The impact of downsizing on the remaining employees in the organisation
Since the early 2000‟s there has been a wave of global downsizing of employees in many organisations. A question can be posed, to what extent have organisations focused to adopt a downsizing policy framework for ensuring a balance of procedural and efficiency imperatives (Chew & Howitz, 2002). Organisational downsizing has recently become an increasingly important issue that needs to be addressed to ensure fair employment practices. Companies worldwide have used downsizing to improve employee competitiveness, profitability, organisational effectiveness, efficiency as well as to reduce the size of their workforce. Downsizing has ramifications for everyone in the organisation, regardless if employees are remaining in the organisation or those. As a result of restructuring, employees might be suspicious about the future direction of the organisation and their role in it. Trust is especially important in knowledge-based organisations because it is known to support knowledge-creation processes and related interactions (Blomqvist 2002; Tyler 2003). Employees are often sceptical about change, as new work roles assigned may cause them anxiety and previous interpersonal relationships may be lost; however companies regard downsizing positively. The reaction of those who survive the downsizing determines the future success of the organisation (Hopkins & Weathington, 2006). An organisation, in a dominant market, share position due to downsizing and restructuring its strategic business units, thus is more complex and emotionally draining than being the leader during periods of growth. Different organisations, at present, have joined the military march of the global epidemic infected with layoffs that is redefining effective leadership and employee motivation, loyalty and commitment (Noer, 2010). Downsizing essentially involves the reduction in the number of workforce within the organisation, which can be achieved through several techniques including, retrenchments, early retirements or casualisation of staff (Hellgren, Nȁswell, & Sverke, 2005). Robbins (as cited in Ndlovu & Parumasur, 2005, p. 14) intensifies the above by defining downsizing as a practice of reducing the organisations size through extensive layoffs, whereby whole layers of the organisation are eradicated and management is done with fewer people. On the other hand, as outlined by Chew and Horwitz (2002), downsizing may not necessarily result in the loss of jobs where employees are retrained and re-deployed, or where other measures such as non-replacement of staff that leave occur.