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This study aims to investigate the effects of attribution of responsibility (AOR) for layoffs on the components of ethical decision-making. Internal, external and no-fault AOR were examined using the model of moral intensity to determine if placement of blame for the layoff influences ethical awareness, judgment and intent.

Surveys were collected from 397 students. The survey provided a scenario about a layoff situation involving an African-American woman and a Caucasian woman. Respondents then answered questions about moral intensity, moral judgment and moral intent concerning the layoff and identified the reasons they believed the layoff occurred. We tested our hypotheses using multiple regression analysis.

Subjects were more likely to make a moral judgment about the situation when layoffs were blamed on the company’s actions (external AOR) and less likely to make a moral judgment when the layoff decision was blamed on employee performance (internal AOR) or on economic factors beyond anyone’s control (no-fault AOR). Results also indicate that layoffs blamed on employee performance negatively moderate the relationship between moral judgment and moral intent.

Previous studies of layoff ethics have not examined the influence of AOR for layoffs using the model of moral intensity. Thus, this paper extends the current understanding of these concepts in ethical decision-making.

The purpose of this paper is to better understand the main effects of agent conscientiousness and reciprocity norm and the interaction effect of these two factors on layoff decisions in firm‐employee relationships.

A scenario‐based experiment with 331 business professionals was conducted and three regression models were run to test three hypotheses proposed in the paper.

The norm of reciprocity reduces decision‐making agents' tendency to lay off employees in the face of an environmental change. In addition, the norm of reciprocity interacts with decision‐making agents' conscientiousness in influencing their layoff decision.

The limitations of this study are the use of single‐agent decision scenario and the specific focus on one aspect of agent personality – conscientiousness and its collective influence on layoff decisions. In a broader picture, the results of this study support the cross‐level analytical approach to investigating organizational phenomena, in which individual‐level and organizational‐level factors interact and determine organizational outcomes.

Recruiting and promoting managers who exhibit high levels of conscientiousness, coupled with proactively cultivating the norm of reciprocity with employees, are critical to a firm's thrust in attaining and sustaining stakeholder management practices with the emphasis on employees' well‐being.

While the extant literature focuses largely on the effects of layoff and the individual perceptions of downsizing and layoff, this paper examines what actually influences decision‐making agents' layoff decisions. The paper expands the literature by investigating the impacts of agent conscientiousness and reciprocity norm on layoff decisions.

Management discretion in the decision to reduce payroll costs is an important but under-researched issue in management accounting. The authors leverage the experimental environment to test the role of organizational culture (close vs. distant) and managerial communion (concern for others) along with their interaction with sales decline persistence (one vs. two periods) on planned layoff decisions. The authors find that communal managers are hesitant to downsize employees and that a close organizational culture interacts with one period sales declines to reduce layoffs although the influence of culture is reduced with persistent sales declines. The authors also examine the influence of culture and communion on managers’ preference for pay cuts as an alternative to layoffs. The authors find that a close culture and higher communion are associated with decisions to choose pay cuts over layoffs; however, these costs interact such that managers low in communion in a distant culture express a higher preference for layoffs. These findings illustrate the combined influence of economic, organizational, and dispositional factors on manager decisions about the extent and form of labor cost reductions due to sales declines.

The purpose of this paper is to learn how managers make downsizing decisions.

Participants read a created organizational scenario and 25 hypothetical employee profiles and then chose five employees to lay off.

Older and minority applicants were chosen most often. No significance was found for performance. Rater group membership in race, gender, and age were significant predictors of layoff decisions.

Because the participants were in a controlled environment they may have disregarded other information often available to decision makers. The majority of the sample was students who may be unrepresentative of managers who make layoff decisions. The inclusion of managers who have made downsizing decisions was designed to help address this limitation.

An employer's use of personal characteristics in making downsizing decisions may ultimately affect the aftermath of downsizing.

This is one of the first studies to study the decision‐making process of layoffs.

This study aims to analyze the effect of cognitive load and social value orientation on managers’ preferences when they face with two types of restructuring choices in financially distressed firms: the first belonging to the family of organizational restructuring (massive layoffs) and the second to the family of financial restructuring (debt increases).

The authors investigate experimentally the impact of managers’ cognitive load and social value orientation on the decision to restructure leveraged buyout (LBO) firms in financial distress by using either massive layoffs or debt increases.

By investigating the impact of managers’ cognitive load and social value orientation on the restructuring decision of an LBO firm in financial distress, the research reveals that, on average, cognitively loaded managers prefer massive layoffs over increased debt levels. The massive layoffs seemingly provide a relatively easier way to avoid conflict with influential, residual claimants. In contrast, social value–oriented managers actively avoid massive layoffs and prefer to increase debt.

