Human Resource Management: Downsizing

Paper Info
Page count 4
Word count 1151
Read time 5 min
Subject Business
Type Essay
Language 🇺🇸 US


Downsizing in organizations is an unpleasant practice, which can be partly seen through the neglect of such issues in literature (Redman and Wilkinson 383). However, it can be stated that such practice is never an end in itself, rather than a means for achieving a specific purpose, e.g. reducing costs, increasing effectiveness, financial crisis, etc.

Despite such omission of downsizing in the practices of Human Resource Management (HRM), it can be stated that an increased interest was triggered recently. In that regard, not only legislative policies were established for redundancy, one of the HRM terms for collective dismissals (Redman and Wilkinson 382), but also various practices were developed for managing workplace reduction in organizations.

In the light of the aforementioned, the present report provides recommendations on managing redundancy programs, based on the case of a large organization that decided to downsize to an increasingly competitive business environment. The aforementioned organization is preparing to dismiss a large number of employees from all positions in the organization. In that regard, the report discusses various HR issues that should be considered, providing recommendations on the approach that should be implemented during such a process.

Legislative Framework

One important notion governing downsizing in organizations is its purpose, where the legislation of most EU15 Member States define it as “dismissals for ‘economic reasons’, i.e. effected by an employer for reasons unconnected with the individual employee concerned” (EIRO 2).

Considering that such purposes apply in the case of the organization in question, such organizational decisions should be discussed with the employees or their representatives. Such directive is outlined in EU Directive on information and consultation, where the employer has to inform and consult the employees or their representatives on the reasons for the job cuts, the number of dismissals, the categories of employees concerned, the criteria determining the employees concerned, and the method of calculating redundancy payments” (EIRO 4).

Although in the European context such directive takes a legislative context, it can be stated that such process has ethical dimensions, rather than legal. According to ACAS, the aforementioned requirements apply even in cases when the employer will offer alternative employment to the employees as well as in cases where the employee is not sure on the number of redundant employees, i.e. whether the established number for downsizing will be sufficient or can be avoided. Accordingly, the employer in such case is obliged to report the projected redundancies to the Department of Trade and Industry (since 2007 now the department of Business, Enterprise and Regulatory Reform) (Banfield and Kay Introduction to Human Resource Management 345).

It should be noted that determining the number of employees to be made redundant, as such factor is crucial for the classification of the downsizing as a collective redundancy, and whether the aforementioned accompanying requirements should be applied. In that regard, different countries establish different numbers for such classification, where the requirement to report to the Department for Business, Enterprise and Regulatory Reform is concerned with the UK, where the established number for downsizing is at least 20 employees over a period of 90 days (EIRO).

The Approach

Choosing the right approach for downsizing, there are several strategies to implement, among which are the strategies reported in Cameron (1994, 1998), cited in (Redman and Wilkinson 389), which are workforce reduction, work redesign, and systematic downsizing. The most applicable strategy in the case of the organization in question can be seen through the workforce reduction strategy, where the focus is the total headcount in the company.

Considering that the reduction involves all positions and departments in the organization, the focus of such a strategy is specifically true. Such a strategy is applicable considering the initial purpose of downsizing in the organization. The main advantage of such an approach can be seen in the rapid pattern of implementation, taking a bottom-down approach such strategy will bring the attention of the employees to the situation that exists within the organization (Redman and Wilkinson 389).

Among the disadvantages of such a strategy is the fact that the rapid time of implementation prevents proper communication with employees, affecting the organization in the long-term in the form of reduced work commitment, less job involvement and reduced work efforts. Although other strategies might be seen more attractive, specifically for employees, considering the purpose of downsizing, in the present case such strategy might be justified. On the one hand, the statistics show that almost half of the employers continue to make further redundancy following the initial reduction of the workforce (Redman and Wilkinson 390).

In such cases, other approaches might extend to longer periods, and accordingly, the environment of fear, panic, and lack of motivation might prevail in the organization, with employees waiting for the next redundancy initiative. On the other hand, the selected approach will facilitate the downsizing process, by speeding up the procedures and transferring the organization to the normal mode of operation.

An important notion that should be considered during such a process is the basis for selecting the employees for redundancy. The importance of such a step is largely correlated with the notions of fairness and “organizational justice” (Redman and Wilkinson 392).

The main purpose of using clear and appropriate selection methods is the elimination of subjective manipulations which evidence suggests to exist in many selection criteria and mechanisms (Redman and Wilkinson 392). The suggested approach for selection in the present case is conducting a selection matrix to identify the group of employees “who have the appropriate skills for the remaining roles” (Banfield and Kay “Example of a Redundancy Selection Procedure”). The main idea behind such matrix is allocating points for several objective criteria in the matrix, where the list of criteria includes such parameters as the following:

  • Attendance
  • Disciplinary records
  • Service
  • Ability to learn new tasks
  • Performance rate
  • Participation in improvement activity
  • Attitude toward others
  • Technical ability (Banfield and Kay “Example of a Redundancy Selection Procedure “)

It should be noted that the list of criteria might be modified to suit the specific organization, the industry and the business. Each criterion will have an upper, lower and intermediate level, with a corresponding set of points to be assigned, e.g. 5, 10, and 15 points. Such assessment will be applicable for employees who are subject to compulsory redundancy, where employees with the highest points will be left in their positions. The initial step in such a case is inviting employees to volunteer for redundancy, after which such assessment might be applied (Banfield and Kay Introduction to Human Resource Management 347).


It can be concluded that managing downsizing is a complex process for both employees and employers. The key aspects in such a process are meeting the legal requirements, preventing unfair dismissal, and implementing clear and objective procedures to select employees for redundancy. Accordingly, the organization should minimize the periods of uncertainty so that the motivation of the employees is not affected by the whole process.

Works Cited

Banfield, Paul, and Rebecca Kay. “Example of a Redundancy Selection Procedure “. 2008. Online Resource Centre. Oxford University Press. Web.

Introduction to Human Resource Management. Oxford; New York: Oxford University Press, 2008. Print.

EIRO. “EIRO Thematic Feature: Redundancies and Redundancy Costs”. 2005.

European Industrial Relations Observatory On-Line. European Foundation for the Improvement of Living and Working Conditions. 2010. Web.

Redman, Tom, and Adrian Wilkinson. “Downsizing.” Contemporary Human Resource Management: Text and Cases. Eds. Redman, Tom and Adrian Wilkinson. 3rd ed. Harlow: Prentice Hall, 2007. Print.

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EduRaven. (2021, December 21). Human Resource Management: Downsizing. Retrieved from


EduRaven. (2021, December 21). Human Resource Management: Downsizing.

Work Cited

"Human Resource Management: Downsizing." EduRaven, 21 Dec. 2021,


EduRaven. (2021) 'Human Resource Management: Downsizing'. 21 December.


EduRaven. 2021. "Human Resource Management: Downsizing." December 21, 2021.

1. EduRaven. "Human Resource Management: Downsizing." December 21, 2021.


EduRaven. "Human Resource Management: Downsizing." December 21, 2021.


EduRaven. 2021. "Human Resource Management: Downsizing." December 21, 2021.

1. EduRaven. "Human Resource Management: Downsizing." December 21, 2021.


EduRaven. "Human Resource Management: Downsizing." December 21, 2021.