Effects Of Downsizing On Employees Work Life Management Essay

The aim of this study is to identify the effects of downsizing on employee behavior and their work life thereby having a negative effect on the productivity of an organization. Secondly, describing how it affects the productivity of the organization. Thirdly, psychologically explaining why it is important to pay heed to the behavior of employees. The results of this study will propose recommendations of how to improve productivity in organizations by prescribing behavioral skills organization citizenship behavior(OCB) that are most essential for delivering excellent quality services. It will also guide managers as how to encourage leftover staff members to attempt self-generated activity that goes beyond basic role instructions and to work together to face the challenges that the changes brings as well as adapt to the new work environment, thus boosting employee reliability and productivity. This study will be carried out by engaging in a comprehensive critical review of the existing literature on impact that downsizing has on the effectiveness and efficiency of workforces, resulting in how much efficiency and effectiveness can be improved, and how it can be improved.

The researcher will use the qualitative method of sampling technique and collect the data from 120 respondents through questionnaires. Data analysis will be done by means of Microsoft Excel or SPSS software. Convenience sampling technique will be used for collection of the sample from the board population.

Chapter 1

Problem and Its Background

1.1 Introduction

Remove double bullet numbers, introduction should be in your own words otherwise universality will throw both out in jungle

Organizational citizenship behavior (OCB) refers to the individual’s contribution in the workplace that goes beyond role requirements as specified in job agreement and has been considered to have significant impact on the effectiveness and efficiency of overall workforces and behavior of the organizations, and its productivity. Organ (1988) defined OCB as personality behavior that promote the effective and implementation of the organization. According to Smith, Organ & near (1983) OCB has three essential requirements namely: The staff must be encouraged to go on board and remain within the system, thus bringing stability to the workplace. Secondly, they must carry out specific role requirements in a stable-going fashion, actions like these forms the basis of quality service provision. Thirdly, staff members must be willing to attempt innovative and self-generated activity that goes beyond basic role instructions. The stress is on serving and satisfying the client instead of following rules or fulfilling policy and moving towards customer orientation. In other words, when the economy is turbulent, the leftover workers need to be more productive and reliable, therefore it is important that managers/researchers to increase their focus on OCB in order to keep the productivity of the organization at a good level because emphasis is raised on the essentiality of service quality.

When a company downsizes, it decreases its workforce with the purpose of improving the company’s bottom line by reducing costs. When downsizing takes place the attitudes and behavior of the surviving work force change. Cameron (1994) reports that “Downsizing inevitably restructures the workplace by discontinuing functions, abolishing hierarchical levels, redesigning tasks or merging units.”, affirming that the process has a positive effect on the firm’s overall costs however; it also affects the basic work environment, which leaves a negative effect on the workforce.

The major problems causes due to downsizing with the employees are corroborated by following analyses made by different researchers: According to a study completed by Luthans and Sommer (1999) downsizing significantly affects the successful organizational by effecting the overall attitudes of the workforce and thus impairs the satisfaction and commitment levels of the employees(p.62). It generates conflicting behaviors of amongst remaining workforce and resultantly would have greater impact on the achievement of overall organization’s objectives, employees are not finding the harmony between their objective that of organization. Downsizing could have devastating effect on the organization and could harm the going concern assumption of the organization. Downsizing Strategies should be design by considering the overall organizational and workforce behavioral factors in broad spectrum.

1.2 Definition of Construct

Downsizing is the ‘conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness’ (Budros 1999, p. 70).

1. To reduce in number or size: a corporation that downsized its personnel in response to a poor economy.

2. To dismiss or lay off from work: workers who were downsized during the recession.

3. To make in a smaller size: cars that were downsized during an era of high gasoline prices.

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Dictionary of the English Language, Fourth Edition updated (2009)

1.3 Background Information

Wateen telecom Founded in 2007 Wateen Telecom UK Ltd embarks on providing leading international voice retail and wholesale communication services to its customers through its ability to faultlessly connect and enable smarter, faster, cost-effective and flexible solutions.

Wateen Telecom is the Abu Dhabi Group’s latest venture in Pakistan. After the successful launch of Warid Telecom in Pakistan, this has a subscriber base of over 10 million customers in 145 cities.

In 1993, several commercial business companies came together and formed the Abu Dhabi Group, which today consists of 10 companies, two of which provide fixed and mobile communications services to users throughout Pakistan.

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One of those companies is Warid Telecom, which was founded in 2005 when the Abu Dhabi Group saw an opportunity to pick up the pace the growing penetration of mobile phones in Pakistan and submitted a bid for GSM license.

With license in hand, the Group started Warid Telecom with differentiating itself in the marketplace by offering high quality, improved security and consistent service. Within six weeks of launching its new network, Warid was providing service to 1 million subscribers and today, the provider is the third largest and fastest growing mobile GSM Company in Pakistan.

