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Tuesday, May 4, 2010

HRM – THE IMPACT OF DOWNSIZING TO EMPLOYEE MORALE


1.0     Introduction
Many companies, large and small, have downsized during the last few years in response to the slumping economy, technological advances, and shifts in corporate priorities. The prime impetus of most downsizing efforts are the desire for an immediate reduction costs and increased levels of efficiency, productivity, profitability, and competitiveness (Farrell and Mavondo, 2004).
A single definition of downsizing does not across studies and disciplines. It is clear that it means a contraction in the size of a firm's workforce. Cascio (1993) posits that downsizing is the planned elimination of positions or jobs whose primary purpose is to reduce the workforce, while Gandolfi adds that a myriad of terms have been used euphemistically in reference to downsizing including "brightsizing" and "rightsizing".

1.1     History
Organizational downsizing as a change management strategy has been adopted for more than two decades. In the 1980s and early 1990s, it was implemented primarily by firm experiencing difficult economic times (Gandolfi, 2006 and 2007). Since in mid-1990s, downsizing has become a leading strategy of choice for a multitude of firms around the world ( Mirabal and De Young, 2005).
Back in the mid-1970s, Charles Handy first predicted that the technological revolution would transform the lives millions of individuals through process he aptly termed 'down-sizing' (Appelbaum, Evarard, and Hung 1999). While few understood his prediction at the time, we know that downsizing has adopted as management technique on the global scale (Macky, 2004). Firms have implemented downsizing as a "reactive response to organizational bankruptcy or recession" ( Ryan and Macky,1998). Downsizing has transformed hundreds of thousands of firms and governmental agencies and the lives of tens of millions of employees around the world (Amundson, Borgen, Jordan, and Erlebach, 2004).

1.2     Overview Impact of downsizing
Downsizing—and even the threat of downsizing—has placed considerable stress on work environments. Most business and organizational researchers believe that cycles of downsizing—also called resizing, depending on your perspective—are not a short-term phenomenon but a reality that is here to stay. (Kenneth P. De Meuse and Mitchell Lee Marks, 2003).
They added, employees can be traumatized by layoffs, their own or those of co-workers. The loss of work can have a devastating impact on people's lives and can also damage, if not destroy, the relationship an organization has with the people who remain. They include that, the management is in the undesirable position of having to motivate and energize staff members who are as concerned about their future with the organization as they are with the work.
Downsizing is a challenging solution to a complex problem and has the potential to affect the business as well as employee morale and productivity. (Erica Siegel, 2009)

    1.3     Psychological contract breach
Kenneth P. De Meuse and Mitchell Lee Marks (2003) suggested that, one useful concept that has relevance to the issue of layoffs is known as the "psychological contract" that exists between employees and their employer. In contrast to formal contracts that spell out in writing expectations between employees and the organization, psychological contracts are more informal and address, in large part, the beliefs that employees have about their relationship with their employer. Much of the psychological contract involves trust, commitment and respect that can develop only over time.

They added that, downsizing and the resulting layoffs often violate this psychological contract and can create intense feelings in employees who believe that they or their co-workers have been wronged. These emotions may be demonstrated through angry outbursts or other overt acts or by withdrawal and lack of motivation to work.

Dealing with employee resentment over psychological contract breaches is a challenge for any manager. Front-line managers are particularly challenged because of their inability to control what happens at the top. It is not practical for managers to believe or to communicate that they can keep layoffs from occurring or to assure people their jobs are safe. However, managers can do a few things to help employees remain motivated to do good work.

