The Importance of Strategic Management when Downsizing Employees

  1. Approach to the organizational mandate
    1. Purpose of the paper

The purpose of this project is to effect change management in a 200 bed healthcare institution known as Roxboro Medical Center. The last two years has seen the institution lose 25% of its market share and this has led it not to operate optimally.  The loss of its market share has resulted in a considerable decrease in its revenue and this has resulted in a decrease in its profits. This has called upon the management team to implement drastic managerial changes that will see a number of employees lose their jobs in the process (Hussey & Sharon, 2016). The purpose of this paper is to discuss the exact strategic management strategy the management team will seek to implement to help the institution adjust to this new challenge and help the organization attain its set goals and objectives as it continues to offer high quality services to its clients. 

  1. Overview of the tasks, potential challenges, and implications of a reduction in workforce

Roxboro Medical Center a 200-bed inpatient healthcare facility has been performing exceptionally well until two years ago when The Jonas Center, a 100-bed day hospital and ambulatory institution was constructed about 25 miles away. The first year when The Jonas Center started its operations, Roxboro Medical Center lost 10% of its market share. To adjust to this lose, the management team did internal reconstruction that saw the organization operate efficiently (Hussey & Sharon, 2016). The second year saw the company lose a further 15% of its market share. This has hit the company hard making it necessary for the management team to restructure its structure and reduce the number of its employees holding managerial positions. The projected percentage of employees that need to be let go is about 30%. These employees should be let go in the next six months. 

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Cutting back on the number of employees will be beneficial to the organization in a number of ways. Firstly, the organization will be able to reduce on its operations costs hence be able to post some profits in its financial books. This is very important as an organization that runs at a loss might find it very hard to attain its goals and objectives because it may lack resources that may be used to finance important projects (Hussey & Sharon, 2016). A reduced workforce in the institution will also ensure that no employees perform or duplicate the responsibilities of each other. This is important as it brings about efficiency in the institution’s operations and reduces conflicts between employees because each employee knows their duties and responsibilities making it possible for the company’s operations to run efficiently and smoothly. 

In implementing this strategy, a number of challenges will be faced and it is up to the management team to ensure that these challenges are dealt with smoothly to ensure the overall objective of this project is attained. Resistance to change by employees will be one of the major challenges the implementers of this project will have to deal with. Malgady (2016) states that employees cut down in an organization are one of the major factors that contribute to anxiety, low morale and motivation, as well as resistant to change. These factors lead to low productivity in the organization and it is therefore important for the project implementers to ensure that employees are managed properly during this period to ensure short-term goals are not jeopardized by lack of employees’ production. Another challenge that will be faced by the organization is that downsizing requires financing and this might not be readily available now because of the decrease in revenues streams in the institution. For this reason, it will be very important for the management team to work closely with the finance department to ensure that the company has the necessary funds that will be used to pay off the contacts of the employees that will be let go in this operation. Finally, the organization should be able to deal with the negative impact brought about by downsizing its employees. Organizations that cut down their employees in a bid to reduce their operation costs paint themselves in a bad light hence tainting their reputations among different stakeholders. Many are viewed as organizations that are not able to cope in this challenging and competitive environment hence their ability to offer high quality services to their customers can be challenging. For this reason, Roxboro Medical Center should have a good Public Relations team with the sole responsibility of communicating to the public and other stakeholders and assure them that the organization is still committed to offering high quality healthcare services to its customers and at a competitive price (Hussey & Sharon, 2016).        

Reducing the number of employees in an organization may have a number of implications to an organization operations and profitability. Even Roxboro Medical Center will benefit in that it will have low costs in terms of salary paid, downsizing of a number of employees may have ripple effect on the other employees who may also think their positions in the organization are not secure. This may lead to low morale making leading to low productivity by the employees (Hussey & Sharon, 2016). This may lead to a situation where the organization might not attain its core objective of offering high quality healthcare services to its customers. For this reason, it is imperative for the organization to manage this process very delicately to ensure that all employees understand what is happening. All employees should also know the main reason why the institution is taking the drastic action of reducing its number of employees.       

