Non-negotiable furloughs increase turnover, hurt firms, says URI

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Posted 4/11/13

SOUTH KINGSTOWN – The survey responses of about 200 furloughed state employees, who were denied input in managing their time off showed higher emotional exhaustion and lower work performance even after returning to work, according to the research of University of Rhode Island Business Professor Anthony R. Wheeler.

Wheeler, who teamed up with University of Alabama Professors Jonathon R. B. Halbesleben and Samantha C. Paustian-Underdahl for the study, recently published its findings in the Journal of Applied Psychology.

The survey sought to reveal the long-term psychological impact of mandatory furloughs on state employees in four different agencies. The results indicated that following a furlough, worker distress and workplace performance remain at pre-furlough levels.

The furloughs, which took place in an undisclosed Midwestern state, forced up to 1,000 workers into unpaid days off when state offices were forced to shut down for seven nonconsecutive days in 2009.

Surveyed workers were asked about their job performance and degree of “burnout,” or emotional exhaustion, in four blocks, twice before the furlough and twice afterwards. Responses indicate that mandatory days off “damage the workforce,” Wheeler said.

As part of the study, Wheeler also looked at 21 state governments, each of which held a different strategy for implementing furloughs. Comparatively, the state in which workers were surveyed was more conservative, giving workers no choice on the dates the offices would be closed.

During furlough days, employees were also prohibited from taking any work-related materials home, despite assignment deadlines, due to their union’s furlough rules.

Furlough strategies that exclude employee input tend to make a cost-cutting situation worse, Wheeler said. In an effort to realize short-term savings, furloughs can also increase employee turnover rates, an additive effect that generates long-term costs for an agency or firm, what Wheeler called a “self-fulfilling prophecy.”

Wheeler suggested that companies and states implement furloughs that minimize stress and anxiety by giving workers an opportunity to manage their time off. He also said that companies are more likely to recover in tough economic times when layoffs are used only as a “last resort,” making incremental cuts in other places instead.

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