MANAGERIAL AND OTHER FACTORS THAT POSITIVELY OR NEGATIVELY AFFECT THE EMERGENCE OF THE SURVIVOR SYNDROME: A case study in an engineering firm.

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Business Administration – Change Management

MANAGERIAL AND OTHER FACTORS THAT

POSITIVELY OR NEGATIVELY AFFECT THE

EMERGENCE OF THE SURVIVOR SYNDROME:

A case study in an engineering firm.

Written by

Annelies Middelburg - S2377292

a.middelburg@student.rug.nl

Visserstraat 58a

9712 CX GRONINGEN

June, 2014

University of Groningen

Faculty of Economics and Business

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Abstract

This research examines the factors that positively and negatively influence the emergence of the survivor syndrome. Seventeen interviews within two case studies were used to gain insight in this. The focus is on four managerial factors and four situational factors which include promoting the understanding of the need for change, paying attention to the psychological contract, optimizing the downsizing practice, organizational justice, economic circumstances, organizational culture, employee age and employment duration. There was also room left for interviewees to bring up experiences of other factors that influence the emergence of the survivor syndrome. The influence of these factors is described by concrete examples. Results show that all four managerial factors influence the emergence of the survivor syndrome. Of the situational factors, economic circumstances, organizational culture, and employee age were of influence; however organizational culture was of different influence than expected. Employment duration was not of influence. Many other managerial and situational factors were discovered, including organizational results, team building and the celebration of successes, personality traits, vacation right after the downsizing, new changes with negative impact on survivors, previous experience with downsizing, one‘s financial responsibilities, one‘s level of knowledge compared to competitors in the labor market, and new job successes of layoffs.

Keywords: Survivor Syndrome, Downsizing, After-downsizing, Management factors, Situational factors, Organizational Change.

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Introduction

The – so-called – survivor syndrome tends to be an unplanned side-effect of downsizing in personnel within organizations (Sahdev, 2004). Nowadays there is a growing concern about the effects of downsizing on the ‗survivors‘ in the organization; the employees who were not forced to leave (Heery & Salmon, 2000: p.57). Heery and Salmon (2000: p.57/58) mention that during a post-downsizing, the organizational competitiveness can be damaged, since retained employees often have low morale, a decreasing level of commitment and productivity, and growing mistrust towards management (Baruch and Hind, 2000). In this thesis, a study is presented that was set up in order to investigate what factors give rise to the emergence of that syndrome, or that – conversely - prevent it from emerging.

Travaglione & Cross (2006:1) describe the survivor syndrome as ‗the negative attitudes and behaviors of those that survive retrenchment‘. They also state that behaviors and attitudes of employees such as satisfaction, commitment, performance, absenteeism, and perceived organizational support are essential for organization productivity (Travaglione & Cross 2006). According to Caulkin (1995:29), the survivor syndrome leads to the situation where the structures and processes are arranged, but there is no human live to make them productive.

In current literature, several causes of the emergence of the survivor syndrome are described. These causes include not understanding the need for change, unplanned changes in the psychological contract, no optimization of the downsizing process, and perceived unfairness in the downsizing process (Travaglione & Cross 2006; Sahdev, 2004). However it is argued that these causes of the survivor syndrome emergence can be managed (Travaglione & Cross 2006). Other factors related to the situation such as employee age and employment duration are also seen as influencing the emergence of the syndrome (Travaglione & Cross, 2006). Additionally, economic circumstances play an important role in the emergence of the survivor syndrome, as is argued that the financial crisis that we currently face increases the survivor syndrome since it creates the situation where unemployment rate is increasing (Farmer, 2013). Despite of the several causes of the emergence of the survivor syndrome, several authors state that a survivor syndrome could be overcome or avoided by effective management, where on the other hand ineffective management could increase the negative effects of the survivor syndrome (Travaglione & Cross, 2006; Sahdev, 2004; Baruch & Hind, 1999).

Research question

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bring other influencing factors to light that influence the emergence of the survivor syndrome. Therefore the following research question is formulated:

“How do managerial and situational factors influence the emergence of the survivor syndrome?” Sub-questions are used to support the research question which includes:

―How do managerial factors influence the emergence of the survivor syndrome?‖ ―How do situational factors influence the emergence of the survivor syndrome?”

In this thesis there are four managerial and four situational factors summarized from theory, of which is expected to be of influence on the emergence of the survivor syndrome. This research is focused on gaining a better understanding on these four managerial and four situational factors. Besides that, this research is meant to identify other factors that influence the emergence of the survivor syndrome.

Literature review

As mentioned in the introduction, this research will focus on the factors that have a positive or negative effect on the emergence of the survivor syndrome, and how they influence the behavior and attitudes of survivors. This section starts off with clarifying the survivor syndrome. After that, existing theories on management factors and situational factors that affect the emergence of this syndrome will be described.

The Survivor Syndrome

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Wood (2009) states that survivors go through four stages after downsizing. Firstly survivors feel relieved that they can stay in the organization. After that, survivors feel guilty and they start asking themselves whether they really deserved to keep their job. Thirdly, the feeling of envy comes up and survivors wished they had left the organization. Lastly, they feel resentment, where survivors are sick of doing all the extra work for the same pay and see the organization ‗going down‘.

Managerial factors impacting the emergence of the survivor syndrome

―Management is a set of processes that can keep a complicated system of people and technology running smoothly‖ (Kotter, 1996: 25). A firm‘s success after downsizing is depending on the reactions of the survivors, and therefore effective management of these survivors is critical (Travaglione & Cross, 2006). Several authors mention that effective management of a downsizing can decrease the negative effects on retained employees (Travaglione & Cross, 2006). Baruch and Hind (1999) argue that the survivor syndrome could be prevented by focusing on three ‗managerial aspects‘, namely understanding the need for change, the psychological contract, and the use of best practice. An important factor that Sahdev (2004) adds to this is organizational justice. These four factors are described below.

