CHAPTER 14: ORGANIZATIONAL DEVELOPMENT
MANAGING CHANGE
-In an organization, change can occur in many reasons and takes on many forms. Change can occur due to
organization development such as downsizing, reorganization, or the introduction of teams, and external mandates such
as managed care or new government regulations, and some changes occur due to new leadership or new personnel.
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Sacred Cow Hunts - first step toward organizational change. Organization sacred cows are practices that have
been around for a long time and invisibly reduce productivity.
- it is in which employees look for practices and policies that waste time and are
counterproductive.
- in the sacred cow hunt, an organization looks at all the practices and polices and ask questions
like these:
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Why are we doing it? Does it add value, quality, service, or productivity?
What if it didn’t exist?
Is it already being done by someone else?
How and when did we start doing these?
Can it be done better by another person, department, or company?
- common types of sacred cows include the paper cow, the meeting cow, and the speed cow.
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The Paper Cow - are unnecessary paperwork - usually forms and reports that cost organization
money to prepare, distribute, and read.
- To determine if something is a paper cow, consider the extent to which the paperwork
increases efficiency, productivity, or quality; and if document is really “read” by other employees.
- A good annual practice is to review all forms and reports and determine whether they
are still needed and, if they are, whether are needed in their current format.
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The Meeting Cow - refers to the number and length of meetings; it is also important to note the cost of
the meeting (e.g., one hour’s salary of each attendance, cost of meeting room, snacks, etc), and
how beneficial the meeting will be.
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The Speed Cow - refers to the unnecessary deadlines that causes employees to work on a faster rate
resulting to more stress, possible health problems, and reduced quality of work.
- In addition to sacred cow hunts, effective change can be encouraged by using these
strategies:
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Think like a beginner: Ask stupid questions, and ask “why” some things are done
that way, and don’t assume that everything will make sense.
Don’t be complacent with things that are working well. Keep looking for ways to
improve, new markets to enter, and new products to introduce.
Don’t play by everyone’s rules; make your own.
Rather than penalizing mistakes, reward employees for making the attempt to
change or to try something new.
Employee Acceptance of Change - Though change can be beneficial to organizations, employees are often
initially reluctant to change. This reluctance is understandable since employees are already comfortable
with the present conditions or environment. Furthermore, there is this fear that the change will create
awful environments or that their skills won’t be valued as much in the future.
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Stages - According to theories, a change process can occur between 3 to 7 stages or phases, depending
on whether the focus of the theory is the organization, the change agent, or the employee. The
difference between a stage and a phase is that stages are distinct time periods, whereas phases
can overlap with one another.
- According to Lewin, organizations go through 3 stages: unfreezing, moving, and refreezing.
1. Unfreezing Stage - the organization must convince employees and other stakeholders
that the current state of affairs is unacceptable and that change is necessary.
2. Moving Stage - the organization takes steps (e.g., training, new work process) to move
the organization to the desired state.
3. Refreezing Stage - the organization develops ways to keep the new changes in place,
such as formalizing new policy and rewarding employees for behaving in a
manner consistent with the new change.
- On the other hand, according to Carnall, employees go through 5 stages during major
organization changes: denial, defense, discarding, adaptation, and internalization.
1. Stage 1: Denial - employees deny that any change will actually take place, try to
convince themselves that the old way is working, and create reasons why the
proposed changes will never work.
2. Stage 2: Defense - when employees begin to believe that change will actually occur,
they become defensive and try to justify their positions and ways of doing things.
The idea here is that if the organization aims to change the way employees
perform, then there is an inherent criticism that the employees must have been
previously doing things wrong.
3. Stage 3: Discarding - At some point, employees will realize that change in the
organization, as well as with the other employees, is inevitable. Then, it is in the
best interest of employees to discard their old ways and start to accept the
change as the new reality.
4. Stage 4: Adaptation - At this stage, employees test the new system, learn how it
functions, and begin to make adjustments in the way they perform. Emplouess
spend tremendous energy at this stage and can often become frustrated and
angry.