  1. Part II: Reduction in Workforce-Deciding
    1. Using Human Resources (HR) metrics Table 1
      1. Approach, choices, rationale

I as the Chief Nursing Officer will have the biggest role to play in this downsizing process because I head the biggest department in the institution. I have been directed to let go of ten employees from my department. The table below shows the employees I will recommend to be dismissed. 

Roxboro Medical CenterHuman Resources Manager Work Metrics
PositionYears since Hire Time in ManagementPerformance RatingAve/RecentUnit Size/ number of bedsRIF or StayRationale
HS.1103 yearsHigh/High200Retained
HS.2128 yearsHigh/High200Retained
HS.31512 yearsHigh/Low200Should be let go
UM.162 yearsHigh/High20Should be let go
UM.2518 monthsHigh/High30Should be let go
UM.342 yearsHigh/Low20Should be let go
UM.45 yearsHigh/Low30Retained
UM.5109 mothsHigh/High15Retained
UM.6155 yearsHigh/Low30Retained
CN.151 yearHigh/High30Should be let go
CN.284 yearsHigh/High20Should be let go
CN.332 yearsHigh/High30Should be let go
CN.426 mothsToo soon to evaluate20Should be let go
CN.5124 yearsHigh/Low20Retained
CN.662 yearsHigh/Low30Should be let go
CN.783 yearsHigh/Low20Should be let go

Choosing who to retain and who to let go has been very hard. All the employees working in this organization were hired through a very competitive process so all of them are competent, skilled, and experienced to perform their work at their workstations. However, being tasked with the responsibility of choosing ten of them to be let go I had to come up with a way to choose then of them to let go. The main criteria or rational I used was I chose those employees that had stayed in the organization for a long time. I believe that it is important to offer the new employees opportunity to show us what they can offer the organization in terms of ideas (Sekhar & Zablon, 2017). The main challenge I faced was to explain to those I had chosen to go why I had made that decision.  

  1. Part III: Reduction in Workforce-Planning the Change
    1. Overview of reorganization plan including timeline

Having reduced the workforce by 30%, it is imperative to mention that the operations of the nursing department have to be changed in a drastic way. We now have two House supervisors. They will be working in shifts at all times. The number of Unit managers and House Charge has also been reduced considerably. It will be the duty of the House Supervisor to come up with duty charge that will allocate all nurses days to work and when they will be off duty (Sekhar & Zablon, 2017). 

  1. Plan for change and application of Kotter’s or Rogers’ change model

Planning for change is one of the most important aspects in change management as it enables an organization management team to prepare employees and other stakeholders about the impending changes as well as prepare for the challenges that are likely to be faced and come up with measures aimed at overcoming the challenges. Many models can be applied in the case of Roxboro Medical Center (Malgady, 2016). However, the eight step Kotter’s change model would be the best to apply in this case scenario. Kotter’s change model has eight important phases and all of them can be used in this case scenario to ensure there is a smooth change in the operations of the organization. The first phase is to establish a sense of urgency. In this case, the hospital management team would establish a sense of urgency because of the dwindling market share to create measures that can help the organization to start operating in a profitable manner. The second phase would be to create a powerful coalition led by head of departments who will be responsible for choosing the employees to be let go by the company. The third phase is creating a vision to guide the organization in moving forward post the downsizing process. It is also important for this vision to be communicated eloquently to the employees, as this would help them understand the direction the institution is taking. It will also be important to make changes that make improvements as well as institutionalizing new approaches that can lead the organization into new successes amid stiff competition posed by other players in its industry. 

  1. Anticipated conflict and the benefits of using a change model

The new changes at the Roxboro Medical Center are bound to create conflicts among the different employees. For this reason, it would be very important for the hospital management team to create a conducive environment where employees can work in harmony with one another at all times. The remaining employees should be empowered and motivated to work harder at all times. Some motivation strategies the organization can use may include paying them competitive wages as well as coming up with reward systems that seeks to reward the most hard working employees at all times. This would encourage employees to work harder and ensure the institution attain its objectives. 

  1. Summary/Conclusions

Letting go of employees can be a very hard decision to make but sometimes it is the only choice managers should take if an organization is facing some challenges. Roxboro Medical Center has been facing major challenges that could only be solved through downsizing the number of employees (Sekhar & Zablon, 2017). The process was conducted in a human manner where all employees where informed of decisions affecting them and all of them where compensated for the dismissals.



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