HR and Hire and Fire - Dissertation Example

Hire and Fire Submitted by: XXXXXXXXX Number: XXXXXXX of XXXXXXXX XXXXXXX XXXXXXXXX XXXXXXXX Date of Submission: XX – XX – 2010 Number of Words: 2595 (Excluding Bibliography) Introduction: Human resources are the greatest assets to companies and the basic working of organizations is not possible without employees. With the declining economic condition across the world, there have been a number of steps that companies have been adopting to make changes to their business. There have been several reasons for this including cutting costs and also to help the company maintain a balance in the difficult economic conditions. There have been a number of different policies and techniques that companies can adopt to help to deal with the current economic crisis. Of the various techniques, one of the most talked about topic is that of the concept of ‘hire and fire’. There have been a high number of debates that relate to the topic and a chaos if this policy should be implemented in companies or not. This paper aims at discussing in detail the concept of ‘hire and fire’ which has been adopted by companies and how the technique impacts the philosophy of the employees. The paper provides a few examples of companies that have used this method and the impact that has been seen on the employees. Based on the examples that have been discussed, conclusions have been drawn out and recommendations for companies have also been discussed. HR and ‘Hire and Fire’: The current scene in today’s organizations is one with continuous change. The changes that are made in the organizations not only impact the business but also its employees. In an attempt to ensure the maximize the organizational effectiveness and the human potential, the main aim of the human resource managers is to estimate the individual capabilities and the talents and to manage them in an effective and efficient manner (Perchthold & Sutton, 2010). The human resource teams not only work on the hiring of the employees but also need to ensure that the employees that are present in the company can meet the organization goals effectively. As explained by Cherrington, 1995, ‘Human resource management is responsible for how people are treated in organizations. It is responsible for bringing people into the organization, helping them perform their work, compensating them for their labors, and solving problems that arise’ (Cherrington, 1995, p. 5). According to Barber (1998), effective recruitment is essential for an organization’s success, thus after the job analysis phase, the job specification or behavioural competencies are understood, and people with the appropriate skills who would meet the requirements are acquired. It is the role of the HR management to ensure that the resources recruited strategically fit into the organization and contribute positively towards achieving the strategic vision (Emden, 2005). There are seven management functions that the human resources teams specifically address. These include the staffing, performance appraisals, training and development, health and safety and also the human resource research. The strategic planning of an organization depends on the Human Resources Management to a great extent, as HRM plays an important role throughout the life span of an employee in the organization, including recruitment, training, development and retention. One of the processes that the human resources team also works with is the ‘hire and fire’ concept (Moran & Longo, 2006). The ‘hire and fire’ has been explained as, employing new staff and dismissing the old staff frequently. Here the companies take drastic steps and tend to be tough on employees who show lowered levels of performance at the job. Also, the concept of ‘hire and fire’ was basically developed to ensure that the low performing employees are not retained within the company and to ensure that the company does not spend on employees unnecessarily, when there is no return from the employees (HR Link, 2008). Return here, basically refers to the productivity of the employees and the ability to work towards leading the company towards its goals. If an employee is not performing well, the companies can fire the person to ensure that the costs are not wasted. However, over the past few years, this concept has been misused and the human resources teams have been noted to fire employees for different reasons apart from the performance. An excellent example that has been provided in an article by Sinha, it is clear that India has been facing this issue to a great extent (Mullin, 2002). An excellent example that she provides is of a general manager for a shoe company who was stripped off his air conditioned car and he was not allowed to enter the gates of the company, as the security stopped him with the letter of termination at the gate itself. Here the employee was being fired unnecessarily and there was clearly no link to the performance in the company or any performance issue that had come up. This is just one of the few examples that have been discussed. Before moving into the other examples of the cases of Hire and Fire, it is essential to look into the ethical aspects of the concept (Snoeyenbos, et.al., 2001). Ethics and the Concept: As explained earlier, the main aim of the hire and fire concept in businesses was to help the companies be guarded from employees who were under performers. The sole intension of the concept was to ensure that the employees working for the company provide value to the company and help in the overall performance of the company. However in the recent times, with the lowering economies and issues of recession that has been developing, companies are now working towards cutting their costs to the maximum possible. This however has been having a clear impact on the employees (Lapid-Bogda, 2004). Employees have been the ones who have been facing the biggest issues due to the failing economies. Companies have been cutting costs by reducing the work force and by increasing the number of layoffs. Although the global melt down has not been a sudden event, and there have been clear indications of the growing issue over the years, the impact it has caused on the companies and the employees is immense (Gehrke, 2008). Considering this issue on an ethical basis, it is clear that the process of hiring and firing is not ethical and does not in any manner take into account the employees’ perspective. "Ethics is a body of principles or standards of human conduct that govern the behavior of individuals and groups" (Gehrke, 2008). Ethical behavior however also includes a number of other aspects as well. This includes actions of individuals, groups and even organizations. Ethics include "the principles, norms, and standards of conduct governing an individual or group" (Trevino and Nelson, 2003, p. 13). Ethics can also be considered to be a set of standards that need to be used as a guide for action of the individuals and groups. The employees and the unions are the organizational stakeholders of a firm .They determine the way the firm operates and the firm is highly dependent on the employees and vice versa. The employees expect job security and career advancements (Johnson, Scholes and Whittington, 2006, p. 190). Their claims to the organization can affect the product market, as their claim for increase in salaries, will in turn affect the product or service cost. The other important member of the organizational group in a large organization is the trade or the employee union. They claim secure and ideal working conditions for the employees, which might involve increase in costs for the investors. This will affect