Managing Human Resources and Its Challenges

Downsizing: Anathema to Corporate Loyalty?

Why is Daniel Sensitive to DSI Recruitment Efforts?

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Daniel is sensitive to DSI’s recruitment efforts because future growth in company operations never picked up as anticipated and the company had already recruited many new interns in anticipation of improved business. The challenge with the company’s human resource strategies lies in the fact that the new interns are likely to induce slack in the organization because their input is not necessarily required when business is low. The existing recruitment dilemma is the fact that the long-term viability of the organization depends on the presence of the new employees, but the catch is that in the short-term, the company would suffer increased inefficiencies if it keeps the new employees.

DSI is therefore in a big quagmire on how to handle its new staff because whichever option it chooses, it will suffer adverse repercussions. If the company decides to adopt the first option of doing away with the new employees, it would fail to maintain company loyalty, sustain long-term strategies and equally fail to pose good records of performance in its balance sheet. The second option would entail maintaining the new employees and this would have a positive impact on its long-term-term operations because the company would maintain customer loyalty, but it would increase employee slack and probably fail to please the shareholders in the short-run. Because of these factors, Daniel was very sensitive to the overall recruitment efforts at DSI.

What Are the Potential Problems for the Current Class of Engineers Recruited at DSI?

The new interns at DSI pose several disadvantages to the overall running of the company. Their disadvantages or potential problems emanate from the fact that employees are currently the biggest assets DSI has (to achieve its organizational goals). Therefore, a weakness in the new employees would equally mean a failure by the company to meet its goals. However, the biggest problem the new interns pose to DSI is their potential inability to adapt to the organizational environment and uphold high levels of dedication and efficiency in the way they carry out their duties (Business Hub, 2011). This problem comes from the fact that the new employees have been sourced from universities across America and they have no practical experience of working in a practical organizational setting. Some may therefore find it hard to cope with their new surrounding and therefore quit altogether. This move may have a significant impact on the company, especially if the number of interns recruited falls out of favor with the company. This is true because the company spent a lot of time, money, and other resources in recruiting the new staff and if they fail to deliver, it would mean that such resources would have gone waste.

Considering the dilemma DSI is in (with regards to retaining or doing away with the new interns); choosing the alternative of doing away with the new interns (especially after a considerable amount of time) poses a problem to the company, in the sense that the interns may leave the organization with a lot of knowledge on how DSI works. If such information falls in the hands of other similar business operators, it may be wrongly used against the company. If such a move is anticipated by the management of DSI, it is advisable to hesitate in their quest to synchronize the new employees with the overall working of the organization.

Also, considering the same human resource dilemma DSI faces, a decision to do away with the new employees may significantly affect other existing employees in the organization because it may send a wrong message to existing employees of the company’s long-term prospects (because dismissals are usually quite infectious and it does not discriminate on the type of employees in the organization) (Business Hub, 2011). This means that a dismissal of the interns would possibly imply poor long-term viability of the company’s sustainability shortly and therefore, existing employees may think that they are next (in the line of termination). This kind of thought may affect the overall work performance of existing employees and therefore compound DSI’s dilemma in the long run.

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How could the USE of Interns Possibly Help DSI?

If utilized well, the new interns at DSI would possibly help the company in several ways. For starters, the new employees may help the company cope with the anticipated upsurge in the semiconductor market, thereby improving the company’s prospects of long-term sustainability. The long-term prospects will be improved in terms of work turnover because the company will be able to effectively accommodate expansive operations. In turn, this will make the new interns more productive. Moreover, research studies (cited in Reh, 2011) affirm that if such circumstances are witnessed, all the employees are likely to be motivated to improve their overall performance, and consequently, they are likely to stick around (in the organization) longer than expected. This improves employee retention levels.

The new interns are also likely to inject new energy into the organization, especially because the current crop of employees at DSI may be locked into some old organizational culture which may not be productive for the organization in the present-day business environment. The new energy may be witnessed in some ways. For instance, new interns may bring with them a new positive attitude to the organization. This new energy may go a long way in improving the overall performance of the company as is affirmed by the American International Assurance Company (cited in Reh, 2011) which recognizes that “the training and development knowledge, attitude and skills of the staff and agency field force are fundamental to its continued efficient and profitable performance” (p. 9).

