Introduction: (purpose and outline of report)
This report has been necessitated by the recent developments on Osprey Insurance markets. The UK based company which boasts of a 10,000-people workforce has faced stiff competition in the market from other companies. Following this competition and the company’s desire to save a minimum of £25 million in the next two years, the company tasked Paul Scott, its Head of HR and Organisational Development, to table a report that would further be scrutinised by the company’s Corporate Management Team. The report was to show what measures the company was supposed to adopt in order to realise these new goals. Now that the report is ready, an expert analysis of the measures suggested in the report becomes necessary before the report is adopted in its entirety. This expert analysis will form the crux of this report.
Part (a) Analysis of Measures
The following session provides an expert analysis of the measure that the report by the Head of HR department of the company has tabled before the management. A critical analysis of the report coupled by strong evidence from scholarly material will be provided to support the arguments.
1. Planned Retirements-staff exercise.
Measure 4.3.3 states that the company has over 35% of its staff aged 50 years and above. The report in this measure, therefore, recommends that the company enters into talks with these employees in an attempt to reduce financial savings pressure. The likely outcome will, therefore, be to lay off all the employees aged 50 years and above and in their place recruit younger employees who will not pose retirement benefit pressure on the company.
Whereas this measure may augur well for the company, the question should be how the employees will receive it. This is likely to employee morale because no one will accommodate a suggestion to force them out of their job. Borrowing from this perspective and applying to the situation that the company finds itself in, the employees who are likely to be affected by the planned forced retirement may go on a go slow even before they are officially forced to retire. It may adversely affect the company and may register even bigger losses. However, the company does not have any other option other than retiring them (Coyle-Shapiro, 2002). It is because they will be liabilities and the company will continue suffering. The earlier they retire them, the better.
2. Pay Freeze
In order to make the company’s £25 million savings goal a reality, the report recommends that the company imposes a pay freeze on all employees for the current year. Whereas this may work well to the benefit of the company, some issues need to be clarified, and others considered. The first one is to look at how the company’s competitors are imposing their pay freezes. If they are not imposing, this will be a very dangerous move because customers will shun the company and migrate to the competitors. The most vital consideration before implementing the freeze, however, is to examine how the employees are likely to be affected by the exercise (Bacon N and Bryton P, 2000). A demoralised employee is the last person that the management would like to work with (Valcour, 2003). This is because the work output will certainly be affected. The employees are likely to go on a go-slow demanding that the increases be made good as they had been promised. In such a situation, the company will register loses and it would be better if the status quo is maintained (Bosch, 1999).
3. Part-Time Working/Job Share
The report recommends that following requests from a number of employees, employees need to be allowed to work part time and also be able to share jobs with other employees. This will be an attempt to cut on the operation costs of the business. When working part time, the employees will be coming from home every day and therefore some of the costs that the company was incurring on meals, rent and transport will be drastically reduced. The company can therefore make savings in that regard. However, before making it compulsory for employees to work part time or share jobs, there is need to have an employee meeting to discuss the same and arrive at an agreement on the modalities. T will do away with any perceived conflict between the management and its employees regarding part time work (Drago, 2005). This is therefore a good move by the company management and it is therefore advised accordingly.
4. Volunteers
Under the heading “minimizing compulsory redundancies”, the report recommends that where it is not possible for the company to avoid redundancies, the company can create more room for volunteers who will work for the company without pay. By having volunteers, the report recommends that less mainstream employees will be required and therefore the salaries and allowances awarded to such employees will have been used as savings.. This is because if they are paid, there is no need of sending employees home and then has volunteers who have no job experience and may even require training and vetting to acquire some knowledge on how the company operates.
Volunteers may also lead the company to greater losses and make it to be shunned by its ardent customers (J.S Brown & M Heywood, 2005). It is, therefore, important to weigh all options before arriving at such a decision. The reports will not advice the company to implement the measure on volunteers because it is misguided.
.Part (b) How the report is strategic
In the perspective of boosting the morale of the employees, Claire Kelleher and Deirdre Anderson opine that a flexible work schedule is the best morale a company can accord to its employees because it makes them happier in the work place (Anderson, 2008). Contrast that with a fixed work schedule where the employees do not even have time to relax and reflect on their past. The performance of the company goes down and it is likely to register big loses. The report may be seen as a strategic attempt by the management to put the company back on track after registering losses that are a result of the growing competition in the market. If implemented, therefore, the measures recommended in the report will ensure that the company saves the targeted £25 million and may use such money for its benefit. The report should, however, no be implemented fully as discussed by this report. Some of the measures have been noted as capable of causing more harm than good and should, therefore, be ignored. The other measures should also be implemented with the reservations that have been discussed by this paper. The loss that might accrue from having volunteers may be bigger than the loss that the company would have registered when all its employees were present (Burud S &Tumolo M, 2004). Although it is looked at on the perspective of business, chances are that it may be misused. This report will, therefore, advise against such a measure and recommend to the company to pursue other measures outside what has been recommended by the report by the Head of HR.
