Archives for September 2011

Introduction

At the most general level, organizational change is present when a workplace experiences a difference in its functions, members, leaders, or form (as cited in Weick and Quinn, 1999). This change subsequently requires an adaptive response on the part of employees (Jex, 2002). Evidence suggests that perceptions of stress in the workplace result from an employee’s cognitive appraisal of their work environment; empirical findings show that during organizational change in the form of a merger, employees consistently report feelings of anxiety, uncertainty, and job insecurity (Jex). Upon consideration of the fact that change often creates these negative feelings among employees, it is reasonable to infer that change is a precursor to higher levels of stress in the workplace, which give rise to tensions that require a certain mode of leadership.

The current literature review explores how outcomes of organizational change, such as employee stress, are associated with alternative styles of leadership. The premise undergirding this paper is the notion that having a strong change leader in an organization is an effective method for mitigating employees’ change-induced stress in the workplace. Through conducting such reviews, it is hoped that practitioners will gain an improved understanding of the leadership practices that are regarded as most effective in times of organizational change. This review examines the efficacy of specific forms of leadership during organizational change, by investigating two questions:

• How can a Manager/Leader be sure their employees do not get stressed out during change?
• How can the leader decrease the employees’ stress?

First, I will discuss the impact of stress on the psychological well-being of employees and the relationship between stress and emotions. Then, I will explain the motivations behind employee resistance to change, by addressing the following three topics: how social interactions, attitudes, and personality traits influence levels of resistance; the features of change that predict how employees are likely to respond to change; and the ways a leader can reduce employee resistance. Finally, I will present findings suggesting that a leader’s ability to motivate positive perceptions of organizational change and change readiness hinges on their level of emotional intelligence and the type of coping strategies their employees use.

Organizational Change and Employee Stress

Recognizing that psychological stress can result from uncertainty in the workplace, Bergdahl, Larsson, Nilsson, Riklund-Ahlstrom and Nyberg (2005) employed the idea of affect to explain the interdependency between stress and emotion. Affect, for these authors, was defined as the convergence of psychological and physiological stress responses that facilitate the feeling of urgency. For example, the uncertainty stemming from the large-scale reorganization of a workplace can affect the psychological and physical well-being of employees through increased levels of distress and systolic blood pressure (Pollard, 2001).

Bergdahl and colleagues (2005) investigated how to improve an individual’s ability to cope with work-related stress. Research has shown that cognitive impairments accompany conditions of stress (as cited in Bergdahl, et. al., 2005). Specifically, researchers have found that the hippocampal-dependent function of episodic memory (e.g., memorizing a list of twelve words) is found to be impaired in high stress conditions. To mitigate the negative impact stress has on memory, Bergdahl and colleagues designed an affect intervention, aimed at increasing emotional awareness, perception, and expression. As expected, the subjects who underwent affect training experienced significant reductions in the levels of stress they perceived, including psychological symptoms. The most pronounced treatment effect was experienced by employees with the highest levels of stress and psychological symptoms.

Responding to Organizational Change

In addition to the emotional aspect of stress, researchers have been exploring the impact that interpersonal variables have on perceptions of stress during change (Lamm & Gordon, 2010; van Dijk & van Dick, 2009). Recently, Lamm and Gordon (2010) conducted a study to examine the extent that psychological empowerment and a predisposition towards adaptation contribute to the extent to which an employee will demonstrate behavioural support for change. Psychological empowerment refers to the extent that an employee perceives that they hold control, are competent, and have internalized the goals and objectives of their organization, while predisposition to adaptation is characterized by one’s readiness to adjust to change. The investigators assessed how employees perceive change by measuring the degree to which they felt autonomous, self-determined, and empowered. Results of the study indicated that regardless of the type of change, rather than predisposition, feeling empowered had a stronger influence on perceptions of stress. That is, employees who felt a sense of empowerment were less likely to experience stress during organizational change. By considering unique personality traits, such as the impact that an individual’s disposition has on his or her openness to organizational change, this study provides insight into employees’ willingness to change on a deeper level.

