Workers’ experiences of redundancy: evidence from Scottish defence‐dependent companies

Pages325-342
DOIhttps://doi.org/10.1108/00483489810213900
Publication Date01 Aug 1998
AuthorMike Donnelly,Dora Scholarios
subjectMatterHR & organizational behaviour
Workers'
experiences of
redundancy
325
Personnel Review,
Vol. 27 No. 4, 1998, pp. 325-342.
#MCB University Press, 0048-3486
Received January 1997
Revised July 1997
Accepted October 1997
Workers' experiences of
redundancy: evidence from
Scottish defence-dependent
companies
Mike Donnelly
Bristol Business School, University of the West of England, Bristol, UK,
and
Dora Scholarios
University of Strathclyde, Glasgow, UK
Introduction
Large-scale redundancies prompted by structural changes in government
policies, markets or technology have been a pervasive feature of the 1980s and
1990s. The resulting job displacement now affects an increasing cross-section
of the labour force, more occupations and crosses regional and national
boundaries (Employment Gazette, 1993; Hamermesh, 1989).
Workers displaced as a consequence of structural unemployment may face
particularly long periods before re-employment and find adjustment to job
loss harder than non-displaced workers, i.e. those losing their jobs as a result
of cyclical occupational or industrial trends (Fallick, 1996). Factors associated
with dislocation, such as industry-specific skills in declining industries and
depressed labour markets in related industries, make it harder for dislocated
workers to find re-employment in comparable jobs (Benedict and VanderHart,
1997; Browne, 1985; Howland and Peterson, 1988). In addition, a recent study
of labour turnover and job security in the UK indicated that entry positions
available to the unemployed have become increasingly unstable, low paid, and
dominated by part-time and temporary jobs (Gregg and Wadsworth, 1995) ± a
situation affecting skilled and semi-skilled industrial workers, in particular. In
several recent surveys of redundant workers after shipyard and pit closures,
(e.g. Derbyshire County Council, 1995; Tomaney et al., 1997; Witt, 1991), those
finding re-employment tended to settle for lower paid, lower skilled or
temporary jobs. Moreover, there was a generally low reported level of training,
reskilling, or transition to self-employment, suggesting that, for the semi-
skilled among these workers at least, there was little effort to rechannel skills
to other industries.
Research also has shown that the more difficult or stagnant the labour
market, the more negative the effects on the psychological wellbeing of
The authors acknowledge the support and assistance of the Strathclyde Defence Industries
Working Group.
Personnel
Review
27,4
326
individuals seeking re-employment (Dooley et al., 1988; Fineman, 1983, 1987;
Gordus et al., 1981; Jackson and Warr, 1987). While short periods of
unemployment with the expectation of re-employment can be experienced
positively (e.g. Burchell, 1992; Fryer and McKenna, 1989) long periods of
unemployment, or the prospect of deskilled or insecure jobs, can have
significant implications for morale and mental health (Leana and Feldman,
1995; Rubery, 1989).
Particular sub-groups within the workforce may also be more vulnerable
than others to being made redundant or in adjusting to redundancy.
Unemployment research generally has shown that those in middle age
ranges take longer to find re-employment and react more negatively in terms
of mental health than either younger or older workers (e.g. Jackson and Warr,
1987). Long tenure in one industry or company, however, which is a feature of
displaced workers, is likely to have greater impact on older and, in some
industries, male workers. These individuals may face greater barriers in
adjusting to a temporary or part-time labour force, in transferring skills across
industries and occupations (Leana and Feldman, 1995), or in dealing with
employers' perceptions of their skills and usefulness (Gibson et al., 1992;
Incomes Data Services, 1996).
Some observers have noted the need for more systematic efforts to manage
redundancy processes, particularly to avoid arbitrary practices which may not
be legally defensible or which prohibit the satisfactory re-deployment of
workers (e.g. Lewis, 1993). Whereas job tenure, or the ``last-in, first-out'' rule,
once served as the primary criterion for redundancy selection, declining union
influence has meant greater management discretion and hence variation in the
criteria for collective redundancy (ACAS, 1993).
Increasing attention also has been directed to the role of the companies
making the redundancies themselves, both in managing the process and to
their role in providing appropriate outplacement services. Surveys of
organisational practice report that an increasing number of companies
which have undergone significant structural change are adopting redundancy
schemes consistent with the 1972 Code of Practice (e.g. Doherty and Tyson,
1993; Gordon, 1984; Woodger, 1992). Thus, for example, companies will offer
voluntary redundancy packages, attempt to spread redundancies over time,
help people find alternative employment or to retrain, provide statutory
redundancy pay based on years of service, often above the statutory
minimum, and offer financial or retirement planning, particularly for
managerial or professional levels of staff. Outplacement counselling is
increasingly recognised as a means of dealing with the consequences of
dislocation (see, for example, Guinn, 1988; Kieselbach and Lunser, 1990; Kirk,
1994; Pickman, 1994).
Recent results from the UK Labour Force Survey, however, suggest some
variance in practice as well as a distinct pattern accompanying high levels of
redundancy (Casey, 1995). Employees from medium and larger companies, as
well as older or higher status employees, are more likely to benefit from

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