Date Added: Feb 2011
Firm-Employee Relationships (FERs) have always been one of the most important stakeholder relationships for firms. Due to various reasons, firms have to lay off employees from time to time. Since layoff affects the laid-off employees, the survivors, and the performance of firms, it is an important decision in managing FERs. This study examines the layoff decision in an FER. Specifically, this study investigates how the norm of reciprocity, agent personality (i.e., conscientiousness), and their interaction influence the layoff decision in an FER. The findings of a scenario-based experiment in this paper indicate that the norm of reciprocity affects the decision-making agents' likelihood to lay off employees in the face of an environmental change.