fairness of the lay-off process and their attachment to the lay-off victims colored their views. This
issue of fairness has been found to be related to a number of other work-related variables and has
outcomes as well as to the end result in determining "fairness." For example, as Brockner's study
reported, the remaining employees considered the way in which their co-workers were treated during
the downsizing process as well as the outcome (i.e., losing their jobs). From this perspective, layoff
survivors can be expected to exhibit the most negative reactions when they identify with the layoff
victims, and feel the victims have not been well compensated.
"When survivors perceived that those laid off had been dismissed with little or no compensation, they
reacted more negatively (from an organizational perspective) to the extent that they felt some prior
sense of psychological kinship with the laid-off parties." (Brockner et al., 1987).
What Brockner's study would indicate is that employees are affected by more than just the fact of
layoffs. They are affected by how the layoffs are managed and by what is done for the individuals in
those positions. Brockner found that negative attitudinal changes were reflected in survivors'
reduced work performance and lowered commitment to the organization. Conversely, the study
showed that employee commitment can actually increase during a layoff process when the company
The post-layoff setting provides organizations with a rather unique...situation in which to express
their commitment to employees; that is, if organizations show commitment to their dismissed
workers (through caretaking activities of providing severance pay and outplacement counseling,)—
Brockner's study indicates organizations can proactively affect surviving employees' attitudes during
periods of downsizing. The next section describes some steps that can be taken to minimize the
eight factors affecting employee loyalty. They are, in descending order: equity, security, good
(McKenna, 1991).
Downsizing is a stressful time for employees, and is a time in which they will question each of the
eight factors mentioned in the above quote by McKenna. By communicating with employees, making
them feel part of the organization, and working to restore loyalty, it is possible to avoid some of the
compounded by the complexity of the layoff process. For example, the rumor mill that develops, or
intensifies, during the preliminary planning stages results in employees spending significant amounts
of time gossiping and worrying about what may happen. Unfortunately, many managers in the
position of being "in the know" are guided by a policy in which they are to avoid talking about rumors
with employees. While this policy may seem appropriate, the associated costs, in terms of lost
productivity and employee loyalty, may be significant. Communication will help to curb the worry and
"If you don't know something, or you do know but SEC rules or other legal constraints have
momentarily sealed your lips, come out and say that. Silence is the worst policy" (Fisher, 1988).
The most preferred method of communication is personal appearances from upper
management; however, any communication at all will be helpful.
17
Ensure that communications cover the following topics:
Talk about the fact that changes are coming; employees already know, but it will increase
explain the need for growth and profitability (which can be perceived as legitimate
reasons when presented in an appropriate manner);
•
if possible, explain future plans including detailed plans for restructuring, upgraded
technology, or some processes to increase efficiency;
•
communicate, whenever possible, that though employee downsizing is necessary, each employee
who is let go will receive appropriate severance pay and (if you intend to offer it) job placement
assistance;
•
emphasize that laid-off employees will be treated with respect and dignity; this is important for
Most importantly, listen carefully to employee concerns and adequately address each concern to
whatever degree possible. This must be done with sincerity and no sense of condescension, such as
In addition, justification for the layoffs is extremely important, especially if times are good and the
downsizing is a part of strategic growth and profitability. Employees need to understand that you
outside the company. When these employees see some top managers leave voluntarily, they may
question the long-term prospects for the company and consider an immediate job change. This is
something to watch out for, as the people who leave under these circumstances are generally those
for an article in Fortune: "If you let people get the idea that the company is not just cutting back but is
sinking into mediocrity, morale really goes to hell" (Fisher, 1988). This quotation highlights the
importance of managing perceptions with "positive press" and communication from upper
management. Discuss the downsizing as a step towards a more efficient and profitable business
trust. Do not allow management to assume remaining employees are merely grateful to still have
jobs. Employees need to feel they are valued, that they have a place in the company, and that
management believes that they are an important part of the success of the organization. To
emphasize this point, talk about where the company is headed, and describe any plans for growth
and prosperity.
19
Employee Morale During Downsizing
Why Morale Matters
Of course employees will feel unsettled during downsizing. However, just accepting loss of morale
as an inevitable consequence may undermine the very productivity gains intended by the change.
So employers should seek to minimize the unwanted impact of downsizing. They also need to
recognize the extent to which the manner of managing such change affects how employees feel
about the change and their future relationship with the company.
Downsizing can threaten employees’ sense of well being in several ways. They may see the
company as having behaved unjustly or unfairly. They obviously feel less secure. They may also
lose the belief that their contribution to the business will be rewarded in future. These responses
may easily threaten business performance. Survivors of downsizing can become unduly risk averse
and narrowly focused, and therefore less creative and open to change.
But ‘morale’ is not a simple concept. It consists of many facets and may be manifest in
many outcomes. These outcomes include:
•
whether they are able to adopt new working practices and learn new skills
•
changes which leave survivors unclear of what is expected of them, or how they will
acquire the new skills they may need
•
Managers who are unwilling or unable to provide adequate time and support to
individuals.
