Managing careers in downsizing firms

The literature on managing careers has traditionally been based on the twin assumptions of organizational growth and increased opportunities for individual advancement. Large-scale layoffs in the 1980s and continued downsizing in the 1990s, however, have left organizations questioning how to develop the careers of their employees under conditions of diminished resources and have left employees wondering how to manage their own careers under conditions of diminished opportunities. This article examines the issues involved in managing careers in downsizing firms from both the organization's and the individual's perspective. In addition, it explores not only short-term tactics for handling career disruptions which occur at the time of downsizing but also longer-term strategies for managing careers during times of little or no organizational growth. © 1996 by John Wiley & Sons, Inc.     

Better practices in managing layoffs

This article presents eight case studies that illustrate “better practices” in how layoffs are managed in organizations. These examples incorporate such policies and programs as early notification of layoffs, provisions for severance pay and extended benefits, education and retraining for displaced workers, outplacement assistance, clear and direct communication of layoff information, and support services for “survivors” of layoffs. These examples highlight the benefits of collaboration among downsizing businesses, public sector organizations, and unions in helping laid-off employees adjust to unemployment and obtain satisfactory reemployment.     

Organizational Prospects, Influence Costs, and Ownership Changes

We augment efficiency-based theories of ownership by including influence costs. Our principal conclusion is that the prospect of organizational decline and layoffs creates additional influence costs in multiunit organizations that would be absent if there was no prospect of layoffs and would be lessened or eliminated in focused organizations. This helps explain the tendency of firms to divest poorly performing units, as well as the pattern of sales of such units to firms already in businesses related to that of the divested unit.     

Strategies for successful organizational downsizing

This article reports the results of a study of 30 organizations that engaged in downsizing over a four-year period. Three questions were investigated: (1) What general strategies are used by organizations to downsize? (2) What are the effects of downsizing on organizational performance? (3) What are downsizing's “best practices?” or, What are the differences between organizations that effectively downsize and those that do not? Three main strategies for downsizing are explained, the managerial actions to overcome the negative effects of downsizing are enumerated, and the best practices of successful downsizing firms are presented.     

Labor union negotiations: stepping stones or stumbling blocks for a responsible downsizing strategy? Empirical tests in Taiwan

Firms have used organizational downsizing strategies for years. But organizational downsizing not only cannot surely improves firm performance, but also harms thousands of employees and their families. A number of scholars investigating organizational change suggest that ‘a responsible downsizing strategy’ can mitigate or solve this issue. As the major stakeholder in downsizing, labor unions naturally negotiate with firms to protect employee rights and benefits. Their negotiation, therefore, may either enhance or mitigate the effect of responsible downsizing strategy on firm performance. This study used a sample of 154 downsized local firms and multinational corporations in Taiwan to examine the research construct, and invited focus groups to have a further validated explanation. The findings show that labor union negotiation may act as either stepping stones or stumbling blocks. The results indicate that firms employing labor union negotiation experience higher downsizing performance than non-unionized firms do. However, labor union interventions can also become stumbling blocks. Labor union negotiation neutralize the positive effect of employee-caring practices on downsizing performance, leading to a decline in downsizing performance when firms increase employee participation and justice consideration in the downsizing process. The research findings provide implications for further scholarly research and management practices in terms of organization change, stakeholder management and labor–management relationship.     

Human Resource Approaches to Retirement: Gatekeeping,Improvising, Orchestrating,and Partnering

This qualitative study examines the patterns in human resource (HR) approaches to retirement across 24 organizations to explore innovative practices as well as gain understanding of the differences in how firms are dealing with major changes surrounding retirement and workforce demographics. Using organizational adaptation theory and carrying out a thorough analysis of in‐depth interviews with HR managers, we identify three dimensions that differentiate organizations’ approaches to retirement: (1) actions and interactions of key stakeholders in the retirement process; (2) HR information gathering focus regarding workforce issues; and (3) HR posture around changes needed in retirement policies and practices. Based on organizational profiles on these dimensions, four distinct approaches to retirement emerge and are described in some detail: gatekeeping, improvising, orchestrating, and partnering. These different approaches also provide insight into how organizations differ in their adaptation to change. © 2016 Wiley Periodicals, Inc.     

Women-friendly HRM good for QWL? The case of Hong Kong based companies

Organizations in Hong Kong were surveyed to gauge how women-friendly they were and how their human resource managers viewed the effect of women-friendly HRM policies and practices on employees' quality of work life. It was found that only about half of the policies mentioned in the questionnaire were practised by less than 10 per cent of the organizations. Principal component analysis conducted showed that organizational women-friendliness was multi-facet in nature. Using these facets - women friendly dimensions (WFDs) - as criteria and controlling for size, the study found that firms with American and European origins were more women-friendly than Hong Kong firms. Furthermore, when American companies were compared to Hong Kong companies, it was on the WFD of career development that the former were significantly higher than the latter. In contrast, when comparing European organizations with Hong Kong organizations, it was the WFD of flexibility on which the two differed most markedly.     

