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Workforce Reduction &HR Competencies: An Exploratory Study

Author(s): Sushmita Biswal Waraich and Gopa BhardwajSource: Indian Journal of Industrial Relations, Vol. 46, No. 1 (July 2010), pp. 100-111Published by: Shri Ram Centre for Industrial Relations and Human Resources

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Workforce Reduction & HR Competencies:An Exploratory Study

Sushmita Biswal Waraich & Gopa Bhardwaj

This study explores the competencies

expected ofHR

professionalswhile

handling the survivors ina downsizingscenario and also describes how

managerial competencies could

change in importance during periods

of significant organizational transi

tion. For the purpose of the study a

competency enquiry listwas generated

through interaction with senior indus

tryprofessionals,both HR and non

HR. The list comprising 10 competencies was administered to 34 top level

managers belonging to 4 organizations (where workforce reduction had

happened in the recent past) in the

manufacturing sector in Delhi and

NCR. The results of the study suggestthat in a downsizing scenario thefive

most important competenciesexpectedto be possessed byHR professionals

are business acumen, interpersonal

understanding, credibility, communi

cation and ability torealignHR policies and practices.

Sushmita Biswal Waraich (E-mail: Sushmita@

waraich.net) is a Doctoral Student in DelhiUniversity. Gopa Bhardwaj is Professor,

(DepartmentfPsychology),Delhi University

Importance of 'Competency'

Designed to help an organizationmeet itsstrategicobjectives throughbuilding human resources capability,

competency modeling has been in ex

istence since the 1970's. An approachto competencies gained momentum by

McClelland's (1973) research. There

is a growing level of interest inmana

gerial competenciesand

managerialperformance with a wealth of litera

ture (Boyatizs 1982, Spencer & Spencer 1993).

The dictionary (Oxford) mean

ing of competence is the ability or

the state of being competent ( com

petent meaning adequately qualified or capable). However, research

literature inHR has brought out dif

ferences between the two terms

competence and competency .As perRowe (1995), competencemeans a skill and the standard of

performance while competencyreferstobehaviour bywhich itwasachieved. Thus, competence de

scribes whatpeople

do andcompe

tency describes how people do it.

100The IndianJournal f ndustrialRelations,Vol.46,No. 1,July 010

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WorkforceReduction & HR Competencies an Exploratory Study

Competence describes what peopledo and competency describes how

people do it.

Whiddett and Hollyforde (2004)viewed that all aspects of competencyframework should be behaviour-based.

According toBoyatzis (1982), A jobcompetency is an underlying charac

teristic of a person in that itmay be a

motive, a trait, a skill, an aspect of

one'sself-image

or socialrole,

or a

body of knowledge which s/he uses .

Referring to competency of a HR pro

fessional, Chanda and Kabra (2000)were of the view that 'the competencyof a professional isdeterminedthroughhis/her evel ofknowledge, capacity toutilize skills and personal attitudes and

values towards theHR function'. Spen

cer and Spencer (2008) defined competency as an underlying character

istic of an individual that is causallyrelated to criterion-referenced effec

tive and/or superior performance in a

job .

Workforce Reduction Scenario

During economic slowdowns,workforce reductions have become

common, though it should be ideallyseen as a last resort. The ultimate pur

pose of downsizing boils down to low

ering the operating expenses by em

ployee elimination to achieve greater

profits for the company (Nair 2008).But the hidden costs are often ignored.

It is not only the victims who are affected but the survivors are equally af

fected.

A downsizing exercise can be said to

be successful only when it can be seen

that the survivors are adapting to the situ

ation comfortably. It has been suggestedthat layoff survivors experience stress that

is as great, or even greater than, the stress

felt by thosewho have been laid off

(Kaufman1982).Studies have shown that

downsizing can have profound effects on

survivors' behaviour including trust and

morale (Fisher 1991), job involvement

(Allen etal 2001),withdrawal (Brockner1990), work effort,

productivity(Brockner et al 1992), and organizationalattachment(Spreitzer& Mishra 2002).

