Effects of Downsizing on Turnover and Morale Report

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I have my final report attached and I need to add about 15 pages (expounding on CH 4-6) discussing the effects of downsizing focusing on turnover and morale. As an Operations Manager for Bank of America for 16 years and 11 years in management.

This project is detailed in the attachment. Please feel free to ask questions and I can clarify any loose ends

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The ADCP Project The ADCP Project is perhaps the most interesting, rewarding, and at the same time, the most challenging part of this course. Broadly speaking, the ADCP project involves choosing a problem you would like to solve, thoroughly researching it, designing a specific plan of action, and writing an extended report. This report approximately 35-40 pages (excluding the title page, abstract, table of contents, bibliography, multiple charts, graphs, figures, and the appendix) will be the major product oil to this course. However, you can always submit more than the minimum. Option 1: Applied Design Intervention In this option, you identify a problem (preferably at your workplace) after some initial observation and study. After a careful definition of the problem, an intervention to alleviate the problem is designed, implemented and evaluated. You must organize your written report of your project into chapters as shown below: Page 1 – Abstract (summary of the entire project) Chapter 1: Introduction Chapter 2: Description of the problem (Research starts at the end of Chapter 2) Chapter 3: Description of the Intervention (Solution) Give Pros and Cons of the Solutions Chapter 4: Implementation and Possible Outcome (Choose a solution & how to experiment it) Chapter 5: The Evaluation Plan (How you are going to measure if your plan is working) Chapter 6: Conclusion and Recommendations Chapter 7: Reflections (a discussion detailing what you learned from the project) Last Page: Bibliography Running head: EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE Effects of Downsizing on Turnover and Morale Name Institutional Affiliation 1 EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 2 Table of Contents CHAPTER 1 ................................................................................................................................... 3 Introduction ................................................................................................................................. 4 CHAPTER 2 ................................................................................................................................... 6 Description of the Problem ......................................................................................................... 6 CHAPTER 3 ................................................................................................................................. 10 Description of the Intervention ................................................................................................. 10 CHAPTER 4 ................................................................................................................................. 14 Implementation and Possible Outcomes ................................................................................... 14 CHAPTER 5 ................................................................................................................................. 18 Evaluation Plan ......................................................................................................................... 18 CHAPTER 6 ................................................................................................................................. 20 Recommendations ..................................................................................................................... 20 Conclusion................................................................................................................................. 21 CHAPTER 7 ................................................................................................................................. 23 Reflections ................................................................................................................................. 23 References ..................................................................................................................................... 25 EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 3 ABSTRACT The study identifies the effects of downsizing based on the variables of turnover and employee workplace morale. In the context of organizational performance and employee performance, an emphasis about this report is made aiming to discuss the effects of downsizing within an organization. As long as invaluable information will be attained from this source, strategists maintaining their focus on comprehending downsizing and finding effective strategies to manage employee performance and reduce turnover. The target population was mainly Bank of America management and employees but also other organizations that can find it applicable to use the research in proper control. Throughput the sections, proper discussion on how employees are affected by downsizing have been presented. Also, as part of the recommendation, the organization should employ better employee compensation strategy as a mechanism to boost employee performance and retention. Employee job moral is a critical factor for improving their overall performance and reducing their intentions to leave the organization. EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 4 CHAPTER 1 Introduction In the corporate world, downsizing is popular in most organizations for both those that are in operational distress and those that are not. Companies are practicing downsizing mechanism as it is an increasing feature used to analyze the performance and profitability of an organization (Entrekin, & Scott, 2013) by reducing the cost associated with having many employees within the organization. Thus, downsizing has presented some effects which we shall analyze in this project by mainly focusing on its effect on turnover and morale. Concentrating on improving profitability as an organization is critical towards determining the future success of an organization that is in a constant battle to survive. Due to downsizing rates of voluntary turnover usually surge in most cases. Most organization today faces critical times to ensure that they avoid effects that are related to downsizing. Therefore, the essay seeks to analyze and discuss the impact of downsizing while focusing on turnover and employee workplace morale. Dire situations might be present in the organization that makes an organization to implement downsizing as a tool of reshaping the organization. Later, most survivors help in bringing back the company to recovery after realizing the impacts created by downsizing (Entrekin, & Scott, 2013). Moreover, procedural fairness and justice is a necessary procedure for addressing employee complaints in an organization and finding a confidential solution towards addressing the issue of downsizing. Companies live with redundancy and employees are forced to reconsider their status either to maintain or leave. Industries looking forward to increasing their profitability should work towards finding better solutions to its process (Entrekin, & Scott, 2013). For example, employee turnover and morale are among significant consequences that are reflected due to company downsizing. EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 5 The research project has been divided into sections to help in understanding our topic of study. The report will contain chapter which provides a