Effect of Downsizing on Employees Morale

8/10/2019 Effect of Downsizing on Employees Morale

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TABLE OF CONTENTS

1. INTRODUCTION

2. LITERATURE REVIEW

(2.1) Conceptual approach to employee downsizing

(2.2) Downsizing and employee attitude

(2.3) Employee morale during downsizing

(2.4) Organizational climate also aects employee retention rate and

positi!ely aects

(2.") #ips $or creating an eecti!e organizational climate $or minimum

employee downsizing

(2.%) Organizational !ital signs&a leading indicator o$ satis$action

measuring O$ employees

(2.') Employee downsizing employee moti!ation are closely nitted

(2.*) Employee down&sizing employee engagement

(2.+) Diagnostic tool

3. RESEARCH OBJECTIVES

4. RESEARCH METHODOLOGY

(4.1) ,ethodology

(4.2) -esearch design

(4.3) ature o$ data

(4.4) Data collection

(4.") /ample size

(4.%) /ampling techni0ue

(4.') /ampling procedure actually employed(4.*) nalytical tools

5. DATA ANALYSIS

6. CONCLUSION & IMPLICATIONS

. RECOMMENDATIONS

!. BIBLIOGRAPHY

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". APPENDI#

1. INTRODUCTION

W$% I' E()*+,-- D+/ S00/

Employee downsizing is a nightmare $eared y most o$ the employees

woring in the corporate world. downsizing strategy reduces the

scale (size) and scope o$ a usiness to impro!e its nancial

per$ormance

n management parlance5 the term downsizing re$ers to pruning

(including layos and retrenchments) o$ the size o$ wor$orce $or a

!ariety o$ reasons6

Osolescence o$ sills conse0uent upon up gradation o$ technology5

/hi$t in the organizational re0uirements7

Outsourcing7

,odernizing5

-estructuring or e!en reducing the acti!ities o$ industrial units7 and

-edesigning the 8o in an organization.

Employees5 nowadays5 will ha!e to reconcile with the ugly realities o$

the corporate world and they may ha!e to e prepared $or alternati!e

employment as the a9e may $all on anyone at any time.

Due to the gloalization o$ usiness5 organizations are ale to de!elop

a numer o$ approaches y which to employ human resources5

technology5 and capital to implement inno!ati!e pro8ects in dierent

parts o$ the world. #hey are ale to deri!e ma9imum ad!antage due to

these possiilities. :hile the larger goals appear 8ustiale and in the

interest o$ most staeholders5 they lead to $re0uent changes at the

organizational5 $unctional5 and indi!idual le!els.

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t the organizational le!el5 such changes can lead to closure o$

usinesses5 o&shoring5 merging with another organization5

outsourcing5 restructuring5 etc. t the $unctional le!el5 it can imply

changes in the a!ailaility o$ resources5 changes in the scope o$

acti!ities5 etc. s a se0uel to these de!elopments5 employees can e

redeployed5 trans$erred5 rendered redundant5 or let go within a !ery

short span5 without ade0uate preparation $or these changes. /uch

changes tae their toll in terms o$ organizational producti!ity5 nature o$

employer&employee relationships and the associated social costs.

;eople who contriute to the organizational goals are the

organization


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o$ downsizing is that the organizations lose e9pertise5 sills5

nowledge5 e9perience and !aluale relationships5 which wal out o$

the door e!ery time someody lea!es. numer o$ alternati!e

approaches can e implemented to achie!e the o!er&riding goal o$

enhancing usiness per$ormance. t the same time5 it is true that

downsizing in many cases is an ine!itale option. Aowe!er5 downsizing

should e considered not as the rst ut the last option. $ the a9e has

to $all5 it should e preceded y a care$ul consideration o$ the

conse0uences o$ such a drastic action.

W$% 0' M+%*-

M+%*-5 also nown as -')0 - +)'is an intangile term used $or

the capacity o$ people to maintain elie$ in an institution or a goal5 or

e!en in onesel$ and others.

ccording to le9ander A. Beighton5 morale is the capacity o$ a group

o$ people to pull together persistently and consistently in pursuit o$ a

common purpose.

M+%*- 0/ $- +7)*%-

:orplace e!ents play a large part in changing employee morale5 such

as hea!y layos5 the cancellation o$ o!ertime5 cancelling enets

programs5 and the lac o$ union representation. Other e!ents can also

in@uence worplace morale5 such as sic uilding syndrome5 low

wages5 and employees eing mistreated.

F%+' 0/89-/0/ (+%*- 0$0/ $- +7)*%- 0/*9-:

o security.

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,anagement style.

/ta $eeling that their contriution is !alued y their employer.

-ealistic opportunities $or merit&ased promotion.

#he percei!ed social or economic !alue o$ the wor eing done

y the organization as a whole.

#he percei!ed status o$ the wor eing done y the organization

as a whole.

#eam composition.

#he wor culture.

H+ D+/;S00/ A


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o$ the company5 poor treatment y their oss5 lac o$ e9citement aout

their growth prospects5 and poor relationships with co&worers. I

Aow muchI :hen you add the costs o$ nding an employee5 training

the new employee5 lost producti!ity and lling in $or the employee who

lea!es5 the cost can easily e0ual 1"GH o$ the ase salary o$ the person

who le$t. /o5 i$ you are paying someone J"G5GGG5 the cost to replace

that person will e appro9imately J'"5GGG. #his money comes out o$

your hard&earned prots.

#his is one o$ the ey reasons that companies are $ocusing so much

eort on eeping their current employees. /ome o$ the steps taen y

companies to retain their wor $orce are6

Ensure you oer competiti!e compensation.

Ensure you oer asic health care enets at reasonale rates.

Consider adding li$estyle enets that are cost eecti!e (read easy

on the cash @ow).

=ind out what employees want $rom their career and do what you

can to pro!ide $or their needs.

e as @e9ile as possile aout how the wor gets done.

e as @e9ile as possile as to when and where the wor gets done.

Can it e OK $or an employee to tae a $ew hours o to attend to a

$amily or personal matter i$ they can accomplish the 8o at their

home in the e!eningI

#ae a real and genuine interest in peopleFs career aspirations and

personal li!es.

-ecognize positi!e contriutions to the company. Communicate

company progress5 nancial news5 ma8or customer or sales

acti!ities on a regular asis. =ollow up on your commitments to

pro!ide in$ormation or answers.

Aa!e regular (i&weely or monthly) meetings with all employees

where they can as you 0uestions aout your plans5 company

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progress5 new de!elopments to loo $or5 etc. e accessile to them

so you can learn their needs. $ you can respond to their needs

e$ore they ecome real issues5 they wonFt egin looing $or

greener grass.

s $ormer employees why they resigned. E!en i$ they le$t si9

months ago5 they still ha!e a !alid perspecti!e.

-outinely as employees what you can do to mae the company a

etter place to wor. /et oundaries i$ necessary as to what items

are not negotiale7 such as ownership in the company or "GH per

year salary increases.

2. LITERATURE REVIEW

>2.1? C+/-)9%* A))+%$ T+ E()*+,-- D+/'00/

@R-8-0- R-'990/

ccording to #heo lacwell o$ #he :or =oundation5 in 1+*Gs and

1++Gs many companies resorted to downsizing their human resourcesin order to cope with economic pressures. ut what most o$ these

companies do not realize is that downsizing does not always lead to

sa!ings in reality or increase in the maret worth o$ the company. On

the contrary5 the downsizing companies may e randed anti&people. t

usually leads to repetiti!e downsizing and results in the loss o$

employee morale and loyalty and therey aects o!erall producti!ity

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le!els. Aowe!er5 they can adopt alternati!e approaches to cope with

economic uncertainties. :ayne Cascio had proposed a new strategy

termed as re@ecti!e restructuring5 which enales companies to oer

a range o$ smarter options to employees. #he article e9plains the

signicance o$ this new concept and pro!ides e9amples o$ companies

in the L/ and LK which ha!e adopted the strategy. t also e9plains that

while companies in the L/ are at a greater lierty to downsize5 the LK

usiness en!ironment is not amenale to such measures.

Kalyan Chara!arti in the article5 D+/'00/ %/ O9'+90/: A/

I/0%/ P-')-0-e9plains the economic situation o$ ndia since

ndependence (post&1+4') and in the a$termath o$ the economiclieralization (post&1++1). gainst this acdrop5 the author analyses

the per$ormance o$ the ndian ;ulic /ector Lndertaings (;/Ls). Ae

outlines the causes that resulted in surplus manpower among ;/Ls.

Aowe!er5 a$ter ndia opened up its economy5 most ;/Ls were

compelled to streamline their operations to increase their e>ciency.

