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Downsizing the Organization

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The recent economic problems felt in the United States have left a lot of managers, and the department heads in a dilemma. This is because most of the department heads have been left with a tough decision to make with regards to their organizations. Some have felt the great economic sting and have resulted to department downsizing and budget cuts. The managers and department heads have to come up with administration approaches that will keep their employees motivated especially in these tough economic times. Employee motivation is a very sensitive area that needs to be addressed by employers especially when dealing with the surviving employees in an organization after downsizing or budget cutting in the organization.

Downsizing an organization normally means reducing the operating costs of a company and reducing the overall size of the organization. The most direct approach for downsizing is laying off of employees in the organization. An organization may feel the need to downsize its staff if it has too many employees and also if they want to increase the efficiency. An organization may have too many redundant departments that do not play any role in the organization and so the only solution is to downsize the departments. On the point of efficiency, the organization may decide to replace a large number of people with machines since machines are known to be very efficient. An organization needs to invest its energy on the employees who remain in order to give them motivation and to gain their trust again. This can be done by assuring them that they are very valuable to the organization and also explaining to them why they had to downsize the employees. This type of communication should be done on a personal level (Heathfield, 2011).

A budget cut, on the other hand, is the budget reductions made by the organization to cut down the costs that the organization is incurring. There are several reasons as to why an organization needs to budget cut. One of the reasons is that there may be the new emergence of other providers, which results to, lower demand of the organization’s products and services. Another reason is that there may uncontrolled spending in times of slow revenue growth. This can attract budget cuts since the organization needs to maintain equilibrium with its revenue and its costs. There may also be an unusual cost effect that drives costs up and the effect may find the organization unawares and so the organization is unable to raise enough revenue to counter the costs. Lastly price competition may force an organization to budget cut since when the competitors reduce their prices the organization has to do the same if it wants to remain in the market (Maddox, 1999).

Six points for effective employee motivation

Employee motivation is usually the key to performance improvement in an organization since with employee motivation comes their employee satisfaction. Employee motivation does not only concentrate on the money factor but also on other factors. Heathfield (2011) looks into the several specific actions that a manager can take so as to increase employee motivation. One is that the senior staff should give employees a lot of attention and constantly communicate with them as this gives the employees motivation since they feel that they are well involved with the senior staff. The managers should congratulate the staff and also enquire about the life events happening in the employees lives.  Two, the managers should communicate to the employees about any new information related to job performance as this ensures that the employees are more effective.  Such information can include things like training opportunities, customers’ feedback and also changing dates of events that had been earlier set. Thirdly, the supervisors in charge of any group of employees should ensure that they maintain a responsive and involved relationship with their employees. The supervisors should interact frequently with the employees and encourage them to air al their ideas regardless of whether they believe that the ideas will work. This makes the employee feel highly motivated.

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Fourthly, the managers of an organization that is facing problems should ensure that after downsizing the firm, the remaining employees are still provided for a chance to expand on their skills and abilities. The managers should try and cross train their employees since they will be assigned roles which are not usually done on a routine basis and this not only breaks the monotony but also develops well-rounded employees. Five, the managers should ensure that they show appreciation for any job that has been done by the employees. They should show that they recognize the employees’ efforts. This does not only mean money gifts but also verbal expressions of appreciation, small tokens like thank you notes and cards. The sixth point is that employees derive motivation from the nature of the work provided for them. If the managers want to increase motivation in an employee, they should grant him a voice in meetings, give him the opportunity to make decisions for himself, provide them new levels of responsibilities, as this is an indication that they can handle big responsibilities in the organization. Lastly, if the managers want to motivate their employees they should have prompt responses to any complains that the employee brings forward. They should keep them updated on how they intend to address the issues and even though the complaints made are not resolved to the employees’ satisfaction, the fact that the managers put an effort in trying to solve the issues keeps them highly motivated. The managers should also try and encourage their employees to bring any queries forward regarding the tasks to be performed. 

Theory X and theory Y of Douglas McGregor that explained on employee motivation 

Theory X had several assumptions. It assumed that the average employee disliked work and would do his best to avoid it, was self-centered and cared less about the organization, wanted to be a leader and not a follower and id not wish to have any responsibilities, highly resists change and is not very intelligent. Theory X assumed that the employee works only for the sake of the money he receives. The management that rules in theory X can either be hard approach or the soft approach. While the hard approach relies on threats, tight controls and coercion, the soft approach relies on permissiveness and seeks to achieve harmony with the employees in hopes of gaining cooperative employees. Under theory X, the optimal management approach lies somewhere in the middle of the two extremes since the hard approach results to deliberate low output, union demands and hostility while the soft approach results to an increasing request for more rewards by the employees. The problem with theory X is that it mainly relies on monetary rewards and so this hinders the satisfaction of the higher-level needs.

Managers who practice Theory Y know that the higher-level needs of self-esteem and self-actualization are never completely satisfied and so they concentrate on satisfying these needs so as to motivate their employees. The assumptions made by this theory are that employees regard work to be natural like play and rest, employees will self-direct themselves to meet their work objectives, and that the employees will be committed if they are assured that the rewards will somehow address their higher needs. In this theory, the employees align their personal goals with those of the organization in a quest of gaining fulfillment. However, this does not mean that the soft approach is implemented, since most of the employees have not attained a level of maturity. There still has to be some form of control until the employee gains full development. 

During the tough economic times, the organization must look for an administrative approach that motivates its employees especially after cutting down on budgets and also after downsizing the departments.

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