Employee Participation, Ownership, and Productivity - Assignment Example

Written Assessment - Analytical Report Name Institution’s Name Date Introduction In contemporary business and market environment, corporations and institutions are faced with countless challenges ranging from the cutthroat competition, global economic and financial recessions and the constantly shifting political, social, technological, economical, environmental, financial and legal forces (Nantaporn & Brian, 2003). These challenges are compelling organizations to be more aware of their internal and external environment and more importantly focusing on the legal, ethical and all essential human resource issues in order to ensure the working environment is favourable for all stakeholders as echoed by Bach (2005). This report seeks to address the legal, ethical and all HR issues implied in the case study COSTLY BUSINESS” by Dr Nadine Zacharias, University of Ballarat. What are the HR implications of the CEO’s announcement to lay off 120 staff? Are any of these implications surprising to you? An organization has varied resources that it utilizes to ensure it is able to operate efficiently and effectively and in so doing achieving its set vision, mission, goals and objectives (Booth & Zoega, 2003). According to the author, these resources include financial resources, material resources, information, capital resources, technology and human resources among others. The human resources is considered the most important, reliable and valuable asset and resource an organization has since without it, the other resources an organization has cannot operate as anticipated (Cameron, 1994). Therefore, meeting the needs of the human resource, generating a conducive environment and engaging them in critical processes of the organization are crucial to the organizational success. Following the CEO’s announcement to lay off 120 staff, the Implications for the HR manager, Maree was to prepare her team and draw up a comprehensive course of action to ensure that the type employees drawn up for the targeted redundancies deserve in terms of their overall productivity and performance (Stone, 2010). This was to ensure that the Utilities Company was safe from legal suits filed against them by employees who may feel they do not deserve being terminated based on targeted redundancies. To this end, Maree and her team were in the process of calling for expressions of interests in voluntary redundancies while identifying employees considered incompetent and underperforming (Stone, 2010). This move on Maree’s part was surprising to me since I would have thought she would consult with the workforce as a HR manager and engage them in coming up with more effective, alternative and suitable ways of cost cutting to ensure none of the employees lose their jobs. If the worse came to worst and it would be necessary to cut off some of them, I would have expected Maree to involve the workforce in identifying appropriate ways of selecting those who would be cut off as supported by Bach (2005). By so doing, it would be unlikely that the staff would feel short changed or feel they were not consulted. As indicated in the case study, Maree hoped for more time to prepare her team, carryout a comprehensive assessment of the firm’s cost structure and skills profile to ensure there were no critical sections over or understaffed. Therefore, the best course of action I would have expected from Maree other than consulting with the employees was to consult the CEO and inform him of her concerns regarding the need for more time and raising the issue about some of the key areas being understaffed. In regards to the case study, the CEO’s announcement to lay off 120 staff had varied implications to the Utilities Company’s human resources. Consultations and engagement is key as supported by Marc & Brian ( 2003),There was evident shock by the human resources since the staff email written by the CEO to the employees previously had indicated that the cut-offs or redundancies would be voluntary (Stone, 2010). By using the media to inform the stakeholders of the impending slashing of jobs, the human resources were shocked, they feared and felt their financial and job security was on the line. Following the announcement, there was obvious implications were signs of the effects of the shock since as indicated by the case study, the email traffic virtually stopped as all the human resources were in closed doors discussing the impeding termination. As the employees were busy planning the next step of actions, working hours were being lost, their motivation, morale and dedication for work was gradually diminishing for they felt that their jobs were on the line (Nantaporn & Brian, 2003). With the implications of reduced work motivation, the outcomes would be poor performance and increased work inefficiencies since more often than not, where employees are not assured of their job security and stability, they demonstrate low accountability, commitment and loyalty to their work and to their employer since they do not know for how long they will be there (Nantaporn & Brian, 2003). The implications for the most valuable employees who are competent and productive were planning for an exit strategy since they knew they could easily get jobs elsewhere. By volunteering for the redundancies, they sought to find an environment where their job and financial security is safe and secure if not better than their status at Utilities Company. What are the OHS concerns that arose in response to the announcement for (a) staff in general and (b) Maree in particular? How did the organisation, and Maree, deal with these concerns? Establishing and maintaining a working environment that is safe and secure is crucial in enhancing the performance and productivity of workers, which is crucial for achieving anticipated business and organizational outcomes (Greenwood, 2002). A working environment that is not favourable for workers is characterized by reduced work motivation and accountability, decreased work loyalty and commitment. Moreover, it is more likely to be characterized by increased rates of employee turnovers particularly involving valuable employees who are proficient, competitive, innovative and hardworking, who may seek a working environment elsewhere where their sense of safety and security financially and job wise is assured (Nantaporn & Brian, 2003). In regards to the case study, there were occupational health and safety concerns, which were, work related stress that arose in response to the announcement. As highlighted in the case, following the CEO’s announcement, virtually not every employee was working and instead they were involved in closed-door discussions about the possibility of losing their jobs (Stone, 2010). The work environment was characterized with palpable fear