Lay off of the individuals in a company has a great impact on the profits made by an organization. Lays off are instrumental in creating missing link in the team that has a detrimental effect on the running of an organization. Aldo Group is the name of a Canadian retailer that operates chain of the shoes along with the accessories stores (Aldogroup.com., 2018). The firings and the unfair promotions within the organization has created negative attitude among the employees of Aldo Group. Corporate downsizing is instrumental in causing negative effect in the workplace. Downsizing decreases the morale of the employees and it has a negative impression on the mind-set of the workers in an organization. This report discusses about the past approaches that have been taken by organizations to solve the problem of lay offs. It discusses about the recent solutions that have to be ineffective for Aldo Group. The report also suggests recommendations that can help in coping with the problem. The report also talks about the costs and the procedures that would be required for finding the solution to the problem.
The firings along with unfair promotions in the Aldo Group have been instrumental in creating negative attitude and discouragement among the workers.
It was found out with the help of research that previously the lay-off of an employee was carried out on urgent basis. The employees were not provided with the right amount of time that could help them in adjusting to the situation. This was instrumental in creating a lot of resentment and dissatisfaction among the other employees working in an organization. The firing of an employee creates a negative attitude among the other employees of an organization and they lose the motivation of working (Richter et al., 2016). In the past, warnings were not given to the employees that created fear among the other employees who were working in the same organization in which the layoff had taken place.
The incidence of sudden firing stripped a worker of his dignity and he had to leave the job on sudden basis. The sudden exclusion of the member of a company makes the other employees feel distressed and they feel insecure in the company (Davis, Trevor & Feng, 2015). It was gathered with the help of research that lays and the unfair promotion were instrumental in evoking mistrust towards the management among the employees of an organization.
The management of an organization should reward the employees who are high-performing that can help the organization in retaining talent. It has been found out that the companies should be careful in the allocation of monetary rewards that can prove to be instrumental in encouraging employees within an organization. The rewards structure of an organization should have a transparent framework that can instill positive attitude in employees of an organization. Favouritism has a negative effect on the corporate culture along with bottom line of an organisation. Favouritism can be manifested in the bestowing of promotion or that of bonus on the employees of an organization (Ferrary, 2018). The subtle indications of favouritism should be done away in an organization because it can create frustration in the employees. There are some industries who possess culture pertaining to favouritism on the basis of gender along with ethnicity. There are various organizations allowing favouritism that has an effect on hiring along with promotion of the individuals and this has negative consequences for an organization. Favouritism can pave the path for law suits that can have severe financial consequence in relation to an organization.
The downsizing of the organisations has become very common in the present age. In the event of employees of an organization leaving, the other employees feel redundant and they feel that their value has decreased in an organization. It has been found that the employees feel unsettled at the time of downsizing. Downsizing threatens the sense of that of well-being of the employees within an organization. The employees feel that they have been treated in an unfair manner by the management of an organization. The survivors of downsizing become averse to risk and they become resistance to the aspect of change in an organization. The lack of the aspect of care at times of downsizing proves to be detrimental for employee morale in an organization.
Presently, there are some precautions that are undertaken in relation to termination of employees of Aldo Group. The management of Aldo Group do not inform the employee earlier about the termination of employee that makes them unprepared when the decision is finally taken. The employees cannot understand about their flaws and they do not get the time to rectify the flaws that they have in relation to their working in the organization. The firing is not carried out in a diligent manner at Aldo Group that results in losing the company along with the trade secrets. The fired employees have the access to that of company property that severely costs the reputation of Aldo Group (Giumetti, Schroeder & Switzer III, 2015). It often happens that the employees who are fired have the confidential information along with files that has harmed the prestige of the company. It has been found that the fired employee does not return the property of the company like the credit card, keys and the pass word that jeopardizes the future of the company.
The firing of the employees proves to be a costly action for the company as the company has to incur loss for paying that of the legal fees. There exist state along with federal laws that can protect the employees against the incidence of wrongful termination (Pandey, 2016). The employees of Aldo Group start developing negative attitude towards the company when an employee is hurriedly laid off. It creates panic among the other workers that creates panic among the other employees of Aldo Group in Canada.
Figure: Effect of Firing cost on the hazard rates
Source: Conference.iza.org., 2018).
It has been found that firms prefer terminating employment relationship before that of the deadline that results into sudden hike of that of separation barrier and this can be explained with the help of kink in that of hazard rate (Ferrary, 2018). The job protection on the other hand can help in lowering separation rate for a large number of employed workers.
Figure: Average Job Duration along with lay-off cost
Source: Conference.iza.org., 2018
The above table shows that eliminating the lay-off costs can increase expected job duration pertaining to its value under that of French regulation. The increase in relation to job duration can be induced by decreasing the rate of job separation at the outset of employment spell. It has been found out with the help of research that mode pertaining to productivity density is closer to that of threshold value under which the jobs are destroyed.
