23974634 Final Assigment on Global Recession and Its Impact on Human Resources Management

7/29/2019 23974634 Final Assigment on Global Recession and Its Impact on Human Resources Management

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GLOBAL RECESSION ANDEMERGING CHALLENGES FORHUMAN RESOURCESMANAGEMENT IN INDIA

Ms.Khyati voraRoll No 12

M.PHIL (COMMERCE)

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GLOBAL RECESSION AND EMERGINGCHALLENGES FOR HUMAN RESOURCESMANAGEMENT IN INDIA

INTRODUCTION

Meaning of Global Recession

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A recession is a decline in a countrys Gross Domestic Product(GDP) growth for twoor more consecutive quarters of a year. Arecession is also preceded by several quarters of slowing down. Aneconomy, whichgrows over of period of time, tends to slow downthe growth as a part of the normal economic cycle. An economytypically expands for 6-10 years and tends to go into a recession forabout six months to 2 years. A recession normally takes placewhenconsumers lose confidence in the growth of the economy and spendless. Theseleads to a decreased demand for goods and services,which in turn leads to a decrease in production, lay-offs and a sharprise in unemployment. Investors spend less; as they fear stocksvalues will fall and thus stock markets fall on negative sentiment.Risk aversion, deleveraging and frozen money markets and reducedinvestor interest adversely affect t capital and financial flows, import

export and overall GDP of an economy. This is what exactly whathappened in US and as a result of contagion effect spread all overthe world due to high integration in the global economy.According to the International Monetary Fund (IMF)s latestGlobal Financial Stability report (GFSR) widening and deepeningfallout from the US subprime mortgage crisis have profoundfinancial system and macro-economic implications.

While the US remains at the epicenter, the backwash effect ofthe American financia

l institution in other countries reflecting thesame overly benign global financial conditions, an inattention toappropriate risk management systems and lapses in prudentialsupervision.

The global slowdown has its implications on the domesticeconomy. During the last three years Indian Economy grew at anaverage annual rate of 8.6 per cent. For the first time the economyhas shown signs of decelerationand grew at 7.8 per cent in the firsthalf year of 2008-09 (April-September). The service sector, whichcontributes more than 50% share in the GDP and is the primegrowth engine, reported to be slowing down, mainly in the transport,communication, trade, and hotels & restaurants sub-sectors. The

industrial growth has decelerated sharply during April-November,2008 encompassing all the constituent sectors. In manufacturingsector, the growth has come down to 4.0 per cent in April-November, 2008 as compared to 9.8 percent in the correspondingperiod of last year. The slowdown occurred in the all the use-basedcategories, except consumer goods where it has accelerated.

Meaning of HRM

Humans are an organization's greatest assets; without them,everyday business functions such as managing cash flow, makingbusiness transactions, communicating through all forms of media,

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and dealing with customers could not be completed. Humans andthe potential theypossess drive an organization. Today'sorganizations are continuously changing. Organizational changeimpacts not only the business but also its employees. In order tomaximize organizational effectiveness, human potentialindividuals' capabilities, time, and talentsmust be managed.Human resource management works to ensure that employees areable to meet the organization's goals.

Human resource management is responsible for how peopleare treated in organizations. It is responsible for bringing people intothe organization, helping them perform their work, compensatingthem for their labors, and solving problems that arise. There areseven management functions of a human resources (HR)department that will be specifically addressed: staffing, performanceappraisals,compensation and benefits, training and development,employee and labor relations, safety and health, and humanresource research.

Global Recession and HRM

The financial downturn is impacting developed as well asdeveloping economies are likely to get worse as the Europeancountries, the US an

d others go into a deeper depression due to theincrease in job losses which often follows recession. The slump inthe market and increased job losses will have some importantimplications for the changing task of human resource professionals.As the unemployment continues to increase, HR professionals arelikely to be dealing with more stressed employees who are the solewage earners in their families.

As recession is becoming the part of the normal cycle ofbusiness. Therefore it makes just as much sense to plan forrecession or downturns as it does to plan for good, economic times.

OBJECTIVE

This economic downfall has affected all the major sectors in India

including IT, aviation, banking, real estate, tourism, outsourcing,

telecommunication, etc with its consequence mainly on the HR

policies of these industries.

This article discusses4


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1. Impact of economic slowdown on employment in India.2.The emerging challenges of human resource management inthe global recession situation.3. Thestrategy adopted by HR personnel to deal with thesechallenges.HYPOTHESIS

In todays economic meltdown where job cuts, loss, payreduction, last come first go, insecurity of employment atmosphereprevail, HR has special responsibility to create ease environment tothe affected by counseling, displaying care and concern, preparingthem for multi skill task, engaging and deploying in other requiredareas of functions like security, crisis management team, etc.Global recession has raised various emerging challengesfor Human Resources Managers

HR needs to be proactive & innovative and try to comeup with early interventions as for any organization tosurvive during recession.

REVIEW OF LITERATURE

The global economic crisis is expected to lead to painful cuts in thewages of millions of workers worldwide in the coming year. Itpredicts that the slow or negative economic growth, combined withhighly volatilefood and energy prices, will erode the real wages ofthe worlds 1.5 billion wage-earners, particularly low-wage andpoorer households. Between the years 1995 and 2007, for each oneper cent decline in GDP per 2 capita, average wages fell evenfurther by 1.55 percentage point, a result that points to the possible

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effects on wages in the current crisis. [International Labour Office(ILO), 2007-08].

The economic slowdown of the advanced countries which startedaround mid-2007, as a result of sub-prime crisis in USA, led to thespread of economic crisis across the globe. Many hegemonicfinancial institutions like LehmanBrothers or Washington Mutual orGeneral Motors collapsed and several became bankrupt in this crisis.According to the current available assessment of the IMF, the globaleconomy is projected to contract by 1.4 per cent in 2009.Even asrecently as six months ago,there was a view that the fallout of thecrisis will remain confined only to thefinancial sector of advancedeconomies and at the most there would be a shallow effect onemerging economies like India. These expectations, as it now turnsout, have been belied. The contagion has traversed from thefinancial to the real sector; and it now looks like the recession will bedeeper and the recovery longer than earlier anticipated. Manyeconomists are now predicting that this Great Recession of 200809will be the worst global recession since the 1930s. [Choudhari2008]

The financial downturn that is impacting developed economies arelikely to get worse as the European countries, the US and others gointo a deeper depression due to the increase in Job losses whichoften follows recession. The slump in the mark

et and increased joblosses will have some important implications for the changing tasksof human resource professionals. As the unemployment continues toincrease, HR professionals are likely to be dealing with morestressed employees who are the sole wage earners in their families.[Mujtaba, 2008}

The global economic crisis has brought to the forefront oforganizations the concepts of viability and survival which at thesetimes can bedesperate pursuit. There are three main reactions inorganizations, namely the corporate reactions in organizations,namely the corporate reaction to remain viable, the employeereaction to survive the turbulence, and the human resourcesreaction ( including recruiting and hiring talent, corporate

organization, training and institutional learning). [KathleenPatterson & Gray Oster, 2008]

