How Cutbacks and Job Satisfaction Are Related: The Role of Top-Level Public Managers’ Autonomy

Abstract

Many studies on cutback management have suggested that cutbacks may have negative consequences for employee well-being in the public sector. However, the relationship between cutbacks and the work-related attitudes of top-level managers has received little attention. In this study, we assess the relationships between five commonly used cutback measures and the job satisfaction of top-level public managers in 12 European countries. We propose and test a model in which autonomy serves as an explanatory variable for the relationship between cutbacks and job satisfaction. The results indicate that cutback measures have little direct effect on the job satisfaction of managers. However, as cutback measures are related negatively to the perceived managerial autonomy of public managers and positively to the degree in which politicians interfere in the affairs of managers, autonomy may function as a mechanism to explain decreased job satisfaction as a result of cutback implementation.

Keywords

cutback management job satisfaction autonomy financial crisis

Introduction: Cutbacks and Top-Level Public Managers

Public management has been characterized by an increasing focus on cost-awareness, value for money and cost-effectiveness in the past decades. The New Public Management (NPM) has placed a major emphasis on increasing cost-effectiveness in the public sector, which has been a dominant paradigm in the way public organizations (strive) to operate (Pollitt & Bouckaert, 2004). The NPM emphasizes clearly formulated goals, a focus on results rather than processes, a reliance on private-sector management styles, and more competition and choice (Hood, 1991). Although some dysfunctions of such management practices in a public-sector context have become apparent at later points in time (Dunleavy, Margetts, Bastow, & Tinkler, 2006; Hood & Peters, 2004), the NPM has placed a major emphasis on increasing cost-effectiveness in the public sector.

In more recent years, the financial crisis and subsequent economic recession have further strengthened the need for a more cost-effective public sector. In many countries, a focus on more efficiency and value for money, as articulated in the NPM, is no longer enough. Many public organizations are forced to cut back on budgets and organizational activities. The recent financial and economic crisis has thus enforced a more radical, but arguably less strategic, way of cutting expenses in public organizations than has been witnessed in the past decades. Because of these developments, cutback management is once again a central issue in both public management practice and research (e.g., Bozeman, 2010; Cepiku & Savignon, 2012; Dougherty & Klase, 2009; Pandey, 2010; Pollitt, 2010; Raudla, Douglas, Randma-Liiv, & Savi, 2015).

Cutback management can be defined as “managing organizational change toward lower levels of resource consumption and organizational activity” (Levine, 1979, p. 180). Although growth comes incrementally and naturally to public organizations, decline does not come about in a reverse fashion (Levine, 1979). Moreover, cutback management is generally not part of the organization’s long-term strategy, but takes the form of a short-term, reactive fix (Pandey, 2010). The implementation of cutbacks results in many hard choices and paradoxes, and thus poses a considerable challenge for many public organizations, and especially for those leading these organizations. In times of savings, political pressure is likely to be high, and previously held areas of managerial autonomy come under pressure. Top-level public managers are thus in their own way affected by cutbacks.

The presumed negative effects of the implementation of cutbacks on employee well-being have been well documented in the literature, although the empirical evidence remains still rather limited. There is consensus that negative consequences of cutbacks for employee morale, job satisfaction, work motivation, work-related stress, and intention to leave are inevitable (e.g., Kets de Vries & Balasz, 1996; Kiefer, Hartley, Conway, & Briner, 2015; Levine, 1978, 1984; Mishra & Preitzer, 1998; Raudla, Savi, & Randma-Liiv, 2013). Much of this work has looked at the relationship between cutbacks and the work-related attitudes of general employees, whereas those individuals higher up in the organizational hierarchy have received far less attention (Buckley, 2011). At first sight, the well-being of top-level managers may seem an irrelevant issue when it comes to the implementation of cutbacks. After all, top-level managers are not to the same extent subject to cutbacks as lower level organizational members. It may well be argued that top-level managers are the executioner rather than the victim of cutbacks. Cutbacks will most likely be directed at the lower or peripheral echelons of the organization. However, many of the mechanisms that may deteriorate work-related attitudes at the employee level may also affect managers higher up in the organization, because they are the ones responsible for implementing cutbacks, and they are the ones who are often blamed by their employees. Ultimately, the work-related attitudes of top-level public managers may have important consequences on their individual and organizational performance (Farnham & Horton, 1996; Steijn, 2004).

