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Archives of Business Research – Vol. 10, No. 2
Publication Date: February 25, 2022
DOI:10.14738/abr.102.11853. Coleman, C. A. (2022). Understanding Employee Responses to Lay-Offs; The Ingredients for Successful Outcomes: An example from
the Charity Sector in West Africa. Archives of Business Research, 10(02). 270-286.
Services for Science and Education – United Kingdom
Understanding Employee Responses to Lay-Offs; The Ingredients
for Successful Outcomes: An example from the Charity Sector in
West Africa
Casely Ato Coleman
Senior Fellow IMANI Africa & Visiting Professor of
Human Resources Management
Institute Superieur De Management, Dakar, Senegal
ABSTRACT
This study examines a recent planned organizational change by an international
charity organization that resulted in the closure of three country offices and
restructure of parts of its regional office which led to the lay-offs of employees
within West Africa. Using an integrated model of the Kubler Ross Reaction change
model, the flow of information in human resource model and industrial relations
systems theory, the study examines the key steps, processes and outcomes that led
to a smooth restructuring process in a region where employee lay-offs can result in
endless litigation. The study concludes that a successful execution of a planned
organizational change that results in office closures and staff lay-offs requires (i) a
grieving model to predict, manage and adapt to employees response to change, (ii)
flow of information and (iii) conformity to national industrial relations laws and
practices.
Key Concepts: Kubler Ross Change Model, Flow of Information, human resources
management, Industrial relations.
INTRODUCTION
Downsizing or laying off employees is usually the strategically planned elimination of large
numbers of personnel or workforce to enhance organizational effectiveness and economic
outlook. The disadvantages of layoffs or downsizing in an organization can include reduced
skilled workers and low morale, as the employees experience mixed emotions, dismay, stress,
guilt, or even envy. In addition, layoffs can reduce existing employees’ satisfaction and
commitment to the organization, which can result into lower performance. (Mujtaba et al
2020). Cutting jobs is a quick way to cut costs — including salaries and benefits but layoffs by
themselves can be expensive since many companies pay for severance and outplacement
services. They can also hurt morale and productivity if remaining employees feel the layoffs
were handled badly; a company may have cut its payroll costs, but if it has unhappy workers, it
may end up limiting its revenue growth, as well. Bruno (2008). Capelli et al (1997) have argued
that the widespread restructuring of organizations usually resulting in a reduction of the
workforce to cut costs—has had a profound impact on the lives of workers.
The study asserts that the traditional relationship between employer and employees will
continue to erode due to employer decisions that results in employee layoffs.
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Coleman, C. A. (2022). Understanding Employee Responses to Lay-Offs; The Ingredients for Successful Outcomes: An example from the Charity Sector
in West Africa. Archives of Business Research, 10(02). 270-286.
URL: http://dx.doi.org/10.14738/abr.102.11853
The case study organization used in this research, is a reputable player in the charity sector
globally and in West Africa. It has operations in ten West Africa countries. Due to shrinking
budget, the leadership team decided to review its operations to align to its finance and program
support operations. A key driver of the change was on the need to be more efficient with
programing following an assessment, which revealed high administrative and personnel
related costs. Consequently, a decision was taken by the Leadership team to reduce staff
strength and realign its structure and operations, close offices in the three countries namely
Liberia, Sierra Leone and Guinea, and establish a hub office to provide oversight for operations
in the 3 countries through partners instead of direct program implementation. The
organization also anticipated that some key roles at the regional office based in Senegal, would
be realigned to fit the desired new organizational model.
OBJECTIVE
This research reviews the steps, processes and outcome of the restructuring exercise, which
resulted in staff lay-offs and discusses the ingredients for ensuring positive employee response
towards the change to facilitate a successful outcome. The discussions is done within the
framework of four different country industrial relations and labour laws contexts.
Hypothesis
a. Management decisions on planned organizational change that results in office closures
and staff lay-offs often creates tension and anxiety amongst employees.
b. The successful execution of a planned organizational change that results in office
closures and staff lay-offs requires (i) a grieving model to predict, manage and adapt to
employees reaction to cope with the change, (ii) flow of information and (iii) conformity
to national industrial relations laws and practices.
DATA & METHODOLOGY
In view of the restrictions imposed by covid19, the study was undertaken virtually in Dakar,
Monrovia, Freetown, Conakry, Freetown at the team level of analysis, comparing the data across
teams. The study was empirical in nature and combined an inductive and deductive approach
as a basis for examining the relationship between Kubler Ross change model, flow of
information and industrial relations in ensuring a successful planned organizational change
process that results in employee lay-offs in the selected international organization in the
charity sector. The deductive approach involved reviewing literature and documents available
at the organization, whereas the inductive approach was based on empirical data obtained from
interviews and questionnaire administered to the respondents. The population of the study
consists of employees of the organization implementing the planned organizational change. In
purposive sampling, researchers use their judgement to select a sample based on previous
knowledge of the population and the specific purpose of the research(Fraenkel & Wallen 2000).
