A recent study published in Human Resource Management Journal explores the impact on employees of restructuring and downsizing and whether consultation can help mitigate the negative impact of change.
“In the context of change, consultation has been found to facilitate sense making, reduce employee uncertainty, and limit cynicism”
Organisational restructuring, downsizing and constant change can have a negative impact on employee motivation and morale which, in turn, can lead to a decline in performance.
The effects of organisational change aren’t static. They can emerge at different stages of a change. At the beginning (when change is announced); during (when employees try to navigate and make sense of what is happening); and after (for those employees who ‘survive’ and who wait for the next change).
“…rare organisations that successfully navigate the complexities of restructuring and downsizing, dedicate attention to surviving employees, including via consultation about where efficiencies may exist and how improvements can be made”
The researchers used the Job-Demands Resources Model to explore the lived experiences of employees of restructuring and downsizing. They suggested that work intensity (job demand) increases in response to change and wanted to examine whether consultation (job resource) could mitigate the negative impact on well-being. For the purposes of this research, emotional exhaustion and job satisfaction were used as the indicators of well-being.
Research took place in the Republic of Ireland in 2009, in the immediate aftermath of the world financial crisis. A telephone survey was used, with 5, 110 people participating. A number of questions were asked to explore job demand, job resources, well-being and experiences of restructuring and downsizing. Of those who responded, 48% had experienced a recent organisational restructure, and 57% had experienced downsizing.
- Employee perceptions of restructuring and downsizing were such that work intensified, i.e. people worked harder and longer in response to the threat they felt changes posed to them.
- The more work intensified in response to restructure or downsizing, the more likely it was that people would experience exhaustion and/or lower job satisfaction.
- Consultation helped to reduce the negative impact of change, such as increased work intensity, exhaustion and job dissatisfaction. The more extensive the consultation, the more the negative impact seemed to be reduced.
Implications and solutions
“In the midst of uncertainty brought about by dramatic organisational change and recessionary contexts, managers would do well to dedicate time to listening and consulting with their employees”
This research has several limitations, most notably that it took place in a country (Ireland) that was significantly and detrimentally impacted by the world financial crisis. This may have skewed the results, particularly as the survey happened in the immediate fall-out when reactions might have been heightened. In addition, the research was based on self-report where it is likely some people will have over-estimated how they were working even harder and longer.
Nonetheless, this research helps reinforce the importance of consultation and engagement with staff at various stages of organisational change – whether it is restructuring or downsizing that is happening.
“…information sharing and involvement facilitate sense making, reduce employee uncertainty and, critically, reduce employee cynicism of change”
In summary, the more effort an organisation expends, through its managers and HR team, on consulting and engaging with employees before, during and after change, the more you can reduce the negative impact on staff well-being and performance. Managers who say they don’t have the time should carefully consider the cost of not prioritising their time to focus on engaging with staff. There is the cost in terms of sick days (more people becoming ill through stress) and lost productivity to name but a couple, let alone the damaging impact to morale and team climate.
Here are some ideas to help managers and practitioners:
- Ensure that any change, whether it is organisation-wide or local to a work-unit, has a communication and engagement strategy that supports each stage of the change. This should include activities and evaluation of those activities.
- Job resources that can act as a buffer to the stresses of organisational life include trust, fairness and managerial support. Therefore, even before change happens, managers should invest time and effort in building a trusting, healthy team climate. By doing this, you’re more likely to successfully help your team members handle change better when it does happen.
- Set up a Transition Monitoring Team (TMT). This is one of the ideas in the model of change by William Bridges and is one I’ve used many times over the past 15 years. A TMT is a representative group of staff who you act as a ‘barometer’ for change. It should be a reciprocal relationship where you can test out messaging, for example, before it goes to a wider staff group; and where you can get feedback on how things are feeling at that point in time. Typically, a TMT will meet every 2-4 weeks, depending on where in the change programme you are.
- Train managers in facilitating consultation and engagement events and activities. Encouraging discussion, keeping momentum going, creating parameters for consultation and engagement etc. require effort and skill. For some managers this will come naturally, for others they may need some support.
In the RSA Journal Issue 1 2018, Anthony Painter wrote an article called ‘Power flows’. He said,
“In the workplace, as trade unions and other supporters have decayed, often we have little voice at all”
For managers, it is vital you make the time and space to ensure employees have a voice. For practitioners, it is incumbent on you to help managers do that and do it well. Giving employees even more of a voice during change could make a positive difference to their well-being.
- Could this new theoretical model help organisations manage change better?
- Building and maintaining trust in teams
- Getting some distance: Employee perspectives on organisational change
- Is continuous improvement leaving your employees feeling helpless?
Full research reference:
Harney, B., Fu, N. & Freeney, Y. (2018). Balancing tensions: Buffering the impact of organisational restructuring and downsizing on employee wellbeing. Human Resource Management Journal, 28(2), 235-254.