Promoting the understanding of the need for change

First of all, individuals in the organization must understand the need for change (Baruch and Hind, 1999). According to Niehoff et al. (2001) it should be clearly explained to employees why downsizing is necessary. Kotter (1995) describes in the first step of his ‗eight step model for change‘ that a sense of urgency needs to be created with the aim of employees understanding the need for change. The reason why this is important according to Kotter (1995) is because if people cannot see the need to change, they will not change. Kanter et al. (1992: p.383) mention the same step as Kotter (create a sense of urgency) in her ‗Ten commandments for executing change‘, where this also originates with creating the need for change. Kotter argues that his first phase is not very easy, and that over 50% of the companies fail in this phase. Wood (2009: p.16) mentions that survivors should be re-engaged, and they should be showed that even though the process is painful, ‗the changes ultimately will make the business stronger, and jobs more secure and rewarding‘. Managers should be able to communicate consistently and openly about the changes in such a way that it will enable them to empathize with and address survivors‘ concerns (Wood, 2009). Therefore, the organization or the change leader has to invest in promoting the understanding of the need for change; otherwise the survivor syndrome will be triggered.

Paying attention to the psychological contract

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print of the employment contract, of what the employer gives, and what employees give in return‖ (Baruch, & Hind, 1999: p.299). Another way to describe it is ―the sum of the implicit and explicit agreements we believe we have with our organization‖, where it includes organizational norms, rights, rewards, and obligations (Cawsey et al., 2012: p. 223). Ciancio (2000) argues that the destruction of the psychological contract is the start of the survivor syndrome. He describes the psychological contract as ‗the assumptions that the employee makes based on his employer‘s recruitment and subsequent behaviors‘, where the assumptions include job security, trust, promotional opportunity, fairness, loyalty, respect, and appreciation. The psychological contract is unique in the way that it is informal, subjective, voluntary, and evolves with time (Hilltrop, 1995). Herriot et al. (1997) add to this that it is open to exploitation and it can undue generosity. Downsizing violates the psychological contract, where it affects employees more than the employer since employees are unable to influence changes at the macro level and changes in the contract are made on the side of the organization (Sahdev, 2004). These changes in the psychological contract could lead to feelings of betrayal and unfairness, which can lead to mistrust and anger (Ciancio, 2000). Cawsey et al. (2012: p. 223) add to this that a loss of trust, fear, resentment, and anger is created, if sense of security and control are threatened by changes. The psychological contract is interrelated with organizational culture, where they influence each other and should be in line with each other (Cawsey et al., 2012: p. 223; Baruch & Hind, 1999).

Baruch and Hind (1999) state that the old psychological contract contains values such as stability, paternalism, security, jobs for life, high trust, and loyalty, whereas the psychological contract after downsizing should include offering high pay, flexibility, the opportunity for life-long learning, and reward for performance, since the employee has to offer long working hours, provide broader skills, tolerate change and ambiguity, and they assume added responsibility (Sahdev, 2007; Herriot & Pemberton, 1995). However, a note should be made on this argument. Where ‗jobs for life‘ was an important part of the psychological contract a few decades ago, this has shifted overtime to a commitment to and investment in human assets and provision of interesting jobs. In case of a downsizing, this enables the ability and experience to find a new job more easily (Baruch, 1999). According to Baruch & Hind (1999) the organization should create a new psychological contract to make the new organizational structure more effective. A downsizing will destruct the psychological contract which is seen as the start of the survivor syndrome. Therefore not making deliberate changes to the psychological contract, gives rise to the survivor syndrome.

Optimizing the downsizing practice

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tried all alternative options. These alternatives include reducing or stopping recruitment for a limited period, early retirement, job-sharing, selling off a part of the company, internal cost-cutting exercises, and voluntary downsizing.

Organizational justice

Another way of management that is provided in literature is that all employees should be treated with dignity and fairness (Niehoff et al., 2001). Travaglione and Cross (2006: p.10) argue that managers should realize that survivors observe how victims of layoffs are treated. Brockner & Greenberg (1990: p.46) add to this that during a lay-off process, ―survivors are likely to evaluate the fairness of the organization‘s actions‖. Sahdev (2004) distinguishes organizational justice into three elements which are important when an organization is going to downsize, namely distributive justice, procedural justice, and interactional justice.

According to Homans (1961) distributive justice includes how people make decisions about the distribution of resources, predominantly in the context of scarcity. During a downsizing, organizational and individual principles could conflict with each other, where the organization‘s perspective is biased towards efficiency and the individual‘s perspective towards the principles and rules that are commonly used in the organization, also known as the guiding principle (Sahdev, 2004). Thus, managers should create correspondence between organizational and individual principles, otherwise the survivor syndrome could emerge.

Procedural justice is about the processes that are used to come to decisions for allocating scarce resources (Sahdev, 2004). Survivors‘ perception of fairness during downsizing is affected by the used procedures for decision making about the downsizing selection (Brockner, & Greenberg, 1990). Sahdev (2004) argues that this is mainly about agreements stemming from consultation with employee representative bodies. If these agreements are not perceived as fair by survivors, the survivor syndrome could emerge.

Interactional justice comprises the way information is presented to employees (Sahdev, 2004). Survivors‘ perception of fairness of the downsizing is influenced by information concerning why certain selection decisions were made. Negative reactions could be largely reduced, by offering explanations. Not properly explaining decisions or informing survivors will give rise to the emergence of the survivor syndrome.