Daniel’s Alternatives for Reducing DSI’s Labor force

Considering the dilemmas Daniel faces at DSI, several alternatives are identified as the most viable in reducing the company’s workforce. The first and most common option among his list of options would be to terminate the work employment of the new interns (Jackson, Schuler, & Werner, 2008). Secondly, he has the option of convincing existing technicians to assume their overtime hours until business picks up (Jackson et al., 2008). Thirdly, Daniel has the option of advising existing employees who have accumulated increased days of vacation and off-time work to take such leaves so that the new interns are accommodated in the organization (Jackson et al., 2008). Lastly, Daniel has the option of recommending an internal transfer option of existing and new employees to other geographic regions that need new employees (Jackson et al., 2008).

All these alternatives have a considerable degree of success, but some are more viable than others. In this regard, some alternatives are beyond the influence of the organization; like the option of advocating existing workers to take their accumulated leave days particularly depend on the employees and therefore, Daniel’s efforts (or the organization’s efforts) would be nothing more than a request. In the same manner, the option of recommending that existing technicians assume their overtime hours to accommodate the new crop of workers would equally amount to a request because it is within the rights of the employees to utilize their overtime hours. Such a move should also be handled with extreme care because if the organization forces the employees to assume their overtime hours, they may face severe legal implications or employee strikes, which would ultimately beat the entire purpose of such a move. The above strategies, therefore, seem quite impractical for the organization because they are not within the control of the human resource department and in any case, they would be violating some of the rights of the existing workers. DSI can therefore not base its solutions on the existing dilemma on mere requests.

Terminating the employment contract of the new interns would equally be an unviable strategy because the company had already incurred a lot of money in the selection and recruitment of the new employees, such that, the movie would seem quite costly in the long-run. Alternatively, such a move could mean that the organization is faced with a lot of legal tussles between the recruits and the organization. This may equally imply increased legal costs. Termination could also paint a very bad picture of the company’s management, in the sense that; management would seem to be acting on impulse without really considering the true strategic implications of their decisions (since the move to hire the new interns was motivated by an anticipated upsurge in demand).

Since all the above options are unviable, the most appropriate strategy Daniel can implement is advocating for an internal transfer option where the new interns will be transferred to other geographic locations where the need for new workers is real. This does not mean that the strategy lacks its disadvantages because it does. For example, relocating the interns into expansive geographic locations across the country (or the globe) will require immense financial resources in terms of relocation perks. The same would also be evidenced if existing employees were to be relocated. However, such a move is viable because the new interns would be supplying the necessary human resource skill where it is needed. This will improve the efficiency of the organization because obviously, the identified geographic locations are not operating at their optimum level. Such a move is also quite practical for the organization, considering the likelihood that there would be little resistance by the new interns (to relocate into new geographic locations) is high since they are just out of university and therefore they are more flexible than the average employee at DSI.

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Lincoln Electric

Lincoln’s Incentive Systems

Lincoln’s incentive systems can be best sourced from its values which are centered on recognizing people as the most valuable assets for the company. From this basis, the company’s incentive systems are based on several environmental and financial factors that improve the employee work environment. For example, the company ensures that it maintains a clean and safe work environment for its employees so that the employees feel well catered for; thereby improving their motivational levels. The company also helps its employees improve their career prospects by encouraging employee training and education through interdepartmental exercises and by encouraging them to take international assignments. The level of integrity within the organization is also an aspect of the company’s incentive system because the company provides an unbiased career progression system where employees scale up the career growth ladder, depending on the capabilities they possess (which are commensurate with their qualifications).

This is done regardless of race, creed, sex, religion, and other parameters that may be proved discriminatory. The company also maintains an environment that is very critical to ethical conduct, creativity, mutual trust, open communication, and other aspects which are tailored towards the overall upheaval of a professional working environment. This incentive facet is also complemented by the organization’s attention to demand integrity, discipline, and professional conduct among its group of employees. Lastly, in addition to maintaining the facilitative environment, Lincoln also recognizes the importance of giving their employees financial recognition for their outstanding performances (in terms of bonuses and other financial perks).

What Aspects of Lincoln’s Motivational System Yield The Most Motivation and Employees Satisfaction?