One o$ the ma8or steps taen to achie!e this goal was to shed the

e9cess sta on their payrolls through the golden handshae5 y

@oating Moluntary -etirement /chemes (M-/) and Compulsory

-etirement /cheme (C-/). #he other ma8or step was to outsource non&

core acti!ities and $ocus on their core competencies. #he article

pro!ides a snapshot o$ the ndian e9perience o$ downsizing and also

discusses the social implications o$ these drastic measures.

arara B Da!ison -)*%0/' 0/ T$- D0


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rightsizing on all $unctional areas5 e!aluating the nancial implications5

and ensuring that each department and employee adds measurale

!alue. #he author illustrates how to carry out a rightsizing e9ercise with

the help o$ a process e9ample5 which descries the most important

steps. n this connection5 it cites the e9amples o$ a $ew companies5

such as Ernst Noung5 Cisco5 gilent #echnologies5 and /chwa5 which

ha!e implemented rightsizing. #he article also illustrates a $ew

alternati!es to downsizing and highlights new wor$orce concepts5 i.e.5

ust&in&time wor$orce and the ;ort$olio wor$orce5 to cope with

@uctuations in usiness cycles.

-ic ,aurer o$ ,aurer ssociates emphasizes the need $ororganizations to act swi$tly to cope with changing usiness conditions

and on their re0uirement o$ human resources. usiness leaders need

to continuously assess the mi9 o$ sills re0uired as well as the numer

o$ employees re0uired $or the present and the $uture. n addition5 they

should engage in a process o$ enchmaring with companies in the

same industry. #he article e9plains that downsizing may pro!e to e a

risy strategy that may not always ring aout much impro!ement in

terms o$ the producti!ity or re!enues to the organizations. Aence5 to

cope with changing re0uirements o$ sta5 companies should consider a

numer o$ dierent alternati!es to downsizing. =urther5 it is o$ the

utmost importance to plan wor$orce re0uirements eeping in !iew the

turulent usiness en!ironment.

I()*-(-/%0+/ O E()*+,-- D+/ S00/

/umati -eddy o$ the C= Lni!ersity5 Ayderaad5 ndia outlines ways in

which employers can implement a well&considered downsizing

program. $ downsizing is ine!itale5 organizations must pay due

attention to the rationale $or downsizing5 in!ol!ement o$ employees in

designing the program5 $ormulation o$ a $air and e0uitale policy5 E0ual

Employment Opportunity (EEO) guidelines5 legal counsel5 etc. #he

article also suggests the use o$ o8ecti!e data to $ormulate the

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downsizing plan. n conclusion5 it points to a $ew indicators to assess

the eecti!eness o$ a downsizing program.

Carlton ecer o$ O-C enumerates a numer o$ lessons $rom the

collecti!e e9perience o$ layos y companies across the gloe. #hese

lessons largely pertain to the need to remain lean and mean in a $ast&

changing gloal usiness en!ironment5 rightsizing the right way5

considering scientic alternati!es to downsizing5 paying attention to

the a$ter&eects o$ downsizing5 and eing aware o$ the legal

implications o$ downsizing. #he author points out those mass layos

should e !iewed as a change process to e implemented y adopting

a systems approach. t e9plains the strategic role o$ A- e9ecuti!esduring the whole process5 especially during the initial stages o$

rightsizing. t $urther e9plains the step&y&step guidelines that A-

e9ecuti!es can adopt in the downsizing process. #he article shares the

e9periences o$ a $ew companies such as ,ac,illan loedel5 Canada5

DaimlerChrysler cult times. /he

concludes that during these di>cult times5 she had no other principle

to li!e y other than the one she had within.-oert , #omaso5

pro!ides guidelines to e adopted while implementing a downsizing

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strategy. ,any organizations are eginning to realize the ad!erse

eects o$ employee downsizing and are looing $or ways to do so in a

more humane manner. Bessons can e learnt $rom those organizations

that ha!e een ale to maintain5 and sometimes e!en enhance5

employee morale. /uch organizations gi!e due attention to each o$ the

three phases o$ downsizing5 i.e.5 planning5 its implementation5 and

managing the results. #he author adds a $ew essential aspects to e

considered while downsizing. #hese suggestions pertain to the

importance o$ adopting participati!e downsizing5 managing the rumor

mill5 pro!iding continual and $re0uent communication5 and paying

special attention to the results. #he article concludes y saying that

those organizations5 which ha!e een acti!e in managing the human

side o$ downsizing would nd that they ha!e laid the groundwor $or

new and stronger relationships with their employees.

/eymour /iegel $ocuses on the need $or organizations to tae care o$

two things in order to gain competiti!e ad!antage in the 21st century.

#he rst pertains to the management o$ nowledge worers and the

second to the appropriate management o$ nowledge itsel$. n an era

o$ downsizing5 organizations need to pay special attention to the $act

that with downsizing5 organizations also stand to lose on the !ital and

tacit nowledge inherent in the outgoing employees. ,anagers are

always con$ronted with the challenge o$ capturing and codi$ying

e9plicit and tacit nowledge and then con!erting it into inno!ati!e

products and ser!ices. #he article descries a numer o$ organizational

practices5 which5 i$ managed on an ongoing asis5 can oset the loss

that can occur as a result o$ downsizing. t also discusses a numer o$

steps to manage nowledge assets.

C+)0/ W0$ D+/'00/

eela -adhia o$ the C= Lni!ersity5 Ayderaad5 ndia5 descries a

new phenomenon oser!ed in the a$termath o$ downsizing & ;in /lip

;arties. t descries how ;in /lip ;arties came into practice and the

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reason $or using the term P;in /lip


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model can also e used to e9amine the impact o$ downsizing on the

duration o$ 8oless spells5 continuity or change in occupation5 on

earnings5 and on 8o satis$action among worers who otain

employment. #he model comines three $actors6 re&employment y

age5 gender5 and education. /ome o$ the signicant ndings o$ the

study are6 downsizing is not a disaster $or most o$ the worers7 '"H o$

the downsized employees nd 8os5 and most o$ them do so 0uicly7

worless spells etween 8os are short or non&e9istent7 and the most

serious grounds $or concern relate to groups o$ !ulnerale worers5

such as older worers and women.

Carl Man Aorn5 :illiam , -odgers 5 eil -idley5 and Baurie ,Aarrington o$ -utgers5 oers glimpses o$ the conse0uences o$

in!oluntary 8o loss $or worers and their employers. t descries the

e!ident patterns o$ worer dislocation6 it aects oth lue&collar and

white&collar employees5 worers o$ all races5 ages5 education le!els5

occupations and industries7 and it happens at !ery short notice (usually

one wee or less5 and many do not recei!e any ad!ance warning). #he

report descries the impact o$ 8o loss on indi!iduals and their $amilies5

the most signicant eing emotional distress and nancial hardship. t

delineates the dierences in approaches y small and large rms.

Barge rms oer more assistance and etter se!erance pay as

compared with smaller rms. t also pro!ides guidelines $or employers5

employees and policymaers to deal with the conse0uences o$ 8o

dislocation. #he e9perience o$ downsizing employees during the last

$ew years points to the need $or employees to e prepared $or a 8o

loss at any point o$ time in their career. #his report also includes

e9amples o$ eecti!e practices o$ a $ew companies to ring succour to

the displaced worers.

>2.2? D+/'00/ A/ E()*+,-- A09-

n today


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in the usiness world is a uni0ue (hope$ully) e!ent $or you and your

employees. t is important to rememer that this e!ent aects not only

the downsized5 ut also those who remain.

W$, I' $0' I()+%/

Downsizing has ecome a common occurrence in today


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with a high need to wor will increase their wor eort5 while those

with a low need to wor will ha!e no change in wor eort.

:hile this result is interesting5 o$ more interest was the nding that

!ariales moderated this oser!ed relationship. /pecically5 rocner

$ound that the remaining employees< perception o$ the $airness o$ the

lay&o process and their attachment to the lay&o !ictims colored their

!iews. #his issue o$ $airness has een $ound to e related to a numer

o$ other wor&related !ariales and has its roots in theories o$

organizational 8ustice.

T$- J9'0- T$-+,

#heories o$ organizational 8ustice propose that people attend to the

processes used to determine outcomes as well as to the end result in

determining $airness. =or e9ample5 as rocner


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commitment to the organization. Con!ersely5 the study showed that

employee commitment can actually increase during a layo process

when the company shows some commitment to displaced worers.

#he post&layo setting pro!ides organizations with a rather

uni0ue...situation in which to e9press their commitment to employees7

that is5 i$ organizations show commitment to their dismissed worers

(through caretaing acti!ities o$ pro!iding se!erance pay and

outplacement counseling5)Se!en as they are in the process o$

ecoming uncommitted to them y laying them o&&the more

committed to the organization are sur!i!ors apt to e (rocner et al.5

1+*').

rocner


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layo process. =or e9ample5 the rumor mill that de!elops5 or

intensies5 during the preliminary planning stages results in employees

spending signicant amounts o$ time gossiping and worrying aout

what may happen. Ln$ortunately5 many managers in the position o$

eing in the now are guided y a policy in which they are to a!oid

taling aout rumors with employees. :hile this policy may seem

appropriate5 the associated costs5 in terms o$ lost producti!ity and

employee loyalty5 may e signicant. Communication will help to cur

the worry and re&direct employee energies to the 8o at hand (=isher5

1+**).

