Contemporary Issues in Managing Human Resources:

we’ll include this chapter by looking at some contemporary HR issues that today’s managers
face: managing downsizing, managing workforce diversity, managing sexual harassment,
managing work-life balance, and controlling HR costs.

 Managing Downsizing
 Managing Workforce Diversity:
Recruitment
Selection
Orientation and Training
 Managing sexual harassment:
Sexual Harassment
Workplace Romances
 Managing work-life balance:
Family friendly benefits
 Controlling HR Costs:
Employee Health Care cost
Employee Pension Plan Cost

Managing Downsizing:

Downsizing is the planned elimination of jobs in an organization. When an organization has too
many employees—which can happen when an organization is faced with declining market
share, has grown too aggressively, or has been poorly managed—one option for improving
profits is to eliminate some of those excess workers. Many well-known companies have
downsized or eased out employees because of poor performance, including Jet Airways,
Kingfisher, GoAir, HLL, Infosys, IBM, ICICI, and Accenture. How can managers best manage a
downsized workplace? Disruptions in the workplace and in employees’ personal lives should be
expected. Stress, frustration, anxiety, and anger are typical reactions of both individuals being
laid off and job survivors. The following exhibit lists some ways that managers can reduce the
trauma.

Tips for Managing Downsizing:

§ Communicate openly and honestly:

Inform those being let go as soon as possible
Tell surviving employees the new goals and expectations
Explain impact of layoffs
§ Follow any laws regulating severance pay or benefits
§ Provide support/counseling for surviving employees
§ Reassign roles according to individual’s talents and backgrounds
§ Focus on boosting morale:
Offer individualized reassurance
Continue to communicate, especially one-on-one
Remain involved and available

Have a plan for the empty office spaces/cubicles so it isn’t so depressing for
surviving employees.
Managing Workforce Diversity:

We’ve discussed the changing makeup of the workforce in several places throughout the book
and provided insights in “Managing Workforce Diversity” boxes in several chapters. In this
section, we discuss how workforce diversity is directly affected by HRM activities.

‡ Recruitment
‡ Selection
‡ Orientation and Training

Recruitment:

To improve workforce diversity, managers need to widen their recruiting net. For example, the
popular practice of relying on employee referrals as a source of job applicants tends to produce
candidates who are similar to present employees. The Tata Group has used this to its
advantage in recruiting diverse employees. The company’s positive experience with a hearing-
impaired employee led to hiring other hearing-impaired employees through employee referrals.
But not every organization has this option. So managers may have to look for diverse job
applicants in places they might not have looked before: women’s job networks, over-50 clubs,
urban job banks, training centers for disabled individuals, ethnic newspapers, and gay rights
organizations, for example. Such nontraditional recruiting should enable an organization to
broaden its pool of diverse applicants.

Selection:

When a diverse set of applicants exists, managers must ensure that the selection process does
not discriminate. Moreover, applicants need to be made comfortable with the organization’s
culture and be made aware of management’s desire to accommodate their needs. For instance,
Microsoft strives to hire a high percentage of female applicants, especially for technical jobs,
and to make sure those women have a successful experience once they’re on the job.

Orientation and Training:

The outsider-insider transition is often more challenging for women and minorities than for white
males. Many organizations provide special workshops to raise diversity awareness issues. For
example, at a Kraft manufacturing facility, managers developed an ambitious diversity program
that reflected the increased value the organization had placed on incorporating diverse
perspectives. Among other things, they trained more than half of the plant’s employees in
diversity issues.

Managing Sexual harassment:

In India, it has been 11 years since sexual harassment was for the first time recognized by the
Supreme Court as human right violation and gender based systemic discrimination that affects
women’s right to life and livelihood. The Court has given mandatory guidelines, known as
Vishaka Guidelines, for resolution and prevention of sexual harassment. The sexual
Harassments of women at Work Place (Prevention, Prohibition And Redressal) Bill was passed
in 2006. Ninety two percent women said sexual harassment had a detrimental effect on their
work (Sanhita studiy), and studies by the International Labor Organization also document the
high cost of sexual harassment as poor organizational image, low work productivity, poor
employee morale, high legal costs, mounting medical bills, and high employee turnover. In a
study of working women in Maharashtra, the incidence of sexual harassment of women at work
place was reported to be 17 percent in organized sector and 20 percent in unorganized sector.

Sexual harassment is not a local problem. It’s a global issue. For instance, data collected by the
European Commission found that between 30 and 50 percent female employees in European
Union countries had experienced some form of sexual harassment. And sexual harassment
charges have been filed against employers in other countries, such as Japan, Australia, New
Zealand, and Mexico.

Even though discussions of sexual harassment cases often focus on the large awards granted
by courts, there are other concerns for employers. Sexual harassment creates an unpleasant
work environment and undermines workers’ ability to perform their job.

Sexual harassment is defined as any unwanted action or activity of a sexual nature that
explicitly or implicitly affects an individual’s employment, performance or work environment. It
can occur between members of the opposite sex or of the same sex.