2.0    Process involved in the implementation of downsizing
The downsizing literature reveals that a number of distinct implementation strategies have been identified. Cameron, Freeman, and Mishra (1991, 1993) have conducted one of the most extensive and systematic studies of corporate workforce downsizing and reported three major findings regarding downsizing implementation strategies. First and foremost, they identified and differentiated between three distinct types of downsizing implementation strategies. That is, a workforce reduction strategy, an organization redesign strategy, and a systemic strategy. The workforce reduction strategy often referred to as the layoff strategy.
It encompasses activities, such as layoffs, retrenchments, natural attritions, early retirements, hiring freezes, golden parachutes, and buyout packages. This strategy is frequently implemented in a reactive manner as a cost-cutting measure and may serve as a short-term response to declining profits. While for the organization redesign strategy focuses predominantly upon the elimination of work, rather than reducing the number of employees.
It encompasses activities, such as abolishing functions, eliminating hierarchical levels (de-layering), groups, divisions, products, redesigning tasks, consolidating and merging units, and reducing overall work hours. Organization redesign strategies are commonly regarded as being difficult to implement quickly as this requires some advanced analysis of the areas concerned. The systemic strategy is fundamentally different from the former two strategies in the sense that it appears to embrace a more holistic view of organizational change. Thus, downsizing ought to embrace all dimensions and aspects of the organization, including suppliers, customer relations, production methods, design processes, and inventories. Systemic strategy focuses primarily upon changing the organization's intrinsic culture and the attitudes and values of its employees.

2.1     Resource & Technology        
During hard time especially when economy downturn, most organization will make a decision to keep operation cost at minimum. Normally they will go for downsizing. The resource that can be applied for downsizing might be outsourcing and collaboration as an alternative.

2.1.1     Outsourcing
Normally company will practice outsourcing as alternative to recruit. There are few advantages of outsourcing which is clearly improved business focus, more productive use of time and resources, and guidance from experts from across the business spectrum. It allows company to focus on the core competencies and provides administrative relief from many employer-related responsibilities, so they can concentrate on developing strategies that provide you a competitive advantage.

2.1.2     Collaboration
Collaboration is a process of participation through which people, groups and organizations work together to achieve desired results. Common factors and characteristics have been identified by research as influencing the collaborative process, including the skills of leadership, communication, sustainability, unity, participation, and a history of successful accomplishments (Hogue, et al, 1995; Keith et.al, 1993).


2.2     Downsizing Model

2.2.1 Implementation plan.
The degree to which downsizing implementation strategies are applied is driven by the magnitude of the mandated reductions. Modest reductions are almost always accomplished by pro rata reductions across the affected agencies and are generally accommodated through attrition. Large workforce reductions, on the other hand, require planning involving multiple concurrent activities--including strategic planning, labour-management relations, communications, and human resources.

2.2.1.1     Strategic Planning.
The impact of downsizing should be incorporated into the organization's strategic plan to maintain a consistent understanding of the future of the organization and how it will get there. The degree to which this has been done among the agencies represented in our study varies greatly. When numeric goals are established for downsizing--as was done in the Federal Workforce Restructuring Act of 1994--it appears that downsizing drives the strategic planning process. Labor-management relations. Organizations with unions secure union involvement as early in the planning process as possible, and that involvement continues throughout the downsizing process. The union is an important participant in gaining employee acceptance of the changes that will be necessary as a result of the required cuts.

2.2.1.2     Communications.
Communication--early and often--among management, employees, customers, and affected communities is a key ingredient in successful downsizing. The implementation plan should identify how this will be accomplished.

2.2.1.3    Human Resources.
The element involving the greatest use of resources in downsizing is the process for handling human resources. Typical activities in this area include:

  • A workforce demographics review, to include retirement and other loss projections and assessments of the age, diversity, and skills of the workforce;

  • Assessment of available options to avoid involuntary separations, such as hiring freeze, buyouts, early retirement, retraining, and relocations;

  • Detailing FTE (Full Time Equivalent) reductions by year, location, program, occupation, position, and person;

  • Providing career transition/job placement assistance;

  • Providing assistance for survivors of downsizing; and

  • Ensuring that an adequate retraining program is in place.



  1. Functional reviews and process reengineering.

    Although some agencies conducted functional crosscutting reviews in their efforts to reengineer processes, we found that, at most agencies, this has been done after the fact as a reaction to downsizing instead of employing reengineering in the planning process.


