Impact of Downsizing on Employee Commitment and  turnover intentions in Public and Private Sector:  Moderating role of social support

Naveed Iqbal Chaudhry

doi:10.31384/jisrmsse/2015.13.2.3

Abstract

Due to economic crisis, organizations all over the world are adopting a number of different schemes to handle emerging problems. Downsizing or retrenchment of employees is frequently used by organizations when they face hardships at the marketplace. Under these circumstances, lack of commitment is the most crucial counter action which organizations have to face. This study intends to examine the impact of downsizing on organizational commitment and turnover intentions of surviving employees in the moderating role of social support. The target audience for this study was four public and private sector organizations located in Islamabad. The sample size consisted of 333 employees of upper and middle level management which were selected through simple random sampling. The result shows that downsizing is positively related to employee turnover intention and has significant negative impact on employee commitment. However, social support as a moderator enhanced employee commitment. This study will help the managers to comprehend when and how to apply downsizing so as not to harm the employee’s commitment. The study will further assist managers to implement downsizing and social support to achieve the objectives.

Highlights

In the 90s the economic crisis jolted almost every country and organization of the world
For analyzing our research results we entered the data into SPSS and AMOS about downsizing, organizational commitment, social support and turnover intention
This study shows that downsizing may hold a significant position when it comes to cost cutting during economic recession, but it adversely effects the performance of an organization

Summary

Introduction

In the 90s the economic crisis jolted almost every country and organization of the world. Organizations all over the world adopted a number of different schemes to handle the problems produced by the economic crunch. One of the most common ways adopted by most of the organizations was downsizing. Downsizing or retrenchment of employees is frequently used by the organizations when they suffer any losses whether it is financial or managerial (Ko & Yeh, 2013). Downsizing influence the wellbeing of a firm in number of ways, i.e. the productivity of the organization, its environment, employee’s satisfaction and commitment etc. The prime objective of the organizations is to minimize cost and maximize profit. Due to the economic recession business organizations faced many problems that affect profitability. To achieve organizational goals in unfavorable situation organization

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Discussion

Conclusion