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Financial crisis leads to unemployment, close down of companies, and it even creates enemies among people. However, if a company employs excellent strategies, it may survive the crisis, thus, reducing unemployment rates. In the case of Utilities Company, the Chief Executive Officer has decided to lay off those people who create expenses to the company. He has decided to deploy a strategy that will see a hundred and twenty employees sent home (Merola & Abraham 2001). On the other hand, the situation could have been void, should the CEO had considered other options. This way, CEO could have saved the company from public humiliation and union battles. Therefore, the scope of this report explores an extensive discussion of various implications, repercussions, as well as the alternative options, as the case study in the human resources areas for the Utilities Company.
i) Implications of the CEO Announcement
The CEO of Utilities Company has made it public that one hundred and twenty people were subject to lay off from their posts. This decision has imposed severe implications for both employees and the company. The first implication of laying employees off is the cost factor, since it is higher than what the companies saves (Jackson, Schuler, Werner & Jackson 2009). Firstly, money was spent towards informing employees about the decision, including deliberating and paper work for employees subject to dismissal. Secondly, managers would take a long of time to educate the remaining staff how to handle duties taken over by the remaining employees. This means that a lot of money was wasted rather than saved.
The second implication is the loss of time. The CEO of Utilities Companies is wasting a lot of time trying to lay off employees, yet he could be performing other duties in the company. Additionally, the human resources department is wasting a lot of time drafting employees subjected for layoff. Moreover, employees in the company are not performing any work in the company, since they are deliberating on who is going to lose their jobs. In this case, employees are scared of losing their jobs rather than doing what they ought to be doing for the company. The lost time could have been used for performing constructive work in the company.
Thirdly, the company is going to have many court battles over dismissal of employees. After the announcement of laying one hundred and twenty employees off, by the CEO decision, unions have started deliberating the best solution for their members. In this case, court battle is one of the possibilities. Additionally, the CEO has given a list of employees, who are fifty years old and above, as part of his dismissal program. This shows that the company is discriminative in towards their employees. For this reason, the company is going to experience a court battle with the human rights organizations for discrimination. Additionally, the company will answer before the court for reasons of laying their employees off, yet there are other options to be explored.
The impact on employee morale is immense. Employees will start being rebellious in the company. For instance, if the company tries to charge employees with additional duties to compensate for those employees that have left, employees will not be ready to accept these duties. In this case, a lot of time and money will be wasted. Additionally, quality of work done will gradually decrease since employees will be trying to rebel any work the management tries to offer them. This shows that employee morale is going to decrease significantly. An excellent example in Utilities Company case is when the most skilled employees are resigning before they are laid off.
The company is going to reduce their public image should it continue off-laying its employees. The public is not amused with certain duties. This is because according to corporate social responsibility, a company is supposed to offer the society employment opportunities instead of sacking them. Moreover, companies are supposed to help the society in eradicating poverty. In this case, the public will consider the decisions made by the company as malice; hence, not going to conduct any business with the company. Additionally, the society condemns companies that are dismissing their employees. This will result in losing revenues for the company significantly.
Another implication of laying the employees off is a creation of enmity. The CEO is likely to receive hate messages from employees due to their rebellious action to his strategies. Secondly, the human resources department will likely receive negative messages from the other employees (IRS 2006). This is because they are the ones who will conduct the whole exercise of choosing those people who are going to be laid off and doing the paper work. In the situation of Utilities Company, both the CEO and the human resources department are likely to receive negative messages. This proves that laying employees off will lead to a lot of hatred and enmity in the company as compared to other options that will lead to friendship.
ii) OHS Concerns that Arose after the Announcement
The OHS team had major concerns about the employees after announcing of employees lay off by the CEO. The employees were starting to experience psychologically related problems. For instance, some employees developed anxiety problems while other became depressed. The OHS team was also concerned about the health of employees after the announcement. In this situation, OHS team was trying to find solutions to solve the problem because the company was running at a slow pace. Additionally, quality of work done was beginning to affect the company. In this case, OHS team was concerned with the employees’ health since it was going to lead the company to poor quality work provision.
