The Effects of Downsizing on Employee Stress and Organizational Loyalty in the Healthcare Industry

This study explored how a downsizing event would impact employee stress and organizational loyalty in two mid-sized hospitals in the southwest United States that had undergone a downsizing event in the past two years. One hospital was in the process of downsizing at the time of the study and the other had experienced many over the past few years, with the most recent two years prior to the start of the study. Data was gathered both quantitatively and qualitatively to get as complete a picture as possible. Demographic information, a stress indicator, Occupational Stress Inventory-Revised. (Osipow, 1998), and personal interviews were used to gather the information. Four trends surfaced with analysis of the data. These trends were a fear of a recurrence of a downsizing event, lack of faith in the organization, longing for former situation, the pre-downsizing organization, and the role of family ties to employment. The research also has uncovered two areas for future research. One of these is re-administering the stress indicator to the hospital in the midst of downsizing to check stress levels and the other is to conduct the same study in a larger market to see if family ties played the same role as in this study