"When the winds of change blow, some people build walls and others build windmills" .
You cannot open a paper or visit an online Website these days without seeing notice after notice of corporate layoffs.
Downsizing, which constitutes the planned elimination of positions or jobs, has had and will continue to have profound effects on organizations, managers at all levels, employees, labor markets, customers, and shareholders. These are just the direct effects. They do not include the effects on families and communities.
Unfortunately, when an organization is confronted with the need to reduce costs, many of the executives who saw their employees as their "greatest assets- see those assets as ripe opportunities for cutting costs. (Gowing, Kraft, Quick, 1998).
With ever-growing frequency, companies today find themselves forced to re-engineer and resize their operations in order to meet competitive challenges. Yet all too often, the results in practice fall short of the promises on paper, in part because the impact of such changes on the remaining workforce is seriously underestimated.
A lot of organizations invest their efforts in helping the downsized employees to move on. This is ethical, reasonable, and positive. Plus, your survivors are watching! To truly benefit from the layoffs and downsizing you experienced, however, you need to invest even more energy in the people who remain behind after downsizing and layoffs. You will aid recovery; fuel productivity; boost morale, despite the loss; and minimize the damage to workplace trust. .
The theories which will be used in this essay are:.
the Organizational Change theory, and .
the Human Capital theory.
The Problem Definition which I will try to answer is:.
Which factors should an organization take into account with respect to its employees when it chooses to downsize?.
Human capital theory.
Human capital refers to the productive capabilities of individuals - that is, the knowledge, skills, and experience that have economic value (Noe, Hollenbeck, Gerhart, Wright, 2003).