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

Sampling technique

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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:

Obsolescence of skills consequent upon up gradation of technology,

Shift in the organizational requirements;

Outsourcing;

Modernizing,

Restructuring or even reducing the activities of industrial units; and

Redesigning the job in an organization.

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 frequent changes at the organizational,

functional, and individual levels.

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 changes in the availability of resources, changes in the scope of

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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.

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Need to reduceCosts

AlternativesTo Layoffs

Voluntary Quits

InvoluntarySeparations

EarlyRetirements

VoluntaryWorkforceReductions

Layoffs

Outplacement

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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

syndrome, low wages, and employees being mistreated.

Factors influencing morale within the workplace include:

Job security.

Management style.

Staff feeling that their contribution is valued by their employer.

Realistic opportunities for merit-based promotion.

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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How Down-Sizing Affects Employees’ Morale

Every year companies spend millions in recruitment due to employee turnover. Turnover

and its 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. HR managers currently find employee retention a business challenge,

long-term demographic 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 competitive compensation.

Ensure you offer basic health care benefits at reasonable rates. Consider adding

lifestyle benefits that are cost effective (read easy on the cash flow).

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Find out what employees want from their career and do what you can to provide for

their needs.

Be as flexible as possible about how the work gets done.

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 job at their home in the evening?

Take a real and genuine interest in people’s career aspirations and personal lives.

Recognize positive contributions to the company. Communicate company progress,

financial news, major customer or sales activities on a regular basis. Follow up on

your commitments to provide information or answers.

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 issues, they won’t begin looking for greener grass.

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 50% per year salary increases.

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LITERATURE REVIEW

Conceptual Approach To Employee Downsizing

“Reflective Restructuring”

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 amenable to such measures.

Kalyan Chakravarti in the article, "Downsizing and Outsourcing: An Indian

Perspective", explains the economic situation of India since Independence (post-1947)

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

article provides a snapshot of the Indian experience of downsizing and also discusses the

social implications of these drastic measures.

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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" workforce, to cope with fluctuations in business cycles.

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 a number

of different alternatives to downsizing. Further, it is of the utmost importance to plan

workforce requirements keeping in view the turbulent business environment.

Implementation Of Employee Down Sizing

Sumati Reddy of the ICFAI University, Hyderabad, India outlines ways in which

employers can implement a well-considered downsizing program. If downsizing is

inevitable, organizations must pay due attention to the rationale for downsizing,

involvement of employees in designing the program, formulation of a fair and equitable

policy, Equal Employment Opportunity (EEO) guidelines, legal counsel, etc. The article

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also suggests the use of objective data to formulate the downsizing plan. In conclusion, it

points to a few indicators to assess the effectiveness of a downsizing program.

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, DaimlerChrysler AG's US unit Motorola, Hallmark Cards,

and Lucent Technologies.

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.

Robert M Tomasko, provides guidelines to be adopted while implementing a downsizing

strategy. Many organizations are beginning to realize the adverse effects of employee

downsizing and are looking for ways to do so in a more humane manner. Lessons can be

learnt from those organizations that have been able to maintain, and sometimes even

enhance, 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 to be considered while downsizing. These suggestions

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pertain to the importance of adopting 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

groundwork for new and stronger relationships with their employees.

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

downsizing. It also discusses a number of steps to manage knowledge assets.

Coping With Downsizing

Neela Radhika of the ICFAI University, Hyderabad, India, describes a new phenomenon

observed in 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.

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

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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 studied a natural experiment, which is

rarely feasible.

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 workers, such as older workers and women.

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 notice (usually one week or less,

and many do not receive any advance warning). The report describes the impact of job

loss on 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

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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 practices

of a few companies to bring succour to the displaced workers.

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Downsizing And Employee Attitude

In today's competitive market, many companies have found that staying in business

means 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 also those who remain.

Why Is this Important?

Downsizing has become a common occurrence in today's business world. Because of

this, and 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 they can provide is expensive outplacement

services.

