Bumping strategy is a practice of allowing more senior level employees who become redundant in their jobs and the organization replaces them in alternate positions which currently are occupied other employees. Redundancy sets in for various reasons such as commercial reasons, employee morale, HR policy etc. The question to be answered is: whether   bumping is the only an option available to employers? Can the organization consider saving the jobs of redundant senior employees at the cost of more junior colleagues?

An employer can avoid bumping if he/she has a good reason to do so. On the other hand, bumping can be used if the employer is able to show that the true reason for the dismissal of the bumped employee is redundancy and not some other reason, such as performance, which would take the dismissal outside the scope of redundancy and therefore make it potentially unfair. Bumping is a point to be considered under corporate governance of
what principles should employers follow while identifying the selection pool for redundant employees.

Even though organizations have considerable flexibility in determining the pool from which employees will be selected for redundancy, they must still consider being reasonable or running the risk that sacking will be deemed unfair. When assessing if an organization is being fair or reasonable in deciding on a selection pool of redundant employees, it is worth fixing a panel to decide parameters to term employees ‘redundant’ and to check whether other groups of employees are doing similar work. And, whether employees’ jobs are exchangeable and whether such transfers/exchanges are there in HR policies or not, and, whether employees are informed about such policies from time to time.

It is worth to note whether highly skilled employees get automatically excluded from a redundancy selection pool: if a group of employees does similar work to those in the selection pool, an employer will need a good reason to exclude that group. One of the examples of bumping is in British Steel plc, London v Robertson (EAT 601/94), in which a group of craftsmen had been trained in all the skills required by the company. Redundancies were made from a pool of longer-serving engineers. The tribunal concluded that the multi-skilled craftsmen should have been in the selection pool, since they could do the same work. So employers should not exclude employees whose jobs are interchangeable with those of individuals in the pool unless they have a good business reason for doing so.

By the way, bumping is a practice used by many organizations to reserve talent pool during downsizing, wherein, a senior level employee, whose position has been selected for elimination, is offered the option of accepting an alternative position of lesser seniority within the organisation. Hence, bumping can be a useful strategy for employers who wish to retain the skills and experience of an employee who would otherwise be downsized. Many organization which practices ethical policies, are reluctant to consider bumping because of its obvious injustice to the employee who is bumped.

On the other hand, bumping maybe considered appropriate when an employer intends to make a senior role redundant but retain a more junior role, and especially if the senior level employee has more experience of service and better qualifications. In such instances, it is obviously prudent to ask the senior employee if he would consider working in a junior position at a reduced salary or would prefer to quit. In most cases, the employee would refuse to accept such a position. But often, an employee maybe inclined to accept the position in certain circumstances, when losing a job would affect him more adversely than accepting a relatively junior position. The bumped off junior employee may also opt for the same option, thus creating a flow of uncertainty in the business as each displaced employee looks to bump out his subordinate in turn.  However, this situation does not arise, it is very rare.

Though the business world keeps talking about ethical values on various platforms, corporate ethical failures have become painfully common. World over, billions of dollars have been paid in fines by corporates charged with ethical breaches. In a survey conducted by ECI’s National Business Ethics Survey, while leaders pay holistic attention to conduct ethical business, workers take advantage of loopholes in system and compromise on the ethical standards set by the organizations. Every employee in an organization is exposed to the risk of facing an ethical dilemma at some point in time, and some ethical decisions can be more challenging.

Bumping can be a result of excessive pressure to reach unrealistic performance targets from the superiors. When imaginative goals are set, employees make compromising choices in order to reach targets, this leads to poor appraisals, resulting into redundancy.

 

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A Professor with 15 years of teaching and 20 years industry experience. My core teaching areas are Marketing Strategy and General Management. While I am a Professor of Marketing and General Management, I have also worked as Director of few Management Institutes in Mumbai. I am a research guide in Mumbai University, SNDT University and YCMOU (Yashwantrao Chawan Maharashtra Open University, Nasik) 6 students have got their PhD degree under my guidance so far, and 11 students are registered for their PhD with me. Research is my passion, and I work on live projects from the industry. I strongly believe that the principal goal of research is to discover new knowledge, while that of teaching is to impart well-established knowledge and provide training in problem-solving. At present I am working as a Director for a Center of Excellence with an 80 years old Educational institution in Mumbai. I am a results-driven researcher, qualified with a PhD in Marketing Management from Pune University, a Post Doctoral Degree D.Litt from Mumbai University. I have authored above 100 articles and research which are published in news papers, business magazines and research journals. I have also authored two books. I am appointed as a Senate Member in Swami Ramanand Teertha Marathwada University, Nanded as the Maharashtra Governor’s nominee. Today we need greater industry-academia collaboration in research in institutes of higher education. I am confident that I will be able to facilitate the organizations with my research skills to create, integrate, and apply advancements in tricky areas. Thus, in my own way I could collaborate between industry and academia. I am curious, responsible, knowledgeable person with a scholarly approach.

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