Containing Costs While Retaining Top Talent and Maximizing Productivity
• Today, most HR managers have been under pressure to cut labor costs, and gaining productivity from workers became an even bigger priority.
How firms are handling this challenge : Managing benefits
ü Cut in pension, bonus, and health case plans
ü Offer programs and incentives to promote employee health
Downsizing
ü leave employees facing insecurity
ü lower level of employee dedication and productivity
ü Create hidden costs of downsizing
Outsourcing
ü Increase organization’s flexibility
ü Lower overhead costs
Offshoring or global sourcing
ü Reduce labor costs by relocating work to countries such as
India, China, and Philippines
ü Involve some hidden costs
Productivity improvement
ü Defined as “the output gained from a fixed amount of input”
ü Resulted from a combination of employee’s ability,
motivation, work environment, and technology used to work