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
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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.
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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/
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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/
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