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Workforce Reduction &HR Competencies: An Exploratory Study
Author(s): Sushmita Biswal Waraich and Gopa BhardwajSource: Indian Journal of Industrial Relations, Vol. 46, No. 1 (July 2010), pp. 100-111Published by: Shri Ram Centre for Industrial Relations and Human Resources
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Workforce Reduction & HR Competencies:An Exploratory Study
Sushmita Biswal Waraich & Gopa Bhardwaj
This study explores the competencies
expected ofHR
professionalswhile
handling the survivors ina downsizingscenario and also describes how
managerial competencies could
change in importance during periods
of significant organizational transi
tion. For the purpose of the study a
competency enquiry listwas generated
through interaction with senior indus
tryprofessionals,both HR and non
HR. The list comprising 10 competencies was administered to 34 top level
managers belonging to 4 organizations (where workforce reduction had
happened in the recent past) in the
manufacturing sector in Delhi and
NCR. The results of the study suggestthat in a downsizing scenario thefive
most important competenciesexpectedto be possessed byHR professionals
are business acumen, interpersonal
understanding, credibility, communi
cation and ability torealignHR policies and practices.
Sushmita Biswal Waraich (E-mail: Sushmita@
waraich.net) is a Doctoral Student in DelhiUniversity. Gopa Bhardwaj is Professor,
(DepartmentfPsychology),Delhi University
Importance of 'Competency'
Designed to help an organizationmeet itsstrategicobjectives throughbuilding human resources capability,
competency modeling has been in ex
istence since the 1970's. An approachto competencies gained momentum by
McClelland's (1973) research. There
is a growing level of interest inmana
gerial competenciesand
managerialperformance with a wealth of litera
ture (Boyatizs 1982, Spencer & Spencer 1993).
The dictionary (Oxford) mean
ing of competence is the ability or
the state of being competent ( com
petent meaning adequately qualified or capable). However, research
literature inHR has brought out dif
ferences between the two terms
competence and competency .As perRowe (1995), competencemeans a skill and the standard of
performance while competencyreferstobehaviour bywhich itwasachieved. Thus, competence de
scribes whatpeople
do andcompe
tency describes how people do it.
100The IndianJournal f ndustrialRelations,Vol.46,No. 1,July 010
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WorkforceReduction & HR Competencies an Exploratory Study
Competence describes what peopledo and competency describes how
people do it.
Whiddett and Hollyforde (2004)viewed that all aspects of competencyframework should be behaviour-based.
According toBoyatzis (1982), A jobcompetency is an underlying charac
teristic of a person in that itmay be a
motive, a trait, a skill, an aspect of
one'sself-image
or socialrole,
or a
body of knowledge which s/he uses .
Referring to competency of a HR pro
fessional, Chanda and Kabra (2000)were of the view that 'the competencyof a professional isdeterminedthroughhis/her evel ofknowledge, capacity toutilize skills and personal attitudes and
values towards theHR function'. Spen
cer and Spencer (2008) defined competency as an underlying character
istic of an individual that is causallyrelated to criterion-referenced effec
tive and/or superior performance in a
job .
Workforce Reduction Scenario
During economic slowdowns,workforce reductions have become
common, though it should be ideallyseen as a last resort. The ultimate pur
pose of downsizing boils down to low
ering the operating expenses by em
ployee elimination to achieve greater
profits for the company (Nair 2008).But the hidden costs are often ignored.
It is not only the victims who are affected but the survivors are equally af
fected.
A downsizing exercise can be said to
be successful only when it can be seen
that the survivors are adapting to the situ
ation comfortably. It has been suggestedthat layoff survivors experience stress that
is as great, or even greater than, the stress
felt by thosewho have been laid off
(Kaufman1982).Studies have shown that
downsizing can have profound effects on
survivors' behaviour including trust and
morale (Fisher 1991), job involvement
(Allen etal 2001),withdrawal (Brockner1990), work effort,
productivity(Brockner et al 1992), and organizationalattachment(Spreitzer& Mishra 2002).
Downsizing can have profound ef
fects on survivors' behaviour in
cluding trust and morale.
Research has
suggested
that that the
role of HR, whilst crucial in sustaininga well motivated workforce has become
very wide-ranging. If organizations are
serious about achieving the envisagedbenefits of downsizing, the implementation of effective people-management
strategies is very important. The role
calls for a range of skills (of HR profes
sionals),competencies
and knowledgeand understanding of organizational de
velopment, employee development, new
forms of employee relations, and en
hanced methods of using competenciesto include behaviours such as managing
ambiguity, insecurity and uncertainty
(Kochanski 1996). Since downsizing is
going tocontinuedue toglobal changesand no
organisation
can
predict
as to
when itmighthave togo forthesame, it
is importantorealise thattheright ay
The IndianJournal f IndustrialRelations,Vol.46,No. 1,July 010 101
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Sushmita Biswal Waraich & Gopa Bhardwaj
to handle survivors is a challenge for
which organisations should be gearedup. In this scenario it has increasinglybeen felt that
along
with the corporate
changes, HR competencies should also
take shape inorder to be able to contrib
ute as a value added function.
