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Organizational downsizing can negatively impact remaining employees by increasing their workloads and potentially causing negative reactions. Managers can minimize these effects through clear communication, maintaining morale, providing support, and re-motivating employees. Effective communication includes explaining the reasons for downsizing, future plans, and addressing employee concerns. Maintaining morale involves anticipating responses, implementing interventions like training, and monitoring indicators such as surveys. Managers can provide supports through counseling, career assistance, and ensuring employees have the skills to handle new roles. Re-motivating involves focusing on goals, involving employees, and recognizing contributions.

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Organizational downsizingGroup 6
In recent years, many organizations downsize and lay off their employees. The remaining employees often have increased workloads. What are the possible negative reactions that he remaining employees may have? What can managers do to minimize the negative effects of downsizing?Introduction
Reasons of downsizing Business Demand Reasons (Demand decreases, supply Decreases)Disaster/Safety Reasons (Financial Crisis, Financial Tsunami)Financial Reasons (Lay off to reduce cost and increases cash flow)Organizational Reasons (Change in structure)Production Reasons (e.g., automation and technological advances)Seasonal Reasons (demand is affected by season - e.g., agriculture)
PCCWHSBC….Ppls feeling + resultshttp://www.youtube.com/watch?v=yF8xphlFj8s&feature=relatedhttp://www.youtube.com/watch?v=SfISF3vatZ8Examples
Behavioral reaction
Behavioral reactionsIncreased absence rates
Due to increased workload and reduced time for rest
Each worker will take up more task which may not be of their strength
Greater number of occupational diseases
Leads to higher number of sick leaves or even absenteeismBehavioral reactionsLowered work effort
due to job insecurity
less likely to innovate and take risks
Worsened Relationships
During layoffs, relationships between employees tend to be less "familial" and more competitive than in the pastAttitudinal reaction on lay-off
Attitudinal reactionsReduced Commitment
Reduced Job satisfaction
Reduced job insecurity
Employees are afraid of making mistakes and be subject to next round of layoff
Increased turnover intentionsPopulation of psychological effect that the remaining employeessuffer
Demoralization layoffs are disheartening lower work performance lower commitment lower productive lower profitUnfairness Remaining employees may doubt about the way of choosing who should be fired Managers should rebuild trust in company's management and direction.Demoralization and unfairness
Worry Reduction on salary Another lay-off Prospect of the jobStress Facing an increased workload Maintaining high work quality Workers may suffer from high pressure Worry and stress
Disillusioned lay-off shows the company is facing financial problem Remaining employees worry about the company’s future and the prospect of their job Guilty The remaining employees lost good friends and coworkers in company's recent layoffsDisillusioned and guilty
Decision of layoff is issued by companyEmployees has no right to sayLack of contributionLow self-esteem
How to reduce the negative effects on the employee?
Implementation of downsizingCommunicationMaintain the morale in the companyProvide supports to the current employeesRe-motivate the employeesWays to reduce the negative effects
Be fair in implementing layoffs; spread layoffs throughout the organizational ranks, not just among lower-level employees. Use weighed totem poleAllow employees to leave with dignity; if possible, allow them. to leave of their own accord. Help those displaced find new jobs. Avoid belittling laid-off employees. Eight-step strategy for downsizing
Weighed totem pole
Be cautious when hiring outside executives as they may not be sufficiently knowledgeable of the industry to help the company. Keep employees informed about the company's goals and expectations. Set realistic expectations; executives must be optimistic but realistic. Use ceremonies to reduce anger and confusion - to convey to employees what is going on. Eight-step strategy for downsizing
Implementation of downsizingCommunicationMaintain the morale in the companyProvide supports to the current employeesRe-motivate the employeesWays to reduce the negative effects
After downsizing, employees spend significant amounts of time gossiping and worrying about the uncertainties in the future.
By communicating with employees, it can make them feel part of the organization and restore their loyalty.
