CASE: Employee Layoffs at the University Medical Center

1. State the main problem of the hospital.

a. Firstly, the hospital is experiencing a net loss in its profit because of the
declining occupancy brought about by the opening of the biggest hospital in
the province.
b. Secondly, the hospitals proposal for employee layoffs is very difficult to
execute as employees will not be receptive about it which can eventually
cause a possible trouble in the long run.
c. Third, hence, if the hospital implements layoff, it will surely create a negative
impact on its image, thus losing its competitiveness.
d. Since the hospital has never experienced an employee layoff, it would surely
have difficulty implementing such layoff. Furthermore, since it would be its
first time to execute an employee layoff, the hospital does not have adequate
criteria of executing it. Even though the hospital has a performance appraisal
system, the criteria would surely not be acceptable to the employees. It is
quite evident that the hospital lacks strategy, as well as HR planning.
2. State the different areas of consideration following the guide below:
a. Strengths of the hospital
Considering the fact that the hospital is considered as one of the largest in the city,
it has the following strengths:
Special expertise
Good and extraordinary reputation
Cultural connections, and
Facilities have grown gradually over the years.
b. Weaknesses of the hospital

The hospital needs to address and overcome the following:

No established specific short-term and long-term marketing plan
No established annual HR planning model, and
No differentiation of service lines

c. Opportunities of the hospital

The following are the opportunities of the hospital despite the issue confronting it:
a. Improve facilities and equipment
b. Expansion of building
c. Renovation of building, and

d. Improve quality of health care services

3.

Avoiding Layoffs Alternative Strategies / ACA

After assessing the hospital downturn and the BODS recommendation layoffs up to
25 % and likely duration of the strategy to be implemented, evaluating the costs
and savings, and considering any legal ramifications, an employer next must decide
on what strategy(s) will best address its situation.
a. Communicate with Employees to Gain their Support and Obtain
their Ideas

No matter what strategy an employer utilizes, results will hinge

on the level of communication with the workforce. As early as
possible after the necessity for cost-saving measures is
identified, educate employees about the state of the company
and possibly about what alternatives to layoff are being
considered. Ideas about what could shave expenditures should
then be solicited from the employees through surveys, emails,
focus groups and interviews.

Not only do employees often offer innovative ideas when their

jobs are directly implicated, but morale will be bolstered by
managements display of confidence in the workforce. The
stronger the communication process, the less likely that
employees will choose to leave the company.

Loyalty is generated in employees who feel that their employers

hear their voices and care about their jobs.

b. Restructuring

Restructuring efforts that could preempt a layoff would include

closing of obsolete plants or branches, administrative overhauls,
selling of non-core operations and improving internal processes.
As to the latter, employees often have the best ideas about how
their jobs could be performed more effectively and/or efficiently.

c. Hiring Freeze and Internal Shift to Cover Open Responsibilities

In a seemingly ironic practice, employers often continue to fill

vacant positions while introducing significant layoffs. This
practice sends employees the message that their needs and
livelihoods are unimportant to the organization.

By simply placing a freeze on all hiring and then shifting

employees internally to cover all functions, savings are coupled
with improved morale. This option, like the other ways to reduce
headcount discussed below, carries the advantages of minimal
risks and costs and is less likely to diminish employee morale.

However, the disadvantages are that longer time commitments

are required to realize somewhat limited savings and the
internal shifting and reassignments will cause some level of
disorganization.

d. Ensure that procedures used to make decisions are seen as

and fair.

This is known as procedural justice. When laid off employees

perceive downsizing procedures to be fair, they tend to file fewer
claims of wrongful termination, and voluntary turnover among
surviving employees is much less frequent.

e. Be transparent about the current conditions that the organization

faces and the potential impact on the workforce.

f.

Employees want to hear the truth, and they want to hear it from the
CEO.
Pretending things are fine will only hurt a leaders credibility. Provide
regular updates at least every four to six weeks, including reports on
year over- year revenue, net income, current business strategy and
future prospects.

Be able to justify the layoff.

A company has to demonstrate a financial loss for several quarters, not

just a generalized sense that the economy is turning down, before
laying off workers.

4. State your recommendations base on your ACA

Cut temporary staff.

Eliminate overtime.
Offer voluntary retirement.
Freeze salaries.
Cut salaries.
Freeze hiring.
Reduce work hours.
Use temporary layoffs (furloughs).
Use furloughs with incentives.
Cancel business trips and costly perquisites.

Reduce or suspend matching contributions to company-sponsored savings

plans.
Raise employee contributions to benefits plans.
Postpone or eliminate bonuses

5. Provide
a
conclusion/detailed
action
recommendations using the guide below
Specific Activity
Work Attitude and
Values
Enhancement

Identify
departments
and functions
that
are
strategically
critical, along
with
critical
employee skill
sets
going
forward.

Identify
criteria
that
reflect
legitimate
business
needs.

Document the
criteria
and
processes

Person
Responsible
LALLAINE
BUENAOBRA
CEO
MELINDA DUMAEL
HR DIRECTOR

Time Frame

to

implement

your

Budgetary
Requirements

used.

Conduct
analyses
to
ensure
that
there is not a
disproportiona
te effect of
layoffs
on
members
of
protected
classes
and
have
all
analyses and
documentatio
n reviewed by
an attorney.

CASE: The Unsatisfied Department Chair