since every employee knew his or her job was on the line. The fear for their job and the intense uncertainty about the staff’s financial future and their heightened concerns for their work culminated to work related stress, which is an occupational health, and safety concern where the employee could not perform their work efficiently and competently, as they should since they were worried. Their worried state of mind is an occupational health and safety concern since they could not focus and concentrate on what they were supposed to do, that is, their assigned work duties. Psychological stress related to work minimizes the efficiency, commitment, accountability and effectiveness with which the staff does their work (Nantaporn & Brian, 2003). In regards to the Human Resource manager, Maree, the OHS concern that arose in response to the announcement was also stress related to work since she knew despite the prospect of voluntary redundancies; the decision to accept would be made by the management in regards to operational requirements. Maree felt that as the HR manager, more consultations and engagement should have been done between her and the CEO and between the management and the workforce. Her stress related to work originated from the fact that she knew her team was not prepared enough for the challenges that lay ahead and she knew she was not very effective in deciding who should be included in the targeted redundancies since she had not done a detailed assessment of the firm’s cost structure and skills profile. She had fears that the company would in the process of slashing off the jobs to survive the current hard times, they would lose valuable employees and in the process impact negatively on the long-term performance and productivity of the firm (Stone, 2010). In addition, slashing off the workforce while there were critical sections of the company that were still understaffed meant that the firm would in the long run fail to achieve expected goals and objectives and incur extra costs in rehiring to fill up the understaffed sections. To resolve the OHS concerns, Maree rallied her team to deal with various issues such as selecting some of her staff to handle the fallout between the company and the union and to handle the redundancy issues while the other HR staff were charged with keeping up the business as usual (Stone, 2010). By delegating some of the responsibilities, Maree had enough time to identify suitable ways to deal with the arising challenges. Nevertheless, the work related issues were too much for Maree and she therefore resigned. What are the equity issues that were raised by the redundancies? What are the risk implications for the organization? It is fundamental for employers to understand that using redundancies to lay off employees has the potential to generate varied legal, ethical and human resource issues, which can lead to legal and ethical implications (Marc & Brian, 2003). According to Greenwood, (2002), among legal and ethical issues that arise when redundancies are used as a means to lay of workers include equity issues, issues of discrimination on the basis of gender, race, creed, ethnicity, religion, nationality, health status and disability among other variables. From the beginning as highlighted in the case study, the voluntary and if necessary the targeted redundancies were bound to generate equity issues since the CEO used them as a means to rid of expensive, long serving staff that he regarded as underperformers who he thought had little or no prospect for growth or improvement (Stone, 2010). Redundancies should be implemented for objective reasons and implemented fairly in order to safeguard against employees selected for targeted redundancies taking legal actions against the company citing unfairness and biasness in the selection. When laying off workers using redundancy approach, it is important for the employer to show that economically the selected number of staff is no longer required and they need to prove the redundancy situations are fair and unbiased and they are not being implemented to conceal discriminatory conduct (Nantaporn & Brian, 2003). As alleged by the union, they felt that the redundancies by the Utilities Company was directly linked to the impending negotiations of a new Enterprise Bargaining agreement. Organizations are ethically accountable for enhancing and fostering fairness and impartiality for its entire workforce and ensure the rights of all employees are respected; this includes the right to work. Other than losing fifty two employees who were not only expert staff, highly educated and with excellent track of performance records who had expressed their interests in the voluntary redundancies, Utilities Company ran the risk of entering into a legal dispute with employees. This will affect employees selected for the targeted redundancies and at worse losing significant amount of money in compensation in case the disputing employees win the case against Utilities Company. In addition, the other risks implications arising from using redundancies is the negative perceptions and image the public would have about the company (Marc & Brian, 2003). As indicated in the case study, the union campaign against redundancies by the company had attracted the attention of state politicians and the media which made CEO’s responses to the media and other stakeholders about the decision to lay off a large number of employees to become progressively more defensive (Stone, 2010). Negative public image could harm the company’s operations as no valuable employee would want to seek employment from the company and at worse, the customers may opt to switch to alternative companies where they feel the management is mindful of the welfare of everyone including the employees (Bach, 2005).  What is the impact of industrial action on the company? Is there an alternative approach the union could have adopted to protect jobs? Industrial actions constitute varied forms of action where workers with or without the reinforcement of labour union seek to put pressure on the employer to stop from doing something or pushing the employee to do something (Verma, 2005). According to Nantaporn & Brian (2003), strikes, go slows and overtime bans are basic types of industrial actions. There are varied impacts that industrial actions have on a company such as physical damages on the company’s assets and material resources in case the striking workers turn violent, lost company time as the striking employees down their tools which translates to reduced productivity which generates to lost sales and profitability (Verma, 2005). In case of the Utilities Company, the impact of an industrial action was diminished reputation of the company and more significantly, reduced productivity as the striking employees instead of working, they were on the streets