Personnel Review 27,4

Downsizing: is it always lean and mean? Nicholas Kinnie, Sue Hutchinson and John Purcell

296 Received February 1997 Revised July 1997 Accepted October 1997

Personnel Review, Vol. 27 No. 4, 1998, pp. 296-311. # MCB University Press, 0048-3486

University of Bath, Bath, UK

Caesar: ``Let me have men about me that are fat; Sleek headed men, and such who sleep o'nights. Yon Cassius has a lean and hungry look; He thinks too much. Such men are dangerous." (Julius Caesar, Act 1 Scene 2)

Introduction Downsizing, and its associated euphemism, ``rightsizing'', became part of the managerial lexicon in the late 1980s and early 1990s. Large scale redundancy programmes were seen to be the solution to the problems facing organisations such as AT&T, IBM, General Motors and British Telecom during this time. By the mid-1990s, however, doubts were emerging about whether downsizing was the route to success that it was first thought. Evidence emerged that many downsizing initiatives had failed to achieve their objectives and the anticipated gains had not been realised. In 1996, Stephen Roach, the US economist, expressed severe doubts about the downsizing programmes which he had previously advocated. One of the reasons put forward for this failure was the way downsizing was handled (Roach, 1996). As early as 1994, Business Week reported, ``The sight of so many bodies on the corporate scrap heap is sparking a corporate debate about profits and legality, and about the benefits and unforeseen consequences of layoffs'' (Business Week, 1994, p. 61). In short, downsizing came to be associated with ``meanness". Over the same period, there was considerable interest in the ``lean organisation'', which was derived from the concept of lean production first popularised by Womack and his colleagues (1990) and more recently by Womack and Jones (1996). These writers claimed that by adopting techniques such as total quality management (TQM), just-in-time (JIT) and team working it was possible to produce more goods and services with fewer resources of all kinds. Subsequent research has sought to extend the concept of lean production away from its Japanese auto industry base and consider the transferability of the concept to other sectors and countries (Oliver and Hunter, 1994; Oliver and Wilkinson, 1994; Shadur and Bamber, 1994; Shadur et al., 1995). However, other writers have developed a critique of the assumptions in the original work, especially its approach to change and treatment of human resources issues (Bergerren, 1993). Some authors have pointed out that these two trends have been linked and that downsizing was perceived as one way of achieving leanness. ```Lean' came to be associated with using less personnel, and hence downsizing came to be seen as a way to become `lean' regardless of the question whether or not

originally Japanese ways of working were used in the new `lean' organisation'' Downsizing: is it (Benders and van Bijsterveld, 1995, p. 9). Similarly, Millman argued (1996, p. always lean and 9) ``Downsizing is invariably promoted under the guise of improving mean? productivity and reducing organisational complexity, both being desirable attributes of the lean organisation." Despite these claims, the relationship between downsizing and the lean 297 organisation is problematic. In the first part of the paper, therefore, we pose the questions: what is the relationship between downsizing and the concept of the lean organisation? Is downsizing always lean? In the second part, two related questions are pursued: what are the consequences for employees of downsizing? Is downsizing always mean? The research reported here is the first stage of a larger project currently underway in conjunction with the University of Warwick, and supported by the Institute of Personnel and Development, into the people management implications of leaner ways of working. This first stage was based principally on a study of the literature in the field together with some preliminary case studies, which are not reported in this paper. A fuller description of the work, together with brief details of the cases, can be found in Hutchinson et al. (1996). Is downsizing always lean? As ever with words such as downsizing it lacks a clear definition, being capable of conflating a number of very different circumstances when organisations reduce the number of employees. For example, the definition put forward by Cascio (1993, p. 96) as a ``planned elimination of positions or jobs'' tells us very little and provides an inadequate basis for answering the question posed. Furthermore, the literature in the field tends to concentrate on the various ways in which these reductions in the workforce can be achieved: redundancies (or ``lay-offs"), voluntary turnover and early retirement. Our concern is not so much how workforce reductions are achieved as the context and motives for such reductions: what are the forms of downsizing and why does downsizing take place? Four different forms can be identified together with their associated motives. Forms of downsizing Reductions in demand for products and services The first form involves making employees redundant and not replacing them with new jobs so that the numbers of employees decline. These workforce reductions are often motivated by a desire to reduce costs because of a decline in demand or increased competition in the marketplace. Cameron (1994) has compared this form of downsizing to throwing a grenade into a room, closing the door, and expecting the explosion to eliminate the desired percentage of employees. This form is often the result of a top down directive implemented over a short time period and is, according to Cameron (1994), typically associated with a failure to achieve the set objectives.

