Northeast Data Company

Topics: Termination of employment, Layoff, Human resource management Pages: 7 (1729 words) Published: October 7, 2011
A human resources case study about the issues that must be addressed with regards to the personnel retrenchment of a national data processing company


Northeast Data Resources Inc. (NDR) has been in a tumultuous situation as the business future projections have faltered. There have been a significant decline in the sales and revenues of the company and the various options available for recovery always came back to the drastic cuts in personnel and the employment of marketing personnel to gain an increase in sales.

Point of View

George Wellington in this case being NDR’s Director for Personnel was given the responsibility of creating a plan for the proposed lay-off and retention of the 100 production and engineering staff and the additional hiring of 15 sales personnel.

Statement of the problem

What downsizing strategies would be most effective to streamline and cut the costs at NDR without risking a number of its personnel with the cut?

What maybe the alternatives to laying-off personnel within NDR which will become beneficial in terms of output efficiency and effectiveness, cost reduction and added-value?

Statement of Objectives

✓ Propose downsizing tactics that will be optimal both for the organization and the personnel involved

✓ Develop alternatives to laying-off employees so as to improve output, reduce costs, and increase value in the long term run

Areas of Consideration

Jack Logan’s aggressive and ambitious misprojection of the company’s growth led to the recent turbulent situation within NDR Inc. His prediction for the company were not in sync to what had happened in reality as a significant decline took place in sales, in addition to the unexpected entry of a new competitor and the increase of expenses within the organization for its expansion. Furthermore, the company’s budget had to be cut to go in hand with the efforts to boost the revenues.

Consequently, Logan took charge of the culpability and urged every member of the team to work on resolving the solutions for the problem.

In line with these dilemmas, the solution the top management has come up with was to downsize and lay-off some of its employees. Downsizing as defined by Coulter and Robbins (2005) is the planned elimination of jobs in an organization. It is a set of activities undertaken on part of the management and designed to improve organization structure. A downsizing strategy reduces the scale and scope of a business to develop its financial performance. And the reduction of workforce is one of only several possible ways of improving profitability or reducing cost (Bakshi, 2010). Wellington being the Director for Personnel at NDR was charged to identifying and examining the staff who will be laid off--a number of personnel summing up to 100 are to be laid-off the company and even if there were no criteria for a decision yet the management all agreed that the loyal and trusted employees who have been with NDR for a number of years should only be released as last alternative.

It would have been very hard for Wellington to endure the process of laying-off of the employees since he was the one who broke new grounds into the company’s recognition of the value of the human resources within the organization. He even made a function plan for the NDR’s personnel department and persevered in allowing the people in the company to give recognition to the major role of the personnel in the institution’s operation.

Alternative Courses of Action

Most companies faced with economic instability resort to downsizing for an immediate solution. NDR is not different as the board has come up with the lay-off solution as an alternative course of action.

Hence, Wellington should propose to the top management downsizing tactics that will be optimal both for the organization and the personnel involved and develop alternatives to laying-off employees so as to improve output, reduce...
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