Impact of Employees’ Perception of Organizational Downsizing on Their Commitment.

Abstract

Sri Lanka is currently experiencing its worst financial crisis in decades. The building construction industry can be cited as one of the leading industries affected by this situation in Sri Lanka. This study aimed to examine whether employees' perception of organizational downsizing impacts their commitment. This was carried out as a cross-sectional field study among a sample of 204 employees in three already downsized construction firms in the Colombo District, Sri Lanka. Simple random sampling was applied to select the sample. Data were collected via distributing an online standard questionnaire. Statistical Package for Social Science (SPSS) was used to analyze the data. Descriptive statistics, correlation and simple regression, were performed to analyze data. When analyzing data, the researcher identified that employees’ perceptions of their organization’s downsizing practices have a significant positive effect on their level of commitment. Moreover, the researcher found a significant positive impact of employees’ perception of downsizing on employees’ affective, continuance, and normative commitment. Maintaining effective communication before, during and after the downsizing process is recommended.