Anticipating impact also means understanding that individuals in different job groups or career
stages may respond differently to downsizing. Although it is often difficult to address interventions to
particular workforce groups, they can sometimes be tailored with varying needs in mind.
Interventions To Build Morale
It is difficult to target interventions with any precision to influence morale. However, the participating
organizations identified several broad kinds of action which they saw as particularly relevant.
Communicating with employees during downsizing is vital. Conveying the reasons for such a painful
change is central. Employees need to understand the business reason for reducing headcount, and
how the change will be managed. Breaks in communication are seen as sinister, and lead to rumors.
Attempts to deny the reality of the painful aspects of the change are seen as insensitive. So
communication has to be honest in dealing with the negative feelings of employees. It is important to
Giving direct support to the ‘survivors’ as well as the ‘victims’ of downsizing leads to other types of
intervention. They may address such areas as Stress Management and Careers Counselling.
21
Organization Development initiatives may be used to try and improve the effectiveness of the
emergent organization. They may include work to rebuild relationships between and within groups
and departments, often through team building activities. Enhanced access to training and work
Performance Management often needs attention to ensure that staff feels that the new demands are
realistic in terms of the reduced staff resource. They also need to be clear what is expected of them
in the new organization. Reward strategies may also need realigning, but there is a lack of clarity at
present about the link between alternative reward strategies and morale.
The employee’s relationship with their line manager may have a significant effect on how well they
cope with downsizing. For line managers to support staff effectively at a time of difficult change, they
in turn have to feel as though they know how to handle queries and problems. It can help for
managers to share their concerns with their peers and discuss how to deal with staff issues. Some
companies use regular forums for managers to do this throughout the change period, and avoid
natural tendency not to want to ask people how they are feeling when you expect negative
responses. Also we know relatively little about cause and effect in the area of morale. Ownership of
the issue may be difficult to establish — senior management itself often being in a state of flux
Many managers believe — or like to believe — that the general level of staff morale is outside their
control. There are indeed many limitations to controlling morale including the variation in individual
response, the impact on individuals of what they see happening to other employees, and the
variation in response over time. Separating the impact of different interventions can be difficult, and
downsizing is seldom the only organizational change going on. In spite of the difficulties of
evaluating the impact of specific responses on morale, organizations are using a range of measures
to monitor some of the outcomes of morale. For example, staff turnover, absence from work and
of employee attitude surveys. These can be used both to identify variations in response within the
workforce, and track changing perceptions over time. Managers need to understand how employees
are feeling in their part of the organization as well as in aggregate. Upward feedback is another way
of collecting information on employee morale and response to initiatives. It can also be used as a
starting point for improving relationships within teams in the wake of downsizing.
23
ORGANIZATIONAL CLIMATE ALSO AFFECTS EMPLOYEE
RETENTION RATE AND POSITIVELY AFFECTS EMPLOYEE
DOWNSIZING RATE
Organizational Climate
Litwin and Stringer define organizational climate as 'a set of measurable properties of the work
environment, perceived directly or indirectly by people who live and work in this environment and
assumed to influence their motivation and behaviour'. Traditionally, organizational climate alms to
capture a snapshot of an organization at one point in time. Organizational climate research has had
a long and active history, with much of its foundation drawn from psychology. Because of space
constraints and the availability of excellent articles which review the extensive history of the
organizational climate literature, we will only briefly review the organizational climate literature here.
Organizational climate is largely based on Lewinian field theory, which is a result of Lewin's work on
experimentally-created social climates This work was advanced by several early key studies
including Litwin and Stringer and Tagiuri and Litwin. Litwi n and Stringer investigated how
organizational climate affects individual motivation. They also suggested that organizational climate
was comprised of nine dimensions: structure, responsibility, reward, risk, warmth, support,
standards, conflict, and identity. Taguiri and Litwin's book was comprised of a series of essays that
objective set of organizational characteristics. Other early studies were aimed at identifying the
After the 1960s and early 1970s, the focus of the organizational climate field became more clearly
defined. More recently, organizational climate researchers have begun to consider how
organizational climates develop. Three schools of thought have developed: the subjectivist,
objectivist, and interactionalist perspectives. Probably the most troubling issue that the
organizational climate literature continues to face is defining the appropriate dimensions that
comprise organizational climate. Organizational climate is a fairly general term which refers to a
class of dimensions which can be critiqued for being too diverse . In addition, the multidimensional
nature24
of organizational climate makes it more difficult to define sharp borders. Organizational climate
organizational climate from various other const ructs, such as structure and individual satisfaction.
