Benefits of a good redundancy process

This research project will look into how a good redundancy process can help both the staff being made redundant and the staff remaining in the company.

It will discuss the importance of using a carefully designed selection process and how the employer’s conduct is vital in a company going through a redundancy.

It will also give an example of a good redundancy process.

By interviewing members of the company who were made redundant and who remained employed. I can conclude that while redundancy is never a good experience for any company it can be done in fair and understanding way and can cause no bad feeling or unrest.

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Table of Contents:

Abstract i

Acknowledgements ii

Table of Contents iii

Chapter 1: Introduction

1.1 Introduction 1

1.2 Aims and Objectives 1

1.3 Reason for this doing this project 1

1.4 Benefits to the organisation 1

1.5 Information and how it will be obtained 2

1.6 What resources will I need 2

1.7 Problems or issues 2

1.8 Time scale for the project 2

Chapter 2: Literature Review

Introduction 3

What is redundancy 3

Selection Criteria 4

Employer Conduct 4

Example of a good redundancy process 5

Conclusion 5

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Chapter 3: Research Methodology

Introduction 6

Research Methods 6

Research methods used for this project 6

The Organisation 6

The Respondents’ 6

The Interview 6

Ethical Issues 7

Limitations 7

Conclusion 7

Chapter 4: Research Findings and Analysis

4.1 Introduction 8

4.2 Research findings 8

4.3 Research Analysis 8

4.4 Conclusion 8

Chapter 5: Conclusions and Recommendations

5.1 Introduction 9

5.2 Summary of main Findings 9

5.3 Further Research 9

5.4 Reflection 9

5.5 Conclusion 9

Bibliography 10

Appendices 11 to 14

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Chapter 1: Introduction

1. What is your research question?

Answer: My research question is what are the benefits of a good redundancy process on the staff that are leaving and the staff who are staying?

2. What are the aims and objectives of the proposed research?


The aims of my research project are to highlight the benefits of a good redundancy process has on all staff staying and going.


1. Explain the importance of fully informing staff of why the redundancies are required

2. What is involved in a good redundancy process?

3. To show how effective a good consultancy period can help staff.

4. To show the effects of a good redundancy process on staff following the redundancies being implemented

3. What are your reasons for considering this topic/ area?

Answer: The reasons for me considering this topic is I recently went through a redundancy with a large US financial services organisation and the process left me feeling like I fully understood why and I would have no problem ever working for them again. There was no negatively towards the company from either the staff going or the staff staying. I believe this is very rare when companies are seeking redundancies.

4. What are the benefits to the organisation? How will it add value?

Answer: Everyone within the organisation fully understood why the redundancies had to take place and accepted the reason. Due the honesty of the managers here in Ireland and the information received from the US.

Also the redundancy package took into consideration the fact as relatively new company a lot of the staff wasn’t entitled to the statutory government redundancy. This showed compassion from the company and all felt it.

Those staying know that if the organisations circumstances changed again they would be treated fairly and well.

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5. What information will I require, and how will I obtain it.

Answer: The information I will require are interviews from both staff that were made redundant and from those who remain employed by the organisation

I will also interview a staff member who stayed, who was made redundant and from management who had to implement the redundancy. I will also use literature on effective redundancy processes. I have chosen the above forms of information, as I will get the answers from people directly involved in the redundancies.

6. What are the resources will you require?

Answer: Time, Equipment, Laptop, Microsoft office including word, outlook, a printer and access to a library.

7. What problems/ issues can you anticipate arising?


Problem 1: Getting people to fill in the questionnaire as everyone has very busy lifestyles.

The resolution: Is to keep the questions short and simple with simple yes or no answer.

Problem 2: Time. My time is limited with working full-time with travelling involved and college.

The resolution: Is to draft a time management schedule and make time for the doing the research project.

8. Include a time scale for the project

November and December – Reading and writing chapter 2

January – Writing Chapter 3

February – Writing Chapter 4

March – Writing Chapter 5 and editing

April – Submit project

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Chapter 2: Literature Review


In this chapter I will discuss what redundancy is and why it happens and also the benefits of a good redundancy process on the staff being made redundant and on the staff remaining in the company.

Redundancy is defined as a dismissal caused by either the company is closing down, downsizing or the employees job is no longer needed or been done. The responsibility of the employer is to show evidence that redundancy is required. They cannot just decide redundancy is required. They must produce viable evidence. The main areas to that need to be very strongly considered when a company is trying to develop a fair and good redundancy process are the selection criteria and the employers conduct. Moffatt (2007,p312)” Redundancy is defined by section 7(2) of the Redundancy Payments Act 1967 which provides that an employee shall be taken to be dismissed by reason of redundancy if the dismissal if attributable wholly or mainly to: the fact that his employer has ceased or intends to cease to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or the fact that his employer has decided to carry on the business with fewer or no employees whether by requiring the work for which the employee has been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or the fact that his employer had decided that the work for which the employee has been employed (or had been doing before his dismissal) should henceforth be done in a different manner for which the employee is not sufficiently qualified or trained, or

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the fact that his employer has decided that the work for which the employee has been employed (or had been doing before his dismissal) should henceforth be done by a person who is capable of doing other work for which the employee is not sufficiently qualified or trained”.

