Defining 'Survivor Syndrome' and Negative Outcomes - Essay Example

Chapter Two: Literature Review Word Count: 5,041 "Organisations and people face uncertainty, change and huge pressures…Many struggle to survive. There can be no more illusions of safety or predictability…It is at once exciting, full of promise and opportunity but also frightening, daunting and exhausting...." -- Bruce Nixon, author and management consultant (Jones et al, 1996). 2.1 Downsizing in contemporary organisations Traditionally, the term downsizing has represented the corporate ideology as a last resort tactic in order to cut costs or boost productivity. In contemporary organisations, however, downsizing has become a vital tool for shaping an organisation to meet new challenges and circumstances (Human Resource Management International Digest, 2002). The implications, with this concept in mind, are that modern corporate restructuring efforts which create the forced displacement of existing staff members are impacting workers more frequently as companies attempt to thrive in fiercely competitive markets. Applebaum & Donia (2001) recognise this contemporary business strategy as a popular organisational tool for business achievement, however, they offer that a negative side effect known as survivor syndrome continues to plague many post-downsizing organisations. Small Business Reports (1993) offer that surviving a layoff can be as difficult as being terminated, however many managers ignore this problem, failing to recognise that survivor's guilt over making the cut and apprehension over the company's future can hinder productive work outputs. 2.2 Defining 'survivor syndrome' and negative outcomes Once senior leadership has determined a strategic direction for a business, in which the policy indicates the need to reduce the organisational workforce, displaced employees are forced to exit the company and pursue other career opportunities. Survivor syndrome, in its best definition, involves the challenges and emotional turmoil experienced by the employees who remain with the organisation; and this 'syndrome' maintains the potential to radically affect the future direction of the firm depending on the severity of survivor attitudes after downsizing initiatives have been instigated. Cappelli (1997) offers that survivors are affected by how their work conditions and work environment are altered by downsizing and each individuals' personal reactions to the "post-layoff" environment dictate the magnitude of emotional response to the changed environment. Putzier (2002) suggests that workplace survivor syndrome has the same characteristics as in war or as a result of any other personal loss. He indicates sadness as a response to the exiting colleagues, while others experience guilt. The implication, based on this professional literature surrounding survivor syndrome, is that the varied range of emotions experienced by workers are psychological in nature and can be measured symmetrically to the increase/decrease of productivity levels within the organisation. Highly dependent on the methods used by executive leadership to carry out the staff restructure are the range of emotions felt by the survivors of downsizing. Appelbaum et al (1997) categorise the negative responses of surviving layoff as feelings of job insecurity, perceptions of unfairness, depression, anxiety, fatigue, betrayal, reduced motivation, lack of management credibility and maintaining a sense of permanent change. Cross & Travaglione (2004) move somewhat away from the employee impacts to demonstrate the negative consequences of downsizing on businesses by indicating that survivors often show lower levels of continuing commitment and job satisfaction along with significantly higher levels of intention to turnover and absenteeism. Each of these negative aspects will be discussed more concisely throughout the review so as to focus on their impact to both the surviving worker and to the productivity within the organisation. 2.2.1 Exploring positive outcomes to survivors of radical restructuring Brockner et al (1993) suggest that survivor syndrome, and the emotions attached, can sometimes create a positive outcome for the downsized organisation. The results of two studies from these professional authors indicate that low self-esteem employees feel more worried when perceived threats to their job security are fashioned, and are more likely to translate their feelings of worry into an increase in motivation and productivity. Self-esteem refers to the evaluation that individuals make and customarily maintain with regards to themselves (Firth et al, 2004). Further, Allen et al (1995) recognise that the current career level of the survivors of downsizing (e.g. mid-manager, senior executive) dictates the emotional response to restructure as mid-career survivors may have been witness to more frequent organisational changes over the years and are thus less affected by layoffs. The result: A team of mid- to upper-level staff members who have more access to the strategic details of the restructuring effort and maintain a sustained commitment to the organisation. 