(See Appendices 11)
Due to downsizing the organisational structure will also go through vast changes. Bon Bon is very power cultured, thus power lies in the hands of a central figure. Many employees will feel resistance to change after all there has been a long tradition where employees has just got on with there job without any feedback. Due to this many layers from the organisations hierarchy may be removed, which may lead to reduced supervision and perhaps more stress. The leadership style of Bon Bon, paternalistic and autocratic will have key impact as to the how the change is handled by employees.
EXTERNAL IMPACT
The loss of many key employees with key skills, will mean that at some point Bon Bon will have to employ new people, however these people will have to be trained and developed just like the ones that were lost, however, the issue arises that will anyone want to work at Bon Bon after it has gone through such an experience, and if they do then this training and development will cost Bon Bon, something that it cant afford to do considering the pressure being placed by the Bank and the poor financial past and present state of the company as a loss is further anticipated.
Downsizing may affect the Bon Bon’s image and how it is perceived by others. Suppliers may be a bit cautious when supplying goods to Bon Bon, because they may assume that the company is facing a financial crisis and doubt whether they will be able to pay for the goods supplied.
Competition is a factor that Bon Bon has currently failed to respond to. Customers may be switching to alternative brands such as Cadbury’s, Rowntree, Nestle etc, due to the lack of innovative desire, Bon Bon is left with a “tired” product range that is not fulfilling the needs and wants of its customer. Therefore its competitors are taking this situation to their advantage leaving Bon Bon with market share loss and even future share prices have fallen by 75% with few takers.
Section 3 – Demonstrate how the impact may be reduced.
INTERNAL IMPACT
Before downsizing, Bon Bon’s plan to downsize and why it must do so must be told to the workforce early. This will give the employees that may be dismissed an opportunity to prepare for their futures and less of a feeling of uncertainty with their situation. It will also give the remaining employees more respect for the company and give them more job security since they feel that the company will be honest with them with respect to company business.
Morale, climate, and culture are negatively impacted during layoffs and downsizing. Bon Bon must recreate the work environment, so that people build their self-esteem, find work satisfying, and achieve at higher levels. This means that whenever possible leaders or supervisors must be visible and accessible so that employees can interact with them on a daily basis. The leading managers must reassure the employees of their value to the manager and Bon Bon. A individual with each of them, to let them know why and how they are valued; tell them what you feel they contribute to your effective, may result in continuously improving work environment.
No matter how reassuring you can be, on some level, after layoffs, trust has been injured and employees need reassurance about their security. They need reassurance about why the people who were let go in the downsizing were chosen. They need reassurance about their future. Internal communication will play a vital role in retaining trust from employees. (See Appendices 12)
EXTERNAL IMPACT
One main threat the company is competition. It is very important for Bon Bon to think of the product range and maybe think about introducing new ideas – innovate. However, the research and development of this maybe cost a substantial amount, maybe something that Bon Bon cannot afford to do at present but must consider it in the near future.
Due to the financial position that Bon Bon is currently in, the Bank is very reluctant to find out what is going on and how Bon Bon will improve the situation that it is now in, it is important that Bon Bon show that they are dealing with the problems, however, it may be best if Bon Bon had a meeting with the Bank Manager to explain the situation and show how they are improving it. This meeting may decrease the pressure derived from the bank and make the bank more confident that we are looking into the problems.
Customers, suppliers and the local community play a major part in Bon Bon. The relationship between them and Bon Bon is a very fragile one. Bon Bon must speak to the suppliers and ensure them about their financial position. The local community will be affected by any of Bon Bon’s decision; therefore it will be important to keep the community informed of all changes and constantly reassure them.
As far as the customers are concerned it will be important for Bon Bon to win back its customers from its competitors and the lack of innovation and “tired” product range is preventing Bon Bon from doing this.
Section 4 – What Human Resource issues are Bon Bon likely to face over the next five years.
RECRUITMENT & SELECTION
In the near future Bon Bon may have to go through the process of Recruitment and Selection to acquire a suitable number of employees with appropriate skills, in order to meet the manpower requirements of Bon Bon. These vacancies could either be filled by existing employees who have the skills in the form of promotions if within the firm or alternatively the vacancies could be job-posted or advertised outside. It will be the job of the Human Resources department to attract and select suitable candidates for these vacancies.