5. Stage 5: Internalization - In this final stage, employees have become immersed in the
new culture and comfortable with the new system and have accepted their new
coworkers and work environment.
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Important Factors - The extent to which employees readily accept and handle change is dependent on
the reason behind the change, the leader making the change, and the personality of the person
being changed.
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The Type of Change - there are two types of change. Evolutionary and revolutionary.
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Evolutionary Change - is vast majority type of changes; refers to the continual
progress of upgrading and improving processes.
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Revolutionary Change - a “real jolt to the system”; changes are drastic and
widespread (a total rework and rewiring); is much harder than evolutionary
change.
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The Reason Behind the Change - Acceptance of changes depends on the reason behind it.
The more understandable and logical the change is, despite being not necessarily liked,
will still be accepted by the employees. On the other hand, changes that are made due to
a sudden whim or are not explained well will receive less acceptance.
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The Person Making the Change - change is more likely to be accepted if it suggested by
someone within the organization compared to an external source. Also, a well liked and
trusted leader suggesting change is more likely to receive support and acceptance
compared to a dislike and not trusted leader. For organizational change of any type of
work, it is essential that employees trust the organization as a whole as well as the
specific individuals making the change.
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The Person Being Changed - Every individual reacts to change differently, thus there 5
classifications of behaviors toward change:
1. Change Agents - these people enjoys change and do change just for the sake of it.
Meaning, they change things just because they want to, which most of
the time, is disruptive.
2. Change Analysts - similar to change agents, these people are open to changes,
however, unlike change agents, accepts change only if it will be
beneficial for the organization.
3. Receptive Changers - these people are also open to change, but is most like not be
the one to start it.These people have high self-esteem, optimistic, and
believes that they control over their lives. Receptive changers are
essential for any major organizational change to be successful.
4. Reluctant Changer - these people does not instigate nor welcome change, but will
do if it is necessary.
5. Change Resisters - these people hate change, are scared by it, and will do
anything they can to keep change from occurring.
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Implementing Change - another important factor in employees’ acceptance of change is how the change is
implemented.
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Creating an Atmosphere for Change - the first step to organizational change is creating a proper
atmosphere - through creating dissatisfaction with the current system. A survey can be done to
measure how satisfied employees are with the current system, and if they are not, what
suggestions do they have. Sharing the results of this survey, especially the negative ones, with the
other employees can then infer a dissatisfaction towards the current system.
- After creating dissatisfaction with the status quo, organizations should work hard to
reduce the fear of change by providing emotional support, allowing employees to vent and
discuss their feelings, and providing employees safety net that allows them to make mistakes
during the transition period.
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Communicating Details - Employees are most responsive to change when they are kept well
informed (unless there is a need for secrecy) and involved in all aspects of the change, from the
initial planning to final implementation, otherwise, employees will suspect resulting to less
cooperation and failed transition. Some tips to take note in communication details of change are:
1. Communicating change is hard work
2. Traning is needed - especially for those who will communicate details of changes
3. Two-wat communication is essential - employees must have the opportunity to
provide feedback to the people making the changes.
4. Honesty is the best policy - be honest with employees and tell them information as it
arises rather than waiting until all aspects of the change are completed.
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Time Frame - Organizations shouldn’t be in the “change mode” for more than 2 years; the longer the
change is, the more likely it is to fail.
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Training Needs - When the organization is implementing change, it’s employees should also be train
in order to “catch up” with the changes to occur.
Organizational Culture - the shared values, beliefs, and traditions that exist among individuals in an
organization; also referred to as corporate culture or corporate climate.
- Culture is what establishes workplace norms of appropriate behavior and defines roles and
expectations that employees and management have of each other. Most cultures also have subcultures,
example to that is the subculture within a specific department that differs with the overall culture of the
organization
- Organizational culture also has role models who influence your work behavior and teach you
norms. Organizational culture can aid employees in behaving optimally, but the same time, it can also be a
contributing factor in many undesirable behaviors such as unethical decision making.