In this article, we specifically focus on the relationship between the implementation of cutbacks and the job satisfaction of top-level managers in European central government organizations. In the next section, we discuss the theoretical mechanisms through which cutbacks can be expected to affect the work-related attitudes of both employees and managers. Subsequently, we introduce autonomy as an explanation for the relationship between cutbacks and job satisfaction on the managerial level. We argue that a negative relationship between the implementation of cutbacks and job satisfaction may be partly explained by a decrease in the managerial autonomy of public managers and an increase in the political interference managers experience. Cutbacks restrict managers’ freedom to manage their organization and increase interference by politicians, which in turn decreases public managers’ satisfaction with their jobs.

The analysis uses the Coordinating for Cohesion in the Public Sector of the Future (COCOPS) Top Executive Survey of more than 3,500 central government public managers in 12 European countries. All managers are active on the first, second, or third highest hierarchical tier of their organization. Rather than examining a single relationship between cutbacks and job satisfaction, we account for five cutback measures that are often applied in contemporary European public organizations: hiring freezes, frontline reductions, cutting existing programs, postponing future programs, and reducing back offices.

Theory and Hypotheses

In this theoretical section, we first discuss the literature on cutback management and job satisfaction to argue that there are several reasons for why a negative relationship between cutbacks and job satisfaction may exist. We will then focus on autonomy as a mechanism that may explain decreased job satisfaction as a result of the implementation of cutbacks. We distinguish between managerial autonomy, the degree to which managers are free to make decisions in their organization, and political interference, the degree to which politicians attempt to influence and steer decision-making in the organization.

Cutbacks and the Job Satisfaction of Public Managers

Despite a recent renewed academic interest in the implementation of cutbacks in the public sector (Bozeman, 2010), there is a dearth of empirical evidence concerning how the implementation of cutbacks or downsizing may affect the job satisfaction of employees. Some of this work focuses on private-sector organizations or health care organizations (Armstrong-Stassen, Cameron, & Horsburgh, 1996; Helogren & Sverke, 2001; Lahner, Hayslip, McKelvy, & Caballero, 2014). Related work has also looked at the effect of furlough days on job satisfaction (Lee & Sanders, 2013), or of public-sector downsizing on employee trust (Feldheim, 2007). Some other work also has looked at the effects of the announcements of cutbacks and treats cutbacks as external shocks (see, for example, Conway, Kiefer, Hartley, & Briner, 2015; Kiefer et al., 2014). At the same time, much conceptual work concerning this issue exists. For instance, Jick and Murray (1982) argue that a “crisis syndrome” may affect organizational members as a result of cutbacks, which consists of a reduced job satisfaction, weakened loyalty toward the organization, stress-related symptoms, and decreased effort on the job. Such dysfunctions of cutback management may not only befall employees who are personally affected by the implementation of cutbacks. Employees who are laid-off arguably pay the highest price, but “survivors” are also affected by the implementation of cutbacks (Mishra & Preitzer, 1998). Symptoms of the so-called survivor syndrome may include the erosion of trust and morale, as well as the increase of work pressure, emotional stress, and job insecurity (Levine, 1984; Raudla et al., 2013). Mishra and Preitzer (1998) argue that cutbacks are likely to turn the surviving staff in “walking wounded” and “carping critics.” Whether they are personally affected by the implementation of cutbacks or not, the implementation of cutbacks thus poses a threat to the psychological well-being of all organizational members (Ashman, 2015; Brockner, 1990; Holzer 1986; Raudla et al., 2013).

Despite the abundance of conceptual work regarding the relationship between cutback management and employee well-being, little is known about how cutbacks affect managers (Buckley, 2011). On one hand, one would not expect their job satisfaction to be affected, as cutbacks are mostly aimed at the lower echelons of the organization. On the other hand, there are many theoretical mechanisms that suggest that the job satisfaction of managers, too, may be negatively related to cutback implementation. First, although they are not personally affected by cutback measures such as hiring freezes and back-office reductions, managers may also be subject to drops in morale and the hostile work environment that tend to spread over declining organizations (Levine, 1978; Whetten, 1987). Sahdev, Vinnicombe, and Tyson (1999) argue that although managers are more the executioner than the victim, as remaining members of the organization, they are still “survivors” and may thus be subject to the survivor syndrome. More generally, having a managerial position during or after the implementation of cutbacks may be difficult, because managers are typically seen as the purveyors of bad news (Buckley, 2011) and may be scapegoated by employees (Cameron, Whetten, & Kim, 1987). In addition, the implementation of cutbacks may increase the amount of conflict in decision-making processes among different departments. The implementation of cutbacks may lead to more conflict over a decreasing resource base and increased animosity between organizational departments. Therefore, even if managers are not personally affected by any cutbacks measures, they may still experience a decrease in job satisfaction as result of a deteriorating organizational climate and an increase in conflict.

