CASE 7

CASE A: Nokia closes plant in Germany and relocates in Romania.
A problem here is that since Nokia closed the plant without any consulting or information, and 4 000 people could lose their jobs, this didn’t give such a great picture of the company. Nokia took advantage of the fact that Romania was a new comer in EU and received aid from the bloc partly. The company’s image got damaged among Germans, and their SPD leader thought it was irresponsible financial investors. The whole decision seed a little bit two rushed, and also brought up a lot of bad media for Nokia as well as seemed unfair for the 4 000 people that were going to lose their jobs. (Communicating labour rights, 2008.)

CASE B: Nokia cuts 3 500 jobs ‘’to ensure profitability’’.
I think they should have learned from their mistake in the past, if the thought process behind the job cuts in Germany, was to ensure profitability, and know they are in the same position, then why would this job cut ensure profitability, if the one before didn’t. Of course you have to understand that this is just a part of having a business, if you aren’t as profitable as you were some years ago, you might just have to let go of people to stay alive, but I think it’s all about the way you do it, which makes the difference, since headlines like ‘’Nokia cuts 3 500 jobs’’ give a bad image of the company. (YLE, 2011.)

CASE C: Hundreds of Nokia’s outsourced Symbian developers leaving Accenture.

It is quite hard to feel satisfied at your job, if you don’t have things to do. This might push you towards wanting to find a new job elsewhere, where you’d have stuff to do. Of course, if you are not satisfied with your job, and they offer you a severance package worth up to 15 moths pay, you’d take it, of course there were smaller pay-outs as well. (YLE, 2012.)

Basics of Human Resource Management
Managing Human Resources chapter 6.

  • Layoffs are a tool to reduce labour costs. 
    • Meant to improve productivity and make the company more profitable
Layoffs are usually associated with a negative stock price.
  • Things to consider regarding layoffs: 
    • Layoffs are usually associated with negative outcomes. 
    • Organizations reputation might suffer. 
    • Layoffs could affect the livelihood of a lot of people and the economic health of families in the community. 
    • There are both negative and positive consequences with layoffs, but it’s all about how you do it.
Managerial perspective
  • Need skills to help an employee who leaves the company voluntarily 
  • But also help employees who have been let go of or fires 
  • If the managers don’t do this right, it can damage the company’s reputation and/or push away talented workforce.
Employee separation
  • Occurs when an employee stops working for a company. 
  • The separation should be managed. 
    • Cost of employee separations 
      • Recruitment costs 
        • Advertising 
        • Recruiting time 
        • Search fees
      • Selection costs 
        • Interviewing 
        • Testing 
        • Reference checking
      • Training costs 
        • Direct training costs 
        • Not having productivity during training
      • Separation costs 
        • Separation pays 
        • Benefits 
        • Unemployment insurance cost 
        • Vacant position
The Benefits of employee separations
  • Reduced labour costs 
  • Replacement of poor performers 
  • Increased innovation 
  • Opportunity for greater diversity
Types of employee separations
  • Voluntary separations 
    • Quits 
    • Retirements
  • Involuntary separations 
    • Discharge
Social media and work can be a terminal mix
  • Social media can help companies connect with their customers and find new ones 
  • Social media can also cause problems, like negative reviews 
  • Employees can also be fired because of things they’ve done on social media
Layoffs
  • Reduce costs for a company 
  • Investors might turn away from a company, since layoffs can be seen as the company having problems.
Layoffs, downsizing and rightsizing
  • Downsizing 
    • A strategy to reduce the scale and scope of its business in order to improve the company’s financial performance
  • Rightsizing 
    • The process of reorganizing a company’s employees to improve their efficiency
Early retirement is one of the first things a company does that is downsizing.
Alternatives to layoffs:
  • Employment policy 
    • Hiring freeze 
    • Cut part time employees and internships 
    • Leaves of absence 
    • Reduced working hours
  • Changes in job design 
    • Transfers 
    • Relocation 
    • Job sharing
  • Pay and benefits policies 
    • Pay freeze 
    • Pay cuts
  • Training 
    • Retraining
Implementing a layoff
  • Key issues managers have to settle 
    • E.g. notifying employees, developing layoff criteria, communicating to laid-off employees, coordinating media relations, maintaining security and reassuring survivors of layoffs
Negative effects of layoffs on survivors
  • Increased absenteeism and turnover 
  • Lower productivity and poorer job satisfaction 
  • Increased sabotage
Survivor management 101
  • Clear communication about the layoff 
    • Explain why
  • Mark the occasion 
    • Have a formal meeting about it
    • Create an event
  • Listen to your employees
Outplacement
  • Helps separated employees with the destress of losing their job 
  • Provides help with finding a new job
Sources: 

Communication Labour Rights, 17.1.2008. Nokia closes plant in Germany and relocates in Romania. URL: https://communicatinglabourrights.wordpress.com/2008/01/17/nokia-closes-plant-in-germany-and-relocates-in-romania/ Accessed: 11.4.2018.
Gomez-Mejia, L.R., Balkin, D.B. and Cardy, R.L. 2016. Managing Human Resources. Global Edition 8/E. Pearson, pp. 209-230.
YLE, 2.4.2012. Hundreds of Nokia’s outsourced Symbian developers leaving Accenture. URL: https://yle.fi/uutiset/osasto/news/hundreds_of_nokias_outsourced_symbian_developers_leaving_accenture/5252177 Accessed: 11.4.2018.
YLE, 29.9.2011. Nokia cuts 3500 jobs ‘’to ensure profitability’’. URL: https://yle.fi/uutiset/osasto/news/nokia_cuts_3500_jobs_to_ensure_profitability/5431070 Accessed: 11.4.2018.

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