Intro

In the recent years the role of high-tech companies is comparable to the biggest scientific centers that creates value for generations. The rapid development of those companies allows employees to get solid remunerations along with special working circumstances. Those actions enable people to focus on their job and do not spread attention on inconveniences, that is connected with the internal atmosphere. The bright example of such organization is Nokia Company.

Nokia was formed as a result of the merger of 3 companies that face people from different cultural and national backgrounds. The management policy of the company had an aim to introduce business procedures that will overcome certain difficulties. Implementation of HR practices reflected in amazing financial results and expanded their market share worldwide. The perfect balance of unique ideas along with information technology development were extremely beneficial for the all members of corporative hierarchy. However, a number of obstacles arose and led to the damaged corporate image.

How do reorganizations and massive layoffs, for example in the spring of 2003, affect Nokia’s employees in terms of their attitude and behaviour?

Layoffs and reorganizations itself are the actions directed to terminate or replace a unit of workforce, in order to reach the highest possible effectiveness or stay efficient in hard conditions.

Declining of the entire technological industry and bankruptcies among high-tech start-ups caused mistrust from investors’ perspective that resulted in one-year stagnation of the whole sector in 2001. When Nokia, one of the major growing company, declared that it still has overestimated its revenues, financial specialists had had enough.

Nokia has begun aggressive layoff policy that regarded as a visible way of pleasing shareholders and potential investors. Announcements with sizable layoffs demonstrated determined leadership and the courage to cut costs, improving earnings in the shortest terms. After all the layoffs of Nokia, a lot of previous workers have found a job on a different position in a same company. Still, during the period from 2000 till 2004 more then 7000 people around the world have been fired.

Meanwhile, Nokia’s top management generously compensated for its efforts to keep the company’s profitability. Forbes magazine listed the salaries and bonuses received by the CEOs outside the US in 2002. Jorma Ollila (CEO of Nokia) was the highest paid CEO, pocketing USD 15.6 million that was 50% more from the second place. [1]

It is clear that absolutely controversial policy could not last without any consequences. Employee’s dissatisfaction about organizational affairs has become an initial point for the internal HR crisis.

How do these critical incidents affect the employees’ perception of Nokia’s HR practices listed above?

Most of big companies do not feel guilty for needed layoffs. If someone is choosing to work on a World Leading Company, he or she should be calm and efficient. There is nothing personal, only effectiveness of corporative goals. As a result, staff can have different perception of HR policy:

* Positive: When HR practices can help staff to understand that the employees are valued as assets, employees have higher dedication and contentment with the company. Moreover, it is the confidence of the employees to the company and the management. In addition, if employees see that the company values and promote the empowerment, they will be more satisfied.

* Negative: When workers see that HR is based on controlling costs - they have a negative attitude to the changes taking place in the firm. Employees believe that the reduction occurs on the background of the economy - then job satisfaction, commitment and productivity falls.

* Neutral: The attitude of the employee to HR-practice does not change, if changes occur in accordance with the working contracts. This suggests that if a worker believes that all HR practices are happening in the background of the collective agreement - he feels no discontent, and takes everything for granted. It will not definitely affect satisfaction, commitment, or employment relationship of an employee. [2]
Even within the same company, different employees may view the same HR practices differently. However, the effect is the same –– if employees feel that they are valued, they respond more positively to the HR practice. That is actually a sign for the statement of effective HR practice.

Taking into account all of the above, it is evident that Nokia had to determine the behavior of their employees and create a favorable environment for them. This would be reflected in the increase of client staff, willingness to do as much hard work as necessary.

A common corporate policy, for both top-management and their subordinates, would be more efficient due to a greater concentration of efforts in the direction of corporate strategy, which will raise the profit and sales of the company. Support from senior management is also critical in such situations and the Nokia employees will perceive these HR practices in a positive manner, which will in turn positively affects the performance of the company in a positive manner. [3]

How certain HR practices can overcome problems caused by reorganizations and massive layoffs?

Firms, which essentially face downsizing as a common and regular practice might apply different layoff-related strategies.
The major aim of HR practices is of course to be able to re-gain former employees, supposed on probable improvement of economy so that the company will have resources to hire again.

* Rehiring bonuses.

A common practice is to propose monetary bonuses for people you would like to rehire after some time specifically so they would know they are coming back. It is also accepted to hire your laid-off employees for external consultations. They also might be returned to the company.

* Building of friendly relations with laid-off employees.

Such an opportunity is provided by communication through internet, seminars, hotlines and mailings to still attract the former employees.
This is important as is gives the company a possibility to rehire an employee ever after, as it does not always want to dismiss a person.

* Internal job fairs.
Internal job fairs are organized before those massive shifts in the working structure so that employees would be able to find a job within the company before a layoff. Which makes the losing of a job less devastating and of course increases a chance for the company to keep in contact and rehire a person back on their position.

How can HRM contribute to firm performance and general employee well-being in times of organizational change (reorganization, downsizing)

Usually, downsizing lead to negative results in the company because of high expenses and makes employees face with stress more.
There are five career growth strategies organizations that must be present in reorganization process and downsizing: [4]

1. Prepare your leaders and managers. Improve your employees’ confidence and skills to have productive career conversations with their co-workers during the change process. Building your managers’ qualification in this area is very important. Remember that your best talents and each person are key assets not only in theoretical terms, but in practice too.

2. Very important is not to lose your best as a result of uncertainty or omission. High performers are often the most capable and usually are the first to leave an inaction. Your employees ought to know who these people are, even outside of the formal circumstance. Be sure that you are focused on the most skilled employees who have specialized talents, customer loyalty, and good potential.

3. You should prepare all of your employees before the changes. Remember, disambiguate leads to decreasing productivity, employee interest and customer satisfaction. Help your team get their own career development plan, understand all changes. All employees can start to think about two scenarios for themselves: Plan A is - What if I’m not affected? What would be the best scenarios for me? And Plan B - What if I am affected by the changes? Will I have any opportunities in other parts of the organization. This will increase their confidence and motivation.

4. Prepare your employees to be affected by the change. Show them resources to redeploy successfully to other sustainable and increasing areas of the organization. Redeployment will not only support your affected personnel, but will considerably cut down on severance, outplacement, searching, and hiring costs. Notice that redeployment will not only reduce the negative consequences for the affected workers but will also increase the emotional energy and productivity of those who stay in their current positions.

5. Energize the people who stayed before, while, and after the change. Notice, struck employees’ roles and projects will be delegated to them, and than they will feel themselves overworked and underestimated. Energize people by offering tools to help them understand their contributions and career aspirations. Help them see why staying with your company in a short and long term will be a good point for them and for the business at all. Try to explain them that this is an opportunity to have the additional responsibilities, get new skills and be as much active as they can.

BIBLIOGRAPHY:
1 - Ari Hakkarainen. "Market Downturn & Nokia." Behind the Screen.

2 - “Employees’ Reactions To Change Are Influenced By A Number Of Factors. It Is Reasonable To Expect, Employees To React Since The Process Of Change Involves Going From The Known To The Unknown,, And When Employees React, It Is Important To Distinguish Between The Symptoms Of Their, and Reactions And The Causes Behind Th. Reactions and the Causes behind Them.”

3 - "DigitalCommons@ILR." Site. N.p., n.d. Web. 27 Jan. 2016.

4 - "Reorganization, Restructuring or Downsizing? - The Human Resources Social Network." Reorganization, Restructuring or Downsizing? - The Human Resources Social Network. N.p., n.d. Web. 27 Jan. 2016.