brief overview of what the essay report entails. Also, in chapter two, the essay gives a description of the problem regarding the effects that downsizing has on turnover and morale of employee in my organization which in this case refers to the Bank of America. In chapter 3, the essay discusses solutions towards mitigating the problem discussed which entail major strategies for employee retention and how to effectively minimize turnover. In this part, the essay will focus on strategies such as employee compensation and benefits as a strategy for reducing employee turnover while increasing employee retention capabilities within the organization In addition, chapter four discusses on implementation of a solution and possible outcomes. Also, I shall discuss how to experiment with the solution. Chapter 5 determines the best evaluation plan that can be used to evaluate the viability of the various strategies used such as employee compensation scorecard to help in measuring and determining if the plan will work out. Moreover, considering that a problem has been identified, interventions to alleviate the problem will be designed and implementation will be critical to help in getting the best outcome. Also, in chapter 6, the essay analyzes on recommendations and conclusion regarding the project of study. Chapter 7 briefly demonstrates my summary of lesson learned throughout the entire project. Additionally, a set of bibliography has been set at the end of the paper giving references on where research information was found to help in discussing the main topic. For purposes of improving financial performance, downsizing is a strategy which makes most employee fear. Various reasons are presented why downsizing is practiced which include modernizing, outsourcing, company restructure, and organization redesign (Entrekin, & Scott, 2013). Thus, employees try to find alternative methods to improve their lives better. In case EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 6 downsizing is implemented on them as part of the human resource unit, various approaches towards dealing with the issue. However, even though downsizing is implemented, organizations do not consider to analyze important implication that is brought about by downsizing the organization (Entrekin, & Scott, 2013). Not only are implications identified but also costs are incurred during the process of downsizing. Often, employees decide to voluntarily turnover by overlooking at the remaining goals present within their environments. Therefore, the essay seeks to analyze and discuss the effects of downsizing focusing on turnover and morale and also have a look at employee retention strategies to minimize turnover (Martin, 2013). CHAPTER 2 Description of the Problem Considering tough economic times, most organizations today rely on downsizing as an option to remain competitive in relation to organizational commitment. However, many companies fail to recognize the effects of downsizing and how it affects turnover and morale itself (Iverson, & Zatzick, 2011). In an effort to reduce or rather cut cost that is incurred, downsizing seems to be influential in the organization to help in reshaping on how employees are replaced to have the salary of new employees being cut twice. Thus, it is critical to understand the relationship created between downsizing and turnover (Ahmad, & Sulaman, 2015). Moreover, when there is an increased turnover, the organization risks being understaffed due to subsequent turnover. Coherently, most organization regard to retain top influential performing employees as a safety precaution to lose them to voluntary turnover. Employees see downsizing as a jarring event; thus their psychological contract risks being violated. EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 7 Moreover, downsizing does not only make employees reevaluate their position in the organization but also their situation when they hear an announcement being made concerning downsizing. Based on a desirable situation, employees would like to retain their position and confirm their status in an effort to improve their life into greener pastures. Thus, the extent of employee’s commitment or dedication is often affected by downsizing meaning that turnover is highly applicable to most employees when downsizing is considered (Ahmad, & Sulaman, 2015). Therefore, employees consider utilizing their options either to stay or turnover on a belief that downsizing will prevent them from quality performance and improvement in the workplace. Perception will be based on how effective organizational commitment is done in the organization. Thus, their morale can only improve if organization regard to procedural justice. As part of human resource practice, procedural justice influence employee decision on how they review the organization process. For example, based on payments provided, employees can boost their morale if payment has been increased but on contrary lower their morale when it is reduced (Iverson, & Zatzick, 2011). Also, it is a salient process to make employees perceive that organizational, procedural justice has been relatively administered on high levels. Downsizing can be influential to employee’s perceptions. Additionally, it is more likely that employees will consider to stay in the organization or rather face disappointment regard what extent they can take to be interdependent with the organization (Iverson, & Zatzick, 2011). For example, some determinants can help identify if an employee will stay or leave due to downsizing such as friend’s relationships, benefit plans, or either paid sabbaticals. Moreover, in relation to downsizing and turnover, the career development of employees also suggests that a positive relationship will be created or not. Career resources centers have proved to be influential in most organizations which are employed to help in employee EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE assessments on their strengths and what needs to be improved. Also, from managerial training and training, organizations have failed to orient their employees on care development and personal growth thus increasing the reasons why they leave after downsizing. Therefore, based on the utility of leaving or staying, they will be influenced after hearing downsizing announcements while they consider their option that they are the best fit for new job market challenges or helping the company grow (Ahmad, & Sulaman, 2015). Therefore, as a consequence, it is essential for an organization to reconsider their stand on downsizing based on the fact that they will improve their profitability or lower their standards due to turnover. It is necessary to practice downsizing, but practices which are done prior to downsizing will automatically influence turnover. As part of work experience, downsizing also affects employee’s morale despite the circumstance of others choosing to leave. Of course, morale matters when it comes to organization performance after downsizing, but it depends on how much influence was caused. Interestingly, an employee will feel unsettled due to downsizing and lose their morale which in turn can be an inevitable consequence which undermines organization productivity (Iverson, & Zatzick, 2011). The manner by which changes of downsizing have been administered in the organization will require an organization to seek on best process or strategies to minimize turnover and improve retention. Moreover, future relationships are built on good morale created within employees but when not effectively practiced, such activities can threaten industrial performance. Also, the wellbeing of an employee is influenced by downsizing as they will rate their situation to be either just or unfair (Iverson, & Zatzick, 2011). Therefore, they will be less assured about their security. As most employees today think and believe that their company performance will be rewarded one day, it will be unsure when downsizing is practiced. 