August 2010

The impact of the global economic crisis of 2008/2009 on employees was significant. While some faced the ongoing stress of working in an environment of job uncertainty, others were terminated. The results of both were devastating.

In addition, the emotional impact of change when colleagues get laid off, can often manifest itself as guilt on the part of those who have managed to hold on to their jobs. And then, in the restructuring, sometimes new employees are brought in as part of the “new organizational structure,” and that can dramatically change workplace relationships.

When it comes to restructuring and organizational change, there can also be trust lost between employees and management. Trust in working relationships is essential for corporate success and, in these situations, it is something that will take time to rebuild.

A study published in the Asia Pacific Journal of Management, conducted after the Asian financial crisis, tracked trust and work-satisfaction levels among workers before and three months after an organizational restructuring. The researchers found that trust and work satisfaction both “declined significantly” compared to levels before the restructuring. Meanwhile, the work group with the new manager and a change in work processes was one where there was a significant negative impact. In short, the more change in the branch of the organization, the more negative the impact on trust and work satisfaction.

The same study did find a positive relationship between work satisfaction and trust. Perception of colleagues’ willingness to help solve job-related problems contributed significantly to the strengthening of trust relations. Further, colleagues’ and supervisors’ willingness to listen to employee problems was also a positive contributor to satisfaction at work.

Putting employees first In light of the period of massive change upon us, it is important for HR professionals to think about how we, as employers, should prepare for and deal with the impact of downsizing and restructuring. Most important, pro-active communication is essential. Even if employees cannot be part of the decisions involving corporate restructuring, they will feel a greater sense of value and engagement if they are aware of the changes early on and long before the “outside world” finds out about them.

As we know, management knows the organization’s new strategic direction and part of their job is to make sure employees know it, too. We should work toward preserving the engagement level of employees and toward re-engaging those employees who are struggling. Appropriate and regular feedback and communication are essential to achieving this. Employees must not only know about the new direction, they must also understand the reasons for it and feel part of the process of rebuilding and achieving the new direction.

They must comprehend what role they will play in being a part of the future success of their organization.

Antoinette Blunt is chair of HRPA’s board of directors.

HR Magazine August 2010

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