Along with the corporate changes,HR competencies should also take
shape in order to be able to contrib
ute as a value added function.
Rationale & Objective of theStudy
In a workforce reduction scenario it
becomes a biggerchallenge forHR professionals as to how to smoothen the exit
process of the victims and keep the sur
vivors motivated. Since decades, com
petencieshave been used in the context
of selection, performance appraisal,
training and development. The presentauthors have tried to look into competencies (of HR professionals) in a
workforce reduction scenario. The re
search was conducted keeping inmind
the suggestions given by senior managers from the industry during interactions
for a larger study related to workforce
reduction. Majority of the practitioners,
especially non-HR,pointedout that Rneeds to play a more active role in a
workforce reduction scenario. Keepingthis inmind itwas felt that itwould becrucial to explore the competencies ex
pected ofHR professionals inorder to
manage the situation effectively.
As pointedoutby Spencer andSpencer (2008), Competencies identifiedby
the competency process are context sen
sitive . Similarly, the current compe
tency study describes what successful
managers in a scenario
specific
to
workforce reduction should do to deal
with the survivors. Will the characteris
tics that predict superior performance in
1990 stillpredict superior performancein2001? Similarly,will the characteristics thatpredictsuperior erformance or
HR professionals in a normal situation
be able topredict superiorperformancewhen
changesare
takingplacein the
organization alongwith thecompulsionto operate with a lean strength? Are cer
tain competencies especially importanta workforce reduction scenario?
The Sample
This studyhad taken intoaccount
onlythe
topmanagement (comprisingdirectors, general managers, vice presi
dents, department heads) from four organizations inDelhi,NCR) from hemanu
facturing sector, where workforce reduc
tion had taken place in the recent past.These top level managers were from both
HR as well as non-HR backgrounds. They
comprised 34 managers (14 managers
belongingtothe R functionnd20man
agers belonging to nofi- HR functions.
The samplingwas purposivewhere the
respondents volunteered for the study.
The Measure
Extensivemeetingswere heldwith 15senior level managers randomly selected
acrossorganizations
and acrossfunctions,who had experience inworkforce reduc
tion scenario. Each of themanagers was
102The IndianJournal f ndustrialRelations,Vol.46,No. 1,July 010
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Sushmita Biswal Waraich & Gopa Bhardwaj
good listener and communicator and
displaying respect for employees. Be
sides, reaching out to the employees'families not only develops a strong
emotionalbondingbutalso instilssense of belong-ingness among the
employees.Saha (2008) isof the iewthat R is themouthpiece of anyvibrant organization as well as the cus
todian of its conscience. Therefore,the challenges that this community
faces, in tough times are to empathisewith employee concerns and play the
role of a humane employer, in such
situations.
HR is themouthpiece of any vibrant
organization as well as the custo
dian of its conscience.
Asexplained by Spencer
andSpencer (2008), inthe ontext fgenericcom
petency model ofmanagers, Interpersonal
Understanding appears most often as:
o Understanding the attitudes,
interests, needs and perspectivesof others.
o Interpreting non-verbal beha
viours, understanding themoodsand feelings of others.
o Knowing what motivates others.
o Understanding both the strengthsand limitations of others.
o Understanding the reasons for
others' behaviour.
Thus, awareness of differences in
interpersonalneeds can help the HR
managers to enhance their relationships.
Credibiltiy # ) is importanthat R
professionals be perceived as fair in
dealing with the situation and creat
ing an impression of credibility.They have to ensure that every as
pect is being handled honestly and
fairly. ovey (1989) uses themeta
phor of an emotional bank account
to describe the amount of trust that
has been built up in a relationship.As trust builds inour emotional bank
account, it becomes the foundation
of regenerative relationships with
others. Then people learn to put all
their ards on thetable todeal withissues and solve problems without
wasting energy focused on differ
ences in personality or position.