In emerging economies, growth is projected to slow downappreciably but still may reach 5.0 percent in the year 2009. Theoverall recruitments are lower for the industry this time ascompanies remain cautious amidst the global financial crisis.[Srivastav, 2009]

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Growth in real wages has slowed down globally in 2008 because ofthe economic crisis and the trend is expected to continue in 2009,despite signs of economic recovery. Growth in average wagesreduced from 4.3 % in2007 to 1.4% in 2008. Real wages in the firstquarter of 2009 also fell in morethan half of 35 countries, comparedto the annual average of 2008, Wage deflationdeprives nationaleconomies of much needed demand and seriously affectsconfidence,Minimum wages are an important policy tool for socialprotection and proposes that minimum wages be combined withother income support measures and/or tax reductions. [ILO,2009]

"The last time anyone faced a situation like this was in the 1930s, soif there is anyone who is 98 (assuming they should have been atleast 20 then) and is coherent the rest of us are figuring out andlearning on the fly," reasons Elango R, chief human resourcesofficer, Mphasis. According to Elango, "Managing the unknown,visualizing into the uncertain future, constantly calibrating andtuning the variables and hoping to high heaven that you are onthe right path are responsible for increasing stress levels." Hebelieves that the challenge is to take long term decisions withoutissuing the short term. This requires skills, knowledge and thinkingthat are not called on ina growth environment. "In a growthenvironment, one's pre-occupations are different, and having seengrowth for years most of us are skilled at this. The current

businessenvironment entails a delicate tightrope walk balancing both thebusinessinterests and employee interests." [Elango R, 2008]

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RESEARCH METHODOLOGY

Secondary Data collected from various sources like

Economic & Political weekly HRM Journals ILO Reports Ministry of Labour & Employment Labour Bureau

ANALYSIS & INTERPRETATION

I. Impact of economic slowdown on employment inIndia.

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.Ripples of recession leading to reduction in exports todeveloped countries are being felt by all the developingcountries. Credit availability and its cost have become majorareas of concern. The combined impact of all these factorswould be loss of employment and reduction of income leadingto social distress. The International Monetary Fund (IMF) placedthe estimated world output growth at 3.75 per cent in the year2008 and 2.2 percent in the year 2009 inWorld EconomicOutlook (WEO), November 2008, which represented asignificant slide from a level of about 5.0 per cent in the year2007.. The global situation deteriorated rapidly after mid September,2008 following the collapse of Lehman Brothers, one of the topfive investment banks in the US, the collapse of AmericanInternational Group (AIG) Bank and also of the mortgagelenders Freddie Mae and Fannie Mae. There has been amassive choking of credit since then and a global crash in thestock markets.. The deepening of the global crisis and subsequentdeleveraging and risk aversion in the global markets affectedthe Indian equity and the foreign exchange markets. While theIndian economy has a sufficient internal ballast to withstandthe impact of global recession because of overall strength ofdomestic demand and the predominantly domestic nature offinancing of investment and exposure of exports to less than20% of GDP, nevertheless some slowdown is inevitable.It may be observed from Table 1 that the total estimatedemployment in all the sectors covered by the survey went downfrom 16.2 million d

uring September, 2008 to 15.7 million duringDecember, 2008 resulting in job lossof about half a million. It isseen that the employment declined every month during this period.It has also been observed that the employment in all thesectors/industries studied went up significantly over the period fromMarch, 08 to September, 2008. Beyond September, 2008, it hashowever, decelerated at all industries/sectors level at an averagerate of 1.01 per cent per month.

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Trends in Average EmploymentPeriod Average Employment inPercentage

(millions)change

September, 08 16.2

October,08 16.0-1.21

November,08 15.9-0.74

December,08 15.7-1.12

Average Monthly change-1.01

Source : Government of India, Ministry of Labour & EmploymentLabour Bureau, Chandigarh.

From the above data it is observed that the management peopleand employees may experience anxiety around a number of issues duringan economic crisis or downturn.

The monthly average rate of employment loss during Oct- Dec, 2008was 1.01 per cent whereas in January, 2009 the rate of decline hasincreased to 1.17 per cent. The increase in rate of change is mainly due tothe decline in employment in IT/BPO sector in January, 2009 in contrast tothe increase in employment during Oct-Dec, 2008 and also higher rate ofunemployment in Automobile Sector. The month wise employment trendsare presented in Table 1.2.

Table 1.2Trends in Average Employment

Sl. No.DeclinePeriod % Rate of1 October, 200891.21


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2 November, 2008 0.74

3 December, 2008 1.12

5 January, 2009 1.17

Source : Government of India, Ministry of Labour & Employment LabourBureau

Chandigarh

The economic slowdown is expected to adversely impact the qualityof employment besides the quantity reflected by decline in employment.The quality aspect is measured in terms of decrease in average wagesreceived bytheemployees. Hence information is also collected on the total 12 earnings ofworkers. The results of the survey reveal that the average monthly wageshave also declined by 0.26 per cent in January 2009. The average monthlydecline during Oct-Dec, 2008 was 3.45 per cent. During the current surveythe average monthly wagesfor direct and contract workers are alsocollected. The findings of the survey reveal that average monthly declinein thewages are 0.25 per cent fordirect category of workers and 0.63 per cent for cont

ract workers inJanuary, 2009. The information is presented in Table 1.3.

Table 1.3

SR.No.ChangePeriod Percentage1 October, 2008 1.742 November, 2008 -11.433 December, 2008 -0.54 January, 2009 -0.26

Source : Government of India, Ministry of Labour & EmploymentLabour BureauChandigarh

Table 1.4Month Wise Estimated Job Loss

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Sl.No. Period Estimated JobCumulative JobLossLoss

1 October, 2008 1,96,092 1,96,0922 November, 2008 1,17,550 3,13,6423 December, 2008 1,77,222 4,90,8644 January, 2009 98,156 5,89,020

Source : Government of India, Ministry of Labour & EmploymentLabour Bureau

Chandigarh

It needs to be noted that the rate of decline in employment inJanuary, 2009 is higher than average monthly rate of the previousquarter, whereas the total loss of employment estimated is less thanthe previous monthly estimates.

In this recession period HR play an important role to make theindustry sustain and the entire economy flourish. This paperexpresses the challenges of human resource management in theglobal recession situation. The role of the Human ResourceManager is evolving with the change in competitive market

environment and the realization that Human Resource Managementmust play a more strategic role in the success of an organization.

The most important challenge in recession period that isrevolutionizing the Human Resource systems to identify, maintains,develop and utilize talents across the organization to their fullestcapacities.The management of Human Resources has now assumedstrategic importance in the achievement of organizational growthand excellence. As globalization advances and we move into the

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information age, organizations need to adapt to the changes intechnology and the changing issues in management of people.

I. The emerging challenges of Human ResourceManagement in the times global recession

The role of the Human Resource Manager is evolving with thechange in competitivemarket environment and the realization thatHuman Resource Management must playa more strategic role inthe success of an organization. Organizations that do not put theiremphasis on attracting and retaining talents may find themselves indire consequences, as their competitors may be outplaying them inthe strategic employment of their human resources.