In a study by van Dijk and van Dick (2009), stress was indirectly assessed by measuring attitude. The authors were interested in two attitudinal variables; the first being the attitudes held by employees towards the change, namely a merger, and the second being the attitude of the leader towards employee resistance. The attitude of a change leader is a highly important factor to take into account. Considering attitude provides a potential explanation for the source of resistance and a measurable feature of the change process that can be targeted to reduce stress. By examining employee and leader attitudes, this study provides evidence of how the two can interact during change. Recently it has been shown by Rubin, Dierdorff, Bommer, and Baldwin (2009) that leaders who are cynical about organizational change are weaker performers on the job and exhibit less positive on the job behaviours. Further, cynicism among leaders has been associated with a negative impact on the performance of employees’ as well.

Numerous studies (e.g., Boselie & Koene, 2010; Lamm & Gordon, 2010; van Dijk & van Dick, 2009) have discussed the negative effect change has on the work-based identity of individuals. In relation, van Dijk and van Dick’s study found that aside from the content of the change itself, two features are found to have a negative impact on the attitude of employees, particularly their work-based identity. The first is the quality of relationships present between a leader and their employees, and the second is the communicative interactions which take place between the two. A major finding of this study emphasized the importance of the change leader creating a sense of continuity for their employees, in the midst of a changing environment. This ability was found to overcome negative effects of the change on employees’ identities and reduce employee resistance.

Leading Organizational Change

Research investigating how outcomes of organizational change, such as stress, are associated with alternative styles of leadership is limited. However, recently Waldman and Javidan (2009) proposed a model to show that charismatic leadership is a key driver behind the ultimate success of an organizational merger or acquisition. A charismatic leader is characterized by having the ability to motivate followers to shift from a state of hopelessness into enthusiasm by giving them a sense of purpose. The charisma of the leader thus results in a strong tendency for followers to transcend their own self-interests for the sake of the collective (as cited in DeGroot, Kiker, & Cross, 2000). Charisma is one of the defining features of transformational leadership.

The research of Neilson and Munir (2009) suggests that the trait which enables a transformational leader to influence the affective well-being of their employees is self-efficacy. By transcending short-term goals and focusing on the higher-order needs of those under their supervision, individuals engaging in transformational leadership are known to motivate their followers to perform above and beyond expectations (Judge and Piccolo, 2004). The following four components constitute transformational leadership. They are as follows: idealistically influential, inspirationally motivational, intellectually stimulating, and individually considerate. Overall, a transformational style of leadership is predicted to develop exemplary followers who trust them, are optimistic about the future, willing to question them and focus on continuous improvement and development (Aviolo and Bass, 1998). In considering these findings it is worth noting that a non-significant difference between charismatic and transformational leadership styles has been established, which shows that the two are equally valid (Judge and Piccolo, 2004).

Rafferty and Griffin (2006) suggest that the way an employee responds to organizational change is marked by the following three change leadership features: (a) frequency, how often the change is introduced, (b) impact, how much the nature of work, values and structure of the organization change, and (c) planning, the amount of effort towards communicating the change prior to implementation. Counterintuitively, the researchers found that the more frequently change occurred, the more unpredictable employees perceived each change. In turn, this uncertainty caused employees to also feel fatigued by the change. Similar to change frequency, the degree of novelty introduced by change also figured importantly into the outcome of stress. The authors found that because highly novel changes required employees to act in new ways and adopt new values, they were associated with higher levels of stress.

Allen, Stelzner, and Wielkiewicz (1998) presented similar views regarding novelty, explaining that the novelty of change and psychological doubt about what change signifies leads to feelings of uncertainty. They emphasized the importance of communication during times of change, proposing that uncertainty can be reduced when a leader identifies change-relevant information and communicates it to their employees.

