Determinants of Voluntary Turnover and Layoffs in an Environment of Repeated Downsizing Following a Merger: An Event History Analysis

Abstract

In this study we formulate and test models of voluntary turnover and downsizing in a hospital undergoing workforce reduction following a merger. Targeted separation packages were primarily employed by the hospital in selecting departments and units as having surplus staff, as well as identifying individual employees. Determinants for the models were derived from the disparate disciplines of economics, sociology, and psychology, as well as demographic and reactions to change variables. Applying event history analysis to data from a sample of 415 hospital employees over a five year period, the results indicate that older, full-time employees, who were less absent, and had an acceptable workload, yet experienced lower co-worker support and responded negatively to the amalgamation of the hospital were more likely to be downsized. Conversely, employees who were younger, white-collar, intended to leave, and predisposed to the amalgamation were more likely to resign. In addition, the differential effects (based on discriminant function analysis) of the five categories of variables found that age, blue-collar, co-worker support, full-time, amalgamation, and work overload discriminated between the two forms of turnover. The theoretical and practical implications of the findings are discussed.