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Impact of the economic crisis on managing employees.
Strategies to manage employees.
Human resource management is one of the most effective components modern organizations. It has gained even more importance in the times of crisis as it makes of an imperative dimension of crisis management. It has also been identified that human resource policies have a huge impact on people as these policies can bring positive changes in the organisation. In the current scenario, human resource management helps in preventing irreparable damage due to the economic crisis. Organizations have started paying more attention to the role of human resource manager. During an economic catastrophe service circumstances are highly affected which results in less optimistic and pessimistic job conditions at work which are therefore negatively assessed. Even if service becomes even more essential and employees are ready to admit the poor service rank, working state and return of safeguarding present service and job position. The general aggravation experienced must have a harmful impact on Job pleasure both extrinsic and inherent aspects. The economic crisis has a major effect on wage level and employment securities. Walmart has been selected for this analysis. The main aim of this report is to develop an HRM strategy that can protect the company from an economic crisis.
The constantly changing business and economic environment challenge companies to understand the important role of their human resource involvement as a basic procedure of leveraging their employee’s information capability, flexibility, and competence. Economic recession is an era of financial hold up featuring low output, illiquidity and unemployment. Effectual human resource management has become serious is using major outlook of the present financial crisis (Imperatori, 2017). Human resource management refers to the management of people at work in a company. It is concerned with the enlargement and effectual use of human resources to attain organizational aims and objectives.
Unsteadiness of financial environment make the company seeks new approaches of supervising human resource through which they can manage the overwhelming impacts of the monetary crisis. Management impacted by the crisis has no capability to administer human resource leading to the crisis on the labor market; noticeable through the huge reformation of workers, mass resignations, and a sharp lack of novel jobs (Psychogios et al., 2016). It has been identified that the economic crisis can generate a serious disbelieve in the functionality of Financial institution the overall mobility of human resource in common but majorly in times of financial crisis at the international level produce a catastrophe of talents human resource specialist and direct all capital to be capable to resolve this problem.
In addition, the Human Resource Department is highly responsible and involved increasingly to recruit for a vacant position in the corporation and long term planning of labor in the organization. During the crisis HR becomes highly essential to support and prepare adequately. Additionally it is necessary to anticipate fair objectives of the personnel needs. It can help in finding a sufficient number of workforce and appropriate arrangement for each area of expertise. It is important to communicate the real situation to the employees so that they can understand and support in an effective manner. Also, the employee must recognize that the times of crisis unavoidably lead to lesser business jeopardy, bonuses can be abridged or vanish asset layoffs, latest income reimbursement or may not be sufficient cash to pay salaries.
In the situation of an economic crisis, employee motivation cannot be granted but appears the emotion of admiration for the organization's precision. The superior excellence of the association between the member of staff and the superior is a matter worthy of thought. It causes no wealth and has an inspiring impact on the employees. It has also been identified that non-monetary rewards play a crucial role during the disaster. When the organization’s finances are low, workers with extraordinary qualities can be esteemed and legitimately recognized. It is very imperative during the crisis that employees get some job security so the productivity of employees cannot be affected (Arzenšek & Lešnik, 2016). The negative impact of the economic crisis can result in reduction in the motivation at work, steady emotion of uncertainty, reducing organizational commitment, fear of plan plus many other factors; even if the financial disaster provides a series of opportunity like the accessibility of provisional workers to observe job steadiness. At the same time, they can grow to be efficient and looking for an innovative job so that they can achieve a new opportunity. The economic crisis can produce behavioral alteration among workers different from previous crisis so that job insecurity has lead to a reduction in employee competence, communication between managers, and employee. The economic crisis can result in major transformations in the structures and the working style of the organization. It is necessary for the employers to understand the situation and react positively and handle the employees in the most effective manner.
The effectiveness and long-term survival of small and medium-sized companies depend on the strategy developed by structured human resource strategy. During an economic crisis, human resource management plays a very important role in identifying and implementing changes that can protect the company from huge damage. In addition, the goal is not only cost-effectiveness and technological reorientation. Furthermore, Walmart operates in a highly dynamic and competitive environment. Therefore quick reactions are habitually necessary. Because of the changed market situations and challenges the competitiveness of the company can be influenced to a major extent by a human factor as a group of well-trained employees can affect the overall performance goals of the company. In this condition, suitable strategic thinking is highly important. The manager must ensure that all the departments are aware of the new mission and philosophy designed to protect the organization from an economic crisis. In addition, the human resource manager understands that the cost-effectiveness capacity, profitability all depends on the human factors of the organization (Meyer, Morin & Wasti, 2018). In the current scenario, employees are generally expected to be creative, motivated, performing, and adaptive and they should show interest and flexibility as well. During the economic crisis expectations of the employees change towards their work and they want to make sure that they will get job opportunities and their job is secure. Recognizing about impacts of economic recession the human resource manager focuses on evaluating the current situation, cost-cutting, redesign training process, efficiency management, consulting and providing honest information to employees and working on compensation benefits.