In an attempt to better understand the motivations behind employee resistance to change and the way change is managed by change leaders, van Dijk and van Dick (2009) proposed that an employee’s perception of a change leader is largely influenced by the way the change leader’s intention are perceived. The study characterized resistance to change as a fluid construct and explored how it is influenced by social interactions. A main conclusion of the study suggested that the negative consequences that are often associated with a change, such as loss of status, are likely to present a threat to an employee’s work-based identity.

Also highlighting the problem of a loss of organizational identity, Boselie & Koene, (2010) investigated the role a human resource department plays as a catalyst for change leadership. Their study looked at change occurring in the context of a private equity buyout (PEB). Causing workplace reorganization comparable to a merger or acquisition, PEBs are known to exert a significant impact on the affected parties, such as a significant loss in jobs, which coincides with increased part-time employment. Thus, expected responses to a PEB include defensiveness, fear, uncertainty, stress, and a loss of personal and organizational identity.

In order to combat the negative impact such change has on employees, Boselie and Koene’s study identified several ways a human resource department can mitigate resistance to change. First, by explicitly recognizing and admitting to the uncertainty the leadership is facing during the change process the organization is more effective at earning the employees’ trust. This finding is particularly important because subsequent to a merger, both institutional trust and levels of employee confidence in the respective organization suffer due to a loss of identity. Second, by distinguishing concrete short-term objectives from more nebulous long-term goals, a change leader reduces the problem of ambiguity, inherent in leading change initiatives.

During a PEB, timing is of the essence and involvement from human resources at an early stage of the change assists in developing employee commitment to change as well as promoting employee retention. Furthermore, in times of change, two of the most influential factors affecting the amount of confidence employees have in their leader are (a) the employees’ ability to identify with their leader and (b) the degree to which employees perceive their leader as competent (Boselie & Koene, 2010).

To address the way a leader can decrease employee stress induced by change, this section will discuss the research of Groves (2006). Incorporating the concept of emotional intelligence, his study assessed how a leader’s use of emotional expressivity works to motivate the way employees perceive organizational change. As a dimension of emotional intelligence, emotional expressivity is defined as nonverbal and emotional form of communication (Groves). The leadership behaviours examined for the purposes of the study were called “visionary” and centered upon the ability of a leader to create, communicate, and implement a vision seen as vivid and desirable. It was hypothesized that a leader’s level of emotional expressivity would moderate the strength of the relationship between visionary leadership and the effectiveness of an organizational change. Consistent with this prediction, there was a significant interaction effect between a leader’s emotional expressivity and visionary leadership. Independent of emotional expressivity, visionary leadership did not elicit a direct effect on organizational change. This finding suggests that visionary leadership alone might be inadequate for motivating a commitment to organizational change.

Huy (2002) found that successful organizational change resulted from two abilities of a leader: first, the ability to display emotional commitment to the change; and second, the leader’s awareness of the emotions of others throughout the change process. Other researchers (e.g., Herold, Fedor, Liu, and Caldwell, 2008) have also commented on the importance of commitment to organizational change and sought to examine how certain kinds of leaders are able to bring it out in their followers. According to Herold and colleagues there are two situational factors which interact to determine the level of commitment employees feel for change, namely, the impact of the change on the employees’ job and transformational leadership.

Another component of the change process that influences employee stress is change readiness. In 2008, Walinga proposed a framework to evaluate the role of leadership as a variable of organizational change in the corporate world by exploring the association between leadership and stress appraisal. The purpose of the study was to gain insight on how to best equip people with the confidence and perceived self-efficacy they need in the face of change. Acknowledging the psychological and emotional complexity involved in confronting a stressor such as change, Walinga was interested in exploring how one’s appraisal of change often determines the coping strategies employed. The study operationally defined change readiness as the state in which one is best prepared to change internally because one is best prepared for changes in the environment. Creating internal preparedness was put forth as the ability of a leader to empower employees by cultivating feelings of confidence, clarity, and control.