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 psychological impact of downsizing on those who

remain. In fact, if downsizing is handled improperly, the problems it was designed to

correct may be intensified due to the impact on the loyalty and attitudes of the survivors.

Effects on Work Effort

In an attempt to determine the impact of downsizing, the effects of job insecurity and

economic need 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 need to work will have no change in work effort.

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While this result is interesting, of more interest was the finding that variables moderated

this 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 its roots in theories of organizational justice.

The Justice Theory

Theories of organizational justice propose that people attend to the processes used to

determine 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 shows some commitment to displaced

workers.

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,)—even as they are in the process of becoming uncommitted to

them by laying them off--the more committed to the organization are survivors apt to be"

(Brockner et al., 1987).

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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 negative effects of downsizing.

Strategies for Maintaining Positive Employee Attitudes

According to survey results from a study on employee loyalty conducted by Industry

Week, there are eight factors affecting employee loyalty. They are, in descending order:

equity, security, good management, integrity, empowerment, good communications,

benefits and personal support (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 most dangerous pitfalls of downsizing.

Communicate

During downsizing, the losses due to decreased employee loyalty, morale and lost

productivity are 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 re-

direct employee energies to the job at hand (Fisher, 1988).

"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.

Ensure that communications cover the following topics:

Talk about the fact that changes are coming; employees already know, but it will increase

their trust level if they hear it from you;

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explain the purpose of the downsizing;

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 managing and maintaining remaining employees' moral and company

commitment.

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 "calming the mob."

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 sincerely need to make these cuts and it is not a whim or a

mistake.

Make Valuable Employees Part of a Progressive Organization

To stay or not to stay? That is the question some remaining employees ask in the

aftermath of their company's downsizing process—particularly those who have other

employment opportunities 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 with valuable skills and training.

A former West Coast bank manager who left when he saw his manager leave made this

comment 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 with an attractive future.

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Rebuild Loyalty

Long after downsizing is completed, continue communicating with employees to re-build

security and 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 employees stay with the organization

whether they achieve organizational or personal goals

whether they are able to adopt new working practices and learn new skills

how they respond to customers

It is a useful start to identify specific outcomes of morale which the organization wishes

to address.

The organizations involved in the study suggested three common strands to a strategy for

influencing morale. They were the ability to:

anticipate likely employee response

identify interventions to impact morale

Monitor and evaluate morale and the impact of actions taken.

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Anticipating Employee Response

A number of ‘risk factors’ were identified as indicating circumstances in which

downsizing was most likely to hit morale. They included:

failure to convince the workforce that job reductions were necessary

apparent lack of clarity or unfairness in deciding on individual redundancies

lack of care over redundant staff

lack of alternative career development options if promotion becomes unlikely

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 communicate throughout the period of

change, not just at the beginning.

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.

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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 experience may be needed to help staff adjust to new job demands.

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 them feeling isolated.

Monitoring And Evaluation

Evaluating the success of attempts to influence morale during downsizing is not easy.

There is a 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 during periods of downsizing.

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 performance indicators

(egg customer service) is often monitored numerically.

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‘Softer’ measures of attitudes and perceptions of employees are obtained through the

increasing use 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.

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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 treated

climate in ways ranging from a subjective interpretation of organizational

characteristics to an objective set of organizational characteristics. Other early studies

were aimed at identifying the dimensions comprising organizational climate

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 nature

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of organizational climate makes it more difficult to define sharp borders. Organizational

climate scholars have responded by making empirical and theoretical arguments to

distinguish 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 differentiation of the organizational climate construct still

remains.

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 of measuring organizational climate, Denison's

investigation of the relationship between 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 literature by exploring the link between organizational climate

and innovation.

Measuring Organizational Climate

At its most basic level, organizational climate refers to employee perceptions of their

work 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 scheduled time to complete the survey,

and employee participation is voluntary.

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Selecting a Survey

Once a decision is made to conduct an organizational survey, it can be difficult to identify

the "right" survey to use. Although not a comprehensive list, the following factors may be

helpful in reducing the number of survey choices:

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 want to ensure that

leadership/supervisory components are included in the survey.