EMPLOYEE APPRAISALS
Performance appraisals may have to be carried out to determine how well employees are doing their jobs, then communicating that information to the employees and establishing a plan for performance improvement.
TRAINING & DEVELOPMENT
T&D activities may have to be introduced to help employees learn how to perform their jobs, improve their performance and prepare themselves for more different positions.
INDUSTRIAL RELATIONS
IR involves industrial tribunals, employer associations, trade unions, industrial law, awards, terms and conditions of work, grievance procedures, dispute settlement, advocacy and collective bargaining. Bon Bon must keep constant update on these issues that affect organization practices.
HEALTH AND SAFETY
Bon Bon will be required to provide a safe work environment free from physical hazards and unhealthy conditions. Through effective health and safety programs Bon Bon must guarantee the well-being of employees.
EMPLOYEMENT CONTRACTS
Bon Bon will have to comply with new laws and regulations that are introduced or amendments. This may mean new rights for employees, in which case the contracts my have to changed.
Section 5 – Strategies to resolve the Human Resource issues are Bon Bon likely to face over the next five years.
1. Short – Term Strategies
- Bon Bon must communicate with its employees as much as possible; as a result of job-losses it is necessary for Bon Bon to have regular meetings to discuss what is happening in the organisation and how it will affect the employees.
- Short question and answer sessions will make the employees feel more valued and allow them to put their views across to relevant management, thus minimising conflict in the future.
- At present Bon Bon’s employees aren’t bound to a contract with Bon Bon. It is important that contract of employment, and terms and conditions of employment are set out and comply with the relevant laws and then reviewed by management so they can be signed by the employees.
2. Medium – Term Strategies
- Appraisal systems should be standardised across the organisation and should incorporate all management levels. Focus should be on the maintenance and improvement of performance.
- A Management Development Committee, chaired by the Chief Executive and the managers and the personnel director should be established to oversee the present and future structure of the organisation.
- Trade Union Recognition – management must approve a recognised trade union to act on behalf of its employees.
- Training and Development programmes could be introduced so help an individual realise his/her full potential and in return ensure the best possible return on Bon Bon’s investment in people.
3. Long – Term Strategies
3.1 Reduce dependence on one product or market. Innovate and diversify to enter different markets and, this way the long-term survival prospects of Bon Bon are improved
3.2 Research and Development practices may allow Bon Bon to see which markets it could enter. Possible innovation of new products and launching them in the market to see if the they are successful.
3.3 Improve financial stability and be less dependent on external sources of finance. Bon Bon could use its financial accounts to assess its financial strengths.
Bon Bon should analyse the current position of its products, its departments or even the whole organisation, it should try to identify its possible future courses of action, by looking at its Strengths, Weaknesses, Opportunities and Threats
Strengths - Bon Bon’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage.
Weaknesses - The absence of certain strengths may be viewed as a Bon Bon’s weakness.
Opportunities – Bon Bon’s external environmental analysis may reveal certain new opportunities for profit and growth.
Threats - Changes in the external environmental also may present threats to Bon Bon.
See Appendices 13 for a SWOT analysis on Bon Bon Confectionery Co Ltd.
Section 6 –Conclusion
A great deal of people will be affected in the process of job-cuts. The decision should be carefully analysed before decisions are made in order to make the process easier on all parties involved. Four general downsizing steps should be followed in order for a successful downsizing, these are: analysis, planning, implementation, and managing the survivors. These steps will reduce the negative affects that job-cuts results from such as reduced loyalty, productivity, morale, and distrust in the company. Making the job-cuts as easy as possible for all parties involved is the responsibility of both management and human resources. Steps should be taken to ease the affects on employees, laid-off employees, and also management.
The main key to a successful organisational downsizing process is good communication. This is something that Bon Bon lacks, the managers must interact more with the employees, clear communication links must be established and this could be through general meeting with employees and keeping employees up-to-date with the changes in the organisation.
Last but not least, Bon Bon must consider extending its product range in order to meet customer’s needs, something that it is not fulfilling to do at present and in return it is losing valuable customers to its competitors. However, innovation will require research and development which could prove costly in the long term, this is something that Bon Bon might not be able to do as yet, because of its overdraft and the concern raised by the bank. Bon Bon must find alternative investment this could be done internally or externally.
