Organizational Restructuring and redesign

For the "survivors" of downsizing

-give them a stronger sense of control -a voice in how to move forward -assist with setting up the plans for accomplishing

Systemic downsizing

-a long term strategy that focuses on changing the org's culture and employees' attitude with the goal of reducing costs and enhancing quality. -less popular, but arguably more effective -puts culture/attitude change in the forefront rather than elimination

Work redesign

-a medium term strategy in which orgs focus on work processes and assess whether specific functions, products, and/or services should be changed or eliminated. -the starting point is a focus on eliminating unnecessary work rather than focusing on eliminating employees. eg. eliminate functions, layers or products merge units redesign tasks -less traumatic for workers and employers because vacated positions are targeted for elimination first.

What can orgs do to make it "fair"?

-advance notification of layoffs -clear, direct, and empathetic announcement of layoff decisions -serverance pay and extended benefits -education and retraining programs -outplacement assistance -consideration of alternatives to large-scale layoff.

Why do organizations restructure?

-declining profits -business downturn or increased pressure from competitors -merging with another org, resulting in duplication of efforts -introduction of new technology -the need to reduce operating costs -the desire to decrease levels of management -overall, restructuring aims to make organizations more effective

Best Practices in restructuring and redesigning

-downsizing should be initiated from the top. -communication should be transparent and should involve employee participation when possible -workforce reduction should focus on "right-sizing" for the long-term -special attention should be paid to those who lose their jobs and to the survivors who remain in the org. -managers should be trained in tech. that support layoff victims and survivors

Organizational restructuring

-strategies to improve an org's efficiency by reducing the workforce, redesigning the work or changing the systems of the org. -planned change in the formal patterns of operations and command -can change the levels of management in the company, the spans of control, product boundaries, centralization of decisions. -often associated with downsizing/layoffs, but not always -visually it involves changing and moving around boxes.

Human cost of downsizing

-the employees that survive are narrow minding, self-absorbed which sinks morale, productivity drops and survivors distrust management (according to studies). -equity theory tells us that when the process of determining layoffs is perceived as fair and just, some of the negative outcomes can be avoided

Workforce reduction/downsizing

-this is a short term strategy to cut the number of employees through attrition, early retirement or voluntary severance packages, ad layoffs or terminations ("downsizing") -reduces headcount and fosters transition -eg. attrition, retirement, layoffs

Types of restructuring

1. workforce reduction/downsizing 2. work redesign 3. systemic downsizing

Downsizing Alternatives

Short term -hiring freeze -mandatory vacation -reducing workweek -reducing overtime -reducing salaries -facility shutdowns -employee input for alternatives to cutbacks Medium term -extending reductions in salaries -voluntary sabbaticals -lending employees or redeployments -exit incentives