Second, job demands–resources theory (Bakker & Demerouti, 2007; Karasek, 1979) can also explain why cutbacks can negatively affect managers’ job satisfaction. Because of centralization in decision-making, more decisions are elevated in the organizational hierarchy (Levine, 1978). This results in an increased workload for managers. Managers in declining organizations therefore report increasing work pressures and work-related stress (Buckley, 2011). Simultaneously, the implementation of cutbacks can be expected to result in a decrease of the resources managers can rely on, as support staff in human resource (HR) and finance departments are being diminished or heavily occupied by the implementation of cutbacks. Moreover, delegating tasks to lower level managers or employees becomes more difficult as other organizational members also experience an increase in workload, and because the most competent employees are more likely to leave the organization (Bedeian & Armenakis, 1998; Levine, 1978). Job demands–resources theory can thus explain how cutbacks may increase the job demands managers experience and decrease the resources managers can use to cope with these increased demands. As a result of this, the implementation of cutbacks may be negatively related to the job satisfaction of managers.

A third and perhaps more cynical view on the relationship between cutbacks and the job satisfaction of public managers can be found in Niskanen’s (1971) budget-maximizing model. This model argues that managers, referred to as bureaucrats in this line of work, may derive positive outcomes from the budget size of their department. In this view, outcomes such as income, prestige, and power are seen as a function of the budget size. Therefore, public managers can be expected to maximize their budgets. As a result of cutbacks, however, managers see their budgets reduced, which in turn may have negative effects on their (future) income and career opportunities, as well as the prestige of their organization. The negative relationship between cutbacks and the job satisfaction of managers can thus be understood as a reaction to the negative consequences for the prestige, power, and legitimacy of their organization, as well as their personal interests.

Although multiple conceptual models thus provide insights into the relationship between cutbacks and job satisfaction, there is a dearth of empirical evidence. Based on the theoretical mechanisms discussed in this section, we propose the following hypothesis:

Hypothesis 1: Cutback implementation is negatively related to job satisfaction of top-level public managers.

Decreased Job Satisfaction in Times of Crisis as a Result of Autonomy Loss

In this section, we introduce autonomy as an intervening mechanism that may explain the negative impact of the implementation of cutbacks on job satisfaction of public managers. Our argument is based on a two-step approach. First, we argue why autonomy is a relevant determinant of public managers’ job satisfaction. Second, we argue how cutbacks may affect the autonomy of public managers and, as such, how the implementation of cutbacks may thus indirectly affect the job satisfaction of public managers.

Autonomy is a multi-dimensional concept (Verhoest, Peters, Bouckaert, & Verschuere, 2004). In this study, we distinguish between managerial autonomy and political interference. Managerial autonomy refers to the relative freedom that managers experience in decision-making processes related to the inputs and processes of the organization, for example, with regard to planning, organizing, budgeting, and staffing. Political interference refers to the degree to which public managers experience influence of politicians in decision-making about organizational affairs.

There are numerous theoretical models that draw on autonomy to explain job satisfaction. Many of these theories draw on the role of autonomy as a driver of high job satisfaction. In Hackman and Oldham’s (1976) theory of work design, autonomy is one of the central antecedents of job satisfaction. Hackman and Oldham argue that a high degree of job autonomy results in a high degree of experienced responsibility for the outcomes of the job, which in turn explains higher motivation, performance, and satisfaction with the job. In the job demands–resources model (Karasek, 1979), autonomy is one of the main resources that individuals can use to cope with the demands of their work. Individuals who can autonomously decide in what way they will manage their organization will be better able to deal with high work pressure, resulting in less stress and higher job satisfaction. Self-determination theory (Deci & Ryan, 1985) also highlights the role of autonomy and choice as a predictor of positive work-related outcomes. Self-determination theory portrays autonomy as “a basic psychological need that is essential for health and wellbeing” (Moller, Ryan, & Deci, 2006, p. 104). In the context of work, situations in which individuals experience freedom and choice can be expected to lead to higher degrees of job satisfaction than work contexts that are characterized by control.