Section 7 – Recommendations
To reduce the number of employees I offered the following options:
- Early Retirements 2) Voluntary Redundancies
3) Cutting overtime, temporary and contract labour
- Laying-off
- Redundancy – should be the last option considered.
Out of these the following are only likely to make a significant change. I concentrated more upon these in Section 1 and they were as follows early retirements, laying-off, voluntary redundancies and compulsory redundancies.
Out of these options I would recommend that the early retirement package be offered to the older employees, these are most likely to be the ones that have been serving Bon Bon for over 40 years. This will be a peaceful way of resolving this matter as the employees will be able to enjoy life without having to work and will show that Bon Bon has the employees best interest at heart.
For the employees who are willing to take voluntary redundancy a enhanced package must be offered, however this could prove costly for Bon Bon as there is always a chance that the more skilled and experienced employees or department managers may take this package, this may leave Bon Bon with an less skilful and experienced team.
To reduce any impact that Bon Bon will face due to the job cuts it is important that Bon Bon it will be important for Bon Bon to:
- Establish clear communication links between the managers and employees.
- Management must reassure the employees of their value to the firm.
- Management must keep the workforce informed of the situation and any changes that are going to take place in reasonable time.
- Fair selection criteria must be selected for those employees who are to leave the company.
1. Short Term Recommendation
1.1 Clear communications to all staff about why and how change is to be achieved; this could be done through regular meetings and team briefings where employee’s questions can be answered.
1.2 If workers are to be made redundant then Bon Bon should offer a valuable package and maybe even help the employees to find alternative employment placement and counselling from outside experts.
1.3 Establish targets for each member of staff / management at appraisal interviews. This will give an aim for employees to work to and then discuss the individual achievements against the targets and then those with outstanding achievements are given merit or bonuses as a reward.
1.4 Bon Bon must provide some evidence to the Bank that it is aware of the current crisis it is facing and then some sort of plan and strategy showing how it will do this.
2. Medium Term Recommendation
2.1 Develop a detailed plan to train each retained employee within the organisation. This will give Bon Bon a well-trained staff to keep productivity and performance to a maximum.
2.2 Performance Related Pay is a financial reward that can be given to staff whose work is above average, this monetary incentive will be a good way to motivate employees.
2.3 Consider a recognised trade union to act on behalf of the employees
2.4 A Human Resource department must be developed to recruit, develop and utilise Bon Bon’s personnel functions in a way which is most appropriate to the achievement of Bon Bon’s aims and objectives.
2.5 Terms and Conditions of Employment and Contracts of Employment must be devised and then signed by the employees so that they are aware that they are bound to some sort of contract.
3. Long Term Recommendations
3.1 At present the financial stability of Bon Bon is at doubt, after providing some evidence to the bank as to how it will deal with the problems, it may be ideal to seek other forms of external finance such as sponsorship or investment from a third-party or alternatively consider a bank loan.
3.2 It is particularly important to innovate I markets where competition is strong and product life-cycles may be short thus the rate of innovation should be high. Bon Bon has failed to do this and therefore now it is facing competition from its rivals. Research and Development practices must be carried out this will allow Bon Bon to develop new products and improve existing products. However, this will require significant amounts of long-term investment and innovation will take time so Bon Bon must be willing to be patient through this time.
3.3 As technology is becoming an important opportunity in many firms it may be a good idea to keep up-to-date with technological advances that could help improve productivity at Bon Bon.
Appendices 1
Source: MAHONEY, M. (1998) Peoples Gas to offer voluntary early retirement packages and eliminate other positions. People Gas <> (updated 1998, accessed 2000).
Appendices 2
Wednesday, 10 May, 2000, 21:36 GMT 22:36 UK
Blair to fight for Ford jobs
About 2,000 workers face redundancy at Ford Dagenham
Source: BBC NEWS. (2000) Blair to fight for Ford jobs. London: British Broadcasting Corporation < > (updated 10 May 2000).
Appendices 3
Source: SMITH, S. (2002) News: fair handling of job cuts. People Management, (07 November), < > (accessed 20 November 2002)
Appendices 4
Source: LINDA, F. (2002) Set clear terms for your redundancy packages. Personnel Today, (06 August), p. 16.
