Organizational Downsizing And Employees Performance of selected Commercial banks In Nyeri County, Kenya.

ABSTRACT

Downsizing strategy has been implemented by many organizations as a way to deal with the

economic pressures from the business environment. Despite the increase in downsizingin

several banks, there is little empirical research on the impact of downsizing on employee

performance. The objective of the research was to investigate the effect of organizational

downsizing on employees’ performance in selected commercial banks in Nyeri County,

Kenya. The specific objectives of the study were to investigate the effect of organizational

commitment on employee performance, to determine the effect of job morale on employee

performance, to assess the effect of job security on employee performance and to determine

the effect of career advancement plans on employee’s performance. The study was guided

by Maslow hierarchy of needs theory, job embeddedness theory and equity theory. The

study used descriptive research design since it determines means and other statistical data of

the population. The study targeted 168 employees from the selected commercial banks in

Nyeri County and since the target population is of manageable size, a census was conducted

to all the respondents. Semi-structured questionnaire were administered to the respondents to

collect primary data. To ease analysis, the Statistical Package of Social Sciences (SPSS)

computer software was applied. Descriptive, correlation and inferential analysis was used to

show relationships amongst the variables. The study found that employees feel part of the

bank family at all times and that they would like to work in the same bank for a longer time.

The study established that employees are satisfied with the salary increments done every

year though some opined that it was not enough compared to their daily inputs. The study

found that employees feel safe in their current positions. The study established that banks

have promotion opportunities available for best performing employees. It was however

established that banks provides regular opportunities for job enrichment to increase

performance. The study found that training needs assessment was carried out continuously

within the organization to enhance performance and that the banks provided opportunity to

do creative and challenging work. The study concluded that employee’s commitment, job

morale, career advancement and job security have a strong positive correlation with the

employee’s performance. The study recommends that banks should provide regular

opportunities for job enrichment to increase performance and training needs assessment

should be carried out continuously within the organization. The study recommends that

downsizing should be done carefully not to affect the commitments of the retained

workforce. The study recommends that the survivors of downsizing need to be managed and

directed to positivity, explaining to them the need for downsizing. The study recommends

that for the purposes of job security, the bank should improve trust between managers and

employees by encouraging frequent and free employee and manager communication at all times.