-As important as it is, organizational culture has traditionally been ignored during restructuring
and other changes. This is either because there is a general belief that culture can’t be changed or because
many organizations do not know how to change their cultures . Consequently, it is important that an
organization knows how to include culture in its change process.
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Changing Culture - the process of changing culture includes holding on to the successful elements of
the present culture and adding new elements that are important.
- Consequently, the first step in changing culture is assessing the desired culture and
comparing it with the existing one to determine what needs to change. Two additional steps are
creating dissatisfaction with the current culture to create support for the new one and
maintaining the new culture.
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Assessing the New Culture - Assessment of the new culture involves a great deal of discussion and
analysis and should include the following steps:
1. Step 1: Needs Assessment - Analyzing and comparing the current culture with the
desired culture to determine what might need to change. Areas such as role
expectations, job descriptions identifying new decision-making responsibilities,
accountability, rewards, and employee selection system must be reviewed. Data
for an analysis are usually collected through observation, review of existing
documentation, and employee interviews and surveys consisting of questions
that ask for potential recommendations of changes.
2. Step 2: Determining Executive Direction - management must then analyze the needs
assessment to determine the decisions or actions that will reinforce the culture
and to assess the feasibility of certain changes. It takes the wholehearted
support of top management to implement an empowering philosophy.
Addressing possible obstacles to culture change during the transformation
process can usually minimize unintended consequences.
3. Step 3: Implementation Considerations - addressing how the new culture will be
implemented.
4. Step 4: Training - as change occurs, then so there will be changes in different role
expectations. Traning organization members with the new philosophy for the
new culture is necessary for them to thrive and be long lasting in it.
5. Step 5: Evaluation of the New Culture - evaluating and reviewing the new culture is
necessary in order to determine whether the change has really occurred and if
there are old norms that persist. If so, additional strategies must be identified to
establish and support the new culture.
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Creating Dissatisfaction with Existing Culture - just as in the “Creating an atmosphere for change”,
instilling dissatisfaction within the employees towards the current culture can be a catalyst to
begin a change.
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Maintaining the New Culture - for the new culture to last, developing new reward systems and
selection methods should occur. It is also important to reward employees for supporting and
participating with the new system.
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Selection of Employees - future employees should be selected based on how they epitomize the new
culture.
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Organizational Socialization - the process whereby new employees learn the
behaviors and attitudes they need to be successful in an organization. This process also
helps newcomers to the organization define his role and what is expected of him in his
position.
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Rituals - a formal procedure in which employees participate to become “one of the gang”
such as attending banquets and staff picnics to reinforce the impression of a “caring”
organization. Some also put newcomers in a “probationary period” as their ritual.
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Symbols - are organizational behaviors or practices that convey messages to employees.
EMPOWERMENT
- increasing levels of employee input
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Making the Decision to Empower
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Factors in Making the Decision to Power - employees need to be involved in decisions in
circumstances in which the quality of the decision is important, the decision affects employees,
the supervisor doesn’t have the knowledge to make the decision, or the employees don’t trust the
supervisor. (print pp. 517)
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Importance of Decision Quality - The first factor to be considered in making a decision is
whether one decision will be better than another. The lower the quality and significance
of a decision to make, the less time and effort should be spent on making it.
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Leader Knowledge of the Problem Area - The second factor in decision making involves
the extent to which leaders have the sufficient information to make the decision alone. If
they do, then consulting subordinates is only necessary if the leader wants them to feel
involved. If otherwise, then consultation is essential.
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Structure of the Problem - The third factor concern in decision making is the extent to
which a leader knows what information is needed and how it can be obtained - that is,
the problem’s structure. If the leader does not know how to obtain this information, the
decision-making process will require other people, and the decision will take longer to
reach.’
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Importance of Decision Importance - The fourth decision-making factor involves the
degree to which it is important that the decision be accepted by others.
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Probability of Decision Acceptance - The fifth decision-making factor is subordinate
acceptance. If the leader feels he can make the decision himself, but the acceptance of the
decision is important, he must determine whether his subordinates will accept it.The
employees’ perception of their leader is a factor whether a decision will be accepted.