On the heels of that unexpected success, the Abu Dhabi Group then spun off Wateen Telecom from Warid in 2005 to influence the growing demand for broadband services and to additional change Pakistan into the 21st century digital uprising. Again, the goal was to made a distinction the company from its competitors by offering high quality and consistent voice and data broadband service offered through next generation technology.

wateen telecom offering the products like fixed land line telephone and wcard for national and international calling ,broadband internet ,multimedia & tv and solutions for information technology.

Because Wateen Telecom’s vision was to provide wireless fixed broadband data services for residential and corporate use, Motorola suggested its next generation wi4 WiMAX technology, based on the IEEE 802.16e-2005 standard.

That solution would not only facilitate Wateen to offer both fixed and mobile broadband data and voice services on a single platform, it would also put together a perfect mobility vision allowing interoperability across GSM, WiMAX and WiFi.

500 + employees are working in wateen telecom in to different functions like human resource , marketing,sales,finance, multimedia, customer services .

Recently Wateen Telecom Pakistan is being hit by a financial crisis. This WiMax provider is moving its lower end in terms of cash in hand. This situation is also affecting the company work force as salaries have yet not been credited to some employees. On the other hand Wateen have denied any such thing and reported that salaries were not given as per normal routine. According to company domestic sources the workforce is actually divided in to different categories as per their pay scale and different categories are given salaries as per different schedule.

Because of financial crisis company apparently fired 550 employees in total from almost all departments.

It is predictable that Wateen has intended to downsize its workforce further in next phase, with equal value. Earlier, Wateen fired at least 200 employees three months ago.

An employee of Wateen Telecom (requesting anonymity) told us that staff is under high stress, with no job security at all.

Downsizing leaving effects of stress and unnecessary work load on survivors.

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1.4 Research Question or Problem Statement or Objectives

(i) Research Questions

RQ1: Whether downsizing is beneficial or harmful for the organization by considering relevant merits and demerits of downsizing that is effect on the remaining employees, future profitability, conflicting behaviors, and impact on the goodwill of organization by different actions of the leftover employees.

RQ2: How effective downsizing strategy plan can be analyzed, designed and implemented?

RQ3: Focusing on the downsizing effects and controls all the adverse factors in order to achieve the objective of downsizing as designed in the overall downsizing strategy.

(ii) Research Objectives

To identify how much downsizing strategies is effective for the organization workforce and whether downsizing is the only solution to achieve the objective of the organizations.

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1.5 Scope and Limitations of Study

Research will be conducted in the environmental boundaries of Wateen Telecom Pvt Ltd Lahore Pakistan from different positions and designations in different department. Concentration in a single department could be a hazard factor of the research due to prominent responses.

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There could be following limitation of the study that can be practical during interviews and questionnaires sessions.

Data will be collected only from customer services department so viewpoint of other departments like marketing and sale may not promising to collect.

For proper schedule trainings may be few employees will be available because of customer services department limits.

Researcher role in organization may subject to limitation.

People some time fail to respond neutral due to personal limitation.

Respondents are from customer services department and spend most of their time in their work and may not available for many hours.

Personal restraint of printed questionnaire may be practical to complex.

Researcher biasness is of most important nature

State of mind of respondents is similarly important

Many respondents may be not knowledgeable so that supervisor will be collected data from that employees.

1.6 Significance of Study

The study will deeply look into a Human Resource Management issue of the organizational downsizing and its effects on employee’s work-life. A link will be established between the independent variables of organizational downsizing and the dependable variables of employee’s work-life. Till now, this issue has never received appropriate responsiveness because of lack of awareness and lack of endeavor on part of organizations.

The findings of the study will help the researcher in his day- to- day quantifiable work as an ex employee to better understand and manage. The research conclusion will go a extended way in helping the organizations issues of the downsizing and effects on employees work-life .


Literature Review

There are number of reasons why company downsizes its employees, merging two or more firms together as a single entity, acquisition if one organization purchase the other one there is a distinct change in the management, economic crisis this is single and major reason of downsizing, strategy change like some companies may trim down certain areas of operation and focus on other areas, excessive work force and out sourcing.

In excess of the earlier period, the workplace has distorted significantly in terms of job stability. People have moreover experienced layoffs immediate or directly known someone else who was impacted by re-engineering, downsizing, outsourcing or acquisition. Intended for employees unfavorably affected by these changes or for those who do not completely realize why these changes are taking place, the effects can be very distressing and impact both their individual and job life.

Downsizing which have exposed that, as the effect of its outcome, high percentages of organizations have noticed these efforts as ineffective. Organization reformation multiple forms of change, which are confidential into three different categories: portfolio, financial and organizational. An analysis of the Freeman and Cameron theoretical framework on downsizing implementation processes is examined in terms of where the process occurs.

Transform initiative like downsizing may build problems with employee attitudes and behaviors (Luthans & Sommer,1999).

Discovered “that the downsizing experience did affect traditional organizational level attitudes such as satisfaction and commitment” (p.62).

(Turnley &Feldman ,1998) advise that this is the case because of violations to supposed psychosomatic contracts or what (Strebel,1998) called the “personal compact”. Workers’ psychosomatic contracts are dishonored in that customary routines and protocols are neglected. Such inconsistencies can be demoralizing for participants in the change.

