Types of change and its impact on motivation

Change is a fact of organizational life, just as it is in human life. Because when the organization does not change cannot survive long. For the purpose of excellence performance, organizations have to change according to the environmental demands. When organizational change is well planned and implemented, there is a surety for its continual survival (Mary Darby, Gerry McGlynn). To survive in these competitive times, companies can’t afford anything less, so to enhance the performance industrialist have to bring change frequently and randomly then it will surely helpful for the organizations for their existence. Organizational change can help the firms achieve higher organizational performance and higher competitive capability in order to survive in high competitive global markets. Due to the competitive environment, and to stay in competition organizations has to bring radical changes in the organization. The highly competitive or large scale organizations bring changes like merger, downsizing, new management techniques or new work forms, are often as increasing the competition, and these changes not only increase the competition but also effect the working environment of employees.

Types of change:

In recent years, business environments have rapidly changed. Several factors may make organizational change necessary, including new competition in the marketplace or new demands by customers. Causes for change are varied from organization to organization and naturally they are different. Generally there are two main reason of change, internal and external. Internal organization system pursues to bring change and some time external environment such as market condition, technology, legal, political economic and social conditions also push up the organization to introduce change in the organization. These types of external forces may create expectations of improved efficiency, better service, or innovative products. There are several types of change such as wide change, sub system change, transformational, incremental, developmental, planned and unplanned change.

An organization to be more stable usually go to the wide change in the organization such as restructuring, collaboration, right sizing or downsizing and cultural change. Some organization goes to change the sub system such as addition or removal of product, department or implementation of new process. Examples of organization-wide change might include a change in mission, restructuring operations, new technologies, mergers, major collaborations, rightsizing, downsizing, new programs such as Total Quality Management, etc (Buckley, 2002)

Transformational change means change in organizational structure, culture, business process or re-engineering. Incremental change means continuous improvement as quality management process, implementation of new process or increase efficiencies. Some time change introduced to improve the poor performance of a product or the entire organization.

Change can also be developmental, it can also bring to become successful, expand the amount of customers which we served, or copy the successful products or services of any brand Sometime the organization has to change unexpectedly for example major or sudden surprise to the organization, which causes its members to respond quickly. Unplanned change might occur when the Chief Executive Officer suddenly leaves the organization, major public relations problems occur, poor product performance, or other troublesome situations arise.

Planned change occurs when leaders in the organization recognize the need for a major change, such type of change is implemented with proper planning. Mostly changed which are implemented are pre planed whether they are transformational or major change except sudden changes. It has been observed that organizations which introduce change with proper planning can implement change most successfully, although sometimes sudden changes also implemented successfully, but it depends on the human resource of that organization. However the main reason of change we can say that the dissatisfaction within the organization, because change is only implemented when something is not going good or does not match with the requirement of the organizational strategies or new market trends.

Effect of change/ behavior:

To enhance the organizational performance and implementing the change successfully organization has to understand what factors influence the performance and change execution process.

Organizational change is about people changing. The major phenomenon of change is that it directly affects the behavior of the people or employees in the organization. Whether the change is major or minor somehow it will affect the people of the organization.

When the organization introduces change, it affects the employees and the reaction towards change called behavior in response to change. The behavior of the employees vary people to people, similarly when the change is introduced different people shows different behavior, some people become stresses, anxious, and some become enthusiastic, committed and become more satisfied with the job.

The organizational change is moving from familiar to unfamiliar environment as the future is uncertain so mostly people do not support the change unless the convincing reasons persuade them to do so (Cummings and Worley, 1993). Organizational change is highly complex process that must take into account how people respond psychologically when asked them to make major changes at work. Their reactions inevitably vary, While some people embrace change, others will resist it. A small number of people are energized by change, but many others feel threatened and anxious (Mary Darby, Gerry McGlynn). When an organization has to implement changes like business merger, the individual who are highly delicacy may become more like to support the organization to achieve goals.

The change execution process effects differently on employees psychological contracts and these psychological contracts affect the employee attitudes, if the attitude of the employees is positive than their performance will be increase and his mutual obligations are met and his commitment, job satisfaction will be positive and the intention of turnover will be negative and If the attitude of employee is negative than it will effect negatively on employees performance.

