Change Management Effect on Employees - Dissertation Example

?MMUBS Masters Network – Dissertation Unit (5A4060) Research Proposal Pro-Forma and registration number Programme and mode of attendance Title of the research project Change management and its effect on employees: Case study of Alinma Bank of Saudi Arabia Research context Contemporary business environment is continually developing and changing. That is why companies, in order for their business processes to be able to adequately respond to the changes of the external environment, have to be constantly changing themselves. Changes and innovations, therefore, should be an integral part of normal business development and growth. At the same time, it should be remembered that many change management decisions of the supervisors are heavily influenced by the employees (Barnett and Carroll, 1995). On the other hand, such decisions, in many cases, have a direct impact on the subordinates. Therefore, effective change management decisions should always take into account how employees, as one of the most valuable assets of an organization, will get influenced by the decision. In this context it can be said that employees, as an internal resource of a company, are the key to creating a competitive advantage through change and innovation (Teece, Pisano and Shuen, 1997). Therefore, the task of the company is to ensure that its employees adapt to changes well and, a result, continue showing good, or even improved, performance. For this reason the effect of change management decisions on employees should be studied in order to determine the most effective and efficient tools and strategies for managing change. This paper, therefore, aims at analyzing the existing change management theory and practical applications, as well as studying employees’ perception and reactions to change. The research will also try to determine how change management techniques and strategies influence employee motivation, organization and leadership. This information, in its turn, might become a basis for developing a system of change management strategies, tools and techniques that will help businesses and organization in managing their change processes more effectively. So, the major objectives of the given work are as follows: Studying how change influences employees’ motivation, organization and leadership. Finding out to which extent uncertainty might lower performance of employees going through the change management life cycle. Researching how important is the quality of communication in the change process. Determining how changes impact employees’ performance through motivation, organization and leadership. These issues are particularly important because they, as the literature review below suggests, have a direct impact on organizational performance. Furthermore, effective management of the change process itself is, according to the IBM Global CEO Study (2008), becoming crucial for companies to survive. Eight out of ten CEOs that participated in the study conducted by IBM admitted they were seeing significant change ahead. Almost all of the 1,130 CEOs “are adapting their business models, two-thirds are implementing extensive innovations. More than 40 percent are changing their enterprise models to be more collaborative” (IBM, 2008). In particular, Alinma Bank of Saudi Arabia is the organization where the research will be conducted. Being a relatively young organization, Alinma Bank does not have any experience going through some large radical changes. However, some ongoing, caused by the changing external environment, changes are being continuously implemented by the company that employs 1052 people. The major activity of the Bank is providing banking and investment services compliant with Islamic Sharia. The mission statement of the Bank implies that Alinma Bank is the ‘best workplace.’ This objective is meant to be reached with the help of innovation, taking initiatives, respect for all, strengthening relationships and honesty. The Bank values it employees and devotes much of its resources to supporting leadership and best managerial in all the aspects of its operations. Change management is not an exception. A committee composed of department heads is responsible for designing changes. Before any changed goes to the implementation stage employees receive questionnaires with a request to report how they feel regarding the potential innovation. If the majority of employees feel comfortable with the change, the management implements it dealing with resistance with the help of personal meeting with those refusing the innovation and trying to find a consensus. This process seems to be very responsive to the needs and feeling of the employees. However, since some resistance is always unavoidable, it is important to know how it can be minimized and what change management practices may contribute to employees’ job performance. Since the bank, in the need to adapt to the ever-changing external environment, has to be continuously introducing new products to the market and, as a result, new work processes to own organization, this study will help to determine the weakest points of Alinma Bank’s change management processes and, consequently, develop recommendations aimed at improving the levels of employees’ job satisfaction, motivation, organization, leadership and, finally, job performance. The recommendations based on the research results will then help the business to