Designated redundant but escaping lay-off: A special group of lay-off survivors

A 3-year longitudinal panel study compared employees who had been declared redundant (N=49) in the initial downsizing stage, but who remained in the organization, and employees who had not been designated redundant (N=118). During the downsizing period, those who were declared redundant reported a significant decline in organizational trust and commitment compared with those who were not designated redundant. However, in the post-downsizing period those who had been designated redundant reported a significant increase in their job satisfaction, trust in the organization and organizational commitment, reporting higher levels on these factors than survivors who had not been designated redundant. There were no significant differences between the two groups for self-reported job performance, perceived job security and perceived organizational morale but there were significant time effects. Perceived job security showed a dramatic increase at Time 3 following the involuntary departure phase of the downsizing and continued to increase significantly, so that perceived job security in the post-downsizing period was significantly higher than during any of the three downsizing phases. Survivors reported a significant decline in job performance in the early phases of the downsizing and in the post-downsizing period 3 years later job performance remained slightly below the initial level. Although there was a significant increase in perceived organizational morale in the post-downsizing period, the level of perceived morale continued to be below the mid-point of the scale. The level of organizational trust showed a similar trend indicating that downsizing has a long-term negative effect on these two variables.