From the perspective of HR management theory, autonomy is thus a desirable aspect of the work context. However, many authors have indicated that autonomy may be limited in a public-sector context. Public managers are subject to the rule of law and the political primate (Rainey, 2014). Moreover, they are typically embedded in many environmental dependencies and checks and balances (Boyne, 2002). Farnham and Horton (1996) argue that public organizations are typically bureaucratic, which means that organizational operations are largely predetermined and standardized, leaving managers with little autonomy in their job (Mintzberg, 1979). The prevalence of legal, environmental, and organizational constraints may thus limit the autonomy of public managers in day-to-day work (Pollitt, 2003).

There are several reasons why the implementation of cutbacks can be expected to further diminish the managerial autonomy of public managers, thereby indirectly decreasing their job satisfaction. Cutbacks may decrease managerial autonomy by increasing the number of actors that are relevant during managerial decision-making. The implementation of cutbacks may also empower staff departments, such as the personnel, legal, and finance departments within the organization (Levine, 1978). These departments can contribute to an increasing number of rules and procedures for decision-making, for example, by forcing managers to formulate implementation plans and social plans for employees who are laid-off, and setting limits for spending. In addition, organizational actors such as supervisory boards, the organization’s work council, and even worker unions may increase their scrutiny on the decisions made by managers, as well as increase their efforts to influence these, thereby decreasing managerial autonomy. Levine (1978) argues that a hiring freeze may be a convenient short-term solution to financial pressure, but that it also takes control away from management, thereby decreasing autonomy. For instance, a hiring freeze restricts a manager ability to hire new personnel to take on new tasks. In terms of HR management, a hiring freeze may also disturb attempts for strategic personnel planning. Cutting existing or future programs of the organization can be expected to decrease an organization’s ability to fulfill its mandate, or to expand its (future) turf. Finally, cutting back by reducing back offices, such as finance or HR, may decrease managerial autonomy by decreasing the information and support that top managers depend on in decision-making processes. We propose the following hypothesis:

Hypothesis 2: The negative relationship between cutbacks and job satisfaction is partly meditated by managerial autonomy.

Next to managerial autonomy, political interference is a relevant concept to examine because the two do not necessarily oppose each other. Many countries, such as the Netherlands, Denmark, or Norway, are characterized by a relatively high degree of managerial autonomy and little interference by politicians. In other countries, such as Portugal or Spain, a reverse situation can be seen. However, there are also countries that are characterized by both a moderately high degree of managerial autonomy and political interference. Estonia or the United Kingdom are examples.

Next to decreasing managerial autonomy, the implementation of cutbacks can be expected to increase the political interference that top-level managers experience. Because cutbacks are essentially about political choices, politicians are likely to have preferences about what programs or policies to cut (Van de Walle & Jilke, 2014). Politicians are thus likely to become a more dominant factor in decision-making processes (Levine, 1978), and increase their scrutiny on organizational affairs. The results may include increased priority setting by central government, the centralization of decision-making to the political elite, and the distancing career civil servants, even regarding operational matters (Peters, 2011). An increased financial pressure and the need to implement cutbacks may thus cause political supervisors of the organization to interfere more with decision-making processes in the organization, thereby decreasing public managers’ job satisfaction. We propose the following hypothesis:

Hypothesis 3: The negative relationship between cutbacks and job satisfaction is partly mediated by political interference.

Method

Research Design and Sample

We examine our theoretical statements using a large quantitative data set. The data set was created through a survey among European top-level public managers. The objective of the COCOPS Top Executive Survey was to measure various developments and challenges in European public sectors (Hammerschmid, Oprisor, & Štimac, 2013). The survey consists of the perceptions of top-level European public managers regarding the impacts of public-sector reforms and reactions to the crisis.

Data were collected in two separate rounds. Between May-June, 2012, and September-November, 2012, the survey was sent in the United Kingdom, Germany, France, Spain, Italy, Norway, Estonia, the Netherlands, Austria, and Belgium. In the spring of 2013, an additional round was done to collect data in Portugal and Lithuania. In total, more than 23,000 top-level European managers at the top 3 hierarchical levels in their organization were contacted to participate in the survey, from whom 5,885 completed questionnaires were obtained. Because of a low response (only 85 returned questionnaires) and limited representativeness, Belgian respondents were dropped from the data set for this analysis. In all, the response rate over the 12 remaining countries is 24.3%, which is acceptable for this managerial level. No indication was found for unacceptable skewness in terms of gender or hierarchical level.

