COMPANY NOT USING LAYOFFS POLICY

Presented by: Gursimar Singh Gagandeep Singh

Summary
In the year 2008, most of the economies of the world were

entering a recession. So almost immediately, all the Indian companies, began announcing tens of thousands of layoffs. Today the one Corporation that didn't cut staff, big loop corp., still has never had an involuntary layoff in its 40-year history. It's now the largest domestic Indian company and has a market capitalization bigger than all its domestic competitors. As its head of human resources once told: "If employees are most important assets of the organization, why would you get rid of them? As the Indian economy emerges from recession, Indians continue to suffer through the worst labor market in a generation. The unemployment rate dipped in January, from 10 to 8 %, but the economy continued to lose jobs.

 Companies have always cut back on workers during economic

downturns, layoffs have become an increasingly common in corporate life whether it be good time or bad time. There are circumstances in which layoffs are necessary for a firm to survive. Some troubled industries seem to be in perpetual downsizing mode. If your industry is disappearing or permanently shrinking, layoffs may be necessary to adjust to the new market size, Sometimes changes in technology or competitors' embrace of cheaper overseas labor makes downsizing feel like the only alternative. The majority of the layoffs that have taken place during recessionat financial-services firms, retailers, technology companies, and many othersaren't the result of a broken business model.

 Companies now routinely cut workers even when profits are rising. For many managers, these actions feel unavoidable. Even if

downsizing, right-sizing, or restructuring is an accepted weapon in the modern management arsenal, it's often a big mistake. In fact, there is research suggesting that firms incur big costs when they cut workers. Some of these costs are obvious, such as the direct costs of outplacement, and some are intuitive, such as the toll on morale and productivity as anxiety infects remaining workers. There's substantial research into the physical and health effects of downsizing on employeesresearch that reinforces the seemingly hyperbolic notion that layoffs are literally killing people. There is also empirical evidence showing that labor-market flexibility isn't necessarily so good for countries, either. A recent study of 20 Organization for Economic Cooperation and Development economies over a 20-year period by two Dutch economists found that laborproductivity growth was higher in economies having more highly regulated industrial-relations systemsmeaning they had more formal prohibitions against the letting go of workers..

Questions
1. Is it right for an organization lay off its management to

reduce its cost in recession? 2. Downsizing: How Should HR Professionals Prepare?

Is it right for an organization lay off its management to reduce its cost in recession?
Employment downsizing is not a cost-cutting cure-all, nor does it guarantee that short-term savings will exceed long-term costs. At the same time, cash flow is the lifeblood of any organization, and some level of employment downsizing may be necessary to preserve it. Business leaders, however, must always be mindful of the shortand longterm costs of layoffs. Before making a decision to downsize, managers should consider the variety of effective alternatives available. When downsizing is the best solution, organizations should use the guidelines suggested throughout this report to treat employees humanely and with dignity, and to be proactive in dealing with the reactions and needs of survivors.

How Should HR Professionals Prepare?

Seize the opportunity to help shape the agendas and strategies of the organization with respect to workforce issues. Educate executives about the effects of employment downsizing on those laid off, survivors, the psychological contract, high-involvement workplaces, knowledge based organizations, long-term financial performance and communities. Ensure that managers are cautious in implementing downsizing strategies that can impose such traumatic costs on employees, both on those who leave and those who stay. If employment downsizing is necessary, take steps now to address the unpleasant symptoms associated with survivors syndrome. Doing so will help control stress, voluntary turnover, drops in productivity and innovation, and other unpleasant side effects.