Featured Research

from universities, journals, and other organizations

Downsizing by position or tenure hurts managerial diversity, while performance guided layoffs don't

Date:
January 30, 2014
Source:
American Sociological Association (ASA)
Summary:
A new study finds that corporate downsizing reduces managerial diversity, especially when layoff decisions consider workers’ position or tenure. But when layoffs are based on performance evaluations, managerial diversity remains intact -- at least when it comes to white women and blacks.

A new study finds that corporate downsizing reduces managerial diversity, especially when layoff decisions consider workers’ position or tenure. But when layoffs are based on performance evaluations, managerial diversity remains intact — at least when it comes to white women and blacks.

“It seems that the more individualized process of evaluating each worker on his or her merits — rather than using blanket criteria such as position or tenure — creates awareness and accountability among executives and motivates them to think deeply and creatively about who they should keep during downsizing,” said study author Alexandra Kalev, an Associate Professor of Sociology and Anthropology at Tel Aviv University. “This outcome of performance-based downsizing is not only good for managerial diversity, but also for the future of the company because the best performers are kept.”

Titled, “How You Downsize Is Who You Downsize: Biased Formalization, Accountability, and Managerial Diversity,” the study, which appears in the February issue of the American Sociological Review, focuses on white and black employees and considers data on 327 private U.S-based companies that downsized between 1980 and 2002. The companies, from manufacturing, service, and retail industries, had at least 50 workers prior to layoffs.

“In an average downsizing organization where layoff decisions considered workers’ position, the shares of white women and blacks in management declined by almost 25 and 20 percent, respectively,” said Kalev. “Downsizing by tenure reduced the share of white women in management by more than 20 percent. Notably, two-thirds of companies in my sample used position or tenure as criteria for layoff decisions.”

Making matters worse for white female and black managers is that position-based downsizing, the most harmful type of downsizing for those groups, became increasingly prevalent over the course of the study period, Kalev said. In the early 1980s, downsizing companies made position-based layoffs less than 30 percent of the time. By 2002, however, downsizing companies made position-based layoffs more than 50 percent of the time.

In addition, Kalev found that companies increasingly used external lawyers to guide them through the downsizing process, which also didn’t bode well for managerial diversity.

“There is a difference between the effect of an attorney who is part of the company and one that the company hires to handle a special task,” Kalev said. “While in house attorneys helped minimize damage to managerial diversity during downsizing, outsourced legal experts did not.”

This was true even when position or tenure were used in downsizing decisions. “I was surprised by the finding that an internal legal counsel made such a big difference in the results of downsizing,” Kalev said. “I discovered that an in house attorney raised awareness of diversity issues among executives and this motivated them to use tools such as repositioning and retraining to maintain managerial diversity.”

In terms of the importance of her research, Kalev said, “This study is a wake-up call. Downsizing is increasingly done in ways that hit managerial diversity the hardest, while downsizing practices that help protect diversity have become less and less common. If these trends continue, women and minorities will become increasingly rare in management jobs.”


Story Source:

The above story is based on materials provided by American Sociological Association (ASA). Note: Materials may be edited for content and length.


Journal Reference:

  1. A. Kalev. How You Downsize Is Who You Downsize: Biased Formalization, Accountability, and Managerial Diversity. American Sociological Review, 2014; 79 (1): 109 DOI: 10.1177/0003122413518553

Cite This Page:

American Sociological Association (ASA). "Downsizing by position or tenure hurts managerial diversity, while performance guided layoffs don't." ScienceDaily. ScienceDaily, 30 January 2014. <www.sciencedaily.com/releases/2014/01/140130040659.htm>.
American Sociological Association (ASA). (2014, January 30). Downsizing by position or tenure hurts managerial diversity, while performance guided layoffs don't. ScienceDaily. Retrieved April 17, 2014 from www.sciencedaily.com/releases/2014/01/140130040659.htm
American Sociological Association (ASA). "Downsizing by position or tenure hurts managerial diversity, while performance guided layoffs don't." ScienceDaily. www.sciencedaily.com/releases/2014/01/140130040659.htm (accessed April 17, 2014).

Share This



More Science & Society News

Thursday, April 17, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Are School Dress Codes Too Strict?

Are School Dress Codes Too Strict?

AP (Apr. 16, 2014) Pushing the limits on style and self-expression is a rite of passage for teens and even younger kids. How far should schools go with their dress codes? The courts have sided with schools in an era when school safety is paramount. (April 16) Video provided by AP
Powered by NewsLook.com
Could Even Casual Marijuana Use Alter Your Brain?

Could Even Casual Marijuana Use Alter Your Brain?

Newsy (Apr. 16, 2014) A new study conducted by researchers at Northwestern and Harvard suggests even casual marijuana use can alter your brain. Video provided by Newsy
Powered by NewsLook.com
Thousands Of Vials Of SARS Virus Go Missing

Thousands Of Vials Of SARS Virus Go Missing

Newsy (Apr. 16, 2014) A research institute in Paris somehow misplaced more than 2,000 vials of the deadly SARS virus. Video provided by Newsy
Powered by NewsLook.com
NYPD Ends Muslim Surveillance Program

NYPD Ends Muslim Surveillance Program

AP (Apr. 15, 2014) The New York City Police Department has ended a program that once kept tabs on the city's muslim population. (April 15) Video provided by AP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins