Research Article
An Empirical Study on the Reactions of Surviving Employees in Downsized Organizations
Published: January 2001 · Vol. 30, No. 2 · pp. 319-347
Full Text
Abstract
To secure the sustained commitment and dedication of organizational members during the downsizing process, it is necessary to understand and manage the various factors that affect the attitudes and reactions of surviving employees who remain with the company after workforce reductions. This is because the surviving employees hold considerable key to determining whether a firm that was compelled to undertake workforce reductions can achieve its intended management objectives and restore competitiveness within a short period after downsizing. From this perspective, this study empirically investigated the reactions of surviving employees and the various antecedent factors influencing them, targeting firms that had recently undergone downsizing. Survey results from a total of 326 respondents revealed that the degree of distributive and procedural justice perceived by members during the downsizing process had a positive effect not only on performance variables such as job performance and altruistic behavior but also on trust in the organization's management. Furthermore, trust was found to be a factor that partially mediates the relationship between these justice variables and job performance, confirming that successful downsizing requires crisis management that actively considers organizational members' perceptions of justice and trust. Additionally, it was confirmed that employment adjustments carried out repeatedly without sufficient prior planning and preparation diminish trust in management and willingness to commit, suggesting that the frequency of downsizing itself needs to be carefully considered in order to sustain high commitment and high involvement among organizational members after downsizing.
