Rating Maximum price Number of pages Language HRM3704 Contemporary issues in Human Resource Management
1 view 0 purchase
Course
Rating Maximum price Number of pages Language HR
Institution
Rating Maximum Price Number Of Pages Language HR
Voluntary resignations at Quality Clothing
Joe Meyer is one of several HR managers working at Quality Clothing, a large multinational corporation
in the clothing industry. The economic slowdown could be one cause of the company’s financial
challenges although their research and development uni...
CONTEMPORARY MANAGEMENT ISSUES
IN HUMAN RESOURCE MANAGEMENT (HRM370-4)
SEMESTER 1 – 2019
ASSIGNMENT 2
QUESTION 1
Read the case study below and then answer the questions that follow:
Voluntary resignations at Quality Clothing
Joe Meyer is one of several HR managers working at Quality Clothing, a large multinational corporation
in the clothing industry. The economic slowdown could be one cause of the company’s financial
m
er as
challenges although their research and development unit says that the challenge could come from the
co
eH w
fact that four major eastern countries have been under sanctions for over 20 years by major economies
and these countries were recently allowed to rejoin the international economy when their sanctions were
o.
rs e
lifted. They have now become major suppliers of clothing to the rest of the world because of their cheap
ou urc
prices. The research and development unit has also found a change in consumers’ behaviour ‒
consumers seem to be avoiding clothing chain shops, but rather buy from cheap Eastern shops or buy
o
material to make their own clothes.
aC s
vi y re
The above issues have contributed to the company’s poor financial performance over the past five years.
ed d
To remain competitive, the company has had to cut costs, which has meant a drastic reduction in its global
ar stu
workforce. The company now employs approximately 315 000 workers compared to a high of 350 000
five years ago. The reduction was achieved through a voluntary programme that gave incentives to
employees who sought work at other companies. This was done to honour a “no firing” pledge the
is
company had upheld ever since its founding decades before. The voluntary programme included
Th
incentives for early retirement and expenses incurred if an employee took a job with another non-
competitive company. Despite the uptake of voluntary departures, the programme has not been without
problems. In particular, senior management now recognises that too many of the company’s good workers
sh
have taken advantage of the incentives, while many weaker employees have remained. An internal study
done by the company’s industrial psychology department has concluded that productivity was down by 20
per cent among the remaining workers, mainly because many of the best employees have left the
company.
Page
This study source was downloaded by 100000823597457 from CourseHero.com on 1 of 903:40:28 GMT -05:00
11-02-2021
, Nevertheless, Joe was surprised to hear the director of HRM announce at a group meeting that the
accounting department had recommended cutting the workforce by another 14 000 to reduce further profit
losses. This has created a problem for HR: how to cut the workforce while honouring the “no firing” pledge
and still keep the best workforce.
Joe was even more surprised to learn that the director of HRM had already put in place a number of
policies. First, she asked her HR managers to “encourage” certain targeted employees to leave the
company. Second, she announced that many of the weaker employees were to be laid off indefinitely,
thereby technically adhering to the no-firing policy. However, a certain number of targeted employees
cannot be laid off because of the terms of their contracts. It is these employees Joe and his HR colleagues
are being told to “encourage” to leave. The director explained that the policies would become effective in
four weeks’ time and that they should remain confidential until that time – the delay was to avoid any
negative publicity prior to the next board meeting (which was to be held in the following fortnight).
m
The director then provided the five HR managers with a memo that outlined these policies and also listed
er as
four expendable employees from each of their departments. The list ended with this statement: “You are
co
eH w
to convince said employees that seeking employment elsewhere would be in their best interest”. The
o.
director of HRM went on to explain to the HR group managers that it was up to them to convince the
rs e
employees to leave and that if they felt that some of the people on the list were there by mistake, they
ou urc
could prepare a memo outlining their objections and suggesting alternative names to be placed on the list.
She also noted that those employees who left would be given two weeks’ severance pay for every year
o
that they had worked at the company, in addition to the mandatory severance pay. However, this offer
aC s
vi y re
would be good only for those who left voluntarily within one month of the policy’s announcement. After
that, there would be no additional severance pay for employees who left voluntarily or who were fired.
Further, she announced that it was the HR managers’ job to inform marginal employees who wanted to
ed d
stay that their pay might be cut or that they might be fired eventually. The HRM director finished her verbal
ar stu
report with a clear statement that a dim view would be taken of HR managers who could not “encourage”
the targeted employees to move on.
is
Back in his office, Joe felt deeply troubled by the whole situation. On the one hand, he was aware that the
Th
best hope for the company’s continued economic survival was to cut back its workforce. On the other
hand, doing so seemed to violate the spirit of the no-firing policy. As he stared at the list of names that
sh
appeared on the memo, Joe became even more troubled. At least two of the four employees named on
the list from his own department were employees he considered to be well above average. Joe thought
to himself: “If someone had to be on the list, I could think of at least two other people whose work is
marginal. How did the director decide who was to be listed?” He also wondered how on earth he was to
go about “encouraging” people to leave jobs they had held, in all four cases, for at least five years.
Page
This study source was downloaded by 100000823597457 from CourseHero.com on 2 of 903:40:28 GMT -05:00
11-02-2021
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller TUTORSON. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.99. You're not tied to anything after your purchase.
