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How to keep your employees at the heart of organisational change 21/03/2011

Due to the economic downturn, many organisations are considering major restructuring and possible downsizing. Lindsey Symes offers a best practice guide to managing change.

How to keep your employees at the heart of organisational change

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  1. Change needs to be managed better
  2. Are you being 'fair' to employees?
  3. Engage the workforce through the whole process
  4. During transformation - help employees adjust
  5. After the dust has settled - get some feedback
  6. The importance of the psychological contract

Change needs to be managed better

Restructuring, redundancies and other major organisational changes inevitably affect the workforce. However, the real test for any organisation is trying to ensure that these periods of transformation are well managed so that any negative impact on employees, in terms of morale and productivity, is minimised. 

A recent survey of 1,000 people in full time employment across a range of companies in both the public and private sectors, carried out by Capita HR Solutions, revealed how commonplace major organisational change has become. Over half (52 per cent) of those surveyed have already been through a large scale organisational change in the last 12 months, while 67 per cent think it's inevitable that their organisation will have to undergo restructuring or make redundancies due to the current economic climate.

Our survey went on to show that employees are having an overwhelmingly negative reaction to these changes in their workplace. Of those that had already been through organisational change half (50 per cent) now feel uncertain about their future at work, 40 per cent feel less motivated and more stressed and one in five are actively seeking alternative employment. In fact, only 12 per cent of respondents say they feel positive about the changes.
 
The survey points to poor change management practices as the reason for employees harbouring these negative feelings. A worrying 63 per cent claim they heard about the changes via a rumour first as opposed to hearing about it from their employer. Nearly half (46 per cent) claim that they felt unsupported by their employer during the change process and 40 per cent assert they were unclear as to how the proposed changes were going to impact on them. 

These results indicate that change must be managed better, from the initial planning stages right the way through to implementation, if employees are to remain engaged and motivated.

Are you being 'fair' to employees?

Prior to restructuring or downsizing, organisations need to recognise that there's a psychological contract between employee and employer. This psychological contract relates to the perceived promises that employees believe were made to them by their employer. If the organisation fails to deliver on these promises, and this psychological contract is breached, then negative behaviours and emotions may ensue.

One of the key elements of this contract is the notion of perceived fairness. Employees understand that organisations need to make tough decisions and occasionally those decisions will involve restructuring or redundancies. However, they expect to be treated fairly during the period of transition. It's important therefore that organisations keep this in mind during the change process and seek to demonstrate that they are treating employees justly.

Ongoing communication is critical, and wherever possible organisations should look to avoid the scenario where employees hear of restructuring or redundancies via a rumour first. Rumours are likely to originate because a certain amount of due diligence or scoping has commenced but nothing formal has been announced to the employee. If there is lack of communication, only rumour, employees will worry and be less productive. In many cases this worrying will have been unnecessary in that the changes may not directly affect the employee at all.

To build trust and keep employees onside, it's important that organisations are upfront and transparent about the changes from the very beginning. Also, clarify and communicate the reasons for the changes and ensure that they are in line with the overall organisational objectives and values.

Engage the workforce through the whole process

If closures or redundancies are planned, then these need to be managed with greater sensitivity. Consulting with those involved and holding face-to-face meetings will demonstrate that the organisation is taking the time to be as fair and respectful as possible. This will also show the employee that the organisation has nothing to hide.

Engaging the workforce from the outset and asking them for their feedback on the proposed changes is also important if a change programme is to be successful. If employees feel that they have not had a chance to put forward their views, or if they feel the proposed changes do not make sense, then they are unlikely to be motivated to support the organisation during the transition and may be less committed to the organisation after the change.

At this juncture, organisations should also seek to understand who the key stakeholders are. Employers should identify the change ambassadors and, perhaps more importantly, the likely saboteurs; those who will actively seek to make the transformation fail. Organisations should then seek to pre-empt the reasons for resistance and find ways of mitigating these as part of its change plan. By turning saboteurs into ambassadors, organisations can ensure a smoother transition.

