ABSTRACT

Retrenchment and downsizing of workers is setback for young crewmembers, which have just started their career in a particular organization. Retrenchment and downsizing in many institutions have has done more harm than good to many organizations. Over 75% of the organizations that have adopted retrenchment have not achieved their objective. On the contrary, retrenchment has presented more negative than positive effects to the organization performance. The study focused on the effect of employee downsizing and retrenchment on organizational performance (A Study of Selected Tertiary Institutions in Abia State). The sought to assess the impact of restructuring and re-engineering, examine the effect of termination and rightsizing, determine the effect of redundancies and collective dismissal and investigate the challenges of employee downsizing and retrenchment on organization performance in Selected Tertiary Institutions in Abia State. The research design used in the study was survey design. The researcher adopted primary and secondary sources of data to collect information from the respondents. The study targeted academic and non-academic staff, junior staff and technologies of Michael Okpara University and Abia State Polytechnic. ANOVA test and regression model were used to test the hypotheses of the study. The study found out that termination and rightsizing has significant effect on growth of Selected Tertiary Institutions in Abia State. Restructuring and re-engineering has significant impact on commitment of Selected Tertiary Institutions in Abia State p-value = 0.000 < 0.05% significance level. Redundancies and collective dismissal has significant effect on sustainability of Selected Tertiary Institutions in Abia State (β = 0.248; t = 0.764 P <.002). Inefficiency, Incompetency, Gross Misconduct are the challenges of employee downsizing and retrenchment on organizational performance in Selected Tertiary Institutions in Abia State. The study concluded that redundancies and collective dismissal has significant effect on sustainability of Selected Tertiary Institutions in Abia State. The study recommended that termination and rightsizing of an employee should be considered at disciplinary committee through proper fair hearing and interview rather than witch hunting and legal appointment that will have ripple effect on performance of the organization.