$ you donciency7

communicate5 whene!er possile5 that though employee downsizing

is necessary5 each employee who is let go will recei!e appropriate

se!erance pay and (i$ you intend to oer it) 8o placement

assistance7

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emphasize that laid&o employees will e treated with respect and

dignity7 this is important $or managing and maintaining remaining

employees< moral and company commitment.

,ost importantly5 listen care$ully to employee concerns and

ade0uately address each concern to whate!er degree possile. #his

must e done with sincerity and no sense o$ condescension5 such as

calming the mo.

n addition5 8ustication $or the layos is e9tremely important5

especially i$ times are good and the downsizing is a part o$ strategic

growth and protaility. Employees need to understand that you

sincerely need to mae these cuts and it is not a whim or a mistae.

M%7- V%*9%*- E()*+,--' P% + % P+-''0- O%/0%0+/

#o stay or not to stayI #hat is the 0uestion some remaining employees

as in the a$termath o$ their companycient and protale

usiness with an attracti!e $uture.

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R-90* L+,%*,

Bong a$ter downsizing is completed5 continue communicating with

employees to re&uild security and trust. Do not allow management to

assume remaining employees are merely grate$ul to still ha!e 8os.

Employees need to $eel they are !alued5 that they ha!e a place in the

company5 and that management elie!es that they are an important

part o$ the success o$ the organization. #o emphasize this point5 tal

aout where the company is headed5 and descrie any plans $or

growth and prosperity.

>2.3? E()*+,-- M+%*- D90/ D+/'00/

W$, M+%*- M%-'

O$ course employees will $eel unsettled during downsizing. Aowe!er5

8ust accepting loss o$ morale as an ine!itale conse0uence may

undermine the !ery producti!ity gains intended y the change. /o

employers should see to minimize the unwanted impact o$

downsizing. #hey also need to recognize the e9tent to which the

manner o$ managing such change aects how employees $eel aout

the change and their $uture relationship with the company.

Downsizing can threaten employeesF sense o$ well eing in se!eral

ways. #hey may see the company as ha!ing eha!ed un8ustly or

un$airly. #hey o!iously $eel less secure. #hey may also lose the elie$

that their contriution to the usiness will e rewarded in $uture.

#hese responses may easily threaten usiness per$ormance. /ur!i!orso$ downsizing can ecome unduly ris a!erse and narrowly $ocused5

and there$ore less creati!e and open to change.

ut TmoraleF is not a simple concept. t consists o$ many $acets and

may e mani$est in many outcomes. #hese outcomes include6

whether employees stay with the organization

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whether they achie!e organizational or personal goals

whether they are ale to adopt new woring practices and learn

new sills

how they respond to customers

t is a use$ul start to identi$y specic outcomes o$ morale which the

organization wishes to address.

#he organizations in!ol!ed in the study suggested three common

strands to a strategy $or in@uencing morale. #hey were the aility to6

anticipate liely employee response

identi$y inter!entions to impact morale

,onitor and e!aluate morale and the impact o$ actions taen.

A/00)%0/ E()*+,-- R-')+/'-

numer o$ Tris $actorsF were identied as indicating circumstances in

which downsizing was most liely to hit morale. #hey included6

$ailure to con!ince the wor$orce that 8o reductions were necessary

apparent lac o$ clarity or un$airness in deciding on indi!idual

redundancies

lac o$ care o!er redundant sta

lac o$ alternati!e career de!elopment options i$ promotion

ecomes unliely

changes which lea!e sur!i!ors unclear o$ what is e9pected o$ them5

or how they will ac0uire the new sills they may need

,anagers who are unwilling or unale to pro!ide ade0uate time and

support to indi!iduals.

nticipating impact also means understanding that indi!iduals indierent 8o groups or career stages may respond dierently to

downsizing. lthough it is o$ten di>cult to address inter!entions to

particular wor$orce groups5 they can sometimes e tailored with

!arying needs in mind.

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I/--/0+/' T+ B90* M+%*-

t is di>cult to target inter!entions with any precision to in@uence

morale. Aowe!er5 the participating organizations identied se!eral

road inds o$ action which they saw as particularly rele!ant.

Communicating with employees during downsizing is !ital. Con!eying

the reasons $or such a pain$ul change is central. Employees need to

understand the usiness reason $or reducing headcount5 and how the

change will e managed. reas in communication are seen as sinister5

and lead to rumors. ttempts to deny the reality o$ the pain$ul aspects

o$ the change are seen as insensiti!e. /o communication has to e

honest in dealing with the negati!e $eelings o$ employees. t isimportant to communicate throughout the period o$ change5 not 8ust at

the eginning.

i!ing direct support to the Tsur!i!orsF as well as the T!ictimsF o$

downsizing leads to other types o$ inter!ention. #hey may address

such areas as /tress ,anagement and Careers Counselling.

Organization De!elopment initiati!es may e used to try and impro!e

the eecti!eness o$ the emergent organization. #hey may include wor

to reuild relationships etween and within groups and departments5

o$ten through team uilding acti!ities. Enhanced access to training and

wor e9perience may e needed to help sta ad8ust to new 8o

demands.

;er$ormance ,anagement o$ten needs attention to ensure that sta

$eels that the new demands are realistic in terms o$ the reduced staresource. #hey also need to e clear what is e9pected o$ them in the

new organization. -eward strategies may also need realigning5 ut

there is a lac o$ clarity at present aout the lin etween alternati!e

reward strategies and morale.

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#he employeeFs relationship with their line manager may ha!e a

signicant eect on how well they cope with downsizing. =or line

managers to support sta eecti!ely at a time o$ di>cult change5 they

in turn ha!e to $eel as though they now how to handle 0ueries and

prolems. t can help $or managers to share their concerns with their

peers and discuss how to deal with sta issues. /ome companies use

regular $orums $or managers to do this throughout the change period5

and a!oid them $eeling isolated.

M+/0+0/ A/ E%*9%0+/

E!aluating the success o$ attempts to in@uence morale during

downsizing is not easy. #here is a natural tendency not to want to aspeople how they are $eeling when you e9pect negati!e responses. lso

we now relati!ely little aout cause and eect in the area o$ morale.

Ownership o$ the issue may e di>cult to estalish S senior

management itsel$ o$ten eing in a state o$ @u9 during periods o$

downsizing.

,any managers elie!e S or lie to elie!e S that the general le!el o$

sta morale is outside their control. #here are indeed many limitations

to controlling morale including the !ariation in indi!idual response5 the

impact on indi!iduals o$ what they see happening to other employees5

and the !ariation in response o!er time. /eparating the impact o$

dierent inter!entions can e di>cult5 and downsizing is seldom the

only organizational change going on. n spite o$ the di>culties o$

e!aluating the impact o$ specic responses on morale5 organizations

are using a range o$ measures to monitor some o$ the outcomes o$

morale. =or e9ample5 sta turno!er5 asence $rom wor and

per$ormance indicators (egg customer ser!ice) is o$ten monitored

numerically.

T/o$terF measures o$ attitudes and perceptions o$ employees are

otained through the increasing use o$ employee attitude sur!eys.

#hese can e used oth to identi$y !ariations in response within the

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wor$orce5 and trac changing perceptions o!er time. ,anagers need

to understand how employees are $eeling in their part o$ the

organization as well as in aggregate. Lpward $eedac is another way

o$ collecting in$ormation on employee morale and response to

initiati!es. t can also e used as a starting point $or impro!ing

relationships within teams in the wae o$ downsizing.

>2.4? ORGANIATIONAL CLIMATE ALSO AFFECTS EMPLOYEE

RETENTION RATE AND POSITIVELY AFFECTS EMPLOYEE DOWNSIING

RATE

O%/0%0+/%* C*0(%-Bitwin and /tringer dene organizational climate as


24/71

$rom a su8ecti!e interpretation o$ organizational characteristics to an

o8ecti!e set o$ organizational characteristics. Other early studies

were aimed at identi$ying the dimensions comprising organizational

climate

$ter the 1+%Gs and early 1+'Gs5 the $ocus o$ the organizational

climate eld ecame more clearly dened. ,ore recently5

organizational climate researchers ha!e egun to consider how

organizational climates de!elop. #hree schools o$ thought ha!e

de!eloped6 the su8ecti!ist5 o8ecti!ist5 and interactionalist

perspecti!es. ;roaly the most trouling issue that the

organizational climate literature continues to $ace is dening theappropriate dimensions that comprise organizational climate.

Organizational climate is a $airly general term which re$ers to a class

o$ dimensions which can e criti0ued $or eing too di!erse . n

addition5 the multidimensional nature o$ organizational climate maes

it more di>cult to dene sharp orders. Organizational climate

scholars ha!e responded y maing empirical and theoretical

arguments to distinguish organizational climate $rom !arious other

const ructs5 such as structure and indi!idual satis$action. :hile these

and other eorts ha!e een help$ul5 some $uzziness around the

orders and dierentiation o$ the organizational climate construct still

remains.

