An analysis of survivors' reactions to layoffs based on psychological theories of justice, organizational commitment, job insecurity, and corporate culture

This study examined the influence of layoffs on the work behaviors and attitudes of survivors (i.e. employees who remain with the company), using a model based on social and organizational psychology theories of justice, organizational commitment, job insecurity, and corporate culture. The model focuses on four factors that were hypothesized to influence survivors' reactions, namely, survivors' perceptions of the fairness of the layoff; prior attachment to their laid off coworkers; prior commitment to the organization; and feelings of job insecurity. The first three predictors were hypothesized to combine interactively to predict survivors' reactions. It was predicted that the violation of survivors' expectations, based on previous organizational cultural norms and societal practices (i.e. how other downsizing organizations are managing their layoffs) would affect their perceptions of fairness. Additionally, the violation of survivors' expectations and the degree of alternative job opportunities available to them were hypothesized to influence feelings of job insecurity. To test the model, a survey was administered to a sample of 150 employees from a financial services organization that had undergone layoffs. Multiple regression analyses were conducted to assess the predictiveness of the variables in the model on survivors' organizational commitment, job involvement, and turnover intention after the layoff.; The analyses generally supported the proposed model. More specifically, it was found that survivors' perceptions of fairness and prior attachment to the victims of the layoff were significant predictors of their reactions, particularly when they were previously highly committed to the company. Moreover, societal practices and violation of survivors' expectations were found to be significant influences on perceptions of fairness. Job insecurity was not found to be a predictor of survivor reactions, but rather another survivor reaction. Additionally, severity of the layoff, a variable not originally included in the model, was found to contribute significantly to the variance in survivors' reactions. Findings from this research can be used practically, to provide guidelines for managers to make more effective decisions in planning and managing layoffs, and theoretically, to broaden the realms of the social and psychological theories that underlie the model.