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Within the UK movements in the trade cycle and changes in the competitive position of a firm have always led to fluctuations in both workforce numbers and hours worked. In this sense downsizing is really a new word for a long established employer practice. The word ``downsizing'' used in this context does, however, imply two important conditions for this activity. First, the choice of redundancy, or collective dismissal as it is termed by the EC Directive, is taken in preference to other forms of cost reduction such as pay cuts (as in Hewlett Packard in the 1980s), hours reduction (Volkswagen in the early 1990s), labour hoarding as commonly practised in the 1960s when unemployment was low, or short-term lay-offs as often occurred in the motor industry 30 years ago. Second, downsizing presupposed that the workers in question were employees of the organisation with open or permanent contracts. Spot contract employees, agency staff and fixed-term contract workers are not made redundant; their contracts just expire. Thus the question is why in the 1980s and 1990s has such a fundamental breach of the employment relationship been used in preference to other forms of labour input reduction? Turnbull and Wass (1997) have argued that employers use this option because of the lack of restraint provided by the State. Deregulation of the labour market has made it much easier (and cheaper) to use redundancy, while other forms of reduction, such as short-term lay-offs or shorter working weeks, have been more difficult to implement since they require pay reductions for all. There is also a strong ``me too'' element here because employers see other organisations in the same industry making employees redundant and perceive a need to be seen to be doing something in the eyes of the City. Indeed, in the US context Business Week (1994, p. 61) commented that ``Critics believe massive downsizing has become ... a bone to throw to Wall Street when investors begin baying for cost cuts". Structural changes resulting from changes in ownership or devolution Structural changes to the organisation resulting in reductions in the numbers employed take a number of forms. Senior managers may decide to simplify the structure of the organisation by removing layers from the hierarchy or ``delayering'' as it has come to be known. Peters (1989) recommended that an organisation should have no more than five layers and examples of these kinds of changes which have attracted publicity include BT, BP, Boots, Storehouse, the Stock Exchange and Rolls-Royce. Research suggests that the main reason for delayering is to reduce costs (Ezzamel et al., 1993) although other reasons include reducing bureaucracy, speeding up communications and improving responsiveness to customer demands. A related change is where there is a move to decentralise the organisation often with a related reduction in the numbers employed in head office functions. It is still surprisingly common to find head offices being reduced to below the 100 employee threshold to symbolise corporate leanness (Goold and Campbell, 1987). This may be linked to the establishment of strategic business