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Selection Criteria

When an employer is implementing redundancies affecting some of their employees, Using a correct selection criteria to choose which roles are to become redundant is probably one of the toughest parts of a redundancy process for management. An employer is required to select fairly for redundancy where there is more than one employee in similar doing the same job. The selection criteria applied should be considerately relevant and applied in a decent way. Pilbeam and Carbridge (2006, p532) ‘whatever selection criteria are decided upon, they need to be applied fairly and equitably’. The selection criteria must be recognized and scrutinized for fairness and lack of prejudice initiation initial stages of the process. There are no exact rules as to what signifies correct selection criteria. Openness and informative should be used in relation to the selection process and secrecy or confusion about the selection criteria should be avoided. The following selection criteria employee’s gender, marital status, family status, sexual orientation, religion, age, disability, race or membership of the traveling community will immediately make the selection process and redundancy unfair and will amount to discrimination under the Employment Equality Acts 1998-2008. It is also best to avoid particular criteria, such as performance reviews and attendance records.

Employer’s Conduct

One of the conditions for determining whether a dismissal for redundancy is fair is whether the employer’s conduct was reasonable. There is no statutory obligation on employers to consult with an individual employee in advance of a decision to terminate his or her employment for redundancy. However, an employer who does not engage in some form of discussion with an employee in advance or who fails to consider if there are any options other than redundancy will be in a difficult position in the event that the termination is challenged. Recent decisions of the Tribunal indicate that in the current economic climate, where it is likely to prove difficult for employees to secure alternative employment, an employer is expected to go to greater lengths then ever before to satisfy the Tribunal that its conduct was reasonable. The employer will be expected to show what consideration it gave to possible alternatives to redundancy. This would include considering proposals that the employee put forward. The potential for redeployment within the organization must certainly be explored. In most cases a redundancy process can be very stressful to the managers involved. Secord (2003, p364) ‘It is seldom a pleasant or easy task and one that many would wish to avoid. Handling redundancy situations can be stressful particularly for operational managers who feel a sense of divided loyalties and a conflict of emotions’.

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A good redundancy process

The following account is off a company who used good redundancy process. It was a US Financial Services Company. When they announced the company was closing for new business and that they required compulsory redundancies, as some employees jobs will no longer be carried out. Firstly this company kept all the staff informed and involved, by have representatives of staff go to board meetings with management and explaining to everyone what and how they were going to select the staff that will be made redundant. Throughout the consultation process staff could put questions and requests. The entire staff understood why the redundancies were needed and to a point they was empathy toward the company and management. The employer’s conduct went a long in ensuring they was no unfairness and through discussions with employee’s on an individual basis everyone understood that there was no other alternative other redundancy. This company was unable to redeploy staff to any other area of business. The company used 3 methods of how selection would take place. They used what they called opened and closed pools and no selection. Open pool was defined as a job that was created out of close for new business strategy and allowed employees with experience in this area to add themselves to this pool. They were only two opened pool positions. Closed pools were defined as where there is currently more people doing the job than is now required. An example of this if there is currently ten staff working on the IT helpdesk and after the close of new business the requirement was for five staff to be on the IT helpdesk. The ten staff was put in the closed pool and from there the selection process was experience, knowledge and qualifications. The company explained this were some people were for obvious reason disappointed on not being picked. They understood why they weren’t picked and why someone else was. The staff in the no selection pool understood and was taking in individual and explained that their no longer existed after the company closed for new business. This was a tough discussion but the openness of the meeting meant there was no doubt by the employee that why were unfairly been made redundant. When the staff that was being made redundant was informed the company brought recruitment agencies, lawyers and experts in social welfare to help the staff that were being made redundant. Internet access and time off for interviews were allowed and advice/ workshops on CV writing and interview tip were scheduled and held for staff. While the though of being redundant was a very nervous time for people. The company could not be faulted in way they went about with the redundancies. The company also took into consideration that a large percentage of the workforce being made redundant had less than two years service and would not qualify for the statutory redundancy. They announced that all staff on 2 years would receive 12 weeks redundancy money. Also because of how good the company handled the redundancies the staff remaining also felt that should this happen again the company would be fair and use a good redundancy process. The only area the redundancy could not prevent was the sense of sadness among the staff going and staying as this company had developed a sense of friendship and camaraderie among the staff. Many of who are still friends to today and meet up regularly.

