Variables such as voluntary turnover rate, downsizing rate, and organizational commitment were measured. The researchers also included 12 measures as indices of human resource practices in the organizations. The survey also included questions asking about the existence of "an ombudsman who is designated to address any employee complaints, or a grievance or appeal process available to nonunion employees." [Trevor & Nyberg, pg (16)]
Overall it was found that downsizing occurred in 38% of the sample (102 companies). Logical regression analysis and multivariate tests were performed on the final completed data. The statistical analysis indicated that downsizing had a considerable effect on voluntary turnover rates. As a statistical measure one unit of downsizing increased voluntary turnover rate by .058%. The study also found that strong procedural justice practices as indicated by high rating of the HR measures tended to mitigate the negative effects of downsizing on the voluntary turnover rate. For instance, the study showed that downsizing .02 of the workforce resulted in an increase in voluntary turnover rate by about 63% in the absence of sound grievance address policies. While for the same rate of downsizing the increase in voluntary turnover rate was only 13% when the procedural justice index was high. [Trevor & Nyberg, pg 23]
Organizational Implications
Given the detrimental effects and the failure of organizations implementing downsizing it is necessary to analyze the mistakes. Almost all the studies that report failed downsizing indicate a total neglect on the part of the HR management. In this regard several studies have reached the consensus that appropriate planning, training and open communication are crucial for the success of downsizing operations. Studies have also pointed out the importance of proper training for the surviving workers so they are better prepared to handle the new roles and tasks assigned to them. Keeping the surviving employees motivated is crucial for the productivity of the organization.. As Dr. Judith Bardwick, author of the book 'One foot out the Door' writes, "After years of downsizing…most of today's workers have concluded that [companies] no longer value them. So they, in turn, no longer feel engaged in their work or committed to the company. The reality of mutual co-dependence between employees and organizations, and the advantages gained from long-term mutual commitment and engagement has been lost." [Caela Farren]
Many studies such as Beylerian & Kleiner, (2003) and Devine et al., (2003) report the gross negligence of organizations in dealing with the survivors of downsizing. The constant fear of losing the job and the insecurity that arises causes loss of organizational commitment and dysfunctional attitudes in 'surviving workers'. This is cited as the important reason why downsizing fails in most of the organizations. [Jeffery R. Woodall, pg 2] The organization should have clear HR policies that are oriented towards preparing the surviving employees embrace the change to the organizational structure. Therefore providing training and support prior to, during, and after the downsizing are very vital. This would help minimize the effects of 'survivor aftershocks' or what is also called as 'survivor illness'.
Conclusion
Downsizing has become a management mantra. Today organizations employ downsizing...
Downsizing and Change Management In any organization, the only permanent reality is change if the firm wants to thrive and succeed in the global economy. In times of extreme hardships, companies will some times have to make decisions, which are fairly harsh but are immensely important for survival of the firm. Downsizing is one such decision and while it appears unfair to some, it is actually the only way a company
.. Of key people, but this material is rarely organized in a fashion that allows for its transmission to other. Employee turnover can negatively affect firm performance through loss of social capital. We expand this by taking into account the tacit knowledge that firms lose when employees leave" (p. 50). Although it is difficult to quantify the value of the tacit knowledge lost when downsizing takes place, it is reasonable
Managing Diversity and Equal Opportunity With the turn of the 21st century, a dramatic increase is being witnessed in the international flow of labor with repercussion for domestic labor supply and management. The native, racial and emigre mixture of the employees is predominantly important for the workplace. The importance of this domestic cultural multiplicity in the labor force, highlighted by worldwide influences and necessities, has lately encouraged the researchers to focus
Management and Business Management Theories and Principles of Each Reading The Fifth Discipline forces managers to look at the way in which learning disabilities which are common to organizations can actually stunt their growth and progress. The author targets several common learning disabilities which can riddle even powerful organizations, they are: identifying with only one position, external enemies, the illusion of taking charge, fixation on events, the parable of the boiled frog,
Downsizing The Effects of Downsizing A noted scholar recently assessed downsizing as "probably the most pervasive yet understudied phenomenon in the business world" (Cameron, 1994). While we have become numbed by the near daily accounts of new layoffs, a New York Times national survey finding is perhaps more telling: since 1980, a family member in one-third of all U.S. households has been laid off (New York Times, 1996). By some measures, downsizing
When all the needs or expectations of the stakeholders are met, the business will continue to thrive. Core Human Resource Functions Involuntary turnover is rampant among employees of high talent. These employees form then crucial asset that determine the overall success of the organization. Involuntary turnover occurs due to issues such as frequent absences, premature termination of contracts, sexual harassment or by the mere fact that an employee becomes overqualified for
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now