Many problems associated with sexual harassment involve determining exactly what constitutes
this illegal behavior. The Bill defines “Sexual Harassments” as such unwelcome sexually
determined behavior such as physical contact, advance, sexually colored remarks, showing
pornography, or making sexual demands, whether verbal, textual, graphic or electronic, or by
any other actions, which may contain: (a) implied or overt promise of preferential treatment, (b)
an implied or overt threat of detrimental effects the present or future employment status of that
employee and includes the creation of a hostile working environment, and (c) the conduct
interferes with an employee’s work or creates an intimidating, hostile, or offensive work
environment or humiliating and may constitute a health and safety problems. For many
organizations, it’s the offensive or hostile environment issue that is problematic. Managers must
be aware of what constitutes such an environment. Another thing that managers must
understand is that the victim doesn’t necessarily have to be the person harassed but could be
anyone affected by the offensive conduct. The key is being attuned to what makes other
employees uncomfortable—and if we don’t know, we should ask!

What can an organization do to protect itself against sexual harassment claims? The courts
want to know two things: First, did the organization know about, or should it have known about,
the alleged behavior? And second, what did managers do to stop it? It’s vital that all employees
should be educated on sexual harassment matters. In addition, organization need to ensure that
no retaliatory actions—such as cutting back hours or assigning back-to-back work shifts without
a rest break—are taken against a person who has filed harassment charges. One final area of
interest we want to discuss in terms of sexual harassment is workplace romances.
Workplace Romances:

Have you ever dated someone at work? If not, have you ever been attracted to someone in
your workplace and thought about pursuing a relationship? Such situations are more common
than you might think: 16 percent of employees surveyed in India by the Team Lease Services
said that they have had an office romance. And another survey in US found that 43 percent of
single men and 28 percent of single women said that they would be open to dating a coworker.
The environment in today’s organizations, with mixed-gender work team and long work hours,
has likely contributed to this situation. “People realize they’re going to be at work such long
hours, it’s almost inevitable that this takes place,” said one survey director. But workplace
romance can potentially become big problem for organizations. In addition to the potential
conflicts and retaliation between coworkers who decide to stop dating or to end a romantic
relationship, more serious problems stem from the potential for sexual harassment accusations,
especially with relationship between a supervisor and a subordinate. The standard used by
judicial courts has been that workplace sexual conduct is prohibited sexual harassment if it is
unwelcome. If it’s welcome, it still may be inappropriate, but it usually is not unlawful.

What should managers do about workplace romances? It’s important to have some type of
policy regarding workplace dating, particularly in terms of educating employees about the
potential for sexual harassment. However, because the potential liability is especially serious
when it comes to supervisor-subordinate relationship, a more provocative approach is needed in
terms of discouraging such relationship and perhaps even requiring supervisors to report any
such relationships to the HR department. At some point, the organization may even want to
consider banning such relationships, although an outright ban be difficult to enforce.

Managing Work-Life Balance

Smart managers recognize that employees don’t leave their families and personal lives behind
when they come to work. Although managers can’t be sympathetic with every detail of an
employees’ family life, organizations are becoming more attuned to the fact that employees
have sick children, elderly parents who need special care, and other family issues that may
require special arrangements. In response, many organizations are offering family-friendly
benefits, which accommodate employees’ needs for work-life balance. They have introduced
programs such as on-site child care, summer day camps, flextime, job sharing, and time off for
school functions, telecommuting, and part-time employment. Work-life conflicts are as relevant
to make workers with children and women without children as they are for female employees
with children. Heavy workloads and increased travel demands have made it difficult for many
employees to satisfactorily juggle both work and personal responsibilities. A fortune survey
found that 84 percent of male executives surveyed said that “they’d like job options that let them
realize their professional aspirations while have more time for things outside work.” Also, 87
percent of these executives believed that any company that restructured top-level management
jobs in ways that would both increase productivity and make more time available for life outside
the office would have a competitive advantage in attracting talented employees. Younger
employees, particularly, put a higher priority on family and a lower priority on jobs and are
looking for organizations that give them more work flexibility.
Today’s progressive workplaces must accommodate the varied needs of a diverse workforce.
How? By providing a wide range of scheduling options and benefits that allow employees more
flexibility at work and that allow them to better balance or integrate their work and personal lives.
Despite these organizational efforts, work-life programs certainly have room for improvement.
One survey showed that more than 31 percent of college-educated male workers spend 50 or
more hours per week at work (up from 22 percent in 1980) and that about 40 percent of US
adults get less than 7 hours of sleep on weekdays (up from 34 percent in 2001). What about
women? Another survey showed that the percentage of American women working 40 hours or
more per week had increased. By the way, this survey showed that the percentage of European
women working 40 hours or more had actually declined. According to the findings of a survey
conducted by TeamLease in February 2008 on “India’s changing world of work,” 87 percent of
the respondents were satisfied with their work-life balance and about 70 percent felt that Indian
organizations have flexible policies for employees that allow them to maintain work-life balance.
This survey had only 401 respondents from 500 top companies of India. However, 54 percent
feel that they have become “weekend parents,” 34 percent feel that two careers substantially
increase the chances of a divorce, and 32 percent feel that it is not possible for women to
pursue their careers after a child break. Other workplace survey still shows high levels of
employee stress stemming from work-life conflicts. And large groups of women and minority
workers remain unemployed or underemployed because of family responsibilities and bias in
the workplace. So what can manager do?