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Subordinate Trust and Motivation - The sixth factor in the decision-making process is the
extent to which subordinates are motivated to achieve the organizational goals and thus
can be trusted to make decisions that will help the organization.
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Probability of Subordinate Conflict - The final factor in the decision-making process
involves the amount of conflict that is likely among the subordinates when various
solutions to the problem are considered.
Decision-Making Strategies Using the Vroom-Yetom Model
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Autocratic I Strategy - leaders use available information to make a decision without
consulting their subordinates.
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Autocratic II Strategy - leaders obtain necessary information from their subordinates and
then make their own decision.
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Consultative I Strategy - Leaders share the problem on an individual basis with their
subordinates and then make a decision that may or may not be consistent with the
thinking of the group.
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Consultative II Strategy - Leaders share the problem with the group as a whole and then
make a decision that may or may not be consistent with the thinking of the group.
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Group I Strategy - Leaders share the problem with the group and let the group reach a
decision or solution.
Levels of Employee Input - due to confusion between the employer and employee’s understanding of
“empowerment”, “levels of input” is a much more appropriate term to use to clearly imply what the
employer means by empowerment.
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Following - employees at the following level have no real control over their jobs, are only given
instructions what, when, and how to do a job, and their jobs are often checked by other
employees or a supervisor. Employees at this level can be those who are new or inexperienced to
the work being performed or those with weak decision-making skills.
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Ownership of Own Product - employees at this level are still being told what to do, but they are now
responsible for the product of their work. Through this, employees will be motivated to check
their work more carefully, provides them with a sense of “ownership” in their product, and
provides a greater sense of autonomy and independence.
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Advisory - employees at this level are asked to provide feedback, suggestions, and input into a variety
of organizational concerns. The key at this level is that there is no guarantee that an organization
will follow the advice given by the employees; the only guarantee is that the organization will
seriously consider the advice. An employees advice about their jobs will be very beneficial since
they themselves know their jobs well.
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Shared/Participative/Team - employees at this level are allowed to makes decisions. However, this
decision is made at a group level. At this level, employees must not only be well-trained in
decision-making, but also be willing to take on the responsibility of making decisions.
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Absolute - employees at this level have absolute authority to make a decision on his own - no group
consensus, no supervisory approval. It is important to point out, however, that he is also
responsible for the consequences of that decision. When employees are empowered to make
decisions, they must first receive some training how to make them. Rather than punishing an
employee who makes a wrong decision, it is better for the organization to discuss with the
employee what might have been a better decision and to explain why the employee’s decision
was improper. Without such training and coaching, employees are not likely to enthusiastically
accept their newly empowered status, especially if their new level of authority is not
accompanied by an increase in pay.
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Empowerment Charts - A chart made for each employee that shows what level of input the employee has for
each task.
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Consequences of Empowerment - Being at a higher control/input can result has many positive aspects such as:
increased job satisfaction for employees, higher skill levels, higher pay, increased job security, and
increased in potential to find another employment. On the other hand, more responsibility means more
stress, risks of making bad decisions resulting to punishments, being fired, or denied of promotion.
FLEXIBLE WORK ARRANGEMENTS
- another popular organization development intervention is to provide employees with flexibility in the hours
they work. Such flexibility might involve the number of hours worked, the times in which the hours are worked, or where
the work itself is performed.
- Flexible work environments results to: lower absenteeism, lower turnover, higher productivity, and more highly
satisfied employees. Employees also benefits by having a better work-life balance and lower commuting costs.
- Interventions involving flexible work arrangements typically follow one of four strategies: (see following)
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Strategy 1: Full-Time Work, Flexible Hours - to accommodate the family lives and personal preferences of
employees, organizations provide flextime, it is a work schedule that allows employees to choose their
own work hours. With this method, employees can better manage their times, can have more time to
focus and take care of their selves, and this enriches the employee’s job, resulting to increased job
satisfaction.
