Current economic downturn has enormous influence on businesses. The field of Human Resource Management (HRM) is not an exception. The common practices in these periods in HR departments are not hiring new employees, layoffs, not paying for overwork hours, cost cutting including wages and bonuses, less training and early retirement programs and so on. What has been happening in my country, Japan, since this financial crisis began was much different from former recessions such as 1990s. For example, the TOYOTA started reducing workings days from five days a week to three or four days a week in most factories instead of firing people. Finally, they decided to close some of them temporarily. It was a very shocking event for Japanese since the TOYOTA is a world famous and a major motor vehicle company. This essay will first provide downsizing as a HRM common practice in recession from the point of view of cost-cutting and alternatives of layoffs. Then, it will also show the role of training during the economic downturn. Finally, it will discuss how financial crisis affects equity in HRM using examples of gender wage gaps, age discriminations and transition of equity perception in Thailand case. The essay also argues what should be carried out as reduction and training strategies in recessionary time. It also discusses about how HR departments can consider equity in such a difficult time for layoffs and salary since “equity” is a key words in current HRM such as equal pay and equal opportunity.
Downsizing – cost reduction
The cost cutting is the first effort which is considered in every department when an economic downturn hits. Aycan and Kabasakal(2006, pp. 492-493) argue that focusing on cost reduction on HRM should be less than production, marketing and financial practices (PMF) as it results in decrease in commitment of employees, their deterioration of mental conditions and job performance. However, it is still the first common step to deal with financial difficulties. For example, Robertson and Dayal(2009, p.22) suggest that training jobs is a traditional area of first cost reduction. They also indicate that some HR departments shift to “the employee self-service model” (Robertson & Dayal, 2009, p. 23), which is a system the employees themselves update their personal information or apply insurance benefits on the internet instead of the HR officers in the firm do them for the workers, to reduce both costs and HR daily tasks. Another example about cost reductions showed by the research of Pudlowski who recommends three steps called “audit-like review” (Pudlowski, 2009, p39). The first step is reviewing all programs offered in the HR department; such as paid-leave program, compensations and parental leave. Then, employees should examine further information in rapid pace like four to six weeks. The last step is coordination of skills provided by key leaders or stakeholders outside of the HRM to give insights (Pudlowski, 2009,...