The most effective component of Lincoln’s incentive system is the increased financial perks when performance is increased. Perhaps this comes out of the fact that finances are among the primary factors identified by many researchers for increased employee performance (Halas, 2002, p. 12). Outstanding employees with high-performance levels are therefore usually very motivated because they enjoy high financial bonuses as compared to their counterparts with lower performance. This incentive model also derives the greatest satisfaction for employees at Lincoln because they can get paid for their increased performance in the organization.

Research studies show that high performing employees are usually discouraged from upholding such performances if the organization does not recognize their efforts, at least on a monetary level (Halas, 2002, p. 13). Even though human interaction incentives like a verbal acknowledgment of high employee performance may ultimately boost motivational levels, it still becomes increasingly important to understand that bonuses and other forms of material incentives derive the most satisfaction for employees. This is probably necessitated by increasing standards of living in today’s world and therefore many employees tend to acknowledge material incentives more than other intangible forms of incentives that Lincoln provides its employees.

What Ways Can Lincoln Improve Its Incentive System?

Employee incentive models are an important element in the realization of organizational goals. From this understanding, employee motivation is deemed an important element for managers and supervisors in the effective running of organizations because from a broad perspective, it reflects on the quality of their leadership. This is the criteria through which the managers at Lincoln Company have developed their incentive system.

Lincoln’s incentive system is effective as it is, though there are other ways through which it can be improved. In as much as the financial incentives work well for the organization, there is a need to integrate this incentive model with more human interactive models. This is the criterion through which Lincoln can improve its incentive model. Commending high performing employees on their good work can be a start. Research affirms that human beings are usually social beings and a majority of them always appreciate good commendation, especially from their managers. Halas (2002) reiterates that “Some staff members yearn for human recognition or verbal interaction on the job. Pausing to offer a few words of encouragement or gratitude can truly make some people’s day” (p. 3). It is therefore important for managers and supervisors to understand that giving a simple commendation like saying “thank you” or “well done”, in addition to offering financial incentives for good performance, always goes a long way in improving employee motivational levels.

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Another way Lincoln can improve its incentive model is by expanding the openness of its communication model. Research studies done by proponents of the human relations theory (in employee motivation) note that improving the openness of communication between employees and management is a good strategy to boost employee morale (Halas, 2002). In a nutshell, this is done by simplifying the communication channel between top-level and bottom level employees. In other words, management should often consult with their employees on issues regarding important functional areas of the organization, including the decision-making process; or by opening up the communication channel where employees can give feedback to management on whatever important areas they feel need to be improved.

Often, top-bottom employee communication channels are identified by many researchers as a barrier to improving open communication between employees and management. In its place, it is important to establish a bottom-top communication channel where employees are consulted (almost all the time) regarding important managerial issues that affect them (such that, they feel like part of the entire organizational team).

Lastly, Lincoln can start a group working strategy where existing employees undertake their duties in a group setting. Initiation of a group working as a strategy to motivate employees was first proposed by Elton Mayo (cited in Tutor2u, 2011, p. 5) who identified that employees are not only motivated by material incentives but also by a strong human touch. From this observation, he proposed some strategies managers could use as human involvement strategies to motivate employees and one of them was group working. Group working improves the level of employee involvement if properly implemented and employees are bound to feel less pressure in performance because responsibility is spread across group members. In this regard, it is important to note that the potential of employees attaining high levels of motivation in a group setting is tremendously high, especially if the tasks to be accomplished are quite sophisticated. Moreover, employee personalities can blend well in a team set up and they are equally bound to feel their roles and duties well complimented by team members. This can also act as a good strategy for improving organizational production.

Comprehensively, Employee motivation is an important element in the smooth running of Lincoln Company. The above improvement criterion for the employee incentive model emphasizes human relations as an important aspect of employee motivation and notes that employees are not only motivated by material incentives but also by the human element as a unique incentive. The managers at Lincoln Company should therefore ensure they take part in motivating their employees at a personal level, by first adopting the above strategies. These improvement areas will go a long way in improving the existing incentive model.


Business Hub. (2011). Employee Retention Key to Success. Web.

Halas, R. (2002). Top 10 Tips For Motivating Employee Success. Web.

Jackson, S., Schuler, R., & Werner, S. (2009). Managing Human Resources: Through Strategic Partnerships. Mason, OH: South western Publishing Learning.

Reh, J. (2011). New Employee Training – Is It Worth the Investment. Web.

Tutor2u. (2011). Motivation – Theories. Web.

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