While these and other efforts have been helpful, some fuzziness around the borders and
Research on organizational climate has continued more recently, including Joyce and Slocum's
study of person and organizational fit, Joyce and Slocum's investigation of the extent to which
organization members agree about their organizational climate, Glick's discussion of the difficulties
organizational climate and performance, and Koyes and DeCotis's work on measuring organizational
climate. Even more recently, Denison has investigated the difference between organizational culture
and organizational climate, and Griffin and Mathieu have looked at how perceptions of organizational
climate vary with the hierarchical level in an organization. Anderson and West contributed to the
environment. Generally, these perceptions are descriptively based rather than value based. For
example, the phrase, "I have more work to do than I can possibly finish" is a description of a
person’s workload, while the phrase "I like my job" is a positive evaluation of one’s job. Thus,
organizational climate is more than simply a summary of employee likes and dislikes.
The assessment of organizational climate typically occurs via an off-the-shelf or customized survey
containing questions about he work environment. Although administration procedures used when
conducting a survey can vary, ideally employees are asked to report to a designated work site at a
survey to use. Although not a comprehensive list, the following factors may be helpful in reducing the
Determine the scope of information included in the survey. As might be imagined, there are a large
number of organizational climate areas that exist. Recent research has identified more than 460
different types of work environment characteristics that have been measured. Many of these
characteristics can be classified into the following major areas: job, role, leader, organization and
work group. In many companies there are particular areas where employee feedback would be
useful. For example, a company concerned about the impact of recent managerial downsizing may
Make sure the number of climate areas included is kept to a manageable level. Not only will
including too many areas on the survey increase the time and effort needed to administer the
survey, but it also can make the interpretation process more difficult. On a related issue, many users
of organizational surveys find it useful to add a few customized items to the survey. Although adding
items does not always add to the scientific value of a survey, it can go a long way in generating
For example, some companies may require the ability to administer the assessment using a paper-
and-pencil format, while others may prefer an intranet format. Factors such as employee
demographics can be important, also. Some companies may require both an English and Spanish
Finally, identify some general pieces of information you would like to see in a report once the survey
responses have been analyzed. For example, some companies may have an interest in only
In addition, some companies may want to have results broken down department-by- department or
item-by-item while others may want one set of analyses based on the entire set of employee
responses. In any event, the publisher/director of an organizational survey should assist a company
opportunity to be involved in the company at a different level than is typically defined in their job
descriptions. Research has shown that employees who are more involved in the company also may
be more satisfied with their job, miss fewer days of work, stay with a company longer, and perform
•Positive work outcomes- In the last 30 years, a significant amount of evidence has been accumulated
general, research has shown that factors in the work environment are related to outcomes such as
employee motivation, job satisfaction, intentions to quit, job performance and even organizational
productivity. In addition, an emerging area of research has indicated that organizational climate can
•Communication forum- In many companies it can be very difficult to communicate with the majority of
employees. Recent trends such as organizational restructuring and/or merging of companies has
resulted in "flat" organizational responsibility charts, which increases the number of employees for
which each manager is accountable. As a result, some managers only have limited amounts of time
environment can fall to the wayside, and in some instances, never take place.
27
Organizational surveys that occur on a scheduled basis (e.g., annually, biannually,
etc.) can be a more efficient way for managers to gather important information.
•Industry comparisons- Organizations often look to other companies when determining organizational
policies and procedures. It is quite common for companies to "explore the market" or conduct
benchmark studies when considering issues such as new product development, salary or employee
benefit policies, marketing strategies, etc. A common question is "How do we compare to others?"
compare the company’s work environment to that of other companies. Many surveys offer a national
normative database that can be used to facilitate comparisons across a variety of conditions and
industries.
more proactive in managing their employees and work environments. When used on a scheduled
basis, organizational surveys can help pinpoint problem areas within the work environment before
they grow into a crisis needing immediate attention. Problems that require a reactive posture
interrupt the normal workflow, and typically cause delays in providing products or services to
customers.
28
TIPS FOR CREATING AN EFFECTIVE ORGANIZATIONAL
CLIMATE FOR MINIMUM EMPLOYEE DOWN SIZING
•
Listen to the entire organization with ease.
•
Collect perceptions in real-time.
•
Reduce organizational bias.
•
Validate the questions and thus improve the results.
•
Facilitate candid and open feedback from employees who respond anonymously.
•
Identifying areas of inefficiency or performance gaps.
•
Identify root causes for poor productivity (such as poor communication or poor
process efficiency).
•
Reduce transition time during changes in the organization (such as reorganization,
relocation, a change in ownership, new products/services, or rapid growth).
•
Inform leaders with the information needed to make the best decisions.
•
Give employees an organized voice to assist leaders in taking actions.
•
Gain a fresh perspective of the organization.
•
Facilitate, track and execute informed action steps in one system.
•
Increase productivity.
