Cafeteria benefits for employees

[NAME WITHHELD]

LER 458Y 002

February 16, 2021

Numbers in square brackets correspond to the numbered entries in the common writing style problems guide in the Essay Project module on Canvas.

The concern for employee downsizing in the workplace started several decades ago, especially from the global financial crisis that happened in the early 2000s. The recession then brought the rate of job losses to a climax worldwide. Specifically, in the United States alone, more than eight million jobs that were mainly concentrated on financial services, automotive and manufacturing have been downsized from 2008 to 2010.[endnoteRef:1] In addition to the economic layoffs that have occurred under poor economic conditions and other factors, including mergers and acquisitions, revenue/market shares have declined through technological changes or other difficulties. Corporate restructuring that aims to increase profitability and the belief that smaller is better are effective reasons for downsizing.[endnoteRef:2] [1: Wayne F. Cascio, “Investing in HRD in Uncertain Times Now and in the Future,” Advances in Developing Human Resources 16, no. 1 (2014): 108-122 ] [2: Kim S. Cameron, "Strategies for Successful Organizational Downsizing," Human Resource Management 33, no. 2 (1994): 189-211. ]

Although the action of employee downsizing in the above situations is necessary, it is never a pleasant task to carry out. One of the major negative effects is that downsizing a company influences large numbers of people in terms of the physical and psychological impact on those getting terminated and those who are being retained.

From the laid-off employee’s side, he/she may unfavorably compare himself/herself to colleagues who still remain with the company and then lose confidence in personal skills and abilities. The sense of frustration, over time, will turn to bitterness and anxiety. Besides, the loss of financial support (i.e., receiving a regular compensation package) also increases the weight of the burden if this employee cannot find an alternative job quickly but has debts and mortgages that need to be paid off and/or has a family to support. The mix of psychological and financial impacts may easily lead to health issues. “[V]ictims of downsizing report increases in headaches, stomach upsets, sleeping problem, cholesterol levels, physical illness, hospitalization rates, heart trouble, hypertension, ulcers, vision problems, and shortness of breath.”[endnoteRef:3] [3: Michael Aamodt, Industrial/Organizational Psychology: An Applied Approach. ([Boston, MA]: Nelson Education, 2012). ]

An interview with Ting Zhu, an ex-employee who worked at Tong Cheng International Travel Service, explains how downsizing a company brings oppression on employees who have a debt to pay off. The operation is a leading provider of leisure travel in China that was found in 2004, aiming to help more people to enjoy traveling inside and outside China. “The year 2020 was the toughest year for us [employees who are engaged in tourism] to achieve progress in the industry because of the unexpected Covid-19,” Ting Zhu said.[endnoteRef:4] When she and her colleagues were asked to leave the company in November 2020, she felt it was a reasonable thing since the profitability continuously went down. In the next moment, she began to worry, however, about her livelihood because she has to pay her monthly mortgage. She is still looking for a full-time job and has to heavily rely on her husband’s income and her bank savings to sustain their daily lives. [4: Ting Zhu, e-mail message to author, February 2, 2021. ]

On the other hand, workforce reduction brings negative influences on employees who remain with the company. Once layoffs are announced, remaining employees may face greater daily job responsibilities and workload without additional pay, which lead to mental pressure (e.g., depression). In addition, they may distrust the employer and worry that another round of layoffs is possible and even happen to themselves, thus further intensifying pressure. The collection of internal feelings produced by remaining employees is termed “survivor syndrome.”[endnoteRef:5] [5: Joel Brockner, "The Effects of Work Layoffs on Survivors: Research, Theory, and Practice," Research in Organizational Behavior 10 (1988): 213-255. ]

The negative impacts are not limited, however, to the aggravation of mental pressure. Employers invest many resources and efforts into recruiting and training employees, which aims to gain and sustain competitive advantage and contend with other competitors in the same industry. In other words, every employee has his/her own essential skills, knowledge, and competencies that are required to complete that individual’s job functions and achieve the organization’s (short-term/long-term) goals. Therefore, employees who are laid off bring their knowledge and experience away during the downsizing process so that they will leave an uncoordinated and low efficient workflow to the remaining employees. This demands the remaining employees to devote more energy and time to their day-to-day work, and even challenging work, to get the workflow back on track.

The second major reason for this argument is that the impact of downsizing a company on employees' families cannot be underestimated. The financial effects arise immediately when the dismissal list is announced, especially for families that have no emergency savings will suffer the most. Basic commodities like fresh food usually turn into luxuries since they can barely afford them. Besides, families that are unable to pay the mortgage have to vacate their current home, move away from the community they are involved in, and look for a cheaper house elsewhere. This further leads to social challenges that may include adapting to a new community and placing children in unfamiliar schools.

When compared to financial and social effects, the marital effects are far much overwhelming in coming up against the dismissal issue. More commonly, family members may experience much friction like complaints and quarrels. The loss of employment (especially experienced by husbands) tends to increase the probability of divorce and finally leads to family dissolution.[endnoteRef:6] [6: Denise Doiron and Silvia Mendolia, "The Impact of Job Loss on Family Dissolution," Journal of Population Economics 25, no. 1 (2012): 367-398. ]

Employers need to be informed on this topic since the impacts of downsizing a company are far more beyond the dismissal of employees themselves. Various lenses, including physical, psychological, and even household impacts, are worth diving deep into the issues. So far, the research and customized interviews have proved that downsizing decisions cast serious influences not only on laid-off employees but also on their family members and employees who remain with the company. More in-depth research on the impacts on downsizing a company reveals a dearth of topics related to the household. This issue will be fixed later by contacting and interviewing more people that are laid off during the Covid-19 pandemic. Another concern raised in the research process is that organizations pay much more attention on laid-off employees than on remaining employees.

COMMENTS:

The essay project will be enhanced if you interview more people who are or were involved in the topic. Interviewees could be parents, siblings, other relatives, neighbors, friends, your managers or coworkers, HR professionals including faculty who teach HR.

What factors force a company to downsize? Seems like technological innovations or managerial miscalculations are the primary reasons for businesses to downsize.

What strategies can a company use to avoid downsizing? For example, can a business contract or subcontract some of its operations to another company? Or can a business decrease the number of full-time employees and increase the number of part-time employees?

How have managers and labor union officials handle the issue of downsizing when the company has unionized employees?

Do companies that downsize eliminate the number of managers proportionate to the number of employees eliminated? For example, if a business eliminated 10% of its employees, would it eliminate 10% of its managers?

Common writing style problems in short essay 01: none found

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