With the increase in competition, locally or globally,organizations must become more adaptable, resilient, agile, andcustomer-focused to succeed. And within this change inenvironment, the HR professional has to evolve to become astrategic partner, an employee sponsor or advocate, and a changementor within the organization. In order to succeed, HR must be abusiness driven function with athorough understanding of theorganizations big picture and be able to influence key decisions andpolicies. Ingeneral, the focus of todays HR Manager is on strategicpersonnel retention and talents development. HR professionals willbe coaches, counselors, mentors, and suc

cession planners to helpmotivate organizations members and their loyalty. The HRmanagerwill also promote and fight for values, ethics, beliefs, and spiritualitywithin their organizations, especially in the management ofworkplace diversity.

These paper discusses few important challenges of HRM due torecession and i.e

1. Problem of Recruitment.2. Managing downsizing program appropriately.3. Talent management.4. Stress Management.5. The Return on Recognition in a Recession.

1. Recruitment and Recession.Recruitment industry is going through a tough time at thismoment, the numbers have dropped drastically for the biggies andeven recruitment agencies are battling for survival. SynergySolutions provides recruitment services to companies in India and inUS, the biggest challenge todayis to find newer and better ways toadd value to the clients. There is a need tofind innovative ways toimprove recruitment ROI for the client.

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First things first, the base idea is not to wait and find ways toweather the storm but to take proactive measures to tide the wave.The world is changing very quickly to combat recession and itsabout time we translate our thinking into action or else we will belate. The main reason being thecompanies who are hiring haverecently made drastic cuts in their recruiting budget and are in theprocess of streamlining their side of the story.

Companies (clients) has to demand greater accountability fromrecruitment agencies and focus on improving their recruitment ROI.Recruitment agencies / staffing companies who are agile in theiroperation and can quickly adapt to the changing environment willemerge victorious at the end ofthis recessionary period.

Few areas where placement agencies should focus:

Closely monitoring the way each industry is changing incurrent times and the way companies within the industries arechanging their hiring strategy.Build stronger relationship with clients thereby working closelywith your contact points in the company to get clarity on theirinternal hiring plans and prepareaccordingly. This will also

help protect your share in the pie from your competitors.Clients will use this recession to re-negotiating the recruitmentcontracts withrecruitment agencies. Since numbers are fallingevery day recruitment agencies will be concerned about theircash flow situation and as a result will have no option but to beforced to negotiate their existing contract. New client wouldwant tostart the relation on the terms advantageous to them,that means lower rates and tougher terms.Look out for companies who are brave and would considerrecession as the right time to recruit good quality talent at theright price. These are usually multinationals with deep pocketsand would want to drive competitive advantage home. Besmart to attack these companies.

Train your recruiters to be tactically smart and agile in theiractions. During the boom there were a lot of open positionsand even more candidates available so the match makingactivity was comparatively easy and largely govern by thegood sentiments in the market. During tougher timesrecruiters need to be smart and get themselves deeper intothe fit gap process and ensure win -win situation for the clientand the candidateUse of technology and social media applications to hunt betterprofiles as compared to job boards. Sites like LinkedIn,Facebook, Twitter and other social and business networking13


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sites are fast becoming every recruiters trump card. Lot ofhead hunting can happen over these networking sites.

If your salary component are on the higher side and youforesee that its going to be difficult to sustain then takeadequate action now try and offer a mix of lower fixed andhigher variable with an assurance that salaries will get back tonormal once the market stabilizes.1.Managing downsizing appropriately.Virtually every country has to face the impact of a global economicdownturn which can be in the form of recession, slowdown,depression or growth recession. When a downturn occurs, theorganizations have to suffer heavy losses and bear the brunt of slowrevenue generation. During this period, there is also less spendingby the consumers, less investment by the investors and more ofsavings. Even the sectors who have been thriving in the boomperiod try to save more.

Numerous causes can be attributed to the economic downturnand one of which affects the business is lack of skilled manpower.Other reasons could be the increasing population, lack of foodsupply, climatic condition, and entry of substitutes, inapt

investments and technological changes. The shift in supply anddemand hugely affects the entire business cycle. There can be acuteshortage of cash supply leading to less or poor investments.

All of this may ultimately affect the morale of the employeeswhich should be a concern to every organization. Also, the decline ingrowth and decrease in profitscertainly calls for certain top-of-thelinestrategies to make adjustments to serve organizational needs.

Managing the teams or human capital at this juncture is aHerculean task. So, a manager should devise certain strategies inorder to manage teams during down turns. Downsizing during thisperiod is certainly not a good option because if thereare merits oflaying off of employees, there are many demerits too.

What should a manager do to manage teams or workforce?

Hold special meetings: During this unsafe situation, theorganizations top most head or CEO should brief the meetingwhere the main subjectshould be the employees and theirconcern. If the head of any organization feels confidant, thewhole organizationfeels confidant. Alternatively, middle-levelmanagers and senior managers can conduct private meetings14


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where they can console their subordinates. Also, give yourworkforce to ask questions and express their feelingsregarding the business insecurity.

Motivate the employees: The key to managing andretaining the employees during downturn is motivation. Apartfrom the special meetings being conducted, a manager shouldregularly be attending to their problemsand constantly triggerthe employees to have good mood.Offering challenging assignments and opportunities: Ifyou offer your teams the challenging assignments, they spiritswill be lifted andthey will manage to survive even in badtimes.Explain to them the importance of their existence injobs: There is no use cryingover the spoilt milk, just likeeconomy turning to a bad shape and business showingdownfall. Its better that youdiscuss about the new projectsand subsequently tell them what role they have toplay. Howtheir productivity can make the organization grow, explain tothem.Initiate change by identifying key people: There are fewemployees who are influencers and can bring about a lot ofchange in the organiza

tion. If these employees are given theright message to convince other team workers, theorganization can move in the right direction.Identify the achievers and reward them: Even during thisperiod, you should give your employees the bonuses andincrements if possible. In this way, they will always remainmotivated and perform.All the above points are crucial to letting the organization grow togreater heights and following the above strategies will promote thegeneral health of the organization despite economic downturns.

3. Talent Scenario during Recession

The law of demand and supply mercilessly applies to humanresources, also. During the economic downturn, companies wereable to downsize by getting rid of redundant work force and deadwood. They also restructured the employee compensation (mostlyby decreasing) to stave off financial losses. Only those employees

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were retained who proved their worth. The employees had to acceptall kinds of compensation-related compromises while maintainingthe same or even higher level of efficiency and productivity. Theycould thus survive the financial tsunami.

These survivors got the opportunity to handle a variety oftasks that further sharpened their skills and made them multi-skilled. Thus, overall quality of talent has increased. At the sametime, those who were out of job lost this opportunity to hone theirskills in a new challenging environment. Adding to our woes,slashing of training and development budgets has led to a depletionof the number of skilled employees within the companies.

Such steps from companies have created an altogether trickyscenario: The quality of talent within the companies has increased(raising the bar of the talent), while the quality of skills available injob market has dwindled. Now, recruiters can hire the requiredquality talent not from outside but from inside their competitorsworkplace.