  2. Monitoring.

    Most agencies include monitoring systems in downsizing plans, either in the form of pre-existing reviews or reviews designed specifically to assess progress in achieving downsizing goals. Some agencies produce reports that can then be used as guides for future downsizing activities. Wherever the workforce reduction allows, human resource options are reviewed with annual budget preparation. A reassessment is done of the requirement for RIFs, and FTEs are reallocated among sub organizations

2.3     Workforce            
For workforce, the actions HR can do as part of downsizing to look over the structure of the organization are as follow:
Try to reduce or terminate the foreign worker. Give priority to the local workers to remain in the organization. (Employment Act 1955) If still exceed organization capacity, then could proceed to termination of local workers.

  • LIFO (Last in, First Out) If possible try to keep the most long serving employees as their compensation is higher & costly to company.

  • VSS (Voluntary Separate Scheme which is employee is offered a package to volunteer to withdraw from the organization. This is normally practice to avoid unfair decision to employee especially when they just lost their job. Normally will

  • Multitasking could also be implemented. This require individual to perform several tasks that is similar or practical to their expertise. Thus it can save costs of hiring new employees.

  • Terminate unnecessary position or department that doesn't need more than it requires. Try to minimum personnel in each area but widen the job scope. This is the best method to face critical situation especially during bad economy downturn.

2.4     Operational activities
At the operational activities, there are certain things can be applied to ensure operation cost can be cut to minimum but still maintain optimum production. As operation involves cost and very expensive these are the things could be done. Firstly try to reduce overtime as this is an extra cost to company that have to bear. Control over this will lead to better operation cost control. Next, working hours could be reduced as well as salary. This is to be fair and equivalent to what they did and receive.
Company can also extend to a level of reduce the working days in a week from 6 days to 5 or 4 days. But ensure the operation per month must be at least 12 working days.
Lastly, for products that are low on demand should be stop and focus on manufacturing high demand product. This is to avoid unnecessary surplus stock that will cost the company if it can't be sold.
  



  1. Employee Morale During Downsizing
    Layoff affect not only those workers whose employment is terminated, but also the 'survivors' of the downsizing process, whose continued efforts remain vital to organizational success (Brockner,1992). They can somehow feel the shock and disappointment of the colleagues being laid off(Tom Mochal, 2003).
    The remaining employees can experience burnout because they have to bear the burden of a heavier workload and required to perform more work with fewer co-workers. Especially in the tough economic times, the company may not be able to pay bonuses or merit increases. (Erica Siegel, 2009)
    Job insecurity produced by the downsizing process could generates stress, which in turn may manifest itself in dissatisfaction, intent to leave the organization, greater absenteeism, higher turnover, and disability claims (Boroson and Burgess, 1992; Koco, 1996; Mishra and Spreitzer, 1998; Tombaugh and White, 1990)
    It is general accepted that it is not easy for any organization to manage changes in its structure and system due to downsizing exercise. Any changes resulted from the exercise often lead to the unsecured feeling by the remaining employees.
    Many people respond well to adversity and use adversity as a learning experience. Others allow adversity to get the better of them. They may begin looking for another job, but only half-heartedly. Once they find a new position, they begin to live in fear of a second layoff. This fear can then easily affect performance, pushing them toward another layoff scenario based on performance issues.
    Ever since downsizing of organizations had became a widespread, Institute for employment studies in United Kingdom supported by its Research club, had taken an initiative to examined this issue with the help of major employing organizations, through workshops and structured discussions. The outcome is a report, which examines the nature of the concern about maintaining morale during downsizing and how organizations are addressing this concern (Kettley P, 1995). In this report, we are going to present the outcome of the IES studies.
3.1     Why Morale Matters
During downsizing, employees will feel unsettled. However, just accepting loss of morale as an inevitable consequences may undermine the very productivity gains intended by the change. So, employers should seek to minimise impact of downsizing as to avoid employees' from seeing the decision made on downsizing to be unjustly or unfairly. They also need to recognize the extent to which the manner of managing such change affects how employees feel about the change, and their future relationship with the company
Downsizing can threaten employees' sense of well being in several ways, as they obviously feel less secure and have anxiety feelings of whether their contribution to the business will be rewarded in the future or not.
These responses may easily threaten the business performance. Survivors of downsizing can become unduly risk averse and narrowly focused and therefore less creative and not open to change.
According to the IES studies, morale consists of many facets and may be manifest in many outcomes. These outcomes include:

  • Whether the employees stay with the organization

  • Whether they achieve organizational or personal goals

  • Whether they are able to adopt new working practices and learn new skills

  • How they respond to customers
IES also implies that it is a useful start to identify specific outcomes of morale, which the organization wishes to address. The organizations involved in the study suggested three common strands to a strategy for influencing morale. They were the ability to:

  • Anticipate likely employee response

  • Identify interventions to impact morale

  • Monitor and evaluate morale and the impact of actions taken.