8 EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 9 The most organization today fail on the part of convincing employee why downsizing will be influential for the future of the organization; thus as an organization, they end up risking downsizing circumstances. Employee response will be less anticipated due to the lack of care they receive and development option like promotions. Moreover, the lack of enough time for the management to approve their skills on supporting employees can also be a consequence related to downsizing. Ironically, more problems will only be created rather than solved due to redundancy or downsizing. Thus, companies need to be equipped with practical strategies to help develop survivors or jobless employees. Despite business today are striving to improve their performance, downsizing is a challenge towards ensuring the company remains competitive. As part of corporate restructuring, it is a powerful approach to help in dealing with competition challenges in the work environment, but productivity and efficiency can be undermined without the consent of managers in administration (Ahmad, & Sulaman, 2015). Downsizing can case acquisitions, mergers and also demergers being formed in a result. Additionally, if the organization does to resort to making employees as their asset, reduction in wages, and lack of development through training can lead to lower productivity as employees will feel no need of continuing to work. In essence, more gap will be created due to employee mistrust which is developed among employers and employees in the whole organization. Employees in an organization are so much skeptical about any changes made within an organization making them have anxiety even when new roles have been administered. Moreover, interpersonal relationships are likely to be lost despite the company being positive towards downsizing influencing future success. EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 10 CHAPTER 3 Description of the Intervention Waiting for an employee to exit from an organization can be a missed golden opportunity. It is essential to fix organizational issues related to employee turnover by employing effective strategies which will develop more employee turnover room and keep the organization running towards achieving its goals and objectives of productivity. What motivates and boosts the morale of employees is an entire touching base that can mitigate the problem of turnover and institute retention (Kappel, 2017). Thus, employee retention is a necessary process as high costs are incurred significantly due to employee turnover as much as twice the salary of an employee. Moreover, from a human resource management perspective, it is worth to invest and have time considering that retention payoff. Therefore, lost morale will be motivated while talents will be retained despite turnover which will contribute to organizational performance and success in the future. As worldwide turnover rates have increased significantly over the years, an average of high turnover rates have been recorded at 13.2%. It is vital to implement possible strategies that can help in mitigation employee turnover and finding solutions to boosting morale among the organizational employees (Iverson, & Zatzick, 2011). Many reasons might be presented as to why most employees leave an organization which is even unknown to their employers. Thus, employers have resorted to strategies that can help make an employee develop a feeling that they are not only valued but also engaged within the organization for its success (Iverson, & Zatzick, 2011). Real impacts reduce the turnover rates for those who leave jobs due to both non-payment and payment reasons at 88% and 70% respectively. Therefore, when managers understand the causes, it will be helpful in finding a better way to implement their strategies. EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 11 Therefore, as an option of increasing retention and reducing turnover, employers should determine that retention is initiated by first making recruitment or new hires. When applicants are screenshot for application and who will attend an interview, employers need to emphasize on organizational cultures and strategies to provide what aspects are considered within an organization (Allen, 2008). Moreover, good recruitment will lead to finding quality candidates to ensure they have the required talents within an organization. Managers such as human resource managers should incorporate acquisition programs which are related to formal retention programs. By default, poor recruitment often cost organizations which a disadvantage. For example, it will cost the industry to find new replacement based on those employees who quit. Thus, it is significant that recruitment processes are adequately run to avoid misleading a candidate who in turn in future quit the job which is a real risk (Allen, 2008). Fixing a candidate to engage with ongoing success is critical. Therefore, scouting out new hires provides pavement for employers to start developing their brand from first impressions made. Alternatively, promoting more education within an organization as well as developing employees based on their skills not only improves how they feel to be valued but also gives them the aspect of responsibility. A clear path will be created as a significant part to make an organization achieve its success comprehensively by evaluating their employees through promotions (Kappel, 2017). Contemporary development and education are essential in determining the arsenal of retention. For example, an organization can integrate their culture from training employee through seminars or rather offering opportunities to attend workshops to help them attain new skills and foster their talents (Kappel, 2017). Additionally, to implement employee education will emerge as a success of valuation among employees; thus they will have their services retained for more extended periods in the company without having an option to EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 12 think on turnover. Learning should be a focus emulated by industries to seek to maintain their productivity and performance among today’s competitive world of business (Allen, 2008). Periodic events of learning on daily activities are necessary as it is an advantage to help employees to mitigate new complex tasks they do not understand, thus higher rate of retention will be acquired when employees will shift focus and believe that it is worth for their investment. Furthermore, high retention capabilities will be positively influenced when an organization provides the best compensation strategies and benefits. Boosting employee’s morale by providing healthy environments and making them happy again plays an essential role in retention. As an organization, employees expect to receive financial awards based on their performance that enhances them to stay or leave (Worldatwork, 2007). For example, incentive compensation and work bonuses are essential to most organizational employees. Considering that employees contribute towards organizational success giving stock options from excess profits made in the organization will increase employee retention. Additionally, flexible work schedules can also institute a path of retention whereas also they get to earn generous leave payments. However, if employees get unpaid leave, it is evident they will get back to work as they cannot afford (Worldatwork, 2007). Thus, benefits are significant but it is also a disadvantage as too many benefits will be detrimental to an organization. For example, some