Fictional Case Study: Company Located In The United States

Organizational Change
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Institution
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Case Analysis Company XY
XY is a limited liability company located in the United States. The company has been in operation for the past 20 years, and since the year 2015, the company has been having issues with a majority of their employees applying for transfers. Since the beginning of the recession, most employees are uncertain about the stability of their jobs and have been looking for alternatives. The majority of the staff at the junior levels are employed on a contract basis and are therefore making a move to find a landing ground rather than being caught unaware. The transfer demands if approved will lead to a shortage of staff, and XY Limited will be unable to sustain production. The managing director is at a deadlock with the head of the human resource on the next course of action. The main point of conflict being that the general manager wants to retain his managers. He wants their jobs secured due to their experience and skills. The human resource manager, however, is of a different opinion. He claims that those top notch managers should be retrenched as their salaries and remuneration packages cost the company more than the rest of the staff. Defending his claim, he says that it is easier to lay off a smaller group with a higher pay than a large number of employees whose total wages are not significant. XY has recorded double losses in both the half-year financial report and the annual audit. Shareholders are beginning to complain as the share prices have dropped since the beginning of the year. The company is therefore under pressure to make a decision fast before they run into bankruptcy and the shareholders demand a reshuffle in the management. The management needs to come up with a solution quickly. In times of economic recession, loggerheads at management are one of the most common issues as is the case with XY Limited.
Case Analysis
The situation seen by XY limited is no different from what major companies experience. Retrenchment is sometimes inevitable. In XY Limited, it is clear that it is time to retrench some of its employees. There are factors that the managers have to consider before laying off people. In this case, they need first to establish;
What do they want to achieve by retrenching? This is the most important thing. The sole purpose of economizing in XY Limited is to cut down on the operational costs brought about by the recession. Before determining who to lay off, they should consider the implication of the workers. This will be guided into making sure they do not get rid of people whose skills cannot be replaced (Gandolfi, 2013).
 What is the best plan to get there? They need to ascertain if their plan is in line with what they want to achieve. XY Limited wants to achieve lower production costs. They need to consider whether it is the only viable option. Some alternatives are salary reductions to be paid back and backdated after the recession is over. They need to look at all the available options before settling on the retrenchment. There are various options available which include:
Limitation on the recruitment of new employees unless for critical positions. Excellent management skills ensure that right at the selection process, an organization selects the candidates they require. At the moment, however, XY can look at the minimum number of employees they need to sustain their daily production. This will ensure that they shall remain in production after laying off some of their employees. Restriction on overtime work. As employees need to be paid for working overtime, the management of XY limited should make sure that no one works overtime(Gandolfi, 2013). If all employees stopped working overtime, then they would reduce new wages that come on top of their salaries. Control of the labor work on special days and Public Holidays. XY Limited can have their offices closed on special occasions. This makes sure that there is no production, which saves on the overall cost. Public holidays have little activities and therefore will save on the wastage of labor. Only Paramount employees should report on these days. This policy can be implemented to state that on public holidays only those employees required to work shall be paid (Muniapan, 2015). Reduce the number of shifts. If each employee covers a minimum of three shifts, XY limited can reduce them to one. This will reduce the working hours which will later reduce their payments. It also gives employees an opportunity to find alternative places of employment and not necessarily rely on one source of income.Conduct retraining programs for employees for multitasking (Muniapan, 2015). XY limited can train their employees on how to work in different departments. This can be done in a cost-effective manner by applying job rotation. This is where the workers move from one department to the next so as to learn how different aspects of the organization work. Employees end up teaching each other and acquiring multiple skills. This means that an employee can do double the work they were hired. In so doing, the number of employees needed will reduce.
If none of the options are applicable, then how they propose to select employees for retrenchment is critical. This is where XY limited are in conflict. The difference in opinion is that the managers earn more hence should be retrenched while the Managing Director is of the option of retaining them and firing subordinate staff. Before settling on who is to be laid off, there is need to find out who will relieve the company the bigger burden. According to HR, the managers earn huge salaries, which are a setback at times of economic recession. However, this is not the best option. According to the logic and future progression of the company, laying off the managers is a temporary solution as they will need to be replaced. The employees left will be required to fill in those slots which will not make a difference. Besides, their skills and expertise cannot be short changed. The best option, therefore, would be laying off subordinates with responsibilities that can be easily taught or learned. This will ensure that when the company can easily replace them when the need arises. Being that they are the majority, the workload pending could be distributed among the employees retained.
When do you want to implement retrenchments? They will need to determine if the timing of the layoffs makes business sense. The management needs time to properly and consult among themselves and other stakeholders on...