3.1.1     Anticipating employee response
A number of 'risk factors' were identified as indicating circumstances in which downsizing was most likely to hit morale. The included:

  • Failure to convince the workforce that job reductions were necessary

  • Apparent lack of clarity or unfairness in deciding on individual redundancies

  • Lack of care over redundant staff

  • Lack of alternative career development options if promotion becomes unlikely

  • Changes which leave survivors unclear of what is expected of them, or how they will acquire the new skills they may need

  • Managers who are unwilling or unable to provide adequate time and support to individuals.
Anticipating impact also means understanding that individuals in different job groups or career stages may respond differently to downsizing. Although it is often difficult to address interventions to particular workforce groups, they can sometimes be tailored with varying needs in mind.
3.1.2 Interventions to build morale
The second factor that could be used as strategy to influence morale is identifying intervention. According to the study, it is difficult to target interventions with any precision to influence morale. However, the participating organizations identified several broad kinds of action, which they saw as particularly relevant.
Communicating with employees during downsizing is vital. Conveying the reasons for such a painful change is central. Employees need to understand the business reason for reducing headcount, and how the change will be managed. Breaks in communication are seen as sinister or threatening and could lead to rumours. Attempts to deny the reality of the painful aspects of the change are seen as insensitive. Therefore, communication has to be honest in dealing with the negative feelings of employees. The study also highlighted, it is important to communicate throughout the period of change, not just at the beginning.
Giving direct support to the 'survivors' as well as the 'victim' of downsizing leads to other types of intervention. They may address such areas as Stress management or Career counselling.
Organization Development initiatives may be used to try and improve the effectiveness of the emergent organization. They may include work to rebuild relationships between and within groups and departments, often through team building activities. Enhanced excess to training and work experience may be needed to help staff adjust to new job demands. Performance Management often needs attention to ensure that staffs feel that the new demands are realistic in terms of the reduced staff resource. They also need to be clear what is expected of them in the new organization. Reward strategies may also need realigning, but there is a lack of clarity at present about the link between alternative reward strategies and morale.
The employee's relationship with their line manager may have a significant effect on how well they cope with downsizing. For line managers to support staff effectively at a time of difficult change, they in turn have to feel as though they know how to handle queries and problems. It can be of help for managers to share their concerns with their peers and discuss how to deal with staff issues. Some companies use regular forums for managers to do this throughout the change period, and avoid them feeling isolated.
3.1.3    Monitoring and evaluation
The third suggestions by IES to become strategically in influencing morale are monitoring and evaluating morale and the impact of actions taken. Evaluating the success of attempts to influence morale during downsizing is not easy. There is a natural tendency not to want to ask people how they are feeling when you expect negative responses. Also we know relatively little about cause and effect in the area of morale. Ownership of the issue may be difficult to establish – even senior management itself often being in a state of flux during periods of downsizing.
Many managers believe – or like to believe – that the general level of staff morale is outside their control. There are indeed many limitations to controlling morale including the variation in individual response; the impact on individuals of what they see happening to other employees, and the variation in response over time. Separating the impact of different interventions can be difficult, and downsizing is seldom the only organizational change going on.
In spite of difficulties to evaluating the impact of specific responses on morale, organizations are using a range of measures to monitor some of the outcomes of morale. For instant, staff turnover, absence from work and performance indicators (e.g., customer service) are often monitored numerically.
'Softer' measures of attitudes and perceptions of employees are obtained through the increasing use of employee attitude surveys. These can be used both to identify variations in response within the workforce, and track changing perceptions over time. Managers need to understand how employees are feeling in their part of the organization as well as in aggregate.
Upward feedback is another way of collecting information on employee morale and response to initiatives. It can also be used as a starting point for improving relationships within teams in the wake of downsizing.
To conclude, IES report mentions that their report has started to examine some of the ways in which organizations are seeking to combat the more detrimental effects of staff reductions on the morale of those who remain. There are inherent limitations to controlling morale, and to their understanding of cause and effect in this area. However, the practical experience of the organizations involved in the study points to some ways of structuring thinking and actions.