While many have forgotten the term War for Talent, thephenomenon is slowly re-emerging. A study by Accenture hasfound that more than two-thirds of executives are now deeply

concerned about not being able to recruit and retain the best talent.In todays global and highly competitive economy, the war for talentis now global, not local. The survey of more than 850 top executivesfrom the U.S, UK, Italy, France, Germany, Spain, Japan and Chinafound worries about talent management were growing, with 67 percent this year putting it second only behind competition as the keythreat, up from 60 per cent last year.

It may be worth noting that great companies such as Infosys,responded to the downturn by investing more in training. Instead offearing of financial losses, these corporate focused on improving thequality of their employees skills. And the effect is visible in theirfinancial results. Member of Infosys board of directors and head of

HRD and Education and Research, T V Mohandas Pai said, Inresponse to the economic crisis, we had stepped up our investmentin training. This has made us more competitive in fulfilling clientsneeds today.The demand for talent in the market will never cease.Retention will always be a challenge.

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New Definition of Talent

While war for talent continues, the bar for talent also goes up. Oldskills and competencies may not work. Companies now needsalesman who does not sell products but does sell solutions;production managers no longer control the operations, they areexpected to innovate and improve productivity; and qualitymanagers need to study competitive products with more zeal andhelp develop better products and services. The employersexpectations have changed and are set to grow:

Highly Productive: The talented employees need to be highlyproductive. They should deliver much more than they arecompensated for. If that happens, employers are willing to givelarger share to them.Multi-Skilled: Companies have discovered that one way todecrease recruitment cost is to have multi-skilled employees.Multi-skilled employees help reduce manpower dependence,and the overall sum of all the multi-skilled employees isgreater than the same number of equal number of specialist.

Self-Managed and Self-Motivated: Self-managed and self-motivated employees reduce managerial efforts. This helpsorganizations to have less number of managers.Innovative and Out-of-the-Box thinkers: As the rules ofthe business change and competition increases, the existingsolutions no longer work. Companies need employees whoconstantly infuse new ideas and provide out-of-the-boxsolutions to meet a customer need that seems to have no end.The Key to Retain Talent Lies in HR Policies and Practices

As organizations increase their expectations from employees,employers too have to significantly change the way they manage

the talent. Talented employees continuously need new challengesand goals they can achieve, and a continuous supply of informationand resources they can use to solve business problems. Andneedless to say, they will in return demand more lucrative andeffective compensations, a great work culture and friendly HRpolicies.

Even during the recession, companies are reviewing and revisingtheir leadership development programs. Survey after survey

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indicates that people who quit their jobs do so because of theirrelationship with the boss, not because of dissatisfaction with theirjob. A recession is a perfect time to take a hard look at leadershipstyle and training to increase employee satisfaction withmanagement.

Five Important Talent Retention FactorsLets us consider five factors that can help organizations retaintalent to meet the client and business requirements in postrecessionera:

i.Clear Goals, Targets and Expectations: You need to tellthem what exactly you expect from employees and whatshould they do to meet these expectations. A talented mindwithout a direction ismost likely to pull the plug than amediocre or a dead wood.ii.Balanced Work Environment: Talented employees havehuge positive energy and they exhaust this energy to meet thedeadlines. But often they need time to re-energize themselves.Organizations that want to retain talented employees need toprovide a positive environment that allows them to re-energizethemselves more often.

iii. Track Performance Goals and Provide Analysis:Innovators and hard workers need constant motivation toperform better. They need to know whether they are producingdesired results. Anysuggestion of not being able to deliverthrows them in doldrums. One way to letthem know abouttheir performance (whether improving or declining) is to pointtoward specific results, achievements or failures (which theycan fix before it is tool late).iv. Fair Evaluation of Performance: At the end of the day, thehigh fliers want to get acknowledged for their work. The firstacknowledgment of the hard work is afair and formal appraisalof their performance. They should be specifically toldwherethey met expectations and where they did not.v.Compensation to Maintain a Decent Lifestyle: Employeeswho deliver quantity with

quality also expect from employersfair compensation that is compatible with themarket. If notfirst, compensation remains the second most important causeof brain-drain from organizations.18


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4. Stress ManagementThe financial recession is impacting large and small organizationsand countries in similar devastating manner. For example, as theprices of goods and products increase, consumers tend to buy lessand thus companies end up having to lay off some of theiremployees in order to avoid bankruptcy or just to stay in business,in the US during the first two months of 2009, over 17 banks havegone out of business and more such bankruptcies and closers andexpected in the financial industry. Such failures tend to increase thenumber of people losing their jobs and moving them closer towardspoverty.

Stress is an inevitable

reality and everyone

needs to find their own

ways of beating it.

Stress is an inevitable part of work life. A recent Assochamsurvey lists construction, shipping, banks, trading houses, electronicand print media, courier companies, SSI, retail, card franchise

companies, and even government hospitals as high stress pronezones akin to chart toppers like BPOs, call centres and ITcompanies. The pressure is truly spreading everywhere! There isample evidence ofthe fact that stress impacts employee health andproductivity. And of late, hundreds of articles have been written onhow financial stress due to the current economic recession is havinga dangerous impact on health and productivity. Resultsfrom theAARP survey, "Impact of Economy on Health Behaviors" reveal that20 per cent of people 45 and older reported health problems due tofinancial stress; 22 per centhave delayed seeing a doctor due tocost; 16 per cent had to use retirement savings or other savings topay for medical care; 21 per cent have cut back on other expensesto afford their medical care; and 16 per cent are not confident theywillbe able to afford health care in 2009. Bob Gallo, AARP Illinois

Senior State Director is reported to have quoted that right now"people are increasingly concerned about their jobs, retirementsavings and simply being able to provide for their families and it'staking a major toll on their health".

India Inc. has woken up to the menace of stress and companiesare taking to novel ideas like teaching employees dancing andmusic, trekking, etc, to reduce stress at the workplace. For instance,Tata Consultancy Services Ltd. has a variety of clubs Theatre Club,Bibliophile Club, Adventure & Trekking Club, Fitness Club, Sanctuary

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Club, Music Club and Community Services Club, etc. to provideemployees that much-needed break. Infosys Technologies Ltd.focuses on increasing self-awareness and providing employees withguidance on howto cope with stress through a series of workshopsby experts. Several organizations conduct off-site picnics, games,and inter-departmental competitions. Some companies usementorship programs or promote open communication to improveinteractions and camaraderie at the workplace. Some employnutritionists to provide healthy food in office cafeterias and counselemployees on healthy eating habits and lifestyle. Others are offeringemployees in-house counseling services or considering employingpsychologists to counsel employees. Some organizations like Emamiuproot employeestress through spiritual discourses and gyms forregular exercises to unwind andkeep fit.

It has been observed that the work stressors that currentlybother top HR executives include narrow perceptions of departmentheads and employees on achieving organizational goals, unrealisticexpectations, waste of resources, employee engagement, ability toremain detached and be objective while dealing with managementandemployees and being a robust problem-solving force in theorganization.

