Effects of Downsizing on Employees

Topics: Self-esteem, Employment, Termination of employment Pages: 9 (2768 words) Published: April 16, 2012
Effects of Downsizing on Employees

Statement of Problem
Downsizing is a major problem faced by employees during tough times of recession. Apart from the economic reasons, they also have severe psychological effects on the employees. This project is about comprehending the effects of cut backs on employees. Employees suffer from severe self-esteem issues, due to which it’s very hard for them to jump back into the same mental stableness. The structure of this study is to assess the effects of downsizing on employees. Employees tend to be less effective after a downsizing procedure took place in their organization. Dedication towards their jobs decline as a result of downsizing. Depression is one of the major issues that are targeted by this study and there are a couple of scenarios that pertain to this topic which are going to be evaluated. The scenarios are as follows: •Depression suffered by employees during downsizing.

Downsizing’s ill effects on surviving employees.
Employees losing self confidence due to termination.
Treatment of employees during termination.
Definition of Terms
The concept of downsizing is commonly known as the lessening of labor force in a business. There are multiple ways of looking at this particular term, as employees and employers look at this from different angles. Organizations believe that they would become more productive and successful due to downsizing. Employees on the other hand look at downsizing as the management’s weapon to implement more control over the employees, as employees would always be on their toes when work is considered because they would be scared of losing their employment. Employees face severe problems of job insecurity. Employees suffer from severe depression, low self esteem and a lot or emotional trauma. To maintain a stable life, they have to try to cope up with all these psychological issues. Downsizing thus defined, falls into the category of management tools for achieving desired change, much like “rightsizing” and “reengineering” (Kumar. M., 2009). Purpose of Research & Implications

Research has to be done on this topic because a conclusive reasoning hasn’t been done on all the characteristics related to this issue. There are a lot of minor details that are not looked at. •Researchers haven’t really focused on the big picture when it came to downsizing. Researchers at time have also showed downsizing as a positive aspect of the company, although all the negative effects on the employees have been disregarded. •Recession has recently hit the world and this is an ideal time to conduct an actual research on the negative effects of downsizing on employees as there are a large number of employees who are affected by this catastrophe. •Since some important areas have been inconsistently researched upon, this is an ideal opportunity to get some pure information about this issue. •Employees are already traumatized by the thought of getting terminated, and at this point of time if they are not even treated with dignity, they would go to a different level of depression and they are bound have very low self esteem. Termination interview’s nature has a big impression on employees as that is that last that they are going to see of the organization, and if the company follows bad termination practices, it’s bound to get the employee even more aggravated and eventually very upset (Wood. M et al, 2009) Major findings and conclusions

There was a study conducted by Obilade, S. (2009) about the impact of downsizing on the employee’s morale, and the random sampling method was used to administer this study. In this study 54 males and 20 females from 12 small businesses were asked to take part. A 20 question survey was formed which focused on the effects of downsizing, the organizations way of informing the downturn and an open ended question at the end on how the person answering the question felt as a survivor on downsizing. The study derived that (i)...

References: Kivimaki, M., Vahtera, J., Pentti, J., Thomson, L., Griffiths, A., & Cox, T. (2001). DOWNSIZING, CHANGES IN WORK, AND SELF-RATED HEALTH OF EMPLOYEES: A 7-YEAR 3-WAVE PANEL STUDY. Anxiety, Stress & Coping, 14(1), 59.
Reinardy, S. (2010). DOWNSIZING EFFECTS ON PERSONNEL: THE CASE OF LAYOFF SURVIVORS IN U.S. NEWSPAPERS. Journal Of Media Business Studies, 7(4), 1-19.
The author describes the organizational developmental theory by this study
Mayton, S. M. (2011). Survivor Coping. OD Practitioner, 43(1), 42-47.
Kumar, M. (2009). "Downsizing" on Retainers ' Behaviour. SCMS Journal Of Indian Management, 6(3), 93-103.
Obilade, S. (2009). Motivating Downsizing Survivors in Small Businesses. Southern Business Review, 34(1), 19-35.
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