29
ORGANIZATIONAL VITAL SIGNS-A LEADING
INDICATOR OF SATISFACTION MEASURING OF
EMPLOYEES
Organizational Vital Signs:
•
identifies the readiness for, commitment for, and skills for change;
•
identifies the values, emotional competencies, and behaviors needed for success;
•
organization-wide with specific departmental demographic separation and analysis. Each category
has been designed to assess one of the key categories, which affect employee performance. This
more people to protect the identities of respondents. Every precaution should be taken to insure
confidentiality in order that respondents will feel comfortable sharing their true opinions and
perspectives
The objective of performing an employee climate assessment is to identify the key areas which are
hindering production, reducing effectiveness and which might generate unexpected costs in the near
future. The idea and approach is for the organization not to simply perform an academic exercise,
simply because they ‘do it at this time every year’, but to critically examine themselves to see where
the company and it’s employees might be finely tuned to generate higher levels of performance.
Once identified, opportunities to strengthen existing approaches, which are working well, as well as
select appropriate interventions for addressing the weakest areas, should be aggressively pursued
are cared for, and the right environment is created where there are no barriers to performance, their
well as self-actualization. The extent to which these and other human needs are fulfilled lead to
higher levels of commitment, initiative and performance. Organizations, who include an emphasis on
fulfilling the needs of their employees to some extent, will enjoy a more productive and stable
workforce.
Full Understanding Of The Realities Of Business
This assessment is written with full realization of the realities of business, and not an unrealistic
utopian view of an idealized work environment. The factors emphasized and measured in this
assessment are the important levers to optimizing employee workplace performance, not just
are a way of life, and these factors are given appropriate emphasis in this assessment because they
represent an ever present dynamic with which every employee must deal.
Keys To Motivation And Commitment
Rather than only identifying potential problem areas to be avoided, this assessment focuses on
areas where human behavior can be leveraged more positively to create employees with higher
with optimal efficiency and effectiveness. One of the most critical and vexing concerns of
management and supervisory personnel in any organization understands of motivation and its role in
performance. Motivation is the desire within an individual that stimulates him or her to action. Higher
behavior,
particularly the ways in which people respond to the action of those around them and to other stimuli
in their environment. Today, we no longer have a socially simple world. The powerful forces are
making it more complex all the times. People are products of experiences they have never
relinquished. Personal history will always make its claim even though it operates silently and usually
One of the earliest approaches to motivation was Frederick Taylor Theory that the employer
essentially bought or exchanged the purchasing power of his wage dollars for the worker’s time,
interest, effort and contribution. This was the first widely accepted motivation theory. At that time, it
become clear that monitory rewards, including the plethora of incentive wage and bonus plans, did
not by themselves buy interest, commitment and motivation. In post World War II ear, new
motivation theories evolved by behavioral sciences in response to the changing environment of time.
Especially noteworthy were the conceptual contributions of Douglas Mc Gregor, Abraham Maslow,
“hygiene” in the sense that they are considered maintenance factors that are necessary to avoid
dissatisfaction but that by themselves do not provide satisfaction. Herzberg reasoned that because
the factors causing satisfaction are different from those causing dissatisfaction, the two feelings
To the question “HOW do you motivate employees? “ Hertzberg has but one answer “the only way to
motive the capable employees is to give him challenging work for which he can assume
responsibility” (and thus drive at least partial satisfaction of his higher need). Hertzberg’s concept
organization having tasks and people more appropriate to Mc Gregor’s Theory ‘Y’. In spite of
deliver for a particular return from their employer. On the other side employer has no choice but to
satisfy his employees by identifying and fulfilling his wants, the employer has to use the motivation
theories as these provide a good idea of how and in what way they will get motivated and satisfied.
The above logic applies to every industry whether it is politics, economics, technology or society. For
instance, in a society the same person who is an employee plays a role of a member of the family.
His duties are to control his children so that they do not get into a bad company and they should
concentrate on their studies. Now the same question comes How to motivate them to study? Here
the employee acts as an employer and the children act as his employees.
What Do Workers Want?
"Supervisors generally ranked good wages, job security, promotion and good , working conditions as
the things workers want from their jobs. While workers felt they want most is full appreciation for
work done, felling "in" on things, and sympathetic understandings of personal problems -all
incentives that seem to be related to affiliation and recognition motives. It’s not only good money but
there is lot of other needs, which an employee wants to fulfill for being satisfied and committed
towards the job. These needs vary from one employee to another, workers needs are totally different
Employee engagement goes beyond the employees’ intent to leave. It includes the employees’
creating a workforce that is passionately involved with the company, the organization can create a
sustainable competitive advantage for itself. This article throws light on the issues to be addressed
Talking about the engagement and commitment of an employee to an organization, most companies
are of the opinion that they do have a few, but they still want more. Why? It is merely because these
companies have come to the realization that their organization’s long-term success relies on
employee performance, which is directly impacted by the level of employee engagement and
commitment to an organization. Well, some organizations think that simply making people happy
and paying them handsome pay packets is the solution. But it is not so. These are things which an
organization need to consider to attract and retain the most qualified individuals, however, when it
comes to engaging employees in their work, there are definitely some more issues that need to be
worked out. Engagement requires engaging not only the employees’ minds but their hearts as well
and this is something that the organizations can neither force not buy in order to succeed in the
marketplace.