Situational factors impacting the emergence of the survivor syndrome

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Impact of economic circumstances on the emergence of the survivor syndrome

The economic downturn could be seen as a ‗fertile ground‘ of the emergence of the survivor syndrome. Luan et al. (2012: p. 1521) describe an economic downturn as ―a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP growth, real personal income, employment, industrial production, and wholesale-retail sales‖. Currently we are facing a global economic downturn which was caused by the ‗global financial tsunami‘ that started in 2007 (Luan et al., 2012: p. 1521). According to Heery and Salmon (2000: 57) this leads to employees looking for stability in their work environment which causes employees to stay in their current job rather than looking for new opportunities. Contrary to that, an economic downturn often leads to downsizing in organizations in order to respond to environmental uncertainty (Davis et al., 2003). Therefore, in times of economic uncertainty the risks of losing your job will increase since finding another job becomes more difficult. As job uncertainty is one of the symptoms that come with the survivor syndrome, an economic downturn fertilizes that syndrome.

Impact of organizational culture on the emergence of the survivor syndrome

Organizational culture could also influence the emergence of the survivor syndrome. As mentioned earlier in this literature review, organizational culture is interrelated with the psychological contract. Burnes (2009: p.600) describes organizational culture as the collection of basic assumptions, norms, values and artifacts that influence and are shared by the behavior of members in an organization. He also states that if proposed changes are not aligned with cultural traditions and biases, it will be very difficult to embed these changes in the organization. A culture that includes continuous incremental change makes it easier for employees to accept transformational/large scale change (Beer and Nohria 2000: 227). According to Clarke (1994: 94) a culture for change needs to be created, which means that change has to be part of the way things are done in an organization and cannot be ―bolted on as an extra‖. Therefore, it is suggested in this research that an organization without a ‗culture for change‘ gives rise to the emergence of the survivor syndrome.

Employee characteristics and the emergence of the survivor syndrome

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less attractive for employers. The first cause is the higher pay for older employees. Secondly, older employees are less proactive in marketing themselves in a greater range of occupations, where older workers need to upgrade their skills and should be more willing to abandon skills and occupations that are obsolete (Wood et al, 2008). A Third factor is employers having imperfect information about the skills and abilities of older workers; so consequently they rely on stereotypes in decision-making. Therefore it is suggested in this research that older employees experience more job uncertainty than younger employees which is seen as a symptom of the survivor syndrome, and therefore being older than 45 years will fertilize that syndrome.

In addition, employment duration also affects the survivor syndrome, where this includes the length of jobs (Travaglione & Cross, 2007; Hall, 1978)). Travaglione and Cross (2007) mention in their research that the average person had been working within the organization for 19 years, which made it more difficult to leave the organization. Where Gramm & Schnell (2013) argue that long-term employment leads to higher levels of commitment among employees, short-term employment contracts lead to distrust among newly hired workers and encourages shirking (Berninghaus, Bleich, & Gueth, 2013). Based on this, it is suggested that long-term employment leads to higher levels of commitment, and therefore increases the survivor syndrome.

Methodology

In this chapter, first the research approach will be explained. After that, the organization-case and the respondents are described. Lastly, the data collection method and the data analysis method are clarified.

Research approach

In order to investigate how managerial and situational factors positively and negatively influence the emergence of the survivor syndrome, chosen was to perform an explorative case study. A double case study was done to provide an in-depth analysis of the downsizing.

The case-organization and respondents

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Within this organization, two different downsizes within two different advice groups were analyzed to answer the research question. They were analyzed as two separate cases. In both cases bad organizational results were the cause of the downsizing and a similar downsizing process was used. In this process, the planning of the downsizing was initiated and done by the business line director and the head advice group (HAG). This plan was presented to the Works Council and after approval of them it was presented by e-mail towards the employees within these advice groups. The information in the e-mail was then complemented by face-to-face communication between the HAG and the employees. That same evening the employees who were laid off received a telephone call at home from the HAG to inform them. The next day all layoffs had a meeting with the HAG and an employee from the HR-department to discuss the consequences and the options they had. All layoffs received a severance pay and the organization gave them the option to let an independent legal expert check the layoff contract.

In case one, interviews were held with seven employees and the change leader/HAG. The downsizing took place in November 2013, five months before the interviews were held. The layoff included 8 employees, and one employee was replaced within the organization. Besides that, two advice groups, working from two different offices were merged into one advice group. This meant a fall out of one HAG and an increase in span of control for the remaining HAG. No changes in employee responsibility occurred. The interviewees were randomly picked by the researcher.

In case two, interviews were held with 7 employees, their current team leader, and the change leader/HAG. The downsizing took place in February 2012, 2 years before the interviews were held. This was one year before the merger that occurred in 2013. However, this merge had no direct effect of their advice group. The layoff included 8 employees. One of the employees who was laid off was hired again 3 months later. No changes in organizational structure or employee responsibilities occurred because of the downsizing. In this case, employees had the ability to sign up as a respondent for this research. The first 7 employees who signed in were interviewed.

Data collection

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influence of the factor on the emergence of the survivor syndrome. The last set of the interview strategy contained all pre-set factors. Interviewees were asked whether these factors influenced the outcome and how. For all factors employees were asked again to give an example. Every interview took approximately one hour.

After conducting the interviews, a feedback session was arranged in both cases, where not significant factors were discussed in a group discussion in order to get more clarity on them. In these group discussions the factors were brought up in the group and questions were asked if this influenced the outcome and how. The discussion took approximately ten minutes per factor.

Data analysis

The data was analyzed based on two coding schemes which can be found in table 1 and table 2, where table 1 includes the pre-set codes and table 2 the inductive codes that were discovered in this study. The coding scheme reduced large amounts of data into a smaller number of analytic units, where this helped the fieldwork to be more focused and made it easier to compare the different data by surfacing common themes. First the coding scheme of the pre-set codes was developed. This was based on the factors mentioned in the theory section. The pre-set codes include promoting the understanding of the need for change, paying attention to the psychological contract, optimizing the downsizing practice, organizational justice, economic circumstances, organizational culture, employee age and employment duration. Secondly, inductive codes were developed. These codes include factors that were brought up in the interviews, as a result of the experiences of the interviewees. The relations between all codes are displayed in a code map which is can be found in figure 1. After the coding schemes were developed, the coding of the interviews started. While reading these interviews, inductive codes were gathered by writing down all other influencing factors mentioned in the interviews. Two transcripts were separately coded by the researcher and a fellow researcher and were compared with each other afterwards, where differences were discussed. This led to the final coding of these two transcripts, and set the basis for the way of coding for the other transcripts that were only coded by the first researcher. After all transcripts were coded, the coding schemes were fine-tuned and all transcripts were coded for the second time, where adjustments were made in the first coded transcripts.