Walinga’s study revealed that appraisals of change as something existing beyond one’s control, led to emotion-focused coping, rather than more effective problem-focused coping. This finding suggested that the key to effective change lies in the individual’s appraisal of the change and the extent to which the change is perceived as stressful. An individual’s perceived control over the change and acknowledgement of his or her lack of control as being non-threatening in a situation may lead to a more problem-focused approach. Reframing was recommended as a way this can be achieved by leaders. When challenges are reframed, the individual is focused on the aspects of change that are controllable, thereby making it more likely for problem-focused coping to occur. Shifting from an emotional stance to a control-oriented focus was deemed necessary for the leader as well as the employees.

Conclusion

In conclusion, this review has examined the effects of change leadership practices on employee stress in the changing workplace. I explored three broad and related topics, including the link between organizational change and employee stress, the ways in which employees respond to change, and the ways in which leaders manage change.

Included in this review is a description of interventions aimed at increasing change leaders’ emotional awareness, perception, and expressivity as effective ways in which a leader may reduce employee stress during organizational change. I also discussed the impact that interpersonal variables, such as empowerment and adaptability, have on employees’ perceptions of stress. Research in this area suggests that there is a strong correlation between feelings of empowerment and feelings of stress during change. That is, the more an employee feels empowered during change, the less like he or she is to feel stressed by organizational change. This finding speaks to the proven effectiveness of a transformational leaders’ ability to influence the affective well-being of their employees by enhancing feelings of self-efficacy.

The literature presented in this paper underscores the integral role that a leader plays during times of organizational change. More specifically, leaders who communicate change with clarity and introduce it less frequently mitigate employee stress associated with frequently and poorly communicated change implementations. An effective way to introduce change may, therefore, be doing it progressively. This would ensure that employees are prepared for the change and help to reduce the incidence of any shocks accompanying novelty. Further, in order to minimize high frequency change, it may be more efficient and less stressful for leaders to bundle complementary changes together, instead of rolling them out one by one. Honest and effective communication relies on the ability of a leader to recognize and admit to the uncertainty they are facing during the change process.

This literature review also highlighted the notion that the association between organizational change and employee stress is emotionally charged, and it is key for change leaders to develop a better understanding of this association in order to overcome the employee resistance to change that may occur. Ways in which a leader can be more aware of the link between organizational change and employee stress include displaying emotional commitment to the change, as well as being sensitive to the emotions of the employees. However, an individual is likely to be more successful at coping with change when his or her perspective of change is grounded in a problem-focused approach, rather than an emotional-focused approach.

My literature review explored the leadership traits and practices to reduce employee stress. This literature review is a preliminary and non-exhaustive attempt to understand this correlation.

In summary, this literature review has emphasized the important role that an individual’s emotions and commitment to change play in the context of change. Although the research reviewed provides valuable insight for change management practices, research that examines the relationship between change-induced stress and alternative forms of leadership remains scarce. The present review provides a resource to redress this need for continued research in the area of employee stress caused by organizational change, as the importance of this subject matter continues to grow.

Amelia Moslemi worked with the IRC throughout the 2010-2011 academic year as a student researcher. With an keen interest in change management, Amelia conducted a review of the literature in this area. This paper is the initial results of her work. Amelia recently completed the Master of Industrial Relations program at Queen’s University. As part of her program, she completed her studies by participating in a spring term exchange at Fudan University in Shanghai, China.

References

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Aviolo, B., & Bass, B. M. (1998). You can drag a horse to water but you can’t make it drink unless it is thirsty. The Journal of Leadership Studies, 5,(1), 356-371.

Bergdahl, J., Larsson, A., Nilsson, L., G., Ahlstrom, K. R., & Nyberg, L. (2005). Treatment of chronic stress in employees: Subjective, cognitive and neural correlates. Scandinavian Journal of Psychology, 46, 395-402. doi: 10.1111/j.1467-9450.2005.00470.x

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