STRESS-RELATED OUTCOMES OF DOWNSIZING
Stress-Related Outcomes of Organizational Downsizing:
A Systematic Review of 21st Century Literature
Susan Anderson and Jeannette Proulx
University of Prince Edward Island
A Signature Project Submitted to
the University of Prince Edward Island, Charlottetown, P.E.I.
in Partial Fulfillment of the Requirements for the Degree of
Master of Business Administration
April 14, 2014, Charlottetown, P.E.I.
©Susan Anderson and Jeannette Proulx
Advisor: Dr. Blake Jelley
University of Prince Edward Island
School of Business
i
STRESS-RELATED OUTCOMES OF DOWNSIZING
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PERMISSION TO USE SIGNATURE PROJECT REPORT
Title of Signature Project: Stress-Related Outcomes of Organizational Downsizing: A
Systematic Review of 21st Century Literature
Name of Author: Susan Anderson and Jeannette Proulx
Department:
School of Business
Degree: Master of Business Administration
Year: 2014
Name of Supervisor(s): Blake Jelley
In presenting this signature project report in partial fulfilment of the requirements for a Master of
Business Administration degree from the University of Prince Edward Island, the author has
agreed that the Robertson Library, University of Prince Edward Island, may make this signature
project freely available for inspection and gives permission to add an electronic version of the
signature project to the Digital Repository at the University of Prince Edward Island. Moreover
the author further agrees that permission for extensive copying of this signature project report for
scholarly purposes may be granted by the professor or professors who supervised the author’s
project work, or, in their absence, by the Dean of the School of Business. It is understood that
any copying or publication or use of this signature project report or parts thereof for financial
gain shall not be allowed without the author’s written permission. It is also understood that due
recognition shall be given to the author and to the University of Prince Edward Island in any
scholarly use which may be made of any material in the author’s report.
Address: UPEI School of Business
550 University Avenue
Charlottetown, PE C1A 4P3
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Abstract
The purpose of this systematic review was to identify and examine the 21st century literature on
stress-related outcomes of downsizing. Our objective was to answer the research question: What
are the stress-related outcomes of downsizing in the workplace? A transparent method of
identifying literature was undertaken and a selection of 33 articles met the criteria for inclusion.
As the topic is multidisciplinary, the authors captured articles from three complementary and
comprehensive databases. As such, diverse and distinct viewpoints were found. Further, the
authors interpreted the articles independently and then deliberated their findings together, adding
to the richness of the findings. The findings indicate devastating effects on victims and survivors
of downsizing. Mental and physical health issues abound; increased workload and decreased
work commitment are pervasive. Further, evidence discussed in related literature has indicated
that positive financial outcomes for organizations are negligible. Conclusions of the present
review are that options to financial woes exist and should be considered prior to downsizing.
Instead of permanently downsizing positions, organizations can cut salary expenses by instituting
a hiring freeze, cutting overtime or reducing the hours of work. Other options include
encouraging or instituting time off or shutting down operations temporarily or offering exit
incentives. If deemed necessary to institute downsizing, corporate leaders should adopt an action
plan to communicate the situation to employees as soon as possible and as fully as possible in
order to curtail the devastation.
Key words: Downsizing, stress-related outcomes, corporate, organization, human resource
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Acknowledgements
Susan Anderson
Thank you to Dr. Blake Jelley, our advisor; to Dr. Wendy Carroll, for helping find that
elusive thread and for her attempts to get me to the finish line; to Jeannette Proulx, my co-author,
for her positive attitude, her determination and her friendship; to Dr. Don Wagner, for his
leadership; to Grace McCourt, for her encouragement, organizational abilities and people skills;
to the faculty and staff of the UPEI School of Business; to the long-suffering staff of the
Robertson Library, especially Interlibrary Loans; to Larry Shaffer, who encouraged me to further
my education; to Kent MacLean, who has been so patient with me throughout this process; and
last, but not least to my family--to Dad, in heaven, who was a constant source of love,
encouragement and support; to Mom, who is my rock, for her love, patience and understanding;
to Sharon, Scott and Sally and their families, for putting up with me; to Aunt Do, Uncle Bob and
Aunt Marion for their constant encouragement and keen interest; to my friends, with whom I am
anxious to spend lots of time “catching up”; and to my two lovely cats, Tiki and Tobi, my
constant companions who comforted me when I was frustrated, upset, discouraged and overtired.
This research was particularly poignant for me, a survivor of major downsizing, as I have
personally experienced many of the stress-related outcomes we identified and examined. Indeed,
finding evidence of what I was experiencing during the waves of downsizing and in the postdownsizing phase was enlightening, yet troubling. Hopefully, downsizing will become a lastresort strategy of reducing operational costs in times of economic crisis so fewer individuals,
families and communities will have to endure the short- and long-term effects of this
omnipresent cost cutting strategy.
It has been a long road, and there were times when I felt I simply couldn’t succeed, but
I’m finally, thankfully, here. Amen.
Jeannette Proulx
The appeal of UPEI’s MBA program was not only the destination, but, every bit as much,
the journey. While it is a great accomplishment to be awarded an MBA, I am equally grateful for
the people I met along the way, the knowledge I gained and the personal growth I have made
over the course of the program. It has been a wonderful experience.
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Table of Contents
ABSTRACT .................................................................................................................................. III
ACKNOWLEDGEMENTS .......................................................................................................... IV
TABLE OF CONTENTS ............................................................................................................... V
INTRODUCTION .......................................................................................................................... 1
RESEARCH QUESTION AND APPROACH ......................................................................................................................3
ORGANIZATION OF THIS SYSTEMATIC REVIEW ..........................................................................................................4
METHOD ....................................................................................................................................... 4
FINDINGS ...................................................................................................................................... 6
SURVIVOR SICKNESS .................................................................................................................................................6
DECREASED COMMITMENT........................................................................................................................................8
JOB INSECURITY ........................................................................................................................................................9
MENTAL HEALTH ISSUES.........................................................................................................................................11
PHYSICAL HEALTH ISSUES.......................................................................................................................................12
DISCUSSION AND CONCLUSION .......................................................................................... 13
PRACTICE IMPLICATIONS .........................................................................................................................................15
LIMITATIONS AND FUTURE RESEARCH ....................................................................................................................16
CONCLUSIONS .........................................................................................................................................................17
REFERENCES ............................................................................................................................. 18
APPENDIX A: SUMMARY OF KEY FINDINGS ..................................................................... 27
APPENDIX B: LEVELS OF EVIDENCE ................................................................................... 50
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Introduction
The recent global economic downturn has forced many organizations to reduce their
workforces in an effort to remain profitable or sustainable. Such downsizing may reduce output
and possibly eliminate entire business lines, which substantiate the elimination of jobs.
Meanwhile, workplace stress has negative impacts on productivity (Gilson, Hurd, & Wagar,
2004; LaMarsh, 2009) as well as consequences for the physical and emotional well-being of
employees (Burke, 2005; Burke & Greenglass, 2001; Moore, Grunberg, & Greenberg 2004). The
present systematic review identifies and examines the stress-related outcomes of downsizing.
Nightly newscasts routinely feature reports about “layoffs”, “budget cuts”, and
“restructuring” in organizations across the country. While the Canada Labour Code, the
Canadian Human Rights Act, provincial and territorial employments standards acts, and
collective bargaining agents exist to create fair, equitable, and healthy workplaces, difficult
economic circumstances may necessitate organizations’ taking extreme measures which could
have grave consequences for employees. Further, some organizations lay off employees as a
recovery strategy (Koller, 2011) or they restructure the organization and outsource or offshore
business lines, entailing job cuts (Maertz, Wiley, LeRouge, & Campion, 2010). The uncertainty
and fear of what may come is stressful to employees (Nathan & Neve, 2009). Further, the loss of
job, income, prestige, workplace belonging, and career fulfillment exacerbates the stress (Moore
et al., 2004). Those employees who are not laid off may have an increased workload, be
unprepared to assume new tasks and responsibilities, feel abandoned by their employer and those
who have left the organization, or feel guilt for having retained their own job while witnessing
the demoralizing effects of others losing theirs (Devine, Reay, Stainton, & Collins-Nakai, 2003).
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These stressors may have physical or psychological outcomes and this systematic review seeks
to identify the stress-related outcomes of downsizing.
Corporate downsizing refers to the permanent termination of employment of one or more
employees resulting from business restructuring or redesign which is done for economic reasons
(Knudsen, Aaron Johnson, Martin, & Roman, 2003). Downsizing is becoming a commonplace
occurrence (Nathan & Neve, 2009). Many workers have experienced downsizing in their careers
or have experienced this second hand via spouses or other family members. Canadians
experienced a 5.5% layoff rate triggered by the recession of the 1990’s; this rate improved
somewhat until 2001 when it reached 4%; before the global recession of 2008, the rate had
improved to 2.4% (Bernard & Galarneau, 2010). The loss of a job is ranked as one of life’s most
stressful events on Holmes and Rahe’s Social Readjustment Rating Scale which identifies life’s
major stressful events (Holmes & Rahe, 1967). It follows that layoffs would be equally stressful.
As stress is known to be a leading cause of illness, researching this topic will provide valuable
information on the derivative yet deleterious consequences of being laid off. Another rationale
for undertaking this systematic review is to enlighten organizational leaders to these possible
consequences in the hope that they may consider alternative solutions to layoffs. In fact, if the
objective of layoffs is to create a positive financial outcome, organizational leaders should be
aware that this result often does not materialize (Burke, 2002; Burke, 2005; Gandolfi, 2008;
Gilson et al., 2004; Koller, 2011; Nathan & Neve, 2009). Some alternatives to cost cutting, such
as a reduced workweek or reductions in salary may achieve the outcome in a more humane
manner (Gandolfi, 2008). Further, in difficult economic times, employee commitment and
engagement may increase if these options are considered or discussed (LaMarsh, 2009).