Communication will help to curb the worry and re-direct employee energies to the job at hand (Fisher, 1988).Communication
The communication should cover the following topics:Point out weakness, room for improvement of the lay-off employeeAdmit the fact of downsizing individually and confidentially.The fact that changes are coming.The purpose of the downsizing.The need for growth and profitability.Explain future plans.Describe what effect is expected on the organization.Emphasize that laid-off employees will be treated with respect and dignity and will receive appropriate severance pay.Listen to employee concerns.Communication
Long after downsizing is completed, make employees feel they are valued.
To emphasize this point, talk about where the company is headed, and describe any plans for growth.Communication
CommunicationsMaintain the morale in the companyProvide supports to the current employeesRe-motivate the employeesWays to reduce the negative effect
After downsizing, maintaining the morale is of paramount importance.
There are three common aspects to a strategy for influencing morale. They were the ability to: Anticipate employee response.Identify interventions to impact morale.Monitor and evaluate morale and the impact of actions taken. Morale
Convince the workforce that job reductions were necessary.Apparent clarity or fairness in deciding on individual redundancies.Care over redundant staff.Managers should be willing or able to provide adequate time and support to individuals. Anticipating Employee Response

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  • 2. In recent years, many organizations downsize and lay off their employees. The remaining employees often have increased workloads. What are the possible negative reactions that he remaining employees may have? What can managers do to minimize the negative effects of downsizing?Introduction
  • 3. Reasons of downsizing Business Demand Reasons (Demand decreases, supply Decreases)Disaster/Safety Reasons (Financial Crisis, Financial Tsunami)Financial Reasons (Lay off to reduce cost and increases cash flow)Organizational Reasons (Change in structure)Production Reasons (e.g., automation and technological advances)Seasonal Reasons (demand is affected by season - e.g., agriculture)
  • 4. PCCWHSBC….Ppls feeling + resultshttp://www.youtube.com/watch?v=yF8xphlFj8s&feature=relatedhttp://www.youtube.com/watch?v=SfISF3vatZ8Examples
  • 7. Due to increased workload and reduced time for rest
  • 8. Each worker will take up more task which may not be of their strength
  • 9. Greater number of occupational diseases
  • 10. Leads to higher number of sick leaves or even absenteeismBehavioral reactionsLowered work effort
  • 11. due to job insecurity
  • 12. less likely to innovate and take risks
  • 14. During layoffs, relationships between employees tend to be less "familial" and more competitive than in the pastAttitudinal reaction on lay-off
  • 18. Employees are afraid of making mistakes and be subject to next round of layoff
  • 19. Increased turnover intentionsPopulation of psychological effect that the remaining employeessuffer
  • 20. Demoralization layoffs are disheartening lower work performance lower commitment lower productive lower profitUnfairness Remaining employees may doubt about the way of choosing who should be fired Managers should rebuild trust in company's management and direction.Demoralization and unfairness
  • 21. Worry Reduction on salary Another lay-off Prospect of the jobStress Facing an increased workload Maintaining high work quality Workers may suffer from high pressure Worry and stress
  • 22. Disillusioned lay-off shows the company is facing financial problem Remaining employees worry about the company’s future and the prospect of their job Guilty The remaining employees lost good friends and coworkers in company's recent layoffsDisillusioned and guilty
  • 23. Decision of layoff is issued by companyEmployees has no right to sayLack of contributionLow self-esteem
  • 24. How to reduce the negative effects on the employee?
  • 25. Implementation of downsizingCommunicationMaintain the morale in the companyProvide supports to the current employeesRe-motivate the employeesWays to reduce the negative effects
  • 26. Be fair in implementing layoffs; spread layoffs throughout the organizational ranks, not just among lower-level employees. Use weighed totem poleAllow employees to leave with dignity; if possible, allow them. to leave of their own accord. Help those displaced find new jobs. Avoid belittling laid-off employees. Eight-step strategy for downsizing
  • 28. Be cautious when hiring outside executives as they may not be sufficiently knowledgeable of the industry to help the company. Keep employees informed about the company's goals and expectations. Set realistic expectations; executives must be optimistic but realistic. Use ceremonies to reduce anger and confusion - to convey to employees what is going on. Eight-step strategy for downsizing
  • 29. Implementation of downsizingCommunicationMaintain the morale in the companyProvide supports to the current employeesRe-motivate the employeesWays to reduce the negative effects
  • 30. After downsizing, employees spend significant amounts of time gossiping and worrying about the uncertainties in the future.
