Downsizing outcomes: Better a victim than a survivor?

Is it better to be laid off when a downsizing initiative is announced? We analyze the outcomes experienced by both victims and survivors involved in a major downsizing program, and present a model of downsizing stress. Results indicate that displaced employees, or “victims,” who secure new employment fare better than survivors. The victims in our study perceive higher levels of control, less stress, and fewer negative job strains than continuing workers, or “survivors.” These results lend credence to suggestions that stress and control are critical factors in understanding employee reactions to downsizing. © 2003 Wiley Periodicals, Inc.     

Downsizing and survivor reactions in Malaysia: modelling antecedents and outcomes of psychological contract violation

This study provides an empirical test of a model of antecedents and consequences of psychological contract violation (PCV) caused by the experience of downsizing. A longitudinal survey method was used to collect data at two different points in time (a month after downsizing, and eight months later) from a sample of 281 survivors from a large Malaysian organization going through downsizing. Respondents were from the headquarters (HQ), factories and subsidiaries located across the country and were employed across hierarchical positions including managers, supervisors, technical, operating and administrative staff. A causal model is proposed and tested. The model proposes that the perception of justice and negative affectivity at time 1 (T1) predict PCV, which in turn predicts three attitudinal and behavioural outcomes of commitment, organizational citizenship behaviours (OCBs) and turnover intentions at time 2 (T2). Three variations of the model (fully-mediated, partially-mediated and unmediated) were tested with structural equation modelling. The results show that both the perception of justice and negative affectivity significantly predict PCV, and that there is a direct effect between PCV and commitment, an indirect effect between PCV and OCBs, and both direct and indirect effects between PCV and turnover intentions. The findings demonstrate the utility of psychological contact framework in explaining survivor reactions to downsizing.     

Downsizing and the fragility of corporate reputation: An analysis of the impact of contextual factors

This study extends prior research on the impact of downsizing on corporate reputation by investigating how specific aspects of downsizing measures influence this relationship. Using panel data on the S&P 100 companies for the period 1990–2000, we find that downsizing affects corporate reputation negatively and that the size of the effect depends on the content and the context of the downsizing announcement. More specifically, we find that the motive for downsizing, the time period in which it is announced as well as the extent of previous layoffs significantly influence the reputational penalties that are associated with corporate downsizing. Our results thus elucidate how contextual factors of a downsizing decision can influence the extent of the reputational damage of this measure.     

Downsizing and the changing role of HR

This paper examines the changing role of HR in the specific context of downsizing. It highlights the key dilemmas facing HR professionals - on the one hand, the contribution of HRM to the achievement of business results has come under increasing scrutiny and, on the other hand, most of the challenges of downsizing are people-related issues that require sophisticated HR interventions. The paper reports the key findings of a pilot study conducted in sixty organizations in the UK that downsized in the last three years. The key conclusion of the study is that the role of HR has become wide ranging, covering the strategic as well as implementation aspects. The clear message from the study suggests that, unless there is alignment between the two aspects, the envisaged benefits of downsizing are unlikely take place. Key challenges facing HR professionals are managing middle managers, managing careers and managing employee expectations. There are indications to suggest that the process role of HR is likely to become more important in the medium and longer terms.     

Relationships between self-concepts,aspirations, emotional responses,and intent to leave a downsizing organization

This study examines how individual-level factors, such as task self-confidence, self-esteem, personal goals, job satisfaction, and organizational commitment affect workers' decisions concerning intent to leave the downsizing organization. Results indicate that task self-confidence and role self-esteem had positive, largely direct effects on intent to leave, which can be contrasted with the inverse relationship between the self-concept and intent to leave typically found in non-downsizing organizations. From this investigation, several implications for managing human resources in the downsizing organization are drawn and discussed in the context of planning for downsizing, implementing downsizing, and managing the downsized organization.     