The data set contains information on top managers in central government (and regional government in federal countries). Specific subsamples were taken in the health and employment sectors, but these are not included in our analysis. The central government sample used here contains respondents from both government departments (ministries) and agencies, and consists of 3,555 top public managers. The respondents occupy positions of secretary-general, director-general or director, or their functional equivalents. The fieldwork documentation referenced above provides further details.

Operationalization and Measurement

This section covers the measures that were used to obtain data regarding the central concepts of this study. A full list of all items used in the analysis is given in Appendix A.

Cutback measures

Managers were asked to what extent their organization had reacted to the financial crisis by means of a set of distinct cutback measures. In the analysis presented in this study, we account for five commonly used cutbacks measures in the European public sector. These are hiring freezes, frontline reductions, cutting existing programs, postponing future programs, and reducing back offices. For each of these cutback measures, managers were asked to indicate to what extent their organization had used these by means of a 7-point Likert-type scale where “1” stands for not at all and “7” for to a great extent.

Managerial autonomy

Managerial autonomy captures the perceived degree of autonomy with regard to budget allocations, contracting out services, promoting staff, hiring staff, dismissing or removing staff, and making changes in the structure of the organization. The items comprising managerial autonomy were measured on a 7-point Likert-type scale where “1” stands for very low autonomy and “7” for very high autonomy.

Political interference

This concept is measured with three distinct items capturing the perceived degree of political interference in routine activities, and in senior-level appointments, as well as the perception whether politicians respect the technical expertise of the administration. The items comprising political interference were measured on a 7-point Likert-type scale where “1” stands for strongly disagree and “7” for strongly agree.

Job satisfaction

Instead of the commonly used single-item measure (e.g., Steijn, 2004), multiple items are used to measure job satisfaction in this study. Our measure of job satisfaction is based on the large-scale 2008 Canada Public Service Employee Survey and is composed of three items. The lead-in of the items is as follows: “When thinking about my work and the organization I work for . . . ” An example item is as follows: “I get a sense of satisfaction from my work.” Respondents were asked to reply using a 7-point Likert-type scale where “1” stands for strongly disagree and “7” for strongly agree.

Control variables

We were able to control for personal characteristics of the respondents, characteristics of the organization they work for, and country. The analysis includes a dummy variable for female gender. In addition, because a large portion of respondents did not indicate their gender,¹ an additional dummy variable for “unknown gender” was added. Age was controlled for by dividing age into three groups: low age (ages to 45), medium age (ages 46-55), and high age (ages above 55). “Low age” was used as the reference category. Three education levels were distinguished: bachelor’s degree, master’s degree, and PhD. In the analysis, bachelor’s degree was used as the reference category. A control was also added to account for the hierarchical tier of the respondent in his or her respective organization. Three hierarchical levels were distinguished: first tier (secretary-general or equivalent), second tier (director-general or equivalent), and third tier (director or equivalent). Three dummy variables were included in the analysis to control for organizational size: 100 to 499 employees, 500 to 999 employees, and more than 1,000 employees. Organizational size of less than 100 employees was used as the reference category. A dummy variable was used to control for differences between managers working in an agency (coded “1”) versus managers working in a ministry (coded “0”). Finally, dummy variables were included for the 12 countries examined in the study. Because it has the largest number of respondents, France was used as the reference category.

Procedure and Analysis Technique

Structural Equation Modeling (SEM) is used as the statistical technique in examining our hypotheses. AMOS 21 statistical software was used. SEM has several advantages over more standard regression analysis. Most importantly, this technique simultaneously assesses the factorial structure of latent variables and the covariance between latent variables. In addition, it allows simultaneously regressing independent variables on multiple dependent variables, and a variable can be modeled as an independent and a dependent variable at the same time. A two-step approach to SEM was applied in this study (Anderson & Gerbing, 1988). First, the factorial structure of the study’s central variables was examined, and the fit of the factorial model to the data was tested by means of a confirmatory factor analysis (CFA) (Byrne, 2001). Second, the structural model was constructed, in which the central variables are related to one another to examine the hypotheses of the study. The degree of model fit of the structural model was first assessed, and the relationships between the central variables were then examined.

