RETRENCHMENT: AN ASSESSMENT OF ITS EFFECTS ON EMPLOYEES JOB PERFORMANCE IN BUSINESS ORGANIZATIONS IN CAMEROON

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Organizations regularly face economic difficulties in the dynamic world of global business, which calls for strategic reorganization and frequently leads to layoffs or workforce reductions. However, organizations play a crucial role in our daily lives, as our well-being often hinges on their performance. Successful organizations are vital for the progress of developing nations. Beyond that, financial analysts often liken the performance of organizations and institutions to an engine that drives economic, social, and political advancement. The continual improvement of employee performance is a primary focus for any organization, as it is through this that organizations can thrive and advance.  

Like many other nations, Cameroon has gone through times of economic unrest that have forced companies to adopt retrenchment plans. Retrenchment, the termination of employees' contracts in situations like redundancy, arises from various factors such as restructuring, production reduction, mergers, technological advancements, business takeovers, and economic downturns (Tourish, D., Paulsen, N. and Bordia, P., 2019). However, a comprehensive review of literature reveals numerous dynamics within and surrounding organizations that influence retrenchment. Technological advancements in business organization aim to enhance workplace quality and efficiency. Organizations are leveraging these new technologies to gain a competitive edge in the market. However, the introduction of new technology poses significant challenges for banks. Overcoming these challenges could lead to increased productivity with fewer employees, potentially resulting in retrenchment. As technology advances, the skills required to keep pace with hardware and software also evolve. Technological changes may render a business organization uncompetitive in the volatile market, leading to a large number of employees exiting the business organization. In carefully planned mergers and acquisitions between business organization, various functions are rationalized, resulting in the elimination of numerous jobs as redundant operations are consolidated. Many units are scrapped as business or combine, either because they no longer align with the strategic vision or because they duplicate existing functions. Therefore, employees performance stands as a pivotal factor in achieving organizational objectives, particularly in managing human capital, including issues like recruitment and retrenchment (Asrar-ul-Haq and Kuchinke, 2016). Hence, a survey will be conducted to assess the effects of retrenchment on employees job performance in business organizations in Cameroon.

1.2 Statement of the Problem

It has been suggested that individuals who endure organizational changes, such as downsizing, often encounter numerous difficulties and mental health challenges. This can subsequently lead to a decline in service quality, decreased job satisfaction, diminished organizational commitment, reduced engagement, heightened resistance to change, and lowered productivity (Chipunza, 2019; Hellgren et al., 2021). However, remaining employees in organizations undergoing downsizing and change often find themselves shouldering greater responsibilities due to job consolidation and expansion. Studies indicate a negative correlation between working hours and job satisfaction, as increased workload can lead to task interference and decreased performance (Nachreiner, 2018).

Furthermore, management may resort to pressuring employees to meet production targets with a reduced workforce, resulting in longer work hours. This heightened pressure can negatively impact employees performance and productivity. Cummings and Worley (2018) suggest that if issues stemming from the downsizing process persist, remaining employees may experience depression, heightened stress levels, decreased motivation, resentment towards management, poor performance, and reduced job satisfaction, all of which can contribute to overall organizational decline. Hence, it is in the light of these that the study seeks to assess the effects of retrenchment on employees job performance in business organizations in Cameroon.

1.3  Objectives of the Study

The main purpose of this study is to assess the effects of retrenchment on employees job performance in business organizations in Cameroon. Specifically, the study will;

Investigate the effect of work load as result of retrenchment on employees’ performance

Investigate the effect of longer working hours as result of retrenchment on employees’ performance.

Investigate the effect of pay cut as result of retrenchment on employees’ performance.

Investigate the effect of depression and anxiety as result of retrenchment on employees’ performance.

Investigate the effect of restructuring of work force as result of retrenchment on employees’ performance.

1.4 Research Questions

The following questions have been prepared for the study:

How does the increased workload resulting from retrenchment affect employees' performance?

What impact do longer working hours resulting from retrenchment have on employees' performance?

How does a pay cut resulting from retrenchment influence employees' performance?

What is the relationship between depression and anxiety, as a consequence of retrenchment, and employees' performance?

How does the restructuring of the workforce, stemming from retrenchment, affect employees' performance?

1.5  Research Hypothesis

H0: Retrenchment does not have any significantly effect on the job performance of employees in Business organizations in Cameroon.

Ha: Retrenchment does have a significant effect on the job performance of employees in Business organizations in Cameroon.

1.6  Significance of the Study 

Knowing how layoffs affect work performance is important for workers who might lose their jobs or have their organizations reorganized. The findings of this study will assists employees in foreseeing possible obstacles and making appropriate plans to lessen the impact on their livelihoods and careers.Additionally,with the information gotten, methods for downsizing can be developed that will limit negative effects on performance, retain staff involvement and morale, and manage the process more skillfully.

Further more, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the effects of retrenchment on employees job performance in business organizations in Cameroon.

1.7 Scope of the study 

The scope of this study is boarded on the effects of retrenchment on employees job performance in business organizations in Cameroon. Empirically, this study will investigate the effect of work load, longer working hours, effect of pay cut, depression and anxiety and the effect of restructuring of work force as result of retrenchment on employees’ performance.

Geographically, the study will be delimited to employees of some selected business organizations in Yaounde, Cameroon.

1.8 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. 

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

 1.9 Definition of Terms

Retrenchment: is the voluntary termination of employment contracts by the employer, which is mainly implemented to save the organisational profits and avoid loses (Mthembu, 2019).

Employee Performance: is a dimension to measure the success of retail firm in which the firm must be able to create high employee performance in order to maintain survival and a sustainable competitive advantage

Employee effectiveness: According to the study is a measure of the relationship between employee inputs (skills and effort) and outputs (good and services produced) and in simple terms the more output an employee can achieve with a given amount of inputs, the more effective they become.

Business Organization: refers to the structure and framework within which a company operates. It includes various aspects such as legal structure, ownership, management, and decision-making processes.