Validity and reliability

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Results

In this section, the results of both case studies are presented per factor. This is displayed in two tables to give a clear overview of how each factor influences the emergence of the survivor syndrome. These outcomes are also graphically displayed in figure 1. Besides that, the results of both cases are compared with each other, remarkable lessons and notes on the outcomes are described. This will be done by explaining which characteristics of the survivor syndrome - which are described in the theory section - are influenced.

Pre-set factors

As can be seen in table one, the interview outcomes were largely in accordance with the expectations about the impact of the four managerial and four situational factors that are discussed in the theory section on the emergence of the survivor syndrome.

Pre-set managerial factors

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15 Pre-set situational factors

Contrary to the managerial factors, not all situational factors were acknowledged as influencing the emergence of the survivor syndrome. Firstly, employment duration was in both cases not seen as an influencing factor. Some interviewees mentioned that this was because the several mergers they had experienced could be seen as working for a new organization. Besides that, layoffs receive a severance pay which is positively related to employment duration. Interviewees saw this as a make up for getting laid off. Secondly, the organizational culture was only seen as an influencing factor in the second case. Interviewees saw the culture as distant and impersonal, where these negative aspects were strengthened by the downsizing. This led to a lower moral and a decreasing organizational commitment. Economic circumstances and employee age were seen as influencing the emergence of the survivor syndrome. At the time of the downsizing, an economic crisis was happening which both caused the downsizing as well as a decreasing demand in the labor market, which increased uncertainty and demoralization among interviewees. Employee age was also seen as an influencing factor, where employees in their 50s experience more fear due to perceived lower chances at the labor market. However, this factor is interrelated with the effects of employees‘ financial responsibilities. This factor will be elaborated in the induced codes section.

Induced codes

The interviews also revealed a number of other impactful factors which are managerial factors that include change leader‘s attitudes and behavior, duration of the downsizing process, team building/celebration of successes, vacation after downsizing, and new organizational changes; and situational factors which include organizational results, previous experience with downsizing, personality traits, employees‘ financial responsibilities, employees‘ level of knowledge, and new job successes of layoffs.

Induced managerial factors

An induced managerial factor that was of great influence in both cases is the duration of the downsizing process. This is defined as the period from the downsizing announcement until the separation of the layoffs from the organization. In this research the downsizing process took less than a month, which was experienced by interviewees as very pleasant. The reason for this is that the uncertainty, fear, anxiety, and frustration that emerge increase when the period between the downsizing announcement and the announcement of layoffs increases. This also decreases organizational commitment. Besides that, interviewees mentioned that walking into layoffs on the work floor keeps you in the negative spiral of the downsizing and brings up old pain which leads to frustration and anger.

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the change leader was perceived by interviewees to increase motivation and organizational commitment.

Team building to celebrate the organizational successes after the downsizing was described as a factor that decreases the emergence of the survivor syndrome. Team building in this research is defined as collectively joining non-work-related activities to celebrate the achieved successes of the business line and the organization. Interviewees mentioned that this increased their motivation and organizational commitment.

In case one, survivors had a collective vacation of two weeks that occurred three weeks after all layoffs had left the organization. This gave them the opportunity to get closure on the old situation which included the downsizing and layoffs leaving the organization, and to make a fresh start after the vacation. A vacation decreases demoralization, frustration and anger.

In case two new organizational changes had an influence on the survivors. Interviewees mentioned that after the downsizing, several organizational changes were made that were perceived as having a negative impact on survivors. An example given was the elimination of the so called ‗old farts days‘. New organizational changes that had a negative impact on survivors were seen as a strengthening factor of characteristics of the survivor syndrome such as a decreasing organizational commitment, frustration, anger, and demoralization.

Changes happening after the downsizing that affect survivors in a negative way are forced from the top upon them and therefore they feel powerless and survivors experience it as not pleasant. The organization is cutting back and employees feel that they are the ones who are victimized. Working conditions deteriorated and a merge which doubled the size of the organization were the two most important changes. Where the merge itself is seen as a positive change, the side effects that it brings along are perceived as negative. This triggers demoralization and a large decrease in organizational commitment.

Induced situational factors

Two of the induced situational factors were in the interviews mentioned as having a direct influence on the emergence of the survivor syndrome. These two factors include organizational results and personality traits.

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the emergence of the survivor syndrome is a research on its own. Therefore details on this factor are not discussed in this research.

Other induced situational factors were only of importance when survivors perceived a threat for more layoffs or even another downsizing. These factors include employees‘ financial responsibilities, previous experience with downsizing, employees‘ level of knowledge, and awareness of job success of layoffs. These factors are only of influence after the downsizing took place.

As mentioned earlier, employees‘ financial responsibilities are interrelated with age. Employees‘ financial responsibilities are here defined as the extent to which one is able to pay the cost that one is responsible for in his personal live. These include e.g. basic needs for the employee and his family, a mortgage, study of their children, where these responsibilities increase when being the bread winner or when costs increase. If an employees‘ responsibility is high, fear and insecurity will increase.

The effects of previous experience with downsizing differed within the two case studies. Previous experience with downsizing is defined as the involvement in one or more downsizing(s) before the current downsizing. In case one, employees mentioned that when fearing for another downsizing, they knew how little influence they have on the outcome if it occurs and therefore they described to be more calm after having experienced a downsizing. Contrary to that, employees in case two described that the previous experience on a downsizing within the same organization that happened two years before increased the feelings of frustration, uncertainty, mistrust towards management, and losing organizational commitment, as it was perceived by interviewees that the organization is not committed to its employees. This way, previous experience with downsizing was in case one only of influence when fearing another downsizing, whereas in case two, it was of direct influence on the emergence of the survivor syndrome.

