The influence of eligibility on employees' reactions to voluntary workforce reductions

This study examined employees' reactions to a voluntary severance program (VSP). Results generally supported a model that links perceptions of justice-based attributes (adequacy of outplacement help; consistency, objectivity, and ethicality of procedures) with affective commitment and intentions to leave. We also considered the main and moderating effects of a particular voluntary severance outcome, eligibility. Eligibility was associated with both commitment and turnover intentions, and moderated the effect of perceived adequacy of outplacement help on turnover intentions, as well as the effect of perceived procedural fairness on commitment. Control variables representing demographics (age), perceived fairness of a previous early retirement program, and anticipation of future layoffs also significantly influenced both outcomes. Implications for future research and for management are discussed.