During the Economic Recession

Introduction

During the economic recession, many organizations are faced with the challenges of a layoff. A layoff can effect not only the internal organizational environment but also the external environment. It is important to understand what those challenges are, how they conflict with each other and how to develop a workable approach that will minimize the impact the layoff has on both the internal and external environments. In addition, shareholders must also be considered when developing a workable approach to ensure their best interest is taken into consideration.

Current Situation

During the economic recession many organizations were able to sustain longer than others. Unfortunately for Scott Wheeler, human resource director at IFP who employed of 10% of the local workforce in Ouachita County, Arkansas, it was only a matter of time before he was faced with planning a layoff. That day had finally came when he had a private meeting with the president of the company, Janet Deason. Janet informed him he needed to develop a plan to layoff 30% workforce in addition to making the transition as smooth as possible (Mondy, 2012).

Answering the Questions

Scott knew there were several issues he would need to take into consideration. First, he needed to think about how the union would react. Scott knew the policy was employees would be let go in order of seniority but he also knew the union would do everything in its power to save as many jobs as they could. In addition, Scott needed to prepare management for this layoff, as he knew the union would be watching management very closely during this time and the union would not take any mishap lightly. An organization is required by law to recognize a union. The union’s job is to negotiate with management about employee wages, benefits and working conditions. Typically there is a contract of this negotiation and Scott will need to be familiar with the terms of the negotiations to ensure they are not in breach of the contract. The concern for the union’s reaction is legitimate as they could have a nature of retaliation, strike and rebellion against the organization. This could further damage the state of the business if it is not approached with careful consideration and preparation for the possible outcome (Mondy, 2012).

The next element Scott will need to consider is the impact the layoff would have in the community. Since IFP does employ 10% of their cities workforce, this will be a major hit on their local community. Also considering the local community