units where, in theory, each of the businesses takes responsibility for its own Downsizing: is it affairs. The extent to which such decentralisation of discretion in the human always lean and resources field is genuine, however, has been the subject of extensive research mean? (Kinnie 1990; Marginson et al., 1993; Purcell and Ahlstrand, 1994). Reductions in head office staff may also take place because of an acquisition of one organisation by another or a change of ownership, for 299 example the Lloyds/TSB merger in 1995/1996 which resulted in the closure of TSB Head Office at Birmingham. Indeed, large scale redundancies of head office staff may be used as one of the arguments to support such mergers in the first place, especially when functions are to be integrated, for example, in the utilities where substantial savings are made by combining customer service and billing units. Similarly, the privatisation of public sector organisations may involve substantial redundancies as new owners appraise the levels of employment required. Core-periphery model ± greater flexibility Reductions in the numbers of permanently employed staff also take place when an organisation adopts the core-periphery model which was popularised by Atkinson (1984). The associated practices involve distinguishing between activities which are central or core to the business and those which are peripheral. Core staff will generally enjoy permanent or long-term contracts and good terms and conditions. Peripheral staff will comprise various other groups including short-term contracts or casual employees and staff employed by labour agencies insourced to the firm (Purcell, 1996). More qualitative changes are involved in some circumstances when the working practices of core staff are modified, especially when new technology is introduced. In these cases these staff will be obliged or encouraged to acquire competence in a wider range of tasks and to become functionally flexible. This model may be applied where market demand is difficult to predict or highly seasonal and cannot be handled by normal methods such as increased overtime working. Often a temporary expedient develops into a new labour force strategy. Adopting this model can mean that employees in areas such as catering, security, payroll, IT and even personnel are made redundant and their jobs are put out to tender by outside contractors. Permanently employed staff are reduced, causing a reduction in the often all important ``head count'' and their jobs are taken on by sub-contractors who do not appear on the payroll figures. In this situation core employees are often required to develop multiple skills following a more general redesign of jobs (Cameron, 1994). These staff may be rewarded for their flexibility by the use of relatively sophisticated human resource management techniques: they may be guaranteed job security, given financial rewards for skill acquisition and access to training and development opportunities. In this instance, the uncertainty resulting from fluctuations in the market is transferred from the core employees to the peripheral employees and the sub-contracting organisations.

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For example, in one organisation in the financial services sector we visited in 1997, of the 650 people working in the divisional office, 400 were permanent, 120 on fixed-term contracts and 130 employed by one of the labour supply agencies. The firm, a household name, like other organisations renowned for the sophistication of their human resources policies, used downsizing to shift to a distinctive core-periphery employment pattern. Prior to the adoption of the model in the 1990s, all employees had been treated as permanent or were on open contracts. Although these forms of employment are often presented as if they are novel in some way, they have a long history as discussed by Gospel (1993). Constant or higher output with fewer employees Downsizing also takes place where employers seek to maintain or improve their level of output by improving their efficiency. Typically these changes involve the adoption of new processes of managing including techniques such as TQM, JIT or team working. TQM has been described as a ``hazy ambiguous concept'' (Dean and Bowden, 1994, p. 394) but is seen to include three fundamental principles: customer orientation, process orientation and continuous improvement (Hill and Wilkinson, 1995). The main aim of JIT is to match output of manufacturing systems to the needs of the market (Oliver, 1991). Both TQM and JIT can lead to reductions in the numbers employed because of the re-organisation of the tasks involved. TQM can lead to reductions in those employed in quality departments and to delayering with the use of teamworking and empowerment policies, while JIT can, in theory, increase employees' task flexibility and autonomy. Often the move to JIT and TQM is accompanied by the introduction of new technology which itself may involve job losses and new working practices (Wilkinson et al., 1996). Changes of this kind are often part of much broader developments in the organisation which Cameron (1994, p. 198) defines as ``systemic". Here the aim is to ``focus on changing the organisation's culture and the attitudes and values of employees, not just changing the size of the workforce or the work". In these circumstances downsizing is seen as ``a way of life, as an ongoing process, as a basis for continuous improvement rather than as a program or a target. A continuous improvement ethic is applied to the task of downsizing, and cost savings throughout the entire system of interorganisational relationships are pursued'' (Cameron, 1994, p. 199). Although only one-third of organisations in Cameron's study adopted this approach to downsizing they were the organisations which were most likely to achieve their objectives. We argue that of the four different types of downsizing only the last two of these can actually be associated with lean production. In order to explain why, despite this, downsizing has become associated with lean production we need to go back to the original work by Womack and his colleagues (1990).

