Retrenchment—The survivor’s guilt

Author: Charlene Gowrie

April 3, 2023

There are few exercises that can cause as much stress to an organisation, as a retrenchment. Regardless of the circumstances or the numbers involved, it creates a difficult climate for everyone.

Understandably, employers tend to consider carefully how to treat those facing redundancy.

Emphasis and priority are given to compliance with legislation, the processes for selecting and terminating employees, severance packages, external counselling etc. and whilst this is vital, what about the survivors, those who will remain with the organisation, those on whom the executive is depending on to take the company forward.

The thinking may be that staff who keep their jobs would be pleased and relieved, and of course, there is this, but these emotions are often stymied by other factors as these feelings of gratitude can often accompanied by feelings of guilt. This phenomenon, known as Survivor Syndrome, is a common consequence of downsizing and restructuring, and denotes the emotional, psychological, and organisational repercussions faced by those who remain employed, or ‘survive’ the redundancy programme. The effects generally include anxiety, impaired productivity, diminished social networks and support, reduced trust, loyalty and commitment to the organization, negative attitudes, challenges with work-life balance and in some cases envy for those who have been given the means to move on and now appear free.

Indeed, Appelbaum et al. (1999), state that the most common cause of poor organizational performance after a retrenchment is that the organisation may not be prepared for the low morale experienced by the survivors and consequent lower productivity. Yet, relatively little is provided for those who continue to work within the organisation.

It must be remembered that those employees who remain with the organisation become the organisation, and will ultimately be responsible for driving forward the objectives and attaining the success of the ‘new’ company. By not considering the survivors, companies run the risk of staff feeling helpless, bewildered and often angry about what has happened; not to mention overworked and under-appreciated if they have taken on extra duties. If left unmanaged, these feelings will adversely affect performance.

So, what can the company do to ameliorate this situation? The process of managing employees through the transition phase should involve guiding survivors and helping them navigate the organisational and emotional outcomes, as opposed to trying to avoid or prevent them, as averting them may not be possible.

Survivors should be able to have confidence in leadership, see management living the organisational values throughout the exercise, have knowledge and understanding of the process and the fair treatment of their peers who were retrenched; perceive that management is aware of the problems that may arise due to downsizing (potential job re-design, increased workloads, reallocation of persons etc.) and feel recognised for their effort and that their work and associated pressures may well increase.

Baruch and Hind (2000), suggest the following when designing and implementing a restructuring or downsizing programme:

• Communicate – create awareness of the current economic situation/impacting event, the future of the company, whether there is likely to be more retrenchment etc., the issues that remaining workers may experience (potential job re-design, increased workloads, etc.)

• Ensure fair and transparent processes for selection of those being made redundant, calculation of benefits as well as compliance with relevant legislation

• Engender trust in managerial decision-making for e.g. not buying new cars, recruiting expensive staff or paying hefty bonuses to executives whilst at the same time making a case to reduce costs

• Maintain organisation values throughout the process

• Facilitate ‘support groups’ for all, where issues can be discussed

• Collaborate with unions where appropriate

• Show appreciation for the work of surviving employees

• Recognise that people manage change differently

Survivors are the ones chosen to secure the future of the company. As such, reinforcing the psychological contract and focusing on employee engagement, organisational commitment and trust, are critical to the experience of the survivor.

By failing to do so, companies run the risk of staff feeling powerless, insecure and lost about what has happened.

Attention to those who remain in employment is just as imperative if the objectives of the restructuring are to be achieved. Organisations should therefore seek to anticipate and prepare for the needs of survivors.

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