2.3 Individualised negative response to downsizing Downsizing can be characterised as a change programme with complex and far-reaching outcomes. People need to see momentum and achievement in order to stay with the process and not sabotage it (Management Intelligence, 2006). When survivors feel that the processes of restructure were performed in an unjust manner, they are likely to distance themselves from the organisation and may exhibit a wide variety of (negative) psychological and behavioural reactions (Beylerian & Kleiner, 2003). It is important to illustrate each theoretical response to downsizing in order to further emphasise these emotions and behaviours in the following sections as indicated by Appelbaum et al (1997): 2.3.1 Job insecurity Survivors will wonder how much longer they can keep their jobs and, therefore, worry that they are not prepared to find work somewhere else. Job insecurity will influence performance behaviours depending on the severity of insecurity felt by each individual survivor. Whether or not the individual perceives their skill level in their particular field as being externally marketable will determine the behaviours expressed during normal working operations; both potentially negative and disruptive or positive to the business agenda. 2.3.2 Perceived unfairness When doubts begin to surface about the overall wisdom of how managers' determined the choice of employee to expel, as well as the competency levels of the managers guiding the organisational change, perceptions of unfairness surface leaving the survivors to feel that their work environment is unjust and restrictive. 2.3.3 Depression, anxiety and fatigue Morris & Maisto (2005) recognise depression as a mood disorder characterised by overwhelming feelings of sadness, and perhaps excessive guilt over a traumatic event. In terms of the effects of a radical downsizing directive, the survivors often feel demoralised as they must watch friends and colleagues forced from the organisation. Appelbaum et al (1997) also indicate that the process of planning and implementing a staffing restructure experience similar emotional weight and guilt due to their role in dismantling the existing staff levels. Anxiety, in terms of the survivors of the downsizing, is borne of the continuing worry that they may be "the next to go". Depression, anxiety, and fatigue are potentially tremendous roadblocks to furthering organisational productivity. 2.3.4 Perceptions of employee betrayal Some remaining staff members no longer sense a positive aspect toward the organisation's future or perceive their place as non-integral to the firm's forward direction. Employees cannot see why they should concern themselves with the needs of the employer considering the employer (perceptually) was not concerned for their colleagues. Poorly organised processes designed during downsizing often allow the employee to maintain the emotions of betrayal. 2.3.5 Reduced motivation and morale Many survivors are afraid to take advantage of an employment opportunity or accept a new work assignment for fear of exposing themselves to criticism or below-average performance appraisals; becoming the target of future layoffs. Appelbaum et al (1997) suggest that these employees try to fit quite well into their actual position of being "safe" and take a less risky method to performance. 2.3.6 Lack of management credibility Some employees believe management is no longer capable of addressing the main operational/strategic concerns of the organisation due to failures in implementing a sound restructuring plan. Some survivors even fear that managers will implement continuing layoffs if the objectives of the downsizing initiative do not reach acceptable goal levels rapidly. The result: A lack of camaraderie between manager and staff that hinders productivity. 2.3.7 Sense of Permanent Change In this scenario, survivors of downsizing maintain an overall sense that working for an organisation will never be as enjoyable or satisfying as it once was. Reduced, overall organisational commitment results from dissatisfaction with the momentum of the firm's staff reduction policies. 2.4 Complex negative consequences of downsizing Anger: An emotional response to a grievance that may be provoked by perceived threats or by abstract concepts such as injustice, humiliation and betrayal (Wikipedia.org, 2006). With this definition in mind, anger can best be attributed as a result of an action, in this case downsizing and the mechanisms behind survivorship. Sahdev (2003) points out that anger and frustration is a recognised negative emotion resulting of downsizing and oftentimes survivors centre their interactions with managers based on cyncism. Reeves (2006) offers the difference between survivors who experience heavy anger over the restructure and those with higher resiliency. He suggests that resilient people seem to hve a greater sense of their own activities and carry an optimistic temperament, believing that things will get better and that they can help to make positive contributions to the organisation. The comparison of anger versus higher survivor resiliency can be measured in the quality of the work outputs generated by the surviving employee. 2.5 Imperfect managerial methodology behind staff reductions Bashford (2004) offers that management often focuses their energy on the staff being made redundant, while those who remain are frequently taken for granted. She offers that managers often reason, incorrectly, that remaining staff should be motivated just by the virtue of the reality that they are allowed to stay with the organisation. Bruce (1995) supports this claim by offering that this type of managerial thinking regarding survivors is "nonsense" and that the people left within the organisation after downsizing are demoralised, uncertain, and deeply unhappy. Bruce further describes these employees as so severely shell-shocked that they can be of little practical use to the organisation. Brockner (1995) offers that most downsizing organisations do not want researchers to be studying ("interfering with") survivors at all. Consider the results of a 1995 post-downsizing survey conducted by a Canadian consulting firm which reported that, though 85% of the surveyed organisations