Impact of Organizational Change

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Organizational change can occur for various reasons including Merger & Acquisition, financial concerns, accommodating growth, expanding markets, or a simple shift in the business model. Without depending on the reasons, change is considered as the most complex or difficult for the organizational employees which might develop a havoc within the organization’s bottom line. Organizational change creates significant impact on mental stress, loss of loyalty, increased turnover, increased time away from work, life changes caused by restructuring etc.

It has been identified that at time of uncertainty as well as change across the country, American adults have been affected by the change at workplace and the main reason behind it was chronic work stress. As per the survey released by the APA (American Psychological Association), the employees who have been affected by the organizational change due to the chronic work stress decided to leave the organization within a year as compared to those who have not been affected by the organizational change. Moreover, more than half of the American workers or 50% of them revealed that organizational changed had created significant impact on them. The survey was performed in March by Harris Poll among nearly 1,500 adults of the United States who were employed for part time full time, or self-employed.

Organizational change due to stress:

The experience of the workers with respect to current or recent change were more than twice related to chronic work stress as compared to the employees who reported anticipated change. Moreover, this change was more than 4 times as likely to report the change related to the physical health symptoms at workplace. Work-life conflict was faced by the American workers who reported current or recent change up to 39%.

The findings of the survey also explore the ways by which the organizational or workplace change affected the experiences as well as the attitudes of the workers on job. Lower level of job satisfaction was reported by the workers who were affected by the organization change within the past year as compared to the employees who does not reported current, recent or anticipated changes.

Employee Cynicism:

As per the survey, underlying reaction of the employees towards the organizational change might be their perceptions related to the motivation behind those changes as well as the likelihood of success. Moreover, nearly every 3rd American worker said that they were cynical with respect to changes and it was identified that the management had a hidden agenda that their intentions and motives were different from what they said. Only 4 out of 10 employees revealed that changes had desired affect and near about 10 employees doubted that the changes would work as intended. Moreover, the effects of the organizational change on employees often relies on the organizational change. the negative culture of the organization has the potential to hinder the changes and make required transitions more complex for the employees to bear.

Various organizations emphasize on the benefits and salaries as the first place which affects the employees due to organizational change is the cost-saving. When this occurs, it becomes inevitable that some employees will leave the organization for seeking employment in other firm.

Employee turnover:

Businesses undergo employee turnover after a major reorganization or organizational change. An employee might identify that the environment is highly unstable. High rate of employee turnover can affect the productivity of the overall organization in sever manner due to the loss of the skilled or talented employees. Hence, the organization is required to recruit as well as train new people. In certain scenarios, the resources can also lead to the loss of the business revenue. For abating employee resistance as well as turnover, the organizations are required to implement a deliberated change management process which helps in explaining the implications as well as significance related to the organizational change and guiding employees afterwards.

Deteriorating work climate: The organizational changes which results in the job insecurity as well as ambiguity develops a declining work condition. This in turn can affect the economic health of the overall organization. Mortality is considered as the most detrimental impact which shows hat a business transformation has been affected negatively. Employees in the deteriorating environment becomes less productive, self-productive, fearful and unmotivated. The productive corporate culture can be promoted by avoiding ineffective changes and by incorporating positive ones.