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The effects of cost cutting measures to staff performance in the KwaZulu-Natal Provincial Treasury Department.

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Cost management is a strong pillar of an organisation’s success. In an endeavour to manage costs, the South African government implemented cost cutting measures. This study examines the impact of cost cutting measures implemented by the Treasury Department, KwaZulu-Natal province to staff performance (achievement of targets and quality) and staff morale (job satisfaction). This study examined whether cost cutting measures implemented have a negative or positive effect on staff members’ job satisfaction or commitment to work; whether this affects employee morale and service delivery. The study further intended to trace whether these cost cutting measures are implemented accordingly and consistently by all senior managers throughout the department. A quantitative research study was conducted through staff questionnaires to get insight into the current problem facing some staff members. The study used self-administered questionnaires wherein close ended questions were asked. The study found that cost cutting measures reduce service quality in the department. The implementation of cost cutting measures influences staff morale negatively in the department which in turn affects staff performance. The study further concluded that cost cutting measures are not implemented consistently throughout the department. The study recommends the implementation of a model which will incorporate cost cutting incentives for both senior management and junior staff for significant cost reduction outcomes. Training of staff to understand the bigger picture of cost containment in the department is recommended. Ongoing monitoring of cost cutting outcomes was also recommended.


Masters Degree. University of KwaZulu-Natal, Durban.