Advantages Of Downsizing Process

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Having discussed how the various strategies of downsizing can be implemented, attention now turns to discussing the advantages that can be derived from consulting with employees about the downsizing process. Research has shown that consultation, employee involvement and interactive communication can help ease the implementation of the downsizing process (Appelbaum et al., 2003). Cameron et al. (1991) suggested that the most effective strategies for downsizing were those that were actually recommended and designed by the employees themselves. Mishra et al. (2009) examined companies that had undergone downsizing successfully and found that those companies had focused on building trust and empowerment among their employees. Communication that…show more content…
Wingate et al. (2003) propose that a downsizing process must begin with the company selecting a method for choosing which employees to lay off and which employees to keep. The method selected by the company should include criteria specifying relevant skills, abilities and knowledge that employees who are being laid off lack, and that employees who are being kept on possess (Schraeder et al., 2006). Companies can avail of various methods of reducing the labour force, including ‘Last in First Out’, voluntary redundancies, and performance assessments. Research has shown that performance appraisals are often used in selecting which employees to lay off during a downsizing process (Schraeder et al., 2006). Whatever strategy a company chooses to implement, there are two key issues that must be considered, namely fairness and organisational…show more content…
Downsizing may result in the company losing many of its key employees who have extensive knowledge, expertise and critical skills. Therefore, the remaining employees may face increased workload and obscure job definition (Gandolfi, 2008). This, in turn, can cause increased stress, reduced commitment, decreased morale and lack of trust in management (Boyd et al., 2013). This can have detrimental effects on the company’s stability and performance levels. It is crucial for the company to provide the appropriate support. Appelbaum et al. (2003) argue that the company must create an environment whereby the survivors feel they have a future with the business. The Human Resources Department should ensure that survivors are communicated with effectively and are given training, cross-training and retraining where necessary (Appelbaum et al.,

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