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Reducing Attrition After Downsizing

Analyzing the effects of organizational support, supervisor support, and gender on organizational commitment.

Introduction

The environmental variables in Thomas Gilbert’s behavior engineering model can yield strategies likely to have significant impact on performance for relatively nominal cost.  Research examines how environmental variables such as supervisor and organizational support can be adjusted to maintain staff and organizational performance after downsizing cycles.

Article

Erickson, R. A., & Roloff, M. E. (2007). Reducing attrition after downsizing: Analyzing the effects of organizational support, supervisor support, and gender on organizational commitment.  International Journal of Organizational Analysis, 15(1), 35-55. doi: http://dx.doi.org/10.1108/19348830710860147

Background

Although downsizing is intended to improve organizational performance, such actions can initially prove detrimental to performance. Post-downsizing attrition is a common occurrence after layoffs. Downsizing survivors view layoffs as a violation of the implicit psychological contract between employer and employee, namely:

  • transactional obligations of high pay and career progression in exchange for work; and
  • relational obligations of job security commensurate with loyalty and tenure on the job.

This perceived breach of trust often leads many remaining workers to seek employment elsewhere.

Factors that may mitigate attrition after downsizing include offering financial incentives; since organizations downsize in response to diminishing financial resources, however, offering such monetary incentives as a way to reestablish trust is typically not a feasible solution.  The research examines whether improving other factors, such as perceived support, is an effective way to reestablish employees’ trust in the organization and rekindle their commitment to organizational goals.

Research

The researchers conducted a secondary analysis of data gathered from a 2004 employee survey at an international consulting firm that had just experienced two years of multiple downsizing events.  As a consequence of the layoffs, employee attrition had reached an all-time high of 40 percent. The researchers sought to examine employee perceptions of internal support systems after downsizing: perceived organizational support (POS), perceived supervisor support (PSS), and their relationship to attrition.

The survey sample consisted of 2,751 employees across 16 different business units and 15 different levels. The survey had been administered online by a third-party to assure respondent anonymity. It consisted of 31 Likert-type queries designed to assess levels of employee perceptions of organizational support and their personal levels of commitment. Participation in the survey was voluntary.

The secondary analysis used the existing data to test five hypotheses, with two having some significance for HPT practitioners.

  • H1. Organizational commitment among downsizing survivors will be positively related to both POS and PSS.
  • H2. POS will be more strongly related to organizational commitment among downsizing survivors than will PSS.

Findings and Implications

The researchers were working from existing data gathered using a survey instrument they did not create. Thus, the typical measures associated with gauging POS, PSS, and organizational commitment were not included. The researchers conducted a factor analysis and constructed scales based on the items that were used and that corresponded to those three focus areas. The correlation matrix indicated that organizational commitment was positively related to POS (r = 0.72, p<0.001) and PSS (r = 0.54, p<0.001) among downsizing survivors. Perceived organizational  support and, to a lesser extent, perceived supervisor support played a major role in workers’ decisions to leave or stay with the organization.

The researchers were careful to qualify their findings given validity and generalization limitations of the data. Nevertheless, their results do have implications for HPT practitioners attempting to address downsizing’s negative effect on remaining staff. At the organizational level, improved communications regarding the reasons for the downsizing and next steps is key to reestablishing trust. Clarification of workers’ new roles and responsibilities in light of increased workloads helps to identify performance standards and ensure that employees get the tools they need to succeed. Career development benefits should continue to be offered to foster confidence in employees’ future prospects within the organization.

At the manager level, supervisors should confirm their commitment to helping their surviving workforce succeed by holding regular one-on-one meetings during which feedback and guidance regarding performance are presented. The organization should emphasize with supervisors the significance of their roles as leaders and hold them accountable for the success and retention of subordinates.

Questions for IPT-N Members

Has your organization undergone downsizing? What measures did the organization take to ensure retention of its remaining staff? As suggested by the research reviewed here, did your organization put effort in helping surviving employees by improving support from their supervisors and from the organization? To what extent were those measures successful?

Workplace Oriented Research Central (WORC)
Prepared by OPWL Graduate Assistant, Susan Virgilio
Directed by OPWL Professor, Yonnie Chyung
Posted on November 13, 2012