-esearch on organizational climate has continued more recently5

including oyce and /locum


25/71

climate5 and ri>n and ,athieu ha!e looed at how perceptions o$

organizational climate !ary with the hierarchical le!el in an

organization. nderson and :est contriuted to the literature y

e9ploring the lin etween organizational climate and inno!ation.

M-%'90/ O%/0%0+/%* C*0(%-

t its most asic le!el5 organizational climate re$ers to employee

perceptions o$ their wor en!ironment. enerally5 these perceptions

are descripti!ely ased rather than !alue ased. =or e9ample5 the

phrase5 ha!e more wor to do than can possily nish is a

description o$ a personFs worload5 while the phrase lie my 8o is a

positi!e e!aluation o$ oneFs 8o. #hus5 organizational climate is morethan simply a summary o$ employee lies and dislies.#he assessment

o$ organizational climate typically occurs !ia an o&the&shel$ or

customized sur!ey containing 0uestions aout he wor en!ironment.

lthough administration procedures used when conducting a sur!ey

can !ary5 ideally employees are ased to report to a designated wor

site at a scheduled time to complete the sur!ey5 and employee

participation is !oluntary.

S-*-0/ % S9-,

Once a decision is made to conduct an organizational sur!ey5 it can e

di>cult to identi$y the right sur!ey to use. lthough not a

comprehensi!e list5 the $ollowing $actors may e help$ul in reducing the

numer o$ sur!ey choices6

Determine the scope o$ in$ormation included in the sur!ey. s might e

imagined5 there are a large numer o$ organizational climate areasthat e9ist. -ecent research has identied more than 4%G dierent types

o$ wor en!ironment characteristics that ha!e een measured. ,any o$

these characteristics can e classied into the $ollowing ma8or areas6

8o5 role5 leader5 organization and wor group. n many companies

there are particular areas where employee $eedac would e use$ul.

=or e9ample5 a company concerned aout the impact o$ recent

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managerial downsizing may want to ensure that leadership?super!isory

components are included in the sur!ey.

,ae sure the numer o$ climate areas included is ept to a

manageale le!el. ot only will including too many areas on the sur!ey

increase the time and eort needed to administer the sur!ey5 ut it

also can mae the interpretation process more di>cult. On a related

issue5 many users o$ organizational sur!eys nd it use$ul to add a $ew

customized items to the sur!ey. lthough adding items does not

always add to the scientic !alue o$ a sur!ey5 it can go a long way in

generating support $rom the companyFs management team.t can e

e9tremely help$ul to choose a sur!ey that oers some @e9iility in itsadministration capailities.

=or e9ample5 some companies may re0uire the aility to administer the

assessment using a paper&and&pencil $ormat5 while others may pre$er

an intranet $ormat. =actors such as employee demographics can e

important5 also. /ome companies may re0uire oth an English and

/panish !ersion o$ the sur!ey to accommodate all o$ their employees.

=inally5 identi$y some general pieces o$ in$ormation you would lie to

see in a report once the sur!ey responses ha!e een analyzed. =or

e9ample5 some companies may ha!e an interest in only re!iewing the

a!erage le!els o$ item responses within the company5 while others

may want to see how the company scored compared to other

companies throughout the nation.

n addition5 some companies may want to ha!e results roen downdepartment&y&department or item&y&item while others may want one

set o$ analyses ased on the entire set o$ employee responses. n any

e!ent5 the pulisher?director o$ an organizational sur!ey should assist a

company in selecting an instrument that will meet their specic

reporting needs.

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B-/-'

Companies that conduct organizational climate sur!eys may

e9perience one or more o$ the $ollowing enets6

U E()*+,-- 0/+*-(-/& y administering an organizational

sur!ey5 employees are gi!en an opportunity to e in!ol!ed in the

company at a dierent le!el than is typically dened in their 8o

descriptions. -esearch has shown that employees who are more

in!ol!ed in the company also may e more satised with their 8o5

miss $ewer days o$ wor5 stay with a company longer5 and per$orm

etter on the 8o.

U P+'00- +7 +9+(-'& n the last 3G years5 a signicant

amount o$ e!idence has een accumulated documenting the

importance o$ the wor en!ironment in relation to organizational

per$ormance. n general5 research has shown that $actors in the

wor en!ironment are related to outcomes such as employee

moti!ation5 8o satis$action5 intentions to 0uit5 8o per$ormance and

e!en organizational producti!ity. n addition5 an emerging area o$

research has indicated that organizational climate can in@uence

customer perceptions o$ the 0uality o$ goods or ser!ices deli!ered

y a company.

U C+((9/0%0+/ +9(& n many companies it can e !ery di>cult

to communicate with the ma8ority o$ employees. -ecent trends such

as organizational restructuring and?or merging o$ companies has

resulted in @at organizational responsiility charts5 which

increases the numer o$ employees $or which each manager is

accountale. s a result5 some managers only ha!e limited amounts

o$ time to tal to employees aout day&to&day acti!ities.

Con!ersations regarding an employeeFs wor en!ironment can $all

to the wayside5 and in some instances5 ne!er tae place.

Organizational sur!eys that occur on a scheduled asis (e.g.5

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annually5 iannually5 etc.) can e a more e>cient way $or managers

to gather important in$ormation.

U I/9', +()%0'+/'& Organizations o$ten loo to other

companies when determining organizational policies and

procedures. t is 0uite common $or companies to e9plore the

maret or conduct enchmar studies when considering issues

such as new product de!elopment5 salary or employee enet

policies5 mareting strategies5 etc. common 0uestion is Aow do

we compare to othersI One ad!antage o$ conducting an

organizational sur!ey is that it can pro!ide an opportunity to

compare the companyFs wor en!ironment to that o$ othercompanies. ,any sur!eys oer a national normati!e dataase that

can e used to $acilitate comparisons across a !ariety o$ conditions

and industries.

U P+%0- (%/%-(-/& dministering organizational climate

sur!eys allows managers to e much more proacti!e in managing

their employees and wor en!ironments. :hen used on a scheduled

asis5 organizational sur!eys can help pinpoint prolem areas within

the wor en!ironment e$ore they grow into a crisis needing

immediate attention. ;rolems that re0uire a reacti!e posture

interrupt the normal wor@ow5 and typically cause delays in

pro!iding products or ser!ices to customers.

>2.5? TIPS FOR CREATING AN EFFECTIVE ORGANIATIONAL CLIMATE

FOR MINIMUM EMPLOYEE DOWN SIING

Bisten to the entire organization with ease.

Collect perceptions in real&time.

-educe organizational ias.

Malidate the 0uestions and thus impro!e the results.

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=acilitate candid and open $eedac $rom employees who respond

anonymously.

denti$ying areas o$ ine>ciency or per$ormance gaps.

denti$y root causes $or poor producti!ity (such as poorcommunication or poor process e>ciency).

-educe transition time during changes in the organization (such as

reorganization5 relocation5 a change in ownership5 new

products?ser!ices5 or rapid growth).

n$orm leaders with the in$ormation needed to mae the est

decisions.

i!e employees an organized !oice to assist leaders in taingactions.

ain a $resh perspecti!e o$ the organization.

=acilitate5 trac and e9ecute in$ormed action steps in one system.

ncrease producti!ity.

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31/71

>2.? ORGANIATIONAL CLIMATE;EMPLOYEE SATISFACTION SURVEY

#he Organizational Climate ssessment is a power$ul instrument5

especially when pro!ided organization&wide with specic departmentaldemographic separation and analysis. Each category has een

designed to assess one o$ the ey categories5 which aect employee

per$ormance. #his assessment should e administered anonymously

company wide5 roen out y departments o$ % or more people to

protect the identities o$ respondents. E!ery precaution should e taen

to insure condentiality in order that respondents will $eel com$ortale

sharing their true opinions and perspecti!es

#he o8ecti!e o$ per$orming an employee climate assessment is to

identi$y the ey areas which are hindering production5 reducing

eecti!eness and which might generate une9pected costs in the near

$uture. #he idea and approach is $or the organization not to simply

per$orm an academic e9ercise5 simply ecause they Tdo it at this time

e!ery yearF5 ut to critically e9amine themsel!es to see where the

company and itFs employees might e nely tuned to generate higherle!els o$ per$ormance. Once identied5 opportunities to strengthen

e9isting approaches5 which are woring well5 as well as select

appropriate inter!entions $or addressing the weaest areas5 should e

aggressi!ely pursued $or the ma9imum enet o$ e!eryone.

#his assessment is designed with the $ollowing assumptions in mind6

Fundamental care of the employee as an asset

Organizations are success$ul ecause o$ the 0uality o$ wor employees

per$orm. :hen employees are cared $or5 and the right en!ironment is

created where there are no arriers to per$ormance5 their true !alue to

the organization can e $ully realized.