  • 31. By communicating with employees, it can make them feel part of the organization and restore their loyalty.
  • 32. Communication will help to curb the worry and re-direct employee energies to the job at hand (Fisher, 1988).Communication
  • 33. The communication should cover the following topics:Point out weakness, room for improvement of the lay-off employeeAdmit the fact of downsizing individually and confidentially.The fact that changes are coming.The purpose of the downsizing.The need for growth and profitability.Explain future plans.Describe what effect is expected on the organization.Emphasize that laid-off employees will be treated with respect and dignity and will receive appropriate severance pay.Listen to employee concerns.Communication
  • 34. Long after downsizing is completed, make employees feel they are valued.
  • 35. To emphasize this point, talk about where the company is headed, and describe any plans for growth.Communication
  • 36. CommunicationsMaintain the morale in the companyProvide supports to the current employeesRe-motivate the employeesWays to reduce the negative effect
  • 37. After downsizing, maintaining the morale is of paramount importance.
  • 38. There are three common aspects to a strategy for influencing morale. They were the ability to: Anticipate employee response.Identify interventions to impact morale.Monitor and evaluate morale and the impact of actions taken. Morale
  • 39. Convince the workforce that job reductions were necessary.Apparent clarity or fairness in deciding on individual redundancies.Care over redundant staff.Managers should be willing or able to provide adequate time and support to individuals. Anticipating Employee Response
  • 40. Communicate throughout the period of change, not just at the beginning.
  • 41. It will be seen as insensitive to deny the reality of the painful aspects of the change.
  • 42. Communication has to be honest. Interventions To Build Morale
  • 43. Giving direct support to the ‘survivors’ as well as the ‘victims’ of downsizing. Provide supports in the fields of Stress Management and Careers Counseling.Rebuild relationships through team building activities to between and within groups and departments.Interventions To Build Morale
  • 44. Provide training to help staffs adjust to new job demands. Make them clear about what they are expected in the new working environment.Adopt reward strategies to boost morale.Use regular forums for managers to share their concerns with their peers throughout the change period, and avoid them feeling isolated.Interventions To Build Morale
  • 45. Organizations are using a range of measures to monitor some of the outcomes of morale.
  • 46. For example, staff turnover, absence from work and performance indicators is often monitored numerically.Monitoring And Evaluation
  • 47. Employee Attitude Surveys Through the increasing use of employee attitude surveys, attitudes and perceptions of employees are obtained. These can be used both to identify variations in response within the workforce, and track changing perceptions over time. Upward feedback Upward feedback is another way of collecting information on employee morale and response to initiatives. Monitoring And Evaluation
  • 48. CommunicationsMaintain the morale in the companyProvide supports to the current employeesRe-motivate the employeesWays to reduce the negative effect
  • 49. Provide a timeframe.Provide psychological and career counseling.Provide training to the staffs.Providing supports
  • 50. CommunicationsMaintain the morale in the companyProvide supports to the current employeesRe-motivate the employeesWays to reduce the negative effect
  • 51. Employee Commitment1. Focus Establish clear goals, expectations, and values.2. Involvement Employees have input into planning, problem solving, and decision making that affect their job.Re-motivate employees
  • 52. 3. Gratitude Recognition and appreciation are shown for employee efforts and accomplishments.4. Accountability Responsibility is given and producing results at high standards expected and upheld.Re-motivate employees
  • 53. What managers do to minimize the negative effects of downsizing towards the people being lay off?Clear explanationOutplacementFinancial assistance
  • 54. LoyaltyMoraleJob satisfactionOrganizational commitmentPhysical and mental healthWork qualityEffects on the employees