The OHS team was concerned with how events have become a stand still in the company. They were afraid of customers reacting due to internal problems affecting the company. For instance, when an employee notices that he or she is going to be laid off, he or she will reduce the work efficiency. This will reduce the quality of services or products being delivered to the customers. Moreover, employees will tend to persuade the customers to move to other companies as a pay back to what the company is trying to do to them. In this case, company was likely to lose much on revenues instead of increasing profits, even before the CEO announcement. OHS team was concerned about the amount of customers that the company started losing.
The OHS team was also concerned about Maree’s health. This is because the announcement came as a surprise to Maree. She did not have the opportunity to review the strategies and provide the CEO with other options. Additionally, she did not have the opportunity to review implications of the strategy to advise the CEO. In this case, OHS team thought that Maree was going to experience serious health implications due to the announcement of the CEO. For instance, depression might be one of the health implications. On the other hand, OHS were afraid that Maree was not going to perform her duties as expected. They thought that Maree was going to rebel the CEO’s decision and rally employees together in rebelling the decision.
However, both Maree and the organization dealt with the concerns differently. Maree did not sleep until she ensured that everything was working perfectly in the company. For instance, she created two teams. One team was to perform the selection of employees that are going to be laid off while the other team was going to ensure all activities run normally in the organization (Stone 2012). The organization provided all the resources that were required to help employees and other parties in the company to cope with the tough times in the company. Secondly, after the announcement, the organization was ready to deliberate with employees for purposes of coming up with another better option.
iii) Equity Issues Raised by Redundancy Option and their Implications for the Organization
One option thought to work was the employee voluntary redundancy. This program was supposed to be used by employees who were supposed to be laid off so that they could be rehired once the company was back on their feet (Great Britain n.d.). However, the problem in Utilities Company was that employees, who expressed in the redundancy program, were highly skilled and young. The employees who were old and resistant to change did not want to fill the forms. These employees were not effective, and they were unqualified. The CEO regards these people as unworthy, expensive and ‘dead wood’ employees of the company who did not deserve employment. In this case, they were the ones who were left in the company.
There was an equity issue in this package where it was seen to be unfair to most of the employees. According to the CEO, his initiative was meant to remove ineffective employees in the company. However, this was not the case. The employees saw this package as malice. In this case, those who knew that they were not effective did not express interest in the package because once they voluntarily agree they will never come back to the company again. This proves that the voluntary redundancy strategy did not imply the equality. Instead, it was discriminative since it only selected certain employees, and yet it was supposed to be voluntary. This was confirmed by the CEO, when he refused use the strategy after he saw the employees who ha filled the forms (Stone 2012).
If the employees who had expressed interest in the voluntary redundancy process were to be laid off until the company recovers from the crisis, the company’s quality of work done would greatly reduce. This is because the employees who have been left in the company are not qualified or competent to work on their own. On the other hand, employees who are likely to go are the ones who have been providing the company with quality work since they are highly skilled and efficient in their work. In this case, Utilities Company is going to decrease the value of work being done to their customers. As a result, revenues at Utilities Company will decrease immensely. Instead of the company picking up, revenues will continue to decrease leading to company’s closure.
Secondly, employees who have expressed the desire to be placed in the voluntary redundancy program will not come back after the company has recovered from the crisis. This is because these employees are highly qualified and skilled (Stone 2012). Despite the financial crisis, they will look for other jobs, and it will not take long before they are hired by another company. For this reason, it will be suicidal for Utilities Company to let them go since they are likely not to come back. In this situation, voluntary redundancy is not going to work for Utilities Company.