Employees‘ level of knowledge is an influencing factor when fearing for more layoffs that was only mentioned in case two. In this research it is defined as the level of one‘s abilities and skills compared to competitive workers in their field and region. Interviewees that perceived their own level of knowledge to be high, experienced less fear and anxiety as another downsizing was in site. This increased perceived chances in the labor market.

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uency to case:

NFC Understanding the need for

change: Lack of understanding the need for change gives rise to negative emotional and attitudinal reactions.

Yes of course it changes the organizational image from my point of view. You basically get the feeling that you‟re more or less just a number in the organization. If your yield is too low, they will get rid of you ruthlessly. That‟s the feeling I had in the beginning. That feeling is decreasing now, but in that period you do feel a little like that. Especially when you see that people get fired and a month later, temporary staff is hired, yeah apparently they are cheaper and flexible and that is what the organization is aiming for. The social aspect has been put to the back.

Not understanding the need for change creates the idea by survivors that the organization randomly picks employees who are laid off. Moreover, survivors feel that the organization does not care about its employees and lays off employees very easily, which causes a decrease in organizational commitment. It leads to the feeling that the personal aspect has been put to the back. In the employee‘s view, the organization sees employees as easy replaceable, where efficiency overrules the employee‘s wellbeing. This creates a growing mistrust towards management.

13 Case 1 & case 2

PSC Psychological contract: An

emerging change in the psychological contract after a downsizing increases the negative attitudes and behavior.

Apparently there are people who worked for 27 years that, I don‟t know if they were busy with work 100%, but who really put their effort in the organization. And now they are just put aside. I am very loyal as a person, but you start questioning whether the organization.. I have a heart for the organization, but the organization is hard to

The organization did not intentionally change the psychological contract. Most employees however felt that the psychological contract was abused. Insecurity increased and loyalty towards the organization and risk taking of survivors decreased. This caused feelings of anger and betrayal among employees.

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BEP Optimizing downsizing process: Showing to employees that downsizing was the last resort, and that the organization had considered or tried all alternative options decreases negative attitudes and behavior.

Yes I think so. Because that way you don‟t have so much the idea that it is trampling all over the employees. It gives you the idea that they did what they could and they‟ve considered their options. And well, in the end you have to do something.

When trying or considering other options than a downsizing creates the idea that the organization cares about its employees and therefore organizational commitment remains stable, the feeling of mistrust towards management is avoided, and anxiety is reduced. In this case, many interviewees mentioned that they had no information on whether the organization used best practice and therefore did not know whether it would help.

4 Case 1 & case 2

OJ Organizational justice: When all employees are treated with dignity and fairness, negative attitudes and behavior remain low.

See Distributive justice, Procedural justice, and Interactional justice.

11 Case 1 & case 2

Distributive justice: When

decisions about the distribution of resources are perceived to be fair, negative attitudes and behavior are lower than when perceived as unfair.

Well, it all happens on that particular night. And a day later all the layoffs come to the office, or not. In general it is all well-organized. The aftercare too. How those people move on and the guidance they get. That all happens well. … You become calmer because of that. Then you know that if it would ever happen to you, the organization

Survivors perceived the aftercare of layoffs as very decent. All layoffs received a severance pay and the organization gave them the opportunity to turn to an independent legal consultant. This was perceived as fair by survivors and made them calmer, knowing that they will be treated fair when/if getting laid off by the organization.

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Look, people get laid off. And when getting laid off, you receive a severance pay. And that severance pay is often so high, that you could have kept him in the organization for a few years. And still they make the decision to say goodbye. So yeah, it‟s on another level of thinking then we do.

However, employees questioned whether some layoffs where financially good decisions for the organization. All layoffs received a severance pay, where the amount of it depends on the length of jobs. Layoffs that worked for over 25 years for the organization received a severance pay just as much as 2 year-salaries, where that money could be used for many other things to solve the problem. Therefore, procedures perceived as not fair give rise to cynicism, insecurity and a decreasing organizational commitment.

Procedural justice: When Used procedures for decision making about the downsizing selection are perceived as fair, negative attitudes and behavior are lower than when perceived as unfair.

Beforehand it [motivation] was not that bad. But especially afterwards when you see that people get laid off, you are more demotivated. That is because you have the feeling that you are a number in the organization and by pulling a number from the lottery you are laid off or not, or at least, that‟s the feeling you have. And on one side it makes me a little angry and therefore also creates some demotivation. … This feeling gets translated into apathy. Not with respect

The way a downsizing is organized in The Netherlands is partly imposed by law; proportionality principle (afspiegelingsbeginsel). This law states that employers are not allowed to select employees based on quality or organizational cost and therefore select them per age group and function. However there is some space for decision-making left for organizations in this principle. It is not clear to survivors how the organization made decisions in this free space within the principle and therefore they

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to work content but on how you look towards the organization.

have no clue whether they could perceive it as fair or not. Most employees said that they understand that the organization does not communicate about that.

Interactional justice: When the way information is presented to employees is perceived as fair, negative attitudes and behavior are lower than when perceived as unfair.

Well for example, you get the feeling that the organization becomes harder. You get more and more employees and yeah look, eventually you‟re a very large organization and you sort of become a number, actually you already are. But yeah, I personally think that a downsizing or something.. The way it is done now is impersonal by creating the situation like „drop the bomb and run‟. Like throw the e-mail over the fence and that‟s it.

