A STUDY OF DOWNSIZING AND HOW IT AFFECTS THE WORK EFFICIENCY OF EMPLOYEES
Due to the effect of worldwide economic meltdown and inflation most countries all around the world and their business organizations is downsizing or have plans about downsizing their employees to be able to cut cost the overhead so that they can survive the challenges of the economy. They usually resort in to agency hiring rather than direct hiring so that they can easily eliminate employees, they may also transfer employees from different position or branch, they can also directly dismiss massive employees or give them early retirement and forcible layoff. Depending on countries but some of this work practice is definitely illegal or unfair to their employees however because of the present conditions they may need to admit that their position is getting out of hand or loose the entire business that can even affect the entire workforce.
As early as in mid 90’s of every types of business all around the world the effect of downsizing and mass layoff has been staggering. Even the multi national companies including fortune 500 corporations participate in this trend because they believe in reduced cost and more productivity and bigger profits can be achieved and employees are in their control this is somehow possible in an organization and the direct impact goes to the employees who have been dismissed. An organization who gone through employees downsizing is definitely morally hampered in its existence and the work efficiency of employees who are left maybe somehow, some way they have a feeling of deprivation and degradation of what suppose to be their future in the company is a big question and they may also feel that their position is in danger if the economic trend will continue to worsen.
The natural effect of downsizing as pressured by most organizations is survival or maintenance, if they are lucky then they may have economic recovery but according to studies of Cameron and Freeman in 1994 in US from 1986 to 1991 only 46% of organizations have accomplished their goal of reducing their expenses while only 32% increased in profit, 22% increase in productivity while only 17% reduction of bureaucracy this means that they have not actually reach their goal in downsizing although downsizing is a natural answer to a dying organization. The real effect of downsizing to their workforce that’s been left is naturally doubts and fear or exaggeration and rebellion in the workplace. Employees are also obliged to perform the duties and responsibilities of those who are terminated and therefore their works may overload and the employees may have a negative response in this situation.
According to studies of Henkoff in 1990 and Baumohl in 1993 that 74% of managers believed that downsizing makes their company suffered in productivity, even an article in Time Magazine during those years have agreed that it is a dumbsizing not downsizing. Although organizations is positive about their approach and they may also give a considerable attention to their employees who have remain in their respective positions but still researchers shows that downsizing creates job insecurity to workers knowing that they are unsure about the conditions, they may also experience anger and hatred due to the sudden changes in their position and work environment, the loyalty and commitment may also deteriorate in a certain time. They make seek other opportunities from other organizations for more security, the trust and confidence of workers is also hampered while some workers may even create unionization, strikes and rallies to condemn their companies to seek fairness and accusation hoping that they can gain more even if they expect the worst.
There are also employees who should have remain in the organizations but they resist their employment in support to their co-employees and to the industry so they resigned from their position or they are also dismissed so they do not affect others. The emotional and physical weakening of employees who have gone through downsizing is not always negative there are also employees who may feel relief and thankful that they still have jobs, sometimes there are also employees who may feel secured that they can take the position of others or they have now the opportunities to be promoted. But definitely the worst devastation and sudden impact is felt from the personnel who have been dismissed especially the old folks in their forty’s above they may find it hard to seek employment and opportunities. No matter how the government and intervention of law the hidden danger or bankruptcy can happen in an organizations so employees must need to prepare its consequence.
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