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 support from the company’s management

team.

It can be extremely helpful to choose a survey that offers some flexibility in its

administration capabilities.

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 version of the survey to accommodate all of their employees.

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 reviewing the average levels of item responses within the company,

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while others may want to see how the company scored compared to other companies

throughout the nation.

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 in selecting an instrument that will meet their specific

reporting needs.

Benefits

Companies that conduct organizational climate surveys may experience one or more of

the following benefits:

• Employee involvement- By administering an organizational survey, employees are

given an 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 better on the job.

• Positive work outcomes- In the last 30 years, a significant amount of evidence has

been accumulated documenting the importance of the work environment in relation to

organizational performance. In 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 influence

customer perceptions of the quality of goods or services delivered by a company.

• 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 to talk to

employees about day-to-day activities. Conversations regarding an employee’s work

environment can fall to the wayside, and in some instances, never take place.

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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?" One

advantage of conducting an organizational survey is that it can provide an opportunity

to 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.

• Proactive management- Administering organizational climate surveys allows

managers to be much 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.

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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.

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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;

alerts managers to needs and opportunities for training, communication, and

development;

helps build strategies for sustainable growth;

is scalable, measurable, and practical.

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ORGANIZATIONAL CLIMATE-EMPLOYEE SATISFACTION

SURVEY

The Organizational Climate Assessment is a powerful instrument, especially when

provided 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 assessment should be administered anonymously

company wide, broken out by departments of 6 or 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 for the

maximum benefit of everyone.

This assessment is designed with the following assumptions in mind:

Fundamental care of the employee as an asset

Organizations are successful because of the quality of work employees perform. When

employees are cared for, and the right environment is created where there are no barriers

to performance, their true value to the organization can be fully realized.

Respect For The Dignity Of The Employee And The Sensitivities Of

Human Beings

Humans have fundamental needs for safety and security, affiliation and acceptance,

involvement as well as self-actualization. The extent to which these and other human

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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 creating an environment where everyone feels better.

Embracing Optimization And Improvement

An irrefutable trend in business today, continuous improvement and increasing levels of

efficiency 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 levels of motivation and commitment.

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EMPLOYEE DOWN SIZING & EMPLOYEE

MOTIVATION ARE CLOSELY KNITTED

A manager’s job is to influence the people in the organization to accomplish the goals

and objectives 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 the motivation, higher the moral

of productive work force.

For motivation, we have to attempt to identify the factors that influence 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 beyond the individual’s awareness.

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 seemed to accurately describe workers responses to

existing environments. As time passes, 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,

Herzbeg, David Mc clelland, Johan Morse and Jay Lorsch.

Motivation – Hygine Theory

The motivation – TWO FACTOR THEORY – proposed by Herzberg postulates that:

The factors causing job satisfaction (and presumably motivation) were different from that

causing job dissatisfaction. He developed the motivation-Hygiene theory to explain these

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results. He called the satisfiers motivators and the dissatisfied hygiene factors, using the

term “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 cannot simply be treated as opposites of one

another.

Therefore, managers who seek to eliminate factors that create job dissatisfaction can

bring about peace but not necessary motivation.

Motivators Hygiene Factors

Achievement Company Policy & Administration.

Recognition, Leadership.

International relation, welfare & salary.

Challenge, growth, Working condition status & security.

Responsibility and accomplishment.

Motivation through job rotation and security.

Satisfaction by communication.

Appraisal & feedback.

When hygiene factors are adequate, people will not be dissatisfied, but neither will they

be satisfied.

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 can be viewed as special application of Maslow in a highly complex

industrialized society, in organization having tasks and people more appropriate to Mc

Gregor’s Theory ‘Y’. In spite of limitations, Hertzberg’s contribution to study of

motivation cannot be ignored. Hertzberg’s theory is widely real and his recommendations

followed by many managers.

