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Good Evening Everyone. Today I will be basically discussing the way in which organisations actually go about downsizing. People may think that organisations may just lay off people and thats it. But from our research and analysis, we have found 3 ways in which organisations can actually STRATEGICALLY downsize an organisation. The first type of strategy is the : 1. WORKFORCE REDUCTION STRATEGY
The first strategy is the workforce reduction strategy which involves the elimination of headcount and the reduction of the overall number of employees. It involves layoffs, retrenchments, natural attritions, early retirements, hiring freezes, and buyout packages. It is a short term response to declining profits.
2. ORGANISATIONAL REDESIGN STRATEGY which focuses on the elimination of work, rather than eliminating the number of employees in the organisation. This may involve activities like: •
Eliminating hierarchical levels
•
Redesigning tasks
•
Merging units
•
Reducing work hours
•
Job enlargement and job enrichment
•
Encouraging employees to use up benefits / entitlements such as long service
3. SYSTEMATIC STRATEGY
This strategy takes holistic view of organizational change and it is a long term, ongoing incremental process whereby employees are not seen as the main target for downsizing but instead they considered as valuable resources in promoting and incorporating downsizing ideas. as a way of life which aims to change the mentality of employees into a cost-saving one which attempts to rigorously target costs in the organisation
From our analysis of ANZ and NAB, we have found that both banks have adopted the first type of strategy which is 1. WORKFORCE REDUCTION STRATEGY. This is because economic crisis developed so quickly that they may not have had time to plan and implement and medium to long term strategy to counter the detrimental effects so had to revert to a direct reduction in their workforce. Examples of this were seen in articles that stated: NAB: •
Nab cut 113 full time branch roles in NSW. A5
•
95 support and management positions lost in business banking sector of NAB. A4
•
NAB in 2009 has already made at least 52 relief staff jobs redundant with further cuts expected. A3
ANZ : •
ANZ to offshore 100 jobs to Wellington, New Zealand. There will consequently be 100 fewer jobs in Melbourne and this process was managed through natural attrition rather than redundancies.
•
ANZ will cut 500 jobs from Melbourne and off shore those jobs to India by the end of 2009 in addition to the 800 jobs it announced would be cut back in December 2008.
Both ANZ and NAB also showed some signs of the second strategy, ORGANISATIONAL REDESIGN STRATEGY in that:
ANZ have recently identified 600 roles which are at risk of being made redundant due to them going offshore. ANZ have noted it is possible some of those employees whose jobs are made redundant will be put in different roles. And NAB also willing to redeployed worker into other branches. Despite this there was very weak evidence to show that they adopted a redesign strategy on a regular basis.
The third strategy, which was the systematic strategy.........................We found no real signs from our collection of articles of the third strategy which is the systematic strategy Perhaps because of the planning and implementation time it requires.
Research also indicates that employees who experience a downsizing event may experience decreased job satisfaction, reduced organizational commitment, less job involvement and greater resistance to change.This brings us to discuss the importance of communication, job satisfaction and retention of skilled employees which Amy will discuss.
The first strategy is the workforce reduction strategy which involves the elimination of headcount and the reduction of the overall number of employees. It involves layoffs, retrenchments, natural attritions, early retirements, hiring freezes, and buyout packages. It is a short term response to declining profits.
2. ORGANISATIONAL REDESIGN STRATEGY which focuses on the elimination of work, rather than eliminating the number of employees in the organisation. This may involve activities like: •
Eliminating hierarchical levels
•
Redesigning tasks
•
Merging units
•
Reducing work hours
•
Job enlargement and job enrichment
•
Encouraging employees to use up benefits / entitlements such as long service
3. SYSTEMATIC STRATEGY
This strategy takes holistic view of organizational change and it is a long term, ongoing incremental process whereby employees are not seen as the main target for downsizing but instead they considered as valuable resources in promoting and incorporating downsizing ideas. as a way of life which aims to change the mentality of employees into a cost-saving one which attempts to rigorously target costs in the organisation
From our analysis of ANZ and NAB, we have found that both banks have adopted the first type of strategy which is 1. WORKFORCE REDUCTION STRATEGY. This is because economic crisis developed so quickly that they may not have had time to plan and implement and medium to long term strategy to counter the detrimental effects so had to revert to a direct reduction in their workforce. Examples of this were seen in articles that stated: NAB: •
Nab cut 113 full time branch roles in NSW. A5
•
95 support and management positions lost in business banking sector of NAB. A4
•
NAB in 2009 has already made at least 52 relief staff jobs redundant with further cuts expected. A3
ANZ : •
ANZ to offshore 100 jobs to Wellington, New Zealand. There will consequently be 100 fewer jobs in Melbourne and this process was managed through natural attrition rather than redundancies.
•
ANZ will cut 500 jobs from Melbourne and off shore those jobs to India by the end of 2009 in addition to the 800 jobs it announced would be cut back in December 2008.
Both ANZ and NAB also showed some signs of the second strategy, ORGANISATIONAL REDESIGN STRATEGY in that:
ANZ have recently identified 600 roles which are at risk of being made redundant due to them going offshore. ANZ have noted it is possible some of those employees whose jobs are made redundant will be put in different roles. And NAB also willing to redeployed worker into other branches. Despite this there was very weak evidence to show that they adopted a redesign strategy on a regular basis.
The third strategy, which was the systematic strategy.........................We found no real signs from our collection of articles of the third strategy which is the systematic strategy Perhaps because of the planning and implementation time it requires.
Research also indicates that employees who experience a downsizing event may experience decreased job satisfaction, reduced organizational commitment, less job involvement and greater resistance to change.This brings us to discuss the importance of communication, job satisfaction and retention of skilled employees which Amy will discuss.