These results imply that the performance mechanisms emphasized to improve agency relations, for example, in LBOs, have their own limitations during periods of financial distress. This study shows that one of these limits is related to cognitive distortions and personality traits.

In this research, the originality lies in understanding how managers’ internal factors affect their restructuring decision-making, in the case of LBO firms in financial distress.

Employees are affected by the interpersonal treatment received from leaders (i.e. interactional justice), especially when being informed of negative outcomes (Brockner, 2010). Although respectful treatment may be expected from leaders generally, little is known about when leaders are more likely to display interactional justice and whether less interactional justice might be acceptable under certain circumstances. Drawing on reciprocity theory (e.g. Gouldner, 1960), and leader–member exchange (LMX) theory (e.g. Gerstner and Day, 1997), the purpose of this paper is to test the hypothesis that employees who are disrespectful and inconsiderate toward their supervisors (i.e. who are themselves interactionally unjust) would and should receive less interactional justice when being informed of a negative outcome.

The authors conducted three experimental studies (Ns=87, 47 and 114), in the context of leaders communicating a layoff decision to their subordinates.

The results supported the predictions albeit the effect of subordinate interactional justice on supervisor justice was modest, yet consistent, across studies.

The findings are consistent with reciprocity theory and the LMX literature and suggest that leader actions when communicating bad news are dependent on employee conduct. Limitations of the studies include a primary reliance on students as participants and the measurement of behavioral intentions rather than behavior.

The studies are among the first to examine interactional injustice perpetrated by subordinates toward their leaders, and its impact on leader behavior when delivering negative outcomes. There is a paucity of literature understanding the causes of leader fairness behavior, in addition to a consideration of unfairness from perpetrators of lower positional power.

Provides a literature synthesis on the impact of downsizing on the survivors and examines the experiences of three large Canadian companies. Results confirm trends that are generally reported in the literature regarding the negative aspects of downsizing. It suggests that where the company had a clear strategy to implement the downsizing, which included scheduling and a well‐specified operational plan, the impact on those dismissed as well as the survivors was buffered. The use of a downsizing plan also mitigated the negative responses on behalf of the remaining personnel. On the other hand, when the company adopts a reactive approach towards the downsizing process, numerous problems associated with the survivors are reported. The firm that applied seniority to layoff decisions received more favorable responses than firms that used criteria other than seniority.

In a field study, we build on previous research examining employee theft, which has focused on the influence of job dissatisfaction and pay inequity (distributive injustice). In a survey of employees at 18 fast food restaurants, where employee theft was a problem, we examine the relationship between employee‐observed theft and justice perceptions (distributive, procedural, and interactional justice), employees' job satisfaction, and judgments regarding the deviancy of theft. As expected, perceptions of procedural justice and employees' judgments regarding the deviancy of theft explained a significant amount of variance in employee‐observed theft; the other predictor variables did not. Theoretical and practical implications for managing employee theft are discussed.

Federal and state policymakers in the USA have sought to better differentiate the performance of K-12 teachers by enacting more rigorous evaluation policies. The purpose of this paper is to investigate whether these policies are working as intended and explore whether district stressors such as funding, enrollment, and governance are associated with outcomes.

The authors examined teacher evaluation ratings from 687 districts in Michigan to identify the relationship between district stressors and two outcomes of interest to policymakers: frequency of high ratings and variation of ratings within districts. A qualitative index of variation was used to measure variation of the categorical rating variable.

About 97 percent of teachers in Michigan are rated effective or highly effective, and variation measures indicate overwhelming use of only two ratings. Charter school districts have fewer teachers rated highly than traditional districts, and districts with higher fund balances have more teachers rated highly. Districts with increasing fund balances have higher variation.

The findings suggest that district stressors presumably unrelated to teacher performance may influence teacher evaluation ratings. State teacher evaluation reforms that give districts considerable discretion in designing their teacher evaluation models may not be sufficient for differentiating the performance of teachers.

This research is important as policymakers refine state systems of support for teacher evaluation and provides new evidence that current enactment of teacher evaluation reform may be limiting the value of evaluation ratings for use in personnel decisions.

Members of an organization that had undergone revolutionary, punctuated equilibrium type change were asked to tell the story of that change. Senior managers tended to make sense of the change as discontinuous, while individual contributors tended to make sense of the change as incremental. Three theories of individual sense‐making; individual agency, personal relevance, and strategic perspective are developed to suggest why individuals made sense of these changes differently.