improve its overall performance by means of improved change management strategies and techniques. The study itself will help to determine how effective the bank’s change management system is now, as well as how effectively change implementation is being conducted in view of employees’ feelings and believes regarding changes and innovations. Overview of the literature Due to its importance to organizational development, the process of change management caught the minds of many scientists quite long ago. Such a popularity of the topic of change management’s influence on employees can be explained by the statement of Stanley, Meyer and Topolnystsky, who believe that “as organizations attempt to cope with a progressively more turbulent economic, technological, and social environment, they rely increasingly on their employees to adapt to change” (2005). Consequently, since change is a vitally important for any organization process, the organization is to implement changes in the most effective way. There exists a great number of studies related to change management and its effect on employees. Some of the most relevant to the given research are presented below. First of all, it should be noted that the process of change management consists of a number of stages. Carson and his colleagues (1999), for instance, have named these stages in the following way: invention, acceptance, disenchantment and decline. They point out that invention and acceptance stages of their change life cycle model is the ones in which effective implementation of an innovation is most likely to take place. Disenchantment and decline, consequently, are the states at which an ineffectively implemented change might be abandoned. Of course, the time each organization takes for each of the stages of change implementation is different. This fact influences the effect of the change on employees. However, an interesting observation is that employees themselves influence the change implementation process via the level of acceptance. On this matter Rogers (1995) writes that the employees that participate in the change management life cycle can be divided into 5 categories depending on how they percept change: innovators, early adopters, early majority, late majority and laggards (Rogers, 1995). A similar division, according to the author, can be applied to organizations as well: while an innovator company might be already abandoning an idea, a laggard business will be only starting its adoption. In any case, no matter to what particular group an employee might belong, facing an organizational change he or she is forced to change one’s psychological contract with the company (Chreim, 2002). This, as a result, may lead to losing a feeling of job security (Anderson and Schalk, 1998). Uncertainty that arises from this process leads to the feelings of anxiety and loss. Chreim (2002) also points out that an innovation makes employees change their attitudes and behaviour. This, in its turn, leads to the fear of unknown and desire to get back to the old ways. So employees’ uncertainty, anxiety and feelings of loss are the factors that evoke resistance to change and raise the possibility of company’s abandoning that change. Therefore, Chreim (2002) recommends organizations to improve their communication strategies and channels before attempting to implement a change. Improved communication, according the author, will help to provide the employees with meaning and background to change. This idea is supported by D’Aprix (1996), who states that a powerful rationale for a change will reduce uncertainty and confusion the employees might feel. Furthermore, such communication should be strategic – well-planned and thought over in advance (D’Aprix,1996). The uncertainty related to organizational change, according to Jimmieson Terry and Callahan (2004) can be categorized into four different groups. They are role conflict, role ambiguity, and role overload. The role conflict can be said to have a direct relation to the change of the previous psychological contract: an individual’s role expectations have to change. Similarly, role ambiguity takes place when post-change role expectations are absent or not clear (Jimmieson, Terry & Callahan, 2004). So, uncertainty caused by a change leads to job dissatisfaction and a decrease in confidence. Job dissatisfaction, as a result, may lead to poor performance and employee turnover. For this reason Kramer (2003) stresses out the importance of effective communication as a part of change management process. Lack of effective formal communication, the author states, leads to employee’s search for informal sources of information. This may also lead to negative consequence as informal sources may provide a person with incomplete or incorrect information and, in such a way, increase anxiety (Kramer, 2003). Another relevant to the given research aspect of change management is employees’ job motivation. Studies of Deery et al (1995) and Morrow (1983) tend to show that better job motivation improves organizational commitment and, thus, decreases resistance to change. The recent study of Halbesleben and Bowler (2007) suggests that job motivation has a positive impact on job performance. Therefore, it can be assumed that a higher level of motivation will make an employee willing to adapt to change and, in such a way, show better performance. However, this idea is not supported by a 2008 study of Vithessonthi and Schwaninger. Vithessonthi and Schwaninger (2008) conducted a research aimed at determining whether job motivation and self-confidence for learning and development can positively influence people’s support for changes. The change in their study was represented by organizational downsizing. 