This report will give an insight in to the supporting legislation, policies and procedures of redundancy. The first section will outline what downsizing is and the adverse effects it can have on an organisation. The second part will look and redundancy and its accompanying legislations, which involves the Payments Act, causes of redundancy as well as selection for redundancy. The third part will outline the policies and procedures that are outlined by organisations to ensure a fair process.
Finally the fourth part will outline the necessity of training for management and the importance of handling redundancy. In the past several years, majority of companies have been experiencing organisational changes in the form of reorganisation, mergers and downsizing. Over the last 5 years statistics suggest that over 85% of Fortune 500 companies have downsized and 100% are planning to do so. However most research reveals that a high % of companies are unsuccessful, failing to present the advantages that downsizing should bring to the organisation..
Downsizing in companies will leave behind workers who will not lose their jobs but create a psycho - social problem known in the industry as "Survivor Syndrome", leading to low commitment and morale, overall damaging the organisation. Cameron 1994 argues that downsizing can have negative consequences. A well planned and executed redundancy process needs to be developed in order to avoid these. In trying to save the organisation money, the result can be costing the organisation more money, not mentioning the negative effectives of the work force that remains.
This can cause long term unforeseen problems for the organisations growth and success. The policies and various legislations supporting redundancy, is an effective method of downsizing in an organisation. It is important firstly to outline what Redundancy is: "In any given situation where a change in an organisation's economic, operational or technological position result in a reduced work force.
That is irrespective of whether the reduction is achieved through compulsory dismissal, voluntary severance, natural wastage or employee transfers. It also applied whether it involves the loss of one job or a significant reduction in part or all of the workforce"The best method an organisation can implement is the formal policy and procedure agreed with trade unions. A fair policy and procedure would be implemented taking into the consideration the well being of both parties those being the employers and employees.
The Employment protection (part time employees) Regulations 1995 removed the differential qualifying threshold for redundancy payments for full and part time employees (where part time workers had to work for 5 years instead of 2 years before qualifying for payment) on the basis of indirect sex discrimination. Records must be accurate and demonstrate reasons for absences. It requires consistency of approach, taking into account patterns of absence and having clear rules about standards.
This may give rise to disability discrimination claims if sickness or time keeping is affected by disability. Conclusion The use of conduct may be useful if employers has kept careful and consistent records and has good supervision and appraisal procedures in place. (National Council for voluntary organisations) The use of these methods for selection can be perceived as unfair, and may result in a case for the industrial tribunal. Many of the methods do not take into consideration the future of the organisation, which if chosen could jeopardise the future of that particular organisation.
Statutory requirements ensure the employees made redundant will be treated adequately throughout the period. This can be seen below. This focuses on employee perceptions about the fairness of the procedures used to make decisions about downsizing and redundancies. Thus not only should the outcomes of downsizing decision making be seen to be fair, but also the procedures used to arrive at such decisions are fair. Negative reactions which are likely to arise be reduced by the use of procedures which are seen to be fair.
Redundancy policies and procedures are an effective method to manage redundancy, however in order to deliver these policies managers need to be trained in order to implement the process that has been to into place by the organisation. Managers need to be competent in handling the variety of employee responses and recognise the importance of treating each employee as an individual. Individuals derive status and self esteem from work, therefore any change in the working arrangements may affect individual morale.
An employee may be afraid that the job loss will result in a loss of status in the community. Another common concern is the fear of the unknown. The fear of change or anticipation may have a more negative effect than the change itself, because humans are resistant to change, they like familiarity and avoid situations that are threatening. Therefore managers in dealing with redundancy need to recognise the emotional dimension and have the sensitivity skills necessary to respond appropriately.
Managers should also recognise that individual circumstances and characteristics such as age, gender and personality effect individual responses e. g. older workers may fear never working again and the real threat of age discrimination may demoralise the individual. Managers need to be able to recognise and handle individual responses of anger, denial, fear and anxiety. There is rarely a place for humour in the redundancy encounters between management and employee. Good listening skills are necessary and employees should be encouraged to express their feelings.
This report will give an insight in to the supporting legislation, policies and procedures of redundancy. The first section will outline what downsizing is and the adverse effects it can have on an organisation. The second part will look and redundancy and its accompanying legislations, which involves the Payments Act, causes of redundancy as well as selection for redundancy. The third part will outline the policies and procedures that are outlined by organisations to ensure a fair process.
Finally the fourth part will outline the necessity of training for management and the importance of handling redundancy. In the past several years, majority of companies have been experiencing organisational changes in the form of reorganisation, mergers and downsizing. Over the last 5 years statistics suggest that over 85% of Fortune 500 companies have downsized and 100% are planning to do so. However most research reveals that a high % of companies are unsuccessful, failing to present the advantages that downsizing should bring to the organisation..
Downsizing in companies will leave behind workers who will not lose their jobs but create a psycho - social problem known in the industry as "Survivor Syndrome", leading to low commitment and morale, overall damaging the organisation. Cameron 1994 argues that downsizing can have negative consequences. A well planned and executed redundancy process needs to be developed in order to avoid these. In trying to save the organisation money, the result can be costing the organisation more money, not mentioning the negative effectives of the work force that remains.
This can cause long term unforeseen problems for the organisations growth and success. The policies and various legislations supporting redundancy, is an effective method of downsizing in an organisation. It is important firstly to outline what Redundancy is: "In any given situation where a change in an organisation's economic, operational or technological position result in a reduced work force.
That is irrespective of whether the reduction is achieved through compulsory dismissal, voluntary severance, natural wastage or employee transfers. It also applied whether it involves the loss of one job or a significant reduction in part or all of the workforce"The best method an organisation can implement is the formal policy and procedure agreed with trade unions. A fair policy and procedure would be implemented taking into the consideration the well being of both parties those being the employers and employees.
The Employment protection (part time employees) Regulations 1995 removed the differential qualifying threshold for redundancy payments for full and part time employees (where part time workers had to work for 5 years instead of 2 years before qualifying for payment) on the basis of indirect sex discrimination. Records must be accurate and demonstrate reasons for absences. It requires consistency of approach, taking into account patterns of absence and having clear rules about standards.
This may give rise to disability discrimination claims if sickness or time keeping is affected by disability. Conclusion The use of conduct may be useful if employers has kept careful and consistent records and has good supervision and appraisal procedures in place. (National Council for voluntary organisations) The use of these methods for selection can be perceived as unfair, and may result in a case for the industrial tribunal. Many of the methods do not take into consideration the future of the organisation, which if chosen could jeopardise the future of that particular organisation.
Statutory requirements ensure the employees made redundant will be treated adequately throughout the period. This can be seen below. This focuses on employee perceptions about the fairness of the procedures used to make decisions about downsizing and redundancies. Thus not only should the outcomes of downsizing decision making be seen to be fair, but also the procedures used to arrive at such decisions are fair. Negative reactions which are likely to arise be reduced by the use of procedures which are seen to be fair.
Redundancy policies and procedures are an effective method to manage redundancy, however in order to deliver these policies managers need to be trained in order to implement the process that has been to into place by the organisation. Managers need to be competent in handling the variety of employee responses and recognise the importance of treating each employee as an individual. Individuals derive status and self esteem from work, therefore any change in the working arrangements may affect individual morale.
An employee may be afraid that the job loss will result in a loss of status in the community. Another common concern is the fear of the unknown. The fear of change or anticipation may have a more negative effect than the change itself, because humans are resistant to change, they like familiarity and avoid situations that are threatening. Therefore managers in dealing with redundancy need to recognise the emotional dimension and have the sensitivity skills necessary to respond appropriately.
