Abstract

This paper is a case study and aims at examining the following situation. A company is experiencing hard times and has to terminate the employment of several employees. In the beginning, there is a short analysis of the reasons of the companys position. There is a list of areas and departments, which are to undergo changes under the influence of crisis. This paper outlines the way a meeting should be held to make employees aware of the coming changes within the company. It gives the agenda of the meeting and suggests methods of going through hard times together with the employees. Finally, it looks into various challenges and the decisions to be made in the situation.

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Keywords: employee, decision, consequences, organization.

MGT-C4

Depending on the quality of management as well as a number of other factors affecting the operation of an organization, there can be a range of difficulties in a companys activity. The company whose situation is being examined has troubles in the manufacturing process. The company has reached the lowest level of profits. Rising costs of materials and wages have resulted in low profits. It is difficult to maintain the company at the same level that is why the senior management took a decision to terminate employment of people from several departments.

When a company is going through hard times, all areas and departments are affected. Low effectiveness of the organization affects all the departments. It disrupts production processes, affects supply of raw materials, payment of wages to employees, sales, and marketing of the company. Moreover, internal communication in the company should be open and clear to make its employees aware of the companys position. Secrets in the company generate unnecessary rumors and lead to conflicts between management and subordinates.

In the current circumstances, the owner of the company should hold a meeting together with department managers, supervisors and subordinates. During the meeting, the companys owner must adhere to the agenda of the meeting and inform employees about the situation without much fuss. First, the owner must inform the employees about the hard times of the organization. Employees need to relate to all the processes taking place within the company. The next step is to mention those departments that are most susceptible to crisis. The owner should clearly describe what caused the problem and name its possible implications. Concerning redundancy of employees, the owner should mention it as a possible outcome of events. Nevertheless, it remains very important to show employees their importance and give them the necessary support. Employees must be ready for any outcome of the companys situation. They should realize that the company is a single entity, which goes through both hard times and success together with its employees.

In the state of crisis, a company resorts to critical actions and sometimes is forced to cut back staff. This decision has a direct impact on many factors determining the performance of the company as a whole. Like any decision, staff reductions have their pros and cons. This solution requires a lot of time not only for its acceptance, but also for its public disclosure. Information about the dismissal of individual employees is strictly confidential and must remain in strict confidence. When dismissing employees, a company is guided by the desire to not only increase the financial reserves, but also reduce costs related to personnel. Large number of employees requires considerable financial base for the payment of salaries and provision of social packages. In times of crisis, a company is forced to sacrifice employees to support its activities and increase the chances of improving the company's position. After the dismissal of a number of employees, there are significant changes within the company. Dismissal is a blow not only for those who are dismissed, but also for those who are still acting within their office. First of all, employees who escaped dismissal will be shocked by the sudden management decision-making. Such decisions seriously affect the psychological climate in the organization. One of the possible behaviors of employees is fear. They will experience fear of losing their workplaces and may lose confidence in companys management. Moreover, employees may begin looking for a new workplace in a rival firm. What is more, there is a chance of information leakage by the workers who hope to obtain more favorable terms in a rival firm.

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In order to avoid confusion during the meeting, the owner of the company should stress the importance of solving problems together with the staff. People must feel connected with the company and its problems. Involvement of subordinates in decision-making and their participation in the development of plans to improve the performance of the company will not only demonstrate their skills, but also help the owner to take decisions.

Talking about kinds of decisions inside of the company it is important to mention the following. The decision about staff redundancy is a non-programmed decision. It is an organizational decision that should bring benefits to the company in the future. It is not a routine decision and has to be taken based on the current position of the company. This is a strategic decision; therefore, it needs to be an informed one. The senior management together decided to terminate the employment of some people in various departments, so it is a group decision. Moreover, it is a policy decision, which belongs to the top management of the company. In addition, this decision is irreversible. There is no other option but to terminate the employment of some people. This decision will have a long-term effect and will affect the company in many areas. A decision to keep secret names of employees who will be laid off is a delayed decision. This decision requires time to become public.

The decision-making process involves a number of factors that affect the outcome and consequences of the decision itself. In the depicted situation, there were a number of constraints somehow influencing the decision. Staff reduction is a complex, deliberate and informed decision. It takes place in the company because of its critical state and the inability to address the situation in another way. Among some of the factors that influenced this decision, the psychological climate among employees, departments performance and financial support of the organization. Every employee's dismissal leads to a number of changes. It is impossible to make a decision without thinking about its consequences. The head of the company is not only responsible for making decisions, but also for their consequences. In this situation, the head of the company endangers the efficiency of teamwork and trust of each employee. These two factors form the basis of the processes running in the company and influence the course of events in the life cycle of the company.

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