Human Resource management Assignment Example | Topics and Well Written Essays - 2750 words

Human Resource management - Assignment Example However, most companies used the common technique of terminating employment of a given number of individuals. When most organizations face weak economy and low profits, executives try to solve this through cost cutting. This includes conducting the downsizing process. Through this process most organizations are able to better their earnings for a shorter period as most of the organizations cannot sustain these gains. This happens as organizations reduce the labor costs by laying off employees. However the hidden costs of downsizing are unbearable to most organizations. This is because the workforce is eliminated from the organization but the work load remains intact. This can cripple organizations effectiveness. The resulting challenge which faces organization’s managers is that they will be forced to review their system and add costs by introduction of: overtime program, casual staff and even long working hours in order to recover what has been lost. On top of incurring high financial costs, emotional costs that are immeasurable can be experienced. For the surviving employees they w ill have no choice but to work harder than usual. Effectiveness and efficiency are major goals of organization’s retrenchment. Therefore, the business entities can retrench redundant workers to pave way for mechanized production process aimed at speeding up production and improving quality of products or services. Gandolfi (2006 p. 2), asserted that downsizing was used by organization in 1990s as a practical measure to increase organizational efficiency and effectiveness. It is a strategic management tool that has affected thousands of organizations and lives of millions workers in the world. Companies experience conditions that compel them to retrench a portion of its work force. The circumstances that cause downsizing include market reduction, economic recession, loss