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EMPLOYEE DOWN-SIZING & EMPLOYEE

ENGAGEMENT

Employees Engagement

In today’s technologically advanced World, employees are aware of what services should

they 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 from the managers and are

rated as least important by Mana

Employee engagement goes beyond the employees’ intent to leave. It includes the

employees’ commitment to the organization and motivation to contribute to the

organization’s success. By 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 by the organizations for creating an

engaged workforce.

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The evidence of a significant relationship between employee engagement and financial

performance is undeniable.

-Towers Perris

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 primary behaviors: Say, stay and

strive.

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.

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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 also emotionally

connected to the organization.

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 deliver and

over-deliver for customers and the colleagues alike.

How to measure employee engagement?

To determine the level of employee engagement, the organizations should make use of a

comprehensive employee feedback and to improve levels of productivity and

commitment by 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 company and to their co-workers.

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 high scores and superior job

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performance and many organizations have found it to be a definitive measure of the

engagement 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 that can help the

management in the following ways:

Identifying cost-saving opportunities

Improving productivity

Reducing turnover

Curbing absenteeism

Strengthening supervisor

Evaluating customer – service issues

Assessing training needs

Streamlining communication

Benchmarking the organization’s progress in relation to the industry

Gauging employees understanding of and agreement with the company mission.

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 avoided. This makes the

employees feeling unheard, thus leading to resentment and this poses a significant threat

to engagement levels within the organization.

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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.

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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.”

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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 feel about their relationship with the boss.”

6. Perceptions of the ethos and values of the organization. “‘Inspiration and values’ is the

most important of the six drivers in our Engaged Performance model. Inspirational

leadership is the ultimate perk. In its absence, [it] is unlikely to engage employees.”

Approaches suggested for creating an engaged workforce

Employee engagement can occur when the organizations work on removing the

blockades to work which necessitates having a clear understanding of the levers required

to improve the key employee attitudes of satisfaction and engagement so as to create an

optimally functioning system.

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

certification programs to drive people towards excellent performance as it so happens at

HCL info systems.

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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 way in affecting the level of engagement of the employees and includes:

Communication: A proper communication system helps employees in finding out

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 resolve their causes, without it affecting their

performance.

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 sustain an active, an ongoing dialog on the

corporate goals and direction.

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, Between Us and various internal and

external help lines.

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

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

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success in a meaningful way, for which there must be performance based reward

scheme in place.

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 benefits tailoring a package to suit their lifestyle.

Developing the right culture: The organizations must have clear and humane HR

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.

The organizations must demonstrate a commitment to employees’ well –being by

providing 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 generating a feeling of belongings.

Giving employees a feeling of belongingness is crucial in creating 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 feedback and guidance to

their employees.

Ideas should be sought from all employees and the frontline employees should be

allowed to 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

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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 active

participation of employees on the shop floor.

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.

An organization can always gain a competitive advantage by creating an engaged

workforce. It 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.

RESEARCH OBJECTIVES

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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

RESEARCH METHODOLOGY

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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 research study. The appropriate research design formulated is

detailed below.

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 appropriate courses of action.

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 method, sampling method, the fieldwork and so on.

Nature of Data

Primary Data: Primary data is basically fresh data collected directly from the target

respondents; it could be collected through Questionnaire Surveys, Interviews, Focus

Group Discussions Etc.

Secondary Data: Secondary data that is already available and published .it could be

internal and external source of data. Internal source: which originates from the specific

field or area where research is carried out e.g. publish broachers, official reports etc.

External source: This originates outside the field of study like books, periodicals,

journals, newspapers and the Internet.

Data Collection

Primary data: Primary data was selected from the sample by a self-administrated

questionnaire in presence of the interviewer.

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Sample Size:

The survey is conducted among 100 respondents

Sample Area: NCR Delhi

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

Articles,

Reports,

Journals,

Magazines,

Newspapers and

Internet

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 just a matter of chance.

Analytical Tools:

Simple statistical tools have been used in the present study to analyze and interpret the

data collected from the field. The study has used percentiles method and the data are

presented in the form of tables and diagrams.

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DATA ANALYSIS

1. What Is Your Primary Reason For Leaving The Company?

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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 Conditions

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50

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

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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

5. Extremely Satisfied

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4. How Was Your Working Experience?