Downsizing and lean production Downsizing: is it Retracing the development of the concept of lean production reveals that always lean and Womack et al. (1990) pulled together ideas which had been popular for at least mean? ten years (e.g. Schonberger, 1982) including JIT, TQM and team working. The main characteristics of lean production can be summarised as follows: . the elimination of waste in terms of material and human resources; 301 . low inventories with minimum buffer stocks; . a ``zero defect'' approach to production; . integrated production chain through a close relationship or partnership with component suppliers; . team working approach to assembly; . involvement of all employees and suppliers in a continuous process to improve product and job design. Although these techniques in themselves were not new what was different was that the concept of lean production put these together in a package in a way that had not been done before. They also placed emphasis on benchmarking and made strong quantitative claims for lean production. Indeed, it was this emphasis on benchmarking using quantitative measures as justification for the new techniques which began to attract most attention. The authors were forthright in their claims for lean production (Womack et al., 1990, p. 13): half the human effort in the factory, half the manufacturing space, half the investment in tools, half the engineering hours to develop new products in half the time. Also it requires keeping far less than half the needed inventory on site, results in fewer defects, and produces greater than ever variety of products.

Lean production was hailed as the manufacturing concept of the future: in the end, we believe, lean production will supplant both mass production, and the remaining outposts of craft production in all areas of industrial endeavour to become the standard global production system of the twenty-first century. That world will be a very different, and much better place (Womack et al., 1990, p. 278).

Despite this there were many aspects of the concept which were not fully articulated and there was little attention given to how these changes would be introduced or for employee concerns. Lean production, however, became associated with success, although many researchers and writers have disputed this claim, most notably Williams et al. (1992). Nonetheless, lean production attracted a great deal of attention and much of it noted that lean production seemed to involve employing fewer people and hence the original message became simplified to resemble a mantra: ``lean production is linked to success is linked to employing fewer people'' or a syllogism: ``lean organisations are more efficient with fewer

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people; therefore if I have fewer people my firm will be more efficient". In fact, the concept soon began to take on the form of a managerial fad (Benders and van Bijsterveld, 1995) where a favoured management concept or technique is talked about as: . promising considerable improvements; . being an absolute necessity for the modern organisation; . is universally applicable; . and, therefore, becomes abstract, vague and ambiguous. This interest in leanness coincided with broader changes in the business and economic cycle. Many national economies experienced a downturn in activity, increased competition and excess capacity in the early 1990s. Major organisations made very large financial losses and were looking for ways to save money. Downsizing seemed to be right for the time and have an irresistible logic of its own, even though there was considerable evidence that these changes were often not the ``right thing to do'', as we discuss in greater detail below. The spread of the message was also helped by the appeal of the metaphorical rather than the adjectival use of the term lean. We associate lean with an absence of fat, and with being healthy and fit. This is often compared to being overweight, unfit and with damaging excess or spare capacity. Lean became equated with good and successful, and fat, the opposite of lean using this metaphor, became associated with bad and unsuccessful and, therefore, something which needed to be removed by a ``diet'' of some kind. It was because of this association between lean and downsizing that lean became associated with mean, and this simple association has persisted for many people. Indeed, this may explain why some organisations in the mid1990s are reluctant to be described as lean: the term has taken on a rather different interpretation for the manager with one eye on the public perception of the organisation. We are finding that what was once a macho term is now sending out the wrong signals, especially to employees. However, if we examine the contemporary use of the lean concept (Womack and Jones, 1996) we can see that emphasis remains on the elimination of waste. This may mean employing fewer people, but this is not inevitably the case. Lean thinking is associated with five key principles as the authors explain: (1) specify value as defined by the ultimate consumer; (2) identify the value stream; (3) make the value creating steps flow; (4) let customers pull value from the organisation; (5) seek perfection. Lean thinking may be associated with employing fewer people if the organisation is in a poor financial state, when some employees will have to