Appendices 5
Consult with individuals or groups as per the following table:
Source: PCR SERVICES (1998) Guide to Redundancy. PCR Services
(accessed 20 November 2002).
Appendices 6
Source: HAMER, C, WHITE, P. (2002) Employment Law Clinic: Collective Redundancy.
Personnel Today, (12), p. 19.
Appendices 7
Sex Discrimination Act 1975
The Sex Discrimination Act 1975 (SDA) makes it unlawful for employers and other organisations to treat women or men less favourably in employment matters because of their sex or marital status.
The types of unlawful discrimination under the SDA are:
-
Direct sex discrimination is less favourable treatment of a woman than a man (or vice versa) because of their sex, for example dismissing a man because he took time off work to care for a sick child when a woman would not have been dismissed for the same reason.
-
Direct marriage discrimination is less favourable treatment of a married person compared to a single person of the same sex, for example making all married women, but not single women, redundant.
-
Indirect sex discrimination occurs when a condition or a requirement is applied equally to both women and men but which affects more women than men (or vice versa) and is not genuinely necessary. An example of this could be a redundancy policy which states that those with the least length of service are selected first: this is more likely to affect women as they are more likely to have taken a break from employment for family reasons.
-
Indirect marriage discrimination occurs when a condition or a requirement is applied equally to married women and single women (or married men and single men) but which affects more married women than single women and is not genuinely necessary. An example of this might be the dismissal of a married woman who took time off work to care for a sick child, since married women are more likely than single women to have childcare responsibilities.
-
Victimisation occurs if you are treated less favourably compared to others because you acted in good faith to assert your rights under the SDA. For instance, you may have a victimisation claim if you are chosen for redundancy before others because you had made an earlier complaint of sex discrimination to your employer.
Source: KIDNER, R. (2002) Blackstone’s Statutes on Employment Law.
12th Ed., United States: Oxford University Press Inc.
Appendices 8
Race Discrimination Act 1976
The 1976 Act makes race discrimination unlawful in:
- Provision of goods, facilities and services.
The Act defines discrimination as direct and indirect discrimination and victimisation.
Direct race discrimination occurs when a person treats another person less favourably on the grounds of colour, race, and nationality, ethnic and national origin.
Examples include:
- Refusing to serve ethnic minority clients
- Ignoring racial harassment of employees
Indirect race discrimination occurs when a condition or requirement which:
- a smaller proportion from the victim’s racial group can comply with, and
- is detrimental to the victim because s/he cannot comply with it, and
- cannot be shown to be justifiable irrespective of the colour, race, nationality
or national and ethnic origins of the person to whom it is applied.
For example, requirement of a certain height.
Victimisation
The act safeguards people who exercise their rights, including people who help others in pursuing complaints regarding race discrimination
Source: KIDNER, R. (2002) Blackstone’s Statutes on Employment Law.
12th Ed., United States: Oxford University Press Inc.
Appendices 9
Disability Discrimination Act 1995
An employer with is not allowed to discriminate against a disabled person without justification. The discrimination must be in one of certain specified areas, but in practice these cover pretty much everything to do with employment. The areas are:
- recruitment
- terms of employment,
- the opportunities which the employer affords the person for promotion, a transfer, training, or receiving any other benefit,
- refusing to afford the person, or deliberately not affording him, any such opportunity
- dismissing him, or subjecting him to any other detriment.
In practice many cases relate to dismissal.
Whether the DDA applies or not, an employee may also have legal rights such as
-
unfair dismissal - where the alleged discrimination relates to dismissal, an unfair dismissal claim is often made as well as a DDA claim
-
redundancy legislation
-
breach of contract - this could happen in various ways. For example, an employer's equal opportunity policy may form part of the contract, so that a breach of that policy is a breach of contract.
-
constructive dismissal (another specific instance of breach of contract).
Code of Practice
Employment aspects of the DDA are covered by the "Code of Practice for the elimination of Discrimination in the field of employment against disabled persons or persons who have had a disability" dated 1996.
Under section 5 , an employer discriminates against a disabled person if:
- for a reason which relates to the disability, he treats the person less favourably than he treats or would treat others to whom that reason does not or would not apply.
Source: KIDNER, R. (2002) Blackstone’s Statutes on Employment Law.
