A comprehensive survey among 10,000 workers in Norway has examined the extent of company reorganisation and downsizing in the country, as well as their impact on job insecurity, job satisfaction and work-related health problems. The results confirm that reorganisation and downsizing have a variety of negative consequences. The study also confirms that a lack of information and consultation are associated with poor quality of work indicators.
Background
Company reorganisation usually means a strategic organisational change in employees’ ways of working. These changes could, for example, imply modifications in terms of responsibilities, work performance, co-workers and colleagues or also with regard to the structure of the company. Reorganisation can be a positive process leading to an improved working environment and increased production, or a negative process leading to poor job security, lack of well-being and an increased number of work-related health problems among workers.
Several studies have revealed that reorganisation and downsizing, in particular, are associated with an increase in the number of workers reporting poor health, as well as a higher risk of absence from work due to illness and a greater incidence of sick leave. Previous research (Jimmieson, Terry and Callan, 2004; Allen et al, 2001; Paulsen et al, 2005) has, however, to a lesser degree investigated whether it is the organisational change itself or the process of change that mostly affects the health and well-being of workers.
Survey on downsizing and reorganisation
A recent study entitled ‘Downsizing and reorganisation among Norwegian workers – do information and consultation affect health and well-being?’ (Sterud, 2009) was based on data from the Level of Living Survey: Working Conditions 2006 (Samordnet levekårsundersøkelse 2006: Arbeidsmiljø (in Norwegian, 3.6Mb PDF)), conducted by Statistics Norway (Statistisk sentralbyrå, SSB) (see also the 2008 EWCO survey report on Work environment continues to improve). The survey was carried out in the form of telephone interviews with almost 10,000 workers, with a response rate of 67%. During the study, downsizing and reorganisation were addressed separately, with downsizing being analysed in more detail.
Effects of reorganisation and downsizing
The survey data show that 47.4% of all Norwegian employees report having experienced reorganisation or downsizing at their workplace within a three-year period. Both reorganisation and downsizing were found to have occurred more frequently in the public sector, in high skilled professions and among management.
Using multiple logistic regression analysis, the data reveal a significantly higher incidence of poor job security and job satisfaction, psychological disorders, as well as neck, shoulder and back pain among employees experiencing reorganisation and downsizing, compared with employees in the reference group. For work-related neck, shoulder or back pain, significant differences between occupational groups were also found. Differences between the professions were, however, less pronounced for psychological disorders. Company size and economic sector were likewise found to be less important in terms of their impact on job security or work-related health problems. Workers in part-time positions or with a lower level of education generally report more frequently poor job security and other work-related health problems regardless of the size or sector of activity of the company.
Of the employees experiencing downsizing in their respective department within a company, 70.2% reported having received insufficient information and/or no opportunity to participate in the process. When compared with a reference group reporting that they received sufficient information and had the opportunity to participate in the downsizing process, an analysis of the data shows a significantly higher prevalence of poor job security, lack of well-being and work-related health problems among those workers who were not informed or did not have the chance to participate in the process.
Commentary
The study results reveal that reorganisation and downsizing are associated with a variety of negative consequences and higher levels of occupational health problems among workers. The data also support the assumption that access to information and personal participation during a reorganisation or downsizing process may have a significant impact on the health and well-being of the workers involved.
References
Allen, T.D., Freeman, D.M., Russel, J.E.A., Reizenstein, R.C. and Rentz, J.O., ‘Survivor reactions to organisational downsizing: Does time ease the pain?’, Journal of Occupational and Organizational Psychology, Vol. 74, No. 2, 2001, pp. 145–164.
Jimmieson, N.L., Terry, D.J. and Callan, V.J., ‘A longitudinal study of employee adaptation to organisational change: The role of change-related information and change-related self-efficacy’, Journal of Occupational Health Psychology, Vol. 9, No. 1, 2004, pp. 11–27.
Paulsen, N., Callan, V.J., Grice, T.A., Rooney, D., Gallonis, C., Jones, E., Jimmieson, N.L. and Bordia, P., ‘Job uncertainty and personal control during downsizing: A comparison of survivors and victims’, Human Relations, Vol. 58, No. 4, 2005, pp. 463–496.
Sterud, T., Søkelys på arbeidslivet 1/2009, Vol. 26, 2009, pp. 59–73.
Bjørn Tore Langeland, National Institute of Occupational Health