``man the lifeboats'' (Womack and Jones, 1996, p. 258). However, if the Downsizing: is it organisation is profitable, Womack and Jones assert, then the changes will always lean and typically involve redeploying people into a lean promotion function (1996, p. mean? 256) rather than making them redundant. The exceptions to this are ``anchor dragging managers'' who will not accept the new way of thinking when there will be a need to ``take action quickly'' (Womack and Jones, 1996, p. 260). They 303 do not, however, provide evidence to substantiate these assertions. To sum up the argument so far we can see that downsizing takes at least four different forms, two of which involve changes only in the numbers employed. This does not, of course, prevent managers from seeking to legitimate such changes by reference to the need for greater leanness even if the outcome of the changes is quite different from the original lean concept (Benders and van Bijsterveld, 1995, p. 9). Only two forms of downsizing could be said to involve the adoption of lean techniques, which include qualitative changes in the process of managing. Consequently, organisations which have downsized are not necessarily lean, indeed, the take-up of lean techniques as a result of downsizing may be very limited. Leanness, as it was originally defined, rather than how it has been used, is about changes in managerial processes rather than simply a reduction in employment. Having concluded the first part of this paper by arguing that downsizing is not always lean we can now proceed to the second question concerning how moves to leanness are actually handled. Is downsizing always mean? Although it is commonly believed that downsizing should result in more efficient, competitive companies there is increasing evidence in the literature, however, to suggest that the majority of downsizings are unsuccessful. The expected economic and organisational benefits failed to materialise. In the USA between two-thirds to three-quarters of all downsizings are unsuccessful from the start (Howard, 1996). Another American study by the Wyatt Company (1994) found that few downsizings meet their desired goals in terms of increased competitiveness and profitability. The majority of organisations meet their immediate cost reducing objectives but this improvement is not sustained in other areas such as long-term goals of improved service and increased competitive advantage. In the study of the financial performance of Fortune 100 companies over a five-year period (two years prior to the announced downsizing, the year of the announcement and two years following it) De Meuse et al. (1994) found that the financial performance worsened, rather than improved following the reductions in the workforce. Downsizing does not appear to offer the ``quick fix'' to a company's financial problems. Advocates of downsizing will argue that if it were not for these downsizings the company might be bankrupt. De Meuse et al. (1994) admitted this point might have some merit but their findings show that companies who downsize continue to suffer financial problems and announce

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lay-offs, or as Cascio (1993, p. 102) noted ``downsizing begets more downsizing". De Meuse et al. (1994, p. 521) concluded that ``if massive layoffs are being used as the medicine for survival, their efficacy is questionable". We can now consider some of the possible reasons for this poor performance: in particular is it because of the way in which these changes have been handled? Is it because downsizing is always mean? Reasons for the failure of downsizing There are a variety of reasons put forward for why downsizings fail to return the expected benefits. Evans et al. (1996) suggested two major reasons for failure, the main one being that downsizing is usually not undertaken as part of a broader strategic repositioning of the firm. The second reason is that, despite their best intentions, some companies risk cutting ``muscle instead of fat'', and can loose key competencies. A number of commentators have suggested that downsizing is often undertaken for the wrong reasons. Vollman and Brazas (1993, p. 21) suggested that downsizing may not be an appropriate response, at least in isolation, to competitive problems resulting from ``poor quality, lack of flexibility, misguided or obsolescent strategies, technological backwardness, slowness in rolling out new products, overdiversification and/or a failure to capture synergies, inability to grasp and or counter competitors strategies, ineffective marketing etc." Some commentators have argued that in times of uncertainty firms copy the actions of others in order to feel secure. Research by Cameron and his colleagues (1991) showed that the failure to share the pain is one of the major reasons that downsizings fail. Top management do not take a cut in their benefits together with those lower down the organisation. Cascio (1993) mentioned the effect that changes in staffing can have on the human resources activity in particular. Redundant employees may be replaced by consultants, there may be a duplication of functions in strategic business units and line managers will require training if they are to carry out human resources tasks, which companies may find expensive. The end result is that some redundant employees may be taken back as consultants. Moreover, there is growing evidence to show that ignoring the impact on survivor employees is one of the main reasons for long term problems (Greenhalgh, 1982; Roskies and Guering, 1990). In a recent article on the decline and rise of IBM, Quinn Mills (1996) claimed that its failure in the 1980s and early 1990s was partly the result of breaking an implied promise to provide job security in order to bail out its shareholders. As a result employees became disillusioned and less effective. Very often organisations that downsize prepare well for those employees who are leaving, by, for example, providing outplacement facilities, career counselling, networking opportunities and early release schemes, but ignore those left behind. For example, a survey by Doherty and Horsted (1995) of financial service organisations showed that the majority (62 per cent) indicated that no evaluation of the impact of redundancies on retained employees had been carried out.

