The dynamic effect and implication of retrenchment on existing staff in Durban Telkom.
Mthembu, Lorencia Finciwe.
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Retrenchment has become a common practise utilized to improve organisational performance. Although retrenchments have increasingly become part of standard managerial strategies in organisations, their efficacy in increasing the efficiency of organisations remains unclear. Normally, retrenchment is aimed at improving organisational performance through increasing productivity, cutting costs and increasing competitive advantage. In certain instances, retrenchments have indeed proved effective in fulfilling these objectives. However there is a growing number of studies that seem to suggest that retrenchment results in an insignificant improvement and in some cases a decline in organisational performance. The aim of this study was to examine the effect of retrenchment on survivor employees’ job satisfaction, commitment, mental and physical well-being and ultimately their job performance at Telkom Durban. A qualitative research method with an interpretivism approach was adopted for this study. The respondents for the study were 12 and were selected using non-probability sampling. Questionnaires were used as data collection instruments. The questionnaires covered various aspects including biographical information of the respondents, their job commitment, the retrenchment process, personal experiences pro and prior retrenchment and their retrenchment coping mechanisms. A pilot study was undertaken to ensure reliability and validity of the research instrument. The data obtained from the questionnaires was restructured, coded and analysed. The findings of this study showed that Telkom survivor employees were affected by retrenchment, emotionally, mentally and physically. The emotional and mental states experienced by survivors were predominantly negative and include anger, fear, uncertainty, worry, shock, sadness and disappointment. Although the survivors used various coping mechanisms to deal with their feelings and emotions, the organisation did very little in ensuring the survivors coped. This resulted in a reduction in productivity, loss of trust for top management and a decline in job commitment. The study could not conclusively determine the impact of retrenchment on the overall profitability of the company as the respondents had conflicting views on the matter. Based on the research and literature findings, it is recommended that retrenching organisations develop strong communication systems, provide support to retrenchment survivors and ultimately create a conducive organisational climate.