During transformation - help employees adjust

Those who are in a position of authority should be seen to be involved, leading by example and taking accountability for the changes. Often leaders aren’t as transparent as they could be. Perhaps they assume that the employees already know what to expect, or believe that the employees don’t need to know or even that they won’t understand the reasons behind the change initiative. Poor communication from the top leads to fear and suspicion amongst employees and increases animosity.

During the period of change, it's also important to have an interactive consultation process. It is worth remembering that employees can often provide some valuable information around what changes are needed, as they see the organisation in operation at ground level. Wherever possible, organisations should consider giving employees the opportunity to assess the feasibility of the planned changes. In creating these forums, the organisation will be better equipped to see what changes will and won’t work, while engaging the employees so they feel part of the change design.

Organisations should also make sure there are processes in place so that those directly impacted by the change can raise their concerns. They can then be counselled accordingly. The employee should understand why the changes are being made and why they have been directly impacted as opposed to another employee in a different part of the business. Holding one to one meetings explaining this to employees, which will help to secure the feeling of perceived fairness and bolster understanding.

After the dust has settled - get some feedback

If a change programme has been given the appropriate amount of consideration, a criteria for success will have been defined at the start. Once the change is implemented, organisations should measure the success of the change against this criteria. Organisations should then communicate this success to employees, as this gives the organisation the opportunity to reinforce the reasons for change and highlight the benefits.

It's equally important that organisations recognise where transformation has been less successful and that any lessons learnt be shared with the workforce. Measuring the success of a change programme in this way should demonstrate the organisation’s commitment to delivering change programmes that achieve their objectives and are fit for purpose. This type of approach will help build confidence, and drive a culture of continuous improvement so that change is embraced as opposed to being feared and resisted.

After a period of transition, an organisation may also consider surveying employees to see how they feel about the changes, how the transition was handled and how they feel now. A word of caution though, an organisation should only undertake an employee survey if it has the means to act on the feedback. Collecting feedback and then taking no action is worse than not asking for employee feedback the first place.

Finally, once a restructure or downsizing has been implemented, organisations should put support services for employees in place. The change programme does not end once the changes have been implemented as employees may continue to feel damaged by the experience. This is particularly true if the employee perceives that the organisation has broken promises they believe were made to them. A support programme that provides access to counselling, or coaching, and one-to-ones with line managers will all help to make sure these employees stay engaged and motivated.

The importance of the psychological contract

In summary, organisations must recognise that in these times of economic uncertainty, where large-scale organisational change cannot be avoided, poor change management can have a long-term negative affect on employees. As employees that have been negatively affected by change, either in terms of reduced job satisfaction, commitment or loyalty, will ultimately affect the bottom line. Those employees that remain in the organisation that harbour these negative feelings are less likely to be committed to delivering a high quality ‘business as usual’ service. They are also less likely to go above and beyond for the organisation, and probably will not take on additional responsibilities or offer to work overtime.

If they have perceived that the psychological contract with their employer has been breached and feel angry or rejected, they may also be acting as saboteurs to the change, which will have an impact on the wider workforce. In addition, those employees that leave because of the changes will create a cost in terms of recruitment, inducting and training a suitable replacement, while the loss of knowledge, especially if the employee in question has been with the organisation a long time,  could adversely impact on service delivery.

By recognising the value in upfront and transparent communication, involvement of employees throughout the transition process and showing consideration post implementation, organisations will be able to mitigate against the negative effects and encourage employees to embrace the change.

Remember, organisational change is business, but to those affected; it’s personal.

For the latest HR jobs and human resources jobs, please visit the Changeboard homepage.

Lindsey Symes, client relationship manager, Capita HR Solutions

Lindsey Symes, client relationship manager, Capita HR Solutions

Lindsey joined Capita HR Solutions in 2007. She is an expert on employee psychology and the psychological contract between employees and employers. Prior to joining Capita, Lindsey worked as a human capital consultant for PWC.