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Research Question and Approach
A systematic review of relevant literature was undertaken to identify stress-related
outcomes resulting from downsizing in the workplace. Specific stress-related outcomes evident
in the literature identify the effects of downsizing in the workplace on the displaced workers
(known as the “victims”) as well as on the remaining workers (known as the “survivors”)
(Devine et al., 2003). The results of this study make a contribution to workplace management
and may prove useful to managers in making informed decisions on the best courses of action to
take in times of economic distress. Further, the results may help victims and survivors by
providing objective and well-founded perspectives to help them understand and accept the
realities of their personal situations and their feelings about their losses.
A systematic literature review involves a transparent search for studies meeting specified
inclusion criteria. The objective of a systematic review is to identify, evaluate, and synthesize
relevant studies to respond to a research question (Rousseau, Manning, & Denyer, 2008). A
framework was developed to organize the search results and to help determine which literature
was relevant to the research question: What are the stress-related outcomes of downsizing in the
workplace? When the information was compiled, the results were synthesized and recorded in
the framework. A heuristic approach was implemented and articles were reviewed independently
by each author. At the conclusion of that exercise, the authors jointly reviewed the articles and
discussed their findings. Key findings from their independent review of each document were
recorded in the framework. In doing so, the foundation of the systematic review was created
which evolved to become the Summary of Key Findings, as shown in Appendix A.
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Organization of this Systematic Review
Having introduced the topic of downsizing and its significance for individuals and
organizations, the next section outlines the methods used to search for relevant literature.
Following this, we explain the data collection process which was used to identify articles for
inclusion and the procedures used for data analysis. Next, the findings of the literature are
reviewed, first revealing the descriptive findings from the data collected and then presenting a
summary and analysis of stress-related outcomes identified as having a correlation with
downsizing in the workplace. The final section summarizes and discusses the findings and
concludes with limitations of the study and suggestions for future research.
Method
This topic is multi-disciplinary, incorporating themes related to workplace management,
business, and the competitive marketplace as well as the physical and mental health of
individuals. An effective research protocol permits researchers to remain neutral and objective.
The present protocol began with an impartial identification of literature. The use of three
databases available through the Robertson Library was found to be most directly relevant to this
topic. These databases were quite complementary because the aggregate results focused on the
varied aspects of the topic. The three databases used in the current study were Academic Search
Complete, Business Source Complete and PsycINFO. These databases offer complementary and
comprehensive peer-reviewed academic journals, periodicals, and reports. The diverse and
distinct viewpoints on the topic were fascinating and provided the basis of a more complete
review. The present protocol was strengthened by the independent article review by both authors;
the individual viewpoints of articles were discussed and deliberated which added to the richness
of the findings.
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The search terms used were “downsizing” and “stress-related outcomes” with the
operator “and” to ensure that both criteria were present in the articles. Initial searches using the
terms “downsizing” and “stress-related outcomes” in abstracts were unsuccessful. Therefore, the
selection criteria were refined to include peer-reviewed articles with both “downsizing” and
“stress” included in the abstracts and with no date parameters; this search criteria returned 56
articles.
On thorough review of the Summary of Key Findings, it was determined that it would be
most productive to limit the scope of inclusion to only those articles published in the 21st century
because major societal changes, such as workplace equality, have been entrenched since the
1960’s and society has almost completely adapted to these changes; some literature published in
the 20th century reflected out-dated workplace practices and philosophies. As such, 27 articles
were eliminated. Through the review of the reference sections of selected articles, four additional
articles were identified which were thought to be potentially worthy of being included in the
complement. Thus, a final complement of 33 articles was included in this systematic review.
Academic Search Complete yielded 16 articles and Business Source Complete yielded 13
articles, and PsycINFO yielded four articles.
As each article was reviewed and a determination on its merit for inclusion was made, the
level of analysis, type of article and level of evidence according to a predetermined array of
conditions was identified and recorded. This was done to ascertain the strength of evidence
according to conventions put forth by Reay, Berta, and Kohn (2009) and to assess the quality of
the final complement of articles. The levels of evidence are listed and explained in Appendix B.
Rousseau et al. (2008) identified four methods to synthesize evidence in a systematic
review: aggregation, integration, interpretation, and explanation. Aggregation is used to combine
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research to increase sample sizes. Integration compares and contrasts research from different
sources. Interpretation synthesizes the evidence to tell a story of the research. Explanation is the
identification of causal mechanisms and the explanation of their operation. This systematic
review used the interpretation method to synthesize the evidence. Evidence relating to stressrelated outcomes as a result of downsizing in the workplace were compiled and synthesized.
Findings
Following the systematic review of the literature, the key findings were methodically
scrutinized. It became apparent that these could be categorized into five overarching themes. In
no specific order, the themes are “Survivor Sickness”, “Decreased Commitment”, “Job
Insecurity”, “Mental Health Issues”, and “Physical Health Issues”. Due to the multi-disciplinary
topic, common elements were noticed across the themes; for example the decrease of one’s
commitment to the organization could impact on job security and vice versa. The following
section describes and develops these categories of findings in greater detail.
Survivor Sickness
Survivors can be neglected in the downsizing exercise and a lack of compassion for their
situation can be common (Devine et al., 2003); after all, they are still employed. To validate the
hypothesis that survivors report greater occupational stress than victims, Devine et al. (2003)
surveyed employees of a Canadian health care organization which was undergoing reductions.
As predicted, the survivors reported more stress than the victims who subsequently found new
employment. Survivors face a distinct set of stresses. Remaining in the workplace where the
same or greater output is required of fewer employees (Dean, 2011) is problematic. In her report,
Kendall-Raynor (2011) discusses the concern that quality of care and patient services will
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decline as jobs are cut. In her article, Dean (2011) asserts that, while the group of nurses in
question had previously accepted pay freezes, the increased workload demands were extensive as
fewer nurses were available to produce the same output. The pressure of increased work
demands is an underlying cause of employee burnout (Greenglass & Burke, 2000). Survivors
experience diminished employee morale and lower levels of mental health (Burke & Greenglass,
2001). In their investigation of two important studies, Burke and Greenglass (2001) found that
when the demands of work interfere with the demands of family or vice versa, conflict arises
which leads to diminished satisfaction and decreased psychological well-being. Work habits or
ethics are affected as seen in job tardiness, lower productivity, less effectiveness, and increased
sickness absences (Devine et al., 2003).
In a longitudinal study, employee burnout was found to be more prevalent in companies
that had downsized (Armstrong-Stassen, 2005) and the resulting exhaustion and diminished
interest in work resulted in increased sickness absences, job tardiness, lower productivity, and
less effectiveness in terms of being creative or comfortable performing tasks. Mood and
personality are affected and appear as cynicism, mistrust, exhaustion, anger, and low morale
(Burke, 2002). In his article, Burke (2002) stated that these negative attitudes and behaviours
proliferate in times of restructuring and downsizing. In their investigation into long-term
sickness absence and hospitalization, Westerlund, Ferrie, Hagberg, Jeding, Oxenstierna, and
Theorell (2004) recognized a direct increase in these occurrences as a result of downsizing. In
their survey Devine et al. (2003) also referenced survivor syndrome, of which guilt is a
symptom; survivors experience guilt at having “survived” as they perceive that victims are
disadvantaged for having lost their jobs. Moreover, in their examination into the impacts of
involuntary job loss on mental health, Eliason and Storrie (2010) found that more mental health
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problems and sickness absences have been found in survivors, particularly among men.
Significantly, survivors reported lower levels of job satisfaction, physical health and quality of
life, as well as increased absenteeism and licit drug use in comparison with victims (Devine et
al., 2003).
The outcomes of downsizing certainly are different for survivors and victims, and
perceptions vary on which group fares better. The short-term effects on victims are more
traumatic and result in acute anxiety and tumultuous circumstances (Burke & Greenglass, 2001).
However, victims reported better long-term outcomes including higher job satisfaction and better
quality of life and overall health than survivors (Devine et al., 2003). In their comparison of US
survivors of layoffs, offshoring and outsourcing, Maertz et al, (2010) state that layoff and
offshoring survivors’ perceived greater negative effects than either outsourcing survivors or
groups which had not downsized.
Decreased Commitment
Survivors experience decreased commitment as they lose trust in their employers (Burke,
2002). Resentment, insecurity, and uncertainty linger and affect focus and motivation (Morgan &
Symon, 2006). Fear can take hold and can limit creativity and confidence. In their study of the
relationships between managerial empowerment, job enrichment, and loyalty, Niehoff,
Moorman, Blakely, and Fuller (2001) proclaim that loyal and committed employees benefit
employers because they demonstrate better performance, are more productive, and have better
attendance records. It is unsurprising that victims’ organizational commitment plummets;
interestingly, survivors also experience decreased commitment (Knudsen et al., 2003). Knudsen
et al. (2003) compared the effects of downsizing on victims and survivors with a particular focus
on attitudinal commitment. Using data from a structured interview collected in 1997 as part of
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the National Employee Survey in the USA, Knudsen et al. (2003) were able to confirm their
prediction that organizational commitment is directly affected by downsizing. Knudsen et al.
(2003) found that the social contract had changed and employees lost trust in their employer;
employees felt resentment and displayed diminished focus and motivation. Morgan and Symon
(2006) reviewed relevant literature and identified that long-term negative impacts, including
insecurity and uncertainty, endured for both survivors and victims.
Productive employees have confidence to take risks, make mistakes, voice their opinions,
and perform creatively (Bunker & Wakefield, 2010). In their article, Bunker and Wakefield
(2010) state that in a downsizing environment, employees lose confidence, and act cautiously in
order to avoid attracting attention.
Job Insecurity
Job insecurity is the uncertainty of job stability. As layoffs increase, healthy workplace
cultures are eroded (McCourt-Mooney, 2000). In his conversation with Sarah Powell (2000),
Cary Cooper proclaims that a “short-term contract culture” has emerged since the 1980’s.