employees may resort to using the opportunity not to work. Transparency is advantageous to an organization as it keeps open communication between administrations and employees. Circulation of ideas by giving privilege to employees gives them an opportunity, to be frank, and also consider to ask questions which matter to their employment. For example, open meetings and forums should be organized within the company to offer a platform for the management to engage with the employees (Phillips, & Connell, EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 13 2003). Moreover, talking to each other provides a feeling of valuation as employees input is given priority to share their opinions. A network of talking will influence their ego and maintain a real character to convey some sense of belonging and trust between the organization and employees to learn from each other. Clear and transparent communication demonstrates the kind of growth between leadership and member involvement between both parties thus increasing trust (Allen, 2008). Therefore, transparent, open discussions or communication can be a disadvantage if employees decide to provide influential negative talks that might hurt the organization. When providing an interview, it is necessary to determine those candidates who will stay during the course. Finding those most likely candidates to remain in the organizations is critical. For example, organizations management can research and find candidates who have had previous stay records of longevity from companies they previously worked in to make to good candidates (Allen, 2008). Furthermore, despite engaging to look at the resume, it is significant to find more details regarding candidates that are shortlisted to work in the organization. Asking questions like how long have they stayed and worked whether in poor or good conditions would help in determining the best strategies to use in this case. Finding individuals who can voluntarily perform better in outdoor engagements can identify if they are determined to a cause on mindset to have positive outcomes despite the process (Kappel, 2017). However, retaining a candidate who keeps on shifting from one job to another will be a difficult challenge as they tend to leave earlier. Thus as an organization, it is applicable to find better candidates who will be approved to work for the company despite issues such as downsizing being mentioned in the future. EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 14 On the other hand, leveraging on the option of technology is an approach to enhance employees pooling. With a perspective that business does change with time, questions can be pre-set at interval levels like weekly to help members in the organizations to list their issue earlier through the exercise to help managers have an overview of how quickly to solve the issue (Phillips, & Connell, 2003). For example, a single question challenges faced during operations can be drafted by supervisors or Human resources manager and channeled to employees to get their responses. It is upon leadership management to offer feedback in return and explain their actions. For example, if maybe some employees were affected by the company’s action of downsizing, it will be the perfect time for the organization to find actions to take against feedback responded by employees (Allen, 2008). However, such an approach does not provide time for all challenges to be addressed; but in essence, it is an essential process towards improving retention by knowing what activities first to respond. CHAPTER 4 Implementation and Possible Outcomes Considering I have worked as an operations manager for Bank of America for 16 years and being in management for 11 years, I will choose to implement employee compensation strategy as the most effective. Every employee works in an organization governed by goals and standard objective provided by the organization to earn salaries and find compensation for their valuable life at work (Worldatwork, 2007). Despite having other workplace retention strategies such as employee development and growth, compensation and benefits also work as a surefire alternative to employee’s detainment. It is important to set company goals in the bank to offer incentives, stock options, and providing extra benefits considering they have exceeded my expectations as an operations manager. In addition, as the benefits are included, it will be EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 15 influential if meaningful benefits are provided to show some sense of respect as it will also avoid wasting money being used on unwanted things (Worldatwork, 2007). As part of the compensation plan, it will be useful if I get to include retirement savings, inventive, bonuses, group health benefits, annual salary, and hourly wage compensations. Regarding paying employees an annual salary as a compensation, it is an important factor towards having a better compensation plan. Despite employees are salaried and have been categorized as non-exempt, or either receive overtime salaries, the inclusion of an annual wage which does not need or require overtime payments to be received (Phillips, & Connell, 2003). For example, based on employees at salary levels who are on a salary scale, compensations can be done considering education, work experience, work competency, and individual expertise or skills. From the personnel management, the organization can wage tables are created while incorporating any increases based gradual grade promotions. Therefore, employees can receive such compensations based on this criterion. Alternatively, it is also essential to create a retirement savings plan for all employees. Employees will be given an opportunity to register for pre-tax contributions which will foster some deductions to be made from their paychecks in anticipation for everyone’s participation. For example, employees can contribute 5% of their total gross salaries to earn a 50% match from their contributions meaning employers match will equal 2.5% from their employees’ gross salary. Moreover, vesting time can be included in a period one to 5 year for all employees in the bank where employees get to receive some percentage of contribution from what employers will contribute after each year. Thus, retirement benefits and savings is a necessary procedure to attain employee compensation. EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 16 From an hourly wage analysis, employees will be able to receive contributions on an hourly basis. However, when there is an overtime work done, a percentage is set to ensure employees get to earn what they have worked for. That means overtime payments will be calculated and included in the regular wage plan (Worldatwork, 2007). For example, the organization can decide to have overtime payments calculated as one and a half multiplied by an hour of work rate. Also, conspiring that our organization consists of an employee who is in agreement through collective bargaining, they will still receive their wages set based on contract agreement terms. For example, when the organization at one time receives labor contract employees who are paid on hourly bases as per the contract wages of maybe $12 per hour, then it is subject to payment based on collective bargaining agreement (Worldatwork, 2007). Therefore, payments made on an hourly basis can be a motivation for employees to find effective interventions to continue developing their skills and learn more on reaching company goals regarding the set goals. Health care benefits are also essential if it is included in the compensation plan. Thus, employers are required to make payments of sizeable portions in total monthly incomes considering that the premium portion is cut from employee income. This, then