HRM3704 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 challenges although their research and development unit says that the challenge could come from the 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 lifted. They have now become major suppliers of clothing to the rest of the world because of their cheap 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 material to make their own clothes. The above issues have contributed to the company’s poor financial performance over the past five years. To remain competitive, the company has had to cut costs, which has meant a drastic reduction in its global 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 company had upheld ever since its founding decades before. The voluntary programme included incentives for early retirement and expenses incurred if an employee took a job with another noncompetitive 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 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.