Predicting Federal Workforce Impacts – Nu Leadership Series

“ Every failure is a blessing in disguise, providing it teaches some needed lesson one could not have learned without it. Most so-called Failures are only temporary defeats.”
Napoleon Hill

Does downsizing really hurt an organization or is it ‘hype?’ Federal leaders need to carefully consider their response. Was it just another fad in corporate America? Let’s review. In the quest for profit in the 90s, many businesses lost focus on the importance of socio-technical systems.

Katsioloudes, a management guru, stated that as profitability of mechanization increases, technology is amplified while workers are often devalued. Pfeffer, author of The Human Equation, argued that an organization’s success is directly related to its implementation, and this capacity comes from the workers.

However, most workers no longer trust management in any organizational structure. According to a USA Today poll, nearly half of those interviewed said that corporations can be trusted only a little or not at all when it involves looking out for the best interest of employees. Therefore, organizational structure will ultimately fail without proper strategy.

For federal workers, this current environment has caused them to demand more than the current organizational status quo. The 21st century presents a brave, new world of personnel challenges, such as virtual organizations, outsourcing, and the financial constraints of declining budgets in many federal agencies. Some of the cultural changes include acceptance of downsizing as a part of work life, the traditional family decline, competitive nature of a global business structure, and advancement of communication technologies to build person-to-person relationships. Some of these factors have impacted the workers’ attitudes about their jobs and the quality of life. In the 1990s, many government agencies followed the cue of the private sector by implementing downsizing or re-engineering in an effort to correct any organizational inefficiencies or miscues.

Government executives felt that downsizing survivors would grumble about the downsizing efforts but would eventually “get over it.” These executives assumed that employees would just be happy to be employed. These leaders were wrong, however. In a study conducted by the American Management Association of over 1,000 companies in the 1990s, surviving employees were found with lower morale, fearing they would be downsized next; survivors were also twice as likely than stable employees to take sick leave and five times as likely to suffer back and muscle pains. Government executives now have a leaner workforce, but at what cost? Caudron, a management expert, maintains that management has lost credibility and trust of workers. She further cited that the primary reason trust has degenerated was not because of the loss of job security, but was due to managers mishandling the workforce changes by treating employees inconsistently, thereby losing credibility in the process. Clearly, any initiatives without worker buy-in will eventually fail. Therefore, effective leaders in the federal system should consider if downsizing is worth the effort.


Caudron, S. (1996). Rebuilding Employee Trust. Training & Development, 18-21.

Hackman, M. & Johnson, C. (2000). Leadership: A communication perspective. Long Grove, IL: Waveland Press.
Katsioloudes, M. (1996). Socio-technical analysis. Human Systems Management, 15(4), 235.
Pfeffer, J. (1998). The human equation. Boston, MA: Harvard Business School Press.
© 2008 by Daryl D. Green