The demands of the current business environment areincreasing stress on HR professionals of today and this is

impacting their work, personal life, physical health and emotionalwell being. Expectations of better people management, coupled withdeadlines and competition, is taking a toll on top HR executives. Theconstant changes in industry, ups and downs in employmentmarkets, challenges ofhiring and retaining best talent, aligning HRfunctions with business objectivesin current environments areincreasingly posing threats to their stress levels. What's more, theeconomic downturn has increasingly put pressure on HR heads tomanage and stretch themselves to the hilt as far as talentmanagement goes innovating continuously with a view tooptimizing productivity with lesser resources. Amidst the challengesof cost cutting, which invariably result in downsizing and layoffs,many top HR executives find themselves at the forefront of theaction wielding th

e 'infamous axe' and taking on yet more stress asthey take on the role all others in the organization fight shy of theone who delivers the pink slips.

Due to the changing demographics of the business world,organizations are discovering that traditional tactics of managementare no longer enough to remain competitive. Following are someways to manage stress effectively.

HUMOR AS A STRESS REMEDY

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Humor is a wonderful stress-reducer. Experts say a good laughrelaxes tense muscles, speeds more oxygen into your system andlowers your blood pressure. Tune intoyour favorite program orcomedy shows on television. Read a funny book. Attend comedyshows. Call a friend and chuckle for a few minutes. Share funnyepisodes with your spouse that can relieve stress as well improvecommunication. It even helps toforce a laugh once in a while. You'llfind your stress melting away almost instantly.

Humor is used to facilitate communication and avoid conflict. Itgives us a different perspective on our problems. If we can make thesituation lighter, it no longer feels threatening to us. With such anattitude of detachment,we feel a sense of self-protection andcontrol in our environment. Bill Cosby says, "If you can laugh at it,you can survive it."

It's sometimes difficult to force a laugh in tense situations. Butthat's precisely when you need it most. One trick for finding humorin the worst of situationsis to blow things absolutely, ridiculously outof proportion. When your scenarioreaches the point of absurdity,you begin to smile. The situation is put in perspective and you cancalm down. Remember humor about sex or gender, ethnicity,politics, humor or joking about tragedy or disease-related symptomsare considere

d humor exclusion zones.

STRESS BUSTING

Understanding what triggers your stress and how to deal with ithelps in stayinghealthier. Here are a few tips:

. Develop a capacity for detached involvement. Be sensitive topersonnel issues and individual employee concerns but resistthe rescuer role.. In times of processing downsizing of staff or upgradingtechnology get expertshelp. Even while dealing with seriouslydisgruntled or dysfunctional employees, collaborate with anEmployee Assistance Program counselor. And, for widespreaddepartment tension use

a corporate change/criticalintervention consultant.. Walk around the organization. Swap stories with employees onthe work floor, become a bridge between management andemployees. This rotation of different hats helps fireproof lifewith variety.. Juggle various roles and responsibilities to promote autonomyby setting boundaries. Delegate work wherever possible. Trainemployees and supervisors on HR-related procedures. Allow21


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vital interdependence between HR and employees; forinstance, install a dartboard on a back wall for fun andcompetition.

. Organize productive team meetings for sharing a logisticallyand emotionally demanding workload. Build a fifteen-minutewavelength segment for group brainstorming and ventingemotionally tough personnel issues -dealing with pink slips,reorganization uncertainty, battles with other departments,and cultural diversity tensions. Let team membersacknowledge sources of work pressure as a group, assess thestrengths and roadblocks affecting solid team coordination andcooperation.. Listen to your family and friends as they know you best, andare often the first to tell you that you are stressed. Theirinsight may reveal situations or incidents that you weren'taware of-such as consistently being short-tempered with oneor other family members. Seek their support to help easeworkload, which in turn will help reduce your "stress load.". Avoid being an over-achiever. Doing everything for everybodyall the time can be rewarding, but it can also be mentally andphysically draining. Seems the moreyou do, there's alwaysmore that has to be done-often without support from others.. Learn to say no. If you find that you're being asked to do morethan you can ma

nage-whether physically, emotionally orfinancially-learn to set boundaries and remember that "no" is acomplete sentence.De-stressing at work

Practicing regular stress management is good for long run. But,practicing preventive stress management helps in improving qualityof life.

"Everybody reacts to stress in different ways and even dealswith it differently," says Dr. Fatema Saeed, a practisingphysiotherapist. Describing how exercises can help de-stress, shesays, "Moderate to intense aerobic exercise for longer durations andresistance training protocols of longer duration,lighter resistanceand longer interest rest intervals, cause the greatest release

ofendogenous opioids (stress-busting or "feel good hormones") in thebloodstream and hence, help in relieving stress. This secretionincreases pain tolerance, improves appetite control and reducesanxiety, tension, anger and confusion. Also, with regular exercise,

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the individual becomes more sensitive to the opioid effects so that ittakes lessof the hormone to induce a specific effect." Therefore,apart from improving physical fitness and overall health, regularphysical exercise also has psychological benefits.

There can be no one solution. Everyone needs to find their ownways of beating stress.

Coaching for productivity

Due to changing demographics of the world such as morecompetition and the introduction of new technologies, organizationsare discovering that traditional tactics of management are no longerenough to remain competitive. As such, coaching is becoming to berecognized and practiced as an effectivetool to increase morale,performance and the bottom line through the success of eachindividual associate. For example studies show that about 90% ofemployees who received their job performance and professionalsuccess. In organizations where coaching is effectively practiced asa management style, the bottom line performanceis two to threetimes better than the traditional command-and control type oforganizations. Furthermore, it has been proven that employeecommitment increases when there is strong, positive relationshipbetween management and his/ her employees. These types of

relationship are developed best as a result of effective coaching.

Coaching can be productive, expansive and costlysimultaneously. Since most employees will not be able to hirepersonal coaches, human resources professionals and managersshould act as coaches to their employees in the organization.

Effective relationship oriented coaching creates moreknowledgeable and competent employees, reduces errors andrework and it greatly assists in bringing new changes to the culture.Effective coaching skills make a managers job easier as it enablesgreater delegation leaving him/her time to take on bigger projects. Itbuilds the mangers reputation as a developer of people while

increasing productivity since everyone will know the expectationsand the fact what they do matters. It can also develop trust and agood relationship between managers and employees. Last but notthe least, good coaching skills can increase creativity, innovation,morale and teamwork since everyone will feel safe working in aninclusive environment.

Simply stated, coaching is about developing a trustingrelationship with your people so you can jointly clarify expectationsand departmental goals thereby leading to specific action plans for

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their achievement. As such, there are many situations wherecoaching skills will be very effective and the following list presentssome of them:

. Reinforcing good performance.

. Motivating employees to new heights and peak performancelevels.

. Orienting new employees into the department or organization.

. Providing new knowledge to individuals about changes andtactics.. Training a new skill for a new task that needs performing.. Explaining the current or new standards and how they can beachieved.. Setting priorities for effective time management with thoseemployees who need it.. Increasing the self confidence of employees about the task ornew responsibilities and challenges.. Conducting a performance review.Coaching is not innate skill but rather it is learned. It occursthrough ones life personally and professionally. From thisperspective, coaching is and it can be one of the most importantfunctions managers perform because it communicates performancelevels, expectations, and the importance of the tasks andresponsibilities and it communicates a caring attitude.

