The purpose of this study was to determine the effect of downsizing on employee performance in commercial banks in Trans Nzoia County. The study was guided by Uncertainty Management Theory. Literature was reviewed as per the study objectives. The study adopted descriptive survey research design. Target population of the study consisted of 470 employees drawn from 14 commercial banks in Trans Nzoia County. A sample size of 216 of employee was arrived at and stratified simple random sampling used to categorize managers, supervisors/administrators and clerical/tellers. Data was collected using the questionnaires. Validity and reliability of the study instrument were ascertained and results showed that the instrument was valid and reliable. Quantitative data was analyzed using descriptive and inferential statistics (Pearson Correlation and regression analyses) at 95.0% confidence level (P<0.05). Analysed data was presented in form of frequency tables and percentages. The results indicated that downsizing (r=0.508, p<0.000) had significant effect on the employee performance in commercial banks found in Trans Nzoia County at varied degrees. Downsizing explained up to 49.9 % (R2= 0.499) of the variance in employee performance of commercial banks in Trans Nzoia County. It was established that the management of downsizing affects the performance of employees in commercial banks found in Trans Nzoia County; downsizing threatens job security, thus reducing employee commitment to workforce quality. It was concluded that increase in the management of downsizing would result to increase in employee performance. It was recommended that commercial banks managers should prepare the employees on the downsizing programs and how the organization is expected to regain after the exercise. Those who were victims of downsizing should be prepared psychologically and given full support from the management and the remaining employees. The findings of this study would be beneficial to commercial banks’ management, employees and future researchers on how to handle and prepare for downsizing and understanding its effect on employee performance.
Key Words: Downsizing, Employee Performance, Commercial Banks, Trans-Nzoia County