Concerning flexible working practices, Claire Kelleher and Deirdre Anderson opine that coming up with a flexible working plan not only works well with the company but also gives an opportunity to the employees to relax and therefore improve their performances (Claire Kelleher and Deirdre Anderson, 2008). The two writers are of the opinion that a flexible work plan accords the company an opportunity to allow its employees to have some break from the tedious and stressful work schedules. As such, the employees will be more motivated and therefore perform more for the benefit of the company.
The retirement option is the best bearing in mind that the aged employees are not as energetic as the younger employees although they have more experience on the jobs that they do. However, this is for the success of the company. Before they retire, however, they should be paid all their dues as per any agreement that is likely to be made between the employees and the company so that the company is not painted in a bad light or be sued in court that will prove more costly than retaining the employees.
Part (c) Recommendations
This report has explored some of the measures that the CMT Head of HR submitted to the management. Very important arguments have been advanced either to support or to refuse the implementation of the same. The CMT management, therefore, has an opportunity to implement the supported measures and drop the measures that appear to be a liability to the company instead of enabling it to pick after a difficult period. For example any act to downsize the company is misguided. As such any act of laying down workers must be followed by another act of recruiting new workers (Adrian Thornhill, Mark N.K Saunders, 1998). This is because the reduction of workers is not followed by a proportionate reduction in the size of the company so that a balance is struck. Those who are left behind following the downsizing are not at a better position. They are in a more precarious position because they will be required to the work that would have been assigned to the employees who have been laid off. It is, therefore, not advisable that the company lies off the employees and not substitute them with others (Paulsen et al., 2005).
Before implementing the planned pay freeze, the company management must first have a meeting with the employees and explain to them about the new developments and how the company has been adversely affected by the emerging competition in the market. The management will therefore give an opportunity for the employees to discuss their views concerning the freeze. It will give the management an overview of the reception of the same among the victims. After the meeting the advice will be that the management will harmonize what it gets from the employees and what comes out of the market survey and strike a balance. A pay freeze will definitely boost the company’s desire to achieve a £25 million savings for the year. In this case therefore, allowing the employees to work part time will not only assist in cutting the operation costs of the company but also give the employees an opportunity to relax and reflect on their past performances as they prepare for the work ahead. The recommendation is therefore welcome and the company management is advised accordingly
This paper has critically analysed the report as pertains four of the most critical measure that the report has suggested. Whereas the report has affirmed three of the measures, one measure remains wanting. This pertains to volunteers. The impact of such measures on the culture of the organization, the moral of the employees and staff motivation will also be accorded the keenness that it deserves. Each heading on the report will provide one measure for purposes of this report.
Regarding the possibility of downsizing the company by laying down workers aged 50 years and above and not replacing them with new and younger employees, Adrian Thornhill and mark Saunders are of the opinion that the a move is misguided because the benefits that are likely to accrue from such a move, if any, are short lived. The company, according to them, will have lost a lot of talent and will start suffering from lack of the same moving forwards. The best advice on that the company should be given concerning this measure is, therefore, that any planned forced retirement of aged employees must be followed by an immediate recruitment of younger and energetic employees to fill in the void that will have been left by the aged employees.
If they are imposing a pay freeze, it needs to be known how much they are imposing so that the company either imposes the same or even lower so that the competition with other companies is maintained. The company may also consider imposing the freeze on only a category of employees and not all the employees so that the remaining category will have their freeze some time later.
This paper, therefore, takes a strong stand on having volunteers instead of salaried employees. The CMT is, therefore, accordingly advised to ignore this measure because it is more of a liability than strategic.
Conclusion
This paper argued a measure like having volunteers instead of the salaried employees of the company as a liability. It should, therefore, not be implemented. This paper however has no problem with the other three measures and, therefore, recommends to the management that he three supported measures need to be implemented immediately before the company continues sinking. Heywood, Siebert and Xiangdong opine that the promises made by the management to the employees must be kept and made good in order to maintain employee morale (Heywood S., Siebert, W.S and Wei, Xiangdong 2010). According to them, failure to keep these promises will lead to reduced work rate and ultimately the company failure. Unless volunteers are employees of the company, which is not likelihood in this case, they always become a liability to the company. It is because the company will have to give them allowances for sacrificing their time to work for the company (Coyle-Shapiro, 2000). Moreover, the company will be liable for any injuries that occur to them while working for the company. These costs had better been incurred by the contracted employees of the company who are permanently employed because they have the experience and can adapt to any changes made to the operations of the company.
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