86 teachers of a Bangkok school took part in the experiment. Multinomial ordered probit regression models were used for analyzing the information received in the course of the research. The researchers conducted a multiple-item survey in the form of questionnaires. The results showed that the levels of teachers’ job motivation and self-confidence for learning and development are not related to the level of support for change. However, it should be noted that the sample size of the given research is not too large and, as the researchers admit, this had led to an estimation problem: coefficients for explanatory variables in the full model showed to be insignificant. Furthermore, the data gathered in the course of the study was based on the questionnaires filled in by the teachers. This means the information might have been subjective and non-reliable, especially considering the small sample size. In addition, while Vithessonthi and Schwaninger study how job satisfaction influences openness to change, it is not clear whether the change itself has an impact on job satisfaction. In 2004 Tourish, Paulsen, Hobman and Bordia carried out a research aimed at determining how organizational change influences employees’ levels of trust and uncertainty. The study was conducted in a hospital that was going to downsize. Two groups of employees were studied: those who got fired and those who continued working at the hospital. The results showed that both groups of people, both positively and negatively affected by the change, experienced the same problem in the process of change implementation. Fear, distrust, uncertainty and resistance to change due to lack of two-way communication and, consequently, sufficient information, were the reactions of all the people (Tourish, Paulsen, Hobman & Bordia, 2004). As such, an effective communication process should, according to Rogers (1995), undergo five essential stages. They are knowledge, persuasion, decision, implementation and confirmation. Rogers’ innovation-decision process implies that at the knowledge stage people learn about the upcoming change. At this stage employees feel a need for information in order to reduce uncertainty. Then comes the persuasion stage. In this process people form attitudes towards the change. Two-way communication should be provided to the employees at this stage in order to make sure they have enough sufficient information for feeling confident and secure in relation to the change. During the decision stage people perform practical activities that will show whether the change will be accepted or abandoned. This may, for example, involve a small-scale testing of a new idea. If the results are positive, the implementation stage comes in force. At this stage all the involved employees put the change to use and, finally, on the basis of positive experience, confirm that the change has been positive (Rogers,1995). Rogers (1995) innovation-decision model has much in common with the stages of change management process presented by Carson et al (1999). Carson’s stage of acceptance, however, seems to incorporate persuasion, decision and implementation of Rogers. Disenchantment and decline of Rogers can, at the same time, correspond to the confirmation stage of Carson et al. nevertheless, the model of Rogers, though is an earlier one, seems to be more detailed and, therefore, will be more convenient for use when analyzing how change influences employees. Since uncertainty is, according to the presented above studies, is the most common reaction to change, employees’ uncertainty, as well as its outcomes, should be analyzed in the perspective of Rogers’ innovation-decision model. Also, it might be useful to learn how different types of uncertainty – role conflict, role ambiguity, and role overload (Callahan,2004) – influence employees in the process of coping with change. Since change has an effect on employees’ levels of trust and uncertainty, and, consequently, job performance, it should be determined whether change has a direct influence on performance, motivation, organization and leadership of different types of employees: innovators, early adopters, early majority, late majority and laggards (Rogers, 1995). Furthermore, it should be determined how in particular (through which cognitive processes) changes might influence job performance if a direct relation is found. Research design The given research will try to determine what influence change management has on performance, motivation, organization and leadership of different types of employees (innovators, early adopters, early majority, late majority and laggards) within Rogers’ innovation-decision model. The study will be conducted on the basis of Alinma Bank of Saudi Arabia. Information obtained from the bank’s employees, as well as related research results of other scientists, will help to identify the major areas of change’s influence on employees. Questionnaires filled in by the bank’s employees of different levels will help to determine how they accept change (to what type of employees they belong), first of all, and, secondly, how in particular change affects them. All the employees of the bank will be offered to