Analysis and Results

The factorial structure of the study’s latent constructs (managerial autonomy, political interference, and job satisfaction) was assessed by means of a CFA. This was done by constructing a measurement model that included all latent constructs, as well as the observed variables concerning cutbacks and all control variables. In addition to a chi-square test, which can be sensitive to inflation due to sample size and the amount of variables in the model (Jöreskog, 1993), other fit indices were used to assess the fit of the measurement model to the data. The Comparative Fit Index (CFI), Root Mean Square Error of Approximation (RMSEA), and the chance (p) of close model fit (PCLOSE) were considered to assess the fit of the measurement model to the data. The fit indices of the initial measurement model indicated an insufficient fit. The CFI of the initial measurement model was .825, whereas a value above .900 indicates a reasonable fit in the social sciences. Similarly, the RMSEA value was .073, which can be seen as a reasonable value, but a value lower than .07 is desirable. The PCLOSE value was .000, which should ideally be above .05.

Based on the CFA, the initial measurement model was modified based on the factor loadings of the different constructs. Because of high correlations between the residuals of items MA1-MA2 (managerial autonomy in budget allocations and in contracting out services) and the political interference items (PO1-PO2 and PO1-PO3), the error correlations between these variables were controlled for. Finally, the item MAN4 (managerial autonomy in hiring staff) was removed from the managerial autonomy construct because of its substantive similarity to the item CUT1 (hiring freezes). The model fit of the modified measurement model is acceptable with the following fit indices: chi-square (2,906.249 / df 262), CFI = .929, RMSEA = .053, and PCLOSE = .001. Composite reliability for managerial autonomy (.871), political interference (.894), and job satisfaction (.890) is satisfactory. Average Variance Extracted is .499 for managerial autonomy, .637 for political interference, and .619 for job satisfaction.

Descriptive Statistics and Correlations

Before constructing the structural model to test the study’s hypotheses, the descriptive statistics of and correlations between the central variables are presented here. Table 1 contains the range, means, standard deviations, and correlation coefficients of all the variables in the measurement and structural model. Cronbach’s alpha is reported in parentheses for the latent variables.

Table 1.

Descriptive Statistics and Correlation Coefficients.

	Range	M	SD	1	2	3	4	5	6	7	8	9	10	11	12	13
1. Hiring freeze	1-7	5.22	2.02	—
2. Frontline reduction	1-7	3.14	1.82	.251***	—
3. Cutting existing programs	1-7	4.56	1.83	.371***	.302***	—
4. Postponing future programs	1-7	4.73	1.80	.377***	.313***	.739***	—
5. Back-office reduction	1-7	4.18	1.97	.324***	.468***	.347***	.335***	—
6. Managerial autonomy	1-7	3.46	1.45	−.198***	−.047*	−.110***	−.104***	−.006	(.82)
7. Political interference	1-7	3.84	1.35	.177***	.103***	.216***	.214***	.090***	−.333***	(.55)
8. Job satisfaction	1-7	5.29	1.24	−.098***	−.130***	−.069***	−.079***	−.033	.290***	−.342***	(.82)
9. Gender	1-2	1.33	.47	.010	.015	.003	−.004	.040*	−.104***	.046*	−.010	—
10. Age	1-3	2.01	.78	−.063***	−.023	−.028	−.027	−.070***	.101***	−.078***	.066***	−.112***	—
11. Education level	1-3	1.96	.59	−.055**	−.020	−.074***	−.064***	−.061**	.101***	−.141***	.009	−.072***	.106***	—
12. Hierarchical tier	1-3	2.11	.752	.128**	.102***	.085***	.067***	.013	−.373***	.209***	−.162***	.144***	−.190***	−.091***	—
13. Organizational size	1-4	2.62	1.09	.039*	.119***	.054**	.039*	.098***	.062***	−.022	.006	.060***	−.010	.005	.021	—
14. Agency	0-1	.039	.049	−.153***	−.066***	−.177***	−.168***	−.085***	.216***	−.176***	.068***	−.013	.028	−.019	−.233***	.002

