18th, March 2013
Most companies are victims of the economic meltdown, which experienced in the previous years. In the aftermath of the financial crisis, most companies have not recovered from the after-effects, and are still struggling to recover, mainly through the adoption of various recovery strategies (Meuse & Marks, 2003). Like other companies in the market, FedEx Corporation, is in need of recovery strategies that will help it regain its profitability and competitiveness in the market. This company has settled for a layoff, which means that a considerable number of its employees will lose their jobs, in order for the company to cut on the costs it incurs, especially on their remuneration. Layoffs have different effects on companies, and if not managed well, these might bear detrimental effects on the company. Therefore, in order to ensure that the expected layoff meets the expected goal of cost cutting, without affecting the company negatively, FedEx Corporation has to either undergo restructuring or maintain its Human Resources practices, in order to cope with the expected layoff. Nonetheless, maintaining its current HR will be more effective, than the company having to undergo restructuring.
FedEx has one of the most notable HRM, known to have propelled the organization to great economic heights. The company’s HRM has had positive effects on its profitability, and this has help it achieve competitive advantages in the market over the years, as it has given the company an edge over its competitors. Therefore, it is more appropriate that this company maintains its HRM, whether it undergoes layoffs, or any other organizational change. In order to develop and establish the current HRM, including tools and practices, FedEx Corporation invested heavily in this. Therefore, abandoning this HRM would mean that the company starts afresh in restructuring another HRM, which would be costly and time consuming. In this case, therefore, restructuring is a bad choice for FedEx Corporation.
According to (Anthony, Kacmar, & Perrewe, 2010), restructuring affects the employees in an organization, as well as the overall HR functions, including recruitment and selection, training, HR planning, employee compensation and benefits, as well as organizational development. Therefore, if FedEx Corporation would choose restructuring, this would mean that it has to as well restructure its HRM, therefore, having to give up on some of the most effective HRM practices that it has previously employed, and which have propelled it to stability and high ranking in the market. This will probably influence the company negatively.
In addition, restructuring comes with a cost. The main reason for contemplating a layoff in this company is to cut on costs, therefore, if restructuring leads to more expenses, then the layoff might not be worthy (Meuse, & Marks, 2003). Nonetheless, restructuring will affect the employees in the company in a negative way, since the company will have to cut on their compensation and benefits, in order to balance the costs incurred in restructuring (Alkhafaji, 2001). Benefits and compensation for employees has been a key way of ensuring employee motivation in FedEx Corporation. Employees are the determinants of a company’s productivity. Therefore, cutting down on their benefits would be a way of demotivating them, thus, they will be less productive, as compared to the previous period, where they were entitled to benefits. This then will lower the company’s productivity, taking it down the economic ladder.
I therefore, recommend that FedEx should maintain its HR, as this has helped it to achieve competitive advantages over decades. The HR system is complex, and includes various high caliber HR practices, including the adoption of technology, retention of employees, employee benefits, training, and communication channels, among others, which have been successful over the years. In case of restructuring, the company will have to give up some of these HR processes, and compromise on others, as a way of cost cutting, or adapting to the new system. Therefore, this might lead to an ineffective HRM, than the one currently adopted. Instead of restructuring, therefore, it is more appropriate if Fed Ex maintains its HR, and works to improve it, and align it to the various needs that will be presented to the company as a result of the expected layoff.
Alkhafaji, A. (2001). Corporate Transformation and Restructuring: A Strategic Approach. New
York: Greenwood Publishing Group.
Anthony, W. P., Kacmar, K. M., & Perrewe, P. L. (2010). Human resource management: A
Strategic Approach. (6th ed.). Mason, OH: Cengage Learning.
Meuse, K. & Marks, M. (2003). Resizing the Organization: Managing Layoffs, Divestitures, and
Closings. New York: John Wiley & Sons.
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