Ch. 5: Downsizing

Concept and brief description:

Downsizing is the planned elimination of large numbers of personnel with the goal of enhancing the organization's competitiveness. Companies resort to downsizing mainly to compete with other businesses and cut costs. However, downsizing, if not done correctly, can do more damage than good to a company. The H.R. department needs to analyze and contemplate the decisions that need to be made, that will in turn help and enhance the company.

Emotional hook (provocative question/ claim/real-life problem):

Suppose your boss comes up to you one day and asks if you would be willing to work overtime. He explains that overtime will be double the pay and sometimes paid dinner. You need some extra money so you eagerly agree. However, after a few weeks you are very tired and find yourself working A LOT of extra hours. You no longer enjoy coming to work and your morale goes down.

Key points to elicit in discussion:

I think that downsizing is needed in several situations and can be very beneficial if facilitated in the right way. A company needs to make sure that they have thoroughly thought through their decisions before they take action. Offering early retirement plans can be a great way to downsize but you need to make sure that you won't be in short supply of employees later on. Also, replacing labor with technology can be very affective and cut costs, but you still need to maintain enough employees to run the equipment. In addition, if a company makes a rash decision to lay a bunch of employees off of work, you are going to create bad morale and decrease motivation for existing employees.

Facilitative questions:

How do you downsize to help the company without hurting your company in the long run?