Human Resource Management Model in Developing Countries

Question: Discuss about the Human Resource Management Model in Developing Countries. Answer: Introduction: In the module the case of Silvertail Airlines, which was the only airline company as competitor of Singapore Airlines in Singapore is being analyzed. Till the year of 1990 there was a policy of two airlines by the Singapore government which owned Singapore Airlines had made convenient and appropriate arrangements with its national competitor Silvertail. The strategy was working well for the people who were able to finance for high priced airfares and schedules that were limiting. According to Armstrong Taylor, the government made efforts in such that both the airlines did not have to put in more efforts in attracting passengers and this effort was named as duopoly (Armstrong Taylor, 2014). The efficiency of both the airlines was remarkable. It was in the year 1980 when changes in the airline sector of Singapore started to come into surface. This has result the pressure to intensify and the government of Singapore to denationalize the sector of air transports. However, there were some nascent airline companies which became unsuccessful in confronting the duopoly set up by the government. Initially there were very minimal effects and the duopoly continued to exist. The effects that were resulting in the market were superficial till the cheaper carriers in both international and domestic markets were introduced. As per Armstrong Taylor, the introduction of cheap airline service had a critical and tense effect on Silvertail (Armstrong Taylor, 2014). The share price of Silvertail fell. The investors of Silvertail were displeased. The Board of Directors of Silvertail was replaced with a team of dynamic and competent accountants, marketers, advertisers and a few professiona ls who were experts in their field of human resource were called in from United States of America where they all were working under a very intellectual and broad minded CEO. The new team worked more efficiently and was quick in taking action. Their approach was ruthless which was appropriate and was the need of the hour (Armstrong Taylor, 2014). The high and stretched network of management was removed as a result in order to reconstruct the management the middle positions of the management had to be dismantled. The maintenance was deployed from exterior source and the regional branches had to be shut. Budhwar Debrah, (2013, 4), Silvertail developed into an advanced, crude and inventive company after lot of strife. However, the ground crew and the cabin crew of the new Silvertail refused to opt for new company even after being approached repeatedly by other companies (Budhwar Debrah, 2013). Therefore the Recruitment Manager and the Director of cabin crew of Silvertail had to discuss about the issue and downsizing the human resource of the company was considered. Downsizing Downsizing in human resource management is the process of decreasing the number of employees from an organization. It is a strategy of improving organizations efficiency by altering the organization system, contracting the workforce and reconstructing the work. According to Brewster, Mayrhofer Morley, 2016, Downsizing becomes a significant activity when the organizations costs, the workforce and work process is affected and measures are required to be taken in order to increase organizational efficiency (Brewster, Mayrhofer Morley, 2016). Though it is not considered as a positive practice by the management and employees of any organization, downsizing also has many positive effects such as saving of cost, strengthening the business and continuing in the business. It is also considered as fat trimming in organizations. It is a way to obtain profitability and increase efficiency in organizations. As per Dias ( 2016), this is a strategy that the management of the organizations impleme nt when they realize that their organizations is not being operated at the highest efficiency and need to find out methods so as to generate more productivity from the organization (Dias, 2016). This also boosts organizational competitiveness in the market. A ratio of employees are made to terminate from the organization so as to counteract the alterations in the market such as acquiring or merging with other companies, removal of service lines or products, a large part of the share market being occupied by the competitors, a slowed down economy, etc. as a result of which downsizing becomes necessary (Hendry, 2012). The work process is affected in an organization by organizational downsizing. This occurs as the workload remains the same as before downsizing but the employees performing the workload are less. The effect of downsizing in an organization results in two kinds of employees: Victims are those employees who are made to terminate their employment in the company Survivors are those employees continue their employment in the organization even after downsizing. To have an effective downsizing in an organization, the management must take the initiative to communicate with its employees the reason due to which the organization has decided to undergo downsizing and the plan for downsizing (Hoque, 2013). It should be the responsibility of the management to pay heed and listen to what the employees would convey along with provision of necessary comfort to keep the surviving employees motivated. The management of any organization also needs to prepare its employees for downsizing in advance. The managers of the organization should measure all the factors which influence the decision of downsizing initially. According to Jackson, Schuler Jiang (2014), at first the analysis of the issues which downsizing is going to solve has to be