Does Downsizing Strategy affect the Retained Employees Performance?

Abstract

Reduction of employees has become a potentially valuable way of securing a competitive advantage and improving organizational performance, downsizing has been in existence for a while now however, its effect on employee or organizational performance has brought mixed reactions in both developed and developing countries. This quagmire has led to a lot of uncertainty while considering downsizing as a tool of enhancing employee performance. Therefore, this study sought to find out the effect reduction of employees as a downsizing strategy on performance of employees of Barclays bank hypothesized as there is no relationship between reduction of employees and employee performance. The study adopted a survey research design. Data for the study were collected from a sample 183 employees of Barclays Bank South Rift Hub, Kenya. Questionnaires were used as the sole data collection instrument. The data that was collected from the field was analyzed using both descriptive and inferential statistics. The findings established that there was a strong positive correlation of 0.982 between reduction of employees and the dependent variable employee performance. The results indicated that higher levels of effective employee reduction leads to effective performance of commercial banks hence they need to consider applying downsizing. The results of this study shall therefore benefit the management of commercial banks to understand the effects of downsizing and put in place appropriate strategies to ensure that only the positive effects leading to improved performance are emphasized.