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R-')- F+ T$- D0/0, O T$- E()*+,-- A/ T$- S-/'0000-'

O H9(%/ B-0/'

Aumans ha!e $undamental needs $or sa$ety and security5 a>liation

and acceptance5 in!ol!ement as well as sel$&actualization. #he e9tent

to which these and other human needs are $ullled lead to higher

le!els o$ commitment5 initiati!e and per$ormance. Organizations5 who

include an emphasis on $ullling the needs o$ their employees to some

e9tent5 will en8oy a more producti!e and stale wor$orce.

F9** U/-'%/0/ O T$- R-%*00-' O B9'0/-''

#his assessment is written with $ull realization o$ the realities o$usiness5 and not an unrealistic utopian !iew o$ an idealized wor

en!ironment. #he $actors emphasized and measured in this

assessment are the important le!ers to optimizing employee worplace

per$ormance5 not 8ust creating an en!ironment where e!eryone $eels

etter.

E(%0/ O)0(0%0+/ A/ I()+-(-/

n irre$utale trend in usiness today5 continuous impro!ement and

increasing le!els o$ e>ciency are a way o$ li$e5 and these $actors are

gi!en appropriate emphasis in this assessment ecause they represent

an e!er present dynamic with which e!ery employee must deal.

-,' T+ M+0%0+/ A/ C+((0(-/

-ather than only identi$ying potential prolem areas to e a!oided5 this

assessment $ocuses on areas where human eha!ior can e le!eraged

more positi!ely to create employees with higher le!els o$ moti!ation

and commitment.

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>2.!? EMPLOYEE DOWN SIING & EMPLOYEE MOTIVATION ARE

CLOSELY NITTED

managerFs 8o is to in@uence the people in the organization to

accomplish the goals and o8ecti!es with optimal e>ciency and

eecti!eness. One o$ the most critical and !e9ing concerns o$

management and super!isory personnel in any organization

understands o$ moti!ation and its role in per$ormance. ,oti!ation is

the desire within an indi!idual that stimulates him or her to action.

Aigher the moti!ation5 higher the moral o$ producti!e wor $orce.

=or moti!ation5 we ha!e to attempt to identi$y the $actors that

in@uence eha!ior5 particularly the ways in which people respond to

the action o$ those around them and to other stimuli in their

en!ironment. #oday5 we no longer ha!e a socially simple world. #he

power$ul $orces are maing it more comple9 all the times. ;eople are

products o$ e9periences they ha!e ne!er relin0uished. ;ersonal history

will always mae its claim e!en though it operates silently and usually

eyond the indi!idualFs awareness.

One o$ the earliest approaches to moti!ation was =rederic #aylor

#heory that the employer essentially ought or e9changed the

purchasing power o$ his wage dollars $or the worerFs time5 interest5

eort and contriution. #his was the rst widely accepted moti!ation

theory. t that time5 it seemed to accurately descrie worers

responses to e9isting en!ironments. s time passes5 it ecome clear

that monitory rewards5 including the plethora o$ incenti!e wage and

onus plans5 did not y themsel!es uy interest5 commitment and

moti!ation. n post :orld :ar ear5 new moti!ation theories e!ol!ed

y eha!ioral sciences in response to the changing en!ironment o$

time. Especially noteworthy were the conceptual contriutions o$

Douglas ,c regor5 raham ,aslow5 Aerzeg5 Da!id ,c clelland5

ohan ,orse and ay Borsch.

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M+0%0+/ K H,0/- T$-+,

#he moti!ation V #:O =C#O- #AEO-N V proposed y Aerzerg

postulates that #he $actors causing 8o satis$action (and presumaly

moti!ation) were dierent $rom that causing 8o dissatis$action. Ae

de!eloped the moti!ation&Aygiene theory to e9plain these results. Ae

called the satisers moti!ators and the dissatised hygiene $actors5

using the term WhygieneX in the sense that they are considered

maintenance $actors that are necessary to a!oid dissatis$action ut

that y themsel!es do not pro!ide satis$action.

Aerzerg reasoned that ecause the $actors causing satis$action are

dierent $rom those causing dissatis$action5 the two $eelings cannot

simply e treated as opposites o$ one another.

#here$ore5 managers who see to eliminate $actors that create 8o

dissatis$action can ring aout peace ut not necessary moti!ation.

M+0%+' H,0-/- F%+'

chie!ement Company ;olicy dministration.

-ecognition5 Beadership.

nternational relation5 wel$are salary.

Challenge5 growth5 :oring condition status security.

-esponsiility and accomplishment.

,oti!ation through 8o rotation and security.

/atis$action y communication.

ppraisal $eedac.

:hen hygiene $actors are ade0uate5 people will not e dissatised5 ut

neither will they e satised.

#o the 0uestion WAO: do you moti!ate employeesI W Aertzerg has ut

one answer Wthe only way to moti!e the capale employees is to gi!e

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him challenging wor $or which he can assume responsiilityX (and

thus dri!e at least partial satis$action o$ his higher need). AertzergFs

concept can e !iewed as special application o$ ,aslow in a highly

comple9 industrialized society5 in organization ha!ing tass and people

more appropriate to ,c regorFs #heory TNF. n spite o$ limitations5

AertzergFs contriution to study o$ moti!ation cannot e ignored.

AertzergFs theory is widely real and his recommendations $ollowed y

many managers.

>2."? EMPLOYEE DOWN;SIING & EMPLOYEE ENGAGEMENT

E()*+,--' E/%-(-/

n todayFs technologically ad!anced :orld5 employees are aware o$

what ser!ices should they deli!er $or a particular return $rom their

employer. On the other side employer has no choice ut to satis$y his

employees y identi$ying and $ullling his wants5 the employer has to

use the moti!ation theories as these pro!ide a good idea o$ how and in

what way they will get moti!ated and satised. #he ao!e logic applies

to e!ery industry whether it is politics5 economics5 technology or

society. =or instance5 in a society the same person who is an employee

plays a role o$ a memer o$ the $amily. Ais duties are to control his

children so that they do not get into a ad company and they should

concentrate on their studies. ow the same 0uestion comes Aow to

moti!ate them to studyI Aere the employee acts as an employer and

the children act as his employees.

W$% D+ W+7-' W%/

/uper!isors generally raned good wages5 8o security5 promotion and

good woring conditions as the things worers want $rom their 8os.

:hile worers $elt they want most is $ull appreciation $or wor done5

$elling in on things5 and sympathetic understandings o$ personal

prolems &all incenti!es that seem to e related to a>liation and

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recognition moti!es. tFs not only good money ut there is lot o$ other

needs5 which an employee wants to $ulll $or eing satised and

committed towards the 8o. #hese needs !ary $rom one employee to

another5 worers needs are totally dierent $rom the managers and are

rated as least important y ,ana

Employee engagement goes eyond the employeesF intent to lea!e. t

includes the employeesF commitment to the organization and

moti!ation to contriute to the organizationFs success. y creating a

wor$orce that is passionately in!ol!ed with the company5 the

organization can create a sustainale competiti!e ad!antage $or itsel$.

#his article throws light on the issues to e addressed y theorganizations $or creating an engaged wor$orce.

#he e!idence o$ a signicant relationship etween employee

engagement and nancial per$ormance is undeniale.

owers ;erris

#aling aout the engagement and commitment o$ an employee to an

organization5 most companies are o$ the opinion that they do ha!e a

$ew5 ut they still want more. :hyI t is merely ecause these

companies ha!e come to the realization that their organizationFs long&

term success relies on employee per$ormance5 which is directly

impacted y the le!el o$ employee engagement and commitment to an

organization. :ell5 some organizations thin that simply maing people

happy and paying them handsome pay pacets is the solution. ut it is

not so. #hese are things which an organization need to consider toattract and retain the most 0ualied indi!iduals5 howe!er5 when it

comes to engaging employees in their wor5 there are denitely some

more issues that need to e wored out. Engagement re0uires

engaging not only the employeesF minds ut their hearts as well and

this is something that the organizations can neither $orce not uy in

order to succeed in the maretplace.

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-esearch has pro!en that wholly engaged employees tend to e more

sel$&moti!ated5 reliale5 and ha!e higher le!els o$ organizational

loyalty. #hey are capale o$ deli!ering sustained aecting the ey

results areas such as employee turno!er5 sales5 inno!ation and

customer satis$action5 engaged employees in customer $acing roles are

more liely to treat customer is ways that positi!ely in@uence customer

satis$action and are more than twice as liely to e company

ad!ocates. #hey share in$ormation with colleagues and pass on ideas

that spea up $or the organization. Engaged employees are much more

liely to $eel secure and stale in their position and are in $act the

amassadors $or the company5 singing its praises to e!eryone5 and

taing the est $oot $orward to deli!er and o!er&deli!er $or customers

and the colleagues alie.