In fact numerous studies show that following downsizing surviving Downsizing: is it employees become narrow-minded, self absorbed and risk averse (Cascio, always lean and 1993). Employees become less flexible and over dependent on traditional, well mean? known ways of doing things, and creativity is inhibited. Symptoms, which have come to be known as the ``survivor syndrome'', include a fall in morale, drop in productivity and distrust of management (Brockner, 1988; Brockner et 305 al., 1987, 1994). Stress increases, absenteeism rises, quality slips, employees work shorter hours and initiate job searches. Survivors may feel guilty that it was not them who went, fear a loss of job, be unclear about responsibilities and what managers expect of them, perceive their workload to be higher, and feel the ``psychological contract'' is threatened. There may also be feelings of ``survivor envy'' (Vollman and Brazal, 1993) ("he's got a special retirement package and new job that pays better etc.") which may reduce employee commitment. Most of the literature is based on US evidence but the problems are universal. In a UK survey of 170 personnel specialists in 131 financial services companies, Doherty and Horsted (1995) concluded that organisations forced to cut jobs are neglecting the needs of the employers who remain. Although 79 per cent of firms provided outplacement services for employees leaving, the survey found that less than half gave support to those who remained. Instead of feeling relieved that their jobs were secure, those who survived were demoralised about their own future. There were also feelings of increased stress, scepticism, anger and bitterness. Although most respondents (93 per cent) said there were formal strategies for retaining and motivating remaining staff, the majority tended to focus on rewards and training (mainly in job skills for new work roles). Fewer than half (42 per cent) reported the use of succession planning or career management (44 per cent). Further evidence of symptoms of the ``survivor syndrome'' were evident in a survey of BT managers (Newell and Dopson, 1996) which found that following the lengthy redundancy and rationalisation programmes managers were demotivated, felt they were working longer hours, lacked information about their role and had reduced control. There is some evidence, however, to suggest that feelings of guilt or fear of further job cuts can increase performance and productivity (Brockner, 1988; Brockner et al., 1987; Doherty and Horsted, 1995). Others, for example, Cooper (1994), claim that fear about future redundancies can lead to inappropriate behaviour in survivors who work long hours simply to be seen at work ± such people being called ``presentees". Implementing downsizing The research discussed above points clearly to a failure by employers to deal adequately with employee issues (both those who leave and especially those who remain) when downsizing takes place. Often there is a very limited or non-existent human resources role in these changes. This evidence provides

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support for those who argue that downsizing is often handled in a manner which can only be described as mean. These methods of implementation are seen as major contributors to the failure of downsizing. Certainly, there is no shortage of advice to practitioners in the literature as to how downsizing ought to be handled. These advice lists usually take the form of ``motherhood statements'' which appear to provide practical help, but have little meaning in practice. For example, Cameron et al. (1991) tell us that successful downsizing strategies require implementation from the top, but also with recommendations from lower-level employees and urge the employer to pay special attention to those employees who loose their jobs as well as those who don't. If downsizing is this straightforward, we are entitled to ask, why do more firms not introduce changes in this way and make a success of the whole process. Evans et al. (1996, p. 5) suggested that it is not enough to manage the downsizing event effectively and humanely and make sure the changes are integrated with the business strategy. It is also vital to consider the career consequences of downsizing. They ask: why would anyone want to stay to work for you in the longer term? You can be sure of one thing. By the time you discover that, the executives on whom you depend are asking the same question about themselves (and) it will be too late.

