Benefits Of Managing Employees And Employee Relations Essay

1395 Words Jun 29th, 2016 6 Pages
1. What is the difference between these two set of companies? Is it simply that one set of companies cares more about its employees than the other set of companies cares about its employees? Or, is it also the case that Southwest, Nucor, and Lincoln Electric have set up their compensation strategies in a way that makes them more able to cut labor costs when times are tough? What about protecting investment in employees and employee relations?

ANS Since payroll costs is almost 50% of a company’s fixed expenses, it will be easier for the organization to decide its focus on cutting employment costs depending on the nature of the slowdown i.e. short-term, medium or long term. Employment be it hiring, training, terminating will have significant impact on cost reduction as it reduces monetary outflow towards base salary, overtime, and benefits. This should be the last resort for the company. In tough economic situations the biggest security that any individual can have is to not worry about being laid-off. Once the worker has this confidence he/she is willing to sacrifice a pay cut or work long hours or take no increments to improve the company’s numbers. Encouraging employees to take short work weeks, sabbaticals, unpaid vacations, redeploying employees to different assignments, freezing recruitment activities are few steps that an organization can do to avoid lay overs. All of this can be inspired in employees when they senior leadership team participating in making…

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