Exploring employee and organisational perceptions of workforce reduction and its influence on financial viability in the mining industry

Abstract

This qualitative phenomenological study examined the impact of perceptual misalignment between employees and organisational leaders regarding workforce reduction on financial viability and organisational resilience in the South African mining industry. Understanding these perceptual dynamics is crucial, as workforce reductions aimed at cost savings can produce unforeseen financial consequences due to lowered morale, knowledge loss, and diminished stakeholder confidence. This study, grounded in psychological contract theory, stakeholder theory, and organisational resilience theory, employed semi-structured interviews with 17 participants, comprising 12 employees and five organisational leaders, from a South African mining company. In a thematic analysis conducted using Atlas.ti software, four themes emerged: (1) substantial perceptual misalignment existed, with leaders who focused on financial imperatives and strategic optimisation, and employees, who focused on procedural fairness, transparent communication, and breaches of the psychological contract; (2) employee perceptions of fairness and communication; (3) organisational rationales and implementation techniques; and (4) perceptual misalignment leading to financial infeasibility and consequences for stakeholder confidence. The study also developed the integrated perceptual alignment framework, which indicated that perceptual alignment has a significant impact on organisational outcomes. Transparent communication, procedural fairness and stakeholder engagement are crucial for maintaining financial viability. A limitation is that findings are based on a single South African mining company, limiting their generalisability to other mining contexts outside South Africa.