Cooper maintains that society moved from a secure job environment to an environment where
job insecurity is prevalent.
The fear or threat of job loss on a day to day basis and the powerlessness to do anything
about it is physically and mentally debilitating (Moore et al., 2004). In their longitudinal study
comparing employees who experienced repeated downsizing exercises, Moore et al. (2004)
found that repeated threats to job security exacerbated the negative effects. Effects include
reduced job satisfaction, job performance, and job involvement as well as increased
psychological distress and physical health conditions (Probst & Lawlor, 2006). Job insecurity
affects collectivist employees to a greater extent than those with individualist cultural values
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(Probst & Lawlor, 2006). Probst and Lawlor (2006) researched cultural values as moderators of
reactions to job insecurity found that while the individualistic employees of a US company
undergoing downsizing reported negative perceptions of job security, the collectivist employees
of a Chinese organizations reacted even more negatively. The powerlessness, loss of trust, and
loss of control create a sense of hopelessness. Stressors such as job insecurity results in negative
work outcomes as well as a decrease in psychological well-being (Burke, 2005).
In their longitudinal study based on data collected in 1990, 1993 and 1997, Kivimäki,
Vahtera, Pentti, Thomson, Griffiths, & Cox, 2001) examined self-rated health assessments of
823 Finnish employees. Job insecurity creates health risks which might not be detected until
some years later (Kivimäki et al., 2001). As job insecurity mounts, so does cynicism, exhaustion,
escape coping, burnout, and withdrawal (Greenglass & Burke, 2000). Further, these health
effects include an array of psychological and physical health issues including poor sleep quality
and ischemic heart disease (Kivimäki et al., 2001).
Job insecurity affects employees at all stages of downsizing and may persist well beyond
the downsizing exercise, particularly if survivors have lost trust in management or if the channels
of communication are such that employees do not receive, understand or believe the information.
Job insecurity can be prevented or limited by sharing information about the impending
downsizing and involving employees in the decision-making at the earliest opportunity
(LaMarsh, 2009). LaMarsh (2009) explains that in order to facilitate the transition and lessen the
negative effects of downsizing, employees need to understand why the downsizing is required
and what it will consist of, how the decisions will be made and how the cuts will be executed.
LaMarsh (2009) advocates for a change management plan wherein communication is a key
feature. Communication should begin at the earliest point and continue throughout the
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downsizing as this will create respect and trust and a collaborative approach will help the
organization achieve the desired results.
Mental Health Issues
Emotional well-being, living a full and satisfying life and the ability to handle life's
inevitable challenges are markers of mental health. Emotional distress, fear, helplessness,
cynicism, depression, anxiety, unhappiness, and dissatisfaction with life are observed in those
with poor mental health. Emotional well-being is impeded as is the ability to handle challenging
situations. In their questionnaire, Holmes and Rahe (1967) surveyed 394 individuals in an effort
to qualify life’s most stressful events. At least four events are closely related to being downsized,
and three of these are in the top half of the ranking (Holmes & Rahe, 1967). A loss of
employment is indistinguishable from a loss of income or a loss of prestige (Hamilton, 2000). In
her study of Russian military officers, Hamilton (2000) notes that while Russian officers once
enjoyed a prestigious and rewarding career, in the harsh times of downsizing of the 1990’s,
indications of anxiety, depression, hostility and suicide were marked. For many individuals,
independence, freedom, social position, and self-respect are acquired through one’s work. It is no
doubt then, that being downsized can affect one’s mental health.
Downsizing is positively correlated with emotional exhaustion, cynicism, depression, and
anxiety (Greenglass & Burke, 2000). Losing a job results in feelings of anxiety, depression,
unhappiness, and dissatisfaction with life in general (Devine et al., 2003). Further, the end-state
of many downsizing exercises is that fewer employees are required to produce the same output
(Greenglass & Burke, 2000). Greenglass and Burke (2000) surveyed 11 nursing units to measure
emotional exhaustion, depression, anxiety, and other measures of mental health; they found that
an increase in workload resulted in higher levels of emotional distress. Downsizing reduces
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morale and motivation (Burke, 2005) which are underpinning qualities of a satisfying life. As
coping mechanisms, avoidance and disengagement help employees handle the trauma of
downsizing (Armstrong-Stassen, 2005); yet these tactics and others such as alienation and
withdrawal are at odds with living a full and satisfying life.
Through a downsizing exercise, passive reactions to the loss of control include fear,
anxiety, and helplessness; active reactions include anger, cynicism, and outrage (Niehoff et al.,
2001). A positive emotional state cannot be maintained in either passive or active reactions; both
are destructive responses which restrict emotional well-being (Niehoff et al., 2001).
Physical Health Issues
Stress is known to be a leading cause of illness. To lay the groundwork for their
hypothesis, Devine et al. (2003) referred to prior research to affirm that stress is known to have
physical manifestations. Their study revealed that victims fared better than survivors in terms of
physical outcomes. Devine et al. (2003) further acknowledge that health problems are positively
related to increases in stress levels and minor somatic issues, such as headaches, joint aches and
stiffness, or digestive irregularities including heartburn, acid reflux, diarrhea or constipation.
Further, Devine et al. (2003) acknowledge that major physical conditions, such as heart disease
and arrhythmia are seen in response to stress.
The human body responds to psychological stressors in various ways. Kivimäki et al.’s
(2001) longitudinal study followed the same group of individuals prior to downsizing as well as
during and after. As such, Kivimäki et al. (2001) were better positioned than cross-sectional
researchers to identify causal inferences of downsizing and they found that self-rated health
declined both during and after downsizing and that this was likely to be long-lasting. In their
study to evaluate employees’ attitudes with regards to organizational change, Svensen, Neset,
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and Eriksen (2007) identify that individuals may present with muscle pain and fatigue.
Westerlund et al. (2004) found in their investigation into long-term sickness absence and
hospitalization, that job strain was a risk factor for coronary heart disease.
Correlating these physical conditions to job loss can be problematic as sufferers may
have difficulty accepting that the source of their ill health is their stress or mental health issues.
Exacerbating these physical conditions are the secondary effects of self-destructive habits
adopted as coping mechanisms in response to stress. Smoking may seem to initially soothe
anxiety and the use or abuse of alcohol may offer a short-term reprieve from the reality of the
situation (McCourt-Mooney, 2000). However, the short- and long-term physical effects of both
coping mechanisms are well-known to be harmful. While drug and alcohol abuse is more
common in men than women (Eliason & Storrie, 2010), it is a coping mechanism engaged in by
untold numbers of individuals. However, these destructive behaviours directly and immediately
add to the harmful effects of stress by restricting the productive behaviours which will help the
individual adapt to their situation or overcome their immediate issue (Eliason & Storrie, 2010).
Further, these destructive behaviours may cause more serious physical conditions in the long
term; losing one’s job may be considered inconsequential when compared to facing cancer, heart
disease or psychological disorders.
Discussion and Conclusion
The purpose of this systematic literature review was to identify and examine stressrelated outcomes of downsizing. Stress is known to produce physical and psychological
outcomes and this literature review sought to synthesize evidence of those effects using data
from 21st century studies. The goal was to assess the effects not only on victims, but also on
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14
survivors. The findings of this literature review were fascinating and somewhat unexpected; the
new understanding on this topic will be discussed further in this section.
This systematic literature review examined the physical and psychological outcomes of
stress on employees who were involved in downsizing. Five overarching themes were identified,
each of which produced varying effects on victims and survivors. The increased workload
demands were felt mainly by survivors, which is obvious because victims had left the
organization. Decreased commitment among both victims and survivors was observed, though to
different degrees. Job insecurity began at the first sign or mere rumour of downsizing and
persisted until long after the downsizing ended. Mental health issues were widespread, affecting
both victims and survivors, yet rather differently. Physical health issues of were also evidenced,
and may have been caused or exacerbated by the previously stated effects.
For victims and survivors, it seems that little good can come from downsizing. While in
the long-term, victims find better or at least similar employment situations this comes with a
large cost in the short-term. For survivors, the broken trust is sometimes irreparable.
Looking at the organizations’ net effect of downsizing, much literature alludes to the
limited financial benefits of this practice. In fact, other options are discussed in the literature yet
evidence of their usage is inadequate. For example, as Gandolfi (2008) suggested, a reduced
workweek or reductions in salary may achieve the desired savings. Gandolfi (2008) offers other
options such as a hiring freeze or a cut in overtime pay, both of which would result in short-term
reduced labour costs. Kendall-Raynor (2011) reports that UK hospitals encourage staff to buy
extra vacation time to help reduce the organizations’ financial woes. Further temporary facility
shutdowns, mandatory vacations, whether paid (with accrued vacation days) or unpaid will also
bring about short-term savings. In addition to these short-term options, Gandolfi (2008) suggests
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15
medium-term options, including salary reductions. Voluntary sabbaticals and exit incentives may
also be considered as medium-term solutions. Finally, a long-term solution of downsizing could
be implemented if the short- and medium-term solutions do not meet the financial objectives.
Approaching downsizing in this manner will help employees know that management is keeping
the employees best interests at the forefront of their decision-making process. In his article,
Koller (2011) discusses the workplace management philosophy of Lincoln Electric, a company
which has a policy of guaranteeing “continuous employment”. They believe their stable
workforce is a competitive advantage. This organization shares the joy in good times as well as
the pain in bad times across all levels of the organization in a fair and equitable manner.
LaMarsh (2009) discusses how organizations can implement hard but necessary cost-cutting
measures with forethought and a solid action plan. After all, if the cost of implementing the cuts
is equal or close to the savings to be realized by cutting employees, perhaps the decision should
be revisited.