What is employee engagement?
An engaged employee is a person who is fully involved in and is enthusiastic about, his or her work.
Such employees are attracted to, and inspired, committed and fascinated by their work. In a recent
research by Hewitt Associates, it was found that engaged employees are not only intellectually
committed to the organization but are also emotionally attached to it, as is measured by three
The age old business dictum goes that “satisfied employees create satisfied customers” by
constantly striving for the best, contributing to the bottom line of the company success by their
motivation and enhanced performance. It is believed that an engaged employee always acts
positively in the interest of the company and takes unconcealed pride in the success and prosperity
of his employer. The engaged employees and the organizations go that extra mile for each other,
thereby realizing the benefits that flow through an investment in such a relationship.
36
Does Engagement Really Make a Difference?
According to the former GE Chairman and CEO, Jack Welch, a company’s health is determined
through it’s energized workforce who not only realize the mission of the organization and have an
understanding of how to achieve it, help the organization win in the long run. Engaged employees
care about the future of the company and are willing to study entitled, The War for talent, reported
that a shortage of skilled employees was an emerging trend and it was more so due to the fact that
the organizations fail in their attempts to create a workforce that is not only cognitively vigilant but
Research has proven that wholly engaged employees tend to be more self-motivated, reliable, and
have higher levels of organizational loyalty. They are capable of delivering sustained affecting the
key results areas such as employee turnover, sales, innovation and customer satisfaction, engaged
employees in customer facing roles are more likely to treat customer is ways that positively influence
customer satisfaction and are more than twice as likely to be company advocates. They share
information with colleagues and pass on ideas that speak up for the organization. Engaged
employees are much more likely to feel secure and stable in their position and are in fact the
ambassadors for the company, singing its praises to everyone, and taking the best foot forward to
identifying the root causes of workplace attitudes. They also help in developing an understanding of
the extent to which employees are passionate about their work and emotionally committed to their
There are several standardized tests, toolkits and instruments available which can help determine
the level of employee engagement in an organization. survey of the Gallup Organization Identifies
strong feelings of employee engagement in four key areas – customer satisfaction / loyalty,
profitability, productivity and employee turnover. The questionnaire has been administered to a
multitude of companies across the world. Results from the survey show a strong correlation between
level of their employees. Standard Chartered, for example, introduced annual survey to measure
improvement in the engagement of teams. The results are used to develop action plan and
continually monitor the follow-through of the teams. This focus has seen a continuous rise in both
the number of engaged teams and extent to which the employees are engaged at Standard
Chartered.
Many organization use employee satisfaction survey to identify the root causes of job issues and
create solutions for improvements with due consideration given to the viewpoints of employees.
Certain employee opinion surveys are also in practice that offers accurate identification of employee
behaviors, feelings, and thoughts for improved organizational development. The other ways used to
measure the employee engagement levels is through tracking changes in the attrition rate and
growth in productivity and business. The data collected from these surveys can furnish information
The surveys must also be integrated with the culture survey s and since the culture varies within the
organization, the companies must aim at measuring the engagement at work group level. The
organization also needs to keep in mind that it is not just about the surveys; whatever follows is of
great importance. After evaluating the results from these surveys it is imperative for the management
to work out the problem areas and take an appropriate action. Many a times it so happens that the
good news is communicated expeditiously to all concerned but the key challenges tend to be
The survey findings must aim at behavioral changes required to improve desired outcomes at the
organizational, team and individual levels. While HR plays an instrumental role in the survey
process, the extent to which the change program can be successful is the responsibility of an
organization’s leaders.
39
DIAGNOSTIC TOOL
The diagnostic tool
Current studies suggest that employee engagement will be influenced by:
1. Employee perceptions of job importance. This study has found that “…an employees
attitude toward the job [‘s importance] and the company had the greatest impact on
loyalty and customer service then all other employee factors combined.”
2. Employee clarity of job expectations. “If expectations are not clear and basic
materials
and equipment not provided, negative emotions such as boredom or resentment may result, and the
employee may then become focused on surviving more than thinking about how he can help the
organization succeed.”
40
3. Career advancement/improvement opportunities. “Plant supervisors and managers
indicated that many plant improvements were being made outside the suggestion system, where
employees initiated changes in order to reap the bonuses generated by the subsequent cost
savings.”
4. Regular feedback and dialogue with superiors. “Feedback is the key to giving
employees a sense of where they’re going, but many organizations are remarkably
bad at giving it.”
5. Quality of working relationships with peers, superiors, and subordinates. “…if
employee’s relationship with their managers is fractured, then no amount of perks will persuade the
employees to perform at top levels. Employee engagement is a direct reflection of how employees
the most important of the six drivers in our Engaged Performance model. Inspirational leadership is
which necessitates having a clear understanding of the levers required to improve the key employee
There can be more than one way to improve the level of employee engagement in a company. In
fact, there are many different things that companies not only can do, but also need to do. Most
organization have a range of practices to improve the engagement level of their employees. Best
practice recommends starting right at the selection or recruitment stage by having the right
employees working in the right jobs and having a strong induction and orientation program in place.
