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ORGANIZATIONAL DEVELOPMENT 09-11 1
WHAT IS DOWNSIZING?
R e d u c i n g t h e o v e r a l l s i z e
R e d u c t i o n i n n u m b e r o f e m p l o y e e s
P i n k S l i p M a n a g e m e n t
ORGANIZATIONAL DEVELOPMENT 09-11 2
TYPES OF DOWNSIZING
R e d u c e d w o r k w e e k
T r a n s f e r s
F i r i n g
J o b S h a r i n g
ORGANIZATIONAL DEVELOPMENT 09-11 3
REASONS OF DOWNSIZING!!
Merging of two or
more firm
Acquisition
When company
goes at loss
Change in
management Economic crisis
Strategy changes
Outsourcing
ORGANIZATIONAL DEVELOPMENT 09-11 4
DOWNSIZING
& HR SYSTEM
E m p l o y e e R e l a t i o n s
P e r f o r m a n c e M a n a g e m e n t
R e w a r d S y s t e m E m p l o y m e n t
T r a i n i n g
M o r a l e o f S u r v i v o r s
P e r f o r m a n c e e v a l u a t i o n a s a l a y o f f c r i t e r i a
C o m p e n s a t i o n p a y & b e n e f i t s
R e p u t a t i o n e f f e c t s o n
r e c r u i t m e n t
L o s s o f T r a i n i n g i n v e s t m e n t f r o m
t u r n o v e r
ORGANIZATIONAL DEVELOPMENT 09-11 5
ORGANIZATIONAL DEVELOPMENT 09-11 6
RELIANCE MART
M u k e s h A m b a n i
H y p e r m a r k e t
T h i r d r e t a i l f o r m a t
1 6 5 0 0 0 s q . f e e t
R a n g e o v e r 9 5 0 0 0 p r o d u c t s
O v e r 4 0 0 h i g h l y s k i l l e d e m p l o y e e s
ORGANIZATIONAL DEVELOPMENT 09-11 7
What Happened @ Rel iance Mart
A l m o s t 5 0 % s t a f f r e m o v e d
2 f l o o r s c o m p l e t e s h u t d o w n
C u s t o m e r c a r e s e r v i c e – h o p e l e s s
P r o d u c t s a r e o f l o w q u a l i t y
C h a r m o f r e l i a n c e h a s g o n e
O n e t h e b e s t e . g o f d o w n s i z i n g i n A h m e d a b a d
ORGANIZATIONAL DEVELOPMENT 09-11 8
REASONS OF DOWNSIZING AT RELIANCE MART?
D e m a n d d e c r e a s e d
I n f l a t i o n
T o u g h c o m p e t i t i o n
R e c e s s i o n
E a r n m o r e a n d m o r e p r o f i t
P o o r q u a l i t y
S c h e m e s w e r e n o t v e r y e f f e c t i v e
ORGANIZATIONAL DEVELOPMENT 09-11 9
EFFECTS OF DOWNSIZING
F i r m ’ s R e p u t a t i o n s u f f e r s
R e t h i n k i n g o f e m p l o y m e n t s t r a t e g y
C h a n g e i n E m p l o y e e B e h a v i o r
V i o l a t i o n o f P s y c h o l o g i c a l C o n t r a c t
S u r v i v o r s E x p e r i e n c e
E a r l y R e t i r e m e n t s
B e s t E m p l o y e e s l e a v i n g o r g .
ORGANIZATIONAL DEVELOPMENT 09-11 10
ORGANIZATIONAL DEVELOPMENT 09-11 11
PINK SLIP MANAGEMENT
P i n k S l i p – r e f e r s t o b e i n g f i r e d o r l a i d o f f f r o m o n e ’ s j o b
C u t t i n g c o s t M a n t r a – a n y o n e ’ s h e a d c o u l d b e o n t h e b l o c k
C a u s e s d e f i a n c e , a n t a g o n i s m , t r a u m a , d i s a p p o i n t m e n t , f r u s t r a t i o n , e t c .