Downsizing can have profound ef

fects on survivors' behaviour in

cluding trust and morale.

Research has

suggested

that that the

role of HR, whilst crucial in sustaininga well motivated workforce has become

very wide-ranging. If organizations are

serious about achieving the envisagedbenefits of downsizing, the implementation of effective people-management

strategies is very important. The role

calls for a range of skills (of HR profes

sionals),competencies

and knowledgeand understanding of organizational de

velopment, employee development, new

forms of employee relations, and en

hanced methods of using competenciesto include behaviours such as managing

ambiguity, insecurity and uncertainty

(Kochanski 1996). Since downsizing is

going tocontinuedue toglobal changesand no

organisation

can

predict

as to

when itmighthave togo forthesame, it

is importantorealise thattheright ay

The IndianJournal f IndustrialRelations,Vol.46,No. 1,July 010 101






to handle survivors is a challenge for

which organisations should be gearedup. In this scenario it has increasinglybeen felt that

along

with the corporate

changes, HR competencies should also

take shape inorder to be able to contrib

ute as a value added function.

Along with the corporate changes,HR competencies should also take

shape in order to be able to contrib

ute as a value added function.

Rationale & Objective of theStudy

In a workforce reduction scenario it

becomes a biggerchallenge forHR professionals as to how to smoothen the exit

process of the victims and keep the sur

vivors motivated. Since decades, com

petencieshave been used in the context

of selection, performance appraisal,

training and development. The presentauthors have tried to look into competencies (of HR professionals) in a

workforce reduction scenario. The re

search was conducted keeping inmind

the suggestions given by senior managers from the industry during interactions

for a larger study related to workforce

reduction. Majority of the practitioners,

especially non-HR,pointedout that Rneeds to play a more active role in a

workforce reduction scenario. Keepingthis inmind itwas felt that itwould becrucial to explore the competencies ex

pected ofHR professionals inorder to

manage the situation effectively.

As pointedoutby Spencer andSpencer (2008), Competencies identifiedby

the competency process are context sen

sitive . Similarly, the current compe

tency study describes what successful

managers in a scenario

specific

to

workforce reduction should do to deal

with the survivors. Will the characteris

tics that predict superior performance in

1990 stillpredict superior performancein2001? Similarly,will the characteristics thatpredictsuperior erformance or

HR professionals in a normal situation

be able topredict superiorperformancewhen

changesare

takingplacein the

organization alongwith thecompulsionto operate with a lean strength? Are cer

tain competencies especially importanta workforce reduction scenario?

The Sample

This studyhad taken intoaccount

onlythe

topmanagement (comprisingdirectors, general managers, vice presi

dents, department heads) from four organizations inDelhi,NCR) from hemanu

facturing sector, where workforce reduc

tion had taken place in the recent past.These top level managers were from both

HR as well as non-HR backgrounds. They

comprised 34 managers (14 managers

belongingtothe R functionnd20man

agers belonging to nofi- HR functions.

The samplingwas purposivewhere the

respondents volunteered for the study.

The Measure

Extensivemeetingswere heldwith 15senior level managers randomly selected

acrossorganizations

and acrossfunctions,who had experience inworkforce reduc

tion scenario. Each of themanagers was







good listener and communicator and

displaying respect for employees. Be

sides, reaching out to the employees'families not only develops a strong

emotionalbondingbutalso instilssense of belong-ingness among the

employees.Saha (2008) isof the iewthat R is themouthpiece of anyvibrant organization as well as the cus

todian of its conscience. Therefore,the challenges that this community

faces, in tough times are to empathisewith employee concerns and play the

role of a humane employer, in such

situations.

HR is themouthpiece of any vibrant

organization as well as the custo

dian of its conscience.

