Giving Nonselective Downsizing a Performance Review

Abstract

The failures of performance management (PM) systems are well known, as is the popularity of downsizing as a corporate strategy. We suggest that the factors integral to the success of PM, such as employee–organization trust, manager–employee communication, goal setting, and reinforcement contingencies, are undermined by organizational downsizing. Broken PM systems increase the likelihood of future downsizing, yet make it difficult to conduct performance-based downsizing. With proper encouragement by HRD professionals and the correct use of employee-centered PM, which may include performance-based downsizing, organizations may break this cycle. Suggested practical implementations include the use of Daniels’s (1985) concept of Performance Management and of Pfeffer and Sutton’s (2006) concept of evidence-based management to (a) implement alternative cost reduction techniques (b) implement contingent PM, that may integrate performance-based downsizing (c) develop HRD specialists and managers to develop and evaluate these integrated systems and (d) reevaluate PM competencies and processes after downsizing has occurred.

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