participate in the research on voluntary terms. The higher the number of the participating employees will be, the more accurate will be the research results. All the respondents will then be divided into the five categories (innovators, early adopters, early majority, late majority and laggards), and changes’ effect on each will be identified. Separate questionnaires will be given to managers in order to determine job performance of different types of employees. In addition, questionnaires will be given to managers and employees with the purpose of determining what change management experience they have and how different the views and opinions of managers and employees on the same changes are. Since the given study will be a quantitative research, statistical analysis will be used for interpreting the received information. Most of the information obtained in the course of the research will be primary data received from a client organization. So, this work will be a consultancy-based report that uses both primary (from of Alinma Bank of Saudi Arabia) and secondary data. References Anderson, N. and Schalk, R., 1998. The psychological contract in retrospect and prospect. Journal of Organizational Behavior, 19. Barnett, W.P. and Carroll, G.R. (1995), ‘Modeling Internal Organizational Change’, American Review of Psychology, 21: 1, pp. 217–236. Chreim, S. (Sept. 2002). Influencing organizational identification during major change: A communication-based perspective. Human Resources, 55, 1117-1137. Carson, P., Lanier, P., Carson, K., and Birkenmeier, B. 1999. A historical perspective on fad adoption and abandonment. Journal of Management History, 5 (6), p. 320-333. D’Aprix, R.M. (1996). Communicating for change: Connecting the workplace with the marketplace (1st Edition). San Francisco: Jossey-Bass Publishers. Deery, S.J., Erwin, P.J., Iverson, R.D. and Ambrose, M.L. (1995), ‘The Determinants of Absenteeism: Evidence from Australian Blue-Collar Employees’, International Journal of Human Resource Management, 6: 4, pp. 825–848. Halbesleben, J.R.B. and Bowler, W.M. (2007), ‘Emotional Exhaustion and Job Performance: The Mediating Role of Motivation’, Journal of Applied Psychology, 92: 1, pp. 93–106. IBM (2008). “The Enterprise of the Future.” Global SEO Study Executive Summary. [online] Available at: < http://www-935.ibm.com/services/uk/gbs/pdf/global_ceo_study_08_exec_ukisa_final.pdf > [Accessed 2 May 2010]. Jimmieson, N.L., Terry, D.J., Callan, V.J. (2004). A Longitudinal Study of Employee Adaptation to Organizational Change: The Role of Change-Related Information and Change-Related Self-Efficacy. Journal of Occupational Health Psychology, 9, 11-27. Kramer, M.W. (2004). Managing uncertainty in organizational communication. Mahwah, NJ: Lawrence Erlbaum Associates.Rogers, E. M. 1995. Diffusion of innovations (4th ed.). New York: Free Press. Morrow, P.C. (1983), ‘Concept Redundancy in Organizational Research: The Case of Work Commitment’, Academy of Management Review, 8: 3, pp. 486–500. Stanley, D.J., Meyer, J.P., Topolnytsky, L. (Summer 2005). Employee Cynicism and Resistance to Organizational Change. Journal of Business and Psychology, 19, 429-459. Teece, D.J., Pisano, G. and Shuen, A.A. (1997), ‘Dynamic Capabilities and Strategic Management’, Strategic Management Journal, 18: 7, pp. 504–534. Ethics Check Form Name of Applicant: Division: Name of Supervisor: Title of Dissertation: Does the project require the approval of any external agency? YES/NO (delete as appropriate) If YES has approval been granted by the external agency? YES/NO (delete as appropriate) Statement by Applicant I confirm that to the best of my knowledge I have made known all relevant information and I undertake to inform my supervisor of any such information which subsequently becomes available whether before or after the research has begun. Signature of Applicant: Date: Statement by Supervisor (please sign the relevant statement) Approval for the above named proposal is GRANTED I confirm that there are NO ethical issues requiring further consideration. (Any subsequent changes to the nature of the project will require a review of the ethical considerations) Signature of Supervisor: Date: ­­­­­­­­­­­­­­ Approval for the above named proposal is NOT GRANTED I confirm that there are ethical issues requiring further consideration and will refer the project proposal to the appropriate Committee ** Signature of Supervisor: Date: ** For work forming part of an MMU taught programme– refer to Faculty Academic Standards Committee ** For work forming part of an MMU research programme – refer to Faculty Research Degree Committee ** For PhD by published work – refer to Research Degree Committee ** For any other work – refer to appropriate Faculty/Department Committee or line manager Ethics Check Form: Notes for Guidance Before completing the Ethics Check Form the person undertaking the activity should consider the following questions: YES NO N/A 1 Is the size of sample proposed for any group enquiry larger than justifiably necessary? 2 Will any lines of enquiry cause undue distress or be impertinent? 3 Has any relationship between the researcher(s) and the participant(s), other than that required by the academic activity, been declared? 4 Have the participants been made fully aware of the true nature and purpose of the study? If NO is there satisfactory justification (such as the likelihood of the end results being affected) for withholding such information? (Details to be provided to the person approving the proposal). 