Practice Implications
Corporate downsizing is prevalent in our society, and individuals are typically powerless
against this. It is incumbent on researchers and academics to alert organizational leaders of the
ramifications of downsizing. Organizational leaders must be made aware that downsizing rarely
achieves the efficiencies they hope to gain (Burke, 2002; Gandolfi, 2008; Gilson et al., 2004;
Koller, 2011; LaMarsh, 2009). They must be informed of the harmful collateral damage caused
by downsizing. Organizational leaders must be mindful that employees are people, that they have
feelings, responsibilities, loyalties, families, and corporate knowledge and skills and are the
essence of an organization. Without people, an organization is nothing.
STRESS-RELATED OUTCOMES OF DOWNSIZING
16
It can be concluded from this systematic review that downsizing is painful and
devastating to organizations, employees, and communities. Nonetheless, local and global
economic challenges will present hard times for organizations; organizational leaders must be
able to find ways to continue their businesses while minimizing deleterious effects. If this
systematic review can encourage organizational leaders to work with their employees to find
better solutions to financial crises, society as a whole may benefit significantly.
The implications for victims and survivors of downsizing are significant. It may be
reassuring to victims and survivors to know that they are not alone in feeling the effects of
downsizing. By leaving organizations, victims can anticipate better outcomes of employment at
other organizations. By staying with organizations, survivors can help themselves recover from
the toxic environments by being open to the channels of communication; by asking leaders
questions and being open to the answers; and by consciously blocking their cynicism, mistrust,
anger, and other negative or self-destructive thoughts or actions.
Limitations and Future Research
This systematic review examined the impact of downsizing on human resources. Many
articles examined the effects on survivors of downsizing, rather than on the victims. Given the
stress-related outcomes identified in this systematic literature review, it is understandable why
the victims have not been studied to the same extent as survivors. Future research may focus
more on victims; if victims do fare better than survivors in the long-term, as indicated in some
articles, more light should be shed on this as it could provide reassurance and hope to future
victims.
Indications in related literature show that organizations do not realize the intended
financial benefits. Future research is needed to show, in concrete terms, what the dollar cost of
STRESS-RELATED OUTCOMES OF DOWNSIZING
17
downsizing is; comparing this to the end state of downsizing may help organizational leaders
make informed decisions. Further, more studies into alternatives to downsizing can be
undertaken. This will provide valuable data and help organizations develop effective and
possibly different strategies to downsizing.
Future research may include an examination on the short- and long-term effects on
employees at different stages of their careers; for example, employees at the start of their careers
would likely react differently than those at mid-career or those approaching retirement.
Conclusions
This systematic review contributed to a better understanding of the vast and varied stressrelated outcomes of organizational downsizing. Prior to implementing downsizing as a costreduction strategy, organizational leaders and decision-makers must consider the ramifications.
Human resources are the core of organizations; without its employees, an organization is
nothing. The evidence suggests that effective communication strategies must be implemented to
inform employees of the impending changes and the reasons for these changes. Approaching a
downsizing exercise with as much transparency and respect as possible will empower employees
and will create greater job commitment and more support for the organization.
STRESS-RELATED OUTCOMES OF DOWNSIZING
18
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Appendix A: Summary of Key Findings
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
1
Coping With Downsizing: A Comparison of Executive-Level and Middle
Managers
Marjorie Armstrong-Stassen
PsycINFO
2005
Met
Perceived job insecurity and workload demands
Organizational
Journal Article - Longitudinal study
4
A comparison of the reactions of executive-level and middle managers to
the large scale downsizing of the Canadian federal public service. Middle
managers reported increased workload demands as downsizing progressed.
They felt a higher threat of job loss and more powerlessness to influence
decisions regarding their jobs, than did the executive-level managers.
Levels of powerlessness over decisions concerning the future of their jobs
increased significantly during the involuntary departure period. Executivelevel managers reported significant increases in sense of powerlessness as
downsizing proceeded. Prior to downsizing, executive-level managers
reported significantly greater use of positive-thinking coping. At the same
time, middle managers used avoidance and disengagement coping tactics.
The use of avoidance tactics was obvious in both levels, but at different
times.
Middle managers reported a significant increase in their workload demands
through the downsizing, perceived more threat of job loss, a greater sense
of powerlessness concerning the future of their job and had increased
feelings of insecurity. Executives’ sense of powerlessness, their use of
avoidance and disengagement increased. The coping strategies between
executives and middle managers became similar following the downsizing.
Burnout is seen at all levels of the downsizing organization.
2
How Do Work Stress and Coping Work? Toward a Fundamental
Theoretical Reappraisal
Rob B. Briner, Claire Harris and Kevin Daniels
PsycINFO
2004
Unmet
N/A
Theory
Journal Article
6
STRESS-RELATED OUTCOMES OF DOWNSIZING
Key findings
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
28
Discusses coping to work stress – how pasts and futures affect stress and
coping. Not related to downsizing.
3
A Values-Based Approach to Facilitating Career Transitions
Duane Brown
Academic Search Complete
1995
Unmet
N/A
Opinion
Journal Article
6
Discusses career transitions and values - not related to downsizing.
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
4
A Question of Leadership
Kerry Bunker and Michael Wakefield
Academic Search Complete
2010
Met
N/A
Organizational
Journal article
6
How leaders can deal with stressful conditions during downsizing. Leaders
should have the emotional competence to balance employees' needs against
management's obligation to implement the required change. They also
recommend that leaders should acknowledge the difficulty of the decisions
and the uncertainty regarding "decisions' righteousness" while laying off
staff. The leaders had to find the balance between being empathetic and
being a strong leader. Not as productive or as creative or as comfortable
doing their work; keeping heads down due to fear of being the next to be
affected. Fear and lack of loyalty, less committed.
Alienation and fear is created from an uncaring leader. People are afraid to
take risks or make mistakes, and voice their opinions. People lose
commitment and focus, so business results are often compromised as well.
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
5
The Ripple Effect
Ronald J. Burke
Business Source Complete
2002
Met
"Survivor sickness" is a group of attitudes and behaviours - low morale,
diminished commitment, increased cynicism, mistrust, and anger
STRESS-RELATED OUTCOMES OF DOWNSIZING
29
Level of Analysis
Type of Article
Level of Evidence
Key findings
Organizational
Journal article
4
Lack of support during downsizing creates negative attitudes and
behaviors, including low morale, diminished commitment, heightened
cynicism, mistrust, and increased anger. Support during restructuring
processes enhanced satisfaction and psychological well-being.
Reference Number
Title
6
Hospital Restructuring Stressors, Support, and Nursing Staff Perceptions of
Unit Functioning
Ronald J. Burke
PsycINFO
2005
Met
Survivor sickness
Organizational
Journal Article - Longitudinal Study
4
Survivor sickness includes the employees' negative reactions to
restructuring and downsizing; it is increasing. Workload has increased
significantly, resulting in high levels of stress and job insecurity and poor
morale (Baumann, A., O'Brien-Pallas, L., Deber, R., 1995). Use of
unregulated generic workers is also a source of stress for registered nurses.
Job insecurity is and will continue to be a "major factor affecting nurses'
psychological well-being" (Burke, 2005). Workload is also recognized as a
significant stressor. In cases where hospital support is provided to staff
during restructuring and downsizing, heightened satisfaction and wellbeing is reported. Hospital-based nursing staff were surveyed twice - first
in 1996 and again in 1999. Previous research has indicated that stressors
such as job insecurity are elevated during restructuring and downsizing.
Such stressors negatively impact both work outcomes and psychological
well-being. In this study, decreases in satisfactions, psychological wellbeing, and perceptions of hospital effectiveness were reported following
increases in restructuring stressors. Levels of morale, motivation, cynicism,
and trust of many staff nurses are negatively impacted by restructuring and
downsizing. Staff who had received support of the hospitals perceived the
restructuring processes as positive indicated "increased satisfaction in their
work, psychological well-being and perceptions of hospital effectiveness"
(Burke, 2005). Anger, low morale, increased workload, diminished
satisfaction is seen.
Downsizing fails to meet goals. Survivor sickness is the low morale and
decreased commitment, cynicism, mistrust, and anger. Job insecurity
negatively affects work outcomes and well-being.
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
Reference Number
7
STRESS-RELATED OUTCOMES OF DOWNSIZING
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
30
Hospital Restructuring Stressors, Work-Family Concerns and
Psychological Well-Being Among Nursing Staff
Ronald J. Burke & Esther R. Greenglass
PsycINFO
2001
Met
Employee morale, anger, distress, psychological well-being
Organizational
Journal Article
4
More effective restructuring and downsizing efforts involve considerable
up-front planning and preparation, the articulation of a desired end-state or
vision, extensive communication to all involved as the process unfolds,
participation by employees in restructuring and downsizing decisions and
efforts to rebuild morale and revitalize the organization in the wake of an
exercise that will always enlist negative reactions
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
8
More Nurses Consider Working to Rule as Pressure of Cuts Rises
Erin Dean
Academic Search Complete
2011
Met
Workload demands
Health Care Sector in the UK
Journal article
6
At a press conference in the UK, RCN General Secretary Dr. Peter Carter
addressed cuts to health care services in the UK. While he was addressing
the topic of stress in the health care sector, he indicated that pressures of
more patients and more demands with fewer staff were increasing.
Strike action could undermine government credibility.
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
9
Downsizing Outcomes: Better A Victim Than A Survivor?
Kay Devine, Trish Reay, Linda Stainton, and Ruth Collins-Nakai
Business Source Complete
2003
Met
Anger, depression, fear, distrust, and guilt
Health Care Sector in a Large Canadian city
Journal article
4
Survey of unionized health care employees in a large, Canadian,
metropolitan area where 3 waves of downsizing were experienced. A study
STRESS-RELATED OUTCOMES OF DOWNSIZING
31
of "survivor syndrome". Occupational stress, the feelings an individual
experiences, is the most obvious category of stress experienced during
downsizing. Self-reported behavioural, physical, psychological outcomes
were measured to determine job strain: job tardiness and absenteeism were
used to measure work behaviours; overall health and perceived frequency
of licit drug use was used to measure physical outcomes; and job
satisfaction and quality of life were used to measure psychological
outcomes. Survivors who continued working in the downsized
environment were more stressed than victims of layoff who were
subsequently successful in obtaining employment elsewhere. High
perceptions of control were shown to reduce stress levels and vice versa.
