DOWNSIZING

Downsizing

Downsizing

Downsizing is considered to be the intentional and organized reduction of human capital in an attempt to bring about a change in the company's structure to have positive impacts on the company's performance. Over the course of time, downsizing has evolved in reputation from being a negatively perceived movement to a strategic human resource management decision. Multinationals such as GM, Dell, Cisco and the like have been known to implement downsizing at numerous times in their history. This paper will attempt to shed light on a broad range of issues that come forth when downsizing is perceived from the perspective of human resource management.

In the human resource perspective, downsizing is significantly different from termination. While termination is the separation of employees from the organization on account of the employee's/employees' inability to serve the organization adequately, downsizing is often brought about on account of the organization's choice to improve performance by not serving the downsized employees. In this regard, while the organization may desire to fill a terminated employee's position, it may not seek out a similar arrangement for the positions that are vacated during a downsizing streak (Karake-Shalhoub and Karake 1999, 33). Furthermore, human resource management principles dictate that a downsized employee does not necessarily have to be at fault in any manner and it is entirely the organization's discretion to ascertain whether an employee has to be made part of a downsizing campaign or not.

Studies based on human resource management have been shedding light on the intricacies of downsizing for quite some time now and one of the issues that comes up almost every time downsizing is studied in the realm of human resource management is that of survivor's guilt. Downsizing is carried out to improve the organization's performance by maximizing the utility of the employees the organization chooses to ...