Minimizing the impact of layoffs on front-line managers: ensuring that layoffs are conducted fairly can help reduce negative feelings among managers who must give notice to workers.(Report)

As we enter what could possibly be a deep recession, we can expect to see a surge in the number of mass layoffs. A long line of research has established that being laid off can produce psychological, economic, and social distress. (1) More recently, research has shown that "survivors"--those who have witnessed the layoffs of co-workers but remain employed--are not spared, often experiencing heightened job insecurity, anxiety, and stress and, as a result, sometimes suffering damage to their physical and psychological well-being. (2) Mass layoffs also unsettle the organizational climate as fear, uncertainty, and even anger fray the emotional bonds that link employees to their supervisors and their organizations.

We know much less, however, about the impact of layoffs on the frontline managers who have to carry them out. Understanding their reactions is important for two reasons. First, as front-line managers, they are in close contact with the workforce and are well-positioned to shape the perceptions and morale of employees. (3) Managers who act with sensitivity in such turbulent environments can help lessen survivors' negative reactions and any spillover damage to organizational performance. (4) Second, focusing on this neglected group (who may soon number in the tens of thousands) can also help organizations take steps to mitigate the "considerable amount of distress" some managers may experience as they live through a "very painful process." (5)

RESEARCH FINDINGS

We report here the results of one of the few systematic studies to examine the impact on managers of implementing mass layoffs. Using data collected as part of a ten-year (1996-2006) longitudinal research project that examined the effects of restructuring on managers and workers at a large manufacturing organization, we compared the attitudes and well-being of managers who either had or had not been directly involved in layoff activities during those years. "Layoff activities" in this study included handing out both warn and layoff notices and, for people supervising white-collar workers, participating in the selection of those to be laid off. (The organization had a history of carrying out mass layoffs and later rehiring some of the affected workers, but over the course of the study the firm was moving to down size permanently as it introduced "lean" manufacturing techniques and outsourced many design and production tasks.)

In a previous paper examining the responses of 410 middle and front-line managers, we found evidence that those who had implemented layoffs were more likely to report increased distancing behavior than those who had not been directly involved in the layoffs. (6) In interviews, several of these "layoff agents" noted they had become "calloused" or "emotionally numb," did not want to get "close to people" until things "stabilized," and wanted to "tune out and shut down." (Similar feelings of emotional and physical distancing were identified in a study based on 40 interviews with "downsizing agents." (7)) The paper also revealed that managers who implemented layoffs were more likely than other managers to report sleep problems as well as various symptoms of poor health, such as ulcers, headaches, and heart trouble, and to seek treatment from health professionals for such health problems. These survey results reinforced what managers told us in interviews about the experience being "devastating" and "gut wrenching" and even "the most catastrophic" of their careers.

As a follow-up to that paper, we report here additional findings that examine the possible effects of implementing layoffs on a wider set of attitudinal variables as well as the degree to which these types of negative impacts persist over time. Data from 361 managers who completed both the third (in 2003) and fourth (in 2006) surveys (60.1 percent male, with a mean age of 50.33) in our longitudinal study revealed that slightly more than half had to issue a warn notice or lay off an employee in either 2002 or 2003. (8) Using standardized measures of job attitudes, job experiences, and well-being, (9) we compared the survey responses of managers who had implemented layoffs to those who had not, thereby enabling us to look at the immediate impact (the 2003 survey) as well as any effects that still lingered some three years later. (10)

Not surprisingly, perhaps, we found that managers who had issued warn notices or announced layoffs reported significantly higher levels of job stress, lower levels of job security, higher levels of depression, and higher levels of emotional exhaustion in 2003. Responses in 2006 revealed fewer group differences, although managers who had issued warn notices or implemented layoffs in 2002-2003 reported that the downsizing activity still affected them and they continued to experience significantly higher levels of poor health symptoms. Although the effects were small for all of the outcome variables (ranging from 1.6 percent to 6.9 percent), they were statistically significant and demonstrate quite clearly that implementing layoffs produces deleterious consequences for job attitudes and well-being measures both in the short term and, to a lesser degree, the long term.