When change violates the individual compressed workers may depart emotionally, demonstrate less devotion and may be less keen to engage in organizational citizenship behavior.

Downsizing hard work creates negative attitudes toward workers’ own group members as well as the overall organization. (Luthans & Sommer,1999)

Even departments not concerned in downsizing pains can be negatively affected by these efforts. In their study, human resources in non-affected departments felt concerned in the direction of those downsized and vicariously felt the effects of downsizing.

The researchers acknowledged a bounce back effect in terms of some employees’ opinions about their personal work groups. Staff member’s early response to the downsizing strategy was negative, but they sooner or later began to work more closely jointly to deal with the challenges brought on by the changes. Luthans and Sommer end by asking if the cost savings of downsizing were considerable enough, bearing in mind the disorder and potential loss of self-esteem, to justify its implementation.

A key result in the downsizing literature (Cameron and Freeman,1994) is that mainly organizations do not achieve the most wanted improvements, but as an alternative experience growth in negative .

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Organization citizenship behavior involves open behavior that helps co-workers, supervisors, and the organization. support newcomers to the organization, not abuse the rights of co-workers, not taking extra breaks, presence optional company meetings, and lasting minor impositions that occur when working with others are examples of OCB that help in cope with a variety of organizational uncertainties. A key part to OCB is happily aiding others with job-linked problems. Multidimensional delineations have known OCB facets such as carefulness, sportsmanship, public virtue, politeness, and humanity (Podsakoff, MacKenzie, Moorman, & Fetter). Other researchers have seprated OCB into two types: behavior that is going to mainly at persons in the organization (OCBI), and behavior that is worried more with serving the organization as a entire (OCB) (Williams & Anderson). politeness and humanity are viewed as mainly benefitting coworkers, but delicacy, sportsmanship and public asset are going to at the organization (cf. Van Dyne, Cummings & Parks, ; Williams & Anderson).

Total job satisfaction and emotional promise are between the emotional work reactions that have been on hand most frequently as background to facilitative/promotive added-role behavior (Van Dyne et al). Studies have found persons job satisfaction and organizational promise to be linked with some OCB facets (Bateman & Organ; O’Reilly & Chatman; Organ; Puffer,; Smith, Organ & Near). For example, Smith, et al. found a underlying relation between job satisfaction and the OCB factor of humanity. Other studies have found proof of major correlations between satisfaction and OCB mechanism (e.g., Puffer). When clear as a psychological classification with the organization and its values, organizational promise has also displayed relations with OCB (O’Reilly & Chatman; Organ). More freshly, Morrison found helpful relationships between emotional commitment and numerous OCB dimensions, while these were mediated by job span.

Although their substantial value, the effects of group, organizational, and environmental contexts on employees’ attitudes and behaviors have been given lacking attention in the management writing(Griffin & Hofmann, House, Rousseau, & Thomas-Hunt, Mowday & Sutton). Recently on the other hand, researchers have successfully used multilevel modeling techniques to empirically look at how variables at the organizational and work group levels might force individual-level variables and their interrelationships. The effect of organization-level goal resemblance on individual attitudes and individual goal similarity(Vancouver, Millsap & Peters), group unity on individual intention to stay in a group (Griffin & Hofmann), and the relation between person satisfaction and organizational performance (Ostroff, )

chapter 3

Research Methodology

The researcher will carry out the proposed study using a questionnaire for collection of a primary data. The secondary data will be collect from research articles, journals, news papers, different web sites etc.

Research Design

The study will be conducted according to the following design to investigate the effects of downsizing on employees work life.

1-The surroundings will be studied as such without any interruption.

2-A sequence of samples will be taken from different subgroups of the population.

3-A non probability sampling method will be used for data collection on the focus topic.


In this research study of population will be both higher and lower staff of customer services department of an organization.

3.3 Sampling Technique

A non probability convenience sampling technique will be used for collection of the sample from the board population.

3.4 Sample size

Sample size will be 120 respondents from the higher and lower staff of Wateen Telecom (pvt) Limited3.5 Survey Instrument

In order to understand the objectives of the study an analysis will be carried out. For this questionnaire will be designed to collect information. The questionnaire is attached with the proposal.

3.6 Sample size

Sample size will be 120 respondents from Wateen Telecom (pvt) Limited Lahore.

3.7 Data Collection

The data will be composed all the way through from the questionnaire. The questionnaire will be scattered by the researcher himself. Data will be collected at five responses for each question based on Likert Scale and the respondents will be contacted for researcher part. People are working at different hierarchical levels. Convenience sampling method will be used.


Data Analysis and Interpretation

Data will be analyzed using Microsoft excel or SPSS soft ware. Formulae will be functional to determine the Mean, Standard Deviation and Variance.


Findings, Conclusions and Recommendations

On the source of data collection, data analysis and interpretation, findings, conclusions and recommendations will be made on the projected research study in order to reach its essential function and objectives.

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