reported lowered costs due to the restructure, a sobering 61% reported decreased morale and 50% reported lessened loyalty and commitment to the organisation (Makawatsakul & Kleiner, 2003). The generalisation that can be made in support of Brockner's statement through analysis of the survey data is that downsizing, in the short term, satisfies the corporate bottom line, but far too often at the expense of survivors' satisfaction. Organisations need to be aware of the issues and repercussions that organisational change poses, not only to their bottom line, but to the employees affected by such changes (Wolfe). However, the researchers' data on corporate reluctance to conduct research studies on survivor mentalities and the high survey percentages indicating negative consequences on downsizing victims (e.g. Brockner, Makawatsakul & Kleiner), point toward an increasing lack of awareness around proper managerial handling of the vast array of emotions surrounding the survivor syndrome. In essence, there are indications that downsizing facilitators not only tend to dismiss the emotional needs of the surviving employees, but prefer to further conceal this improper managerial handling of the survivors from being exposed in research studies. A competent assessment of this situation is that managers and downsizing facilitators must come to recognise the failures involved in failed restructuring processes and focus corporate energy on easing the tensions felt by the survivors of the cuts. 2.5.1 Managerial concealment of downsizing initiatives and strategy In a post-downsizing business environment, developing the remaining staffs' skills and career-building opportunities can theoretically increase overall survivor satisfaction and make the individual feel as though they have a somewhat stable future within the industry. Donkin (1997) has provided research which finds that employees who have become less convinced that their managers were helping them to develop maintained growing doubt about the extent to which management considered their professional interests in decisions affecting them. Mathis & Jackson (2003) suggest that survivors need information about why the actions had to be taken, and what the future holds for them personally. In many situations, the managerial staff chosen to facilitate the downsizing initiatives are the only members of staff who are privy to the details of the restructuring effort while subordinates perceive the process as unjust and the survivors feel powerless to affect their own working environment. Managerial restructuring facilitators, often referred to as Downsizing Agents (DAs), sustain the somewhat arduous task of removing individuals from a changing organisation either through forced dismissal or buyout (severance) packages. Clair & Dufrense (2004) offer a case study in which DAs within a contemporary business were required to keep all aspects of the downsizing confidential during planning of who was to be laid off, the procedural guidelines for the dismissals and what benefits (if any) were to be dispensed to the displaced workers. As rumours spread throughout the subordinate staff, the DAs were forced to deceive and lie to others in order to conceal company secrets. In such a scenario, surviving employees who witness deception and falsehoods prior to downsizing will likely exhibit the more negative emotional indicators of survivor syndrome; pointing toward the necessity for managers to handle these restructuring processes with a more honest, trustworthy approach. 2.5.2 Case studies: Ineffective downsizing procedures Mathis & Jackson (2003) offer three case studies of modern industries who dictated downsizing with a somewhat reprehensible methodology: Inacom Corporation told their company's 5,000 employees to call an 800 number spontaneously. As they dialled in, a recorded voice told them they were out of work – effective immediately. Amazon.com used their e-mail systems to layoff a US operational staff told not to come to a meeting in which job cuts were announced. Chrysler employees showed up for work, as they normally would on any given day, only to find that their identification badges no longer opened their security access gates. The frequency of scenarios such as the aforementioned are likely irregular, that is, not a commonplace downsizing situation, however case studies such as these serve to highlight situations in which survivors who witness these types of unjust worker reductions will likely develop an immediate intention to leave the industry and maintain a lowered commitment to the organisation. Beylerian & Kleiner (2003) offer that negative emotions surrounding the survivor syndrome can be dramatically reduced if a survivor's colleagues who were displaced were notified of the news in a fair manner. Further, the authors suggest that many survivors can sustain an increased organisational commitment if those who were displaced were provided some sort of severance package and offered outplacement counselling in order to help ease the pain of being downsized. In situations such as those listed in the case studies, based on the literature, if those organisations had provided a better ideology in the moral implications about their processes to restructuring, it is suggested that the surviving workforce would be less "shell-shocked" and prepared to thrive in a more efficient work environment. 