Motivation in Economic Downturn for Surviving Employees

Topics: Employment, Termination of employment, Layoff Pages: 8 (2477 words) Published: April 21, 2013
Motivation in Economic Downturn for Surviving Employees|
Julia Gao Helen HuHannah Hung Chimeme Pan Johnson SunMandy WongYidi YuElaine Zhu| |


Motivation in Economic Downturn for Surviving Employees
1. Executive summary
The global economy experiences a downturn every five to ten years nowadays. During such financial crises, organizations might have to face the issue of lay-off in order to reduce cost and survive from the downturn. Apart from the negative effects on the unemployed, those survivors also go through a hard time. This report has firstly investigated possible negative effects on remaining employees. It is found that survivor syndrome, including five major types, occurs among survivors. Besides, four relevant solutions for managers are provided to minimize the negative influence on remaining employees and to support future development of the company. Lastly, current issues and concerns with respect to motivation maintenance are also discussed for feasibility.

2. Introduction
During the financial crisis, many organizations are downsizing and laying off their employees. A major factor that contributes to the failure of most organizations to achieve their objectives after downsizing is that they do not adequately and effectively address the “people factor” related to surviving employees throughout the process. In other words, most companies focus on comforting the leavers instead of concerning the negative effects on the survivors. Survivor Syndrome is a mental condition that occurs when people perceives themselves to have done wrong by surviving a traumatic event when others did not. In the field of management, it refers to the negative psychological and physical impact that originations’ layoffs bring to the remaining workers (Cascio, 1993). In this report, we identified 5 major negative effects on survived employees and provide possible solutions to the managers.

3. Major negative effects
3.1 Psychological effects
1. Job insecurity. Survivors wonder how long they will be able to keep their jobs, and they worry that they are not prepared to find work elsewhere, or that there are no comparable outside jobs. Since survivors are at the risk of losing jobs, they no longer regard themselves as an integral organization member, as which they are responsible for the future of organization. 2. Depression, anxiety and fatigue. The process is demoralizing and stressful for the managers who must lay off employees, as well as for employees who lose friends and colleagues. After the layoffs, more work and more pressure to perform, mentally and emotionally drained after survival. 3. Reduced risk-taking and creativity. Many survivors are afraid to face challenging jobs, accept a new task, or discuss a work-related problem for fear that they expose themselves to criticism or poor performance appraisals and become the target of future layoff. As a result, they are receptive to their status quo as being “safe” instead of taking initiative. 4. Distrust and betrayal. Doubts may arise about the wisdom of the layoff choices when survivors believe that someone laid off is more capable than a remaining one. The feeling of unfairness can lead to worries about the transparency of organization operation thus causing distrust and possible job-hopping. 3.2 Physical effect

Apart from the psychological negative effects, layoffs may also influence the physical health of the survivors. Great pressure and heavy workload can have a bad impact on employees’ immune system. Under this situation, people are probably to have more physical symptoms, like stomachache, headache and cold.

4. Solutions for managers
The following are four solutions provided to minimize negative effects on survivors. 4.1 Open Communication
Research has proposed that procedural justice, which is the perceived fairness of the process used to determine distribution of rewards, has a critical role...
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