During tough economic times, organizations try to cut every cost they can; anything unnecessary goes. A hand-to-mouth attitude takes over.
Activities that don’t immediately contribute to profits are classed as disposable.
In many organizations, one area of the business that is viewed in this light is human resources. Unfortunately, human resources management is frequently seen only as an administrative function or a theoretical “nice thing to have” and not seen as an area of management contributing to the long-term success of a business. The result is that HR activities are curtailed or eliminated.
HUMAN RESOURCE PROGRAMS ARE NEEDED
Instead of being a disposable, I would contend that human resource programs are needed more than ever, both for the present and for the future:
• Undoubtedly, some employers are ignoring, either through lack of knowledge or because of desperation, the rules that apply to termination of employees. Currently, in the Toronto area, a local law firm has realized this and is advertising its services to individuals that feel that they have not received proper compensation at the time of their termination.
• Performance management is an activity that is often poorly carried out even in the best of times.
‚Ä¢ Formal appraisals aren’t carried out on a timely basis and are often less than candid.
• Aside from formal appraisals, parts of performance management are also not carried out effectively. Verbal warnings or reprimands are not properly recorded. As a result, when it comes time to appraise staff and determine who should stay and who should go, there are only anecdotal references to support the action.
‚Ä¢ A good appraisal program should contain development plans for the individual. These plans need to continue to be pursued even though business is tough. Otherwise, the business won’t be able to compete in the future.
‚Ä¢ Safety is an area that needs greater attention than ever during difficult times. Unfortunately, some organizations believe that they don’t have the time or resources to continue their safety program.
• In the first place, certain actions and activities are required by law and are not a nicety that an employer can dispose of when they have less staff or everyone who is still employed has to work harder.
• Accidents have a tendency to increase when employees are concerned about their future employment. Some individuals believe that they will be better off on workers compensation than on unemployment insurance. Therefore, every accident needs to be investigated carefully or the organization will find that its WSIB premiums will be escalating.
• Employers and managers have a duty and responsibility to ensure that work is being carried out in a safe manner even if the safe way takes a little longer. Failing to do so can lead to criminal charges.
• Benefit programs can be abused during a recessionary period in much the same way as workers compensation programs. It is important that there is an HR responsibility to monitor any significant changes in benefit usage, particularly short and long-term disability benefits.
• There is never a better time to look at organization structure than during tough times. Reviewing and revising an organization structure is often a traumatic experience for individuals. Sometimes power and scope of position is taken away and employees have a hard time dealing with this. However, during difficult times, people are more likely to support and assist in helping an organization design a more effective way of doing business.
The advantage of revising and improving organization structure and processes is that the benefits will flow over to the time when business improves.
NEED HUMAN RESOURCES DURING DIFFICULT TIMES?
Human resource management doesn’t mean having a big HR staff. Any HR department that might exist should be subject to the same review for performance and organization effectiveness as any other part of a business.
Many smaller businesses may not even have HR departments, but they do have HR issues. These issues need to be addressed and dealt with in difficult times as well as when times are good.
All aspects of human resource management need to be brought together in an effective way to ensure that your people costs are as good as they can be. In most organizations, after raw materials, people costs are the next largest expenditure for a business.