Edited by Rosalind H. Searle and Denise Skinner
Chapter 16: Trust and Engagement in a Downsizing Context: The Impact on Human Resource Managers
Finian Buckley INTRODUCTION: HRM IN A RECESSION CONTEXT The impact of economic cycles is a significant factor in understanding the efficacy and appropriateness of human resource management (HRM) practices within organizations (Lahteenmaki et al., 2006). For instance, evidence from organizations facing the recessionary climate following the Asian financial crisis in 1997 indicates that HRM practices shift considerably as a response to economic contraction and that once-diverse human resource (HR) bundles become more limited and primarily focused on improved productivity (Benson and Debroux, 2004). While it may appear intuitive that the HRM function declines in importance when employee numbers contract in a recessionary context, the paradoxical contention, which suggests that in this very context the HRM function becomes a strategic driver of an organization’s future viability, has gained support (Greer and Ireland, 1992). The influence of the HRM function in lean times appears to be key when the HR strategy is aligned with firm strategic intent and is sensitive to internal as well as external needs (for example, Boxall and Purcell, 2004; Chadwick et al., 2004). It would be simplistic to overplay the influence of the role of the HRM function and appropriate HR practices as a key to firm success when managing through a recessionary climate, as research indicates that a host of exogenous and endogenous factors interact to influence firm adjustment (Datta et al., 2010). However, when a firm decides to reduce staffing through downsizing, the role played by the HR function appears to be pivotal in terms of...
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