Purposive sampling was employed to draw the sample of the study consisting of 25 senior and
junior staff drawn from the four offices of the organization. In addition, 4 labour inspectors and
3 lawyers based in the countries where the lay-offs were to be implemented were also
interviewed. This was reinforced with extensive secondary data from the change management
and industrial relations literature.
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Archives of Business Research (ABR) Vol. 10, Issue 2, February-2022
Services for Science and Education – United Kingdom
SECTION ONE - CONCEPTUAL FRAMEWORK
This section examines the conceptual framework for the study namely Kubler Ross Model, flow
of people and flow of information in human resources management and Industrial relations
systems theory.
Introduction
H. Levinson(1976) has argued that whether change is resisted or embraced, all change is
nevertheless a loss experience, particularly a loss of familiar routines. He argues that most
organizational change flounders because the experience of loss to an employee, is not taken
into account. To undertake successful organizational change an executive must anticipate and
provide means of working through that loss.(Levinson 1976). According to Burke(2001) there
are at least three ways to help organizational members deal with change: conceptually, by
achieving closure, and through participation. Bridges(1986) also distinguishes between change
and transition. Change he states is something that “starts and stops, or when something that
used to happen in one way starts happening in another”. Transition is a psychological process
extending over a long period of time that cannot be managed in a rational way. Burke (2001)
argues that these optimistic theories about how people eventually embrace change while
psychologically accurate are somewhat simplistic due to individual differences.
Lay-offs also cause emotional and social hardships on affected employees. Acevedo (2017).
After losing one’s social connections and/or means of professional contribution, terminated
employees may experience feelings of anger, helplessness, and other negative emotions as
workers become uncertain of the future and their new reality of unemployment. (Mujtaba et al
2020). According to Heathfield(2019)employees affected by lay-offs experience illness,
defensiveness, low energy, lack of motivation, difficulty concentrating, accidents, and
interpersonal conflict.
Grieving – Kubler Ross Model-Figure 1
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273
Coleman, C. A. (2022). Understanding Employee Responses to Lay-Offs; The Ingredients for Successful Outcomes: An example from the Charity Sector
in West Africa. Archives of Business Research, 10(02). 270-286.
URL: http://dx.doi.org/10.14738/abr.102.11853
Kubler-Ross(1969) described five stages of grief. These stages represent the normal range of
feelings people experience when facing death or significant change in their lives. The Kubler
Loss change curve, provides a model to focus on and deal with the emotional response of
people affected a change process. It all starts with an event or an announcement that produces
Shock or surprise at the event resulting in the initial reaction of Denial. This can then develop
in Anger due to the frustration of unmet expectations. Depression is the stage where the
person fights the Change but starts redeveloping some form of energy. Experiment is a phase
where the person begins an initial engagement with the new situation tries to make sense of
what happens. Decision is the stage where person begins to learn to adapt to the new situation
feeling more positive. Integration is finally the stage where moving-on happens. Moving across
these stages requires three types of support: Information and Communication, Emotional
Support and Guidance and Direction — all critical in the way that Change can impact.(Caredda
2020).
Coping Strategies – Psycho-social Perspectives
In addition to the Kubler-Ross model which helps to understand how employees cope and react
to a transition process such as job loss or restructuring, other researchers have done extensive
work on employee coping strategies for dealing with involuntary lay-offs. Coping is a process
that evolves from resources (Lazarus and Folkman, 1984). Coping resources are those
psychological, social, and organizational resources which are possessed by, or available to, a
person and which influence whether a particular coping strategy can or will be implemented
(Dewe, 1989; Fleishman, 1984; Moos and Billings, 1982; Pearlin and Schooler, 1978).
Greenberger and Strasser (1991) suggested that, in the case of workforce reduction, layoffs may
actually generate a perception of a lack of relationship between survivors' actions and their
outcomes (job retention). They argued that this will especially be the case when layoffs are
conducted on the basis of seniority and not performance. However, Swindle, Heller and Lakey
(1988) noted that some studies have found control dispositions to be unrelated to the perceived
controllability of the particular stressor. Folkman (1984) pointed out the importance of
differentiating between generalized beliefs about control and situational control appraisals,
both of which are posited to influence coping efforts. Generalized beliefs about control should
be less affected by an environmental stressor than situational control appraisals. Moreover,
workforce reductions are generally characterized by ambiguity, and in ambiguous situations
generalized beliefs about control are more likely to prevail (Phares, 1976).
Social support is broadly defined as the resources provided by other persons (Cohen and Syme,
1985). According to Cohen and McKay (1984), social support will be effective only when there
is a match between the source of support provided and the coping requirements of the
situation. Work-related sources of support are more effective in alleviating the impact of work- related stressors than support from non-work sources (Karasek and Theorell, 1990; Swindle et
al., 1988). In particular, support from one's supervisor and/or co-workers has been shown to
be important in reducing adverse reactions to stress (Chisholm, Kasl and Mueller, 1986;
Ganster, Fusilier and Mayes, 1986; LaRocco, House and French, 1980).
Lazarus and Folkman posited that coping has two broad functions: problem-focused and
emotion-focused. Problem-focused coping is directed at altering or changing the stressor
whereas emotion-focused coping is directed at regulating or managing one's emotional