Fedex Case Study

Only available on StudyMode
  • Download(s) : 194
  • Published : September 5, 2012
Open Document
Text Preview
Abstract
Workers understand that companies, at times, need to take drastic actions. The real issue is whether they see the company balancing its immediate business interests against how those decisions will affect employees and the long term business sustainability. Labor relations is a broad field encompassing all the myriad interchanges between employers and employees. While labor relations is most often used to discuss this exchange as it pertains to unionized employees, it may also refer to nonunion employees as well. Labor relations are dictated in a large part by the government of a nation and the various regulations it provides regarding the treatment of employees. The forming of a union can be a precarious situation for employers. Employees form unions when they are unhappy with the terms of their employment and the direction the business is taking. Although employers can take certain steps to avoid unions forming within their place of work, they must follow the law and regulations regarding labor law.

At a time when technology is becoming the key distinction among transportation firms, FedEx recently announced plans to shrink its 4000 employee IT division by about 200 workers. The move has been considered jarring by some because FedEx traditionally has used layoffs only as a measure of last resort. How could this action affect the company’s organizational culture and employee relations, especially in lieu of its corporate philosophy? What steps should FedEx take in order to prevent or minimize possible negative effects?

Many years have passed since our nation has experienced an economic downturn of the severity, rapidity and frightening uncertainty that marks our current circumstances. In an effort to maintain even marginal profitability, companies have been slashing costs, including laying off workers. The newly unemployed each month have been numbering in the hundreds of thousands.

Despite what has been said about the unimportance of job security to recent generations of workers, security remains the most basic need, albeit sometimes latent, of the overwhelming majority of people at work. We see in these times just how powerful that need is, as it was for workers during the Great Depression and for their children who were admonished to get “safe and secure” jobs. Depending on its severity and length, the current downturn can leave similar psychological scars on this generation of workers and their families.

Current conditions generate enormous amounts of psychological stress in workers. Some stress is inherent in the work situation and, at moderate levels, is not only not harmful but natural and functional as people seek to perform and achieve challenging goals. The current level of anxiety; however, is anything but functional. It is a management fallacy that keeping people nervous about their jobs induces them to perform at high levels. To the contrary, great stress causes employees to focus on their own tenuous situations rather than on getting their jobs done and done well. There is abundant evidence about the harmful impact of great stress on physical health. As one example, researchers have found that people exposed to prolonged job stress face at least twice the risk of having a heart attack as other workers. The American Psychological Association estimates that job related stress costs U. S. companies about three hundred billion dollars per year in absenteeism, productivity loss and health care costs. Severe stress, then, is harmful both to the worker and the business (King, 2006).

In addition to the impact of great stress, layoffs generate a sense among workers that they are disposable commodities and that, in turn, results in a disengagement from the company and its objectives. Company slogans that proclaim that “employees are our most important asset” ring hollow if, when times get tough, one of the first things a company does is to lay off workers. This is not to say...
tracking img