Employees' Perceptions of the Effects of Retrenchment on Job Stress and Organisational Commitment in a Mining Company

• Author: Pierre A. Joubert,Landiswa Pilvia Seteni,Manilall Dhurup
• DOI: 10.25159/2664-3731/6430
• Published date: 01 July 2021
• Date: 01 July 2021
• Pages: 1-23

Article

African Journal of Employee Relations

https://doi.org/10.25159/2664-3731/6430

https://upjournals.co.za/index.php/AJER

ISSN 2664-3731 (Online), ISSN 2709-0426 (Print)

Volume 45 | 2021 | #6430 | 23 pages

© Unisa Press 2022

Employees’ Perceptions of the Effects of

Retrenchment on Job Stress and Organisational

Commitment in a Mining Company

Landiswa Pilvia Seteni

https://orcid.org/0000-0002-7098-6093

Vaal University of Technology, South

Africa

setenilandiswa@gmail.com

Pierre A. Joubert

https://orcid.org/0000-0002-8445-0329

Vaal University of Technology, South

Africa

pierrej@vut.ac.za

Manilall Dhurup

https://orcid.org/0000-0002-8845-3527

Vaal University of Technology, South

Africa

royd@vut.ac.za

Abstract

Over the past decade, South African organisations have had to cope with an

ever-increasing rate of local and global changes. There have been considerable

and ongoing socio-political changes, resulting from new government

regulations. Most organisations have experienced some type of downturn,

whether due to external business factors or poor internal performance. A typical

response to organisational decline is retrenchment. This study seeks to outline

employees’ perceptions of the effects of retrenchment on job stress and

organisational commitment in a mining company. The study is located within a

quantitative research paradigm. Four research hypotheses are posited and data

collected from a sample of 400 surface mining employees, including

management, administrators, engineers and artisans, in one region. The results

indicated that the effects of retrenchment did not have a negative impact on job

stress (time stress and anxiety). This may be owing to the fact that the mining

company in question had a planning and consultation process in place for the

employees prior to the retrenchment process. The results also indicated that job

stress (time stress and anxiety) is negatively associated with organisational

commitment. Implications of the findings are discussed, limitations of the study

are mentioned, and future research directions are given.

Keywords: retrenchment; time stress; anxiety; organisational commitment

Seteni, Joubert and Dhurup

2

Introduction

Owing to continued economic decline, many organisations have found it difficult to

retain a large workforce. The services of some employees have been declared redundant,

leading to poor performance and uncertainty among the remaining employees (Kiriago

& Nyaberi, 2013). Most organisations have experienced some type of downturn,

whether due to external business factors or poor internal performance. This often results

in organisations having to cut back on their workforce significantly (Ahmed, 2017).

Retrenchment is attributed to cyclical downturns, market losses or other economic

factors, which oblige the employer to reduce the labour force (Gribble & Miller, 2009).

When faced with declining performance, some business leaders respond through moves

such as aggressive marketing and new product development. Other market leaders

respond by focusing on extensive cost-cutting, including laying off employees and

selling assets (Barker et al., 2011). Retrenchment connotes a deliberate action by an

enterprise or industry to reduce the number, percentage or level of employment of its

staff (Adesina, 2015). Retrenchment consists of the cutting of costs and, if essential, the

reduction of assets. It is sometimes referred to as downsizing (Mutonga, 2011). In the

publication Labour Relations Act 66 of 1995 and CCMA-Related Material (Juta, 2015),

retrenchment is defined as dismissal based on operational requirements. These

requirements are based on economic downturns, technology, unstable political

situations, globalisation and structural requirements (Arnold, 2013; Nel & Ngirande,

2012).

Previous studies have been conducted on the psychological effects of retrenchment,

such as loss of identity and self-esteem and how those who lose their jobs involuntarily

manifest anger (Gribble & Miller, 2009). Freese et al. (2013) have also found that

retrenchment has considerable psychological and physical consequences and causes that

increase health problems.

Purpose and Objectives of the Research

The purpose of the research was to assess employees’ perceptions regarding

retrenchment and to shed some light on the influence it had on individuals, more

specifically the survivors.

Literature Review

Theoretical Framework

This study used the cognitive dissonance theory as espoused by Festinger (1957) to

explain the impact of retrenchment on job stress and organisational commitment. Within

this theory, dissonance and consonance are relations among cognitions that relate to

opinions, beliefs, knowledge of the environment and knowledge of one’s own actions