done followed by the identification of resources that can be utilized in the present moment (Jackson, Schuler Jiang, 2014). The effects that downsizing is going to have in the long term should also be considered. The m anagers must keep in mind that whether and in what ways highly capable employees with exclusive skills and talent be replaced at the time of improvement along with risks that are involved in losing those skilled employees (Mondy Martocchio, 2016). It is also necessary that the managers treat the employees with dignity and humanely. While planning for downsizing the management of the organization needs to identify these key issues: Determination of number of people who are about to lose their job Determination of which employees are going to be made to terminate their employment and the basis of their termination (performance, seniority or potential, etc.) Determination of the methods of downsizing being carried out i.e. early retirement, termination or layoffs, attrition or severance) Checking of whether there will be any legal implications, violations to be specific (human rights or collective agreement, wrongful dismissal and employment standards) Drawing plans for present scenario as well as for future works which is a major challenge for any organization and is often overlooked. Materializing the decision. Conducting follow-up assessment and evaluate the efforts of downsizing which is important but neglected most of the time by the management of organizations. Restructuring the organization by downsizing leaves a huge effect especially on those employees who survive in the organization, their approach and attitude along with human resource as a whole. However understanding the workforce might be, downsizing still has a negative effect on the human resource and the way in which the workforce look up to the management (Nickson, 2013). Downsizing can be considered as a portion of strategy of workforce which extensively alienate closely with the business strategies as a whole. Certain practices to fend off while downsizing are: Using downsizing as the first counteract than using it in the last as employees and workforce costs are generally not the real source of the issues in the organization. Rather workers are the source of backbone of the organization and contribute by their innovation, creativity and renewal. Not being able to change the way business is being carried out while trying to change the workforce does not help the organization as the results obtained are same as the real alterations is required in the business and not in the workforce. Not being able to recognize the importance of involving employees to suggest ways for reduction of waste, efficiency and costs as the workforce ,at while have a more clear vision of the issues on the ground which top managers fail to notice. Overlooking the implications that occurs on the shareholders that downsizing has. Ignoring the deterioration of organizational and company culture as the employee morale is going to be affected first which gives a negative sense to the employees regarding organizational culture. Being unable to reassess results and rectify the mistakes which results in no change in productivity. Alternatives to Downsizing With the need of downsizing in an organization the management should also look at the scenario whether it is permanent or temporary. There are certain alternatives which a manager can take if he or she seeks to avoid downsizing being aware of the current business scenario. As per Purce (2014), if the downturn is permanent then the management needs to retrain the workforce so as to progress into new business lines (Purce, 2014). But if the management thinks that the downturn is temporary then the alternative is to trace out numerous potential ways for cutting costs. Alternatives for permanent downturn are: Redeployment: - Shifting the underused employees into customer facing profiles such as sales will boost productivity. Reduction of working hours to reduce payroll costs. Cutting of payments and salaries with incentives. Inculcating rings of defense strategy wherein first ring is to stop the hiring process and remove unrestrictive costs and the second ring is to shift most of the employees to four day workweeks and then eliminate the contract and temporary workers. Including work sharing among the workforce. Moving to workspaces that are smaller and allowing tele network. Alternatives to Downsizing When Downturn Is Temporary Alternatives to avoid downsizing when the downturn is temporary are: Cutting or removal or removal of staff that is temporary. Offering of voluntary retirement. Cutting or reducing salaries and pay. Elimination of overtime. Freezing of salaries. Rising of delays. Reduction of working hours Ceasing of hiring Using leaves with incentives. Using of furloughs that are temporary. Suspension or reduction of contributions that are matching to the savings plans sponsored by the company. Raising contributions of the employees to benefit the plans. Elimination or delaying of bonuses. Cancellation of costly advantages and business trips. Implications of Downsizing According to Renwick, Redman Maguire (2013), the victim employees no doubt face the direct heat of the downsizing as their income dwindles. Downsizing gives rise to financial insecurities that creates depression. This further makes people feel that they do not have any control over the events (Renwick, Redman Maguire, 2013). This gives rise to the ailments such as headaches, hopelessness, fatigue, sleeplessness, severely upset stomach, etc. These ailments can be cured when the victims are offered help to reach for other opportunities, people and networks and concentrate on individual strengths. The layoff generally creates a