1. Much More Positive than Negative

2. More Positive than Negative

3. More Negative than Positive

4. Much More Negative than Positive

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5. If Your Experiences Are More Negative Than Positive, What Factors Are

Responsible? Select All That Apply.

1. My Performance Evaluation and the Outcome

2. My Role, Responsibility and/ or Title

3. Job Training

4. My Boss

5. My Co-Workers

6. My Compensation

7. Change in Compensation Package

8. Company Savings Plan

9. Medical Benefits and Insurance

10. Relocation

11. Vacation Time

12. Other

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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

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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

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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

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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%

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10. Does Working Conditions Affect You To Leave Your Job?

1. Yes 2. No

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11. How Would You Rate The Morale In Your Company?

1. Low 2. Very Low

3. High 4. Very High

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12. Could This Company Have Done Anything To Encourage You To Stay?

1. Yes 2. No

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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.

2. The employees do not feel valued by their employer.

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 feel

motivated for its work.

5. The work schedule is very much inflexible & Stressful.

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.

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RECOMMENDATIONS

64

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 – Strategies, Issues and Cases, Kogan Page, London, 1999.

3. Barney Olmstead and Susanne Smith (2001): Creating a Flexible Workplace: How to

Select and Manage Alternative Work Options

4. Khanewal Rohit (February 2002), "Winning the Retention Game", Human Capital,

Pg. 10-12.

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.

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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

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5. Extremely Satisfied

4. How Was Your Working Experience?

1. Much More Positive than Negative

2. More Positive than Negative

3. More Negative than Positive

4. Much More Negative than Positive

5. If Your Experiences Are More Negative Than Positive, What Factors Are

Responsible? Select All That Apply.

1. My Performance Evaluation and the Outcome

2. My Role, Responsibility and/ or Title

3. Job Training

4. My Boss

5. My Co-Workers

6. My Compensation

7. Change in Compensation Package

8. Company Savings Plan

9. Medical Benefits and Insurance

10. Relocation

11. Vacation Time

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

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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

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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 constitute several controllable and non-controllable factors.

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

Feeling bored or unchallenged by repetitive tasks

Lack of job security

Lack of learning opportunities

More generous compensation or benefits package offered elsewhere

Concerns about the future of the firm

It’s Not Just the Pay … 

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, work-life balance and other topics has

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mushroomed, indicating a strong interest in and recognition of how other aspects of working

life influence people’s decisions to stay with or leave a company.

 Why do people choose to leave or stay?

 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 good retention. These features 

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 to see how their own contribution influence

the company’s well-being.

Opportunities for learning and skills development and consequent advancements in

job responsibilities.

Effective communications, including channels for open, two-way communication,

employee participation in decisions that affect them, an understanding of what is

happening in the organization and an understanding of the employer’s main business

concerns.

Good compensation and adequate, flexible benefit plans.

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.

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1. What are the reasons for employee downsizing?

Obsolescence of skills

Shift in organizational requirements;

Outsourcing;

Modernizing,

Redesigning the job

Restructuring or reducing the activities of industrial units

2. Is downsizing the only way out for the above problem?

Yes No

3. If No, What are the alternatives to downsizing?

Employment Changes in Pay/Benefits Training

Policies Job Design Policies

4. Which is a better criteria to use as the basis for downsizing employees?

seniority performance

5. Are the reasons for downsizing communicated well to you?

Yes No

6. When should the employers convey about downsizing to their employees?

give future notice

tell them on the day they are expected to leave

7. Does downsizing affect the motivation of the employees?

Yes No

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8. In what circumstances the employee morale is most hit during downsizing?

failure to convince that job reductions were necessary

lack of clarity in deciding on redundancies

lack of care over redundant staff

lack of alternative career development options

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

Alternative career options

10. Does downsizing also have an impact on the survivor employees?

Yes No

11. has this Company Done Anything To Encourage You ?

1. Yes 2. No

12. What are the consequences of employee downsizing?

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