Exploring types of organizational change and differential effects on employee well-being and personal development

To date, research reported mixed evidence on the question whether organizational change (OC) affects employee well-being and personal development positively and/or negatively (e.g. Nikolova, Van Ruysseveldt, De Witte, & Syroit, 2014; Kiefer, Hartley, Conway, & Briner, 2014). Some studies highlighted the bright side of OC, while others looked for and found negative employee reactions to OC, neglecting the fact that employee reactions to OC might be depend upon the type of the OC processes under investigation.A promising venue to obtain a deeper and more nuanced insight into the OC – employee outcomes relationship may be to identify and differentiate between different OC types. As an exception, Kiefer et al. (2014) distinguished between cutback- and innovation-related organizational changes and found differential effects on employee well-being. Cutback-related OC showed predominantly negative effects (negative emotional well-being), while innovation-related OC was associated with positive outcomes (job satisfaction, engagement), but also with less negative outcomes.In this study, our main research question is whether and how employee reactions to change in their organization depend upon the kind/type of OC and its core characteristics. To this end we conducted two studies. In study 1, our goal is to explore different types of OC, using both quantitative (e.g. staff numbers) and qualitative (e.g. process innovation) criteria. In study 2, we investigated whether these OC types are differentially associated with positive (competency development) and negative (emotional exhaustion) outcomes for employees. Additionally, we explore underlying mechanisms, which may act as potential mediators in the relationship between OC types and employee reactions to change.Study 1: exploring OC typesExpanding the cutback- and innovation-related OC types developed by Kiefer et al. (2014), we distinguished and combined to dimensions. The qualitative axis represents the prevalence of innovation within the organization (process and product) and differentiates between low versus high innovation. The quantitative axis distinguishes between growth and decline, not only in terms of staff numbers, but also the presence of restructuring events (e.g. fusion of departments). Within this classification, six OC types emerge (see below).In a longitudinal survey, at T1, respondents (N = 1010) of a representative sample of private sector employees (both industrial sectors and private services) were asked whether their organization was characterized by (any) OC. Those who indicated that OC was present in their organization (n = 656) were asked at T2 (one half year later) to describe the changes that took place in this reference period: changes in staff numbers, the occurrence of restructuring events (e.g. fusion of departments), expansion in production capacity, introduction of new products, the level of process innovation (i.e. changes in production technology, work procedures, working methods, …).K-means cluster analyses confirmed our expectations as we found 6 OC types representing the types we identified within our classification scheme. 1. ‘expansion’ type: increasing staff numbers and production capacity expansion;2. ‘shrinkage’ type: decreasing staff numbers;3. ‘lean restructuring’ type: decreasing staff numbers associated with organizational restructuring;4. ‘thriving’ type: expansion (both in staff and production capacity) and product innovation;5. ‘innovative restructuring’ type: staff reductions in combination with product/process innovation;6. ‘innovative expansion’ type: capacity expansion in combination with process innovationStudy 2: OC types and differential employee outcomes The aim of this study was to investigate whether the different OC types were associated with different employee outcomes, both positive (active workplace learning measured as competency development) and negative (well-being measured as emotional exhaustion). We assumed that in OC types characterized by innovation and/or growth active learning is stimulated, while OC types characterized by decline and restructuring without innovation are associated with high levels of emotional exhaustion.Both employee outcomes were measured at T1 and T2, enabling us to combine a between-subject with a within-subject design. Additionally, half a year after T2, respondents (n = 656) again were asked to complete a questionnaire. We conducted ANCOVA (T2 data), one way repeated measure ANOVA (T1, T2 and T3) and mixed design ANOVA (T1, T2 and T3) analyses. Compared to the control group ( no change at T1), employees in all OC types experienced higher emotional exhaustion and active learning. Comparing the six OC types, as expected, the ‘thriving’ OC type showed to be the most advantageous type (relatively low emotional exhaustion, but high levels of active learning). The ‘innovative restructuring’ type represents the most detrimental situation: high levels of emotional exhaustion and medium levels of active learning. In between these types, the ‘innovative expansion’ type combined medium levels of emotional exhaustion with high active learning. Additionally, the one way repeated measure ANOVA revealed that the high level of emotional exhaustion in the ‘innovative restructuring’ type significantly declined in the half year following the organizational changes.In conclusion, our studies succeeded in identifying various OC types and at the same time revealing their differential effects – both positive and negative – on employee well-being and personal development.Kiefer, T., Hartley, J., Conway, N., and Briner, R. (2014). Feeling the squeeze: Public employees’ experiences of cutback- and innovation-related organizational changes following a national announcement of budget reductions. Journal of Public Administration Research and Theory, 14, xx-xx.Nikolova, I., Van Ruysseveldt, J., De Witte, H., & Syroit, J. (2014). Employee well-being in times of task restructuring: The buffering role of workplace learning. Work & Stress, 28, 217-235.