Downsizing the Workforce | Business Studies for GCSE/IGCSE - Year 11 PDF Download

Dismissal & Redundancy

• Termination of employment, commonly referred to as dismissal or firing, occurs when an employer ends the employment against the employee's wishes.
  • Employees are typically dismissed due to misconduct, such as violating company policies, or inadequate performance.
  • Employers may opt for immediate dismissal without notice or compensation, or provide a notice period during which the employee can continue working.
  • In certain countries, employees have the option to pursue legal action against the employer if they believe the dismissal was unfair.
• Redundancy arises when a business no longer requires a particular job role, leading to the dismissal of the worker, often accompanied by compensation.
  • The process of selecting employees for redundancy must adhere to clear and equitable legal standards.
• Some employees view redundancy positively for various reasons.
  • Having another job lined up, early retirement plans, or aspirations to establish their own ventures.
  • Attractive redundancy packages offered by certain businesses can sway employees' decisions.

The Factors used to Determine who is made Redundant

Downsizing the Workforce

• Workforce planning involves assessing future human resource needs in terms of both the quantity and skills of employees required.
  • During expansion phases, businesses often need to increase their workforce, but at times, they also face the need to downsize, meaning reducing the number of employees.

Reasons for Downsizing

• Lower demand can result in decreased production needs and the necessity for fewer employees.
• Integration with other companies through mergers or takeovers may lead to duplicated job roles.
• Business closure typically requires only a minimal workforce for the legal dissolution of the organization.
• Automation entails increased machinery usage, often replacing human jobs with a focus on machine operation.
• Retrenchment usually leads to decreased resource requirements, including a reduced need for employees.
• Business relocation can prompt operational reorganization, potentially necessitating a smaller workforce.