Friday, November 2, 2007

Fight or Flight: How Employees Cope with Organizational Change

In a global marketplace, change isn't just good. For many companies, says Angelo Kinicki, it's necessary.

"Why are organizations going through change?" says Kinicki, professor of management at the W. P. Carey School of Business. "Simple. Globalization. International competition. The spread of information technology. All of these factors have escalated competition and the need to change in order to maintain competitive advantage. Organizations have to be faster, more responsive, and produce higher quality. All told, there is more pressure than ever, on everyone, to be able to change."

Many top executives understand this. What they don't understand, says Kinicki, is that managerial changes viewed as good and necessary can be seen by employees as intimidating and even terrifying. But when companies don't take this into account, and force changes that employees aren't prepared to handle, those companies risk alienating their workers, losing money and, in the end, seeing those great strategic changes fall flat.

"Everyone should be interested in change," Kinicki explains. "The focus of our research is to examine the process by which your employees cope with these changes so that managers can more effectively implement organizational change.

Change impacts psyche and performance

Kinicki explores these issues in a new paper, soon to be published in Personnel Psychology, entitled "Employee Coping with Organizational Change: An Examination of Alternative Theoretical Perspectives and Models." His co-authors are Mel Fugate of the Cox School of Business at Southern Methodist University and Gregory E. Prussia of Seattle University.

In their study, the authors examined the effect of organizational change on workers in a large government office, and found that significant change greatly impacted both the psyche and performance of employees. The lesson of the work, the team says, is that when managers push through changes too quickly, without keeping employees in the loop, they may soon see employee performance drop -- or even lose those workers altogether.

"Managers must do what they can to apprise their workers of what's going on in the work environment," Kinicki says. "Managers have to focus on the positive aspects of what [the company] is doing, how they're doing it, and what effect that will have on people. Because when people perceive these changes negatively, they will try to escape. That escape will lead to negative emotions, and before you know it, they may want to quit."

The researchers conducted their study at a large government office undergoing major organizational change.

Among the most significant changes was the hiring of a new top administrator who brought along a strong record of achievement -- a record, the researchers note, that "starkly contrasted with the previous top administrator, who did little besides preserve the status quo." Other changes at the office included the restructuring of the management team, the creation of 17 new supervisory positions, and new schedules, duties and responsibilities for workers all down the organizational ladder.

The changes were extensive enough to affect each and every employee in the office.

"This was a government agency going through major change," Kinicki explains. "When people hear 'restructuring,' they're going to think that management is going to start getting rid of people. Employees are going to be on pins and needles. But at the same time, management is saying, 'We've got to pick up the workload.' So people are stressed, and the question we asked was: How do they cope with this?"

To find the answer, Kinicki and his colleagues polled 163 employees on their perceptions of those changes one month after the process began. The team also gathered company data tracking sick time and voluntary turnover for the entire 12-month transition period. The goal was to see how employees reacted, or coped, with the widespread changes in their workplace.

"We learned some interesting insights," Kinicki says. "We have a better understaning of how people coped with the stressors associated with organizational change. And based on what we learned about how they cope, we think we can help managers devise ways or techniques of reducing that stress."

Two kinds of coping: Taking control or making an escape

Broadly speaking, Kinicki says, workers handle change in one of two ways. Some turn to "control coping." Others resort to "escape coping." And it's those in the latter group that companies would be wise to keep an eye on.

As Kinicki explains, "control copers" meet their personal challenges head on. If a deadline is looming, these workers will put their head down and get the project done. In the realm of change, this set of employees may act quickly to get themselves on board with the new regime. Even if they harbor negative feelings about those changes, in other words, they don't run from them.

The same can't be said for those in the "escape coping" group. These are the workers, Kinicki says, who see a challenge looming ahead -- and then do whatever they can to avoid it.

"When these people have a deadline, they aren't trying to get it done," he says. "Instead, they're going for a walk in the park. They go out and drink too much. But when you avoid a challenge, it doesn't make it any better. You may feel better temporarily, but that escape coping just leads to more negative emotions later. These people may feel like they need to get away, but then that just leads them to feel guilty, and then they feel bad, and that leads to more pressure."

It also could make them hate their jobs.

As Kinicki's research showed, the employees who coped badly with organizational change were so strongly affected that they began to avoid work altogether. The data showed that the change process drove these workers to use more sick time, or quit, in order to run away from changes they perceived as problematic.

In the long term, that can cost companies a lot of money.

"We learned about some of the bad things that people do to cope with change," Kinicki says. "When people generate negative emotions about what is going on, they'll take more sick time. That costs money. And while we don't have any direct evidence for this yet, we believe a moderate percentage of those people taking sick time really aren't sick. They've just had enough -- or they're out looking for a new job."

Communicate, communicate, communicate

So how can managers avoid this? Simple, says Kinicki: "Communicate, communicate, communicate."

How employees react and cope with change is connected to the way they perceive, or "appraise," that change. So if managers can get employees on board with a change strategy early in the game -- before those workers have the chance to form their own negative opinion of it -- managers have a fighting chance of making those changes work.

"In life, stuff happens," Kinicki says. "What matters is not so much what that stuff is, objectively speaking, but what matters is how we interpret it. A classic example is this: When some people lose their jobs, they are invigorated. They feel good. Other people lose their jobs and just feel horrible."

When trying to sell a change plan, Kinicki advises managers to talk openly and honestly with their workers about the changes to come. But he also says they would be wise to focus on how those changes will ultimately be a positive thing for the company -- and, by extension, the employees.

"One of the things about communicating about change that is important to remember is this -- people will tend to resist change when they don't understand why it's happening," he says. "So you've got to script it out and present it in a way that the average person will understand."

Bottom Line:

The global economy and the rise of technology are forcing companies and organizations of all kinds of change in order to compete.
Even when change is necessary, however, employees may view it more skeptically than managers and executives would like to believe. And when employees take a negative view of change, their performance may suffer.
According to a new study, employees who cope with change by "escaping" it appear more likely to use sick time -- even if they're not sick -- and voluntarily quit.
Managers can avoid these problems by getting employees on board with a change plan early -- and, more importantly, emphasizing how that change will be positive in the long run.

Published: October 24, 2007

1 comment:

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