2.5.3 Organisation disloyalty: questionable tactics Syrett (1997) offers that in recent years, private investigators, including the notable Kroll Private Associates, were being called in by leading investment banks in London to advise them to likely defections among key staff members. In a post-restructuring environment, telephone conversations and even socialisation chatter in public places were being secretly taped while conference rooms were being bugged in search of employee disloyalty. The implications to employee morale and overall job satisfaction, in this situation, should be quite obvious when an employer uses questionable tactics to isolate individuals who are dissatisfied with the organisation and are making plans to exit the industry. However, it does serve to illustrate the breakdown of proper downsizing activities, on behalf of executive management, that show a clear theoretical gap between effective downsizing procedures and that of offering employees the perception of an industry that is trustworthy and values its staff's emotional well-being. According to Loi et al (2006), employee turnover represents a practical problem to an organisation in terms of loss of talent and for additional costs that are associated with training newly hired staff members. It has been pointed out, somewhat clearly, that a survivor's intention to leave an industry is nearly balanced as a reaction to how managers handle a downsizing process. If employee turnover represents a somewhat incalculable loss to an organisation, the question arises, then, as to why an industry resorts to such dramatic steps to handling downsizing crises when the result of negative executive/managerial actions create a similar effect within a surviving victim of restructuring. Cornerstone Business Solutions (2001) makes a statement that supports this position by citing that if survivors do not witness a well-handled downsizing effort, the workplace may be poisoned by mistrust. 2.6 Burn out and demoralisation Ciancio (2000) offers that demoralisation is one of downsizing's most common effects felt by surviving workers. He suggests that demoralisation manifests itself throughout a variety of symptoms such as anxiety, tension, fatigue, sleeplessness and impaired judgement. The author offers that if these symptoms are left to be managed by the individual and remain unchecked, the stressors wear away the worker's resolve, confidence and stamina, causing a build up of unresolved emotions that forces the employee to simply give up and go through the motions of the job position in a detached, lethargic manner. The result: A symptomatic response to downsizing and its negative consequences called survivor burn out. Noted one survivor of burn out in the health care industry, "I'm burned out and miserable. I have to 'hold hands' and walk everyone through their days." (Ciancio, 2000). Burn out, from a theoretical standpoint, is the culmination of a multitude of behavioural and emotional responses to the individual's perceptions of a negative post-downsizing environment that not only affects the quality of work outputs, but spills over into the personal life of survivors; causing physical symptoms that can serve to make the employee rather useless to an organisation. It is important to point out the downsizing affects of a variety of individuals in a collection of different industries, thus by offering the example of a burned out, victimised employee of the health care industry, burn out maintains the opportunity to affect very important issues such as patient care or negligence. In terms of a more corporate-minded environment, burn out can maintain the same negative consequences on a contemporary business with the production of excessive errors that dramatically impact the productivity of an organisation. 2.7 Theoretical steps to sustaining a positive downsizing environment Iskat & Liebowitz (2003) offer thirteen specific steps that managers can take during an organisational change initiative that will make the process easier on the surviving employees and gain the best chance of gaining employee commitment to sustained excellence on the job: Provide your rationale – Offer employees information about why the organisation is taking steps toward improvement. Be empathetic – Maintain the awareness that individuals are psychologically impacted by emotions and offer compassion to surviving employees who witnessed the exit of friends/colleagues Communicate clearly – In all aspects of the restructuring directives, ensure that staff understands the organisation's expectations as well as how the employee will be impacted in the post-downsizing environment. Explain the benefits – Provide a justification for the downsizing effort and the overall improvements that will be felt organisation-wide that impact the employees as well as increased profit and productivity. Identify a champion – Point out those individuals who have been integral to the restructuring, including those who volunteered for accepting extra workload, to promote a positive camaraderie amongst staff and downsizing facilitators. Obtain participative input – Allow survivors to express their concerns over the restructuring effort and offer suggestions on how to make the process more efficient. Be aware of the timing – Managers must understand that the precise timing of the effort should try to fall when morale and productivity are at their highest points to avoid disloyalty. Maintain job security – Allow individuals to recognize that their roles in the organisation maintain the potential to improve and progress along their chosen career paths. Provide training – Offer employees an added incentive for cross-functional learning and skills development to provide a sense of security and the perception of a future with the changing industry. Proceed at a manageable pace – Survivors are often overwhelmed when displaced workers' job responsibilities are suddenly "dumped" on them, causing significant stress and extra hours. Manage the downsizing