Organizational downsizing as convergence or reorientation: Implications for human resource management

This article proposes that there are two basic approaches to organizational downsizing. Downsizing as reorientation is the proper approach when organizations undertake major downsizing programs. In this approach, many elements of the organization are questioned and changed simultaneously. The goal is a fundamentally different, not just smaller, organization. Downsizing as convergence is part of continuous improvement, and its goal is to refine and streamline all ongoing organizational processes. Each of these approaches to downsizing involves a particular pattern of downsizing tactics, implementation processes, and organizational changes. Thus, each approach to downsizing generates different implications for human resource management.     

Configurations of human resource practices and battlefield performance: A comparison of two armies

A prominent theme in the HRM literature is the organizational impact of configurations or “bundles” of human resource practices, mostly researched in business firms. A recurrent empirical finding here is that configurations of high performance HR practices generally have a more positive effect on employee attitudes and behavior and on organizational performance than configurations of traditional HR practices. In this paper this research is extended beyond business firms to include army organizations. Specifically it is argued, first, that these two configurations are exemplified in respectively the German Army and the US Army in World War II and second, that these configurations can be reasonably related to a relatively more effective battlefield performance of the German versus the US Army, even in spite of final defeat.     

A Temporal Approach to Retrenchment and Successful Turnaround in Declining Firms

This study extends current understanding of the retrenchment–turnaround relationship in declining firms by introducing a temporal approach and arguing that the effectiveness of retrenchment as a strategy is contingent on its adoption early in turnaround attempts. Drawing from the two‐stage turnaround model and insights from the literature on downward spirals in organizations, we develop and test a theoretical model that explains how temporal considerations in retrenchment influence the likelihood of successful turnaround. Using a matched pair sample of 96 US firms, we find that declining firms that implement retrenchment actions early have a higher likelihood of successful turnaround. The findings also indicate that while two specific retrenchment actions, early divestments and early geographic market exits, significantly contribute to the likelihood of successful turnaround, early layoffs do not. Overall, the findings shed some light on the importance of timing strategic actions in organizational turnarounds. Implications for research and practice are discussed.     

HR in the small business enterprise: Assessing the impact of PEO utilization

Within small businesses, organizational leaders are themselves often responsible for the HR function, an area where they typically have limited training and experience. Not surprisingly, small business leaders have raised concerns about the quality of HR programs in their firms and the fact that HR consumes scarce managerial time. While professional employer organizations (PEOs) emerged in response to such concerns, much controversy exists as to whether and how small businesses benefit from PEO utilization. Using a survey of more than 740 small businesses, we examine the relationship between PEO utilization and two key small business outcomes: managerial time required by HR activities and satisfaction with HR outcomes. Our results indicate that firms not using a PEO reported significantly lower levels of satisfaction with HR outcomes than firms that used a PEO for a limited set of transactional services and firms that used a PEO for both transactional and strategic HR services. Among firms using a PEO, satisfaction with HR outcomes was significantly higher among firms that obtained a broader set of transactional and strategic HR services. Firms that used a PEO also reported that HR consumed significantly less managerial time relative to leaders in firms that made no use of a PEO. However, there was no significant difference in the time demanded by HR between firms that used a limited set of transactional services and those that used a broader range of transactional and strategic services. Implications for the role of PEOs and their use within small businesses are discussed. © 2005 Wiley Periodicals, Inc.     

新形势下企业裁员过程管理探讨

随着企业减员提效趋势的增强、《新劳动合同法》的颁布和金融危机的爆发,企业裁员行为日趋增多。对企业裁员过程的管理无疑成为非常关键的一环,很多矛盾都有可能在这一阶段被激化。企业只有对裁员过程进行科学管理,才能防止裁员过程中出现盲目、混乱的行为,确保裁员过程的公平和公正,使裁员计划能够顺利实施。     

Slash and burn or nip and tuck? Downsizing,innovation and human resources

Workforce downsizing has become a popular human resource practice by management over the last few decades. But surprisingly its impact on a number of organizational outcomes remains ambiguous. In this study we examine the link between different types of employee downsizing and organizational innovativeness. Our results, based on a survey of UK firms, indicate that the impact of workforce downsizing on innovation is contingent on the speed of implementation and the motive for downsizing. Contrary to expectations, the results reveal that the size of the workforce reduction has no significant impact on innovation.     