H+ + (-%'9- -()*+,-- -/%-(-/

#o determine the le!el o$ employee engagement5 the organizations

should mae use o$ a comprehensi!e employee $eedac and to

impro!e le!els o$ producti!ity and commitment y identi$ying the root

causes o$ worplace attitudes. #hey also help in de!eloping an

understanding o$ the e9tent to which employees are passionate aout

their wor and emotionally committed to their company and to their

co&worers.

#here are se!eral standardized tests5 toolits and instruments a!ailale

which can help determine the le!el o$ employee engagement in an

organization. sur!ey o$ the allup Organization denties strong

$eelings o$ employee engagement in $our ey areas V customer

satis$action ? loyalty5 protaility5 producti!ity and employee turno!er.

#he 0uestionnaire has een administered to a multitude o$ companies

across the world. -esults $rom the sur!ey show a strong correlation

etween high scores and superior 8o per$ormance and many

organizations ha!e $ound it to e a deniti!e measure o$ the

engagement le!el o$ their employees. /tandard Chartered5 $or

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e9ample5 introduced annual sur!ey to measure impro!ement in the

engagement o$ teams. #he results are used to de!elop action plan and

continually monitor the $ollow&through o$ the teams. #his $ocus has

seen a continuous rise in oth the numer o$ engaged teams and

e9tent to which the employees are engaged at /tandard Chartered.

,any organization use employee satis$action sur!ey to identi$y the

root causes o$ 8o issues and create solutions $or impro!ements with

due consideration gi!en to the !iewpoints o$ employees. Certain

employee opinion sur!eys are also in practice that oers accurate

identication o$ employee eha!iors5 $eelings5 and thoughts $or

impro!ed organizational de!elopment. #he other ways used to

measure the employee engagement le!els is through tracing changes

in the attrition rate and growth in producti!ity and usiness. #he data

collected $rom these sur!eys can $urnish in$ormation that can help the

management in the $ollowing ways6

denti$ying cost&sa!ing opportunities

mpro!ing producti!ity

-educing turno!er

Curing asenteeism

/trengthening super!isor

E!aluating customer V ser!ice issues

ssessing training needs

/treamlining communication

enchmaring the organizationFs progress in relation to the industry

auging employees understanding o$ and agreement with thecompany mission.

#he sur!eys must also e integrated with the culture sur!ey s and

since the culture !aries within the organization5 the companies must

aim at measuring the engagement at wor group le!el. #he

organization also needs to eep in mind that it is not 8ust aout the

sur!eys7 whate!er $ollows is o$ great importance. $ter e!aluating the

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results $rom these sur!eys it is imperati!e $or the management to wor

out the prolem areas and tae an appropriate action. ,any a times it

so happens that the good news is communicated e9peditiously to all

concerned ut the ey challenges tend to e a!oided. #his maes the

employees $eeling unheard5 thus leading to resentment and this poses

a signicant threat to engagement le!els within the organization.

#he sur!ey ndings must aim at eha!ioral changes re0uired to

impro!e desired outcomes at the organizational5 team and indi!idual

le!els. :hile A- plays an instrumental role in the sur!ey process5 the

e9tent to which the change program can e success$ul is the

responsiility o$ an organizationFs leaders.

>2.1? DIAGNOSTIC TOOL

Current studies suggest that employee engagement will be

infuenced by:

1. Employee perceptions o$ 8o importance. #his study has $ound that

WYan employees attitude toward the 8o ZTs importance[ and the

company had the greatest impact on loyalty and customer ser!icethen all other employee $actors comined.X

2. Employee clarity o$ 8o e9pectations. W$ e9pectations are not clear

and asic materials and e0uipment not pro!ided5 negati!e emotions

such as oredom or resentment may result5 and the employee may

then ecome $ocused on sur!i!ing more than thining aout how he

can help the organization succeed.X

3.Career ad!ancement?impro!ement opportunities. W;lant super!isors

and managers indicated that many plant impro!ements were eing

made outside the suggestion system5 where employees initiated

changes in order to reap the onuses generated y the suse0uent

cost sa!ings.X

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4. -egular $eedac and dialogue with superiors. W=eedac is the ey

to gi!ing employees a sense o$ where theyFre going5 ut many

organizations are remaraly ad at gi!ing it.X

5. \uality o$ woring relationships with peers5 superiors5 and

suordinates. WYi$ employeeFs relationship with their managers is

$ractured5 then no amount o$ pers will persuade the employees to

per$orm at top le!els. Employee engagement is a direct re@ection o$

how employees $eel aout their relationship with the oss.X

6. ;erceptions o$ the ethos and !alues o$ the organization.

WTnspiration and !aluesF is the most important o$ the si9 dri!ers in

our Engaged ;er$ormance model. nspirational leadership is the

ultimate per. n its asence5 Zit[ is unliely to engage employees.X

A))+%$-' '9-'- + -%0/ %/ -/%- +7+-

Employee engagement can occur when the organizations wor on

remo!ing the locades to wor which necessitates ha!ing a clear

understanding o$ the le!ers re0uired to impro!e the ey employee

attitudes o$ satis$action and engagement so as to create an optimally

$unctioning system.

#here can e more than one way to impro!e the le!el o$ employee

engagement in a company. n $act5 there are many dierent things that

companies not only can do5 ut also need to do. ,ost organization

ha!e a range o$ practices to impro!e the engagement le!el o$ their

employees. est practice recommends starting right at the selection or

recruitment stage y ha!ing the right employees woring in the right

8os and ha!ing a strong induction and orientation program in place.

esides gi!ing the employees clarity on the !ision and goals o$ the

organization5 it is essential $or organizations to put into place regular

technical ? so$t V sill training and de!elopment programs and the

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certication programs to dri!e people towards e9cellent per$ormance

as it so happens at ACB in$o systems.

Once the employees ecome a part o$ the system5 eorts ha!e to e

put into place to engage employees to their highest le!el. #his includesgi!ing emphasis on certain areas which go a long way in aecting the

le!el o$ engagement o$ the employees and includes6

C+((9/0%0+/: proper communication system helps

employees in nding out what is going on within the company

outside their immediate team. #hey also help to create an

en!ironment o$ trust and openness within the organizations where

they are ale to tal openly. Employees who $eel they are listened toare ale to e9press dissatis$action and wor together to resol!e

their causes5 without it aecting their per$ormance.

#he initiati!e must e taen y the leaders at the top as it happens

at the /um ,icrosystems where the CEO interacts with /un

employees through :/L5 a $orum on /unFs intranet. Ae uses this

to sustain an acti!e5 an ongoing dialog on the corporate goals and

direction.

#he organizations must wor towards implementing the

communication $orums to pro!ide regular $eedac to all people5

including team meetings and con$erences. 3, $or e9ample

encourages employees to ring $orward their 0uestions or concerns

through such programs as letFs tal t O!er5 etween Ls and !arious

internal and e9ternal help lines.

esides using the regular employee opinion and satis$action

sur!eys5 an update on the !arious organizational issues can e

traced y the organizations through the usage o$ in&house

magazines and online communications5 including discussion oards

y company personnel including the senior management.

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R-% S$-(-': #hese $orm an important part o$ a companyFs

o!erall employee engagement program. /tudies ha!e long shown

that while money in itsel$ is not a moti!ating $actor the asence o$

nancial reward can e a signicant demoti!ator. #hus the role o$

reward schemes in oosting. #hus the roles o$ reward schemes in

oosting employee engagement areI #o remo!e arriers to

satis$action in the organization and pro!ide a $ramewor $or

rewarding e!eryone in the organization $or their per$ormance. #his

may e achie!ed through right compensation and enet programs5

stoc ownership and prot sharing plans and recognition programs.

;eople want to now i$ their input matters and that they are

contriuting to the organizationFs success in a meaning$ul way5 $or

which there must e per$ormance ased reward scheme in place.

n $act5 organizations must ha!e @e9ile enet schemes5 as Aewitt

ssociates does5 to attract and retain their talent5 which pro!ides

employees with the $reedom to choose how they recei!e their enets

tailoring a pacage to suit their li$estyle.

D--*+)0/ $- 0$ 9*9-:#he organizations must ha!e clear

and humane A- policies and tae initiati!es to maintain the 0uality

o$ wor li$e o$ its employees. Opportunities must e pro!ided $or

social interaction such as $amily gathering are0ues5 and trips to

the cinema or picnics. t ACB n$o systems5 a alance etween

personal ? pro$essional li!es o$ employees is maintained through

recreational acti!ities lie $esti!ities ] ACB5 get&togethers ]ACB5

sport]ACB. #he company also encourages an open and transparent

culture to empower its people and de!elop entrepreneurs.

#he organizations must demonstrate a commitment to employeesF

well Veing y pro!iding opportunities $or career ad!ancement and

e de!eloping a sa$e5 clean and inspiring wor en!ironment $or their

all&round growth. #he employees must e pro!ided with enough

resources to sol!e their day&to&day prolems or to do a 8o well.