Leavers who had obtained positions elsewhere had a higher level of job
satisfaction, overall physical health and quality of life and had lower levels
of absenteeism and licit drug use compared to the survivors of downsizing.
Victims were subjected to less stress in their new positions, believed they
had higher levels of control and reported fewer job strains than the
survivors. Survivors reported more tardiness and higher levels of stress
resulting from perceived lower levels of job control. Diminished job
satisfaction, quality of life, and overall health and increased use of drugs
were reported by survivors. Employees who had expected lifetime
employment following qualification for their health care positions and who
were victims of downsizing reported more positive outcomes than did the
survivors. Those who lost their jobs as a result of downsizing who were
able to take more control with regards to their work situations, reported
more positive outcomes than did the survivors who felt like victims, due to
the uncertain environment following downsizing. "Significant perceived
stress" manifested as different strains, but psychological and physical
strains in particular, were experienced as a result of downsizing.
Comparison of survivors and victims who gain alternate employment.
Victims become anxious, depressed, unhappy, and dissatisfied with life in
general; survivors display anger, depression, fear, distrust, and guilt.
Surviving is so difficult that continuing employees experience higher levels
of stress than displaced employees. Occupational stress is heightened; the
feelings an individual experiences if job demands exceed the ability to
cope are heightened. Minor somatic conditions (e.g., headaches) to more
major symptoms such as cardiovascular, biochemical, gastrointestinal
complaints are reported. Employee behavioral responses such theft,
sabotage, or aggression are exhibited. Finding a consistently positive
relationship between levels of job stress and these measures is difficult.
Reference Number
Title
Author
Database
Year
Inclusion Criteria
10
Work Stress and Coping: Theory, Research and Practice
Philip Dewe
Academic Search Complete
2004
Unmet
STRESS-RELATED OUTCOMES OF DOWNSIZING
32
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
N/A
Opinion
Journal Article
6
Discusses work stress not related to downsizing
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
11
Inpatient Psychiatric Hospitalization Following Involuntary Job Loss
Marcus Eliason and Donald Storrie
Academic Search Complete
2010
Met
Affective disorders; nervous and stress-related disorders; drug and alcohol
abuse; other mental disorders; other alcohol-related diseases; self-harm and
disability
National (Sweden)
Journal Article - Longitudinal study
4
The study of the risk of admission to inpatient psychiatric treatment
following involuntary job loss was conducted over a 12-year period
following job loss due to 760 plant closures in Sweden. The researchers
found that there is an "increased and statistically significant overall
admission rate among women but not among men". Research has shown
that "women react to various stressors with elevated rates of depression".
The findings that "the impact of job loss of hospitalization with an
affective disorder was also very large among women", but was not found to
be significant among men. It is difficult to compare the sexes directly,
since the study was conducted separately on each sex. Men may experience
more mental problems than women survivors. Higher sick leave due to
"minor psychiatric morbidity" was found within male dominated industry
sectors. Usually, men drink more than women and avoidant coping is
common amongst men who drink. It is much more likely for women who
have lost their jobs to be admitted to hospitals for drug and alcohol abuse.
The researchers had previously studied the impact on hospital admissions
for myocardial infarction, stroke, alcohol-related diagnoses, self-harm, and
injuries from traffic accidents. Job loss tended to increase hospitalizations
for alcohol-related diagnoses, self-harm and injuries from traffic accidents
for men but only an increase in hospitalizations for alcohol-related issues
were elevated among women who had lost their jobs. Mental health has
been found to be affected in men who have lost their jobs, but the impact is
lessened through seeking help for stress-related issues, so the psychiatric
disorders experienced could be underreported. Other studies referenced in
this article: Hamilton, Broman, Hoffman, and Renner found "increases in
clinically significant levels of depression and anxiety" equally among men
and women who had experienced job loss. Keefe et al found no significant
increase in hospital admissions for mental health issues, but increased
Level of Analysis
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STRESS-RELATED OUTCOMES OF DOWNSIZING
33
admissions for self-inflicted wounds were evident. In their study, Brand,
Levy, and Gallo, like the authors of this article, found that job loss had
increased levels of depression among women.
Sweden. We find that inpatient psychiatric treatment due to affective
disorders and alcohol or drug abuse is significantly higher among the
displaced women but we find no such effect for nervous or stress-related
disorders. Among men, we find no significant impact of job loss on any of
the categories of discharge diagnoses. However, the risk of hospitalization
due to alcohol-related conditions was elevated among both male and
female job losers as was the risk of hospitalization due to traffic accidents
and self-harm among male job losers. 370 were men and 229 women,
equivalent to 4.5 and 3.4 percent, respectively. The corresponding figures
for the non-displaced workers were 2,649 (3.2%) men and 2,186 (2.7%)
women...we conclude that admission for alcohol or drug abuse is about
twice as common among both male and female displaced workers
compared to non-displaced workers. Among women, admission with
affective disorders and with nervous or stress-related disorders is more
common among those who had been displaced, whereas, for men, no such
differences are present...admittance differences are explained by socioeconomic differences...we find an increased and statistically significant
overall admission rate among women but not among men. Generous
Swedish social welfare system
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12
A Balanced Scorecard Approach to Networking: A Guide to Successfully
Navigating Career Changes
Monica L. Forret and Sherry E. Sullivan
Business Source Complete
2002
Unmet
Increased work demands, increased family responsibilities, job insecurity
Global
Journal article
5
This article discusses the benefits of networking to achieve a successful
career. Downsizing and stress are both mentioned, but the article relates to
increasing one's likelihood of career success and fulfillment.
This article is not related to downsizing; it discusses switching careers and
networking.
13
Cost Reductions, Downsizing-Related Layoffs, and HR Practices
Franco Gandolfi
Business Source Complete
2008
Met
STRESS-RELATED OUTCOMES OF DOWNSIZING
34
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
N/A
Organizational
Journal Article
5
Normal organizational reduction-in-force (RIF) activities have been proven
to be ineffective in achieving desired economic and organizational gains.
Yet organizational decimation (downsizing) has been the first response to
cost-reduction requirements for many years. It is now known that human
and societal after-effects (secondary effects) of downsizing are present in
the post-downsizing phase. These "costly and devastating outcomes" affect
not only the individuals who were victims of downsizing, but also their
families as well as their communities. Rather than being the first response,
layoffs should be a last-resort option to overcoming financial crises. Firms
must first realize what stage of cost-reduction (or the time frame necessary
to reduce operational expenditures) they are currently experiencing--shortrange; mid-range; or long-range phases. Because forecasting is susceptible
to many unknown variables, accuracy in preparing such plans is difficult to
achieve. This article looks at alternate HR practices that can be utilized to
improve the bottom line to "minimize, delay or circumvent reductions-inforce, layoffs and downsizing-related activities".
This article discusses options to layoffs. Other solutions or options may be
better for the employees and the organization.
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Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
14
Creating a Concession Climate: the Case of the Serial Downsizers
Clive Gilson, Fiona Hurd and Terry Wagar
Business Source Complete
2004
Met
Decreased motivation, reduced productivity, increased workplace conflict,
uncertain level of satisfaction, less favourable attitudes towards
organization, decreased performance, workplace conflict
National - New Zealand
Journal Article
4
The focus of this research was on the organizational response to
downsizing activities, more than on the impact on survivors or victims.
However, the authors did discuss the ramifications of downsizing on
employees. Two surveys were distributed to organizations with over 50
employees--one in 1995 and a second in 1999. The authors found that early
downsized organizations had higher levels of workplace conflict and lower
levels of job performance. The negative effects of downsizing are less
significant four years later than immediately following downsizing
activities in organizations that had experienced only one wave of
downsizing. Those firms had recovered levels of performance in the
interim. The findings of the study indicated that "negative performance-
Level of Analysis
Type of Article
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Key findings
STRESS-RELATED OUTCOMES OF DOWNSIZING
35
based effects of downsizing appear to diminish significantly over time".
Those organizations which experienced more recent downsizing activities
reported greater negative performance indicators. Employees of
organizations that had undergone repeated downsizing again reported
negative consequences in the form of reduced employee satisfaction,
increased conflict, and decreased performance.
Discusses the effects of downsizing: decreased workforce = decreased
output. Any gain in stock price is short-lived. Job security increases are
related to productivity. Repeat downsizing leads to repeat negative
consequences such as employee satisfaction decreases, increased
workplace conflicts, and decreased workplace performance. How and why
downsizing happens requires further study.
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Title
Author
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Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
15
Hospital Downsizing, Individual Resources, and Occupational Stressors in
Nurses
Esther R. Greenglass & Ronald J. Burke
Academic Search Complete
2000
Met
Emotional exhaustion, Cynicism, Professional Efficacy, Job Insecurity
Organizational
Journal Article
5
Emotional exhaustion was found to be directly related to job demands;
professional efficacy was related to resources and cynicism was related to
both. Individual skills accounted for some positive outcomes through the
use of coping strategies.
Work overload is a predictor of negative mental health outcomes. Coping
strategies. Deleterious effects. Downsizing is related to emotional
exhaustion, cynicism, depression, anxiety. Greater workload = greater
emotional exhaustion, cynicism, depression, anxiety.