Communication Skills (# .5):More
importantthan simply possessinggood communication skills is how
thesame isbeing utilized for reducingtheheartburn f thevictims as
well as the survivors. How well and
how much in advance the victims
were communicated has quite an
impact on the psyche of the survi
vors. Following a downsizing exer
cise, employees' concerns about the
organizations future and their own
jobs get aggravated. Here it is im
portant for theHR managers to talk
to employees on an ongoing basis as
well as create a culture in the organization where the senior management meets people, keeping at baythe fears of the employees. As ob
servedbyBhattacharya (2009), communication is thekey to tackle in
creasing stress levels and uncertaintyat workplaces. When the downturn
caughtupwithMaruti Suzuki India
104The IndianJournal f ndustrialRelations,Vol.46,No. 1,July 010
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WorkforceReduction & HR Competencies: An Exploratory Study
during hefestive easonof2008, the
company put its communication
strategy into top gear, helping
change the entire work environment
for thebetterrather hanyielding toit. he HR head satwith employeestoexplain theglobal crisis.Withoutthis stress on clear communication,
7,000 people could have 7,000 different perceptions.
When the downturn caught up with
Maruti Suzuki India during the festive season of 2008, the company
put its communication strategy into
topgear, helping change the entirework environment for the better
rather than yielding to it.
Ability toRealign HR Practices andPolicies
(# .5): Sittingon the once
framed' practices and policies willnot work in a changing scenario. HR
professionals should be able to re
align HR practices and policies as
the situation demands. Business is
prone to cyclical fluctuations. In dif
ferent stages of the cycle, organizations adopt different business strat
egiesand
accordinglyHR has to re
align practices and policies, e.g., HR
strategy depends upon the business
strategy and on theHR strategy, de
pends, the compensation strategy.HR managers need to understand and
accordinglydesign appropriatemo
tivational and other strategies.
Personal Conviction & Courage (#6): When an organization downsizes,
HR professionals must possess ad
equate mental strength. As put by
Reardon (2007), those who act cou
rageously in business settings have
an instinct for opportunity. Theyread situations quickly, but
they
are
never reckless. Choosing the righttime is themost difficult artof the
courage calculation; it takes a deep
sensitivity to one's surroundings and
a great deal of patience . In essence,
theHR manager must be personallyconvinced about the transition, its
necessity and the consequences fol
lowing
the
change.
HR
professionals must have the grit and determi
nationtohelppeople see through he
change.
Counselling Skills (#7): For victimsis counselling any helpwhen theirbread and butter has been snatched?
For survivors is counselling any
good when insecurity and instabil
ity s loominglarge nd thequestion'maybe I will be the next one' is
haunting their minds? Yes, even in
such a scenario counselling helps
prepare both the victims and survi
vors. HR has to take the lead to en
sure that in this atmosphere of un
certainty all managers are ready to
take the initiative for counselling the
employees. This could reduce thebitter feeling among the victims as
well as the survivors to a great ex
tent. In Waraich and Bhardwaj's
(2009) study,93% of the non-HR
professionals felt thatcounsellingworks only ifdone much beforeworkforce reduction and not just
prior to the time of workforce reduc
tion. According to them, HR's role
incounselling isverycrucialwhichis quite often being overlooked.
The IndianJournal f ndustrialRelations,Vol.46,No. 1,July 010 105
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WorkforceReduction & HR Competencies: An Exploratory Study
As seen inTable 2, business acumen
is considered as a very important com
petency across all the age groups-
topmost
priority iven bythe
youngest,the
middle age groups and second most im
portant for the elder groups. This could
be attributedpossibly to the fact thatwithout business acumen itwould be
difficultforHR managers to plan andunderstand the situation better. Further,thiswill also help carryout theprocess
more effectively i.e. having all the an
swers
ready
to thevolley
ofquestions
posed by anxious survivors.
Business acumen is considered as a
very important competency across
all the age groups.
Interpersonal Understanding occu
piesthe next most
important position
af
ter business acumen across all the age
groups- with the youngest and middle
age group rankingit second and the eldest group ranking the most important.
Interpersonal understanding is requiredtoa greatextentwhile bidding adieu tothe victims as well as handling survivors
especially during such timeswhen the
industryis
plagued by
unrest and uncer
tainty. The maturity and past experienceof the eldest group of managers could
have contributed inranking PU as themost important competency during such
times.
Next, credibility, as a competency has
been ranked as important across all the age
groupsthird nd fifth
bythe
youngestand middle age groups respectively. How
ever, it has been ranked as important as
business acumen by the eldest age group.Personal conviction and courage which
hasnotbeen looked tby thetwoyoungerage groups has been
given importance bythe eldest age group managers. Though it
is a characteristic/trait and not a skill or
knowledge it becomes an important re
quirement during such turbulent times.
Emotional self control has got equal
importance as personal conviction and
courage in the eldest age group. Though,
Spencerand
Spencer (2008)havebeen of
the view that emotional self- control at a
senior level is not mentioned because it
has been ingrained. But the eldest age
groupstillfeelsthat t s n importantequisite formanagers to possess in the postworkforce reduction scenario. Communi
cation has been ranked as the fourth im
portant ompetencyby theyoungestage
groupwhereas for the eldest
age groupcommunication does not feature among the
top five competencies. Counseling skills
have not been looked at among the top five
competenciesby theyoungestage groupwhereas the same have been ranked fifth
and fourth y themiddle and the eldest
age groups respectively. Probably the
youngest age group felt that theuncertaintyand
insecurityfactors are so
highthat sur
vivors will not take the counseling seri
ously. Whereas, the other two age groupsfeel that t ould be ofgreathelp in mooth
ening the transition.