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Culture V uilding acti!ities are great $or generating a $eeling o$

elongings. i!ing employees a $eeling o$ elongingness is crucial

in creating a thri!ing organization that people $eel committed to and

others want to 8oin.

L-%-'$0): Eecti!e leaders who help in setting the tone $or

creating an engaged wor$orce can really dierentiate an

organization $rom its competitors. E!eryone in the organization with

leadership responsiility must ha!e the emotional intelligence and

leadership sills needed to switch and employees on they must act

as role models5 demonstrate and set high standards to which others

can aspire. ood practices include eecti!e per$ormance

management and a $air e!aluation o$ per$ormance. #he leaders

must act as coaches and mentors and must gi!e an honest

$eedac and guidance to their employees.

deas should e sought $rom all employees and the $rontline

employees should e allowed to e9ercise a degree o$ discretion

during ser!ice deli!ery E.g.5 allowing employees to spend up to a

certain amount to correct a customerFs prolem or handle a

complaint. #he success o$ ,icroso$t5 $or e9ample5 stems in part $rom

ill gatesF elie$ that smart people anywhere in the company should

ha!e the4 power to dri!e an initiati!e. nitiati!es such as /i9 /igma

are dependent5 in part on the acti!e participation o$ employees on

the shop @oor.

=or great managements5 the path towards engaging employees and

eeping them engaged eings with asing them what they want and

what is important in order to e eecti!e in their roles. Eecti!e

leaders donFt wait to get the resignation to now that an employee

is dissatised.

n organization can always gain a competiti!e ad!antage y

creating an engaged wor$orce. t there$ore5 ecomes5 imperati!e

$or the organizations to identi$y the le!el o$ engagement in their

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organization5 stri!e to eliminate the reasons ehind the disengaged

wor$orce and implement strategies to mae them $ully engaged.

Employee engagement is something that is !ery di>cult to

accomplish ut i$ eorts are made on an ongoing asis5 it can

shri!el with relati!e ease.

3. RESEARCH OBJECTIVES

#he o8ecti!e o$ the study is.

1. #o mae a conceptual study o$ Employee Down&/izing

2. #o study as to what cause this Employee Down&/izing

3. #o study the impact o$ Employee Down&/izing on the employeeFs

morale

4. #o study as to how Employee Down&/izing5 Employee -etention

and employee commitment are inter related

4. RESEARCH METHODOLOGY

-esearch ,ethodology denes the purpose o$ the research5 how it

proceeds5 how to measure progress and what constitute success with

respect to the o8ecti!es determined $or carrying out the research

study. #he appropriate research design $ormulated is detailed elow.

E9ploratory research6 this ind o$ research has the primary o8ecti!e o$

de!elopment o$ insights into the prolem. t studies the main area

where the prolem lies and also tries to e!aluate some appropriate

courses o$ action.

#he research methodology $or the present study has een adopted to

re@ect these realties and help reach the logical conclusion in an

o8ecti!e and scientic manner. #he present study contemplated an

e9ploratory research

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R-'-%$ D-'0/

#he research design is the asic $ramewor5 which pro!ides guidelines

$or the rest o$ the research process. #he present research can e said

to e e9ploratory. #he research design determines the direction o$ the

study throughout and the procedures to e $ollowed. t determines the

data collection method5 sampling method5 the eldwor and so on.

N%9- + D%%

P0(%, D%%:;rimary data is asically $resh data collected directly

$rom the target respondents7 it could e collected through

\uestionnaire /ur!eys5 nter!iews5 =ocus roup Discussions Etc.

S-+/%, D%%: /econdary data that is already a!ailale and

pulished .it could e internal and e9ternal source o$ data. nternal

source6 which originates $rom the specic eld or area where research

is carried out e.g. pulish roachers5 o>cial reports etc.

E9ternal source6 #his originates outside the eld o$ study lie oos5

periodicals5 8ournals5 newspapers and the nternet.

D%% C+**-0+/

P0(%, %%:;rimary data was selected $rom the sample y a sel$&administrated 0uestionnaire in presence o$ the inter!iewer.

S%()*- S0-:

T$- '9-, 0' +/9- %(+/ 1 -')+/-/'

S%()*- A-%: C- Delhi

S%()*- 9/0: Employees o$ many companies in ehru ;lace

(Delhi)5 these people were re0uested to ll in the 0uestionnaires during

the lunch inter!als at the ehru ;lace premises

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SECONDARY DATA: /econdary data has een used which is

collected through

rticles5

-eports5

ournals5

,agazines5

ewspapers and

nternet

S%()*0/ T-$/09-

-andom sampling techni0ue has een employed to e9tract the $ruit$ulresults. #his includes the o!erall design5 the sampling procedure5 the

data collection methods5 the eld methods and the analysis procedures

S%()*0/ P+-9- A9%**, E()*+,-:

#he process employed to select the sample was simple random

sampling. /imple random sampling re$ers to that sampling techni0ue

in which each and e!ery unit o$ the population has an e0ual and same

opportunity o$ eing on the sample. n simple random sampling5 which

item gets selected is 8ust a matter o$ chance.

A/%*,0%* T++*':

/imple statistical tools ha!e een used in the present study to analyze

and interpret the data collected $rom the eld. #he study has used

percentiles method and the data are presented in the $orm o$ tales

and diagrams.

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5. DATA ANALYSIS

1. W$% I' Y+9 P0(%, R-%'+/ F+ L-%0/ T$- C+()%/,

1. enets '. etter o Opportunity

2. Commute *. Con@ict with Other

Employees

3. Con@ict with ,anager +. =amily -easons

4. o E9pectation 1G ot Challenging

". ;ay 11 ;ersonal -easons

%. -eallocation?,o!e 12. :oring Conditions

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2. H+ L+/ H%- Y+9 B--/ T$0/70/ A+9 L-%0/ T$-

C+()%/,

1. One ,onth or Bess 2. One #o " ,onths

3. ,ore #han " ,onths

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3. H+ S%0'- A- Y+9 W0$ T$- C+()%/, Y+9 W+7 F+

1. E9tremely Dissatised 2. Mery Dissatised

3. either /atised nor Dissatised 4. Mery /atised

". E9tremely /atised

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4. H+ W%' Y+9 W+70/ E)-0-/-

1. ,uch ,ore ;ositi!e than egati!e

2. ,ore ;ositi!e than egati!e

3. ,ore egati!e than ;ositi!e

4. ,uch ,ore egati!e than ;ositi!e

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5. I Y+9 E)-0-/-' A- M+- N-%0- T$%/ P+'00- W$%

F%+' A- R-')+/'0*- S-*- A** T$% A))*,.

1. ,y ;er$ormance E!aluation and the Outcome

2. ,y -ole5 -esponsiility and? or #itle

3. o #raining

4. ,y oss

". ,y Co&:orers

%. ,y Compensation

'. Change in Compensation ;acage

*. Company /a!ings ;lan

+. ,edical enets and nsurance

1G. -elocation

11. Macation #ime

12. Other

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6. H+ F*-0*- I' T$- C+()%/, W0$ R-')- T+ Y+9 F%(0*,

R-')+/'00*00-'

1. Mery n@e9ile 2. /omewhat n@e9ile

3. either 4. /omewhat =le9ile

". Mery =le9ile

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. D+ Y+9 H%- A C*-% P%$ F+ C%-- A%/-(-/

1. /trongly Disagree 2. /omewhat Disagree

3. either gree or Disagree 4. /omewhat gree

". /trongly gree

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!. H+ S%0'- A- Y+9 W0$ Y+9 P+'00+/ A T$0' C+()%/,

1. Mery /atised 2. /omewhat Dissatised

3. ot /atised nor Dissatised 4. /omewhat /atised

". Mery /atised

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". W$% P% O P%, P*%, I/ Y+9 D-0'0+/ T+ L-%- T$-

O%/0%0+/

1. 2G&4GH 2. 4G&%GH

3. %G&*GH 4. *G&1GGH

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1. D+-' W+70/ C+/00+/' A


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11. H+ W+9* Y+9 R%- T$- M+%*- I/ Y+9 C+()%/,

1. Bow 2. Mery Bow

3. Aigh 4. Mery Aigh

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12. C+9* T$0' C+()%/, H%- D+/- A/,$0/ T+ E/+9%- Y+9

T+ S%,

1. Nes 2. o

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6. CONCLUSION & IMPLICATIONS

T$- )-'-/ -)+ 0/0%-' $% $- +**+0/ -%9-':;

1. etter 8o opportunities in outer maret pay are the main reasons

$or increasing attrition rate.

2. #he employees do not $eel !alued y their employer.

3. #he woring en!ironment in the company also mae them to lea!e

their 8o.

4. ;er$ormance ppraisals are not gi!en at regular inter!als so that the

Employee $eel moti!ated $or its wor.

". #he wor schedule is !ery much in@e9ile /tress$ul.

