Table of Contents

The Psychology of the Recession on the Workplace

The Psychology of the Recession on the Workplace

New Horizons in Management series

Edited by Alexander-Stamatios G. Antoniou and Cary L. Cooper

An economic recession can affect the aggregate well-being of a population. This highly regarded and timely book shows a significant increase in the mean levels of distress and dissatisfaction in the work place in recent years. In particular, increasing job demands, intrinsic job insecurity and increasingly inadequate salaries make substantial contributions to psychological distress, family conflict and related behaviors. The contributors reveal that the recession has fundamentally altered the way employees view their work and leaders. With employers and employees still facing a continued period of uncertainty, a severe impact on employment relations is a continuing reality.

Chapter 9: The psychology of unemployment: laying off people in a recession

Adrian Furnham

Subjects: business and management, human resource management, organisational behaviour, strategic management

Extract

Economic recessions have social and psychological consequences. Many people lose their jobs or are compelled to work part-time. Young people cannot find work. A sense of lethargy and despair pervades many communities and offices. In some countries people take to the streets: in others they seem quietly resigned to their fate. There have been numerous studies of the psychological distress that unemployment brings (Bjarnsasson and Sigurdardotter, 2003). Counsellors used to remind people that it was jobs, not people, who are made redundant. They used words like: ‘surplus to requirements’, ‘let go’, ‘early retirement’, and ‘right sizing’ which were all euphemisms for involuntary unemployment. Boom and bust come in cycles. There were many layoffs in Europe in the early 1980s and then again in the early 1990s. The road from ‘layoff’ to ‘getting a life’ seems to follow various stages. The first crucial issue is the perception of procedural fairness or justice when being laid-off. This question is essentially twofold: who is ‘prepared for the chop’ and how is the process handled? Sometimes, but not often, it is pretty obvious who first deserved the ‘yellow card’. It is easier for managers to close a whole department or a whole section. How reasonable, rational and fearful that is perceived to be, by hopefully a rational and reasonable workforce, is part of the question. Procedural and distributive justice issues are very important here.

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