Layoffs When an organization experiences a downturn in the economy, they may be force to perform employee layoffs. Organizations such as the Boeing Company announced in September 2001, that they will be cutting 10,000 jobs which is caused by the U. S. airlines to decrease operational capacity by about 20% due to traffic reductions. Airlines are expected to park older aircraft and defer deliveries of newly built transports as they trim their operational fleets (Smith B. (2001)).
The Boeing Company is an American multinational aerospace and defense corporation that was founded in 1916 and is the largest exporter by value in the United States (Smith B. (2001)). This layoffs will created a shortage of aerospace jobs and has created a tough hiring environment for unemployed workers. Brockner, J. (1992) stated that “if the layoffs are mismanaged, thereby hampering survivors' productivity and morale, then the organization stands to lose a sizeable portion of the savings it hoped to achieve by introducing layoffs. Even though employee layoffs may allow organizations to cut jobs and safeguard relationships with the existing employee this can be create a challenge to the remaining employees in that, they may experience excessive stress of increase workload, lack of motivation and they may consider searching for a new place of employment to reduce redundancy. Heathfield, S, M (2010) stated that “employees experience an increased level of stress relating to both the increased workload and your distrust of management. Depending on how respectfully the layoffs were handled with their organization, this distrust may run deep. This may cause distrust with the employee and the organization. Employees may be less motivated to complete assigned work when coworkers depart from an organization due to layoffs. According to Adler, N. (2008) “motivation is a passion to work for reasons that go beyond money or status a propensity to pursue goals with energy and persistence. ” One would suggest that to motivate these individuals could consist of bringing in bake goods to work or have a potluck with existing coworkers. This could motivate the remaining employees to work towards a successful work performance and accomplishing team goals.
Searching for a new place of employment to reduce redundancy is common in organizations when layoff occurs. According to Heathfield, S, M (2010) “Research indicates that many employees polish up their resumes and begin a job search which can help the downsizing survivor feel more in control of their situation. ” Employees could be fearful to be unemployed due the many responsibility of life such as child care expenses and bill payments. Child care expenses could include child support payment, food and clothes while bill payments could include mortgage, rent and utilities. Child care expenses and bill payments is essential to one’s life.
A decline or shortage in salary for childcare expenses and bill payments and could result in one child or children being uncared for and one could become homeless. Reduce work hours Management changes can include reduction in work hours for employee, early-retirement and furloughs. Pierce, J. L. ; Dunham, R. B. (1992) conduct a research on police officer responses to changes to their work schedule from a rotating eight hour shift to a compacted 12 hour shift which includes personal activities, work schedule attitudes, stress and fatigue and concluded that “employees was not satisfied with the result”.
One would suggest that the organization give the employee ample time to prepare for the individual wages to be reduced in that the employee can be proactive and make changes that can affect them in their personal life. Some of these proactive measures could include speaking with loan officers to refinance personal loan, cut back on dinning expenses or discontinue insurance plans or retirement matching plans. Even though furloughs may temporarily aid organization on reducing pay cuts in staying in business employee may choose not to return to work after being furlough or the employee may consider to ind another place of employment. Organization may offer senior employees early retirement as another method for to reduce operation cost during an economy downturn. Senior management and those who have been working for an organization the longest usually make the highest salaries and have the best benefits package Bradley J, B. ; Demand M. (2011). Early retirement of senior employees may result in can result lost of unspoken knowledge over a long run. One would suggest that the organization. Some organizations perform furloughs in economy recession. A furlough is mandatory time off for an employee.
For non-exempt employees, the employer doesn’t pay the employee when the employee is not at work. However, exempt employees are required to take a mandatory full workweek off without pay (marylandnonprofit. org). Salary reduction of any kind can also be hardened on the employee where as the individuals may also have to limit expenses in order to afford to pay for regular expenses. Benefits and rewards
Benefits reductions and canceling education reward are other ways for organization to cut back on operation expenses. Benefit reductions are yet another way to cut back on expenses.
An employer may have to discontinue some insurance plans, reduce or eliminate retirement plan matches or contributions, or require employees to pay higher co-pays and deductibles on health and/or dental insurance (marylandnonprofit. org). Organizations changes such as layoffs, reduce work hours and a stagnate in benefits increase and rewards affects employee morale in that, employees consider a new place of employment or retire earlier than expected. Employees may also be less motivated to accomplish goal or become stress from work overload as a result from their past co-workers who have left the organization.
Mossholder, K. W. , Richardson, H. A. , ; Settoon, R. P. (2011) stated that “employees are encourages perceiving that developing and maintaining relationships creates a tacit social resource from which to draw when pursuing more complex or ambiguous goals. Relationships among employees will be more lasting than in market pricing climates, for they serve as an asset that has value for both extrinsic and intrinsic reasons. ”
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