society of employees that are insecure inwardly and prone. Some of these employees become so habituated and will be able to experience downsizing twice or thrice till the time they retired. It produces a series of physical and mental consequences on health. However, people who voluntarily accept termination during downsizing are less affected the burn out. Thes e people accept that the process being undesirable and uncontrollable leaves options for them opened. This results in much lower stress (Riley, 2014). Implications on the Survivors The workforce that sustain the downsizing often feel depressed and guilty. Most of the cases there is a decrease in the trust, motivation, loyalty, morale of the employees in the organization. There is an also a decline in the satisfaction of job, job involvement and organizational commitment after downsizing. Simultaneously there is increase in the intentions of the employees to quit, stress levels becoming high, actual voluntary turn over levels up. . This gives a sense to the employees partly that they actually have no control over their important events of their lives (Storey, 2014). Implications on the Organization Most of the organizations become unsuccessful in achieving their objectives by downsizing. One of the most important factors that the organization fails to achieve its objective is to create a negative effects in the existing employees. They believe that the policies of downsizing are not fair and are enforced on them. They are not explained clearly about the procedures and policies of layoffs. There is a lack of empowerment of the members during the downsizing period. There are worries among the workforce about their employment and future (Renwick, Redman Maguire, 2013). The employees have a feeling that due to the layoffs their workload will eventually increase. The downsizing strategy being intentionally carried out due to necessity, the efforts of the employees to achieve the organizational objectives solely depends on the behaviors and attitudes of the employees. The organizational commitment in the workforce decreases. This leads to the decrease in productivity with increase i n severance and absenteeism. On the other hand when the workforce believes that the downsizing process in the organization is fair and the employees receive support from the organization there is a significant rie in the commitment of the employees in the organization. Downsizing brings changes in the environment of work for the employees which lead to uncertainty. Human Resource Plans To Consider The brand of a company has a very strong effect on the employee as well as on its customers and clients. The brand of the employer is a very important part of the employee value hypothesis. It communicates about the organizations identification to its entire workforce, whether current or potential. According to Mondy Martocchio, (2016), the brand of the employer influences the recruitment of the employees, their retention, engagement and impression as a whole in the market (Mondy Martocchio, 2016). Employers brand refers to the reputation that the company has in the market. Downsizing in an organization with a good branding definitely sets the market heating up. It is the responsibility of the senior Human resource managers to put in efforts to maintain the brand of the employer even after downsizing. Career management Career management is the planning of ones personal career with orderly planning and effective management choices and undergoing the employments during throughout his or her life for attending growth, financial security, overall fulfillment, work and life balance, achievement of goal, etc. Career management much similar to organizational management as organization is a collection of individuals. The beginning of career management starts with the idealization of individuals short term goals which begins with individuals studies and courses. Efforts are meant to be given every single day towards achieving the goals. Eventually career management ends with the analysis of the plan of career management and to trace out if progress is achieved or there needs to be changes in the plan (Jackson, Schuler Jiang, 2014). The employers have benefits in information on managing careers to their employees. The human resource professionals should know how to help employees in managing their careers during downsizing so as to boost up employee engagement and ease up succession planning and workforce. It is a strategy used by an organization to define the ways it manages and prospects the pay and benefits of its employees. An effective strategy regarding compensation can serve as motivation for existing employees while attracting new ones (Hoque, 2013). Compensations are different from regular salary as the former includes all aspects of benefits of an employee. The compensation strategies that are practiced in an organization are:- Direct financial compensation which includes pay received as salary, wages, commissions, bonuses, etc. which an employee receives at regular intervals. Indirect financial compensation: - Benefits such as retirement plans, employee services, leaves, education services and other benefits, etc. come under the financial rewards form indirect financial compensation. Non-financial compensation: - These denote to the section of opportunities for advancement, recognition and career developments along with conditions and environments for work. During downsizing efforts should be made by the management of the organizations so as to include the most appropriate compensation to its employees as every employees need is different from the other (Dias, 2016). Every employee works for different reasons and motivation. 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