effort to allow for adjustment to the new environment. Indicate top management's support – It is vital for managers to indicate to survivors that they are valued and will receive support for concerns related to the restructuring efforts. Publicise successes – Each and every time the organisation reaps benefits (e.g. profits, productivity gains) present the data to staff to indicate their efforts have substantially, positively impacted the success of the business. Provide employee services – As much important to the displaced workers, survivors require counselling, benefits assessment or any other need that should be provided by human resources or similar management. During the downsizing process, both pre- and post-restructure, there maintains a level of uncertainty both for the managers and for the surviving employees. Paulsen et al (2005) offer research evidence that points toward a pattern of successful results due to a successful implementation of a downsizing initiative. The authors found that levels of job uncertainty, perceptions of personal control and overall job satisfaction tended to stabilise after the downsizing process within an industry which provided support for their surviving workforce. The authors' suggestion is that with proper implementation of downsizing efforts, managing uncertainty for the survivors can be managed on a strategic level both during and after such an organisational change takes place. 2.8 Executive assessment of overall productivity in downsized environments Doherty & Horsted (1995) point out the results of a survey aimed at a sampling of organisations regarding the formulation of methods available to help survivors stay with the firm after a downsizing effort. The survey revealed that 80% of the surveyed organisations had not measured productivity objectively in a post-downsized environment, leaving employees feeling uncertain about their own survivability, thus creating long-term effects on the organisations. Measuring productivity in a post-downsizing environment can be a complicated task, as the restructuring effort is riddled with complicated variables in which few individuals have experience. Referencing the quotation by Bruce Nixon at the heading of this review of literature, organisational change can be full of opportunities as well as being "frightening and daunting", which points toward an ongoing uncertainty variable that makes productivity hard to measure since, often, there is no standard with which to judge productive work outputs. However, methods available to reduce a survivor's intention to leave involve establishing the employees' perceptions of a just, impartial, and fair assessment of the individual's productivity levels. Having established the result of the 1995 survey indicating 80% of organisations measuring productivity rather subjectively, the literature suggests that contemporary agencies must factor objective assessments both in the appraisal of the surviving workforce and in the best practice methods for how the business expects to produce results. 2.9 SOBBOs and HOBBOs One rather unique concept of the mentality surrounding the emotions and behaviours of survivors of downsizing comes from Kaye (1998) who refers to two types of individuals that remain with the restructured organisation. The first group she refers to SOBBOs: Staying On But Building Options. The second group might be called HOBBOS: Hanging On But Building Options. The author suggests that the key differences between these survivors lies in the different mechanisms involved in their individual, long-term coping responses to the downsizing. Her assessment of SOBBOs is that the group is more competently attuned to the realities of change within a business and describe them as the following: Politically savvy, proactive and self-managing – SOBBOs understand the mechanisms involved in office politics and can thrive in that environment regardless of the effects of organisational change. Realistic about the future – Essentially, minded with the idea that "things happen and one must move on" Committed to growth and learning – The SOBBO realises that advancement in a downsizing environment requires skills training and volunteerism. The assessment of Kaye's professional standpoint is that the SOBBO group, regardless of the implementation practices of the company's downsizing effort, is that this type of individual can perform under the most negative conditions and is more likely to gain organisational commitment and enhanced productivity based on their nature. Kaye (1998) describes the HOBBOs in a radically different light, pointing toward a more difficult group of survivors that might sustain an overall intention to leave. According to the author, HOBBOs are: Reactive and victimised – These individuals are ready to strike out at managers and play the role of victim well. Waiting for something to happen – Continuously wondering whether they will be the next to go and display negative behaviours based on this assessment. Committed only to employment and a pay check – This group refuses additional workloads imposed by restructuring and maintains virtually zero loyalty or commitment to the organisation. Kaye suggests that both groups must be motivated continuously, though the implication is that the HOBBO group is substantially more difficult to motivate based on the personality constructs of this group. It was important to highlight these different groups, as Kaye's literature offers the suggestion that the severity of the emotional or behavioural responses to downsizing initiatives may very well be connected to the inherent personality characteristics of the individual surviving employee. To put the author's concept into another context, the effects of motivating positive response to a company's downsizing may not solely rely on the tactics that are used during implementation or post-downsize, but may very well be the result of specific characteristics of the survivor workforce. In such a scenario, an organisation might have a substantially difficult task of recognising SOBBOs and HOBBOs during the planning of a downsizing event and, after displacing workers, may find themselves in a difficult situation where most of the surviving workforce consists of the HOBBO mentalities, thus driving down overall productivity. The literature is interesting as it poses a challenge to strategists when planning which employees to excise so that the organisation does not experience a tremendous turnover ratio after post-downsizing strategies. 