Research shows that the psychological contract is the key variable that causes organizational change to succeed or fail. If during the implementation process of change, the current psychological contracts of employee are taken into consideration, than the change can be implemented successfully ( Rousseau,1996).

For the successful implementation of change it is require positive attitude and behavior according to the requirement of change, without the positive attitude and cooperation of organizational members, successful implementation of change cannot be implemented. Therefore, negative attitude towards organizational change is the serious threat for the organizational development.

Resistance:

The transition between the present state and the changed state is difficult for both individuals and organizations; resistance must take place in these types of situation. Major organizational changes are like the threat to working relationships due to which Resistance to organizational change increases and job satisfaction and organizational commitment decreases (Ashford et al., 1989; Davy et al, 1997)

There are numerous reasons that employees resist change.  Some are simply afraid of the unknown. Some people become imagining that it will negatively effect on production, resource procurement, company goals, or organizational culture (McNamara, 1999). It is a manager’s job to identify these resistance factors and deal them during the planning stage to eliminate them as soon as possible.

Resistance can normally be seen in a few different ways.  First, it can be immediate, in the form of voiced complaints; work slowdowns, and threats to go on strike.  These types of resistance are the easiest for managers to deal with because dissatisfied employees openly demonstrate them.  Resistance to change can also be postponed and it might not be easily managed. Forms of this type of resistance are loss of loyalty

Anxiety:

Anxiety is another outcome of change because when the change is introduces people become fear or denial whether they survive with the change or not due to which they become anxious. This condition is very bad for the employees as well as for the organization because anxiety reduces the innovative ideas and creativity, due to which employee’s performance reduces, Moreover employees become less committed to the organization.

Although anxiety can be reduced or overcome through creating readiness of change and remove resistance to change. Dealing with resistance to change includes at least three major processes: communication; support; and participation (Cummings and Worley, 1993).

Stress:

Change leads to work environments that have high ambiguity and high conflict because they don’t know about the future and don’t know when the change is finished. As a result it has higher psychological stress and lower job performance (Babakus et al., 1999).

Major organizational changes cause stress due to increased work targets, threats of job losses, changes in job holders’ responsibilities and authority and shifts in the balance of power (McHugh & Brennan, 1994)

Psychological stress is an outcome of pressure of work and work environment. It refers to employee feeling psychologically and emotionally of the pressure during the organizational change. In accountants if they have higher psychological stress it leads to lower job performance. In high psychological stress, they feel the lack of energy and emotion resources being used up. As a result, it reduces personal accomplishment involves low motivation and self-respect (Almer and Kaplan, 2002).

In employees that have high psychological stress they have to use higher motivation and more energy to do the job. Many researches show that the psychological stress is the cause of lower Job satisfaction, lower organizational commitment, higher intention to leave, and lower job performance (Babakus et al., 1999; Wright and Cropanzano 1998; and Mohr and Puck 2007).

Role of leader:

Changes such as mergers and acquisitions will often change or combine cultures, creating a whole new set of values, beliefs, and attitudes.  Managers should attempt to establish a vision of what the new culture will be and what will be the consequences of it on the employees as well as on the organization and help the employees to understand it before changes take place.

Leaders must control operations, take responsibility, create positive atmosphere and also to tell the advantages of change that the change will provide. Best Leaders set a clear direction and manage risks. The research indicated that leaders identify and select priorities for change. However it was the leaders who made a definite decision to change something and stick with it. Once decisions were made, leaders set success criteria and communicated the need for the change.

Organization leaders need to understand the change process (Huy, 2001). Changes can be uncomfortable, disturbing, threatening, and frightening. With an understanding of the stages, organizations can better help managers and employees deal with change. The psychological changes are

Shock/Denial: People may feel threatened by an upcoming change, unsafe, unable to take risks, and/or deny the existence of change. Generally, workplace production drops.

Defensive Retreat/Resistance: People often react to change and/or loss with anger. At this stage they may often try to attempt or understand but yet feel conflicted. At this point, people do not feel safe to take risks. Once people realize that change will be a reality, they may resist the change. The next section will consider resistance to change and how to overcome it.

Acknowledgement/Exploration: Eventually, people don’t deny the change. Psychologically, this stage includes both grief and a sense of liberation. People begin to consider the pros and cons of the new situation and are more willing to take risks. Employees may explore the change, often with training, and develop an understanding of how the change will affect them.