The HR initiatives have to be balanced in an effective manner. Also, the cost-cutting is about the immediate activities to reduce the personal expenses of the company but the HR Association initiative has to be focused on the future as well. The personnel are to be the best capital of the organization and HR recession initiatives cannot be focused on full destroyer of the human capital of the company. The employees to be fired have to be selected appropriately and the rest of the employees have to show about the future of the organization. The company has to guarantee the future for the most competitive employees, the key employee's high potentials, and the managers (Markovits, Boer & Dick, 2014). The human resource function has to focus on honest communication in the recession and also inform the employees fairly about the salaries, bonuses the number of employees in the organization (Su & Tang, 2016). In addition, there should be transparency in the process so that employees feel motivated and they can share their issues or concerns. Employees and managers have to follow the fairness and transparency initiatives as they can build trust in the HRM function. The innovation during procession has to focus on the following:
Strategizing for the slowdown:
Walmart must resolve strategy to slow down the growth in the same manner as they would have planned for robust growth. The human resource manager must design and ultimate strategy for the survival of the company and hence a strategy for the slow down is an absolute necessity.
The human resource manager will also focus on reducing costs in order to save the budget for further planning. In addition, the training function also needs to observe this aspect. It will help the company to become fast, appropriate, reliable, possible by cutting down on the fronts link to training (Johnson et al., 2017).
Proactive alert to top management:
Trainers can play a major role in understanding the impact on the organizations and identify the necessary areas which significantly contribute to the growth of the company.
Human resource strategy plays a very important role in designing the effective approaches and strategies that can protect the profitability and productivity of the organization in the most effective manner the most effective manner.
Strategies for the financial crisis include the cost-cutting strategy. During the economic crisis, hiring has slowed but it has not detained. With the slowdown, the human resource manager can achieve the opportunity to assess and involve the hiring practices. The cost-cutting approaches will include restoring how talented employees are selected interviewed and onboarded as well as how offers a structure to increase cost efficiency when times are uncertain. This will help the human resource manager of Walmart to save costs by making hiring practices more effective and reducing employee turnover and improving business productivity through effective hires (Stahl, Brewster, Collings & Hajro, 2020). In addition, the strategy also included compensation planning. The Human resource manager can also review the compensation policy and assess the compensation structures that will best support the company during the time of crisis. Furthermore, compensation planning is imperative to cost-cutting as it helps to show unnecessary expenses or provide an opportunity to find ways that can increase payroll.
Another major element in cost-cutting is training and development. The human resource manager can develop the most efficient training and development programs in order to save additional expenses. In addition, decreasing or eliminate overtime pay for workers can be an effective practice for plummeting operational costs cost in the short term. The company can also choose to eliminate additional cost and it may come to cut the selected group only (Wilkinson & Wood, 2017). In this strategy, the human resource management of Walmart will focus on cutting additional costs rather than the salaries of the employees. The organization understands that cost-cutting may lead to serious issues between employers and employees. It can also affect the overall job satisfaction and increase turnover in the organization. HR will make sure to increase transparency in the organization so that employees can work towards the achievement of goals and objectives.
It has been identified that an economic crisis can influence the overall effectiveness of the organization. Also, human resource plays an imperative role in identifying and managing the organization during an economic crisis. In addition, HR must be responsible for designing effective approaches that can save the organization from severe loss. It has been identified from the overall analysis that an economic crisis can affect the trust and morale of employees. It can also negatively influence their productivity and efficiency. Furthermore, the economic crisis has also given an opportunity to implement major structural changes within the company. The HR professional has selected cost-cutting as the most appropriate strategy to deal with the economic crisis. With the help of this strategy, the company deal with economic crisis as cost-cutting is one of the imperative strategies to save additional expenses.
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Fabiani, S., Lamo, A., Messina, J., & Rõõm, T. (2015). European firm adjustment during times of economic crisis. IZA Journal of Labor Policy, 4(1), 24.
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