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Article: Organizations In Flux: Managing Employee Attitude and Allegiance During Reorganizations, Mergers, Downsizings, Spinoffs and Other Major Changes. Related Resources

Organizations In Flux: Managing Employee Attitude and Allegiance During Reorganizations, Mergers, Downsizings, Spinoffs and Other Major Changes.

© 1996 C.S. Clarke, Ph.D.



At one time or another, most organizations go through reorganization, downsizing, spinoff, merger or some other distressing major change. Over the last decade, there have been so many of such changes that it seems like there's a contest going on with a prize to the organization that makes the most changes or most drastic change.

In many organizations, the result of those changes is devastation of employee morale and concurrent decline of performance. In some organizations, however, employee satisfaction and performance survive the transition without any destabilization or in a few, morale is actually improved and performance excels. Since the organization needs the good will and good performance of the employees who remain after a change, it is important to understand what makes that difference in motivation and attitude.

What accounts for the difference is primarily communication.. In what has come to be called the Information Age, knowledge may be considered the greatest power. The more information employees get from the organization and the more feedback they give, the more involved and empowered they feel. The more impact their feedback seems to have on events, the more their attitudes are to trust the organization to be fair with them, even if they end up being reduced in rank or income or displaced from their jobs.

Think about it. It makes complete sense. Imagine you are a "rank and file" employee in an organization in the midst of change. Imagine what you will think and feel, especially in an era where the news media regularly reports wide spread corporate downsizing and reorganization, budget cuts that will result in loss of contracts government dependent industry, fewer people to handle larger amounts of work, and growing demands for qualifications and performance with shrinking rewards. An age wherein top graduates of the best universities and professional schools can't get a job, when experienced professionals and executives are underemployed and underpaid (when they aren't just out on the street). It seems that people don't have careers or professions anymore, just uncertain jobs.

Knowing all that, if your organization is in change and the change is treated as secret or proprietary information of top management only, don't you long for knowledge necessary to make decisions about your life and job before you find the figurative rug yanked from under you? Don't you want some opportunity to influence the choices management is going to make that determine whether or not you have a job tomorrow? After all, protecting yourself is a basic motivation.

So if nobody credible tells you what you need to know, rumors start getting more plentiful and nightmarish. You are sure the people at the top don't care about you. You don't trust the organization. You begin to believe that you have nowhere to go. Even though the organization has left you in limbo, you are stuck with being there daily in the real world. And you don't even know how long it's going to be before you're stuck daily in the unemployment line in that real world. Of course you get anxious and/or depressed. Of course your attitude, motivation and performance suffer. You probably lose sleep. You lose or gain weight, depending upon your personal temperament. You are angry and resentful. You remember the old joke. "They must think we're mushrooms. They keep us in the dark and feed us manure." All because the only useful knowledge you have is that you have no useful knowledge.

I can't say this too loudly: THE GREATEST STRESSORS AND MOTIVATION SAPPERS IN ORGANIZATIONAL CHANGE ARE "UNKNOWNS" AND "UNCERTAINS." In the absence of information flow from official sources, or if official sources are not trusted, employees will start speculations that become rumors that become eventually considered "hard news." What employees make up in the absence of real information is worse than the stuff of nightmares. You can forget about a nightmare in the light of day, but the dark imaginings of employees during corporate change last far beyond the time the company stabilizes.

The most important and helpful thing an organization can do before, during and after restructurings, reductions in force and other major changes is to become an "information mill" and short circuit the "rumor mill." If your goal is to have employees with positive attitudes and continued motivation for good performance, make reasonably complete and totally accurate information available to employees about what is going on with the organization. Be specific and honest about intentions and expectations. Let everyone know how whatever is happening will affect the organization as a whole and individual jobs. Leave as little as possible to speculation. And when nothing is likely to be changing for a while, let that be known as well. Make sure your information is believable and comes from believable sources in the organization.

Within the limits of what's lawful and advisable (considering the effects of such information on stock trading and values during mergers and acquisitions) start a sendout about company changes, what's actually happening, what the results might be for the company and employees, what effects might upon performance, what you'd like to do about that, etc. Solicit feedback from the employees about how they feel, what they think and what they want to do to solve the problems they have. Believe them. Respect what they say. And act as closely as possible within the guidelines they give you for resolving their difficulties. Employees always know better what's wrong with them and their organization than any outside consultant can ever tell you: their financial lives depend upon it. The need for accurate information flow goes both ways. Information is power and motivation. For everyone.

Going back to imagining being the employee in the organization in change, consider how it would be for you if the organization informed you what to expect every step of the way, bad and good. You knew why what happened had to happen. You were allowed to participate in the change. The organization seems to listen to and care about employees The organization planned for and helped with the displacement of personnel. Would you feel you better understood your place in the restructured organization? Would you believe perhaps you still had the opportunity for advancement in the organization or the support of the organization in getting better placement elsewhere? Would you feel treated fairly even though you didn't like the change?

In organizations where employees have been historically treated as intelligent, thoughtful, respectful, loyal and important partners in the business, they have been known to work overtime or even regular time without pay, without benefits and without any guarantees of reemployment to help their ailing organizations back on their feet. Just because of the kind of communication between them and top management. Just because of the mutual trust and respect that communication built. Imagine what that means to every organization, regardless of its reason for needing change.
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