A recent survey of over 4,000 UK employees conducted by GfK NOP found that one in four were planning to leave their organisation within the next year.
The survey suggests these intentions are linked to the actions taken by the employers dealing with the effects of the recession. Continuing measures such as redundancies, recruitment freezes, pay freezes and restrictions on training have led to reduced morale and diminished job satisfaction.
In the public sector almost 40% of employees reported that morale was worse than the previous year.
Throughout the recession a lot of attention has been paid to the obvious victims — those who have suffered redundancy and job loss — but what about the survivors, the ones who have kept their jobs but may have suffered in other ways?
Joel Brockner (1992) borrowed the term ‘survivor syndrome’ from the realm of severe traumatic events, such as genocide and natural disasters and applied it to corporate restructuring and redundancies. It relates to the negative feelings and changes of behaviour demonstrated by those who have been left behind.
Various studies into the after-effects of restructuring on those who remain in the organisation have identified a number of potential impacts in areas such as reduced feelings of job security, reduced commitment to the organisation, increased turnover intentions, increased stress and reduced well-being or morale. However, the nature and severity of the impacts depend on the way in which the employer deals with the situation.
Breaking the psychological contract
In the wave of downsizing and restructuring that took place in the 1980s and 1990s many employees were shocked at being suddenly laid off. They had assumed that they had an unspoken mutual agreement with their employer that, in return for loyalty to the organisation, they would be rewarded with job security.
This implied bargain was called the ‘psychological contract’. It is a set of beliefs about what is a reasonable reward for your actions. The employees expected that certain behaviours on their part would be reciprocated by corresponding behaviours from their employers. They also assumed that the employers understood and agreed to the terms of this agreement without it ever being explicitly stated.
The terms and conditions of a psychological contract do not just cover continued employment. They may also include expectations about training, development, compensation or promotions.
Employers may reinforce these beliefs unintentionally through their words and actions. Similarly, employees may fall prey to confirmation bias — only paying attention to the words and actions of their employer that reinforce their initial expectations. Obviously, when an employer does something that significantly contravenes the assumed contract, this will break the employee’s self-delusion, resulting in disappointment, distrust, resentment and possibly embarrassment at being so gullible.
The employees who remain in an organisation after a restructuring may have had the same unrealistic expectations of their employer as the people who left. Having seen what happened to their ex-colleagues, their own psychological contracts may have been broken.
[As a bit of an aside, during the Advanced Guidance Skills course I was co-delivering last week, we focused on the process of contracting during a guidance or coaching discussion. Unless the agreement you build with a client about what you will work on together is detailed, explicitly agreed and continually monitored and adjusted, they may construct their own set of assumptions about what will happen — their own psychological contract. If you can’t deliver on their imagined expectations, you risk producing the same responses as the contract-breaking employers.]
One factor which seems to mitigate the negative consequences of cost-cutting actions is the perceived fairness of the employers actions. This fairness has three components:
- Distributive justice — Are the outcomes fair and equitable?
- Procedural justice — Is the decision making process consistent and transparent?
- Interactional justice — Are people involved in the process and treated with respect?
According to Beugre & Baron (2001) and Brockner (1995), procedural and interactional justice can have the biggest impact on an employee’s attitude to their employer during a restructuring.
I wonder how many employers included in the GfK NOP survey focused on procedural and interactional justice during their cost-cutting activities.
[As another aside, the contract built between an adviser and a client should also cover, not only the content of the discussion, but also the process and the dynamics of the relationship between the two parties.]
- Have you had any experience of survivor syndrome?
- Has your psychological contract ever been broken?
- Any good examples of procedural or interactional justice?
- What are your good and bad experiences of building contracts with clients?
- Brockner, J. (1992) Managing the effects of layoffs on survivors California Management Review, 34(2), 9-28.
- Appelbaum, S., Delage, C., Labib, N. & Gault, G. (1997) The survivor syndrome: aftermath of downsizing. Career Development International, 2(6), 278-286. DOI: 10.1108/13620439710178639
- Robinson, S. & Rousseau, D. (1994) Violating the psychological contract: Not the exception but the norm. Journal of Organizational Behavior, 15(3), 245-259. DOI: 10.1002/job.4030150306
- Beugre, C. & Baron, R. (2001) Perceptions of systemic justice: The effects of distributive, procedural, and interactional justice. Journal of Applied Social Psychology, 31(2), 324-339. DOI: 10.1111/j.1559-1816.2001.tb00199.x
- Brockner, J. (1995) Decision frame, procedural justice, and survivors′ reactions to job layoffs. Organizational Behavior and Human Decision Processes, 63(1), 59-68. DOI: 10.1006/obhd.1995.1061
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