Aowe!er an eecti!e retention policy could e $ollowed to mae the

employees stay in the company starting $orm recruitment and

selection o$ employees5 pro!iding an eecti!e pay pacages and

compensation5 outlining an e>cient career de!elopment path $or

employees and most importantly catering to their emotional5 mental

and $amily needs. lso practices should e $ollowed to ring the e9&

employees ac in the company.

. RECOMMENDATIONS

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!. BIBLIOGRAPHY

1. Charles -. reer5 /trategic Auman -esource ,anagement6

eneral ,anagerial pproach5 /econd Edition5 ;erson Education5

2GG4

2. #yson5 /.5 Bawrence5 ;.5 ;oirson ;5 ,anzolini5 B.5 and /e$eri5 /.M.5

Auman -esource ,anagement V /trategies5 ssues and Cases5

Kogan ;age5 Bondon5 1+++.

3. arney Olmstead and /usanne /mith (2GG1)6 Creating a =le9ile

:orplace6 Aow to /elect and ,anage lternati!e :or Options

4. Khanewal -ohit (=eruary 2GG2)5 :inning the -etention ame5

Auman Capital5 ;g. 1G&12.

". rocner5 .5 ro!er5 /.5 -eed5 #.5 Dewitt5 -.B. (1++2). Bayos5 8o

insecurity5 and sur!i!ors< wor eort6 e!idence o$ an in!erted&L

relationship. #he cademy o$ ,anagement ournal5 3"5 413&42".

%. rocner5 .5 ro!er5 /.5 -eed5 #.5 Dewitt5 -.B.5 O


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APPENDI#

UESTIONNAIRE

NAME: ;

JOB TITLE: ;

ORGANIATION: ;

CELL NO. : ;

AGE GROUP: ;

1. W$% I' Y+9 P0(%, R-%'+/ F+ L-%0/ T$- C+()%/,

1. enets '. etter o Opportunity

2. Commute *. Con@ict with Other

Employees

3. Con@ict with ,anager +. =amily -easons

4. o E9pectation 1G ot Challenging

". ;ay 11 ;ersonal -easons

%. -eallocation?,o!e 12. :oring Condition

2. H+ L+/ H%- Y+9 B--/ T$0/70/ A+9 L-%0/ T$-

C+()%/,

1. One ,onth Or Bess 2. One #o " ,onths

3. ,ore #han " ,onths

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3. H+ S%0'- A- Y+9 W0$ T$- C+()%/, Y+9 W+7 F+

1. E9tremely Dissatised 2.Mery

Dissatised

3. either /atised nor Dissatised 4. Mery /atised

". E9tremely /atised

4. H+ W%' Y+9 W+70/ E)-0-/-

1. ,uch ,ore ;ositi!e than egati!e

2. ,ore ;ositi!e than egati!e

3. ,ore egati!e than ;ositi!e

4. ,uch ,ore egati!e than ;ositi!e

5. I Y+9 E)-0-/-' A- M+- N-%0- T$%/ P+'00- W$%

F%+' A- R-')+/'0*- S-*- A** T$% A))*,.

1. ,y ;er$ormance E!aluation and the Outcome

2. ,y -ole5 -esponsiility and? or #itle3. o #raining

4. ,y oss

". ,y Co&:orers

%. ,y Compensation

'. Change in Compensation ;acage

*. Company /a!ings ;lan

+. ,edical enets and nsurance

1G. -elocation

11. Macation #ime

12. Other

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6. H+ F*-0*- I' T$- C+()%/, W0$ R-')- T+ Y+9 F%(0*,

R-')+/'00*00-'

1. Mery n@e9ile 2. /omewhat n@e9ile

3. either 4. /omewhat =le9ile

". Mery =le9ile

. D+ Y+9 H%- A C*-% P%$ F+ C%-- A%/-(-/

1. /trongly Disagree 2. /omewhat Disagree

3. either gree or Disagree 4. /omewhat gree

". /trongly gree

!. H+ S%0'- A- Y+9 W0$ Y+9 P+'00+/ A T$0' C+()%/,

1. Mery /atised 2. /omewhat Dissatised

3. ot /atised nor Dissatised 4. /omewhat /atised

". Mery /atised

". W$% P% O P%, P*%, I/ Y+9 D-0'0+/ T+ L-%- T$-

O%/0%0+/

1. 2G&4GH 2. 4G&%GH

3. %G&*GH 4. *G&1GGH

1. D+-' W+70/ C+/00+/' A


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3. Aigh 4. Mery Aigh

P%0-' T+ R-9- E()*+,-- D+/;S00/

,any companies $ace the challenge o$ employee turno!er5 and incur

hea!y losses. #he employers pro!ide se!eral attracti!e pacages in

order to retain the employee. -easons $or employee turno!er

constitute se!eral controllale and non&controllale $actors.

ood economic timeFs means lowered unemployment5 increased

producti!ity5 and etter prospects $or growth in all sectors. Aowe!er5

economic prosperity also means increased 8o&hopping among the 8o

seeers. Opportunities aound e!erywhere with increasing competition

$or talent among companies. =re0uent 8o changes are no longer a

stigma5 ut they are ecoming norm. #he issue o$ employee turno!er

is so pronounced in todayFs world5 that e!en in apan5 where li$e&time

employment and high employee loyalty are the norms5 worers are

ecoming increasingly moile. E!en sur!i!al will ecome 0uestionale5

i$ the company witnesses higher turno!er among the top per$ormer.

:ith the increasing moility among the worers5 Wemployee retentionX

poses a distinct challenge to any company.Companies that are in@e9ile5 or whose organizational culture is

characterized y domination and autocracy are liely to ha!e

dissatised employees no matter how good the incenti!es to stay may

e Or5 at the !ery least5 the tenure o$ their employees is liely to e

highly sensiti!e to changes in specic (usually monetary) incenti!es6

small changes in compensation may lead to numerous departures.

#here are howe!er other aspects o$ the wor en!ironment or particular

8os that can act as strong Tde&moti!atorsF that can cause people to

lea!e their employment. #hese include

Bac o$ control o!er oneFs wor

F--*0/ +- + 9/$%**-/- , -)-00- %'7'

L%7 + + '-90,

L%7 + *-%/0/ +))+9/00-'

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M+- -/-+9' +()-/'%0+/ + -/-' )%7%- +cient to ensure

strong employee commitment. O!er the past 1G or 1" years5 the

usiness literature dealing with employee participation5 worplace

wellness5 wor&li$e alance and other topics has mushroomed5

indicating a strong interest in and recognition o$ how other aspects o$

woring li$e in@uence peopleFs decisions to stay with or lea!e a

company.

W$, + )-+)*- $++'- + *-%- + '%,

/etting aside list o$ retention policies and programs5 it is clear that

there is road agreement in the A- literature aout the general

$eatures o$ any potential A- program that contriutes to good

retention. ,ost o$ these are directly related to creating a satis$actorywor en!ironment $or employees and thus5 in turn5 to good retention.

#hese $eatures

stimulating wor en!ironment that maes eecti!e use o$

peopleFs sills and nowledge5 allows them a degree o$

autonomy on the 8o5 pro!ides an a!enue $or them to contriute

ideas5 and allows them to see how their own contriution

in@uence the companyFs well&eing.

Opportunities $or learning and sills de!elopment and

conse0uent ad!ancements in 8o responsiilities.

Eecti!e communications5 including channels $or open5 two&way

communication5 employee participation in decisions that aect

them5 an understanding o$ what is happening in the organization

and an understanding o$ the employerFs main usiness concerns.

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ood compensation and ade0uate5 @e9ile enet plans.

-ecognition on the part o$ the employer that employees need to

strie a good alance etween their li!es at wor and outside o$

wor.

-espect and support $rom peers and super!isors.

1. W$% %- $- -%'+/' + -()*+,-- +/'00/

Osolescence o$ sills

/hi$t in organizational re0uirements7

Outsourcing7

,odernizing5

-edesigning the 8o

-estructuring or reducing the acti!ities o$ industrial units

2. I' +/'00/ $- +/*, %, +9 + $- %+- )+*-(

Nes o

3. I N+ W$% %- $- %*-/%0-' + +/'00/

Employment Changes in ;ay?enets #raining

;olicies o Design ;olicies

4. W$0$ 0' % -- 0-0% + 9'- %' $- %'0' + +/'00/

-()*+,--'

seniority per$ormance

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5. A- $- -%'+/' + +/'00/ +((9/0%- -** + ,+9

Nes o

6. W$-/ '$+9* $- -()*+,-' +/-, %+9 +/'00/ +

$-0 -()*+,--'

gi!e $uture notice

tell them on the day they are e9pected to lea!e

. D+-' +/'00/ %


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1. D+-' +/'00/ %*'+ $%- %/ 0()% +/ $- '90+

-()*+,--'

Nes o

11. $%' $0' C+()%/, D+/- A/,$0/ T+ E/+9%- Y+9

1. Nes 2. o

12. W$% %- $- +/'-9-/-' + -()*+,-- +/'00/

Effect of Downsizing on Employees Morale

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