The psychological impact of downsizing on employee survivors in the manufacturing industry

Abstract

In today’s business environment, where most organizations are forced to restructure due to unstable political situations, globalization and economic downturns, downsizing has proven to be a relevant strategy to organizations. Most employers seem to know the importance of the remaining employees (survivors) yet they still find difficulties in keeping them insecure and productive. The objectives of this study were to identify the psychological impact of downsizing on employee survivors, determine the commitment and attitude of survivors after downsizing and to determine whether a correlation exists between commitment and stress after downsizing. This study provides a starting point, not only in understanding the psychological impact of downsizing to the survivors, but also in providing recommendations for downsizing planners in terms of the remaining employees (survivors). Using a quantitative research design, self-administered questionnaires were distributed to a sample of 123 respondents in the selected manufacturing industries. A random sampling procedure was utilised. The data was subjected to a number of statistical analysis including inferential statistics and Pearson product correlation. Results indicated that survivors were less committed to the organization, although they had a negative attitude towards downsizing process.Organizations need to develop and communicate compelling employee propositions that highlight the availability of counseling, training and career development opportunities, as well as providing them with personal mentors. Key words: Downsizing, survivors, commitment.