Giving Nonselective Downsizing a Performance Review

The failures of performance management (PM) systems are well known, as is the popularity of downsizing as a corporate strategy. We suggest that the factors integral to the success of PM, such as employee-organization trust, manager-employee communication, goal setting, and reinforcement contingencies, are undermined by organizational downsizing. Broken PM systems increase the likelihood of future downsizing, yet make it difficult to conduct performance-based downsizing. With proper encouragement by HRD professionals and the correct use of employee-centered PM, which may include performance-based downsizing, organizations may break this cycle. Suggested practical implementations include the use of Daniels's (1985) concept of Performance Management and of Pfeffer and Sutton's (2006) concept of evidence-based management to (a) implement alternative cost reduction techniques (b) implement contingent PM, that may integrate performance-based downsizing (c) develop HRD specialists and managers to develop and evaluate these integrated systems and (d) reevaluate PM competencies and processes after downsizing has occurred.