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In a lot of ways, there's no real difference between rightsizing and downsizing. Typically, the term "rightsizing" is used more by the people doing the cutting of jobs and "downsizing" is used by other observers.
Technically, rightsizing is just adjusting the size of your workforce to get it to the correct size. It is possible that one could rightsize by adding workers.
By contrast, downsizing must necessarily involve cutting workers.
But, in general, the two terms mean the same thing. But "rightsizing" sounds better and is therefore often used as a euphemism for "downsizing."
Right Sizing: With help of manufacturing industry example, I will try to clear the difference between both terms. In manufacturing industry, we have MAN TO MACHINE RATION for example 2:1. we have 50 machines then we can hire only 100 employees, but we actual have the 110 employees the 10 employees are excess than actual, if we fire them(10 employee) this will be called right sizing because we again come at right position.
Downsizing: with reference to above example if management decide to reduce the ratio, means 1.5:1,then we reduced the size of employee from 100 to 75.this will be the downsizing
Technically "Downsizing" refers to the cutting of workforce of any organization to controll the problems (like defeciency of funds, and other problems like to reduce extra employment levels, to handle bad economic, political, govt. policies etc) without any distinction of their performance and need for organization. In this case organization only focuses to survive by firing of employees. The company may hire other workforce in later favorable circumstances but for that particular problem the organization only keep the minimum number of employees through which company can continue its basic functions. Due to downsizing the existing employees have ot bear the burdon of work of the fired employees.
Well in addition to financial and many other problems when organization faces inefficiency in its benchmarks and goals and founds its performance below the standards then it closely study every factor regarding employ's performance, its behavioral status and effect on working enviornment and then carefully decides to fire only the inappropriate, non efficient, disturbance creators or Black sheeps.By firing such employees company not only get rid of its inefficient cost but also founds another oppertunity by outsourcing or hiring (as the case may be) the best alternatives. In this way its work force which is reduced is then filled by only efficient and eligible workers. Thus RIGHTSIZING is basically the process by which organizations determine and mantain only RIGHT EMPLOYMENT for its requirements and increase their efficiency and repute.
Rightsizing and downsizing are both buzzwords that have gained popularity among business and management circles. Both these words represent an approach to management functions of manpower planning and staffing.
Rightsizing, which gained popularity before the other word, refers to reducing the the total size of the manpower employed by the company to cut down on cost. Implicit in this practice is an assumption that the company being downsized is essentially over staffed and that performance levels can be maintained or even improved by reducing manpower. Plain retrenchment of the employees, or with some scheme of voluntary retirement accompanied by one time compensation were the primary means of achieving downsizing.
To some extent, the practice of downsizing resulted in making companies more efficient and cut down cost. Bur in many cases companies found that that in the process of downsizing they have also thrown out the baby with the bath water. The found that the people given voluntary retirement were performing useful function which cannot be handled effectively by the remaining staff. Also it was found that in may cases the alternative of sub-contracting is neither economical nor effective.
Realizing these problems, the experts and management consultants coined a new term - rightsizing. In theory the term rightsizing implied that companies should determine and maintain and level of employment "right" for its requirement. This is precisely what the traditional function of manpower planning and staffing are supposed to achieve. However, done in the traditional way, it becomes a slow and activity and lacks the glamour associated with latest management fads. So, under the name of rightsizing companies continue to practice downsizing - perhaps with some extra caution.
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