Note. For Table 1, correlations for the control variables were calculated using ordinal variables with the following codings: gender (1 = male, 2 = female), age (1 = under 45, 2 = 45-55, 3 = 56 and above), education level (1 = bachelor’s degree, 2 = master’s degree, 3 = PhD), hierarchical tier (1 = first hierarchical tier, 2 = second hierarchical tier, 3 = third hierarchical tier), organizational size (1 = less than 100 employees, 2 = 100-499 employees, 3 = 500-999 employees, 4 = 1,000 employees or more). * indicates statistical significance with p < .05, ** indicates statistical significance with p < .01, *** indicates statistical significance with p < .001

The descriptive statistics indicate that top-level managers report relatively high job satisfaction scores. The average scores for managerial autonomy and political interference are below the mid-range of the scale. Managerial autonomy and job satisfaction are positively correlated, whereas political interference and job satisfaction are negatively correlated. The scores for the five cutback measures are all above the mid-range of the measurement scale, except for frontline reductions. Hiring freezes are most applied. Moreover, hiring freezes, frontline reductions, cutting existing programs, and postponing future programs are negatively correlated with job satisfaction.

Structural Model

The structural model—the model that proposes relationships between latent variables—was then constructed to resemble and test the study’s central hypotheses. First, the degree of model fit was assessed by means of examining the fit indices. The fit indices of the structural model indicate an acceptable fit, with chi-square divided by degrees of freedom = 2,958.505 / 309, CFI = .929, RMSEA = .049, and PCLOSE = .813. The structure of the model and the significant regression coefficients between the variables are depicted in Figure 1. To ensure visual clarity of the model, only control variables that are significantly related to the latent variables are depicted. Country differences are significant and are given in Appendix B.

Figure 1.

Structural model.

The structural model in Figure 1 depicts the direct and indirect relationships between five commonly applied cutback strategies and the job satisfaction of top-level managers. The results indicate several significant relationships between the central variables in the model. Of the five cutbacks measures included in the model, only a reduction of frontline presence is significantly directly related to the job satisfaction of top-level managers. A higher degree of frontline reduction in the organization coincides with a lower level of job satisfaction of its highest managers. The other four cutbacks measures that were examined are not directly related to managers’ job satisfaction. The results are thus partly supportive of Hypothesis 1, which stated that a higher level of cutbacks in the organizations is negatively related to top-level managers’ job satisfaction, but it should be noted that most of the examined cutbacks measures are not directly related to job satisfaction in our model.

Next to direct effects, our model also indicates indirect relationships between cutbacks and job satisfaction. As proposed in Hypothesis 2, the indirect relationships between cutbacks and job satisfaction involve managerial autonomy and political interference. Both managerial autonomy and political interference are strongly related to managers’ job satisfaction. Managerial autonomy is positively related to job satisfaction. Political interference has a negative relationship with job satisfaction.

The results of the structural model indicate that several cutback measures are related to the managerial autonomy and political interference that top-level managers perceive. Hiring freezes are negatively related to managers’ perceived managerial autonomy. Canceling or postponing future programs and cutting back offices are positively related to the political interference that managers report. Cutting existing programs is not significantly related to any of the dependent variables in the analyses. Some control variables are also worth reporting. Hierarchical tier is significantly related to autonomy: The higher the hierarchical level, the more autonomy managers experience. This is especially the case for managerial autonomy, and to a lesser degree for perceived political interference. Organizational size is also related to managerial autonomy, but the analysis shows only significant differences for very large organizations (more than 1,000 employees) when compared with small organizations (less than 100 employees). Furthermore, managers in agencies report higher autonomy than managers in ministries, but a lower degree of job satisfaction.

Discussion and Conclusion

The financial and economic crisis has resulted in a renewed interest of public management researchers for processes and consequences of cutback management in public organizations (Bozeman, 2010). This study was aimed at further increasing our understanding of the consequences of implementing cutbacks in the public sector, by assessing its relationship with the job-related attitudes of public-sector managers. We specifically focused our attention on the job satisfaction of top-level managers in European public-sector organizations.