Besides giving the employees clarity on the vision and goals of the organization, it is essential for
organizations to put into place regular technical / soft – skill training and development programs and
the
41
certification programs to drive people towards excellent performance as it so happens
at
HCL info systems.
Once the employees become a part of the system, efforts have to be put into place to engage
employees to their highest level. This includes giving emphasis on certain areas which go a long
what is going on within the company outside their immediate team. They also help to create an
environment of trust and openness within the organizations where they are able to talk openly.
Employees who feel they are listened to are able to express dissatisfaction and work together to
The initiative must be taken by the leaders at the top as it happens at the Sum Microsystems where
the CEO interacts with Sun employees through WSUN, a forum on Sun’s intranet. He uses this to
The organizations must work towards implementing the communication forums to provide regular
feedback to all people, including team meetings and conferences. 3M for example encourages
employees to bring forward their questions or concerns through such programs as let’s talk It Over,
Besides using the regular employee opinion and satisfaction surveys, an update on the various
organizational issues can be tracked by the organizations through the usage of in-house magazines
and online communications, including discussion boards by company personnel including the senior
management.
•
Reward Schemes: These form an important part of a company’s overall employee
engagement program. Studies have long shown that while money in itself is not a motivating factor
the absence of financial reward can be a significant demotivator. Thus the role of reward schemes in
boosting. Thus the roles of reward schemes in boosting employee engagement are? To remove
barriers to satisfaction in the organization and provide a framework for rewarding everyone in the
organization for their performance. This may be achieved through right compensation and benefit
42
programs, stock ownership and profit sharing plans and recognition programs. People want to know
if their input matters and that they are contributing to the organization’s success in a meaningful way,
In fact, organizations must have flexible benefit schemes, as Hewitt Associates does, to attract and
retain their talent, which provides employees with the freedom to choose how they receive their
policies and take initiatives to maintain the quality of work life of its employees. Opportunities must
be provided for social interaction such as family gathering barbeques, and trips to the cinema or
picnics. At HCL Info systems, a balance between personal / professional lives of employees is
maintained through recreational activities like festivities @ HCL, get-togethers @HCL, sport@HCL.
The company also encourages an open and transparent culture to empower its people and develop
entrepreneurs.
opportunities for career advancement and be developing a safe, clean and inspiring work
environment for their all-round growth. The employees must be provided with enough resources to
solve their day-to-day problems or to do a job well. Culture – building activities are great for
a thriving organization that people feel committed to and others want to join.
•
Leadership: Effective leaders who help in setting the tone for creating an engaged
workforce can really differentiate an organization from its competitors. Everyone in the organization
with leadership responsibility must have the emotional intelligence and leadership skills needed to
switch and employees on they must act as role models, demonstrate and set high standards to
which others can aspire. Good practices include effective performance management and a fair
evaluation of performance. The leaders must act as coaches and mentors and must give an honest
exercise a degree of discretion during service delivery E.g., allowing employees to spend up to a
certain amount to correct a customer’s problem or handle a complaint. The success of Microsoft, for
example, stems in part from Bill gates’ belief that smart people anywhere in the company should
have the4 power to drive an initiative. Initiatives such as Six Sigma are dependent, in part on the
For great managements, the path towards engaging employees and keeping them engaged beings
with asking them what they want and what is important in order to be effective in their roles. Effective
leaders don’t wait to get the resignation to know that an employee is dissatisfied.
therefore, becomes, imperative for the organizations to identify the level of engagement in their
organization, strive to eliminate the reasons behind the disengaged workforce and implement
strategies to make them fully engaged. Employee engagement is something that is very difficult to
accomplish but if efforts are made on an ongoing basis, it can shrivel with relative ease.
