cost&benefit
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Cost and benefit of pay offTRANSCRIPT
Company Cost and Benefit AnalysisInappropriate management of workforce reduction perhaps cause major damage to both organizations employment and business reputations in general. amage to the former is able to affect the organizations attracti!eness significantly with potential future employees by producing a bad image of negligence. "imilarly# according to $%ecksher# &''(). Bad publicity o!er retrenchment can cause customers to worry about firm may go out of business or gi!e rise to problems in the continuity or *uality of supplies and ser!ices. +he benefits which organizations claim to be seeking from layoffs are sa!ings in labour costs# time for decision making# better communication# enhanced in!ol!ement of employees and greater responsi!eness to customers $e ,euse et al.#&''-# p.&./). +he primary moti!e for laying off employees is to reduce company labor e0penses. 1ften# companies are said to try to downsize employees at the high end of the pay scale if capable# lower2paid employees are a!ailable to pick up the slack and union agreements do not pre!ent it. 3ages and salaries are usually one of the highest costs companies incur in business operations. Cutting jobs is therefore one of the most efficient ways to significantly lower costs. In certain cases# downsizing is not a mo!e of desperation# but a way to reduce wasted e0penditures on paying employees who add just little !alue to the company. 4egular %4 analysis possibly helps Ban 5iet Bank keep track of how much each position produces and adds !alue to the company. Ifthey find redundancy of roles or employees whose jobs are outdated based on current company objecti!es and business strategy# layoff might be the best option. By cutting insufficient performers# Ban 5iet Bank not only sa!es time and money# but also remo!es some of the bottlenecks that clog up efficiency of other employees and work processes.According to ,ason $&''-) suggest that# howe!er# the results of downsizing were 6illusory7 and the 6terrifying7 in the long2term. ownsizing# it seems# can ha!e a negati!e effect on their corporate performance. Cole $&''8)# drawing from learning theory# pointed out that employee turno!er hurts organizational memory in so far as indi!idual organizational members ha!e 6a primary repository of an organizations operational knowledge and trust7 which cannot be easily replaced as it is impossible to document. +his is especially rele!ant in terms of customer contact as bonds are built with indi!iduals $Cole# &''8# p.&92&(. :*ually# other studies ha!e found downsizing has an ad!erse effect on inno!ation $ougherty and Bowman# &''() and on the bottom line $,c;inley et al.# &''(). :mpirical research has found that companies using layoffs as a strategy for financial impro!ements failed to achie!e their goals# and profit margins# return on assets as well as return on e*uity continued to deteriorate but at an e!en faster rate than prior $e ,euse et al.#&''9 as cited in e ,euse et al.#&''-). Industrial conflict is claimed to make redundancy now so commonplace and wo!en into the fabric of industrial life. It is seen as an ine!itable conse*uence of work in hypercompetiti!e times $ickson and