{"title":"Consequences of Labor Cost Reduction Practices: A Structured Literature Review*","authors":"Kelsey Matthews","doi":"10.1111/1911-3838.12276","DOIUrl":null,"url":null,"abstract":"<div>\n \n <p>When firms face pressures to reduce costs, evidence from the field suggests that they often reduce labor costs (i.e., wages, benefits, payroll taxes). Because of the prevalence of labor cost reduction in the field, academic research has begun to investigate the consequences of management's decisions to reduce labor costs. I provide a structured literature review on the employee-level consequences of three labor cost reduction practices: employee downsizing, furloughs, and pay cuts. My literature review synthesizes the labor cost reduction research through a lens of a discretionary management accounting decision to reduce costs and highlights opportunities for management accounting researchers to explore the consequences of labor cost reductions on employees' attitudes and behaviors. To synthesize the literature on labor cost reduction, I develop a model that proposes that management's labor cost reduction decisions, which include features of the implementation and contextual factors, influence employees' perceptions of management's and employees' attitudes and behaviors. Consistent with my model, my synthesis of the literature shows that labor cost reduction generally has negative employee-level consequences. However, features of management's implementation of the labor cost reduction practice and contextual factors can alter employees' perceptions and mitigate these negative consequences.</p>\n </div>","PeriodicalId":43435,"journal":{"name":"Accounting Perspectives","volume":"20 4","pages":"687-718"},"PeriodicalIF":1.6000,"publicationDate":"2021-09-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Accounting Perspectives","FirstCategoryId":"1085","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/1911-3838.12276","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 3
Abstract
When firms face pressures to reduce costs, evidence from the field suggests that they often reduce labor costs (i.e., wages, benefits, payroll taxes). Because of the prevalence of labor cost reduction in the field, academic research has begun to investigate the consequences of management's decisions to reduce labor costs. I provide a structured literature review on the employee-level consequences of three labor cost reduction practices: employee downsizing, furloughs, and pay cuts. My literature review synthesizes the labor cost reduction research through a lens of a discretionary management accounting decision to reduce costs and highlights opportunities for management accounting researchers to explore the consequences of labor cost reductions on employees' attitudes and behaviors. To synthesize the literature on labor cost reduction, I develop a model that proposes that management's labor cost reduction decisions, which include features of the implementation and contextual factors, influence employees' perceptions of management's and employees' attitudes and behaviors. Consistent with my model, my synthesis of the literature shows that labor cost reduction generally has negative employee-level consequences. However, features of management's implementation of the labor cost reduction practice and contextual factors can alter employees' perceptions and mitigate these negative consequences.
期刊介绍:
Accounting Perspectives provides a forum for peer-reviewed applied research, analysis, synthesis and commentary on issues of interest to academics, practitioners, financial analysts, financial executives, regulators, accounting policy makers and accounting students. Articles are sought from academics and practitioners that address relevant issues in any and all areas of accounting and related fields, including financial accounting and reporting, auditing and other assurance services, management accounting and performance measurement, information systems and related technologies, tax policy and practice, professional ethics, accounting education, and related topics. Without limiting the generality of the foregoing.