  1. The employees positive approach
    On the employees perspective Tom Mochal (2003) advised; when you are caught up in a layoff, make sure you do the followings:

  • Leave your current company on a positive a note as you can. Who knows, they may want you back some day.

  • Get over the emotional side of the layoff as quickly as possible.

  • Stay positive – it's the most critical aspect in surviving a layoff. Your probably didn't have any control over your layoff, but you do have control over your job search. You also have control over your emotions. Learn from the past, but let it go. Be positive and focus on your next opportunity.

  • Look at as many opportunities as possible, as soon as possible. Hit the pavement, the want ads, the internet, etc.


  1. Actions to be taken by Management in curbing the crisis        
    Kenneth P. De Meuse and Mitchell Lee Marks (2003), had suggested few steps to be considered by management in curbing the crisis. They put forward the idea that, under the planning process, the management team should think of the best possible ways to motivate employees in facing a downsizing environment. It is important for management to understand of what makes employees upset. Amongst the issues are financial security, employment status, family commitment or any other related matters that relates to loss of income and benefits. The most significant issue, employees' are afraid of the situation being betrayed by the management.
    They include the followings measures that can be considered in the implementation of downsizing:
4.1     Open Communications
Often, rumours are more unbearable than the truth. Managers should be sensitive to the rumours spread among employees'. It is more appropriate if the upper level management or the human resources personnel to help filter the fact from fictions. An official session conducted to all employees as to provide feedback about the future plans of the organization. Although the news may not be good, but certainly employees will appreciate any information that comes from a credible source.
Employers often avoid telling employees they will be laid off until the last moment. This action creates an environment of mistrust from surviving employees and opens the organization up to liability regarding wrongful termination. Employees who feel they were blindsided by the termination often look to the legal system for retribution.

Companies often risk losing efficiencies and cost savings from undergoing layoffs if there is not proper attention given to the remaining workforce—and the lodging industry is no exception. Often surviving employees feel mixed emotions of relief and guilt that they survived the layoff, but that their co-workers were not as fortunate, and apprehension that they may still be at risk.


Management in each sector, from room service and guest relations to food and beverage and maintenance, must recognize these emotions if they want to ensure that its own individual work force remains focused and productive. Employers often avoid telling employees they will be laid off until the last moment. This action creates an environment of mistrust from surviving employees and opens the organization up to liability regarding wrongful termination. Employees who feel they were blindsided by the termination often look to the legal system for retribution.

There is often a period of adjustment, and managers should recognize this by empathizing with their remaining workforce and listening to their concerns. Managers should also be aware that rumors can be more damaging than the factual reasons the company makes certain decisions. Employees may even assume more layoffs are inevitable and begin spreading rumors which can have a negative impact on productivity. Honestly communicating with employees, even when it is bad news, is often better then the remaining uncertainty.


  1. Educate everyone to sustain focus on performance
    In order to overcome the negative feeling of employees, it is important for all managers to help their employees to remain focus at work. Managers should acknowledge the frustration and concerns of employees as well as find ways to maintain employees' confidence. It would be appropriate for every manager to educate employees that a downsizing exercise is a shared problem, not one for employees to deal with individually.


  2. Support employees who choose to leave
    Separation may be the best option for employees whom are not able to overcome their negative feelings toward downsizing exercise. Ideally the management should work out a training plan that will lead to new employment opportunities for those who wants to leave. That will be useful for employees to develop new skills for other jobs within the organization or outside the organization. The best way to handle employees' morale is to give advance notice possible (Tom Mochal, 2003). This is important for employees' to prepare mentally as well as physically. Employees' who are mentally prepared are generally more calm and gracious when the notice is given. They don't express anger or burn bridges during those last days on the job. With advance notice, employees' can update their resume, start looking at the job market, and start to cut back on their personal expenses.
    Tom Mochal (2003) added, employees' whom views the exercise from the positive perspective would react positively. They would be able to learn what they can, hence move forward. They may become more prepared by doing a better job of keeping their skills up to date. They may decide that they need to become certified in their skill sets. They may decide to move into consulting positions. Once they understand the basic point, they may lead to more options and a better chance for success in the long term.