On the other hand, the company would gain favor by using the redundancy strategy from the public and employees themselves. This is because the employees who are to be laid off have accepted voluntarily to leave the company. In this case, the morale of the employees would not go down in fear of being laid off. Secondly, employees will be motivated to work hard so that they could survive the hard time and get their fellow colleagues back to work (Roodt 2004). Additionally, revenue levels are expected to increase gradually since the employees are highly motivated to work. Therefore, despite the redundancy strategy being ineffective for Utilities Company at the time, it can turn to be the most effective strategy as compared to the option of laying employees off involuntarily.
iv) Impact of Industrial Actions and Options Unions Could Have Taken
After the announcement of laying the employees off by the management, there was a lot of industrial action. This is where the unions came in to protect their members from losing their jobs. Additionally, unions wanted to show their members that they were powerful and could protect them from employers who are unreasonable in their demands. In this case, industrial actions would have great influence on Utilities Company. In this case, it might destroy the strategies Utilities Company was trying to employ. On the other hand, it could have a positive impact on Utilities Company.
The first impact on Utilities Company is that the company is going to receive a lot of resistance from employees, and it is not going to employ the strategies as had earlier planned. This will be a major set back to Utilities Company because the company’s work performance would suffer, due to enmity among employees and management. For instance, the management will want to sack those employees in unions for purposes of reducing problems in the company (Stone 2012). On the other hand, employees will want to do what they want since they are aware the union is protecting them. In this case, the company will go down slowly since people in the company are at hatred with one another.
Secondly, industrial action can have a positive impact on the company. It said that two heads are better than one. There are many options when two heads are thinking together as compared to one head. In this case, the unions might come with new solutions that will help the company instead of laying employees off (Bridges 2011). This is where the unions are adding value to the company rather than going on strike, which might destroy the company. In the situation of Utilities Company, unions have tried all they could deliberate with the management of the company so that they could be able to meet their grievances for the benefit of the company and the employees. For this reason, they will be able to improve the company positively, and at the same time helping their members to protect their jobs.
Therefore, unions could have used a different approach in Utilities Company to protect the jobs of their members. This is because, despite deliberating with the management of the company, the CEO was angry and fixated on laying ‘dead wood’ employees off (Stone 2012). The best solution to solve such a situation would be if unions could have come up with options for the CEO that would ensure employees continue working. For example, they could have asked their members to reduce their salaries during hard times. Once the tough times are over, their salaries would be reviewed again. In this case, the managers or the CEO should be made comfortable with an amount that he cannot refuse. However, if he refuses all the options, the court systems should be used. In this case, unions should provide proof of trying to show the CEO options that could work, but he refused. In this case, the court will see their side and order the CEO to take their options.
v) Another Option the CEO Could Have Communicated About the Lay Offs
There are alternative ways the CEO could have announced the decisions of laying off employees. For instance, he should have involved the employees in the decision process. This is where he should have shown employees what is happening to the company if some of the employees do not go. In this case, employees would have been involved in the decisions process, and they would not have been surprised (Beaumont 1995). Instead, they would have been supportive of their CEO. However, that was not the case for Utilities Company. Employees were taken by surprise, which was leading to health problems and a stand still for the organization.
v) Why did Maree Resign?
Maree resigned from the job because the CEO was unethical, and he was going to bring the company down (Armstrong 2006). According to Maree’s point of view, it was discriminatory to fire people who are fifty years old and above. Secondly, the CEO did not want to listen to her option, yet she was the one who was supposed to lay off these employees (Gardiner, Stuart, Forde, Greenwood, Mackenzie & Perrett). For this reason, Maree knew that this would ruin her career as a human resource officer. Moreover, Maree knew that she was going to be psychologically affected, if she went through with the decision as made by the CEO. Therefore, Maree had no choice as to file a resignation.
According to the case of Utilities Company, there were many issues affecting the company. The CEO was not ready to listen to any options that did not involve laying ‘dead wood’ employees off. The CEO was fixated on the options that the only solution to save the company was to remove the employees, who were not adding value to the company. According to him, these employees were fifty years old and above. Secondly, the CEO was using the human resource department to implement his strategy. According to the law, this was unethical on the grounds of discrimination. This was putting a lot of pressure on employees and the human resources department leading to emotional problems among the employees. Finally, based on the analysis of the situation, the management of the company, including the CEO, could have used alternative option that was not costly or time wasting for the employees.