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Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
Impact of downsizing
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Impact of downsizing

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Downsizing & Pink Slip Management

Downsizing & Pink Slip Management

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  • 1. ORGANIZATIONAL DEVELOPMENT 09-11 1
  • 2. WHAT IS DOWNSIZING? Reducing the overall size Reduction in number of employees Pink Slip Management ORGANIZATIONAL DEVELOPMENT 09-11 2
  • 3. TYPES OF DOWNSIZING Reduced workweek Firing Job Transfers Sharing ORGANIZATIONAL DEVELOPMENT 09-11 3
  • 4. 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
  • 5. 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
  • 6. ORGANIZATIONAL DEVELOPMENT 09-11 6
  • 7. 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
  • 8. 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
  • 9. 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
  • 10. 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
  • 11. 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
  • 12. 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
  • 13. 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
  • 14. 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
  • 15. ALTERNATIVES OF DOWNSIZING Cut back on Offer Job employee Change Systematic Sharing benefits work week change ORGANIZATIONAL DEVELOPMENT 09-11 15
  • 16. 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
  • 17. 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
  • 18. 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
  • 19. ORGANIZATIONAL DEVELOPMENT 09-11 19

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