2.10 Positive employee reactions to downsizing efforts A comparison study undertaken by Baruch & Hind (2000) point toward results that do not always reflect a deterioration of survivor motivation over time, rather the reverse. A confidential organisation referred to as a large UK financial institution was highlighted as part of this study to determine factors involved in downsizing that led to a more positive behavioural and emotional response to the efforts. Researchers found that employee perceptions of openness had become more positive and that trust levels improved based on one particular factor: The individuals who were strategically displaced from the organisation were already less-productive members of the staff and had been referred to as "dead wood". The authors found that elimination of the unmotivated group with low existing morale and satisfaction left the survivors with a more positive work attitude. In this scenario, workers found the reduction of a properly formulated displacement campaign to be a procedurally fair and just campaign and the indications are that the existing survivor group of staff did not experience the shock and anxiety that usually accompanies downsizing initiatives. Once again, it is important to illustrate that, in support of the aforementioned concepts, that a fair and partial strategy to eliminate the appropriate members of the work force can theoretically lead to a more satisfied sense of managerial accomplishment in the perceptions of the survivors. The competent assessment of a motivated worker who is already burdened by assuming the excess responsibilities of a less-motivated colleague would value the removal of that employee; thus generating a sense of higher personal victory and relief for the more-motivated subordinate who is allowed to keep his or her position based on managerial comparisons of which worker is ultimately more productive. 2.11 Procedural unfairness and perceptions of injustice A research study conducted by Wiesenfeld et al (2000) reported that the relationship between survivor perceptions of procedural unfairness and managers' behaviours were mediated by their individual self-esteem. They state that subordinates of managers who engaged in less effective administrative behaviours had more negative perceptions of their immediate work environments. The results of the Wiesenfeld et al research study points toward verifying the existing professional opinion of Kaye (1998) which points toward inherent personality characteristics as an indicator of continued commitment to a downsized organisation. To illustrate, self-esteem is a personality factor that can be driven by a multitude of environmental stimuli, however, the expression of self-esteem is often noticeable in the output of behavioural activities of an individual. An employee with a higher level of self-esteem and self-concept, who recognises his or her potential in aiding the business further after post-downsizing, might engage in a more effectual relationship with managers than those individuals who have lower levels of self-confidence. The result: A more productive and open relationship with superior colleagues and a drastically lessened negative perception of unfairness in the downsizing effort. 2.12 Summarisation of available literature It is vital to point out the differing theoretical concepts both in the methods currently being undertaken by managerial professionals during a downsizing effort as well as the affective reactions of the individuals who survive the restructuring. Thus far, the literature has pointed toward inherent personality characteristics, appropriate or inappropriate tactics undertaken by the organisation to implement downsizing, and the realistic emotions displayed during the survivor syndrome that each maintain the potential to adversely/positively affect the future momentum of a business in a post-downsizing environment. The aims of this dissertation are to explore the process of downsizing and to determine the effects on both the employee and the business after a significant restructuring change has taken place. In order to support or refute the professional standpoints of the authors within this review of literature, this exploration will take a new direction with a case study approach to determine how real-life individuals react, behave, and commit to a downsizing organisation. Having illustrated the theoretical relationship between a restructuring business and a surviving work force, the upcoming sections will summarize a set of themes which will categorise the cause and effect of survivor syndrome within contemporary businesses. References Allen, Timothy D., Freeman, Deena M., Reizenstein, Richard C. & Rentz, Joseph O. (1995). 'Just another transition? Examining survivors' attitudes over time'. Academy of Management Journal: p.78. 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