16
(In)Justice in Waiting: Russian Officers' Organizational Commitment and
Mental Distress During Downsizing
V. L. Hamilton
Academic Search Complete
2000
Met
Depression (12 items, including loss of sexual interest or pleasure,
loneliness, and suicidal thoughts); Anxiety (5 scale items, including
nervousness and trembling); and Hostility (4 items, including annoyance or
irritability, and urges to break or smash things)
Organizational
Journal Article - Case Study
STRESS-RELATED OUTCOMES OF DOWNSIZING
36
Level of Evidence
Key findings
5
Study of 1,900 male Russian officers, including both leavers and stayers in
the pre-unemployment downsizing phase. Leavers had "significantly lower
organizational commitment" than stayers; and the outcome of their job loss
was rated "significantly worse" than stayers. They also reported more
anxiety, depression, and hostility than stayers. "Leavers thought they had
more respect than stayers thought the leavers were receiving". If injustice
was perceived, stress outcomes included depression, anxiety, and hostility.
Leavers were more distressed, less committed, and had more negative
perceptions about leaving the army than stayers. Data show that
downsizing and injustice are stressful, and that just treatment serves to
reduce stress.
Examined the justice aspects of downsizing. Loss of employment = loss of
income and prestige. Officers are highly committed to the military. Justice
refers to how the layoffs are carried out. When handled unfairly, survivors
grumble, malinger or steal. The way in which a stressful situation is
handled can affect ones’ evaluation of the situation. Could be related if the
cause if the injustices are stress related.
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Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
17
Hard Sell on Survival
Anjoti Harrington
Academic Search Complete
2011
Unmet
N/A
Organizational
Journal article
5
The author suggests that self-promotion may be a method of survival. He
uses the acronym PIE to represent the elements of self-promotion performance, image, and exposure that he considers to be the means to
retain positions in periods of downsizing and re-organization.
This article looked at how employees could keep themselves employed.
Puts the onus on the employee to ensure their job security: enhancing their
performance, image, and exposure could make the difference in their
survival. No stress outcome?
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
18
The Hybrid Manager
Gary Homes
Business Source Complete
2001
Unmet
N/A
Industrial
STRESS-RELATED OUTCOMES OF DOWNSIZING
37
Type of Article
Level of Evidence
Key findings
Scholarly Journal
5
Homes mentions stress as an element in his study, but not in regard to
downsizing. The focus of his study is on the many demands imposed upon
managers, especially in the post-downsizing/restructuring phase. Homes
suggests competencies necessary to effectively deal with issues as they
arise, being able to deploy the appropriate role at the appropriate time,
rather than being all-encompassing all the time.
Discussed the emerging needs of and demands on managers (in times of
downsizing, managers need more skills and that could be stressful.)
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
19
Job Cuts, Restructuring, Mergers and Closures Leave Staff Fearful
Petra Kendall-Raynor
Academic Search Complete
2011
Met
Job insecurity, increased work load, decreased general good health
Regional
Journal article
5
The author discusses the impact of downsizing on medical professionals in
regions of England. Nurses worry about the impact of the downsizing on
the health care of their patients who can no longer access the same services
they could prior to the changes imposed. The massive downsizing
(anticipated to be approximately 1,500 clinical positions by 2015) was
necessitated by a reduction in government funding. Facilities have closed
and former unit nurses have been redeployed to inpatient and community
roles in the region. Closure of a psychiatric facility has increased the
workloads of nurses on regional mental health teams who already were
feeling overworked and, therefore, felt that they could not cope with
additional patients. The union suggested a program whereby employees
would be able to buy extra annual leave and pay for it via payroll
deductions. The Trust accepted the proposal and immediately implemented
the scheme. It is anticipated that for every 26 employees who buy extra
annual leave, cost savings realized from this initiative could equal the
salary of one full-time position.
Survivor stressors – worry and concern for their job security and level of
work and services provided. Overtime – extra hours. Buy extra annual
leave. Unions = rumours.
Impending restructuring is creating fear for job security. Unions suggest
staff buy extra annual leave to offset to cuts.
Reference Number
Title
20
Downsizing, Changes In Work, and Self-Rated Health Of Employees: A 7Year 3-Wave Panel Study
STRESS-RELATED OUTCOMES OF DOWNSIZING
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
Reference Number
Title
Author
Database
Year
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Variable of Stress
Level of Analysis
Type of Article
38
Mika Kivimäki, Jussi Vahtera, Jaana Pentti, Louise Thomson, Amanda
Griffiths, and Tom Cox
Academic Search Complete
2001
Met
Long-term sickness, Job insecurity, Increased sick leave, Increased
physical job demands and Decreased control
National
Journal Article - Longitudinal study
4
A longitudinal study of the relationship between downsizing and self-rated
health was conducted in Raiso, Finland between 1991 and 1994. The
researchers formulated the following hypotheses: 1. Downsizing is
associated with a decline in self-rated health of employees; 2. Downsizing
increases job security, physical demands, and conflicts between supervisors
and subordinates, and decreases job control; 3. These changes in work
partially mediate the relationship between downsizing and self-rated
health. Downsizing was found to be associated with all of the work
characteristics except Conflicts with Supervisor. As the degree of
downsizing increased, job insecurity and physical demands increased and
the sense of job control decreased. Age was not a factor, but more women
were subject to downsizing than were men. Self-rated health declined
significantly after major downsizing in comparison with employees who
had been subjected to minor downsizing. Downsizing was found to be
associated with "increased feelings of job insecurity, and pressures to
modify jobs in ways that led to increased physical demands and less
control over work in terms of lowered skill discretion, decreased decision
authority, and participation in decision making, and reduced work
predictability".
Long-term sickness absences. Self-rated health. Job insecurity = health
risk. Psychological ill health + distress, burnout, organizational
withdrawal, decreased sleep, increased sick leave, ischemic heart disease.
Increased job demands + decreased job control. Social conflict = decreased
social support.
21
Downsizing Survival: The Experience of Work and Organizational
Commitment
Hannah K. Knudsen, J. Aaron Johnson, Jack K. Martin and Paul M. Roman
Academic Search Complete
2003
Met
Survivor guilt, Increased workload, Decreased commitment, Increased
responsibility, Changed social contract
National (U.S.A.)
Journal Article
STRESS-RELATED OUTCOMES OF DOWNSIZING
39
Level of Evidence
Key findings
4
Researchers at the University of Georgia used data collected as part of a
National Employee Survey (NES) conducted in 1997. While the number of
respondents was impressive, at 2,505 (a 62% response rate), the final
sample size was reduced to 1,909 workers. The population was not
representative of either the American labour force or organizations. The
criteria established for inclusion in the study were: 18 years of age and
older; and those who worked and received pay for at least 37.5 hours per
week. Workers who were victims of downsizing were not included in the
study; only survivors of downsizing and workers who had not been
subjected to downsizing in their workplaces were included. The researchers
found that surviving downsizing has both "direct and indirect effects on
several variables of interest": there is a significant negative association
between survival and commitment to the organization; a positive
association between surviving downsizing and lower levels of job
autonomy and greater job pressure than that experienced by employees
who had not undergone downsizing in their organizations. They also found
that coworkers tended to be more supportive in the post-downsizing phase
in regards to work-related activities. Also, those who have survived
downsizing tend to think that their organizations are being less supportive
than those who have been unaffected by downsizing in their workplaces.
Where there is perceived lack of organizational support, the introduction of
job enrichment and empowerment are suggested means of regaining
employees' commitment to their organizations.
Downsizing decreased commitment at a time when employees’
responsibilities increased. Social contract changes.
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Author
Database
Year
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Variable of Stress
Level of Analysis
Type of Article
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22
Lay off the Layoffs
Frank Koller
Business Source Complete
2011
Met
Job Insecurity
Organization
Journal Article
6
Mentions job insecurity resulting from downsizing, but the main focus of
this article is on the bottom line of the organization, rather than on the
effects on employees.
Concerned with the validity of layoffs as a strategy. No stressors
Reference Number
Title
Author
Database
23
How Companies Reduce the Downside of Downsizing
Jeanenne LaMarsh
Business Source Complete
STRESS-RELATED OUTCOMES OF DOWNSIZING
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
Reference Number
Title
Author
40
2009
Met
Anger, fear, frustration, feelings of betrayal, abandonment, loss,
questioning value, inability to perform, utilizing delay tactics, bringing
lawsuits against organizations, loss of loyalty, grief, uncertainty, guilt,
increased workload, reduced productivity, distraction, distraught
Organizational
Journal Article
6
LaMarsh states that the result of downsizing can lead to many "unintended
consequences", all of which are considered to be "bad": people who are
emotional throughout the process cannot "perform at the optimum level";
affected people seek ways to have the change process altered--to make
changes "go away" and to delay implementation of cost-reducing
measures; and the reputation of the organization will be diminished. The
downside can be much greater than the required organizational gains
realized. Downsizing is recognized as a disruptive change but if a change
management plan is actioned, the resulting effects of downsizing on staff is
minimized. Lamarsh stresses the importance of effective communication,
providing accurate and complete information early in the process and in
every phase of a change management plan. Use of effective
communication strategies can result in employees accepting the impending
changes, even if the change is negative. LaMarsh advises that victims of
downsizing may be offered training and assistance to help in the search for
new jobs, while other less prosperous companies may offer other means of
encouraging development of a new skill set. Victims immediately returning
to the workforce will experience less pain and sense of loss. The survivors,
however, require retraining to be able to perform required duties with
fewer remaining employees. Losses of experienced or more knowledgeable
employees necessitate the transference of information to ensure continuity
of productivity. LaMarsh stresses the importance of companies providing
encouragement and recognition to employees making changes to illustrate
how their efforts are appreciated. For the victims, managers showing
compassion and attempting to minimize distress on the last day of work is
important in fostering loyalty and sense of fairness among the survivors.