4. The Return on Recognition in a RecessionPeople management is a Key Result Area in delivering success fora business unitduring the downturn. It is obvious to adopt lay off asa strategy in achieving the cost minimization strategy. Butalternatives such as seeking voluntary reduction in salaries andincentives, flexible work hours and improvement in productivity areworth enoughto try during the slowdown. These strategies reducethe costs besides improving the efficiency of the organization.

Every year, PricewaterhouseCoopers (PwC) launches its GlobalCEO Survey during the World Economic Forums annual meeting inDavos, Switzerland. The survey, PwC saysin its introduction to the2008 edition, examines how CEOs perceive the businessenvironment in which they operate and how an increasingly

connected world affects the way their companies function andachieve success.

This years survey says: At present, CEO confidence is at anall-time low. Worldwide, just 21 per cent of CEOs say that they areconfident about revenue growth in the next 12 months, down from50 per cent in last years Global Annual Survey. Pessimism prevails

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across all geographic regions, business sectors and levels ofeconomic development.

In these tough economic conditions, there are many reasons tosuggest that if thehuman element was responsible for plungingcompanies and the world into this deep financial crisis, then thehuman resources of an organization are also perhapsthe best bet tohelp it emerge out of the same. And this is the reason why expertsview this period of economic recession as an opportunity for HRmanagement rather than a crisis.

The declining state of the global economy, layoffs,bankruptcies, the credit crunchthe headlines are impossible toignore. Companies across industries and around the world aredealing with similar complex challenges due to the ailing economy.Now is not the time for employees to give in to fear and not work ashard becausethey believe they will not be recognized for theirefforts. But how do company leaders address these employeeconcerns while remaining fiscally responsible, encouraging greaterproductivity and sustaining growth?

Strategic employee recognition programs reaffirm employeesin the value of theircontributions, acknowledge the additional workand effort they are being asked toperform, and allay rumorsthrough frequently updated executive messages. Human Resourcesleaders can actual

ly deliver savings to the bottom line through aproperly deployed strategic recognition program whilesimultaneously boosting morale and productivity. As Judy Bardwicksaid in Psychological Recession, Chronically fearful people are tooexhausted to be creative andinnovative. They expect the worst tohappen, so they see no reason to give theirall.

Power of Recognition in a Recession

Recognition helps people to be resilient. Businesses rightnow...theyre trying to survive. And to survive youve got to havesome psychological resilience. Youve got to have employees whoare positive despite the negative situations around them....I wouldargue that recognition is even more important in times like this.

Jim Harter, Gallup, October 2008News articles and research studies from firms including Gallup,Deloitte, Towers Perrin and many others confirm three commonissues among employees in this recessionary economy:

1) Survivors guilt Those remaining on the payroll after a round oflayoffs often feel guilty about surviving the ax. This guilt distractsthem from the task at hand. These employees typically needadditional reinforcement of the value of their work to help themjustify their status in the group.

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2) More work, less motivation The survivors are also paying closeattention to how management handles the layoff and subsequentredistribution of the work. With more tasks on each employeesdesk, managers need a way to encourage strong individualperformance while reinforcing priorities based on ultimate corporatestrategic objectives.

3) Rampant rumor mill The inevitable rumors of additional layoffsor restructuring further contributes to productivity and motivationchallenges. Teams often suffer the most with rumors fuelingbackstabbing and protection of individual tasks over team goals.

A recessionary economy is precisely when companies need toget the most productivity out of fewer employees, however.Company leaders are struggling with how to accomplish this whenannual or performance bonuses and even pay increases are nolonger in the budget.

Roughly half of the HR executives from several hundred firmswho responded to a Society for Human Resources Management(SHRM) November 2008 survey reported wage freezes and bonusescuts were likely in response to the downturn. A similar study byTowers Perrin found nearly half of the 450 companies surveyed arelikely to cut spending on pay and merit increases while 39 percentplan to

cut annual bonuses and other cash incentives.

At a fraction of the cost of cash compensation and bonuses,strategic recognition targets each of these challenges withmechanisms to acknowledge and reward performance, personalachievement, and teamsuccesses. The recognition program shouldalso be used to reiterate core companymessages such as key goalsand the mission to keep staff focused on achievable targets. Byusing the tool to encourage team members in a stressful time,company leaders communicate clearly their commitment to thewellbeing and future of the employees. Deployed correctly, strategicrecognitionprograms also become a scorecard for executives onincreased productivity and thefactors that are specifically drivingthat increase.

Savings through Proper Program Deployment

Most companies are already investing significantly in an incentive orrecognitionprogram of some sort, but the majority of thoseprograms are disparate, unfocused and do not deliver the full returnon investment possible with strategic recognition.

Simply by consolidating multiple disparate programs into oneand implementing efficient global administration, companies areable to achieve tremendous savings on their current investment in

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recognition. Globoforces strategic recognition programs take theburied and distributed budget of multiple legacy initiatives,consolidate it into a single global program, track it, and provideexecutives with reports on the value of the program across thecorporation.

These strategic recognition programs reduce the budget spenton recognition through a Zero Budget Impact and Net Cost Savingsstructure. This is possible by consolidating the various overheadexpenses of multiple programs and implementing features to moreeffectively invest the budget allocated to recognition. Nowexecutives can track spend in all divisions and groups and compareto the resultsachieved in terms of productivity, demonstration ofcorporate values, and achievement of strategic objectives.

Strategic employee recognition ensures:

Budget spend is primarily invested in employees and not onmultiple local administrators. Fully automated and integrated processes reduce the costsassociated with data entry and errors. Cost savings and program enforcement through global corporategovernance, tax compliance, and program measurement and

management.The Problem with Cash-based Incentives

With the cash bonus and annual compensation increase pool dryingup and employeeson a cash incentive performance track no longerable to meet those performance goals, many employees arechoosing to not work as hard because their goals (andaccompanying incentives) are out of reach. Yet many companiescontinue to rely oncash-based recognition programs, which neithermaintain program consistency on aglobal scale nor ensure localparticipants feel motivated and involved in the organization.Additionally, people become habituated to cash no matter howmuch you give them, viewing it as an entitlement. An August 2008study found that

in eight of nine tasks, the promise of a biggerbonus actually significantly decreased peoples performance.

Non-cash recognition programs save money by reducingmanual intervention and eliminating the paper chase while alsocreating a positive work environment where employees see thatbest practices, strong ethics and exceptional performance arerecognized and rewarded consistently, openly and fairly anenvironment that encourages loyalty, commitment and honesty ofeffort. It is thiskind of environment that drives greater morale andproductivity when company leaders need it most.