Research on work-life balance has shown that there are positive outcomes when individuals are
able to combine work and family roles. As one study participant noted, “I think being a mother
and having patience and watching someone else grow has made me a better manager. I am
better able to be patient with other people and let them grow and develop in a way that is good
for them.” In addition, individuals who have family-friendly workplace support appear to be more
satisfied on the job. This seems to strengthen the notion that organizations benefit by creating a
workplace in which employee work-life balance is possible. And the benefits are financial as
well. Research has shown a significant, positive relati8nship between work-life initiatives and an
organization’s stock price. However, managers need to understand that people differ in their
preferences for work-life scheduling options and benefits. Some prefer organizational initiatives
that better segment work form their personal lives, and other prefer programs that facilitate
integration. For instance, flextime schedules segment because they allow employees to
schedule work hours that are less likely to conflict with personal responsibilities. On the other
hand, on-site child care integrates the boundaries between work and family responsibilities.
People who prefer segmentation are more likely to be satisfied and committed to their jobs
when offered options such as on-site child care, gym facilities, and company-sponsored family
picnics.
Controlling HR Costs:

HR costs are skyrocketing, especially the cost of employee health care and employee pension.
Organizations are looking for ways to control these costs.

ΠEmployee Health care cost

ΠEmployee pension plan costs

Employee Health care cost:

HCL Comnet has set up Employee First Councils in five area of which wellness is one of them.
The Wellness council conducts health checkups for employees. Johnson and Johnson reports
saving $8.5 million per annum in the form of reduced employee medical claims and
administrative savings because of focusing on a healthy employee and healthy workplace. Ritu
Anand, at TCS, says that they strive to make work a joyful experience through “Maître,” a
unique platform for all employee engagement activities. Different clubs like Theater Club,
Adventure and Trekking Club, Fitness Club, Sanctuary Club, among others facilitate fun at work.
These clubs organize various events for TCS employees. These entire examples illustrate how
companies are trying to control skyrocketing employee health care costs. The Employer Health
and Wellness Program study estimates that China will lose $558 billion, India $237 billion, and
Russia $303 billion in national income from 2005 to 2015 due to only three chronic diseases:
heart disease, stroke and diabetes. And smokers raise the rates for companies even more:
They cost about 25 percent more for health care than do nonsmokers. Another health care cost
for companies is obesity, which costs organizations an estimated $45 billion per year in medical
expenditures and absenteeism. A study of manufacturing organizations found that
presenteeism, which is defined as employees showing up at work but not performing at full
capacity, was 1.8 percent higher for workers with moderate to severe obesity than for all other
employees. The reason for the lost productivity is likely the result of reduced mobility because of
body size or pain problems such as arthritis. Is it any wonder that organizations are looking for
ways to control their health care costs?

How can organizations control their health care costs? First, many organizations are providing
opportunities for employees to lead healthy lifestyles. From financial incentives to company-
sponsored health and wellness programs, the goal is to limit rising health care costs. About 41
percent of companies are using some type of positive incentives aimed at encouraging healthy
behavior, up from 34 percent in 1996. Another recent study indicated that nearly 90 percent of
companies surveyed planned to aggressively promote healthy lifestyles to their employees
during the next three to five years. Many are starting sooner: Google, Akruti City of Mumbai,
Patni, and others are putting health food in company break rooms, cafeterias, and vending
machines; providing deliveries of fresh organic fruit; and imposing “calorie taxes” on fatty foods.
In the case of smokers, some companies have taken a more aggressive stance by increasing
the amount smokers pay for health insurance or by firing them if they refuse to stop smoking.
Employee Pension Plan Costs.

In addition to health care, another area where organizations are looking to control cost is
employee pension plans. Corporate pensions have been around since the nineteenth century.
But the days when companies could afford to give each employee a broad-based pension that
provided a guaranteed retirement income have changed. Pension commitments have become
such an enormous burden that companies can no longer afford them. In fact, the corporate
pension system has been describe3d as “fundamentally broken.” It’s not just struggling
companies that have eliminated employee pension plans. Lots of reasonably sound companies
—for instance, NCR, FedEx, Lockheed Martin, and Motorola—no longer provide pensions. Even
IBM, which closed its pension benefits, would be frozen. Obviously, the pension issue is one
that directly affects HR decisions. On the one hand, organizations want to attract talented,
capable employees by offering them desirable benefits such as pensions. On the other hand,
organizations have to balance that with the costs of providing such benefits.