The need to take a new look at the development of careers is well covered in the literature on delayering. Some research (Brockner, 1988; Guest and Peccei, 1992) suggested that symptoms of survivor syndrome are alleviated when survivors perceive the situation to be handled fairly for both those leaving and those remaining. Doherty and Horsted (1995) suggested that employee survivors need professional advice, training and counselling and support if they are to manage change successfully and counteract the effect of the survivor syndrome. Part of the answer lies in employability, that is the opportunity to take on board personal career ownership. This allows individuals to be better equipped to cope in terms of emotions and skills. For the organisation it offers the chance to achieve more flexible and painless change and the opportunity to generate more appropriate behaviours. If organisations, however, are to move to employability rather than employment they must find alternative ways to develop skills and retain and motivate employees. Thornhill et al. (1997) have developed a diagnostic tool for analysing survivors' responses to downsizing. They identified five areas of intervention to address issues of survivors' commitment to the organisation: perceptions of fairness and justice; line managers' skills to support changes; open and realistic communications; senior management commitment and attempts to clarify uncertainties. Doherty and Horsted (1995), however, suggested that most organisations are quite narrow in the HR interventions they use to manage survivor

syndrome. Beyond reward and skill-related training few other approaches are Downsizing: is it generally applied. Doherty and Horsted (1995, p. 31) suggested that managing always lean and change successfully means addressing issues from the organisational and mean? individual perspective: This requires the development of HR strategies which dovetail the use of internal and external interventions, to give equal support and assistance to individual's personal transition by offering them opportunities to develop themselves for the benefit of the organisation, whatever that may be in the future.

Behind this is the wider question of managing employees' expectations and creating realistic expectations of job security, career and job content. The failure to address these issues, either though silence, a failure to recognise the importance of expectations, or optimistic blandishments that despite all the changes there will be no changes to job security and careers leads to frustrated expectations and most important a breach of trust. Expectations are at the heart of job satisfaction, the psychological contract and the illusive concept of commitment. Downsizing organisations by definition are changing the parameters of the psychological contract but many fail to recognise it. The requirement to manage expectations is especially pertinent when downsizing is associated with stepped change that is likely to be persistent. This is clearly the case in the adoption of the core-periphery model, it is also true postacquisition, integration or privatisation (Hubbard, 1996). Where downsizing is linked to the adoption of the lean organisation the process changes required of customer orientation, continuous improvement and learning better ways of working are so marked that the failure to address expectations is likely to trigger the negative effects of downsizing analysed earlier rather than lead to the required state of high commitment, high trust and empowerment. More generally, the evidence on what constitutes good HR practice for a successful downsizing is not particularly strong. Kettley (1995) suggested that there are discernible trends in the way employers can adjust HR policy and practice during and after a downsizing. These include: . Winning commitment to the change via considerable effort in employee communications. For example, the workforce should be well informed about the need for cuts, the redundancy criteria, any changes in their responsibility plus long-term plans for the company. . Ensuring adequate provision of support for the well being of retained as well as outplaced staff including career counselling and stress management interventions such as employee assistance programmes. . Enhancing opportunities for training and development of new skills, to achieve new ways of working for individuals and groups. . Realigning the performance management system. Cameron (1994), drawing on a four-year study of downsizing, found that certain forms of downsizing were more likely to succeed than others. He subsequently identified to managers the best practice of successful

