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Impact of downsizing



Downsizing & Pink Slip Management

Downsizing & Pink Slip Management



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  • hi, can you please send this ppt to pathaalok@gmail.com as soon as possible
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  • Hi, can you please send this ppt to my e-mail id salian.ashwini@gmail.com.

    it is very useful for my class preparation.

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  • Can you please share this ppt with me. Its very well done , with theory as well as case on the concept of downsizing!
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    Impact of downsizing Impact of downsizing Presentation Transcript

    • WHAT IS DOWNSIZING? Reducing the overall size Reduction in number of employees Pink Slip Management ORGANIZATIONAL DEVELOPMENT 09-11 2
    • TYPES OF DOWNSIZING Reduced workweek Firing Job Transfers Sharing ORGANIZATIONAL DEVELOPMENT 09-11 3
    • REASONS OF DOWNSIZING!! Merging of two or more firm Outsourcing Acquisition When company Strategy changes goes at loss Change in Economic crisis management ORGANIZATIONAL DEVELOPMENT 09-11 4
    • Morale of Employee Survivors Loss of Training Relations investment from turnover Performance Training Management DOWNSIZING & HR SYSTEM Performance evaluation as a layoff criteria Reward Employment System Reputation Compensation effects on pay & benefits 5 recruitment ORGANIZATIONAL DEVELOPMENT 09-11
    • RELIANCE MART Mukesh Ambani Hyper market Third retail format 165000 sq. feet Range over 95000 products Over 400 highly skilled employees ORGANIZATIONAL DEVELOPMENT 09-11 7
    • What Happened @ Reliance Mart Almost 50% staff removed 2 floors complete shutdown Customer care service – hopeless Products are of low quality Charm of reliance has gone One the best e.g of downsizing in Ahmedabad ORGANIZATIONAL DEVELOPMENT 09-11 8
    • REASONS OF DOWNSIZING AT RELIANCE MART? Demand decreased Inflation Tough competition Recession Earn more and more profit Poor quality Schemes were not very effective ORGANIZATIONAL DEVELOPMENT 09-11 9
    • EFFECTS OF DOWNSIZING Firm’s Reputation suffers Rethinking of employment strategy Change in Employee Behavior Violation of Psychological Contract Survivors Experience Early Retirements Best Employees leaving org. ORGANIZATIONAL DEVELOPMENT 09-11 10
    • PINK SLIP MANAGEMENT Pink Slip – refers to being fired or laid off from one’s job Cutting cost Mantra – anyone’s head could be on the block Causes defiance, antagonism, trauma, disappointment, frustration, etc. India – lay offs not common, leads to psychological tension Retrenched employees – worried about EMIs ORGANIZATIONAL DEVELOPMENT 09-11 11
    • NAME OF THE SECTOR JOB LOSSES Export Sector 30,00,000 Engineering Sector 1,00,000 NAME OF THE COMPANY JOB LOSSES Air India 15,000 (offer to non-operational staff) Jet Airways 1900 (reinstated by the company) Satyam 1500 Wipro 1000 TCS 500 Patni Computers 400 Kingfisher 300 Virtusa 200 Source: Business World, November 3, 2008 ORGANIZATIONAL DEVELOPMENT 09-11 12
    • PARTICULARS PLC PARTICULARS ELC INTRODUCTION • Heavy Operational cost INDUCTION • Period of slow performance • Lot of promotional • Lots of developmental & activities supporting activities GROWTH • Product fully accepted DEVELOPMENT • High performance & • Profit enhancement productivity realized. • Aiming @ improve • Sales high & improve knowledge, sharpen skills revenues & mould attitude • Less amount of • More Managerial Level promotional activities MATURITY • Sales growth decline PROMOTION • Reward & recognition • Product realized – • Job Enrichment & higher prospective buyer responsibilities • Promotional activities • Look for higher tasks withdrawn • Training play minor role ORGANIZATIONAL DEVELOPMENT 09-11 13
    • PARTICULARS PLC PARTICULARS ELC DECLINE RETIRE/ • Gives up work RETRENCHMENT • Sometimes earlier, early retirement incentive plans • Employee can’t predict when his life will be end Recession times – prepare mentally & physically for layoffs ORGANIZATIONAL DEVELOPMENT 09-11 14
    • ALTERNATIVES OF DOWNSIZING Cut back on Offer Job employee Change Systematic Sharing benefits work week change ORGANIZATIONAL DEVELOPMENT 09-11 15
    • CONTD… EMPLOYMENT CHANGES IN PAY/BENEFITS TRAINING POLICIES JOB DESIGN POLICIES Attrition Tr a n s f e r s Pay freeze Retraining Cut overtime Hiring freeze Relocation pay Use vacation & Cut interns Job sharing leave days Vo lu nta r y t im e - Pay cuts offs Reduced work Profit sharing - hours or variable pay ORGANIZATIONAL DEVELOPMENT 09-11 16
    • Associate line managers – retrenchment & retention strategies Be voice for employees – find effective solutions Enhance retained employees Compensate employees – quality output ORGANIZATIONAL DEVELOPMENT 09-11 17
    • Knowledge Era – keep updated, have learning attitude Financial Experts – keep adequate bank balance B-Schools Today – introduce specialization like lay – off management or pink slip management Don’t think why “me”, go for other options, search job sites of your sector Consider it as an opportunity ORGANIZATIONAL DEVELOPMENT 09-11 18