12th Ed., United States: Oxford University Press Inc.
Appendices 10
Source: NELSON, P. (2002) KMPG defends e-mail redundancy decision.
Personnel Today, (2), p. 2.
Appendices 11
Maslow's Hierarchy of Needs
Needs: being all you can be; developing artistic skills for personal satisfaction, involvement in causes that help others; altruism; charity.
Needs: self esteem that comes from confidence in mastering a skill; esteem and recognition from others.
Needs- also called Social/Affiliation needs: the need for family and relationships; this is also reflected in belonging to organizations, rooting for an athletic team, being considered part of a group
Needs: the need for self-preservation, often translates into job security or other assurance that that one will be able to continue to meet one's physiological needs.
Needs: food, shelter, clothing. For some people, most of their efforts will be consumed by filling this need.
Source: GORDON, D, STUBBS, S. (1988) Maslow’s Hierarchy of Needs.
<www.bacweb.the-bac.edu/~michael.b.williams/maslow.html
(accessed 20 November 2002).
Appendices 12
Source: DAVENPORT, J. (2002) Redundancy Lesson: how to lose staff
and retain trust. Personnel Today, p. 4.
Appendices 13
SWOT Analysis on Bon Bon Confectionery Co Ltd
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Contents Page
Introduction Page 1
Terms of Reference Page 2
Contents Page 3
Section 1 – Indicate a recommended course of action for reducing Pages 4 - 8
the number of employees, voluntarily or otherwise, in as peaceful
manner as possible.
Section 2 – Indicates the likely impact both internally and Pages 9 & 10
externally for Bon Bon Confectionery Co Ltd.
Section 3 – Demonstrate how the impact may be reduced. Pages 11 & 12
Section 4 – What Human Resource issues are Bon Bon likely Page 13
to face over the next five years.
Section 5 – Strategies to resolve the Human Resource issues Pages 14 & 15
are Bon Bon likely to face over the next five years.
Section 6 – Conclusion Page 16
Section 7 – Recommendations Pages 16 - 18
Appendices 1 - People Gas to offer voluntary early retirement packages Page 19
and eliminate other positions.
Appendices 2 – Blair to fight for Ford jobs. Page 20
Appendices 3 – Fair handling of job cuts. Page 21
Appendices 4 – Set clear terms for your redundancy packages. Page 22
Appendices 5 – Consultation periods with individuals or groups. Page 23
Appendices 6 – Employment Law Clinic: Collective Redundancy. Page 24
Appendices 7 – Sex Discrimination Act 1975. Page 25
Appendices 8 – Race Discrimination Act 1976. Page 26
Appendices 9 – Disability Discrimination Act 1995. Page 27
Appendices 10 – KMPG defends e-mail redundancy decision. Page 28
Appendices 11 – Maslow’s Hierarchy of Needs Page 29
Appendices 12 – Redundancy Lesson: how to lose staff and retain trust. Page 30
Appendices 13 – SWOT Analysis on Bon Bon Confectionery Co Ltd. Page 31
Bibliography Page 32 - 33
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BBC NEWS. (2000) Blair to fight for Ford jobs. London: British Broadcasting Corporation < > (updated 10 May 2000).
SMITH, S. (2002) News: fair handling of job cuts. People Management, (07 November),
< > (accessed 20 November 2002)
LINDA, F. (2002) Set clear terms for your redundancy packages. Personnel Today, (06 August), p. 16.
PCR SERVICES (1998) Guide to Redundancy. PCR Services
< > (accessed 20 November 2002).
HAMER, C, WHITE, P. (2002) Employment Law Clinic: Collective Redundancy. Personnel Today, (12), p. 19.
KIDNER, R. (2002) Blackstone’s Statutes on Employment Law. 12th Ed., United States: Oxford
University Press Inc.
KIDNER, R. (2002) Blackstone’s Statutes on Employment Law. 12th Ed., United States: Oxford
University Press Inc.
KIDNER, R. (2002) Blackstone’s Statutes on Employment Law. 12th Ed., United States: Oxford
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MARCOUSÉ, I. et al. (2000) Business Studies. 2nd Ed., London: Hodder & Stoughton Educational.
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15 DAVENPORT, J. (2002) Redundancy Lesson: how to lose staff and retain trust.
Personnel Today, p. 4.