Case Background
The practice of workforce reduction presents an important responsibility for human resource managers. While the practice can be viewed as unethical towards the employees, there are ways in which human resource managers can mitigate the negative aspects of the practice. In the case scenario, the human resource manager is required to plan a workplace reduction strategy within the next three months to prevent the company from failure. Therefore, the core reason for the reduction is the company’s failure in the market, which limits its ability to maintain its current workforce.
Key Considerations for Workforce Reduction: Exploring the Best Options
There are several strategies that human resources managers can use to address the problem of labor surplus. If I were a manager from the case scenario, I would consider the options of downsizing, pay reductions, and work sharing. In my opinion, it is important to point out that while the organization resorts to workforce reduction, many external factors influence the company’s failure in the market.
Both downsizing and pay reduction strategies are associated with causing a high amount of suffering among workers (Noe et al., 2022). Conveying the idea that the company’s situation can stabilize can support workers’ decision to tolerate a pay cut while the company corrects its financial situation. Moreover, considering that the leadership specified a three-month limitation for workforce reduction, workers will have enough time to consider whether they should look for a new job or accept a salary reduction.
Justifying the Optimal Approach
The strategies selected for the case present the best fit for the conditions specified in the scenario. For example, while no information is available about the proportion of workers who can retire in the next three months, the early retirement strategy cannot fit the case. Furthermore, choosing a natural attrition strategy will not provide the desired results at the required speed. Therefore, the most effective and ethical solution would be to offer employees a pay cut or reduce staff and redistribute their functions among the remaining employees while maintaining their salaries.
Reference
Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2022). Fundamentals of human resource management (9th ed.). McGraw Hill.