Unique support options should be provided to the employees of Aldo Group who are laid off that can help in the employee in dealing with his condition. Outplacement support should be provided by the Canadian retailer that can help the employee in dealing with his loss. Lower cost services can also be provided that can have a positive impact on the employees of Aldo Group (Hitka & Balážová, 2015). It can help the employees who are fired in recovering and adjusting successfully to the loss. The new opportunities will be useful in creating a positive impression on the mind of a laid off employee. It has been found that layoffs can increase the stress that the employees feel and it can result in burnout of the employees. This has been found to pave the path for greater turnover and it diminishes the willingness of the employees for helping each other. A study that has been carried out by Morgan Franklin Consulting and Fierce CFO has stated that the fastest growing companies of the year 2014 were those who had been able to cut back on that of hiring that can pave the path for accelerated growth of the employees of an organization. It has been found with the help of research that the outplacement plans should not be standardized (Redman, 2016). It has been found that personal outplacement plans can help in easing the feelings that the employees have after they are displaced and it can help them in finding other opportunities. A report that was carried out by US Bureau of labour Statistics in 2014 have found that only a small percentage 61 % of the workers who had undergone displacement had been re-employed. This evidence shows that very little effort is taken for the employees who lose their job that harms the morale of the other employees in an organization.
The company can lay down specific rules that states the circumstances under which an employee can be laid off. Aldo Group should establish policies pertaining to layoffs by their action or the statements (Zailani, Aminudin & Wee, 2016). In the event of a worker having employment contract it should be checked carefully in order to ascertain that a worker can be laid off owing to economic reasons. Aldo Group can offer termination benefits that can help in appeasing an employee who is being laid off. It can help in showing that Aldo Group values the contributions of the workers. It can help in showing that the organization takes due consideration of the welfare of its employees that can reduce negative attitude among the employees of that of Aldo Group (Chitsaz-Isfahani & Boustani, 2014). This can help in retaining the confidence of the other employees who are working in the organisation. This can then help in boosting the morale of the employees of Aldo Group that can increase the efficiency of the performance of the employees in the organization. In the event of an employee in Aldo Group being terminated, insurance should be provided to the terminated employees that can help them in dealing with the loss. Unemployment insurance should be provided to the employees and financial assistance should be provided to them when they are looking for work. This can prove to be useful in reducing the negative attitude of the employees and it can provide encouragement to the workers in an organization (Cummings & Worley, 2014). Aldo Group should communicate with the employees at the times of downsizing that can help the organisation in making progress. The communication should be honest that can prove to be useful in dealing with the aspect of negative feelings of the employees of an organization.
The cost that Aldo Group would have to bear for offering outplacement support is around $ 10,000 for the senior executives and it should be $ 6000 for the people working in the lower level of the administration. In the event of the company offering termination benefits it would have to incur cost of around $ 20,000 (on annual basis). Aldo Group should contact the outplacement supports that are in Canada that can help them in taking advantage of the services of Aldo Group. People who are in the management of the company can attend career events that can help them in getting in touch with the renowned outplacement support systems that are located within Canada. Proper procedure of termination can help a company in avoiding the legal issues. The company should lay down groundwork before they fire a worker and it can help them in dealing with the issue of lay off.
Conclusion
Layoffs that are made by an organization has a great effect on the amount of profit that is earned by an organization. The layoffs can create missing link that has a bad effect in relation to functioning of an organization. The firings within the organization creates negative attitude in the employees of Aldo Group. Management of the company do not inform employees earlier regarding termination that makes the employees unprepared pertaining to the termination of their service. Employees do not get the right amount of time to understand flaws that hampers their working in Aldo Group. Aldo Group can lose the trade secrets in the event of the firing of the employees being carried out in arbitrary manner. Support systems being given to employees of Aldo Group can help them in dealing with the aspect of firing. Canadian retailer should provide outplacement support that can help employees in coping with the situation of lay off in Aldo Group.
References
Aldogroup.com. (2018). ALDO. Retrieved from https://www.aldogroup.com/
Chitsaz-Isfahani, A., & Boustani, H. R. (2014). Effects of talent management on employees retention: The mediate effect of organizational trust. International Journal of Academic Research in Economics and Management Sciences, 3(5), 114.
Conference.iza.org. (2018). The Detrimental Effect of Job Protection on Employment: Evidence from France. Retrieved from https://conference.iza.org/conference_files/EVAL_2018/cahuc_p73.pdf
Cummings, T. G., & Worley, C. G. (2014). Organization development and change. Cengage learning.
Davis, P. R., Trevor, C. O., & Feng, J. (2015). Creating a more quit-friendly national workforce? Individual layoff history and voluntary turnover. Journal of Applied Psychology, 100(5), 1434.
Ferrary, M. (2018). The structure and dynamics of the ceo’s “small world” of stakeholders. An application to industrial downsizing. Technological Forecasting and Social Change.
Giumetti, G. W., Schroeder, A. N., & Switzer III, F. S. (2015). Forced distribution rating systems: When does “rank and yank” lead to adverse impact?. Journal of Applied Psychology, 100(1), 180.
Hitka, M., & Balážová, Ž. (2015). The impact of age, education and seniority on motivation of employees. Business: Theory and practice, 16, 113.
Pandey, S. (2016). Impact of spiritual capital on work motivation among employees: an exploratory study. International Journal of Science and Consciousness, 2(3), 42-52.
Redman, T. (2016). Downsizing. In Encyclopedia of Human Resource Management. Edward Elgar Publishing Limited.
Richter, M., König, C. J., Koppermann, C., & Schilling, M. (2016). Displaying fairness while delivering bad news: Testing the effectiveness of organizational bad news training in the layoff context. Journal of Applied Psychology, 101(6), 779.
Zailani, N. F. I., Aminudin, N., & Wee, H. (2016, October). Human Resource Management (HRM) practices and employees’ retention in travel agencies. In 3rd International Hospitality and Tourism Conference, IHTC 2016 and 2nd International Seminar on Tourism, ISOT 2016. CRC Press/Balkema.
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