means that early pre-tax deductions will be made from employees pay as an offer for health coverage. Many employees today face the challenge of receiving proper medication due to lack of funds, thus when they have been compensated through coverage from employment they feel more joyful to get insurance coverage. For example, supplement coverage can be initiated in the organization on employees to take care of dental coverage. Therefore, when coverage is assured to employees, they will receive more valuation program what aids into satisfying their medical cover need. For example, employers can set up employee wellness programs which will be effective for EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 17 employees to have money saving for coverage on services they would not cover in case of an emergency. Additionally, as an option of paying employees for excellent work performance, it will keep employees engaged and also healthy to work more as a retention program. Thus, the compensation and benefits programs will retain quality employees to sweeten contract that they have signed with the company. It will work towards meeting employee’s needs that are a priority. Also, it will not only boost employee loyalty, but it is also essential in increasing employee motivation. The focal point of success is job satisfaction by improving benefits in the company and increasing set bonuses as it is a program that will be influential towards knowing which employees decide to stay or leave. Therefore, the productivity and profitability of the company depends on such programs as employees work on environments that they are motivated. It is an advantage to the organization when a balanced scorecard is implemented as it is better for strategic planning and also projects are well aligned. Finding framework that act as guidance will assist the company in building a competitive strategy. From the scorecard, a business map or model is established to know what amount of pay is recorded. The resulting measurements provide an analysis on what is the best strategy to give while reviewing costs made against the budget (Worldatwork, 2007). On the other hand, results can be compared with organization objectives to find a better indicator on what type of incentive to give in compensation. As part of an indication, providing data regarding how various managers give their preference in the organization will help in creating an open environment within the organization that in essence will help determine areas of weaknesses in the organization. EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 18 Therefore, a compensation program will highlight anything that is wrong in payment which is critical towards finding exact figures to compensate. CHAPTER 5 Evaluation Plan As part of an evaluation plan, I will measure my implemented employee compensation plan using an employee compensation scorecard. Major expenses are incurred due to employee compensation in the organization and management of these expenses is critical for better analysis and evaluation (Bowles, & Cooper, 2009). Through the scorecards, data plan can be made transparent to improve and monitor the aspect of performance and make management more effortless. Based on incremental costs, the organization finds that often compensation is unevaluated; thus problems are experienced from invisible nature by which compensations operate. For example, the organization cannot differentiate payments made on performance, or instead between over and underpayments. Employee compensation should be done appropriately to make employees feel they are paid fairly and to increase their level of satisfaction within the organization. Furthermore, effectiveness can be increased when the scorecard is used in evaluation for compensations. By the principle that what is measured is done, the option of measuring compensations is essential. Thus, efficiency in compensations management is an accurate measure to help in executing our strategy (Bowles, & Cooper, 2009). Results will be displayed to monitor and compare various compensation strategies employed in all department and units within the organization. Moreover, compensation problems will simply be detected easily to assist in making transparent decisions that will improve the quality of decision made from EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 19 compensation actions (Worldatwork, 2007). For example, the following scorecards sample can be used in the organization on employee reports based on their performance ratings, grade inflation, and average merit by increase, profit growth on correlation, Annual salary, Employee Number Grade inflation Performance ratings (1-10) Average merit by increase (5% of budget) Profit growth on correlation Annual Salary (% based on target) 10014 67172 81221 23320 2% -6% 4% 17% 6.4 7 8 3 3.6% 4.1% 6.0% 3.5% 5 6 6 3 101% 100% 100% 102% 32798 46122 50954 6.5% 8% 18% 5 6.7 9 1.2% 3.5% 4.0% 4 7 5 100% 109% 101% Therefore, compensation scorecards will help the organization in planning the desired outcomes and to assist managers in making viable decisions. It will also help in improving transparency, the balanced scorecard and creating a more responsive organization. Money that is spent on compensation should be effectively utilized and measure to ensure nothing goes to waste (Worldatwork, 2007). As compensation tool, the scorecard is manageable and simple for assessment. Thus, working together with the human resource department as an operations manager, it is influential that compensation scorecards will be administered every quarter within a year to make assessments more comprehensive. Additionally, options of differentiation can quickly be paid as well as forced distribution thus understanding the Banks compensation strategy, elements, and measures to be used (Worldatwork, 2007). It is important to send EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 20 messages that are visible and appropriate to avoid having wrong results even when working with compensation mechanisms. Moreover, implementation of the best compensation strategy which measures individual differentiation based on performance considering the organization is of broad-based population. Thus, of course, the highest performers will always get higher pay compared to low performing employees. So the actual strategy of compensation should always base company descriptions and examples. The compensation strategy should have good coordination together with main organizational strategies. Additionally, it is a highly valuable tool to help in tracking performance in the whole organization (Phillips, & Connell, 2003). Reliable data is captured to provide a clear picture from the resulting metrics to help company’s management in making wise decisions. For example, from the above sample I have provided to help in assigning a better compensation program the company can better, attract, motivate and retain employees when everything measured is correct. CHAPTER 6 Recommendations Employee retention is a productive process that helps human resource professional to retain quality employees compared to the option of recruiting. Also considering that I find recruitment of new employees into the company is a costly process, I find it better for the organization to train and recruit from the organization without having to orient new people for replacement. It is essential to consider an internal employee because I believe they have a better experience (Bowles, & Cooper, 2009). Thus, I recommend the Bank of America to emulate this exercise as an overview to reduce wasted costs taken into training new individuals. However, I EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 21 do not claim recruitment to be the wrong decision in management, but