Asexplained by Spencer

andSpencer (2008), inthe ontext fgenericcom

petency model ofmanagers, Interpersonal

Understanding appears most often as:

o Understanding the attitudes,

interests, needs and perspectivesof others.

o Interpreting non-verbal beha

viours, understanding themoodsand feelings of others.

o Knowing what motivates others.

o Understanding both the strengthsand limitations of others.

o Understanding the reasons for

others' behaviour.

Thus, awareness of differences in

interpersonalneeds can help the HR

managers to enhance their relationships.

Credibiltiy # ) is importanthat R

professionals be perceived as fair in

dealing with the situation and creat

ing an impression of credibility.They have to ensure that every as

pect is being handled honestly and

fairly. ovey (1989) uses themeta

phor of an emotional bank account

to describe the amount of trust that

has been built up in a relationship.As trust builds inour emotional bank

account, it becomes the foundation

of regenerative relationships with

others. Then people learn to put all

their ards on thetable todeal withissues and solve problems without

wasting energy focused on differ

ences in personality or position.

Communication Skills (# .5):More

importantthan simply possessinggood communication skills is how

thesame isbeing utilized for reducingtheheartburn f thevictims as

well as the survivors. How well and

how much in advance the victims

were communicated has quite an

impact on the psyche of the survi

vors. Following a downsizing exer

cise, employees' concerns about the

organizations future and their own

jobs get aggravated. Here it is im

portant for theHR managers to talk

to employees on an ongoing basis as

well as create a culture in the organization where the senior management meets people, keeping at baythe fears of the employees. As ob

servedbyBhattacharya (2009), communication is thekey to tackle in

creasing stress levels and uncertaintyat workplaces. When the downturn

caughtupwithMaruti Suzuki India






WorkforceReduction & HR Competencies: An Exploratory Study

during hefestive easonof2008, the

company put its communication

strategy into top gear, helping

change the entire work environment

for thebetterrather hanyielding toit. he HR head satwith employeestoexplain theglobal crisis.Withoutthis stress on clear communication,

7,000 people could have 7,000 different perceptions.

When the downturn caught up with

Maruti Suzuki India during the festive season of 2008, the company

put its communication strategy into

topgear, helping change the entirework environment for the better

rather than yielding to it.

Ability toRealign HR Practices andPolicies

(# .5): Sittingon the once

framed' practices and policies willnot work in a changing scenario. HR

professionals should be able to re

align HR practices and policies as

the situation demands. Business is

prone to cyclical fluctuations. In dif

ferent stages of the cycle, organizations adopt different business strat

egiesand

accordinglyHR has to re

align practices and policies, e.g., HR

strategy depends upon the business

strategy and on theHR strategy, de

pends, the compensation strategy.HR managers need to understand and

accordinglydesign appropriatemo

tivational and other strategies.

Personal Conviction & Courage (#6): When an organization downsizes,

HR professionals must possess ad

equate mental strength. As put by

Reardon (2007), those who act cou

rageously in business settings have

an instinct for opportunity. Theyread situations quickly, but

they

are

never reckless. Choosing the righttime is themost difficult artof the

courage calculation; it takes a deep

sensitivity to one's surroundings and

a great deal of patience . In essence,

theHR manager must be personallyconvinced about the transition, its

necessity and the consequences fol

lowing

the

change.

HR

professionals must have the grit and determi

nationtohelppeople see through he

change.

Counselling Skills (#7): For victimsis counselling any helpwhen theirbread and butter has been snatched?

For survivors is counselling any

good when insecurity and instabil

ity s loominglarge nd thequestion'maybe I will be the next one' is

haunting their minds? Yes, even in

such a scenario counselling helps

prepare both the victims and survi

vors. HR has to take the lead to en

sure that in this atmosphere of un

certainty all managers are ready to

take the initiative for counselling the

employees. This could reduce thebitter feeling among the victims as

well as the survivors to a great ex

tent. In Waraich and Bhardwaj's

(2009) study,93% of the non-HR

professionals felt thatcounsellingworks only ifdone much beforeworkforce reduction and not just

prior to the time of workforce reduc

tion. According to them, HR's role

incounselling isverycrucialwhichis quite often being overlooked.

