Effect of downsizing on workforce quality among commercial banks in Kenya
Downsizing has become the strategy favored by many companies attempting to cope with fundamental structural changes in the world economy. This trend is set to continue with more companies planning to retrench over the next few years. For several years, there has been a strong tendency to adopt a downsizing strategy to deal with the economic pressures in the environment. Once seen as a short-term measure, downsizing has become the way to increase profitability. Of course, there are many anticipated benefits of downsizing, in terms of the economic level and increased operational efficiency of the organization. Downsizing results in detrimental effects on the work force quality if not implemented appropriately. Successful downsizing requires managers to evaluate the overall impact of downsizing especially on the signal they send to the employees as this might reduce their morale. The study sought to establish the effect of downsizing as a human resource tool on the workforce quality in commercial banks in Kenya. The study employed a purposive sampling research design. The target population included the commercial banks in Kenya that have done downsizing from 2009 to date, targeting senior managers in the banks. The study used primary data which was collected through the use of structured questionnaire to be answered by the respondent. Data analysis procedures employed involved both quantitative and qualitative data analysis procedures. Quantitative data was analysed using descriptive statistics such as frequency counts, means and percentages while qualitative data was analysed using content analysis. Statistical Package for Social Sciences (SPSS) was used to analyse quantitative data. The study found among other things that organizational downsizing undermines teamwork, reduces employee empowerment, and undercuts employee perceptions that their organization is committed to them and erodes employee commitment to quality workforce building; threatens job security, thus reducing employee commitment to the quality program. Further, downsizing weakens top management commitment to quality workforce and undermines the basic premises underlying workforce quality management Therefore, it is recommended that, analysis of the effects of downsizing on workforce quality and the organization performance as a whole should be done before undertaking downsizing. The study further recommends that, organizations should involve experts while undertaking this exercise, to establish the right criteria to use.