priorities are sometimes better served to help in finding new alternatives. Also, I recommend my organization to emulate employee compensation program as a retention strategy to maintain good relationships with the organization. It is the same employees who help the organization to make profits, so my organization needs to realize that as employees, we need to have such privileges at least to feel valued and appreciated (Bowles, & Cooper, 2009). Thus, acts of kindness can be administered towards employees in so many ways, but respecting the presence of an employee is critical. A key ingredient to retention is people feeling they are satisfied with where they are working. I recommend the Bank of America to give constant and positive payoffs with retention programs that will reduce turnover problems. Motivated employees will need to continue working for the company as it is a worthy and necessary procedure. It should be noted that not only can employee compensation be recommended as the only strategy but other organization can also decide to other retention programs for future research. For example, performing recruitments from within, open communication forums, creating a positive culture and even making the employees to feel more valued in an organization (Martin, 2013). Also, I urge my company to understand each employee based on their concerns before downsizing and taking action to reduce the organization. Conclusion Therefore, having analyzed and discussed the effects of downsizing focusing on turnover and morale and also have a look at employee retention strategies to minimize turnover, deliberate reductions have been made in the organization(Bowles, & Cooper, 2009). Thus, implementation of the employee compensation strategy as the best employee retention strategy to minimize EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 22 turnover will work to ensure downsizing effects do not much influence the organization. Considering that organizational downsizing the workforce in the organization is deliberately reduced. Downsizing is practiced as a cost control mechanism, but also it should not be linked to business failure. Reducing the amount of workforce has gained popularity but doing cause implications for employees (Bowles, & Cooper, 2009). Focusing on turnover and morale, many organizational employees today try to find alternative means of survival is by chance they do not get to achieve their personal goal. Work performance is directly influenced by corporate downsizing which leads to a structural transformation. Practical managerial skills are required to find strategies of minimizing turnover and more importantly improve employee performance even after downsizing. As discussed in the essay, other employees are forced to voluntary turnover when they find that the organization practices mergers, acquisition, and operations transfers are practiced. Moreover, employee turnover today are an ongoing activity that is independently influenced by financial performance. Regarding customer compensation strategy, employees can receive benefits, bonuses and other monetary incentives that can boost their morale and have a healthy enjoyable environment while working (Martin, 2013). Also, having discussed on major strategies that can be implemented to reduce turnover cases, employee compensation gives a priority for company employees to enjoy health benefits which is a fundamental requirement in their lives. Also, during the report, I have already discussed a powerful tool that can be used for employee compensation strategy used as a measurement tool for evaluation. Compensation needs to be adequately evaluated despite the primary measure of incremental costs. Thus, the effectiveness of the organization will be increased due to the use of compensation scorecard as what is spent is effectively used. Considering that it is critical to have an alternative while EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 23 performing organizational measure, incentives are essential. Therefore, customer loyalty and respect will be earned when organizations can strategies their decision effectively. A balance scorecard identified above is helpful to the company’s administration in finding compensation problems and improve their decisions by making every action to be transparent. CHAPTER 7 Reflections The project has been valuable and influential to my learning as it has comprehensively stimulated my discussion to be more aware of what to research and how to implement in a functional project. As part of a corporative process, this project I hope it will aid other people for example activists and librarians in future to make more research and analysis and try to find better action plans based on my topic. Thus, throughout the entire project, I have learned more about the project concept and how to effectively find a mutual combination of different documentation materials that have helped in my research project. Besides, access to various sources for information dissemination has been helpful to me especially utilizing school library materials and outside sources. Additionally, I begin to understand that every employee has a critical role to play in organizational performance. Every leader within an organization should always find effective methods to practice their leadership skill to influence other employees working within the organizational setup positively. Considering that I am working as an operations manager and I have over 11 years’ experience, I have made simple mistakes that have been expensive for my company. But I now have learned how I can better up my game and improve my responsibility, much of my services are required to assist another employee in learning from me and also EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 24 continuing the same culture towards teaching other too. Moreover, I should trust my employees and ensure that the top management also allows every individual to exercise their skills. For example, respect should be earned even to persons with disabilities and do not have a means of possibly receiving suitable treatments. EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE 25 References Entrekin, L., & Scott-Ladd, B. D. (2013). Human resource management and change: a practising manager's guide. Routledge. Bowles, D., & Cooper, C. (2009). Employee morale: Driving performance in challenging times. Springer. Phillips, J. J., & Connell, A. O. (2003). Managing employee retention: a strategic accountability approach. Routledge. Allen, D. G. (2008). Retaining talent: A guide to analyzing and managing employee turnover. SHRM Foundation Effective Practice Guidelines Series, 1-43. Ahmad, N., Sulaman Tariqb, M., & Hussain, A. (2015). Human resource practices and employee retention, evidences from banking sector of Pakistan. Journal of business and management research, 7(3), 186-188. Iverson, R. D., & Zatzick, C. D. (2011). The effects of downsizing on labor productivity: The value of showing consideration for employees' morale and welfare in high‐performance work systems. Human Resource Management, 50(1), 29-44. Worldatwork (2007). The WorldatWork Handbook of Compensation, Benefits & Total Rewards: A Comprehensive Guide for HR Professionals. Hoboken, N.J.: John Wiley and Sons. Martin J. (2013). Linking Employee Wellness, Morale and the Bottom-Line. Forbes. Retrieved from https://www.forbes.com/sites/work-in-progress/2013/06/11/challenge-2013-linkingemployee-wellness-morale-and-the-bottom-line/ EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE Kappel M., (2017). 5 Ways to Reduce Employee Turnover. Retrieved from https://www.forbes.com/sites/mikekappel/2017/08/09/5-ways-to-reduce-employeeturnover/ 26
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Explanation & Answer