Mixed signals: employee reactions to talent status communication amidst strategic ambiguity

Abstract

Given the sensitive nature of communicating talent status in an ‘exclusive’ talent management system and the complexity involved in simultaneously sending signals of exclusivity and inclusivity, some organisations avoid open communication and instead opt for ‘strategic ambiguity’ – intentionally maintaining an element of secrecy and information asymmetry. However, we know relatively little about the effects of this communication approach as a feature of the organisational context on the reactions of employees. Drawing on signalling theory, we examine the reactions of both talents and ‘B’ players on finding out about their talent status in the context of a company that adopts strategic ambiguity in its communication about talent. The data consists of 24 in-depth, qualitative interviews with individuals with experience of TM in a Finnish subsidiary of a large, US-based multinational corporation. The findings reveal that the contextual effects of strategic ambiguity in talent communication affected the reactions of talents and ‘B’ players in distinctly different ways, but had few long-term positive effects on the attitudes and behaviours of either group. These findings present important theoretical and practical implications for the role of communication and organisational context in employee reactions to talent pool inclusion and for talent management more generally.     

A Multilevel Appraisal and Conceptualization of Company Downsizing

Downsizing is widely used to improve corporate efficiency and competitiveness. Although downsizing can be useful, the process has a number of associated disadvantages, and companies commonly overlook the negative impact on society, the business profession, the company, and employees' collective attitudes and perceptions. Consequently, the purpose of this study was to present a multilevel framework that examines the impact of societal, institutional, organizational, and individual factors on corporate downsizing. The potential negative effects of downsizing on each of these domains are also examined, and recommendations regarding the successful implementation of employee reduction programs are presented based on information highlighted in the framework.     

Influence of high performance work systems on employee subjective well-being and job burnout: empirical evidence from the Chinese healthcare sector

Over the last two decades, high performance work systems (HPWSs) research has been dominated by examining the effects of these systems on firm performance. Research on the impact of HPWSs on employees has been marginalised. This study examines the impact of HPWSs on two psychological outcomes for employees, namely, subjective well-being (SWB) and workplace burnout, by utilising data collected from 1488 physicians and nurses in 25 Chinese hospitals. It also examines the moderating effects of employees' organisational based self-esteem (OBSE), as an individual intervention and physician–nurse relationships, as an organisational intervention, on the relationship between HPWSs and employee outcomes. HPWS is found to increase employees' SWB and decrease burnout. Such well-being-enhancing and burnout-relieving effects are stronger when employees have high OBSE. The positive effect of HPWS on SWB is also stronger when there is a collaborative relationship among employees in an organisation. The major contribution of this study is to unpack the ‘black box’ of how HPWS influences employee well-being in the Chinese healthcare sector context.     

The Face-to-Face Delivery of Downsizing Decisions in UK Public Sector Organizations: The envoy role

In the wake of current UK public sector retrenchment, this article introduces a role that may be important to successful restructuring management, referred to here as the ‘downsizing envoy’. It involves delivering the news of downsizing decisions, face to face, with the victims and then dealing with the repercussions. After a review of the relevant, but limited, literature the findings are presented from interviews with twenty-four envoys drawn from public sector organizations. They indicate that the envoy role is emotionally demanding and that the public sector context invokes additional pressures that may not occur in other sectors.     

Engagement in European social dialogue: an investigation into the role of social partner structural capacity

Despite the importance of social dialogue for the European social model, there has been little attention to the factors that account for social partner engagement with European social dialogue. On the basis of data from 28 European sectoral social dialogue committees, this article investigates structural factors that account for the conclusion of European sectoral social dialogue agreements. It is found that actors' organisational density is a necessary but not sufficient factor for successful European social dialogue and four different categories of sectoral social partner engagement with European social dialogue are identified.     