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Strategic recognition programs:

Drive productivity and morale by giving far more frequent awardsto far more employees. Use non-cash recognition, which produces twice the performanceboost as cash. Offer a hard, predictable budget to manage against.Become a scorecard for executives on increased productivityAs companies tighten their belts during tough times, its importantto remember that money isnt always what matters most toemployees. When it comes to encouraging employees to pourdiscretionary effort into their work, the chance to make a differenceand be recognized for their contributions can provide a muchstronger incentive. Unfortunately, only 49% of non-managementemployees report that their contributions are recognized by theircompany when they perform well. HayGroup Insight, September2008

The Problem with Merchandise Rewards

During the 20th century, many companies added a catalog-based merchandise rewards program to their cash bonus plans.However, this century old method offers no bottom-line savings onrecognition budgets. These programs typically include 30% markupon their products with unpredictable and very costly shipping,

handling, customs and duties fees. These programs deliver even lesson a global scale where companies tend to spend 10-40% more onawards to employees in countries with a lower standard of living,inequitably awarding them more than their colleagues and certainlymore than wasintended.

Gift-card based strategic recognition programs give rewardrecipients the key tocountless shopping, dining, entertainment andtravel adventures. With set shipping fees, the gift-card model alsofrees human resources managers from tracking global shipping fees,customs and duties laws while giving them a hard, predictablebudget to show to senior executives.

Benefits of Strategic Recognition in a Recession

Companies who implement a strategic recognition program ina recession can boostmorale, increase productivity, realize savingsand gain competitive advantage.

Boost Morale

Strategic employee recognition programs reaffirm employeesin the value of theircontributions, acknowledge the additional workand effort they are being asked toperform, and allay rumorsthrough frequently updated executive messages. By using the tool

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to frequently recognize and encourage team members in a stressfultime, company leaders communicate clearly their commitment tothe wellbeing and future of the employees.

Increase Productivity

Strategic recognition acknowledges and rewards individualperformance, personal achievement, and team successes. By tyingevery recognitionto a company value demonstrated or strategicobjective contributed to, employeesbegin to see how their effortsdirectly impact company success, giving them meaning andpurpose. This recognition reinforces and increases repetition ofprecisely those actions and efforts the company needs fromemployees to succeed. Deployed correctly, strategic recognitionprograms also become a scorecard for executives on increasedproductivity and what factors are specifically driving that increase.

Realize Savings

Consolidating multiple disparate programs into onecomprehensive, compliant and governable program saves 50-70% ofa companys currentinvestment in tactical recognition and incentiveefforts. Company leaders also realize cost savings through global

corporate program governance, tax compliance, and programmeasurement and management. Studies show non-cash recognitionproduces twice the performance boost as cash with praisingemployees saying thank you equal to a 1 percent increase inpay.

Gain Competitive Advantage

Companies implementing a strategic employee recognitionprogram during recessionary times position themselves tooutperform the competition today and when the economy turns.Perform at a higher level today and rebound quickly in the upturn byhaving the right people in the right jobs and by fostering a culture ofappreciation key tale

nt will want to be part of over the long term.Partner with the CFO to deliver program savings and increaseproductivity by creating a marked difference in the morale and focusof your employees over the competition.

I. The strategy adopted by HR personnel todeal with these challenges.

The recession is an opportunity for HR professionals to stepand contribute strategically. In the classical strategy paradigm, webegin by looking at the macro-economic environment. Then we look

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at the micro-environment -what affects us and our competitors.Next, we establish which strategic factors HR influences directly.Finally, we drop down to our tactics. The recession is about thecreative Human Resources Management. The HRM Function is askedto bring new ideas, to change the HRM Processes and to develop orchange the procedures. And this effort has to be cheap or it has tocut the costs of the organization. The HRM Innovation is easy intimes of the business growth, but the recession is not good for biginnovative HRM Initiatives.

Dave Gartenberg, Director HR of Microsoft UK, reportedly saidrecently: In turbulent times more than any other, there is not onlythe opportunity but the need for HR to provide leadership to thebusiness. The ability to attract and retain workers when times arereally tough requires leaders to be at their best. Many feel thatissuing pink-slips and managing layoffs are the biggest challengesthat HR faces today; but there is far less wisdom in this beliefbecause the real challenge that confronts corporate HR today is toutilize this period of recession as an opportunity.

.Finding opportunities during recession.i.Consolidate workforce: Workforce consolidation is a hugeopportunity that any organisation has nowadays. This is not

only in terms of having a leaner workforce, but also inredeployment of the workforce to improve utilisation andefficiency.ii.Streamline salaries: For the past few years most industrieshave seen above-normal salary hikes due to the pressure ofretention. In fact, India Inc recorded the steepest salary hikesin Asia for seven years running till 2008, according to HewittAssociates. But the recession has changed things dramatically.Salary freezes and pay cuts have suddenly become the orderof the day. The 13th annual Salary Increase Survey conductedacross 480 companies by Hewitt Associates shows that salaryincrease projections for 2009 in India have dipped to 8.2 per

cent from an actual increase of 13.3 per cent in 2008, butcontinue to be the highest in the Asia-Pacific region and amongthe highest globally.30


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According to the company, for the first time in six years,India will see single digit salary increases. Importantly, thedata for the survey was collected from December 2008 toJanuary 2009 and Hewitt expects that the salary increaseprojections may fall even further in coming months. Hence,this period can be viewed as an opportunity to streamlinesalaries and cut costs.

iii. Make organizations more performance-centric: Therecession has forced organizations to take a close look at theworkforce and identify the real performers. The non-performershave either found their way out of the organization or havebeen put on a short notice to deliver or perish.iv. Identify real talent: The renewed strict focus onperformance alone for survival in organisations has not onlyexposed low-and non-performers, but has also brought to thefore real talent in the organization.v.Develop talent as leaders: A recession is the right time towisely invest in the development of talent, both in terms ofskill sets and in the form of future leaders. The focus has to beon how much they are investing in their employees and whatskill sets they will need to grow their businesses in the future.

vi. Review and restructure policies: The mad pace of hiring,training and appraising seems to have come to a screechinghalt. And if not to a complete full stop, the rate is low and slow.This also gives HR the time to revisit its policies, compare themwith the best-in-class practices and restructure them formaximum effectiveness in the present and the future.vii. Build employer brand: Despite the fact that manycompanies have put a freeze on hiring, both hiring talentedpeople and retaining them will continue to be a challenge forHR. Hence, keeping the employer brand intact and re-buildingthe same could have a cascading impact later.viii.Communicate and build trust and morale: Communicatingwith employees not only remains one of the greatest needs of

HR, but is also an opportunity to build the trust and morale ofpeople during tough times. It is vital for HR to see that themorale of employees does not sag while the organization issailing through rough waters.

.How to intact your employee during recession:31


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Here is how to keep your employees with you and away from yourcompetitors duringtough economic times.

Differentiate Between Your Good and Average Employees

Redirect Your Employees to Other Departments (Job Rotation)

Listen to Your Employees

Keep Them Motivated and Busy (Communicate-Communicateand Communicate)

Show them the long term vision

The above steps will enable the employer to hold its team togetherduring a recession, and will even make bond between all of youstronger. Employees should be motivated enough to stick to theemployer during tough times and put in the extra effort required forthe organization growth.