The IndianJournal f ndustrialRelations,Vol.46,No. 1,July 010 105





WorkforceReduction & HR Competencies: An Exploratory Study

As seen inTable 2, business acumen

is considered as a very important com

petency across all the age groups-

topmost

priority iven bythe

youngest,the

middle age groups and second most im

portant for the elder groups. This could

be attributedpossibly to the fact thatwithout business acumen itwould be

difficultforHR managers to plan andunderstand the situation better. Further,thiswill also help carryout theprocess

more effectively i.e. having all the an

swers

ready

to thevolley

ofquestions

posed by anxious survivors.

Business acumen is considered as a

very important competency across

all the age groups.

Interpersonal Understanding occu

piesthe next most

important position

af

ter business acumen across all the age

groups- with the youngest and middle

age group rankingit second and the eldest group ranking the most important.

Interpersonal understanding is requiredtoa greatextentwhile bidding adieu tothe victims as well as handling survivors

especially during such timeswhen the

industryis

plagued by

unrest and uncer

tainty. The maturity and past experienceof the eldest group of managers could

have contributed inranking PU as themost important competency during such

times.

Next, credibility, as a competency has

been ranked as important across all the age

groupsthird nd fifth

bythe

youngestand middle age groups respectively. How

ever, it has been ranked as important as

business acumen by the eldest age group.Personal conviction and courage which

hasnotbeen looked tby thetwoyoungerage groups has been

given importance bythe eldest age group managers. Though it

is a characteristic/trait and not a skill or

knowledge it becomes an important re

quirement during such turbulent times.

Emotional self control has got equal

importance as personal conviction and

courage in the eldest age group. Though,

Spencerand

Spencer (2008)havebeen of

the view that emotional self- control at a

senior level is not mentioned because it

has been ingrained. But the eldest age

groupstillfeelsthat t s n importantequisite formanagers to possess in the postworkforce reduction scenario. Communi

cation has been ranked as the fourth im

portant ompetencyby theyoungestage

groupwhereas for the eldest

age groupcommunication does not feature among the

top five competencies. Counseling skills

have not been looked at among the top five

competenciesby theyoungestage groupwhereas the same have been ranked fifth

and fourth y themiddle and the eldest

age groups respectively. Probably the

youngest age group felt that theuncertaintyand

insecurityfactors are so

highthat sur

vivors will not take the counseling seri

ously. Whereas, the other two age groupsfeel that t ould be ofgreathelp in mooth

ening the transition.

AligningHR practices and policieshave been ranked as a fairly important

competencyby all thethree ge groups.The HR

practicesand

policieswhich

worked fine, prior to theworkforce re

duction need to be re-looked now.

The IndianJournal f ndustrialRelations,Vol.46,No. 1,July 010 107






Table 3: Mean of theRanking Preferences of Competencies of HR Professionals in a PostWorkforce Reduction Scenario among HR and Non-HR Professionals

Deptt. NCompetencies inorderofPriority

HR 14 BAC(2.7) IPU(2.2) COM(1.9) HRP(1.7) PRO(1.6)Non- HR

20_IPU(2.7) BAC(2.6) CRE(2.1) PCC(1.7) HRP(1.6)

Note: The figures inparentheses indicate themean of therankingsgiven by therespondents

As seen inTable 3, while the non

HR professionals gave priorityto thehumaneangle theHR professionals feltthat understanding the organizational di

rection, business challenges, culture etc.

would be most important. Communica

tionoccupied thirdplace forHR professionals, whereas for the non-HR professionals it is credibility. Communication,as a competency, would help theHR professionals inbringing lot f clarity nd

transparency during the post workforce

reduction scenario and thus lessening the

anxiety of the survivors. At the same

time,credibilityof theHR professionals ismore important. The 'communica

tion' part would be more effective if the

survivors look up to theHR professionals as credible

-perceived as fair in their

intentions, it helps them in becomingeffective communicators.