On the contrary, immediately escorting former employees out of the
building or treating them badly on the last day may lead to fear of similar
treatment of the remaining employees. Managers taking care to be
compassionate in the process of downsizing can reduce the likelihood of
having to repeat the exercise. Communication will help survivors
understand and accept downsizing which will make it more successful in
the long run
24
Downsizing Effects on Survivors: Layoffs, Off shoring and Outsourcing
Carl P. Maertz Jr, Jack W. Wiley, Cynthia LeRouge, and Michael A.
STRESS-RELATED OUTCOMES OF DOWNSIZING
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
41
Campion
Business Source Complete
2010
Met
Voluntary turnover, reduced survivor attachment, reduced organizational
performance, decreased job security, decreased affective and calculative
attachments
National - USA
Journal Article
5
The authors of this article conducted research in the USA, comparing
survivors of layoffs, offshoring, outsourcing and their combinations to a
group who had not experienced downsizing in their places of work over a
3-year period, from 2003 to 2005. The results of the study revealed that
"recent survivors of layoffs, or combinations of forms including layoffs,
generally have lower perceived organizational performance, lower job
security, lower affective and calculative attachments to the organization,
and higher turnover intentions than a no downsizing comparison group".
The evidence "suggests that layoffs are the most negatively regarded and
costly form in terms of increased turnover propensity, but not on perceived
organizational performance".
Compares the effects of layoffs vs. those of off shoring and outsourcing
25
Spotlight on Cary Cooper, BUPA Professor of Organizational Psychology
and Health at the Manchester School of Management, UMIST, UK
Maggie McCourt-Mooney
Business Source Complete
2000
Met
Stress, unemployment, unhappy people, rising divorce rates
Global
Journal article
6
STRESS-RELATED OUTCOMES OF DOWNSIZING
42
Key findings
This article compares the free enterprise, competitive environment of the
economies in the USA and the UK to continental Europe and Asia. While
some pressure in the workplace can have positive, that which exceeds a
person's ability to cope results in stress. Health-related or behavioural
changes may result, depending on the individual. In the modern work
world, and especially due to mobility, people do not have the same level of
support as in other generations. Workers are often separated from family
and community and, therefore, do not have the levels of engagement
enjoyed by previous generations. At the same time, job security has
diminished. Workers losing their positions today do not have the same
sense of assuredness that they will be recalled when markets improve. Job
security became less of a certainty in the 1980s, which has compounded
the effect of additional stress in the form of intrinsic job insecurity in the
workplace, also known as short-term contract culture. Also, another
mitigating factor adding to the levels of stress in the workplace which did
not even exist 50-years ago was that as women entered the workforce to
establish careers, men became increasingly uncertain about their evolving
roles. Job security is no longer the norm. Organizations offer little or no
loyalty to individuals, so individuals are not committed to organizations. In
the USA and the UK, psychological contracts between employer and
employees no longer exist, especially in the age of outsourcing,
downsizing, and the "flexible workforce". The psychological contracts
between employers and employees are still evident in continental Europe,
where loyalty remains intact. The USA and the UK have realized economic
growth through free enterprise and specifically, through the use of the
"flexible workforce". Cooper claims that managers in the UK are more
reflective than those in the USA. Organizational changes in the workplace,
including downsizing and outsourcing, are occurring at the rate of 66.6%,
which has resulted in "massively lower morale and loyalty". Boards regard
these changes positively, whereas senior through to junior management
levels have the polar opposite view, because they deal with reduced
motivation and loyalty amongst the workers.
Downsizing and restructuring reduces morale and loyalty. EAP, training
and audits help deal or alleviate stress. Stressors lead to increased smoking
and drinking.
Reference Number
Title
26
Repeated Downsizing Contact: The Effects of Similar and Dissimilar
Layoff Experiences on Work and Well Being Outcomes
Sarah Moore, Leon Grunberg and Edward Greenberg
Business Source Complete
2004
Met
Job insecurity, increased role ambiguity, intent to quit, depression, and
health problems
Organizational
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
STRESS-RELATED OUTCOMES OF DOWNSIZING
43
Type of Article
Level of Evidence
Key findings
Journal Article - Longitudinal Study
4
The authors discuss the effects of repeated downsizing on "work-related
reactions and well-being of employees". Over the 4-year period 1998 to
2002, 5.5 million people, or approximately 76% of those who received
layoff notices, worked for companies that had downsized repeatedly.
Survivors of one downsizing may be subjected to further waves of
downsizing. The uncertainty of their future employment results in
development of senses of vulnerability as well as chronically stressful work
environments. The organization studied by the authors has been
experiencing many "waves of mass downsizing" since 1995. Chronic job
insecurity leads to high levels of poor health and depression. Acute
stressors were experienced at the time of downsizing, whereas chronic
stressors linger and may manifest fatigue or exhaustion. Repeatedly being
exposed to downsizing can be trying and individuals may be weakened in
the process, while others may be fortified by these experiences and become
more resilient to downsizing or even desensitized to the threat with
repeated exposure. This leads the authors to conclude that being subjected
to repeated downsizing "may not necessarily result in deleterious job and
health outcomes". The longitudinal study found that exposure to repeated
waves of downsizing results in more negative work attitudes and, if there
are different types of contact (direct versus indirect), more negative health
outcomes result. It was also determined that "employees do not habituate to
layoffs", nor do "they become more resilient to its damaging effects".
Discusses a resiliency model versus a stress-vulnerability model. Going
through more than one downsizing episode exacerbated the effects.
Employees don’t habituate to layoffs or become resilient to the damaging
effects.
Reference Number
Title
27
The Experience of Outsourcing Transfer: Implications for Guidance and
Counselling
Stephanie J. Morgan and Gillian Symon
Academic Search Complete
2006
Met
Job insecurity, increased health problems, long-term negative impact of
insecurity and uncertainty for both survivors and victims, anxiety, Feelings
of insecurity, Difficulties adjusting to new relationships, Adverse health
consequences, Changed psychological contracts, Increased work demands
IT Professionals
Literature Review and Longitudinal Study
4
A review of previous research literature indicates the following stressors
are evident in downsized organizations: anxiety, increased tension,
“increased work-related injury and illness" (Mayhew et al., 1997);
Author
Database
Year
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Type of Article
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Key findings
STRESS-RELATED OUTCOMES OF DOWNSIZING
44
"emotional upheaval" (Armstrong-Strassen, 1993); loss of trust and reappraisal of relationship with organization (Rousseau & Wade-Benzoni,
1995); feelings of being unwanted, feelings of insecurity, difficulties
adjusting to new relationships, adverse health consequences, reduction in
commitment, motivation, and job satisfaction (from Allen et al., 2001;
Stjernberg & Tillberg, 1998); broken psychological contracts, . . . loss of
connectedness and affiliation (DeVries & Balazs, 1997); physical and
psychological illness (Hughes, 2000); increased pessimism, despair, and
anxiety (e.g. Gowan & Gatewood,1997); reduction in self-esteem
(Kinnunen et al., 2003); depression and health problems (Moore et al.,
2004); uncertainty and loss of control (Donaldson-Feilder & Bond, 2004);
strong feelings of job insecurity… reduced psychological well-being and
health (Ferrie et al., 1998a); poor relationships with colleagues and
superiors (Kinnunen et al., 2000); low self-esteem (Kinnunen et al, 2003).
The review of previous research literature also found that outsourcing and
downsizing resulted in unmet career expectations, increased job insecurity,
increased health problems, "long-term negative impact of insecurity and
uncertainty for both survivors and victims". Anger, emotionally drained.
The findings of the longitudinal study aspect of this article concluded that
the previous research was relevant. They confirmed there was increased
job insecurity, general anxiety, sense of injustice, perceived lack of
communication and low trust, and concerns about future opportunities
(especially among older workers). This study also found evidence to
support the findings of previous research: resentment (from Konovsky &
Brockner, 1993), disbelief and denial, anger, emotional bargaining and
depression (from Kubler-Ross, 1969), and adverse health consequences
(Ferrie et al., 1998b). The empirical work was well-received by the IT
professionals, who were allowed time to express their emotions to the
researchers.
Outsourcing creates anxiety and insecurity
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
28
Layoffs Picking Up the Pieces
Katharine Nathan and Gretchen Neve
Academic Search Complete
2009
Met
Fear, insecurity and uncertainty; Frustration, resentment and anger;
Sadness, depression and guilt; Unfairness, betrayal and distrust
Organizational
Journal Article
6
This article discusses the impact of downsizing on employees by
categorizing feelings into four clusters which define "layoff survivor
sickness". If these "feeling clusters" do not dissipate over time, they can
intensify to become "chronic resignation, fatigue, and depression as well as
STRESS-RELATED OUTCOMES OF DOWNSIZING
45
a sense of loss of control and/or heightened and focused anger". As OD
practitioners, the authors have developed a strategy to help both
management and employees who have survived the layoffs to "evaluate
their post-layoff status and determine next steps in re-engaging managers
and employees".
OD = Organizational Development. RIF = Reduction in Force. Layoffs do
not necessarily make organizations more effective and produce unintended
consequences. Survivor sickness feeling clusters: fear, insecurity, and
uncertainty; frustration, resentment, and anger; sadness, depression, and
guilt; unfairness, betrayal, and distrust.
Reference Number
Title
Author
Database
Year
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Variable of Stress
Level of Analysis
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Reference Number
Title
Author
Database
Year
Inclusion Criteria
29
The Influence of Empowerment and Job Enrichment on Employee Loyalty
in a Downsizing Environment
Brian P. Niehoff, Robert H. Moorman, Gerald Blakely and Jack Fuller
Business Source Complete
2001
Met
Decreased loyalty, feeling of violation of psychological contract
Organizational
Journal Article
4
One of the survivor outcomes of downsizing is decreased loyalty in the
organization. Empowerment and job enrichment have been identified as
mechanisms which allow survivors to better cope with the stress of
downsizing. "The purpose of this study was to examine the degree to which
empowering behaviors of managers and job enrichment are positively
related to the loyalty of downsizing survivors". Survivors' responses are
categorized as constructive/destructive or active-passive. Constructive/
active responses are hopeful and optimistic; constructive/passive survivors
are obliging and faithful; destructive/passive survivors exhibit fear, anxiety
and helplessness; and destructive/active responses are anger, cynicism and
moral outrage. The researchers surveyed 203 employees in a federal
government research facility. The results of this study showed "that
empowerment does not have a direct affect on loyalty but affects loyalty
indirectly through job enrichment".