Attached.

Effects of Downsizing on Turnover and Morale-Outline
Thesis: Employee job morale is a critical factor for improving overall performance and
reduction of the attrition levels.
I.

Introduction
A. Downsizing
B. Associated costs

II.

Description of the Problem
A. Downsizing to increase competition
B. Employee morale

III. ... Description of the Intervention
A. Retention
B. Transparency
IV. ... Implementation and Possible Outcomes
A. Employees compensation
B. Satisfaction
C. Productivity
D. Retention
V. ... Evaluation Plan
A. Employee scorecard
B. Employee satisfaction
C. Decision to pay
D. Governing law
VI. ... Recommendations

A. Recruitment and training
B. Compensation
C. Positive Payoffs and Retention


Running head: EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE

Effects of Downsizing on Turnover and Morale
Name
Institutional Affiliation

1

EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE

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Table of Contents
CHAPTER 1 ................................................................................................................................... 3
Introduction ................................................................................................................................. 4
CHAPTER 2 ................................................................................................................................... 6
Description of the Problem ......................................................................................................... 6
CHAPTER 3 ................................................................................................................................. 10
Description of the Intervention ................................................................................................. 10
CHAPTER 4 ................................................................................................................................. 14
Implementation and Possible Outcomes ................................................................................... 14
CHAPTER 5 ................................................................................................................................. 22
Evaluation Plan ......................................................................................................................... 22
CHAPTER 6 ................................................................................................................................. 29
Recommendations ..................................................................................................................... 29
Conclusion................................................................................................................................. 33
CHAPTER 7 ................................................................................................................................. 35
Reflections ................................................................................................................................. 35
References ..................................................................................................................................... 37

EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE

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ABSTRACT
The study identifies the effects of downsizing based on the variables of turnover and
employee workplace morale. In the context of organizational performance and employee
performance, an emphasis about this report is made aiming to discuss the effects of downsizing
within an organization. As long as invaluable information will be attained from this source,
strategists maintaining their focus on comprehending downsizing and finding effective strategies
to manage employee performance and reduce turnover. The target population was mainly Bank
of America management and employees but also other organizations that can find it applicable to
use the research in proper control. Throughput the sections, proper discussion on how employees
are affected by downsizing have been presented. Also, as part of the recommendation, the
organization should employ better employee compensation strategy as a mechanism to boost
employee performance and retention. Employee job moral is a critical factor for improving their
overall performance and reducing their intentions to leave the organization.

EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE

4

CHAPTER 1
Introduction
In the corporate world, downsizing is popular in most organizations for both those that
are in operational distress and those that are not. Companies are practicing downsizing
mechanism as it is an increasing feature used to analyze the performance and profitability of an
organization (Entrekin, & Scott, 2013) by reducing the cost associated with having many
employees within the organization. Thus, downsizing has presented some effects which we shall
analyze in this project by mainly focusing on its effect on turnover and morale. Concentrating on
improving profitability as an organization is critical towards determining the future success of an
organization that is in a constant battle to survive. Due to downsizing rates of voluntary turnover
usually surge in most cases. Most organization today faces critical times to ensure that they avoid
effects that are related to downsizing. Therefore, the essay seeks to analyze and discuss the
impact of downsizing while focusing on turnover and employee workplace morale.
Dire situations might be present in the organization that makes an organization to
implement downsizing as a tool of reshaping the organization. Later, most survivors help in
bringing back the company to recovery after realizing the impacts created by downsizing
(Entrekin, & Scott, 2013). Moreover, procedural fairness and justice is a necessary procedure for
addressing employee complaints in an organization and finding a confidential solution towards
addressing the issue of downsizing. Companies live with redundancy and employees are forced
to reconsider their status either to maintain or leave. Industries looking forward to increasing
their profitability should work towards finding better solutions to its process (Entrekin, & Scott,

EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE

5

2013). For example, employee turnover and morale are among significant consequences that are
reflected due to company downsizing.
The research project has been divided into sections to help in understanding our topic of
study. The report will contain chapter which provides a brief overview of what the essay report
entails. Also, in chapter two, the essay gives a description of the problem regarding the effects
that downsizing has on turnover and morale of employee in my organization which in this case
refers to the Bank of America. In chapter 3, the essay discusses solutions towards mitigating the
problem discussed which entail major strategies for employee retention and how to effectively
minimize turnover. In this part, the essay will focus on strategies such as employee compensation
and benefits as a strategy for reducing employee turnover while increasing employee retention
capabilities within the organization In addition, chapter four discusses on implementation of a
solution and possible outcomes. Also, I shall discuss how to experiment with the solution.
Chapter 5 determines the best evaluation plan that can be used to evaluate the viability of
the various strategies used such as employee compensation scorecard to help in measuring and
determining if the plan will work out. Moreover, considering that a problem has been identified,
interventions to alleviate the problem will be designed and implementation will be critical to help
in getting the best outcome. Also, in chapter 6, the essay analyzes on recommendations and
conclusion regarding the project of study. Chapter 7 briefly demonstrates my summary of lesson
learned throughout the entire project. Additionally, a set of bibliography has been set at the end
of the paper giving references on where research information was found to help in discussing the
main topic.
For purposes of improving financial performance, downsizing is a strategy which makes
most employee fear. Various reasons are presented why downsizing is practiced which include

EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE

6

modernizing, outsourcing, company restructure, and organization redesign (Entrekin, & Scott,
2013). Thus, employees try to find alternative methods to improve their lives better. In case
downsizing is implemented on them as part of the human resource unit, various approaches
towards dealing with the issue. However, even though downsizing is implemented, organizations
do not consider to analyze important implication that is brought about by downsizing the
organization (Entrekin, & Scott, 2013). Not only are implications identified but also costs are
incurred during the process of downsizing. Often, employees decide to voluntarily turnover by
overlooking at the remaining goals present within their environments. Therefore, the essay seeks
to analyze and discuss the effects of downsizing focusing on turnover and morale and also have a
look at employee retention strategies to minimize turnover (Martin, 2013).
CHAPTER 2
Description of the Problem
Considering tough economic times, most organizations today rely on downsizing as an
option to remain competitive in relation to organizational commitment. However, many
companies fail to recognize the effects of downsizing and how it affects turnover and morale
itself (Iverson, & Zatzick, 2011). In an effort to reduce or rather cut cost that is incurred,
downsizing seems to be influential in the organization to help in reshaping on how employees
are replaced to have the salary of new employees being cut twice. Thus, it is critical to
understand the relationship created between downsizing and turnover (Ahmad, & Sulaman,
2015). Moreover, when there is an increased turnover, the organization risks being understaffed
due to subsequent turnover. Coherently, most organization regard to retain top influential
performing employees as a safety precaution to lose them to voluntary turnover. Employees see
downsizing as a jarring event; thus their psychological contract risks being violated.

EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE

7

Moreover, downsizing does not only make employees reevaluate their position in the
organization but also their situation when they hear an announcement being made concerning
downsizing. Based on a desirable situation, employees would like to retain their position and
confirm their status in an effort to improve their life into greener pastures. Thus, the extent of
employee’s commitment or dedication is often affected by downsizing meaning that turnover is
highly applicable to most employees when downsizing is considered (Ahmad, & Sulaman,
2015). Therefore, employees consider utilizing their options either to stay or turnover on a belief
that downsizing will prevent them from quality performance and improvement in the workplace.
Perception will be based on how effective organizational commitment is done in the
organization. Thus, their morale can only improve if organization regard to procedural justice.
As part of human resource practice, procedural justice influence employee decision on
how they review the organization process. For example, based on payments provided, employees
can boost their morale if payment has been increased but on contrary lower their morale when it
is reduced (Iverson, & Zatzick, 2011). Also, it is a salient process to make employees perceive
that organizational, procedural justice has been relatively administered on high levels.
Downsizing can be influential to employee’s perceptions. Additionally, it is more likely that
employees will consider to stay in the organization or rather face disappointment regard what
extent they can take to be interdependent with the organization (Iverson, & Zatzick, 2011). For
example, some determinants can help identify if an employee will stay or leave due to
downsizing such as friend’s relationships, benefit plans, or either paid sabbaticals.
Moreover, in relation to downsizing and turnover, the career development of employees
also suggests that a positive relationship will be created or not. Career resources centers have
proved to be influential in most organizations which are employed to help in employee

EFFECTS OF DOWNSIZING ON TURNOVER AND MORALE
assessments on their strengths and what needs to be improved. Also, from managerial training
and training, organizations have failed to orient their employees on care development and
personal growth thus increasing the reasons why they leave after downsizing. Therefore, based
on the utility of leaving or staying, they will be influenced after hearing downsizing
announcements while they consider their option that they are the best fit for new job market
challenges or helping the company grow (Ahmad, & Sulaman, 2015). Therefore, as a
consequence, it is essential for an organization to reconsider their stand on downsizing based on
the fact that they will improve their profitability or lower their standards due to turnover. It is
necessary to practice downsizing, but practices which are done prior to downsizing will
automatically influence turnover.
As part of work experience, downsizing also affects employee’s morale despite the
circumstance of others choosing to leave. Of course, morale matters when it comes to
organization performance after downsizing, but it depends on how much influence was caused.
Interestingly, an employee will feel unsettled due to downsizing and lose their morale which in
turn can be an inevitable consequence which undermines organization productivity (Iverson, &
Zatzick, 2011). The manner by which changes of downsizing have been administered in the
organization will require an organization to seek on best process or strategies to minimize
turnover and improve retention. Moreover, future relationships are built on good morale created
within employees but when not effectively practiced, such activities can threaten industrial
performance. Also, the wellbeing of an employee is influenced by downsizing as they will rate
their situation to be either just or unfair (Iverson, & Zatzick, 2011). Therefore, they will be less
assured about their security. As most employees today think and believe that their company
performance will be ...


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