High-Involvement Management and Workforce Reduction: Competitive Advantage or Disadvantage?

Abstract

Although interest in the workplace trends of downsizing and high-involvement work practices continues to grow, research examining the intersection between them has been limited. In this study, we examine (1) how layoffs moderate the relationship between high-involvement work practices and productivity, and (2) how continued investments in these work practices throughout layoff periods maintain workforce productivity. Findings indicate a negative relationship between high-involvement work practices and productivity in workplaces with higher layoff rates. However, workplaces that continue investments in high-involvement work practices are able to avoid productivity losses, as compared to workplaces that discontinue such investments.