Final answer:
Increased resignations by valued employees pose a significant risk to a company during downsizing due to job insecurity and potential morale issues. Downsizing can lead to the loss of key talent and challenges in maintaining workforce engagement, which companies need to carefully consider when making such decisions.
Option 'b' is the correct.
Step-by-step explanation:
Among the options provided, increased resignations by valued employees poses a risk to a company because of downsizing. When a company undergoes downsizing, which is the process of reducing the number of employees to cut costs, it can lead to a myriad of negative outcomes. The retained employees may experience job insecurity, leading to increased stress and a possible decline in organizational commitment. This climate of uncertainty can incentivize highly skilled and valuable employees to seek stability elsewhere, potentially resulting in their resignation from the company.
Additionally, such an environment might discourage wage raises, further impacting morale. Industrial-organizational (I-O) psychologists often work with businesses to manage these transitions by helping communicate these changes effectively and supporting both laid-off and remaining employees. An important focus is to minimize the adverse effects of downsizing and maintain a productive and engaged workforce. However, despite such efforts, downsizing can have lasting impacts, including the risk of losing key talent and the challenge of maintaining morale among those who remain.
It is crucial for companies to consider these risks when contemplating downsizing as a strategy. Recessions and reductions in production often necessitate such measures, but the choice between layoffs and alternative cost-saving strategies, such as across-the-board wage cuts, can have significant implications for the workforce composition and company's future performance.