Acceptance and Adaptation/Commitment: Most people will eventually internalize the change, do what is necessary to adapt, and move on. People will have left behind the old situation, including the confusion, pain, or fear experienced earlier. Their level of commitment may change over time (employee behavior and organizational cahnge)

How successfully the change process is implemented will affect the performance of the organization

Change and motivation:

Make able and ready to employees for change is the best practice for creating high performance organization during the change. There are lots of factors that contribute to the change but the role of motivation is most important. Motivation help to implement and develop change successfully. Edward stated in his article that People do not automatically come to work, continue to work or work hard for an organization. They need to be motivated to take a job with a company, to come to work each day, to continue to work there, to learn, to perform efficiently, and to accept change.

In this study firstly we will see how the organizational change brings motivation to employees. Sometimes people/ employee get automatically motivated with the declaration of change but some time or most of time leaders have to motivate to people towards the change. People cannot be forced to change it is the duty of management to do best during the change. Leaders play the important role in motivating the employees.

Admittedly, some organizations have made amazing transformations. Nokia, for example, has become a successful global electronics company. Intel was able to abandon its memory business and build a strong microprocessor business. But, the reality is that most change efforts in established organizations fail to meet expectations because the internal barriers to change, most of which are human, are so frightening. A key barrier in most change efforts is the motivation to change; all too often it is simply missing. (Edward E. Lawler III and Christopher G. Worley)

Types of motivation:

Motivation is an inner drive or an external encouragement to behave in some particular way. Employees will serve best when somebody is provided motivation.

Motivation can be intrinsic or can be extrinsic. Extrinsic motivation concerns behavior influenced by obtaining external rewards (Hitt, Esser, & Marriott, 1992). Praise or positive feedback, money, and the absence of punishment are examples of extrinsic or external rewards (Deci, 1980). Intrinsic motivation is the motivation to do something simply for the pleasure of performing that particular activity (Hagedoorn and Van Yperen, 2003). Examples of intrinsic factors are interesting work, recognition, growth, and achievement.

Several studies have found there to be a positive relationship between intrinsic motivation and job performance as well as intrinsic motivation and job satisfaction (Linz, 2003). It is observed that intrinsic motivation is long lasting than extrinsic, so the managers or leaders should more emphasis on intrinsic motivation, because if the employees become intrinsic motivate than they will not only committed but also helpful for the organization to bring new changes in the future.

Communication:

However the most important thing in change is communication. How well the leader will communicate to people or employees they will be better understand the objectives of change and will be motivated to change. Because open communication or indicating objectives and consistent criteria for decision making will increase the employee feelings of empowerment. One way of motivating people is to give relevant information the consequences of their actions on others (Olajide, 2000).

Communication provides the information about the change and reduces the speculation, uncertainty and fears about the change. Because change is not immediately accepted by recipients so employees become suspicious about change and spread rumors so if the change agent or mangers communicate well with them resistance/anxiety can be overcome through it.

It has been examined that during the implementation process of change, if the communication, participation and support are practiced well than it will positively reflect on the employee’s attitudes. Support has the strongest relationship with the psychological contract. The better the psychological contract, the better the employee’s attitudes (René Schalk, Jennifer W. Campbell ).

When employees dislike the change they deal it by ignoring them (people, change) and go along and some time they also affect the believers of change and start looking another jobs or create hurdles to bring the change. At this stage, if change agent or supervisors of change do not communicate with them then they can create many hurdles in executing the change and might possible the change become flop.

The negative attitude towards change can be managed through communication towards the employees. Because of communication employees can perceive the change in a better way that will leads to positive attitude.

Participation/empowering:

The second step to remove the anxiety or resistance is to support the employees by showing interest in their feelings, perception and their concerns, and then they will be more willing to share their ideas, concern to you. If we directly involve the employees in decision making, the resistance and anxiety both can be reduced (Bron-son, 1991).

It has also been observed that employee’s attitudes towards change can be changed or positive if involve them in the decision making. Because they feel that their suggestions are valued and that it creates some level of respect and feel that they have the power in the organization, in spite of it whether these outcomes are positive or negative (Folger & Konovsky, 1989).