44
RESEARCH OBJECTIVES
The objective of the study is:-
1.To make a conceptual study of Employee Down-Sizing
2. To study as to what cause this Employee Down-Sizing
3. To study the impact of Employee Down-Sizing on the employee’s morale
4.To study as to how Employee Down-Sizing, Employee Retention and employee
commitment are inter related
45
RESEARCH METHODOLOGY
A Research Methodology defines the purpose of the research, how it proceeds, how to measure
progress and what constitute success with respect to the objectives determined for carrying out the
Exploratory research: this kind of research has the primary objective of development of insights into
the problem. It studies the main area where the problem lies and also tries to evaluate some
The research methodology for the present study has been adopted to reflect these realties and help
reach the logical conclusion in an objective and scientific manner. The present study contemplated
an exploratory research
Research Design
The research design is the basic framework, which provides guidelines for the rest of the research
process. The present research can be said to be exploratory. The research design determines the
direction of the study throughout and the procedures to be followed. It determines the data collection
Sample unit:Employees of many BIG companies in Nehru Place (Delhi), these people
were requested to fill in the questionnaires during the lunch intervals at the Nehru Place
premises
SECONDARY DATA:
Secondary data has been used which is collected through
⇒ A r t i c l e s ,
⇒ R e p o r t s ,
⇒ J o u r n a l s ,
⇒ M a g a z i n e s ,
⇒ N e w s p a p e r s a n d
⇒ I n t e r n e t
Sampling Technique
Random sampling technique has been employed to extract the fruitful results. This includes the
overall design, the sampling procedure, the data collection methods, the field methods and the
analysis procedures
Sampling Procedure Actually Employed:
The process employed to select the sample was simple random sampling. Simple random sampling
refers to that sampling technique in which each and every unit of the population has an equal and
same opportunity of being on the sample. In simple random sampling, which item gets selected is
collected from the field. The study has used percentiles method and the data are presented in the
3. Job Training
4. My Boss
5. My Co-Workers
6. My Compensation
10. Relocation
12. Other
55
0%
5%
10%
15%
20%
25%
my performance evaluation
and the outcome
myrole,responsibilityand/or
title
jobtraining
mybos s
myco-workers
my compensation
changein compensation
package
company savingsplan
medical benefits and
insurance
relocation
vacation time
other
myperformance
evaluationandthe
outcome
25%
my role,
responsibility
and/or title
10%
job training
5%
my boss
10%
myco-workers
10%
mycompensation
2%
changein
compensation
package
8%
companysavings
plan
5%
medicalbenefits
and insurance
10%
relocation
5%
vacat
i
ontime
5%
56
6. How Flexible Is The Company With Respect To Your Family Responsibilities?
1. Very Inflexible
2. Somewhat Inflexible
3. Neither
4. Somewhat Flexible
5. Very Flexible
0%
5%
10%
15%
20%
25%
very inflexible
somewhat inflexible
neither
somewhat flexible
very flexible
veryinf lexible
25%
somew hatinf lexible
25%
neither
10%
somew hatf lexible
25%
veryflexible
15%
57
7. Do You Have A Clear Path For Career Advancement?
1. Strongly Disagree
2. Somewhat Disagree
3. Neither Agree or Disagree
4. Somewhat Agree
5. Strongly Agree
0%
5%
10%
15%
20%
25%
30%
strongly disagree
somewhat disagree
neitheragreeor disagree
somewhatagree
strongly agree
stronglydisagree
25%
somew hatdisagree
10%
neitheragreeor
disagree
10%
somew hatagree
25%
stronglyagree
30%
58
8. How Satisfied Are You With Your Position At This Company?
1. Very Satisfied
2. Somewhat Dissatisfied
3. Not Satisfied nor Dissatisfied
4. Somewhat Satisfied
5. Very Satisfied
0%
5%
10%
15%
20%
25%
30%
35%
very satisfied
somewhat dissatisfied
not satisfied nor dissatisfied
somewhat satisfied
very dissatisfied
very satisfied
20%
somew hat
dissatisf ied
30%
notsatisf iednor
dissatisf ied
10%
somew hatsatisf ied
5%
verydissatisf ied
35%
59
9. What Part Of Pay Play In Your Decision To Leave The Organization?
1. 20-40%
2. 40-60%
3. 60-80%
4. 80-100%
0%
5%
10%
15%
20%
25%
30%
60
10. Does Working Conditions Affect You To Leave Your Job?
1. Yes
2. No
0%
10%
20%
30%
40%
50%
60%
70%
yes
no
yes
65%
no
35%
61
11. How Would You Rate The Morale In Your Company?
1. Low
2. Very Low
3. High
4. Very High
0%
5%
10%
15%
20%
25%
30%
35%
low
verylow
high
veryhigh
low
35%
verylow
20%
high
25%
veryhigh
20%
62
12. Could This Company Have Done Anything To Encourage You To Stay?
1. Yes
2. No
0%
10%
20%
30%
40%
50%
60%
yes
no
yes
40%
no
60%
63
CONCLUSION & IMPLICATIONS
The present report indicates that the following features:-
1. Better job opportunities in outer market & pay are the main reasons for increasing
attrition rate.
3. The working environment in the company also make them to leave their job.
4. Performance Appraisals are not given at regular intervals so that the Employee
However an effective retention policy could be followed to make the employees stay in
the company starting form recruitment and selection of employees, providing an effective
pay packages and compensation, outlining an efficient career development path for
employees and most importantly catering to their emotional, mental and family needs.
Also practices should be followed to bring the ex-employees back in the company.
64
RECOMMENDATIONS
65
BIBLIOGRAPHY
1. Charles R. Greer, Strategic Human Resource Management: A General Managerial
Approach, Second Edition, Person Education, 2004
2. Tyson, S., Lawrence, P., Poirson P, Manzolini, L., and Seferi, S.V., Human Resource Management –
5. Brockner, J., Grover, S., Reed, T., & Dewitt, R.L. (1992). Layoffs, job insecurity, and survivors'
work effort: evidence of an inverted-U relationship. The Academy of Management Journal, 35, 413-
425.
