The role of outplacement in redundancy management

Date01 August 1998
Published date01 August 1998
AuthorNoeleen Doherty
Subject MatterHR & organizational behaviour
Outplacement in
Personnel Review,
Vol. 27 No. 4, 1998, pp. 343-353.
#MCB University Press, 0048-3486
Received January 1997
Revised June 1997
October 1997
The role of outplacement in
redundancy management
Noeleen Doherty
Cranfield School of Management, Cranfield University,
Cranfield, UK
No guarantees
Organisations have rarely been able to guarantee that the number and type of
people they employ will remain constant, therefore redundancy has always
existed as one legitimate means of manipulating the internal labour market to
enable adjustments to the size and composition of the workforce. Often used
liberally to reduce the number of employees in blue-collar positions, the threat
of redundancy was once limited to lower level positions. However, the
pressures of recession in the 1980s and 1990s resulted in large-scale workforce
reductions and posed the threat and the reality of redundancy across all levels
of employees including managerial positions (Cole, 1988; Employment Gazette,
1993; Nicholson and West, 1988). This situation was driven by the need to
increase organisational effectiveness, efficiency and productivity. Global
competition, technological innovation and business process re-engineering
provided the rationale for re-organising and re-structuring, reportedly
resulting in 90 per cent of Britain's largest companies downsizing during
the early 1990s (Crace, 1995).
The mass exodus of large numbers of employees has been stark testimony
to the extensive use of redundancy tactics, legitimised by this need to attain
flexibility and adaptability, in order to meet the challenge of business survival
in an increasingly competitive environment. Contraction of the workforce
through a reduction in head-count was equated with reduction in costs and
posed as the way of generating lean, mean, competitive businesses (Hamel and
Prahalad, 1994). Even though research has suggested that the anticipated
gains in productivity were not realised over time (Cameron, 1994; McKinley et
al., 1995) such transformations continued, making redundancy one of the most
pervasive and significant outcomes of organisational change in recent times.
The event of redundancy
Because of the various functions which work fulfils, not only as a means for
economic existence but as a social activity and as a source of personal identity
and status, the event of redundancy can prompt personal changes at the
individual level for both those being made redundant and those remaining in
the organisation. Much research has focused on the individual variables,
exploring the psychological impact on those made redundant. The detrimental
effects of redundancy can be profound. Loss of employment can result in a
loss of dignity, loss of confidence, anxiety, depression and despair for some

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