Despite the downsizing and other savings, try to keep having attention for employees, keep it more personal. That would help the organization at least to keep people close and keep people within the organization. In the hallway I hear pretty often like „it‟s because of the economic bad times, but otherwise I would have looked for another

Communication about the downsizing was often done via e-mail, complemented by some oral communication of the change leader. Employees preferred a more personal way of communication, also from top management. This was especially of importance with the first announcement about the downsizing. By announcing the downsizing in writing, employees organizational commitment decreases. This way of communication was perceived as the organization not caring about its personnel and cowardice of top management. Survivors also preferred to hear who were laid off as soon as possible. Now this was done a few days later and awkward situations between employees arose because of not knowing from each other whether they were laid off or not. Moreover employees started developing their own ‗layoffs-list‘ which increased rumors and

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job‟. As soon as the market gets better, there‟s a danger that people indeed will look for a new job. That‟s what you hear around you.

gossiping in the workplace. All of this, increased mistrust towards management, anger and frustration.

ECO Economic Downturn in Labor

market: Bad economic times make it more difficult to find a new job, which therefore causes negative attitudes and behaviors among survivors when fearing another downsizing.

A few years ago, I got some job offers of other companies. Well in that case it is not so bad if they tell you „you‟re fired‟. But the last few years of course. Well the economy is getting better but still it was, you start to worry a bit more like can I find a job any time soon? And what kind of work is it? And is it going to be for a long period?

The economic bad times make it more difficult for employees to find another job. Therefore job uncertainty and the negative consequences of losing your job increase, which subsequently increases the level of fear that employees have for a possible downsizing.

13 Case 1 & case 2

CULT Organizational Culture: An organizational culture that is person oriented lowers the negative attitudes and behavior.

Well, the culture of the organization is I think conservative and to some extend distant. What I already said, being a number in the organization. But I think this cannot change. It will be like that in every large organization.

The size of the organization has increased over the past years, which was mainly due to several merges and takeovers that took place, which increased the number of employees extremely. This was a cause of employees feeling like they are a number in the organization. The downsizing increased this feeling of being a number and therefore decreased organizational commitment. Besides that, society is changing to more flexible jobs, which also changes organizational culture.

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23 AGE Age of employee: Survivors in the

age of 50+ experience more fear of losing their job, which increases the survivor syndrome.

When you‟re 25 you maybe care less because you think, I‟ll go work somewhere else. The chance of finding a new job is much higher then, then when you are 50 years old I think. … And you notice that when a downsizing is coming, things are happening and people choose to leave the organization themselves. They stopped burying their heads in the sand and that were particularly the younger employees. … And the chance of getting the same salary somewhere else is much higher when you‟re younger.

Different responses by people of a different age are noticed. This is not only due to the fear of employees above 50 to see troubles for finding a new job. But also because employees grow in salary over time in their current job, which makes it financially less beneficial to switch jobs. Another reason mentioned for this phenomenon is that the society is changing; where the older employees grew up in a society where lifelong employment was common. This has slowly shifted to more flexibility in a working career. This flexibility led to a decreasing organizational commitment, as the organization does not commit to its employees anymore. Also fear among employees increases. Age is however interrelated with financial home situation (see table two). When older, it is more difficult to find a new job, but when younger employees could have more financial responsibilities such as a mortgage, children, or being the bread winner.

9 Case 1 & case 2

TIME Duration of jobs: Negative attitudes and behavior increases

Yes, and that‟s what you heard. If they fire me, that‟s fine. Then I‟ll get a big bag of

Employees state that the duration of jobs is not affecting behavior and attitudes of survivors.

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24 when time working for an

organization increases.

money and then I can manage things for a while.

When having a permanent contract employees felt safe in the organization, but in a downsizing this does not offer any certainty. The pain of getting laid off after working very long for the organization is moderated or even avoided by severance pay. Employees experience this as some kind of assurance. Some interviewed survivors even mentioned that when getting laid off and receiving ‗a big bag of money‘, they could even benefit from it when finding a new job relatively fast.

Table 2: Coding scheme and corresponding results of induced codes

Code Code description Examples from interviews How does it influence the survivor syndrome Freq-uency

Applied to case:

RES Organizational results: An

increase in the amount of work that all employees have and/or an increase in financial performance of the business line/organization give rise to positive attitudes and behavior.

The results remained bad in the organization. There were still hard times. And what you saw was that many experienced employees chose to leave the organization. They thought, we get less and less, so let‟s go somewhere else. So besides the downsizing, employee turnover increases.

Organizational results were the cause of the downsizing and therefore seen by survivors as a measurement tool for downsizing. When results are good, the chance of another downsizing decreases and thus more job certainty is created. Good results motivate survivors and give them more faith in the organization.

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At first people become very careful and yes it takes time for people to get more faith in the organization. Well, what eventually increases motivation very much is seeing organizational successes. And successes are of course the numbers, but also the work and the projects that we acquire.

C-L Change leader’s actions,

attitude and behavior: A change leader that has good leadership skills, sees the need for a major change himself, re-engages survivors (by showing that process is painful, but will make the business stronger, and jobs more rewarding and secure), and communicates consistently and openly about changes, will decrease the negative behavior and attitudes of survivors.

I think that he [change leader], he increased motivation among employees and kept them more positive. It is difficult to say how he motivated us. It‟s also a feeling. It‟s also because of his attitude, how he sees things; always look on the bright side of life. … His appearance, how he communicate things, it‟s open and for that matter positive and optimistic. That helps.

Organizational commitment decreased because of downsizing. How the change leader interacts with the survivors helps to decrease the loss of organizational commitment among them and/or to re-engage survivors to the organization again. A positive attitude and open communication of the change leader counter the loss of organizational commitment and increases motivation among survivors.

8 Case 1 & case 2

PEX¹ Previous experience with downsizing: Having survived previous downsizing has a

I think you are better prepared. You can feel better whether it‟s going to be you or not and you can switch more easily to deal with it. So

Affects employee behavior and attitude before and during the downsizing. So when being afraid for another downsizing, previous

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26 positive effect on behavior and

attitude.

you can set out lines to external clients before the downsizing takes place like, „well I don‟t know what my future looks like, but do you perhaps have a vacancy in your organization?

experience with downsizing that employees have survived, make them less concerned and care less. Employees become calmer.