We introduced managerial autonomy and political interference as theoretical mechanisms through which cutbacks may affect the job satisfaction of top-level managers. As can be expected based on existing theoretical frameworks about job satisfaction (e.g., Hackman & Oldham, 1975; Karasek, 1979), autonomy is an important predictor of the job satisfaction of top-level public managers. Both managerial autonomy and political interference were found to be strongly related to job satisfaction—the former positively, the latter in a negative way. More specifically, other studies concerning the job satisfaction of public managers report similar results. In a study of public and nonprofit managers in the United States, Chen (2012) finds that rule constraints, which Chen argues stem from checks and balances in the external environment of the organization, are negatively related to job satisfaction. Hansen and Høst (2012) study how the organizational decision-making structure influences job satisfaction of (lower level) Danish managers. They find that decentralized decision-making structures, which increase the autonomy of managers, are positively related to job satisfaction. Our findings are thus in line with the extensive body of literature on the role of autonomy in job satisfaction. Moreover, we contribute to the understanding of how public management reform in response to the crisis may affect the work context of public managers. Whereas the NPM is often assumed to advocate more decentralized decision-making structures and freedom for managers to manage (Hood, 1991; Pollitt & Bouckaert, 2004), budget cuts in response to the crisis may counter these reforms and decrease managerial autonomy in public organizations.

Although it can be argued that managers’ job satisfaction may be affected by the implementation of budget cuts in similar ways as employees, a key finding of our study is that cutbacks have little direct effect on job satisfaction. This finding is in line with Cameron, Kim, and Whetten (1987), who report that decline in resources is not related to top management responses. Although the implementation of hiring freezes, frontline reductions, cuts to existing programs, and postponing future programs are negatively correlated with top-level managers’ job satisfaction, the only direct relationship in our structural model is that reducing frontline presence, and managers’ job satisfaction. A possible explanation for this direct relationship could be that a reduction in frontline presence is the only cutback in the analysis that involves letting go or reducing the existing workforce of the organization. This could be interpreted as evidence for the existence of the survivor syndrome mentioned in the theoretical section. Alternatively, a reduction in frontline presence has a significant impact on the visibility of one’s organization, and hence status.

In addition, our analysis indicates several indirect relationships between cutbacks and job satisfaction. Through managerial autonomy and political interference, hiring freezes, postponing future programs, and cutting back offices have a negative (but relatively small) effect on job satisfaction. Our analysis indicates that hiring freezes reduce the managerial autonomy that top-level managers experience. This is a quite obvious relationship, because this cutback measure has a direct impact on what managers are able achieve in their organization. Hiring freezes are often imposed on public organizations by higher level tiers of government (Klase, 2011; Raudla et al., 2013), leaving managers with less resources and thus freedom to manage. Even when top-level managers themselves opt for a hiring freeze in their organization, they may impede their managerial autonomy. Levine (1978) argues that a hiring freeze is a convenient short-term strategy because it allows managers to buy time and preserve options. In the long run, however, “it also takes control over the decision of whom and where to cut away from management and thereby reduces the possibility of intelligent long range cutback planning” (Levine, 1978, p. 322).

Postponing future programs is positively related to political interference, possibly because it makes the manager vulnerable after having postponed programs in which politicians had vested interests, thereby sparking renewed political zeal to closely monitor what is going on the organization to avoid further political damage. The results also indicate that diminishing back offices may increase (perceived) political inference. We see two possible explanations. One is that a reduced expertise and support of back offices (such as HR and financial experts) may make managers more vulnerable to the interference of their political superiors, and may serve as a partial confirmation of the job demands–resources theory. In addition, reducing back offices may create an impression among politicians that the organization was not run efficiently in the first place, and thereby free the way for further interference.

Our study is subject to several limitations. These limitations include the cross-sectional nature of our design, and self-reported measures that were used to capture the study’s central concepts. Furthermore, we acknowledge that our measure of political interference is relatively weak. A recommendation for future research is therefore to study the relationship between cutbacks and top-level public managers’ work-related attitudes over time, and to relate top-level public managers’ work-related attitudes to objective data about their organizational budgets instead of self-reported cutback measures.

Footnotes

Appendix A

Appendix B

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The research leading to the results has received funding from the European Union’s Seventh Framework Programme under Grant Agreement Number 266887 (Project COCOPS), Socio-economic Sciences and Humanities.

Notes

Author Biographies

Joris van der Voet is an assistant professor of public management at Leiden University. His research is concerned with organizational change management and cutback management in public organizations.

Steven Van de Walle is a professor of comparative public administration and management at Erasmus University Rotterdam. His research focuses on public perceptions of public services, public officials’ trust in citizens, and public-sector reform. He was coordinator of the European Union (EU)-funded COCOPS project, which looks into the effect of New Public Management (NPM) reforms in European countries. His recent work has been published in a range of public administration journals.

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