The employees who have given the authority to control over the situation and participate in decision making are most probably embrace the change and do not show the resiliency in the organization. As a result people less like to leave the organization and tend to show higher levels of organizational commitment. The other benefit of participating in decision making is the long term relationship with the managers and the organization too.

The positive outcome of it, create long term relationships with the organization and high quality social relationships. When organizations recognize the importance of the employees and invest them then it creates the long term social exchange relationship and provides the chance to employees to anticipate the change.

People who have the ability to say their opinion about changes at a higher hierarchical level in the organization may influence the outcome of a decision and because of it they are more committed to the organization. Similarly employee voice in times of change provides recognition to employees so that they feel valued and strengthen the employee. Because people have the opportunity to right to be heard their opinion, they build reliable relationships with their line managers and with the organization as a whole, whether the outcome of a decision is positive or negative (Ing. J. G. P. van Ruiten ).

The supervisor or mangers can bring positive attitude towards organizational change in the employees by conveying strategy and message during or after change (Armenakis & Harris, 2002; Eby, et al., 2000).

Rewarding:

The third step to motivate the employees is giving short term wins and rewarding them of their contribution.

People will not accept change unless they will not assure that this change will give them proper reward of their efforts, sometimes employee resist to change because they think that this change will not support of their efforts and do no reward properly to them which they deserve. So for the purpose of keeping employees motivated is necessary to create short term wins or give rewards of their effort towards change will defiantly motivate the employees to accept change and enhance their performance.

The reward system is a powerful motivational tool in the hands of management .Brown and Shepherd [44] reported that motivation improves workers’ performance and job satisfaction. They argue that the reward system is critical to organizations, and that it contributes to maintain employee morale and, more importantly, it motivates workers to prepare themselves for great responsibilities.

Working condition:

The environment plays a very important role in the employee’s intellectual performance. As In workplaces where employees feel helpless and disempowered and because of this they do not able to think intelligently and develop creative ideas that directly affect the performance of the employees and the organizational performance. Thus organizations which make possible frank communication are able to be stressed out of their employees and utilize their abilities.

There is also a relationship between working condition and employees’ performance. This means that high level of goods working condition has positive impact on employees’ performance. This means if organization change the working condition or make structural changes that improves the working environment than it will impact on the performance of the employees as they will be more enthusiastic with the change and better environment and their productivity will be increase. High level of working condition will lead to high level employees work performance. (Balasundaram Nimalathasan)

Dr. Eng & Ec. George Balan and Dr. Eng. & Ec. Mihail Aurel conducted the research on employee attitude towards change, they stated that Most of the employees embrace changes that lead to the improvement of the working conditions and the motivation of the employee who perform a quality activity, so the acceptance of the change is depend on the motivation, if employees become motivated the change will be accepted easily, here he also explore that employees are radically more willing to adopt that change which is related to improvement of their working conditions , if the organization makes improvement in their working condition like friendly working environment, making some improvements in their offices or work place or renovate them then they also impact on their psychological conditions and people become more willing to complete their assign duties happily, not only they will complete their tasks but also enhance the creativity and they also more willing to take initiate to bring change. He also describes that changing in the relationship or involvement of bosses or supervisors in the production also impact on their attitude and performance.

According to Mark Twain, cited by Pietersen, 2002, the restaurant industry cannot survive without change. If there is no improvement, a restaurant will lose competitive advantage. A pleasant workplace would keep employees happy. Cheerful staff will contribute to higher level of motivation and greater restaurant performance. High-spirited employees would be able to establish and maintain harmonious working relationship with workmates and contribute to keeping high morale. Managers should always maintain a pleasant workplace for employees to keep them motivated because a stressful environment will negatively impact the restaurant.

When the change is implemented the working environment also changed that make employees’ jobs more efficient. As a result, employee behavior may be positively influenced. But some time change can also serve as a threat to businesses, depending on the industry. If technological advances create a risk to a company, it will effect on employees behavior will most likely be negative and employees may respond with fear and anxiety.

Impact of motivation

Motivation is one of the best strategies through which employee’s performance can be enhanced. Luthans (1998) claim that motivation is the process that arouses, energizes, directs and sustains behavior and performance. This is the process of inspiring people to take action and to achieve a desired task. Motivation is the most effective and long lasting thing due to which employee can be more satisfied, committed and become loyal of that organization.

