Mixed-method Evaluation of Perceived Approach and Criteria of Employees Retrenchment in Selected Commercial Banks in Southwest, Nigeria

Abstract

Ever since post consolidation era, retrenchment in the Nigerian banking sector is prominent and even alarming. This paper adopted a mixed method technique to evaluate the dimensions of retrenchment approach and criteria used by banks’ employers in determining employees to be retrenched and extent of fairness perceived by the surviving employees. The study was anchored on organizational justice theory. Four banks - two each from the old generation bank and new generation commercial banks in southwest Nigeria were selected for the study. The sample size comprised 256 survivors selected through the triangulation of purposive and simple random sampling techniques, while questionnaire and in-depth interviews (IDIs) were used to gather data. The quantitative data were analyzed using frequency percentage distribution, cross tabulation, and content analysis for qualitative data. Findings revealed the new generation banks - Access and Eco banks and even UBA Plc. among old generation bank adopted reactionary approach, thus retrenching their workers arbitrarily without prior or adequate notice. In retrenching employees, the banks combined many criteria, but the most commonly criterion used to evaluate employees’ productivity was performance appraisal system; for instance, 100% of survivors in NGB and 98.4% in OGB accepted the use of performance appraisal, however 74.2% in NGB perceived the outcomes were subjective and unfair. The study concludes that banks’ management have treated their employees in unfair manners during retrenchment, thus survivors have manifested high level of perceived injustice in the system. It recommended top management to applyfairness during retrenchment and treat survivors in a fairly manner.