Communication occupied thirdplace for HR professionals, whereas

for the non-HR professionals it is

credibility.

Ability to realignHR practices and

policies is considered an important com

petency for HR professionals- ranked

fourth ndfifthbyHR professionals nd

non-HR professionals respectively. In or

dertobe able todo this, R professionals

need to analyse the current situation as

well as industry benchmarks and work on

aligning theHR practices and policies-

here there would be no room for rigidity.

Pro-activity has been ranked as the fifth

competency by the HR professionalswhich would help prevent knee-jerk reac

tions, leaving an unpleasant taste in the

mouths of the victims as well as the survi

vors. This would require a lotof planning,

thinkingnd commitment,n thepartoftheHR professionals.

It isquite surprising ofind that instead of the HR professionals, non-HR

professionals have given importance to

personal courage and conviction. As ex

plained by Sanghi (2007), 'courage ofconvictions is a belief in one's own ca

pability as expressed in increasingly

challenging circumstances and confi

dence in one's decision or opinions,within the framework of public interest,

ethics, values and organizational integ

rity.tmay includeproviding leadership,direction and inspiration to others bymaking difficult ecision and taking c

tions thatmay not be popular, but are in

the best interest of the organization and

its clients'. Without personal courageand conviction, itmight become difficult leading toa rise in stress levels fortheHR professionals, to operate duringsuch turbulent times.

108The Indian journal of ndustrialRelations,Vol.46,No. I,July 010






emotional self-control combined with

personal courage and conviction of the

HR professionals. The eldest groups'

maturitylevel has made them feel that

some amount of counselling would helpthe survivors in alleviating the anxiety.

Implications of theStudy

The current study has a lot to con

tributeto the world ofwork when itcomes to a workforce reduction sce

nario. Isabella(1989)

has noted thatwhile organizations are usually pre

pared tomeet the needs of thosebeinglaid off, theyare oftenunprepared forthestrong motions, lengthy djustmentperiods, diminished morale and lower

productivity often experienced and ex

pressed by survivors. Thus, it could be

said that the above identified competencies would have

greater implicationsfor

the HR fraternity, especially in a

workforce reduction scenario for man

aging the survivorsaswell as handlingthe situation effectively.

Limitations and Suggestions for

Future Research

Managerswho

agreedto share their

experiences were very few.A bigger

sample from more organizationscould be considered.

The number of competencies exploredin the current studywere very limited

which could be further increased.

For thisstudyonly themanufactur

ing sector has been considered. Butfor future research organizationsacross sectors could be studied.

The same competency enquiry list,ifused again, itwould be better toask the respondents to rank all the

competenciesinorder of

priority,for

better result interpretation.

The competencies could be further

broken down into 'clusters'.

References

Allen, T.D., Freeman.D.M., Russell, J.E.A.,

Reizenstein, R.C. & Rentz, J.O. (2001),Survivor Reactions to

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Boyatzis, R. E. (1982), The CompetentManager:AModel forEffectivePerformance,Wiley:New York

Brockner, J,Grover, S.L., Reed, T.F. & DeWitt,

R.L. (1992), Layoffs, Job Insecurity, ndSurvivors' Work Effort: Evidence of anInverted-U Relationship , Academy of

Management Journal, 35: 413-25.

Brockner,J. (1990), Scope of Justice in the

Workplace: How Survivors React toCoworker Layoffs , Journal of Social Issues,

46: 95-106.

Brockner,J., Davy, J.& Carter, C.(1985), Lay

offs, Self-esteem, and Survivor Guilt: Mo

tivational,Affective, andAttitudinalCon

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