The role of social cognition in downsizing decisions

Abstract

PurposeThe purpose of this paper is to learn how managers make downsizing decisions.Design/methodology/approachParticipants read a created organizational scenario and 25 hypothetical employee profiles and then chose five employees to lay off.FindingsOlder and minority applicants were chosen most often. No significance was found for performance. Rater group membership in race, gender, and age were significant predictors of layoff decisions.Research limitations/implicationsBecause the participants were in a controlled environment they may have disregarded other information often available to decision makers. The majority of the sample was students who may be unrepresentative of managers who make layoff decisions. The inclusion of managers who have made downsizing decisions was designed to help address this limitation.Practical implicationsAn employer's use of personal characteristics in making downsizing decisions may ultimately affect the aftermath of downsizing.Originality/valueThis is one of the first studies to study the decision‐making process of layoffs.