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downsizings and argued that the most critical factor for success was the effective management of the human resource system. ``Employee involvement, teamwork, communication and information sharing, rewarding, appraising, training, articulating with vision and administering downsizing in a trustworthy and fair manner are all critical aspects of successful downsizing'' (Cameron, 1994, p. 210). He concluded that ``Human resource professionals have a central role, therefore, in ensuring the successful implementation of downsizing strategies'' (Cameron, 1994, p. 211). Forms of downsizing and the human resources role The proposals discussed above provide a possible means of avoiding some of the adverse effects on employees and thereby improving the success rate of downsizing. However, they fail to acknowledge that downsizing takes a number of different forms, with varied associated motives, and that the human resources implications of each of these forms are likely to be different. Although downsizing involves a change in the absolute or relative number of employees, these reductions take place, as we have seen, in very different circumstances and for different reasons. Reducing output involves a reduction in employment of some kind with associated human resources considerations such as outplacement activities and procedures for managing those employees who have survived the downsizing and remain within the organisation. Merging two organisations or a change of ownership will involve decisions about the shape of the new organisation and which employees from the original organisations will be retained and which are made redundant. The core-periphery model involves a fundamental re-appraisal of the activities of the business, renegotiation of contracts of employment and of service and careful handling of the tendering process. Finally, seeking to produce the same output with fewer people is likely to involve reductions in employment, the introduction of new forms of working such as JIT, TQM and the formation of teams and the associated changes in training programmes, appraisal and pay systems. Conclusion In conclusion, we summarise our findings and address two outstanding questions. We have argued that downsizing takes at least four forms, each of which is associated with a particular context and set of motives: reductions in employment because of reduced demand; restructuring and reorganisation; adoption of the core-periphery model and higher output with fewer employees. Only the last two of these can be characterised as adopting the lean principles. Indeed, rather than becoming lean, downsized organisations will often become anorexic or skinny, when what they really want to do is become fit for their purpose and responsive to their markets. Downsizing often fails to achieve the objectives which are set for it for a variety of reasons. One of the most important of these is the inadequate attention paid to employees and the associated human resource management

practices. Although there is some evidence of attention to employees who Downsizing: is it leave the organisation it is rare for employers to consider the interests of those always lean and who remain in employment, which led us to see downsizing as mean. mean? Organisations seldom gain the benefits of increased efficiency associated with lean production, but reap all the drawbacks of meanness. Given these findings, it is interesting to consider why downsizing has 309 become associated with leanness and meanness. There are various possible explanations for the association between downsizing and leanness: practitioners seek a rationale for changes which are made for quite different reasons, consultants package together a whole series of techniques into a ``change programme'' and writers rely on management accounts of changes made and fail to take sufficient account of the forms of and motives for downsizing. The link between downsizing and meanness is less problematic since both the research and the practical experience of either redundancy or surviving a redundancy shows that employers often pay little attention to employee concerns. Summing up, the review suggests that downsizing is rarely lean, but often mean and hence frequently associated with failure. Despite this evidence, the link between lean and mean and downsizing seems to be firmly established in the eyes of employers, with the corresponding public relations connotations. But is it inevitable that downsizing is rarely lean but often mean? We have seen in our empirical research some examples of companies that have adopted lean working practices and also managed to deal with the employee issues. It is in this area that we believe the potential for further research lies where changes in business processes are made with full consideration for the human resource implications. Indeed, we suspect that only by using these methods can leaner ways of working be sustained. References Atkinson, J. (1984), ``Manpower strategies for flexible organisations'', Personnel Management, Vol. 16 No. 8, pp. 28-31. Benders, J. and van Bijsterveld, M. (1995), Leaning on Lean: The Processing of a Management Fad (mimeo), University of Nijmegen, The Netherlands. Berggren, C. (1993), ``Lean production ± the end of history?'', Work, Employment and Society, Vol. 7 No. 2, pp. 163-88. Brockner J. (1988), ``The effects of layoffs on survivors: research, theory and practice'', in Staw, B.M. and Cummings, L. (Eds), Research in Organisational Behavior, Vol. 10, JAI Press, pp. 213-55. Brockner, J., Grover, S., Reed T. and Dewitt, R. (1994), ``Layoffs, job insecurity, and survivors' work effort: evidence of an inverted-U relationship'', Academy of Management Journal, Vol. 35 No. 2, pp. 413-25. Brockner, J., Grover, S., Reed, T., Dewitt, R. and O'Malley, M. (1987), ``Survivors' reactions to layoffs: we get by with a little help for our friends'', Administrative Science Quarterly, Vol. 32, December, pp. 526-41. Business Week (1994), ``The pain of downsizing'', Business Week, May.

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