Managing people across hospital networks in the UK: multiple employers and the shaping of HRM

Building on the insights from a growing number of studies on the HRM implications of inter-organisational relations, this article investigates the HR issues in two case studies of ‘best practice’, long-term collaborative working. It identifies three common challenges for HRM: (a) how to build employee commitment and identity to the partnership without putting at risk the employing organisation's goals; (b) how to establish attractive career pathways in a partnership context requiring some degree of sharing of skill standards and coordination of training provision; and (c) how to sustain partnerships in a changing policy and organisational context. The data point to inherent problems in managing employment when there is more than one employing organisation exercising influence. Differences in organisational goals and HRM approaches in hospital networks are an obstacle to long-term integration – especially in public–private arrangements where integration of goals and HRM is more difficult.     

“Look at Him ... He’s Failing”: Male Executives’ Experiences of Redundancy

Participation and success in paid work is a key element of identity for many men. The increased prevalence of downsizing and the associated discarding of individuals from their workplaces, then, has particular relevance for men. This paper shares qualitative findings from an exploratory phenomenological study investigating the experiences of Australian executives who had been made redundant. Three themes related to male identity are presented here: Failing as the breadwinner; Being less of a person; and, Losing success. The participants in this study shared feelings of anger, sadness, fear and embarrassment as a result of the assault to their identity that accompanied their involuntary redundancies. The impacts of redundancy were not only felt in relation to their job loss, but continued after returning to work. At a time when downsizing continues to feature as a routine part of organisational life—for some, an experience repeated throughout their careers—further exploration of the experience of redundancy and its implications is required.     

Justice source and justice content: evaluating the fairness of organisational career management practices

This article presents part of the findings of a multi‐method study into employee perceptions of fairness in relation to the organisational career management (OCM) practices of a large financial retailer. It focuses on exploring how employees construct fairness judgements of their career experiences and the role played by the organisational context and, in particular, OCM practices in forming these judgements. It concludes that individuals can, and do, separate the source and content of (in)justice when it comes to evaluating these experiences. The relative roles of the employer, line manager and career development opportunities in influencing employee fairness evaluations are discussed. Conceptual links with organisational justice theory are proposed, and it is argued that the academic and practitioner populations are provided with empirical evidence for a new theoretical framework for evaluating employee perceptions of, and reactions to, OCM practices.     

Creating a concession climate: the case of the serial downsizers

This paper uses panel data from New Zealand from the years 1995 and 1999 to examine the impact on those organizations, size fifty and over, that engaged in repeat downsizing during this period. It was found that, during the panel period, approximately 20 per cent of the 322 organizations in the survey had engaged in the permanent reduction of their workforce in both periods. When compared with organizations in the survey that had not engaged in downsizing in both periods, it was found that the repeat downsizers exhibited characteristics that were little different from those that had downsized only in the later period, who reported the greatest decline in performance. However, those who had downsized only in 1995 had, by 1999, largely recovered from the initial negative effects. The repeat downsizers appear to have created a long-term concession climate that is associated with negative workplace performance.     

Beyond strategic human resource management: is sustainable human resource management the next approach?

Strategic human resource management (SHRM) emerged as a dominant approach to human resource management (HRM) policy during the past 30 years. However, during the last decade, a new approach to HRM has evolved. This approach has been labelled sustainable human resource management (sustainable HRM). It is an approach that seeks to link HRM and sustainability. The term sustainability is fraught with semantic difficulties, as is conceptualising its relationship to HRM. Consequently, sustainable HRM is viewed in a variety of ways. This paper examines the major features of SHRM, some of the meanings given to sustainability and the relationship between sustainability and HRM. It then outlines the major characteristics of sustainable HRM. Although there are a diversity of views about sustainable HRM, this approach has a number of features which differentiate it from SHRM. It acknowledges organisational outcomes, which are broader than financial outcomes. All the writings emphasise the importance of human and social outcomes. In addition, it explicitly identifies the negative as well as the positive effects of HRM on a variety of stakeholders; it pays further attention to the processes associated with the implementation of HRM policies and acknowledges the tensions in reconciling competing organisational requirements. Such an approach takes an explicit moral position about the desired outcomes of organisational practices in the short term and the long term. Sustainable HRM can be understood in terms of a number of complimentary frameworks.     

