Surviving downsizing in financial service industry: exploring impacts on employee engagement and psychological contracts

The Nigerian banking sector has undergone significant change and re-shaping due to a Government initiated consolidation process (2005-2006). The reforms took the form of merger and acquisition and involved cost cutting, downsizing, and redundancy to enable the remaining banks to stay afloat. While there is a growing literature that considers governance and financial services in Nigeria, there is little that focuses on ‘the impact of financial distress in the Nigerian banking industry’ in relation to ‘job satisfaction and perceived stress on the psychological well-being of employees’ (Samuel et al, 2009, p 624). Drawing on social exchange theory (Blau, 2009) and psychological contract theory (Rousseau, 1989) and taking a critical realist perspective (Bhaskar, 2008; Sayer, 2000), this paper presents an initial literature review as a precursor to empirical data collection and analysis together with implications from a first round of semi-structured interviews with X managers and X employees. As such, the initial stages of this doctoral research provide valuable insights into individual perceptions and experiences of major change and the on-going effects for individuals and organisations. Implications for further research and theory development are considered.