Downsizing Impact
What is the impact of downsizing? As the studies below indicate, layoffs have a number of negative effects not only on workers in different industries, but also on their communities and the market as a whole. Although it has been said that downsizing can be economically beneficial to companies, the following shows that there are two sides to this issue.
Over the past decade, the workplace has altered considerably in terms of job stability. People have either experienced layoffs firsthand or directly known someone else who was impacted by re-engineering, downsizing, outsourcing or acquisition. For employees adversely affected by these changes or for those who do not completely understand why these changes are occurring, the effects can be very disturbing and impact both their personal and job life.
A variety of different industries have been impacted by layoffs, not only manufacturing. For example, hospitals like other companies and nonprofit organizations have experienced downsizing that has negatively impacted healthcare employees with varying degrees of psychological distress and poor health. In a 2002 study, Greenglass, Burke and Fiksenbaum showed that restructuring and its changes can result in lower job satisfaction and job insecurity.
The researchers studied the relationship between impact of restructuring, job satisfaction, job insecurity and absenteeism in nurses. The results were similar to earlier studies indicating that job insecurity can often have harmful consequences for individuals. Job insecurity has frequently been reported to lead to decreased psychological well-being (Dekker & Schaufeli, 1995; Ferrie et al., 1998). In a study of Finnish employees, Kinnunen et al. (2000) reported that job insecurity, which led to negative relationships with colleagues and superiors, was still being noted at least one year after the event.
The respondents of the Greenglass study, who consisted of 1,363 nurses employed in hospitals that were undergoing extensive restructuring, first filled out a self-report anonymous questionnaire. Results of this study demonstrated that the impact of hospital restructuring had a direct effect on job satisfaction, which in turn then had a pointedly negative impact on absenteeism and on job insecurity. In addition, the study found that the more the nurses believed hospital restructuring had lowered the quality of health care and had had a negative impact on working conditions, the less likely they were to experience job satisfaction and the more apt to report feelings of job insecurity. Findings further demonstrated that job satisfaction functioned as an intermediary between the impact of restructuring and job insecurity: That is, lower job satisfaction resulting from a greater impact of restructuring led to decreased job security. The impact of restructuring also placed an indirect effect on absenteeism through job satisfaction. The lower the job satisfaction, resulting from restructuring, the more likely the nurses were to be miss work.
These results were similar to prior studies that linked layoffs with an increased amount of job insecurity. Campbell-Jamieson, Worrall, & Cooper (2001), for instance, compared responses from managers in three different business settings: organizations that restructured and downsized in the previous year, those firms that restructured without downsizing, and companies that had not restructured. Managers in organizations that had downsized had less job security, lower organizational commitment and reduced morale. Research has also demonstrated that reorganization can lead to greater emotional turmoil, including such feelings as anger, anxiety, cynicism and resentment (O'Neill & Lenn, 1995). Burke & Nelson (1997) found that this is most likely the result of a variety of negative observations throughout the restructuring, such as the belief that workers were treated unfairly, the psychological contract was eroded, and future employment would be insecure.
The findings by Greenglass additionally showed that the restructuring impacts job insecurity in both direct and indirect ways. In other words, an effect of downsizing is lower satisfaction with one's job. This is most probably the result of disillusionment as well as feelings of being let down by the company and uncertainty about one's employment in the future. Decreased job satisfaction then leads to lower job security. The researchers do note, however, that these increased feelings of disillusionment and decreased feelings of job satisfaction and job security can be reduced if the organization's administration does its best to offer support, information sharing, and input into decision-making. To the degree that healthcare workers believe they are important to the hospital and that the institution cares about them and their opinions, the effects of restructuring can be considerably decreased.
The impact of downsizing on workers is a combination of both the psychological and physical. Kivimaki et. al (2000) conducted...
Industrial Relations Employment Relationship Industrial Relations and HRM Globalization and Industrial Relations Industrial Relations in United States of America Current Response to Globalization The paper critically examines the effects of global trade expansion on national industrial relations and how USA has responded to the changing business environment to meet its economic targets. In order to understand the impact on the national industrial relations from the rise in global trade we need to study the historical factors and
(2000) "in today's business world, no company is likely to stay on top for too long that doesn't rethink at least some key processes on a regular basis." (p. 33) This is especially true in industrial relations, where the new intersection of previously unaffiliated cultures is leading to opportunities for shared advancement. With effective change management, it may be possible to achieve the optimal integration of the UAE's domestic
You can approach your local magistrate for assistance and the standard Notices to use in a claim. While this is certainly an advantage the factor that is most treasured by the subcontractor is that the contractor is responsible for all the work as well as other aspects in terms of the sub-contractors employers. Furthermore, the contractor is the individual which may be held liable in terms of a lawsuit
" (Spangler, 2003) In this sort of positioning, "the gains and losses will all add up to less than zero," or the original position. For example, in the case of General Motors, the entire company had to be steeply cut, in all of its departments, and in the case of the New York Transit workers, there had to be budget cuts across the board in the New York City government.
(Post-socialist trade unions: China and Russia) China's practice and history of managerial practices All the attributes pertaining to the human resources management inclusive of the personnel recruitment, training, labor relations and also the reimbursements and advantages not only vary from the United States but also differ among the regions of China. (Performance-Enhancing Strategies for China: Lessons from Japanese and American Companies) the pressure of the Chinese cultural values on managerial and
Just as employees need to take criticism constructively, management needs to do the same. When used constructively, criticism is the strongest building block of improvement. This brings up another important part of keeping employees happy, which is making sure that they feel secure. Employees need to know that they can come to management with a complaint, or even to blow the whistle on another employee's misconduct, without fear of being
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