Which statement is the best comparison of downsizing and rightsizing?
a) Rightsizing maintains long term employee commitment. Downsizing leads to outsourcing.
b) Rightsizing links long term organizational goals to staffing levels. Downsizing is one of the actions that may be performed.
c) Rightsizing maintains competitive levels of employee surplus. Downsizing emphasizes quality management.
d) Rightsizing is another term for offshoring. Downsizing is another term for outsourcing.
e) Rightsizing is a euphemism for a racist workforce. Downsizing means cutting the number of employees.
The correct answer and explanation is :
The correct answer is:
b) Rightsizing links long-term organizational goals to staffing levels. Downsizing is one of the actions that may be performed.
Explanation:
Rightsizing and downsizing are two different strategies organizations use to manage their workforce, but they serve distinct purposes.
Rightsizing is a proactive approach that aligns a company’s workforce with its long-term strategic goals. It involves evaluating business needs, market conditions, and future growth potential to determine the optimal staffing level. Rightsizing does not always mean reducing employees—it can also involve restructuring roles, retraining employees, or even hiring new talent to meet the company’s evolving needs. The primary goal of rightsizing is to create a more efficient and competitive organization while maintaining operational effectiveness.
Downsizing, on the other hand, is a reactive measure often taken due to financial struggles, declining market demand, or organizational restructuring. It typically involves reducing the number of employees to cut costs. Downsizing can have negative consequences, such as lower employee morale, loss of key talent, and decreased productivity. While downsizing is sometimes a part of rightsizing, rightsizing is a broader and more strategic concept.
The key difference between the two is that rightsizing is a long-term strategy aimed at optimizing workforce efficiency, while downsizing is a short-term solution to reduce expenses. Rightsizing ensures that an organization has the right number of employees with the right skills at the right time, while downsizing is mainly focused on immediate cost reduction.
Thus, option (b) correctly differentiates the concepts by stating that rightsizing is a strategic approach linked to organizational goals, and downsizing is one of the actions that may be used within this process.
Here is the image illustrating the differences between rightsizing and downsizing.