PEX² Previous experience with downsizing

Well, when you have experienced downsizing a few times; the first time it has more impact than the second and third time. It‟s for your own good not to stress about it; „can I keep my job or..‟ So when it happens the second and third time, you think „whatever, It‟s going to be fine. You‟ll see what happens. But the impact of the downsizing on your feelings remains the same. Because you know that colleagues where you‟ve worked with 5 days a week, well, they leave the organization. For those who leave, it is not pleasant. So yeah the impact remains the same in terms of feelings.

Two downsizings took place within two year where this empowered the idea that the organization lays off employees very easily, which decreases organizational commitment among survivors, and increased the feelings of frustration, uncertainty, and mistrust towards management.

Case 2

DDP Duration of downsizing

process: A short downsizing process decreases the negative behavior and attitudes of

Because as soon as those people [layoffs] walk on your floor or in the building you talk about it. So every time, old pain comes up again. So that creates a negative spiral every time again.

A fast downsizing process decreases negative feelings that come along with the downsizing such as ‗old pain‘ coming up and it helps to get rid of a negative spiral. Besides that, they only

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survivors. … and to break that through in that way [a fast downsizing process], is not enjoyable, but it is clear and I think good as well.

face uncertainty, anger, fear and demotivation for a short period of time which means stress for a short period, which was preferred by interviewed employees.

PER Personal traits: Differences in habitual patterns of behavior, thought, and emotion of individuals give rise to different responses towards a downsizing and influence how one experiences a downsizing.

You can complain „crappy organization and it‟s all bad‟ or you can think like, does this create any advantages for me? Well, and then you could see for yourself what is happening around you and what do I want for myself?

I don‟t really like changes. That has to do with that loyalty. I prefer to know beforehand what is going to happen, so that infringes my personal.. You know, at once there is a big change.

Personal traits were seen as an influencing factor on the attitudes and behaviors of survivors after a downsizing. Some experienced the downsizing as having a big impact on their feelings towards the organization and had the need to talk often about it with colleagues, while others just continued doing their work without talking too much about it. Besides that, some employees experienced the downsizing as a very large change that had a lot of impact on them, while others saw it as something that had only little impact on them.

10 Case 1 & case 2

HOM Employees’ financial

respon-sibilities: Higher financial responsibilities in one‘s personal life increase negative behavior and attitudes.

I sometimes say, don‟t become too dependent on your employer. If you have a lot of debts in your home situation en you are really dependent on your job, yes then it has a big impact. But when you live responsible and you save some money and don‟t live too expensive, and then it happens to you, then you can deal

When being afraid for another downsizing coming up, one‘s financial home situation has an impact on the experienced fear of survivors. Having high financial responsibilities increases fear, since the consequences of losing your job are high. Being the breadwinner of the family, having children (that go to university), having a

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with it in a different way. So that also influences your reaction on such a situation.

mortgage are examples of factors that increase fear, and therefore increase the survivor syndrome.

TEA M

Team building/celebrating

successes: Organizational

investments in activities where employees can get to know each other decreases the negative behavior and attitudes of survivors. Where teambuilding could be used to celebrate successes.

Well initially it [meeting for drinks with colleagues] didn‟t happen anymore. And also business parties didn‟t happen anymore because the organization doesn‟t want to spend money on that. That sort of decreased the cooperation with colleagues and it also decreased the fun employees have. I personally think it‟s important to know your colleagues personally and doing nice activities with each other creates team spirit. By not doing those activities anymore, people choose more for themselves or think „why should I do something fun with my colleagues?‟. … But if you also economize on things like that [parties and drinks with colleagues], that made my view on the organization not blurred but more negative.

It‟s also the little things that can make it [get faith in the future] happen. Throw in a pack of

Team building is seen as a means to higher motivation, better cooperation, and employees enjoying their work more. Since the organization benefits from team building among employees, employees expect some investments of the organization in such activities. This gives employees the idea that the organization cares about its employees.

Interviewees mentioned that team building could also be linked to the celebration of successes where this could lead to higher organizational commitment. Mentioned in the discussion was that celebration of success should not only happen within the department, but also with other departments in the building, since they were also supporting the survivors during the difficult times of downsizing. This helps to increase organizational commitment to not only the business line but to the entire organization.

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cards you know and do something fun. It‟s very simple but it works, I know for sure. And we‟re going to do some activities again and we‟re going to drink some beers with each other. I think it is very important to celebrate the successes, and you can do that by doing such things.

HLK Employee’s Level of

know-ledge: Having a high level of knowledge compared to others in the work field gives rise to positive behavior and attitudes after a downsizing.

But I also look at myself. My knowledge is broad. I‟ve also been seconded to another organization as an engineer, so I know how things go. And therefore I know what they think of me. So I think, if I get fired, I think things will end well, because of the knowledge you gained, what you know. So yeah, then you know that you‟ll find another job very soon.

Having a high level of knowledge compared to others in the work field of survivors increases the opportunities for getting a new job after a layoff. Therefore survivors feel more secure. When getting laid off, the chance of finding a new job is higher. Knowing that organizations respect your skills helps to decrease the fear.

3 + discus sion

Case 2

JSL Job success of layoffs: Seeing job successes of layoffs decreases negative emotional and attitudinal reactions after a downsizing.

Some layoffs were already working for the organization for 25 years. It felt for them like they were married with the organization. They first got a hard punch because they were laid off, but eventually they started doing something else. And what I hear is that they are happy again that they are doing something else. And some are even happier with their new

Hearing about the successes of layoffs after the downsizing, motivates survivors and decreases their negative attitudes towards the downsizing. Survivors see that a downsizing could also bring new opportunities for employees.

5 + discus sions

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place. So yeah, based on that, a downsizing can also have a positive result. And to see that, it gives me more strength. … And that changes your view towards a downsizing.

It mainly helps to hear stories of those who find their way again. That‟s I think very motivating for me.

