Rating Maximum price Number of pages Language HRM3704 Contemporary issues in Human Resource Management

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 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 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.This study source was downloaded by from CourseH on :40:28 GMT -05:00 This study resource was shared via CourseH Page 2 of 9 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). The director then provided the five HR managers with a memo that outlined these policies and also listed four expendable employees from each of their departments. The list ended with this statement: “You are to convince said employees that seeking employment elsewhere would be in their best interest”. The director of HRM went on to explain to the HR group managers that it was up to them to convince the employees to leave and that if they felt that some of the people on the list were there by mistake, they 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 that they had worked at the company, in addition to the mandatory severance pay. However, this offer 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 stay that their pay might be cut or that they might be fired eventually. The HRM director finished her verbal 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. Back in his office, Joe felt deeply troubled by the whole situation. On the one hand, he was aware that the 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 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.This study source was downloaded by from CourseH on :40:28 GMT -05:00 This study resource was shared via CourseH Page 3 of 9 Joe then looked over the names of the employees from the other departments and his heart sank even further. Only the previous week he had played cricket with Pete Briely. Pete was an engineer at Quality Clothing and had been there for about seven years. Joe did not see much of Pete at work, but when their local cricket clubs played against each other, they shared a beer afterwards. The previous Sunday, Pete had told Joe how he and his wife were expecting their third child and as a consequence had put their house on the market and had organised finance to purchase a larger one that they had been admiring. Although the mortgage payments would be steep, especially without a second income until Pete’s wife returned to work, they were looking forward to these new beginnings. They expected to sign the purchase contract in the next week or two. Joe decided to call the other HR managers. They all agreed that it seemed clear that the company was not simply encouraging voluntary participation. Rather, it was pressuring certain employees into quitting, thus making the no-firing policy a mere sham. However, if they failed to carry out the company’s orders, they knew that they would be looked upon as marginal. They told Joe that they did not know how they should proceed. 1.1 Analyse the ethical issues faced by HR managers at Quality Clothing from utilitarian, Kantian, rights and justice perspectives. Start by explaining the meaning of each of these ethical theories. (16) Refer to chapter 8 (Ethical issues and challenges in human resource management) and section 8.3 (Ethical decision-making frameworks) 1.1.1 Utilitarianism Utilitarianism theory stresses the consequences that result from an action or practice (1). The right thing to do, is that which maximises the greatest good for the greatest number of people (1). Utilitarianism requires HR practitioners to implement policies and practices which produce the greatest net benefit for all relevant stakeholders, and not those who produce only the greatest benefit for the enterprise (1). (2 marks for explaining the concept) The majority of people at Quality Clothing (employees and HR managers) were affected negatively by the HR managers’ approach to voluntary resignations (1). This is so, particularly because many weaker employees would be indefinitely laid off, under the pretext that their situation would be temporary (1). Another dire consequence of voluntary resignations would be the departure of capable employees, and the loss of skilled and experienced employees. Employees who agreed to voluntary resignations were mostly motivated by incentives, as per the utilitarianism perspective, to exit the organisation. Hence, in managing these people there was no weighing of all the consequences (good or bad) for those who would be affected by the decision to implement voluntary resignations in the short and long term (1). (2 marks for analysing the ethical issues facing the HR managers)This study source was downloaded by from CourseH on :40:28 GMT -05:00 This study resource was shared via CourseH Page 4 of 9 1.1.2 Kantian duty Kantian duty stresses the importance of an individual duty towards others, rather than the consequences. It challenges management...