the customers and there is a chance for them to shift to another provider. Hence the organizational stakeholders have to take into account, the consequences of their claims and act responsibly, so that they as well as the product market stakeholders benefit. The capital market also has to ensure that they share the profit generated with its employees, as they are the ones who create the company’s wealth (Snoeyenbos, et.al., 2001). Ethics in a company mainly are to ensure that the happiness and security of an individual are not violated or encroached upon for the simple need for pleasure of the company (Snoeyenbos, et.al., 2001). It is essential when any steps are undertaken to consider how many people would benefit out of the decision being made and how many people would be harmed in any way. The main aim of any ethics that are incorporated within a company is to make sure that the number of people benefiting from any decision is higher than the people suffering due to the decisions made. It is the moral responsibility of any company to ensure complete confidentiality of the employees, customers and even any person related to the company (Winstanley & Woodall, 2000). In such a case when companies use the technique of hire and fire they are clearly are not being ethical and the rights of the employees are clearly being taken away from them. Above all, it is not ethical for companies to fire employees for no mistake of theirs and only for needs of the business. The impact that the decision can have on the employees and their families can be devastating to a great extent (HR Link, 2008). The financial security of people working in developed countries like UK and US is much higher and there is also a chance for a better standard of life for people in these countries. However considering countries like India and other developing or under developed countries, it is important to note that the use of hire and fire can be very devastating and is not acceptable as a policy at all (HR Link, 2008). For instance, in a recent report, the case of a newlywed IT working couple was presented. The couple had taken a loan from the companies for around Indian Rupee of forty lakh as a home loan. After a few months of buying the house, one of the two was fired from the job as the business was seen to cut down the costs. This led the couple to be faced with major issues as the salaries went in completely for the loan and with only one income in the family, it was virtually impossible to pay back the loan (HR Link, 2008). The couple was also in trouble as due to the recession, there was also a clear decline in the price of the house as well. Hence the couple was unable to pay for the house as well as sell the house. This clearly shows how unethical it is for companies to use the technique of hire and fire. It is important to note that in the case of any business, decisions should be taken based on the good of all within the business (HR Link, 2008). This simply implies that the business should consider all the stakeholders before taking any decision and need to ensure that business decisions is beneficial to all rather than simply creating profits for the company. A few examples of companies that have been using this approach has been discussed in the following section and this helps gain a better perspective of the number of companies that use this method although it is unethical and incorrect for the benefit of the employees (HR Link, 2008). Examples of the Approach: One of the best examples here includes that of NHS, the National Health Service of UK. The company has been noted to be excessively hiring and firing. The organization has seen a high level of attrition of the senior level management. NHS employees have been noted an average working time of one year (HSJ, 2010). After this the employees have been noted to leave the jobs. Other companies that also fall into the same category include AstraZeneca, is another very big company and has cut as many as 15000 jobs and have had plans of cutting out as many as 8000 jobs more in the UK. Similarly even Toyota has cut down almost 750 jobs in the main factory of UK. The company has been noted to have cut down even more jobs across the country (Telegraph, 2010). A report on Guardian explained, “The news of thousands of job losses follows a stark warning from a group of labour market experts earlier this month that unemployment may continue to rise for years after the recession ends” (Allen, 2010). Another company which has been noted to be on a hire and fire spree is ITV, which has been firing employees for speaking up to the bosses and not being pushed around by their bosses. An unbelievable issue that has been presented is one faced within ITV, where two reporters who were good at their jobs were not allowed to work in the company any longer as because they wanted to travel abroad for short courses (ET, 2010). This again is a very wrong reason for the companies to fire employees and is not ethical. The above mentioned are a few of the examples of companies that misuse the ‘hire and fire’ process. Conclusions and Recommendations: In conclusion, it can be clearly said that the concept of ‘hire and fire’ has been developed with the aim of helping companies ensure that the employees working within the organization were effective and efficient and to ensure that the expenses of the company was not on unnecessary pays to employees who did not work well. However, the concept has changed to a great extent and now companies misuse this to meet the needs of the business and to ensure that the business gains profits (O’Brien & O’Halloran, 2010). The ethical aspect of the concept and the importance that needs to be provided to the employees has been fading away over the years. It is also important to note that in the current time where the companies are being faced with the recession and many companies have even needed to file for bankruptcy, the technique of hire and fire is becoming more prevalent and this is being used by companies to cut costs and reduce the overall expenses. Recommendations to companies is to ensure that the ethical aspect of the techniques is kept in mind while any hiring and firing process. Also, it is essential that the companies follow a few simple steps to avoid litigation and to avoid any form of liability (O’Brien & O’Halloran, 2010). For instance, while companies hire professionals for the job, they need to ensure that the hire is based on lawful criteria without any form of discrimination or any form of bias. Also, hiring should be based on skills and qualifications rather than on any other basis. Also, it is the duty of the human resource teams to ensure that employees are treated with all fairness and there is in no way a lack of dignity or consistency and respect while engaging with the employees. Also, termination or firing an employee should be on a strong basis and with enough proof that the employee has not been able to prove themselves or lacks discipline (O’Brien & O’Halloran, 2010). It is important to conclude, trying to cut jobs is not a technique to help face the recession. Examples of companies like Six Flags, who have being dealing with layoffs in order to deal with the increasing costs is not an option and is not an ethical manner of dealing with recession (Lalate, 2010). Companies need to face recession with prudent strategies and with excellent management rather than lawsuit termination of employees. The issue of recession should not be used as a reason to apply the technique of ‘hire and fire’, and businesses that do so will eventually face a higher number of issues. 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