. HRM Innovations in RecessionThe recession is about the creative Human ResourcesManagement. The HRM Function is asked to bring new ideas, tochange the HRM Processes and to develop or change the

procedures. And this effort has to be cheap or it has to cut the costsof the organization. The HRM Innovation is easy in times of thebusiness growth, but the recession is not good for big innovativeHRM Initiatives.

On the other hand, the top management understands theeffort to innovate the HRM Processes better. The top management isin the searchfor the potential cost savings and they count everysingle penny brought by the line management. The HRM Costs areusually a very significant cost to the organization and the HRMFunction has to be proactive.

The HRM Function has to focus on unpopular innovationsduring the recession as the role of Human Resources during therecession is to sa

ve money to the organization. The topmanagement expects all the support functions to bring innovativesolutions, which will have to make the organization stronger, whenthe next growth era comes.

The HRM Innovation during the recession has to focus on thefollowing topics:

. Reduce the number of employees in the organization

. Strategic initiatives to increase the productivity and efficiency ofthe wholeorganization. Redesign of the compensation scheme

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. Cancellation of several benefit schemes

On the other hand the HRM Function has to find innovativesolutions for the following topics:

. Identifying the real key employees and to keep them in the

organization

. Identifying the real top potentials and to strengthen their

development program

The second two topics have to be done with the minimumadditional costs and it is a really hard task to accomplish. The HRMFunction hasto have priorities in mind and the strategic impact ofthe HRM Innovations in the recession time. The role of the HRMFunction is not to cut the costs for the time being, but to make theorganizationstronger and ready for the future growth.

As a leader and strategic partner in your organization, youhave the tools to assist your company in surviving and thrivingthrough these difficult times. First you need to start thinking

strategically.How can the organization make effective and economical changesthat will help through these difficult times?

What can I do to minimize our organizations risk for fines,violations and/or unnecessary legal proceedings?Following area should be looked upon:

The point has to be focused by HR management during recessionare as follows:

To optimize the manpower strength. To take strategic initiatives to increase the productivity and

efficiency of the entire organization.

To work on compensation benefits. Redesign training and development programs. Ensure your organizations policies and handbooks are up todate. Remember that an annual review of your employee

handbook for compliance by an experienced professional is

highly recommended. Also, each employee having a copy of

the employee handbook is not enough. They have to be able

to read and understand the content. Be sure that you provide

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employees a handbook in a language they can read andunderstand.

Layoffs are never easy. Ensure you are familiar with yourlegal responsibilities in a lay off to minimize yourorganization's risk. Be sure that you have properly defined thecriteria you are using to determine who will be let go.Alternative Workweek Schedules and Flexible Scheduling canmaximize production and cut-back on overhead costs fororganizations. Be sure you follow all of the DLSE rules whendeciding if an Alternative Workweek Schedule or FlexibleScheduling is right for your organization.Cutting Pay may be an option to consider to save on todayscosts. Is this really an option for your organization? How areyour pay scales as related to the market? Are you willing torisk losing key employees whose talents may be needed byother organizations, because you chose to reduce their pay atthis time? Remember, you should not cut pay without arecovering strategy of how you will re-adjust when theeconomy has turned.

Downsizing does require internal document maintenance foryour organization. As jobs are modified and responsibilitiesare increased changes also must be made to your jobdescriptions. Offer Professional Development as a reward or incentive toemployees for performance and hitting goals. ProfessionalDevelopment courses are an economical way to rewardemployees with the gift of education and skills they will usethroughout their lifetime.34


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Downsizing does require internal document maintenance foryour organization. As jobs are modified and responsibilities areincreased changes also must be made to your job descriptions. Remember that the law is very specific on what positions canbe considered Salaried Exempt and what constitutes anIndependent Contractor. Looking at adjusting your staff to fitinto one of these two categories is NEVER the answer whentrying to save money.. Situational Leadership style during recessionDuring recession, H R manager has to act as a democratic leader.He should also try to combine the organizational and employeesinterest and adoptsituational leadership style as well as humanisticapproach for leading the employees to achieve the organizationgoals. Following are few recommendations for H R Manager to dealwith employees during recession:

1. Top management should know the contingency plan.2. Do the brainstorming session with your top management andcontribute in theirstrategic planning.3. A complete or partial job freeze, however, communicate to theworkforce that the company many continue to recruit key individualseven in difficult times

4. Review the employee performance evaluations to determinethe key people that company cannot afford to lose.5. Flow of Communicate should be from top to down that willhelp in making conducive atmosphere within the organization6. Make prepare yourself for individual and group concernstherefore there should be a proper counseling session.7. To maintain a calm atmosphere8. Review all HR policies, processes and procedures to ensurethat they are purposeful and contribute directly to the success of thecompany.9. Suppose the company has to lay-off staffs ensure that there areno other opportunities for them in other functions or divisions of theorganization.10. Advise managers to deal the process of managing change.

Managing Human Resources (HR) in a difficult economicenvironment is even more demanding than working in times of rapid

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growth. Therefore the task of HR is very important to maintainequilibrium throughout the hierarchy.

CONCLUSION

To sum up we can say that the global financial recession whichstarted off as a sub-prime crisis of USA has brought all nationsincluding India into its fold. The GDP growth rate which was aroundnine per centover the last four years has slowed since the lastquarter of 2008 owing to deceleration in employment, export-import, tax-GDP ratio, reduction in capital inflows and significantoutflows dueto economic slowdown. In India, the impact of the crisishas been deeper than what was estimated by our policy makersalthough it is less severe than in other emerging market economies.

Since humans are an organization's greatest assets; withoutthem, everyday business functions such as managing cash flow,making business transactions, communicating through all forms ofmedia, and dealing with customers could not be completed. So whenwe are discussing the topic of recession and recovery fromrecession, Human Resources Management plays a very vital role.

Human Resource Management must be able to address theright kind of demands relat

ed to Human Resource functions duringthe recession. Human Resource Management must play a highlyproactive role in managing the issues of global recession by helpingorganization to enhance their abilities to learn and collaborates,manage diversity, ambiguity and complexity. Human ResourceManagement is responsible to manage the human resource of thecorporate to maximize the productivity, efficiency at minimal costand maximize profit. During thisglobal recession, Human ResourceManagement is facing the many challenges and changes inorganizational level, workplace and HR department level itself. Thechallenges can be faced by HR Managers effectively if properstrategies are implemented. The recession is the temporaryeconomic climate of the business world. It will be changed through

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more productivity at minimal cost and maximize profit at moderateprice of products in business.

BIBLIOGRAPHY

1. Economics and Political Weekly Journal.2. International Labour Office (ILO), Global Wage Report 2008/093. Choudhari 2008, HRM Journal.4. Mujtaba, 2008, HRM Journal5. Kathleen Patterson & Gray Oster, HRM Journal6. Elango R, Chief Human Resources Officer, Mphasis.7. Global Wages Report 2009.8. DK Srivastav Global Head, HR, HCL. HRM Journals9. Government Of India official website.10.ILO website.11. Human Resources Management, -Diwedi.37


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Documents

23974634 Final Assigment on Global Recession and Its Impact on Human Resources Management