An integrative model of employee responses to major organisational change.

One of the enduring issues facing organisations relates to the high number of change initiatives that fail outright or only partially meet expectations (Beer & Nohria, 2000). Although there are many potential causes of failed change, much of the extant change identifies resistance to change as the major source of this problem. In order to bring about successful organisational change, it is important that managers create a change-ready environment, one where employees accept and affectively commit to change. A major consideration in creating such an environment relates to employee perceptions of justice. The Integrative model of employee responses to major organisational change that was developed and tested in this study, asserts that change implementation practices will influence employee perceptions of justice and subsequently, that justice perceptions will influence affect, organisational trust, and attitudes toward change and the organisation. The organisational practices referred to in this thesis include communication, enabling voice or participation by employees (Daly & Geyer, 1994; Kernan & Hanges, 2002; Kotter & Schlesinger, 1979). Other practices such as perceived organisational support and the perceived consistency between change goals and management behavior are more recent approaches that were expected to positively influence employee justice perceptions (Hopkins & Weathington, 2006; Kernan & Hanges, 2002). Perceptions of justice were, in tum, expected to influence employee affect and trust in the organisation (Cohen-Charash & Byrne, 2008). Affect and trust in the organisation were thereby expected to influence attitudes towards the organisation, operationalised as turnover intention and commitment to change. The study involved a population of 694 members from three different organisations, all of whom had experienced significant change within the previous six months (NI = 140; N2 = 374; N3 = 180). Organisation One was a large, private, multi-national service organisation, whose core business cuts across the agricultural sector as well as the minerals, oil, gas and chemical industries. Organisation Two was a major state public sector organisation. Organisation Three was a small rural health service providing a broad range of services to its community. While the full path model contains numerous significant paths, the overall message that they reveal is that justice perceptions directly influence affect, albeit certain forms of perceived justice (distributive and informational) are important in influencing positive affect, while other forms (distributive and procedural) are important in influencing negative affect. Affect - both positive and negative - in turn influences one's trust in the organisation, as well as the extent to which employees commit to change endeavours. The trust engendered by affective responses also has significant and substantial impact on intentions to leave. Indeed this latter relationship was the strongest of any observed in the full model. The paragraph that follows details the path co-efficients of these complex and multiple relationships. Organisational Trust (β=-.48) directly impacted Turnover Intention. Negative (β=-.18) and Positive Affect (β=.22) directly impacted Normative Commitment to Change. Organisational Trust directly influenced Affective Commitment to Change (β=.28). Negative (β=-.20) and Positive Affect also influenced Affective Commitment to Change (β=.25). There were direct effects of Distributive Justice (β=-.42) and Procedural Justice (β=-.13) on Negative Affect, and direct effects of Distributive Justice (β=.23) and Informational Justice (β=.31) on Positive Affect. In addition, there were direct effects of Distributive (β=.49), Informational β=.12) and Interpersonal Justice (β=.11) on trust. Positive Affect (β=.18) and Negative Affect (β=-.18) directly impacted Organisational Trust, while Trust moderated the relationship between Negative Affect and Affective Commitment to Change as well as that between Positive Affect and Affective was moderated by both Positive and Negative Affect. In relation to the independent variables and justice perceptions, the main findings were as follows: Communication Quality exerted the strongest direct effect on Informational Justice (β=.56) and Procedural Justice (β=.26). Voice exerted a substantial effect on Informational Justice (β=.43) and Procedural Justice (β=.49). Perceived Organisational Support exerted a significant effect on Distributive Justice (β=.65) and Interpersonal Justice (β=.34). Implementation had small, direct effects on Distributive (β=.13), Informational (β=.16) and Interpersonal Justice (β=.17). The qualitative findings indicated strong, positive affective responses by employees toward change, based on a clear understanding as to why change was necessary. Numerous benefits of change were identified by interviewees. Many commented that their organisations had successfully achieved their change objectives, or were in the process of achieving their change objectives, but that there were mistakes made along the way. Although there were several negative responses, these were not so much directed at the change interventions per se, but at the manner in which the changes were handled by their respective organisations. In light of results emanating from both qualitative and quantitative studies, the following, broad suggestions are proffered with a view to improving change implementation practices and encouraging employee perceptions of fairness. In relation to communication quality, findings from the current study suggest that in order to influence justice perceptions, the emphasis should be on 'quality', i.e., on-going, accurate, timely and helpful information. Inter alia, this can be achieved by: 1. Involving the executive team in designing an appropriate communications strategy 2. Justifying the need for and the appropriateness of the change 3. Addressing any 'bad' news honestly and openly 4. Tailoring the change messages to suit the various stakeholder groups 5. Providing comprehensive information that addresses employees' specific change questions 6. Maintaining consistent communications amongst key stakeholder groups over the duration of the change implementation process 7. Adopting multi-media approaches to conveying change messages 8. Enlisting the support of senior executives to address employees face-to-face 9. Treating employees with dignity and respect, and therefore avoiding 'spin' 10. Evaluating the effectiveness of the communications strategy Voice affords employees a sense of being valued and of control over their future in terms of influencing change activities. Findings from both studies suggest that not only should there be opportunities for employee participation, but these opportunities should be genuine. In order to encourage employee perceptions of fairness, organisations could consider: 1. Promoting dialogic exchange, with a view to acting on employee feedback 2. Providing multiple and genuine opportunities for employee voice 3. Encouraging employee input through the use of informal settings 4. Listening to and acknowledging employee input An important consideration arising from the findings relates to perceived organisational support or the way an organisation demonstrates that it cares about the well-being of its employees during change. In this instance, consideration should be given to both tangible and intangible support and this could be approached by: 1. Devising a strategy to ensure appropriate tangible resources for change are in place e.g. training, human resources, funding, technology and so forth 2. Communicating the resourcing strategy 3. Eliminating barriers that may impede successful change implementation 4. Acknowledging difficult challenges arising from the change 5. Providing appropriate emotional support by listening to employees and acknowledging the emotional realities of change. In summary, this thesis takes a holistic approach to understanding employee responses to major change at a time when organisations are challenged with responding to the demands of increasingly turbulent external environments. While the pace and complexity of doing business in the 21st century might easily tempt organisations to focus on change initiatives from a blinkered firm -perspective, the results of this study underscore the importance of also paying due consideration to employee perceptions and emotions. A key finding is that the way employees perceive the practices and processes during change of their managers and their organisation more broadly, set in train affective responses that impact on both actual and intended behaviour. This finding, and the more nuanced relationships between the variables that underlie it, makes an important step forward in understanding how employees transact with management in times of uncertainty; and how management can respond in order to help to facilitate the smooth passage of change.