VAC

Vacation: Having a vacation a few weeks after the downsizing process was finished (when layoffs have left the organization) decreases negative behavior and attitudes of survivors.

In January we will make a fresh start, everybody has been on vacation. And yeah, everybody just needed a vacation you know. People looked quenched and didn‟t feel like doing their work anymore. And then it is nice to have two weeks off. … It gives you the opportunity to be busy with other things.

A vacation gave survivors the opportunity to take a break from the downsizing and all the negative feelings that came along with it. After the vacation a fresh start could be made and survivors could focus on the future rather than getting stuck in the past. It gives them the possibility to gain closure of the old situation and to make a new start. This decreases demoralization, frustration and anger.

3 + ackno wledg ed in discus sion Case 1

NNC New organizational changes:

Organizational changes that took place shortly after the downsizing that affect survivors in a negative way, have a negative influence on survivors‘

Many things are initiated from the top. That includes not only downsizing but also working conditions, it includes everything. Things are forced upon us. For example the so called „old farts days‟ which are abolished, they are just abolished! Yes the works council approved on

Changes happening after the downsizing that affect survivors in a negative way are forced from the top upon them and therefore they feel powerless and survivors experience it as not pleasant. The organization is cutting back and employees feel that they are the ones who are

5 + discus sion

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behavior and attitudes. this, but we don‟t have contact about that with the works council. Nowadays more working conditions have been cut back, and of course because the business wasn‟t doing very well, that‟s very logical. So yeah it creates the idea that everything is initiated from the top and it is just happening to you, and you have to take it as it is.

You want to keep looking to the future and stay positive. At least that is what I try. But on the other side it leaves its marks. So after every negative message you think „oh nice‟ [sarcastic]. … Many experienced employees chose to leave the organization. They thought „we get less and less, so let‟s go somewhere else‟. So besides the downsizing, employee turnover increases.

Look, in this sort of situations I don‟t look very positive at the organization of course. There is a lot of agitation and uncertainty. And the merge we are in now, so many systems don‟t

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In this section, first the research question and its sub-questions will be answered. After that, the theoretical and managerial implications of this research are presented. Lastly, limitations of this research are described.

The influence of managerial factors on the emergence of the survivor syndrome

Starting off with the managerial factors described in the theory section, promoting the understanding of the need for change should be done by clearly explaining to employees why downsizing is necessary (Niehoff et al., 2001). Comparing this with the results of this research agreed could be on this outcome. Not seeing the need for change leads to mistrust towards management, frustration and a decreasing organizational commitment among employees. However, in the results of this research is argued that promoting the understanding of the need for change should continue after the downsizing in order to avoid mistrust and frustration, and keep survivors committed to the organization. Therefore it is proposed that promoting the understanding of the need for change influences the emergence of the survivor syndrome.

Secondly, as described in the theory section, suggested is that attention should be paid to the psychological contract, which is also validated in this research. As in the case studies no attention was paid to managing changes in the psychological contract, survivors felt that their psychological contract was abused. The abusing of the psychological contract caused an increase of insecurity and a decrease in organizational commitment and risk taking. Besides that, it causes feelings of betrayal and anger among employees. Based on this, proposed is that the paying attention to the psychological contract influences the emergence of the survivor syndrome.

A third managerial factor that was pre-set in this research is optimizing the downsizing practice. As in both previous theory and the outcomes of this research is argued that there should be shown to employees that downsizing was the last resort and the organization had considered or tried all alternative options. If this is done, organizational commitment remains stable, the feeling of mistrust towards management is avoided, and anxiety remains to its minimum. Proposed on this factor is therefore that optimizing the downsizing process influences the emergence of the survivor syndrome.

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Next to the pre-set managerial factors, a total of 5 other managerial factors were found in this research. First of all the duration of the downsizing process should be as short as possible. The period from announcing the downsizing until the announcement of the layoffs should be as short as possible since this increases uncertainty, fear, anxiety and frustration among all employees involved and organizational commitment decreases. Also the following period until all layoffs have left the organization should last as short as possible. In this period, survivors remain hanging in the negative spiral that the downsizing has caused which means that recovering from these negative effects can only start after the entire downsizing process is ended. Therefore it is proposed that the duration of the downsizing process influences the emergence of the survivor syndrome.

Secondly the actions, attitude and behavior of the change leader resulted to be important for keeping survivors committed to the organization and to increase motivation among them. In order to do so, change leaders should use open communication and have a positive and a positive and optimistic attitude. For that reason the next proposition includes that actions, attitudes and behavior of the change leader influences the emergence of the survivor syndrome.

The third managerial factor that came to light in this research is team building with the survivors where organizational successes and successes in the business line should be celebrated in order to increase motivation and keep survivors committed to the organization or to re-engage them if organizational commitment among survivors was decreased. As a result, proposed is that team building with survivors influences the emergence of the survivor syndrome.

Having a collective vacation shortly after ending the downsizing process was only recognized in one of the cases. A reason for this could be that in the other case no collective vacation was planned after the downsizing. In the first case the vacation was used in two ways, namely to take a break from the negativity and as a mean to gain closure in order to make a fresh start afterwards. A vacation was seen as decreasing demoralization, frustration and anger. Therefore a vacation is seen as being of influence on the emergence of the survivor syndrome.

Similar to the previous factor, new organizational changes were also acknowledged in only one of the cases. In case two, several organizational changes were made which were perceived by survivors as influencing them negatively. This created the idea that the organization‘s commitment towards employees has decreased and in turn this leads to a decrease in organizational commitment among survivors. Besides that, it triggers demoralization. Based on this, proposed is that new organizational changes influence the emergence of the survivor syndrome.

MANAGERIAL AND OTHER FACTORS THAT POSITIVELY OR NEGATIVELY AFFECT THE EMERGENCE OF THE SURVIVOR SYNDROME: A case study in an engineering firm.

Business Administration – Change Management