6. Brockner, J., Grover, S., Reed, T., Dewitt, R.L., & O'Malley, M. (1987). Survivors' reactions to
layoffs: We get by with a little help for our friends. Administrative Science Quarterly, 32, pp. 526-541.
7. Fisher, A.B. (1988, May 23). The downside of downsizing. Industry Week, pp.
42-51.
66
APPENDIX
QUESTIONNAIRE
NAME:
-
JOB TITLE:
-
ORGANIZATION: -
CELL NO. :
-
AGE GROUP:
-
1. What Is Your Primary Reason For Leaving The Company?
1. Benefits
7. Better Job Opportunity
2. Commute
8. Conflict with Other Employees
3. Conflict with Manager
9. Family Reasons
4. Job Expectation
10 Not Challenging
5. Pay
11 Personal Reasons
6. Reallocation/Move
12. Working Condition
2. How Long Have You Been Thinking About Leaving The Company?
1. One Month Or Less
2. One To 5 Months
3. More Than 5 Months
3. How Satisfied Are You With The Company You Work For?
1. Extremely Dissatisfied
2.Very Dissatisfied
3. Neither Satisfied nor Dissatisfied
4. Very Satisfied
67
5. Extremely Satisfied
4. How Was Your Working Experience?
3. Job Training
4. My Boss
5. My Co-Workers
6. My Compensation
10. Relocation
12. Other
6. How Flexible Is The Company With Respect To Your Family Responsibilities?
1. Very Inflexible
2. Somewhat Inflexible
3. Neither
4. Somewhat Flexible
5. Very Flexible
68
7. Do You Have A Clear Path For Career Advancement?
1. Strongly Disagree
2. Somewhat Disagree
3. Neither Agree or Disagree
4. Somewhat Agree
5. Strongly Agree
8. How Satisfied Are You With Your Position At This Company?
1. Very Satisfied
2. Somewhat Dissatisfied
3. Not Satisfied nor Dissatisfied
4. Somewhat Satisfied
5. Very Satisfied
9. What Part Of Pay Play In Your Decision To Leave The Organization?
1. 20-40%
2. 40-60%
3. 60-80%
4. 80-100%
10. Does Working Conditions Affect You To Leave Your Job?
1. Yes
2. No
11. How Would You Rate The Morale In Your Company?
1. Low
2. Very Low
3. High
4. Very High
69
Practices To Reduce Employee Down-Sizing
Many companies face the challenge of employee turnover, and incur heavy losses. The employers
provide several attractive packages in order to retain the employee. Reasons for employee turnover
Good economic time’s means lowered unemployment, increased productivity, and better prospects for
growth in all sectors. However, economic prosperity also means increased job- hopping among the job
seekers. Opportunities abound everywhere with increasing competition for talent among companies.
Frequent job changes are no longer a stigma, but they are becoming norm. The issue of employee
turnover is so pronounced in today’s world, that even in Japan, where life-time employment and high
employee loyalty are the norms, workers are becoming increasingly mobile. Even survival will become
questionable, if the company witnesses higher turnover among the top performer. With the increasing
mobility among the workers, “employee retention” poses a distinct challenge to any company.
Companies that are inflexible, or whose organizational culture is characterized by domination and
autocracy are likely to have dissatisfied employees no matter how good the incentives to stay may be Or,
at the very least, the tenure of their employees is likely to be highly sensitive to changes in specific
(usually monetary) incentives: small changes in compensation may lead to numerous departures. There
are however other aspects of the work environment or particular jobs that can act as strong ‘de-
motivators’ that can cause people to leave their employment. These include
Lack of control over one’s work
•
While remuneration and other types of benefits continue to be an important factor in the retention
equation, it is important to note that the current HR literature treats them as only one potential area for
retention, and not always in and of themselves, sufficient to ensure strong employee commitment. Over
the past 10 or 15 years, the business literature dealing with employee participation, workplace wellness,
Setting aside list of retention policies and programs, it is clear that there is broad agreement in the HR
literature about the general features of any potential HR program that contributes to good retention. Most
of these are directly related to creating a satisfactory work environment for employees and thus, in turn, to
A stimulating work environment that makes effective use of people’s skills and knowledge, allows
them a degree of autonomy on the job, provides an avenue for them to contribute ideas, and allows them
participation in decisions that affect them, an understanding of what is happening in the organization and
Recognition on the part of the employer that employees need to strike a good
balance between their lives at work and outside of work.
Respect and support from peers and supervisors.
71
1. What are the reasons for employee downsizing?
Obsolescence of skills
Outsourcing;
Modernizing,
changes which leave survivors unclear of what is expected of them, or how they will
acquire the new skills they may need
•
Managers who are unwilling to provide adequate time and support to individuals.
9. What helps to build the morale of the employees during downsizing?
Effective communication
Psychological support
Counseling
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