The performance of employee not only relies on his/her actual skills but it also depends on the motivation level of that employee. For example if a person do not have necessary skills to do a particular job but he is motivated to achieve that particular goal then the person surely struggle for it and achieve that goal.

Hammed, T. Ayo conducted the research on influence of motivation on employee performance, he describe in this study that Employee motivation is positively correlated with employee`s performance. When people are motivated in the workplace, performance is enhanced. The quality and relationship between a leader and the group members serves as a motivator for the group. Employee motivation is also a vital ingredient to achieving business progress, overcoming problems and achieving business goals. So the employee motivation is very useful in the case of bringing or implementing change because it is not only overcome the resistance problems of change but helpful is achieving the goals related to change and also enhance the progress of not only the employees but also of the organization.

Clark argued that there is solid evidence that, motivational programs can increase the quality and quantity of performance from 20 to 40 percent. Motivation can solve three types of performance problems:

People are refusing to change

Allowing themselves to be distracted and not persist at a key task

Treating a novel task as familiar, making mistakes but not investing mental effort and taking responsibility because of overconfidence (p. 21).

If the employees are motivated they can easily adopt change and the employees who are unfocused or do not complete their assign duties can complete their tasks and it is also helpful for the persons or employees who do not exert their mental effort and do not take serious of their work can do perform better if they are motivated.

Abubakr M. Suliman illustrates that well motivated employees are generally good performers Employees who are satisfied with their motivation climate of the organization feel good and perform better. Katz declared that organizations need to motivate their members to join and remain in the organization, perform their assigned duties consistently, and demonstrate innovative and spontaneous behaviors.

Likewise, Speen stated that people who work in that environment where their work is appreciated and incentives are given to them and the employer uses motivational program they feel that organization is concerned about their welfare so they perform better and get work done in the organization. Organizations can optimize the performance of their employees by engaging them in the promotion, motivation, communication and recognition programs. Incentive and motivation programs help to obtain extra performance.

Goal theory suggests that employees will expend greater effort toward achieving performance goals that they believe will result in important outcomes (Locke & Latham, 1990).

The satisfied employee are more happy and enthusiastic, there are different claim about the effect of happiness on proclivity. Some think that the enjoyment of life will produce involvement and smooth interaction, thus boosting productivity.

commitment;

One thing which is helpful for the implementation of change process is commitment; it can be defined as a belief in and acceptance of the goals and values of an organization, a willingness to exert effort on behalf of the organization, and a strong desire to maintain membership of the organization (Mowday, Steers, & Porter, 1979). Commitment is positively related with organizational change, because committed employees are more optimistic and they embrace changes quickly rather than the non committed employees, these employees are ready to accept the new goals, directions and values of the organization. However it has been studied that commitment may be result of employee and supervisor or manager relationship or employee and organization relationship.

But commitment is not a simple concept – it is the end product of a complex set of psychological and sociological relationships between employer and employee. Building employee commitment is essential to sustained business success

Organizations that can successfully tie together the commitment of their employees enjoy several distinct competitive advantages. They are more able to execute their business strategies more successfully and are more flexible and adaptive to changing market conditions. They can enhance the business reputation in the market place and can attract and retain the best talent. They produce better shareholder value through lower operating costs and higher revenues and profits. Their employees show higher levels of integrity and support customers and colleagues more effectively.

The commitment of the employees toward their work teams and organization can influence turnover, willingness to help colleague and team performance. Building employee commitment to the workplace is one important goal of human resource policies and practices. Research shows commitment has a positive effect on productivity, turnover and employees willingness to help co-workers.

Commitment is a multi-faceted; it can impact on different employee behaviors and can impact on the business in a number of different ways. In addition, the factors that employees look for will change over time as their own circumstances change and if commitment is to be maintained then the nature of the employment deal will need to be continually modified to accommodate these changing requirements. Finally it is important to remember that relationships are influenced from the very first meeting.

Organizational change can produce many tangible benefits, including improved competitiveness, better financial performance, and higher levels of customer and employee satisfaction. By restructuring organization and management practices, organization can increase efficiencies and responsiveness. Organizational change also affects organizational performance and competitive advantage of the firms. However organizational change tends to have larger work force, employees work very hard, resulting employee’s productivity and performance increased (Schweiger and Densis 1991).