Downsizing

.
             Effect of downsizing on employee morale.
             Organizations have seen the negative affects of downsizing. Morale suffers which equates to lower productivity and profits for the organization. low morale creates anxiety and paralysis within their companies to the subsequent detriment of productivity. When an individual loses his/her job, confusion and anxiety sets in. "Many of them are thrown into unexpected transitions with extended middle periods characterized by confusion and a lack of ability to move forward. According to a research 10 percent reduction in personnel resulted in only a 1.5 percent reduction in costs. Their research also found that the employee trust and empowerment were shattered after the downsizing. This caused the employees left after the downsizing to show less initiative in getting the work done. Their feeling was that they would be the ones terminated next, so their attitude is one of "Why try to do the job since I am going to be the next one laid off".
             Downsizing can threaten employees" sense of well being in several ways. They may see the company as having behaved unjustly or unfairly. They obviously feel less secure. They may also lose the belief that their contribution to the business will be rewarded in future. .
             These responses may easily threaten business performance. Survivors of downsizing can become unduly risk averse and narrowly focused, and therefore less creative and open to change. .
             A number of "risk factors" were identified as indicating circumstances in which downsizing was most likely to hit morale. They included: .
            
             • Failure to convince the workforce that job reductions were necessary .
            
             • Apparent lack of clarity or unfairness in deciding on individual redundancies .
            
             • Lack of care over redundant staff .
            
             • Lack of alternative career development options if promotion becomes unlikely .
            
             • Changes which leave survivors unclear of what is expected of them, or how they will acquire the new skills they may need .