The idea that renewal strategies, like redundancy and restructuring, are necessary to achieve organisational goals comes from a supply and demand analysis of the job market. However Today’s working environment is seen to be excessively using these strategies in order to accomplish short term goals, resulting in businesses not looking towards their long term futures. This essay will address this issue by looking at the significance and implications redundancy and restructuring raise, that of reduced morale, satisfaction, motivation, and retention of the future workforce. It will also outline the many perspectives on the issue, that of a resource, industry and company based view, as well as display the veracity of these views. It will demonstrate that although redundancy and restructuring is a viable change method to achieve organisational goals, they should only be used as a last resort, due to the many significant costs it raises for businesses long-term success.
Many reasons exist for why businesses feel they need to change, ranging from mergers and acquisitions, technological advances, and economic and financial considerations (Business HR, 2011). This last point is particularly relevant in today’s environment due to the aftermath that the economic crisis created. The fast paced and unstable environment that ensued led to a reduction in business profits and cash flows, leading some to believe their future growth plans were in danger. As a result, organisations constantly need to adapt their workforce skills to the markets changing demands, and therefore adopt the view that change and renewal is an essential and natural response in order for growth and survival (Robbins & Muerji, 1994). However, the need to review an organisations staff and operations often leads to inevitable changes occurring, affecting both employee and organisational roles (Business HR, 2011).
This change often takes the form of restructuring (Hanson, Dowling, Hitt, Ireland, & Hoskisson, 2008), which affects a few employees or the entire workforce (Business HR, 2011). Consequently, redundancy has become a hard fact for many businesses and employees (DOL, 2011). This is a significant issue for New Zealand (NZ) as these renewal strategies are inadvertently causing a large proportion of our skilled workforce to source work elsewhere.
This factor is affecting our reputation and ability to be successful long term, as success is directly correlated upon ability to increase productivity, which we cannot achieve if we are not retaining, or motivating our skilled labour (DOL, 2011).
Redundancy and restructuring has a significant emotional impact on all workers involved in the process, where common reactions include anger and sabotage. However, employee motivation is the one factor that tends to be affected the most in dismissals. This is due to workers becoming comfortable in their jobs and fields of expertise (Reference for business, 2011), and once dismissed, leaves...