What determines the size of the HR function? A cross‐national analysis

What determines the resources allocated to an HR department? The antecedents of the size of HR departments within firms and the relationship between HR department size and the role that HR departments perform are issues of theoretical and practical importance. Using large‐scale survey data from organizations in Europe and Japan, this article explores the influence of nationality, size, and sector on the comparative ratio of HR specialists in organizations, and on the likely scope and brief of such departments. It also examines the internal organizational characteristics associated with HR department size. In contrast to previous literature on administrative components, we demonstrate that the human resources staff component is affected not only by organizational size but also by sector and national location. © 2006 Wiley Periodicals, Inc.     

Do Institutionalized Traditions Matter During Crisis? Employee Downsizing in Korean Manufacturing Organizations

This study examines the downfall of the permanent employment tradition in South Korean manufacturing organizations in the aftermath of the 1997 East Asian economic crisis. We explore whether organizations abandon their traditional institutionalized practices under discontinuous environmental change or despite the change continue these time‐honoured practices. We examine both the organizational factors that inhibit lay‐offs and performance indicators that trigger organizations to re‐evaluate their lifetime employment practices under drastic environmental upheaval. We test our hypotheses on 574 Korean manufacturing organizations and find that under discontinuous change: (1) economic and institutional factors simultaneously apply opposite forces on organizational actions; (2) organizational factors such as poor performance on productivity and export create a need for headcount reductions while factors such as size, domestic ownership, government support, and unionization create social and institutional pressures that inhibit downsizing; and (3) prior experience with downsizing moderates the relationship between institutional factors and further downsizing.     

Preparing for organizational death: Proactive HR engagement in an organizational transition

This article describes an HR team's call to action in managing an organization's transition from healthy, vibrant, and financially successful workplace to its death after being acquired. The HR team countered conventional practice in two key ways. First, despite being from the seller's side, it acted unusually early in the company's acquisition and operated proactively throughout the integration process. This constructive approach stemmed from the self‐confidence developed in the HR function over years of process improvement and culture change. Second, the HR professionals were motivated (rather than threatened) by the high stakes involved in this organizational transition. Their company—with its industry‐leading business results and a loyal, long‐tenured workforce—was slated to be closed, dismantled, and auctioned off in pieces to other firms. The HR team's mission was to help people deal with the death of their current employer and prepare for life afterward while maintaining a focus on business results. This article shows how HR helped senior leadership handle the challenge of retaining the talent needed to meet customer commitments and keep the business running while also readying people for an uncertain future with many eventual layoffs. © 2008 Wiley Periodicals, Inc.     

How mass layoffs are related to lower job performance and OCB among surviving employees in Chile: an investigation of the essential role of psychological contract

This study aimed to investigate how mass layoffs impact surviving employees in organizations. More specifically, this study ascertained the relationships between mass layoffs and employee work behaviors. It was theorized that mass layoffs will be negatively related to employee performance and organizational citizenship behaviors (OCB) through its relationships with job insecurity and psychological contract breach. Moreover, it was expected that perceived manager support would buffer against the negative relations of contract breach with employee performance and OCB. A study among 615 employees in multiple Chilean organizations showed support for the hypotheses: job insecurity and psychological contract breach mediated the relationships between mass layoffs and employee performance and OCB. We also found moderating relationships of manager support, but the relations of breach with performance and OCB were particularly negative when manager support was high, indicating feelings of betrayal among high-support employees in response to contract breach. Moreover, the relation of contract breach with performance was positive for low-support employees, and non-significant for high-support employees. Our study advances understanding of the processes underlying how mass layoffs influence employee behavior in the workplace, through introducing the psychological contract as a way of understanding the relationships.     

Managing human reources for learning and innovation: a comparative study of Brazilian,Japanese and Korean firms

In this paper we develop a comparative study of the processes of organizational change which leading-edge technology firms are experiencing, particularly in terms of human resources management, which favour the learning and development process of employees and of organizations themselves. It focuses on the telecommunication industry in three countries: Japan, Korea and Brazil where qualitative research was conducted in eleven companies. The outcomes of the field research reveal innovative policies and practices in human resouces management, even though these are specific to each country. The specificities are mainly justified by the stage of development of each industry in the scenary of global competition. Nevertheless, all companies considered already show the traces that are required to consider them as learning organizations.     

Does downsizing improve organisational performance? An analysis of Spanish manufacturing firms

The objective of this study is to examine the effect of downsizing on corporate performance, considering a sample of manufacturing firms drawn from the Spanish Survey of Business Strategies for the 1993–2005 period. No significant difference in post-downsizing performance arises between companies that downsize and those that do not. Likewise, we find that substantial workforce reductions through collective layoffs do not lead to improved performance levels either. Downsizing may not, therefore, be a way for managers to enhance performance. This is particularly true of Spain, where the labour market is characterised by the ring-fencing of employees' rights and substantial severance costs.