Layoffs worry remaining workers

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By Gabriella Boston

As the laid-off -= referred to as "victims" by workplace psychologists -- line up for unemployment checks, the remaining employees -- "survivors" -- are left picking up the slack and cowering in their cubicles asking, "Am I next?"

Acute job insecurity might spur harder work and productivity gains initially, researchers say, but in the longer run it breeds anxiety and timid conformity in the work force -- at the very moment when creativity and new ideas are most needed.

It's not pretty out there: In November, a half-million people lost their jobs, the biggest monthly loss in 34 years. The total number of unemployed Americans now stands at 10.3 million.

"The vast majority of effects" of layoffs on the residual work force "are negative," said organizational psychologist Rainer Seitz, a consultant and a psychology instructor at Washington State University in Vancouver.

Some productivity gain can be seen initially as remaining workers feel the pinch of job insecurity, he said. Workers are "producing at a higher level because of increased stress and fear."

However, as the survivors scramble to fill the void, they lose an often essential component of productivity -- and even more so, success -- namely, creativity, said Mitchell Marks, a professor of organizational psychology at San Francisco State University.

"People are much less likely to think outside the box at exactly the time when their company most needs them to do so," Mr. Marks said.

By simply cutting the head count, the company looks better to Wall Street initially, but in the long run, nothing has changed except for the head count. The product and the way of doing business are the same. That usually is not enough of a turnaround to make the company successful, Mr. Marks said.

Fresh ideas are what downsizing companies need, but people lose their creativity during times of stress and fear because diverging from ordinary thinking inherently carries risk.

Simply put, people become averse to risk -- not to mention deprived of time.