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The Honolulu Advertiser
Posted on: Monday, July 30, 2001

Downsizing has its downside

By Stephanie Armour
USA Today

There's a downside to all this downsizing. Mounting concerns over job cuts have managers grappling with a surge in job-performance problems.

• Work quality is declining. Some employees are so concerned about layoffs that work is on the decline. ComPsych, a Chicago-based employee-assistance provider, has seen a 20 percent jump in calls from employers wanting help with workers' performance.

"You're seeing people whose performance is deteriorating because of the stress of the economy and increased demands," says Richard Chaifetz, CEO of ComPsych. "How do people deal with stress and the unknown? A lot of people retreat into a shell."

• Injury rates are up. Employees in an environment of job insecurity are less likely to follow safety rules and more apt to experience injuries, according to a new study in the Journal of Occupational Health Psychology.

"If employees feel production is of primary concern, they're going to focus on production and take safety risks," says Tahira Probst, assistant professor at Washington State University at Vancouver.

"Their physical health is also affected. They're more stressed about job insecurity and have more headaches, insomnia and ulcers."

• Workplace relationships are suffering. The recent economic downturn has led to an 11 percent decline in satisfaction with relationships between co-workers and supervisors, according to a study this year by Rutgers University and the University of Connecticut.

"If you have a lull in customers, it can really de-motivate people," says Rohan Mahadevan, CEO of Aftermind, a Fremont, Calif.-based provider of integrated technology and services solutions.

At PeopleSupport, a provider of Web-based customer care solutions, managers have seen some workers improve their performance because of the uncertain financial outlook. But that's not always the case.