demonstrating against unfair job dismissal of some of the workers (Stone, 2010). Lost company time translates to lost business and lost time that could have been used to improve the profit margins and the competitiveness of the company (Goodstein, 2000). An alternative approach the union could have adopted to protect jobs is dialogue. As highlighted by the case study, immediately the CEO announced the slashing of 120 jobs, the company received a letter from the union citing a successful application lodged with Fair Work Australia for protected industrial action (Stone, 2010). The industrial action was scheduled to occur in a weeks time after the CEO announced the lay offs. The best alternative the union would have adopted to protect its members was to engage the management at Utilities Company in dialogue and discuss with them on the most suitable solutions that could favour both the company and the interests of the employees (Verma, 2005). It is important to note that an industrial action should be implemented as a last resort, when all other measures and initiatives to reconcile the existing differences have been tried and failed. In the case study, no attempts were made by the union to consult and involve the company in protecting the jobs of its members (Goodstein, 2000). The union had already set up the day of the industrial action without first considering the ramifications of such an action to the employees and to the company. The union should have communicated with Utilities Company about their concerns and if the communications and dialogue were unproductive, then and only then, could the union seek to facilitate an industrial action against Utilities Company. How should the decision to lay off a significant number of staff have been communicated to staff and managers? How should it have been implemented? According to Booth & Zoega, (2003), there are times when an organization may be compelled to lay off some of its workers either to cut costs in order to survive hard economic and financial times or to eliminate unproductive and underperforming employees. Despite the need to lay off workers, it is crucial to ensure that one is able to retain the valuable employees and thus help safeguard against costly errors of losing valuable workers as a result of voluntary separation and reduced motivation, which leads to work-related psychological disengagement (Ben-ner & Jones, 1995). Instead of making a public announcement to lay off large number of people as done by the CEO of Utilities Company, which generated unnecessary shock, fear and apprehension among employees, the CEO should have first effectively and comprehensively discussed the need for cutting off some of the employees with other management personnel including the Human resource manager. In order to ensure the entire management is on board and supports the move of laying off employees and ensuring that the use of termination as a cost cutting measure is the most effective way to address the present need (Goodstein, 2000). In addition, the CEO should have given the HR team sufficient time to prepare itself for the impending challenge of laying off workers. After comprehensive communication and consultations with the management, it would have been crucial for the CEO with the support of the management, to negotiate and consult with the entire workforce and the labour union to inform them on the need for laying off some of the workers. In addition, highlighting the criteria that will be used to identify workers for the targeted redundancy in case the figure of 120 employees required is not met using voluntary redundancy. Engaging employees in such critical process such as decision making especially on matters that affects them is fundamental in making them feel valued and more importantly ensuring their level of commitment, accountability, productivity, loyalty and dedication to work does still remain high (Ben-ner & Jones, 1995). By involving the employees first, the CEO could have prevented the shock with which his announcement was met and more importantly, his announcement could not have affected work performance as it did where workers left their work to discuss the possibilities of them losing jobs. In addition, consulting and engaging the Labour union could have prevented the union from filing for such an action. If the Union had filed the action, the engagement with could have compelled the employees from participating in an industrial action since the decision to lay off some of them could have received substantial support from the employees and the union themselves (Cameron, 1994). Why did Maree resign from her job as HR manager? Would you have done the same? Mareee as the HR manager at Utilities Company resigned for ethical reasons. Maree felt that the CEO was not straightforward in stating the reasons for the redundancies. Although the CEO had indicated that the redundancies were fundamental in responding to the hard economic environment and countering competition, Maree knew that the real intentions were to appeal to close to one third of the middle managers and senior administrative employees to volunteer to accept voluntary redundancy packages, whom the CEO perceived as expensive, long serving and underperforming with no prospects for growth (Stone, 2010). Other than that, Maree felt she was not given sufficient time to arm her team for carrying out such as challenging task of terminating employees but also, she did not think she had sufficient insight in indentifying 120 redundant jobs in the back ground of the fact that some critical sections within the company were understaffed. Since the 52 employees who had volunteered for voluntary redundancy were valuable employees, Maree felt overwhelmed in handling the whole issues coupled with the pressure from the Union. If I were the manager, I would not have resigned from my job and instead I would have identified ways of engaging all the relevant stakeholders into coming up with amicable solutions to the present problems. References Bach, S. 2005. Employment Relations and Public Services' 'modernization' Under Labour. Melbourne: Emerald Group Publishing. BEN-NER, A. and JONES, D. C. 1995. Employee Participation, Ownership, and Productivity: A Theoretical Framework. Industrial Relations. A Journal of Economy and Society, 34: 532–554. doi: 10.1111/j.1468-232X.1995.tb00387.x Booth, A.L., & Zoega, G. 2003. On the welfare implications of firing costs. European Journal of Political Economy, vol. 19, Issue 4, pp 759-775 Cameron, K. S. 1994. Strategies for successful organizational downsizing. Human Resource Management, vol.33, pp. 189–211. doi: 10.1002/hrm.3930330204 Goodstein, J.D. 2000. Moral compromise and personal integrity: exploring the ethical issues of deciding together in organizations’ business. 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