HR,perceived organisational support and organisational identification: an analysis after organisational formation

Academic research has rarely investigated the role that people management plays in encouraging employees to identify with their employing organisation. This article reports on a study investigating the role that employee perceptions of the HR environment plays in encouraging organisational identification and the importance of perceived organisational support in this relationship. Two research surveys are discussed, one carried out shortly after the formation of the new organisation within the UK National Health Service, and one is a replication study undertaken 13 months later. The results show that key HR‐related factors predict organisational identification; this effect is both direct and indirect through perceptions of organisational support. The findings also demonstrate that, as the organisation matures, there are some interesting changes in which aspects of the HR environment predict identification and perceptions of organisational support.     

The role of perceived justice in buyer-supplier relationships in times of economic crisis

This paper explores the importance of perceived organisational justice in times of crises, when supplier commitment has the potential to offset the negative impact of external pressures on business performance. We draw data from a survey of 117 suppliers of a major Greek grocery retailer. The grocery retail sector in Greece suffered considerably during the peak of the financial crisis, in 2016, providing a unique opportunity to explore the role of fairness in buyer-supplier relationships in times of crisis. The paper makes a distinct contribution by exploring the role that POJ plays in mitigating the impact of a financial crisis on suppliers’ performance, both operational and financial. Moreover, we explore the role of commitment as a mediator between POJ and performance, in the specific context of a financial crisis. Our findings indicate that organisational justice influences firm performance through commitment and that the financial crisis moderates the relationship.     

Training and organisational performance: A meta‐analysis of temporal,institutional and organisational context moderators

Drawing on systems theory, we conducted a moderated meta‐analysis of the training and organisational performance relationship using 119 primary studies. We examined the moderating effects of quality versus quantity of training, time, institutional and organisational context factors in the relationship between training and organisational performance. Our findings reveal that training is positively and directly related to organisational performance with no statistically significant difference between measures of training quality and quantity. We found that the relationship was stronger over time and that country performance orientation and country labour cost moderate the training and organisational performance relationship. We found no evidence for the moderating effects of the three organisational context moderators we examined (i.e. industry sector, organisational size and technology intensity). Finally, our results reveal that training type (i.e. general or firm‐specific) does not moderate the training and organisational performance relationship.     

Economic austerity and healthcare restructuring: correlates and consequences of nursing job insecurity

The healthcare system underwent considerable restructuring and downsizing in the early to mid-1990s in several countries as governments cut costs to reduce their budget deficits. Studies of the effects of these efforts on nursing staff and hospital functioning in various countries generally reported negative impacts. Healthcare restructuring and hospital downsizing is again being implemented in North America in 2009/2010 as governments struggle to reduce their deficits at a time of worldwide economic recession. The present study examines the relationship of hospital restructuring initiatives in and their link with increased threats to job security with a variety of individual and hospital outcomes in a sample of nursing staff working in hospitals undergoing significant restructuring and downsizing. Data were collected from 289 nursing staff working in California hospitals. Nurses reported a relatively large number of restructuring and downsizing initiatives. Restructuring initiatives and threats to job security accounted for a greater increment in explained variance on every outcome measure than did personal demographic factors and work situation characteristics. Threats to job security were generally associated with negative work attitudes and satisfactions, levels of psychological well-being and perceptions of hospital functioning. Some suggestions for more successful approaches to cost reductions are offered.     

Organizational downsizing as convergence or reorientation: Implications for human resource management

This article proposes that there are two basic approaches to organizational downsizing. Downsizing as reorientation is the proper approach when organizations undertake major downsizing programs. In this approach, many elements of the organization are questioned and changed simultaneously. The goal is a fundamentally different, not just smaller, organization. Downsizing as convergence is part of continuous improvement, and its goal is to refine and streamline all ongoing organizational processes. Each of these approaches to downsizing involves a particular pattern of downsizing tactics, implementation processes, and organizational changes. Thus, each approach to downsizing generates different implications for human resource management.