- Flextime can be arranged into several ways such as: bandwidth, core hours, and flexible
hours.
1. Bandwidth - the total number of potential work hours available each day. A
company rule or alike wherein employees can start their work schedule in any
hour within the bandwidth, per say 7:30am to 7:30pm.
2. Core Hours - the hours in a flextime schedule during which every employee
must work (e.g., peak hours where the company is busiest).
3. Flexible Hours - the part of a flextime schedule in which employees may
choose which hours to work. These are the remaining hours of the bandwidth
wherein the employee has a choice of working.
- The most flexible of these schedules is called gliding time. It is a flextime schedule in
which employees can choose their own hours without any advance notice or scheduling. Meaning,
employees can come and go whenever they like as long as they work 8 hours a day.
-most flexible working hours are categorized as flexitour or modified flexitour.
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Flexitour - A flextime schedule in which employees have flexibility in
scheduling but must schedule their work hours at least a week in
advance.
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Modified Flexitour - a flextime schedule in which employees have
flexibility in scheduling but must schedule their work hours a day in
advance.
- an innovative approach to flextime is the FlexYear option offered by tax firms. Rather
than working parts of days, employees approved for FlexYear work certain parts of the year and take the
remainder of the year off.
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Strategy 2: Compressed Workweeks - work schedules in which 40 hours are worked in less than the tradition
5-day workweek.
- the advantages of compressed workweeks is obvious in the employees’ perspective. They get
more vacation days, more time with family, more time to sleep, and reduced hours in commuting.
Eventhough worker do feel moderately fatigued, their work behavior and work attitudes generally improve
once a compressed workweek schedule has been adopted.
- the differences in hours worked per day also has no significant effect in the employees’ health,
productivity, or turnover, instead there is higher satisfaction and improved sleep.
- On the other hand, despite differences in hours have no significant effect in health and
performance, very long hours can take it toll as well, thus adjustments on the organizations side should be
made to reduce these risks.
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Strategy 3: Reducing Work Hours
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Peak-Time Pay - certain employees are encouraged to work only part time but are paid at a higher
hourly rate for those hours than employees who work full time. This approach is usually common
in organizations wherein they have certain peak hours thus will be needing more manpower
during those hours compared to any other working hours.
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Casual Work - a practice related to peak-time pay, is a scheduling practice in which
employees work on an irregular or as-needed basis. This approach is much
more common in peak seasons where organizations are expecting more
manpower during a long period or a season.
Job Sharing - a work schedule in which two employees share one job by splitting the work hours. With
job sharing, employees with complex occupations as teaching and accounting to enjoy the
advantages of fewer work hours. Also, jobs of the two employees are considered to be as one,
thus they can correct each other’s works.
Strategy 4: Working from Home - Telecommuting, also called “telework” and “mobile working”, is a type of
working from home by communicating with managers and coworkers via phone, computer, fax machine, and
other off-site data. It is ideal for such tasks as computer programming, data entry, and telemarketing.
- telecommuters faces less work-family conflict, better relationships with their supervisor, higher
job satisfaction, less role stress, lower intention to turnover, and higher performance levels than their
non-telecommuting colleagues.
- disadvantages are that difficult to organize workers when they are scattered around many
locations, difficult for the government to enforce safety and fair treatment standards, and employees cannot be
easily supervised.
DOWNSIZING
-When organizations restructure, the result is often a decrease in size of their workforce.
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Reducing the Impact of Downsizing
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Signs of Problems - there are certain signs to look out for that may require downsizing as a response.
Steps taken at this stage can greatly reduce the need for, or size of, future downsizing.
1.
Temporary Employees - also called “temps”, employees are hired through a temporary
employment agency. Temps are hired to freeze the hiring of new permanent employees
and fill vacancies caused by employees leaving or retiring. Temps are not considered as
official employees of the organization, and when the “worst” occurs, organizations can
just terminate their contracts with them.
2.