  3. The Downsizing Dilemma
    Erica Siegel (2009) has outlined eight important steps to be considered by companies who are contemplating layoffs. She added, it's important to be aware of some fundamentals. Companies that take the time to plan and prepare for downsizing find they're able to minimize the impact. Here are the steps to consider:

4.4.1    Make smart decisions now
If a layoff is likely to occur eventually, evaluate other options. For example, you can realign existing personnel to cover current vacant positions, or you have solid performers take on additional responsibilities of poor performers and use attrition to make the necessary cuts. (It is important to document any training the poor performers received.) If you have a front desk worker who could succeed in the position of concierge, combining the two positions can reduce payroll expenses and ensure continuity in the workforce.


  1. Reduce the risk of litigation.
    There are federal, state and even local laws that govern layoffs. Make sure you are aware of those that may affect your organization.


  2. Recognize the human side of downsizing.
    How downsized employees are treated directly affects the morale and retention of your remaining high-performing employees. A study in the Academy of Management Journal found that employers who experience layoffs often see an increase in voluntary turnover among employees they wanted to retain.


  3. Keep things familiar
    If there was always a Monday morning staff meeting, keep the Monday morning meeting in place. After a layoff, employees will experience a heightened sense of insecurity, so being able to rely on certain areas of familiarity can have a positive effect on productivity.


  4. Recognition and rewards.
    Although company might have tough time to pay bonuses or merit increment, but many recognition programs can be implemented as a substitution to let employees know you're aware of the added burden and that you appreciate their hard work.


  5. Future goals.
    Communicate the strategic direction of While layoffs may become a necessary action for an organization, being prepared can set the stage for a more positive outcome. In the lodging industry, the best advice is to be smart plan and communicate and you can steer clear of avoidable risk.
    The organization with employees and each employee's role in helping the company achieve those successes. By communicating with employees about their future in the organization and the company's goals, employees will feel more vested and connected to the organization.


  1. Recommendation - Learning from the Past
    Downsizing started to become a management issue way back in mid 1970s. Downsizing was practiced as an initiative to reduce cost and as a way to eliminate the non performer staff with the economic recession.
    According to Franco Gandolfi, in the Reflecting on Downsizing: What Have Managers Learned?, there are five downsizing lessons for executive contemplating a downsizing strategy :
    Lesson 1 : Organization should be fully prepared strategically and proactively for downsizing in terms of the HR plans, policies and programs a year before executing the downsizing which indirectly allows minimal disruption and pain among the surviving and the departing workforces.
    Lesson 2 : Managers should provide adequate training and supports to survivors in order to proactively prepare the workforce for change and help individuals cape successfully with downsizing.
    Lesson 3 : Managers must be pay considerable attention to survivors because these survivors are mentally and physically stressed with the downsizing practiced to their colleagues. The survivors faced with aftershocks of downsizing. Managers need to make sure that the survivors receive counselling, support, help, honest as well as unbiased information.
    Lesson 4: Managers must thoroughly counting the downsizing cost
    because there is always an indirect and hidden cost in practicing downsizing. Miscalculation of cost can result in the organization facing loss of gain due to underestimation.
    Lesson 5 : Manager should consider downsizing as a last resort
    in encountering bad economy stage. There are other practices that can be carried out in order to survive in the economical recession such as reduce workweek, hiring freezes, natural attrition, limited overtime pay and etc.
    According to Asuman Akdogan, in The Effects of Organizational Downsizing and Layoffs on Organizational Commitment: A Field Research, downsizing represents a strategy managers implement that affects the size of the organization's workforce, its cost and the work processes. The effect of downsizing are members worried about their future and employment, they believe that their workload will increase because of layoffs and remaining employees believe that downsizing politics are enforced unfairly.
    In order to minimize the effect, Akdogan outlined few strategies and can be carried out by managers as stated below :

