A Survey of the Practices of Staff Downsizing Among the Major Oil Firms in Kenya

Abstract

Most employers and employees alike know that in this current economic climate, there are few businesses immune from at least the possibility of staff downsizing. Of course this knowledge does not mean that laid off employees are going to be any happier or more understanding about it. Though the psychological and behavioral effects of retrenchment/early retirement on the affected employees was conducted in Kenya, the aspect of the reason for staff downsizing, the process of the exercise and the alternatives to staff downsizing has not received attention as it should be the effect/impact. In fact the impact is as a result of the process of implementation of downsizing exercise. The perception of employees on how companies handle staff downsizing is pathetic. The way many companies are going about their staff downsizing leaves a lot to be desired - and their reputations may suffer as a result, due to mishandling of the process. This research project reports a study of the practices of staff downsizing among the major oil companies in Kenya, in terms of reasons for staff downsizing, process and alternatives to downsizing by organizations. The first objective was to examine why oil firms resort to staff downsizing and to find out whether or not there were any organizational intervention programs. Further, the study sought to establish the practices, in terms of the process of staff downsizing, alternatives to downsizing and find out whether there is any relationship between staff downsizing and other company characteristics. The population of study comprised of all the major oil companies in Kenya and the definition for 'major' is based on the distribution network, turnover, number of employees and ownership. The sample consisted of eight human resources experts from those oil companies. The data was collected by the use of questionnaire that was designed to capture the aspects of the process of staff downsizing, reasons why companies resort to downsizing and factors influencing staff downsizing. Descriptive statistics was used to summarize the data while chi-square statistic using the SPSS was used to test the relationship between some characteristics of companies and the practice of staff downsizing. I recommend that organizations should properly plan how to conduct staff downsizing, explore employee contracts that reflect the new employment relationship and conduct layoffs in the contemporary organizations' new reality. They should also build intervention models that empower employees and organizations to restore energy and productivity and make cost benefits analysis in a risk taking downsizing environment.