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Chapter 3: Research of the Project

3.1 Introduction. In this chapter I will discuss the difference between research methods and also explain why I have qualitative (Interviews) and also some issues that may arise

3.2 Research Methods. There are two research methods qualitative and quantitative. Qualitative is interviewing a small number of people with very detailed questions and answers usually done face to face or via telephone of email. Qualitative is defined as – relating to or based on the quality or character of something, often as opposed to its size or quantity. Marchington and Wilkinson (2005) says ‘That qualitative research is more fashionable than in past when there was greater stress on ‘objectivity’ and ‘reliability’ and an attempt to impose scientific use of theory. Qualitative research puts emphasis on individuals’. For my research project I feel I need more specific answers to very definitive questions. Fineman and Mangham (1983) observe ‘ If behaviour is viewed as situtationally specific, idiosyncratic, multi-variate or holistic, then a ” richer” more descriptive analysis may be taken to be worthwhile’

The other method of research is quantitative which is to send out a large quantity of questionnaires to large amount of staff. The questions are generally answered by yes or no and does not make it possible deeper probing into the questions.

3.3 Research Method used. The research method I have used for this project is the qualitative method

3.4 The Organisation used. The organisation I am using a US financial services that in July 2009 made half its workforce redundant due to the closing for new business.

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3.5 The Respondents. The respondents I am using for this are as follows:

A Manager: That remained employed and also had to deliver the redundancies to his department

A Personal Assistant: That remained employed

A Personal Assistant: That was made redundant

A project Manager: That was made redundant

3.6 The Interview

The interviews will take place as follows:

Two interviews will take via telephone

One interview will be face to face

One interview will take via email

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3.7 Ethical Issues

Due to the sensitive nature of redundancy I have decided to leave the names of the staff I interviewed out. Also I have done this, as the company did not want to use their name. Bryam and Bell (2007) states ” It is the responsibility of the researcher to access carefully the possibility of harm to research participants and the extent that it is possible, the possibility of harm should be minimised’

3.8 Limitations

The limitations I have found while doing research were as follows:

Time: Due to working full time it can be difficult to allocate enough time. Likewise time is also a limitation for the persons being interviewed as they work full time and have other obligations to attend to.

3.9 Conclusion

In this chapter I have explained the difference between the research methods qualitative and quantitative. I shown which method I have used taking into consideration my literature review and the topic I have chosen to do my research on.

I have discussed the ethical issues and how I have overcame them.

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Chapter 4 Research Finding.

4.1 Introduction.

In this chapter I will discuss the answers to my interview questions and analysis any common traits and what the answers means in terms of this research project.

4.2 Research findings

My research finding though the interviews I held found that for a manager conducting and implementing redundancies it better to have a solid and fair selection criteria. That by management being open and honest about all aspects made it easier for them.

I also found that while being made redundant was terrible there was no bad feeling towards the company or managers. The staff being made redundant felt that they were treated fairly and had accepted the reasoning behind them being selected for redundancy. For the staff remaining there was initially a sense of guilt and sadness but upon the employers conduct towards the staff being made redundant they feel that should the company need to conduct more redundancies they would be treated fairly.

4.3 Research Analysis

The above chart shows that the employer’s conduct was the most important aspect of a good redundancies process. Everyone one who I interviewed listed this as his or her most important aspect. The next most important was the selection criteria which 75% of the people interviewed also stated this was very important. Finally both the staff members who were made redundant stated theta the redundancy payment and the workshops were a good aspect and showed the company did appreciate them.

4.4 Conclusion.

The conclusion to this chapter that the when I analysised my finding it showed that it is the important area in the redundancy process followed closely by the selection criteria

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Chapter 5 Conclusion

5.1 Introduction.

In this chapter I am going to conclude this research project by giving a summary of my findings. If there is any further research is required and my personal reflections of the research project.

5.2 Summary of this project.

This project has been based on showing the importance of a good redundancy process on the staff being made redundant and the staff remaining with the company. My research I believe showed that by a company incorporating solid and fair selection criteria for their staff and by the company being open and honest and by considering the situation that is they can make a redundancy as painless as possible for all the staff involved whether they are leaving or staying.

5.3 Further Research

There is a lot more research on redundancy available now due the economic climate. Although my research was about a good redundancy process and that the people I interviewed were satisfied with Company x’s redundancy process. I could of have to do more research if the outcomes were less positive.

5.4 Personal Reflections

My personal reflections on doing this research project were mixed, as some chapters were easier to do then others. Also I have never conducted a research project before. I had been through a good redundancy before and felt during this challenging times this was a good topic to my research on.

5.5 Conclusion

In this chapter I have concluded this research project by giving a summary of my findings. Why further research could be required if my findings were different and my personal reflections of the research project.

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