Outsourcing - a strategy of having certain organizational functions performed by an
outside vendor rather than an employee in the organization. Outside vendors will then
provide services previously performed internally, such as data-processing.
3.
Encourage employees to change careers and then help these employees learn the skills
needed to make the career change.
4.
Reducing the needs for layoffs is to offer early retirement packages.
5.
Ask employees to take pay cuts or defer salary increase.
6.
Adjusting work schedules through restricting overtime, implementing job sharing,
encouraging work from home, implementing pay-less holidays or a shortened
workweek, and reducing their employee’s pay.
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Selecting the Employees to Be Laid Off - criteria to consider who should be laid off are seniority,
performance, salary level, and organizational need. In order to reduce legal problems, laying off
should be diverse in terms of age, race, and sex.
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The Announcement - the way layoffs are being announced can affect the future of the organization.
Announcement can be done in general or one-by-one, but what’s important that the following
questions must be answered:
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Why are layoffs needed?
Isn’t there any alternative?
When will the layoffs take place?
Who will be laid off?
What type of financial assistance will be available?
Will we get help writing résumés?
How will this affect my pension?
Outplacement Programs - to help layoff victims move on with their lives. These programs typically
include emotional counseling, financial counseling, career assessment and guidance, and job
search training.
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Emotional Counseling - after being laid-off, employees undergo to different stages similar
to stages of change: denial, anger, fear, and acceptance.
1. Denial Stage - employees denies that an organizational change or layoff will occur.
Employees who are denial will not participate in the efforts to help them
because they don’t see a need to participate in something that is not going to
happen.
2. Anger Stage - employees become angry at the organization. At this stage, it is
important that employees be given an appropriate avenue through which to
vent their anger and frustration.
3. Fear Stage - employees worry about how they will survive financially. At this stage,
emotional counseling moves from a listening stage to one that is more empathic
and soothing.
4. Acceptance Stage - employees accept that layoffs will occur and are ready to take
steps to secure their future.
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Financial Counseling - this process include the issues of severance pay, unemployment
insurance, medical insurance, and any special programs that might be available to help
the layoff victims.
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Career Assessment and Guidance - conducting workshops on such topics as understanding
the job market, finding potential job openings, writing résumés, performing well in the
employment interview, and making decisions about job offers.
Effects of Downsizing
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Victims - the negative effects of being a victim of downsizing on health are increases in headaches,
stomach upsets, sleeping problems, cholesterol levels, physical illness, hospitalization rates, heart
trouble, hypertension, ulcers, vision problems, and shortness of breath.
- it’s effects emotionally are high levels of stress, increased drug and alcohol abuse, more marital
problems, and feelings of depression, unhappiness, anger, frustration, and dissatisfaction with
life.
- Socially, victims are reluctant to share their feelings with friends, avoid family and friends due
to feelings of embarrassment and shame, and avoid social situations and entertainment requiring
money.
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Survivors - employees who retain their jobs following a downsizing. Survivors also suffer from
psychological trauma and their future productivity is related to the way in which they and their
not-so-fortunate counterparts are treated during the downsizing process.
- research indicates that survivors:
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Become afraid of taking risks and are more apprehensive and narrow-minded;
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Are more stressed, anxious, secretive, skeptical, cynical, and distrustful;
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Have greater role conflict and ambiguity;
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Lose confidence in themselves and in management;
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Have lower levels of morale and job satisfaction; and
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Feel a loss of control.
- to reduce the negative effects on survivors, organizations must ensure that the procedure used
to determine layoffs is fair and clearly communicated to both victims and survivors.
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Local Community - layoffs and plant closings affects local communities due to reduced tax base and
revenues, charities gets fewer donations and often have increased demands for their services, retail
stores lose business, banks have greater numbers of loan defaults. On the positive side, layoffs result in
an increase in the quality of the available workforce.
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The Organization - the positive effects of downsizing in organizations are still not clear. For example:
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Financial success are not met after layoff
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Lowered productivity after layoff
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Small reduction in expenses, small increase in productivity and improved quality
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Lower performance after downsizing