I n d i a – l a y o f f s n o t c o m m o n , l e a d s t o p s y c h o l o g i c a l t e n s i o n
R e t r e n c h e d e m p l o y e e s – w o r r i e d a b o u t E M I s
ORGANIZATIONAL DEVELOPMENT 09-11 12
N A M E O F T H E S E C T O R J O B L O S S E S E x p o r t S e c t o r 3 0 , 0 0 , 0 0 0
E n g i n e e r i n g S e c t o r 1 , 0 0 , 0 0 0
N A M E O F T H E C O M P A N Y J O B L O S S E S A i r I n d i a 1 5 , 0 0 0 ( o f f e r t o n o n - o p e r a t i o n a l
s t a f f ) J e t A i r w a y s 1 9 0 0 ( r e i n s t a t e d b y t h e c o m p a n y )
S a t y a m 1 5 0 0
W i p r o 1 0 0 0
T C S 5 0 0
P a t n i C o m p u t e r s 4 0 0
K i n g f i s h e r 3 0 0
V i r t u s a 2 0 0
Source: Business World, November 3, 2008
ORGANIZATIONAL DEVELOPMENT 09-11 13
P A R T I C U L A R S P L C P A R T I C U L A R S E L C
I N T R O D U C T I O N • Heavy Operational cost
• Lot of promotional
activities
I N D U C T I O N • Period of slow performance
• Lots of developmental &
supporting activities
G R O W T H • Product fully accepted
• Profit enhancement
realized.
• Sales high & improve
revenues
• Less amount of
promotional activities
D E V E L O P M E N T • High performance &
productivity
• Aiming @ improve
knowledge, sharpen skills
& mould attitude
• More Managerial Level
M A T U R I T Y • Sales growth decline
• Product realized –
prospective buyer
• Promotional activities
withdrawn
P R O M O T I O N • Reward & recognition
• Job Enrichment & higher
responsibilities
• Look for higher tasks
• Training play minor role
ORGANIZATIONAL DEVELOPMENT 09-11 14
R e c e s s i o n t i m e s – p r e p a r e m e n t a l l y & p h y s i c a l l y f o r l a y o f f s
P A R T I C U L A R S P L C P A R T I C U L A R S E L C
D E C L I N E
R E T I R E /
R E T R E N C H M E N T
• Gives up work
• Sometimes earlier, early
retirement incentive
plans
• Employee can’t predict
when his life will be end
ALTERNATIVES OF DOWNSIZING
ORGANIZATIONAL DEVELOPMENT 09-11 15
S y s t e m a t i c c h a n g e
C h a n g e w o r k w e e k
C u t b a c k o n e m p l o y e e b e n e f i t s
O f f e r J o b S h a r i n g
CONTD…
E M P L O Y M E N T P O L I C I E S
C H A N G E S I N J O B D E S I G N
P A Y / B E N E F I T S P O L I C I E S
T R A I N I N G
A t t r i t i o n Tr a n s f e r s P a y f r e e z e R e t r a i n i n g
H i r i n g f r e e z e R e l o c a t i o n C u t o v e r t i m e p a y
C u t i n t e r n s J o b s h a r i n g U s e v a c a t i o n & l e a v e d a y s
V o l u n t a r y t i m e o f f s - P a y c u t s
R e d u c e d w o r k h o u r s - P r o f i t s h a r i n g
o r v a r i a b l e p a y
ORGANIZATIONAL DEVELOPMENT 09-11 16
A s s o c i a t e l i n e m a n a g e r s – r e t r e n c h m e n t & r e t e n t i o n
s t r a t e g i e s
B e v o i c e f o r e m p l o y e e s – f i n d e f f e c t i v e s o l u t i o n s
E n h a n c e r e t a i n e d e m p l o y e e s
C o m p e n s a t e e m p l o y e e s – q u a l i t y o u t p u t
ORGANIZATIONAL DEVELOPMENT 09-11 17
K n o w l e d g e E r a – k e e p u p d a t e d , h a v e l e a r n i n g a t t i t u d e
F i n a n c i a l E x p e r t s – k e e p a d e q u a t e b a n k b a l a n c e
B - S c h o o l s T o d a y – i n t r o d u c e s p e c i a l i z a t i o n l i k e l a y – o f f
m a n a g e m e n t o r p i n k s l i p m a n a g e m e n t
D o n ’ t t h i n k w h y “ m e ” , g o f o r o t h e r o p t i o n s , s e a r c h j o b s i t e s
o f y o u r s e c t o r
C o n s i d e r i t a s a n o p p o r t u n i t y
ORGANIZATIONAL DEVELOPMENT 09-11 18
ORGANIZATIONAL DEVELOPMENT 09-11 19