Survivor outcomes loyalty decreases with downsizing. Empowerment and
job enrichment could have a positive effect on loyalty. However, loyalty
and empowerment must begin before downsizing.
30
Health Effects of Downsizing Survival and Job Loss in Norway
Ståle Østhus
Academic Search Complete
2012
Met
STRESS-RELATED OUTCOMES OF DOWNSIZING
46
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
Prolonged uncertainty, psychological distress
Data from Statistics Norway
Journal Article
5
Prolonged uncertainty results in chronic stress. Survivors who have
seniority or more experience are better able to cope during downsizing, but
the more senior is a workforce, the less healthy is a workforce.
Psychological distress. Survival effects are negligible but women tend to
become more distressed than men and lesser educated individuals tend to
become more distressed than higher educated individuals.
Prolonged uncertainty = chronic stressor. Survivors have seniority or more
experience which could help them cope. A more senior workforce is less
healthy because of aging. Psychological distress. Downsizing survival
effects are negligible. Women are more distressed than men. Lower
educated are more distressed than higher educated.
Reference Number
Title
31
Cultural Values as Moderators of Employee Reactions to Job Insecurity:
The Role of Individualism and Collectivism
Tahira M. Probst and John Lawler
Business Source Complete
2006
Met
Job insecurity
International
Journal Article
4
Researchers examined employees' reactions to downsizing in relation to
individualism versus collectivism. Their findings suggest that employees'
cultural values "were related to the manner in which employees reacted to
organisational announcements of downsizing, their job attitudes, and their
reported levels of job-related stress". Under conditions of perceived job
security, there was little difference between individualists and collectivists.
However, where job security was low, in comparison to individualists,
collectivists had a more negative reaction to the announcement of changes
in the workplace; had more negative attitudes towards their jobs; and
reported higher levels of job-related stress. These findings were also
evident in the second study of Chinese employees. Their reactions to job
insecurity were more negative than American employees, and they also had
lower levels of job satisfaction, higher turnover intentions and work
withdrawal behaviors. The results of the "two studies indicate that cultural
values may play an important role in understanding how employees react
to organizational transitions and to the perception of job insecurity". To be
successful, Human Resource strategies must align with cultural values of
employees. Individualists react more positively than collectivists to such
HR strategies. In light of problems associated with economic development
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
STRESS-RELATED OUTCOMES OF DOWNSIZING
47
uncertainties in China, as well as bankruptcies and privatization of stateowned enterprises, employees have been experiencing high job losses and
job insecurity is rampant. Competition from other countries has intensified,
which has also affected levels of job insecurity among Chinese workers.
"Negative effects of job insecurity…may be exhibited to an even greater
extent in the Chinese culture when expectations for job security are not
met".
Job insecurity. Collectivist employees react more negatively to insecurity
than individualists.
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
32
Factors Associated with a Positive Attitude Towards Change Among
Employees During the Early Phase of a Downsizing Process
Erling Svensen, Gunnar Neset, and Hege R. Eriksen
Academic Search Complete
2007
Met
Higher risk of mortality and of ending up with disability pension, muscle
pain, fatigue, sickness absence, job strain, increased incidence of
hospitalization, anxiety, depression
Organizational
Journal Article - Longitudinal Study
4
The focus of this study was on the effects of a positive attitude towards
change in an organization subjected to downsizing. The important element
is whether or not the employees see the change in the organization as a
threat or an opportunity. Positive attitudes towards changes in the
organizations may be an important factor in resiliency. Differences in
employees' attitudes to changes in the workplace could stem from the work
environments, especially when management's handling of the change
process. Being pessimistic about outcomes can lead to changes in hormone
levels among the employees, who may become more at risk of becoming
sick. Throughout periods of organizational change, people want to be
"treated with justice". Employees tend to have more positive attitudes if
they believe they have been treated with justice. Job strain and job
insecurity experienced in combination can increase the risk of encountering
problems with both mental and physical health. Ursin and Erickson (2004)
found that "differences in outcome expectancy are based on differences in
the individual's learning experiences". Employees who believe they are
treated fairly are more likely to have positive attitudes about the work
environment; those who believe they are not being treated fairly are more
prone to health issues and also to "organizational citizenship behaviour".
The researchers of this study found that "perceived CSR was the most
important factor" in creating positive work environments. The second most
important factor was "employee involvement" and the third factor in
importance was leadership. Interestingly, older employees had more
STRESS-RELATED OUTCOMES OF DOWNSIZING
48
positive attitudes than their younger counterparts; employees with
leadership responsibilities were more negative than employees who did not
have those responsibilities. Pride, remuneration, and work-life balance did
not factor in to employees' attitudes to change. The authors found that job
satisfaction is higher when top management stress ethical values and they
also found a positive link between corporate ethical values and
organizational commitment. CSR was found to be related to attitude
towards change. Not all employees are at risk; those who are tend to have
more negative attitudes toward change. Despite an increase in workload
post-downsizing, survivors did not experience more ill health effects than
in the pre-downsizing phase. Stress experiences might have a more harmful
effect on health if followed by sustained activation. Those with positive
attitudes and emotions tend to experience less stress and for shorter
durations than do those with negative attitudes and emotions. Job
insecurity can increase activation, but if followed with a positive attitude to
change, the activation period will be reduced, thereby minimizing harm to
health. On the other hand, "negative attitudes to change tend to increase the
activation period, which is potentially harmful". Perceived high levels of
CSR may reduce negative attitudes to change. Because team leaders must
defend decisions of the organizations to their employees, they tend to
suffer from depression and low self-esteem in the post-downsizing phase.
One-third of the participants of this longitudinal study had negative
attitudes toward change; a status that increases the likelihood of illness. If
organizations stress the positive outcomes of reorganization, negative
attitudes toward change may lessen, but will not be eradicated, and the risk
remains. This study found that "CSR and employee involvement were the
most important factors for creating positive attitudes".
Attitude affects how we perceive downsizing and our outcomes. Attitude is
affected by CSR and employee involvement before downsizing.
Reference Number
Title
Author
Database
Year
Inclusion Criteria
Variable of Stress
Level of Analysis
Type of Article
Level of Evidence
Key findings
33
Workplace Expansion, Long-Term Sickness Absence, and Hospital
Admission
Hugo Westerlund, Jane Ferrie, Jan Hagberg, Kerstin Jeding, Gabriel
Oxenstierna, Töres Theorell
Academic Search Complete
2004
Met
Long-term Sickness Absence; Hospitalization
National - Sweden
Journal Article - Observational Study
3
The major focus of this observational study was on the long-term sickness
absences and hospital admissions as a result of expansion - the opposite to
downsizing. However, the authors also included employees of
organizations that had undergone moderate and large downsizing in their
STRESS-RELATED OUTCOMES OF DOWNSIZING
49
study. Moderate downsizing was found to be associated with an increased
risk of long-term sickness absence. The strongest association between
repeated exposure to organizational change and long-term sickness absence
was in women in the public sector. In addition, those who had been
exposed to moderate downsizing repeatedly were found to have a
significantly increased risk of long-term sickness absence. Interestingly,
exposure to major downsizing as well as men in the public sector found no
significant results. Men in the private sector who had been exposed to
outsourcing were found to have a significantly decreased risk of long-term
sickness absences in comparison with those who had not been exposed to
outsourcing. Women in the private sector who had experienced years of
exposure to large downsizing had a decreased likelihood of hospital
admission. The authors also found that there is a proximity effect (effects
seen quite quickly and for limited duration) for outsourcing, whereas
downsizing might have effects over longer periods of time. This study
found that corporate downsizing was linked to adverse health outcomes.
The sample was of mostly healthy individuals with a good employment
record and was representative of all sectors of the Swedish labour market.
It was suggested that employees of downsizing organizations may have
been reluctant to take sick leave, which would lower the numbers of
working days lost due to illness. Sweden has an active labour market
policy which may have played a significant role in the fact that
unemployment was very low. There have been significant decreases in
public sector personnel and also major and frequent reorganizations,
including a trend toward professionalism. Many less-qualified, traditionally
female positions were cut in this change. When the Swedish economy
rebounded from the recession of the late 1990s, a marked increase in longterm sickness absence was noted, particularly among women and public
sector employees.
While the study examines sickness absence related to expansion, data on
sickness absence related to downsizing is also presented. Private and public
sector: women had increased long-term sickness absences compared to
men but less hospitalization.
STRESS-RELATED OUTCOMES OF DOWNSIZING
50
Appendix B: Levels of Evidence
Level of Evidence
Management Research
Level 1
Randomized Controlled Studies, Meta-analyses
Level 2
Non-randomized Controlled Studies
(a) high quality, replicable literature review which provides a synthesis and
actionable recommendation.
(b) a systematic literature review on randomized controlled studies
Level 3
Observational Studies
Comparative, multisite case studies or large-sample quantitative studies
involving data collection from more than one site (organization)
Level 4
Before After Studies
Small-sample qualitative or quantitative studies. Theoretically motivated
and are completed by trained researchers who have (at most) an arm's length
relationship with the organization under study for objectivity.
Level 5
Surveys and Descriptive
Descriptive studies and/or self-reported studies. These studies generally
include observations, admonitions, and recommendations of import to
managers.
Level 6
Expert Opinions
Opinion of respected authorities or expert committees without additional
data. Some papers offer anecdotal evidence as a means of supporting
expressed opinions.
(Source: Reay, Berta, & Kohn, 2009)