5 Have the participants given their explicit consent? If NO is there satisfactory justification for not obtaining consent? (Details to be provided to the person approving the proposal). 6 Have the participants been informed at the outset that they can withdraw themselves and their data from the academic activity at any time? 7 Are due processes in place to ensure that the rights of those participants who may be unable to assess the implications of the proposed work are safeguarded? 8 Have any risks to the researcher(s), the participant(s) or the University been assessed? If YES to any of the above is the risk outweighed by the value of the academic activity? 9 If any academic activity is concerned with studies on activities which themselves raise questions of legality is there a persuasive rationale which demonstrates to the satisfaction of the University that: i the risk to the University in terms of external (and internal) perceptions of the worthiness of the work has been assessed and is deemed acceptable; ii arrangements are in place which safeguard the interests of the researcher(s) being supervised in pursuit of the academic activity objectives; iii special arrangements have been made for the security of related documentation and artefacts. RESEARCH PROPOSAL ASSESSMENT CRITERIA (pass mark 50%) CRITERIA Learning Outcomes FAIL PASS PASS WITH MERIT PASS WITH DISTINCTION 0 - 45 45 – 49 (MARGINAL) 50 - 59 60 - 69 70 - 79 80 - 100 1. Identify the macro and micro organisational contexts for the dissertation and the objectives of the research. This should be in the light of a client’s briefing if applicable. The organizational context and current issues are not identified leading to no clear research objectives. The organizational context and current issues are partially identified, leading to objectives that are inappropriate or imprecise. The organizational context and current issues are sufficiently identified and expressed, but lacks clarity in some areas, leading to an adequate but somewhat loose identification of research objectives. The organizational context and current issues are clearly identified and scoped, leading to the identification of appropriate research objectives. The organizational context and current issues are unambiguously identified, scoped and prioritized, leading to well framed research objectives. The organizational context and current issues identified are theoretically grounded. Factual data are well used to iterate the business scenario that leads to precisely framed research objectives. Additional feedback comments from the supervisor in relation to learning outcome 1. 2. Critically review and synthesize the relevant literature on the subject area in order to construct a conceptual framework to underpin the research. There is an insufficient range of literature considered. This impairs the analysis and integration of concepts, models and theories that might lead to a conceptual framework to underpin the research. There is a sufficient range of literature considered, but the analysis and integration of concepts, models and theories are fragmented and do not lead to a clear conceptual framework to underpin the research. There is a sufficient range of literature considered, and some attempt at analysis and integration, but lacking in critical focus towards a clear conceptual framework to underpin the research. There is an adequate range of literature considered. Analysis and integration of concepts, models and theories have an adequate critical focus, leading to a substantiated conceptual framework to underpin the research. An extensive range of literature is considered. Good analysis and integration of concepts, models and theories with substantial critical content. The conceptual framework underpinning the research is well argued for. Very good application and critique of concepts with evidence of breadth and depth of literature reviewed and integrated, leading to a sound conceptual framework and a theoretically well grounded investigation. Additional feedback comments from the supervisor in relation to learning outcome 2. 3. Identify the nature of relevant evidence and associated data sources to support the research objectives. There is insufficient identifiable evidence to corroborate the argument and the conclusions. Fieldwork or secondary data is non existent or very little. Sufficient relevant sources of evidence are identified but the data collection (primary or secondary) is not sufficiently informed by the conceptual framework underpinning the research. Sufficient relevant sources of evidence are identified and the data collection (primary or secondary) is sufficiently informed by the conceptual framework underpinning the research. An adequate range of relevant sources of evidence are identified. The data collection (primary or secondary) is clearly informed by the conceptual framework underpinning the research. A wide range of relevant sources of evidence are identified. The data collection (primary or secondary) is clearly and largely informed by the conceptual framework underpinning the research. A wide range of very relevant sources of evidence are identified. The data collection (primary or secondary) is clearly and very thoroughly informed by the conceptual framework underpinning the research. Additional feedback comments from the supervisor in relation to learning outcome 3. Read More