AligningHR practices and policieshave been ranked as a fairly important
competencyby all thethree ge groups.The HR
practicesand
policieswhich
worked fine, prior to theworkforce re
duction need to be re-looked now.
The IndianJournal f ndustrialRelations,Vol.46,No. 1,July 010 107
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Sushmita Biswal Waraich & Gopa Bhardwaj
Table 3: Mean of theRanking Preferences of Competencies of HR Professionals in a PostWorkforce Reduction Scenario among HR and Non-HR Professionals
Deptt. NCompetencies inorderofPriority
HR 14 BAC(2.7) IPU(2.2) COM(1.9) HRP(1.7) PRO(1.6)Non- HR
20_IPU(2.7) BAC(2.6) CRE(2.1) PCC(1.7) HRP(1.6)
Note: The figures inparentheses indicate themean of therankingsgiven by therespondents
As seen inTable 3, while the non
HR professionals gave priorityto thehumaneangle theHR professionals feltthat understanding the organizational di
rection, business challenges, culture etc.
would be most important. Communica
tionoccupied thirdplace forHR professionals, whereas for the non-HR professionals it is credibility. Communication,as a competency, would help theHR professionals inbringing lot f clarity nd
transparency during the post workforce
reduction scenario and thus lessening the
anxiety of the survivors. At the same
time,credibilityof theHR professionals ismore important. The 'communica
tion' part would be more effective if the
survivors look up to theHR professionals as credible
-perceived as fair in their
intentions, it helps them in becomingeffective communicators.
Communication occupied thirdplace for HR professionals, whereas
for the non-HR professionals it is
credibility.
Ability to realignHR practices and
policies is considered an important com
petency for HR professionals- ranked
fourth ndfifthbyHR professionals nd
non-HR professionals respectively. In or
dertobe able todo this, R professionals
need to analyse the current situation as
well as industry benchmarks and work on
aligning theHR practices and policies-
here there would be no room for rigidity.
Pro-activity has been ranked as the fifth
competency by the HR professionalswhich would help prevent knee-jerk reac
tions, leaving an unpleasant taste in the
mouths of the victims as well as the survi
vors. This would require a lotof planning,
thinkingnd commitment,n thepartoftheHR professionals.
It isquite surprising ofind that instead of the HR professionals, non-HR
professionals have given importance to
personal courage and conviction. As ex
plained by Sanghi (2007), 'courage ofconvictions is a belief in one's own ca
pability as expressed in increasingly
challenging circumstances and confi
dence in one's decision or opinions,within the framework of public interest,
ethics, values and organizational integ
rity.tmay includeproviding leadership,direction and inspiration to others bymaking difficult ecision and taking c
tions thatmay not be popular, but are in
the best interest of the organization and
its clients'. Without personal courageand conviction, itmight become difficult leading toa rise in stress levels fortheHR professionals, to operate duringsuch turbulent times.
108The Indian journal of ndustrialRelations,Vol.46,No. I,July 010
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Sushmita Biswal Waraich & Gopa Bhardwaj
emotional self-control combined with
personal courage and conviction of the
HR professionals. The eldest groups'
maturitylevel has made them feel that
some amount of counselling would helpthe survivors in alleviating the anxiety.
Implications of theStudy
The current study has a lot to con
tributeto the world ofwork when itcomes to a workforce reduction sce
nario. Isabella(1989)
has noted thatwhile organizations are usually pre
pared tomeet the needs of thosebeinglaid off, theyare oftenunprepared forthestrong motions, lengthy djustmentperiods, diminished morale and lower
productivity often experienced and ex
pressed by survivors. Thus, it could be
said that the above identified competencies would have
greater implicationsfor
the HR fraternity, especially in a
workforce reduction scenario for man
aging the survivorsaswell as handlingthe situation effectively.
Limitations and Suggestions for
Future Research
Managerswho
agreedto share their
experiences were very few.A bigger
sample from more organizationscould be considered.
The number of competencies exploredin the current studywere very limited
which could be further increased.
For thisstudyonly themanufactur
ing sector has been considered. Butfor future research organizationsacross sectors could be studied.
The same competency enquiry list,ifused again, itwould be better toask the respondents to rank all the
competenciesinorder of
priority,for
better result interpretation.
The competencies could be further
broken down into 'clusters'.
References
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