    1. Form a well-organized downsizing plan

    2. Maintain core competencies while experiencing the downsizing process

    3. Make all employees both remaining and those leaving to participate in the downsizing process

    4. Inform all employees about the downsizing process
    Basically, both writers have common idea on the action to be taken by managers should include from the perspective of the organization as a whole, from the perspective of the employees who are lay off and from the perspectives of the survivors. The process of downsizing itself created a self protective mood among employees. So, it is important for managers to ensure the organization is run on a minimal effect of downsizing and thus increasing returns in the organization in line with the main purpose of executing downsizing at the first place.


  2. Conclusion
    This report has examined some of the ways that organizations may consider to combat detrimental effects of staff reductions on the morale of those who remain. What they proceed from the applied approaches and plans will impose a bigger impact towards the remainders on their perception of the organizations current situations. The experience of living with the possibility of redundancy and watching others leave has become part of the working experience of many employees. How can organisations hope to maintain staff morale in such circumstances?
    In that case, the organisation is responsible to do something that may treat the situation by looking seriously into employee's morality who retain in the organisation. Through an actions that equivalent to managing stress and de-motivation, the organisation can communicate effectively with the leavers and survivors. But between these two groups, the attention should be more towards the survivors as to treat their anxiety on the job security and company's survival.
    It is recommended that the company or organisation which had came down with downsizing as a survival loom, will look into learning the details involved in directing, executing, participating in or preparing for a Reduction In Force (RIF). In this case, they should covers determination of competitive areas and levels as well as the establishments of retention registers.
    The survivors or retainers or retainers must be educated by the employers to stay focus on their performance and prepare them for the evitable. Apart from that, the employer should also look into the rewards and recognitions without jeopardizing the employees' trust and at the same time ensuring the organizations on-going survival in the market.
    On the other hand, the employees who are leaving or intending to leave must be put into consideration about their welfare. Perhaps, a good practice of layoffs will foster their unemployment for a time being before they proceed with another job in other organizations.
    Finally, it is also a must for the organisation to paid balanced attentions on the organizational abilities in coping with downsizing issues from the monetary and non-monetary aspects as guaranty to survive in the industry. Perhaps, the attention on the employee morale will be weighted as the same in supporting the organisation survival to pursue their objectives in the future.


  3. REFERENCE


  • Brockner J. 1992. Managing the effects of layoffs on survivors. California Management Review 34: 9-28.
  • Wayne F. Cascio, "Downsizing: What Do We Know? What Have We Learned?" Academy of Management Executive, Vol. 7.


  • Daniel C. Feldman and Carrie R. Leana, (1994). Better Practices in Managing Layoffs. Human Resource Management, Summer, ,


  • Cooper, Cary L. and Ronald J. Burke. The Organization in Crisis: Downsizing, Restructuring, and Privatization. Blackwell, 2000.



  • Gandolfi, F. (2008). Reflecting on Downsizing : What Have Managers Learned?. S.A.M. Advanced Management Journal, Vol. 73, Iss.2;pg.46,11 pgs



  • Akdogan, A. (2009). The Effects of Organizational Downsizing and Layoffs on Organizational Commitment: A Field Research. Journal of American Academy of Business, Cambridge. Hollywood, Vol. 14, Iss. 2; pg. 337, 7 pgs
  • Koco L. 1996. Downsizing spurs disability claims, survey finds. National Underwriter 100: 27-28, 32.
  • Mishra AK, Spreitzer GM. 1998. Explaining how survivors respond to downsizing; the role of trust, empowerment, justice, and work redesign. Academy of Management Review 23: 567-588.
  • Tombaugh JR, White LP. 1990. Downsizing: an empirical assessment of survivors' perceptions in post-layoff environment. Organization Development Journal 8: 32-43.
  • Adams, G.R., & Schvaneveldt, J.D. 1991. Understanding Research Methods 2nd Edition Longman Publishing Group.
  • Appelbaum, S.H., Delage, C., Labibb, N., & Gault, G. 1997. The survivor syndrome: aftermath of downsizing. Career Development





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