Question

Need an elaborated explanation on the following:

Impact of Organizational Change on Employee Productivity

Answer 1

Introduction

To move ahead in this global economy, organizations are changing strategically. As part of the change strategy, support for employees during the change is critical, notonly to reduce stress, but also, for the change to be successful, keep productivity at anacceptable level and to keep costs down.Financial considerations typically provoke organizational change. Cuts infunding, decreased economies, changes in the market, dramatic needs to increaseproducts or services or changes in an administration, technology or trade barriers maybe the catalyst for change. Plans of how organizations change include: radical shifts inbusiness strategies, changes in values and/or missions, restructuring staffs and/oroperations, mergers, layoffs, rightsizing, new management, new technologies andfundamental changes of functions Jacobs (2011), McNamara (2006), Ormond, Keown-Gerrard and Kline (2003), and Ussahawanitchakit and Sumritsakun (2008). Change isalso becoming more difficult, Maurer (2010) finds that due to organizations having staffspread across the globe are no longer able to communicate effectively due to differenttime zones and different prioritiesChange is difficult for both the employer and employee. Anxious employees willstress over their lack of: control, trust, needed skills, role ambiguity and communication.

Add to this an expected “24/7” mentality and it’s no surprise that job stress is becoming an epidemic. The cost of workplace stress to American organizations is growing,from $150 billion per year in 1990 to $200 billion per year in year1999 (Maxon, 1999). Factors included in the estimate were absenteeism, reducedproductivity, compensation claims, health insurance, and direct medical expenses.Research by Maxon (1999) stated the following:Three out of every four American workers describe their work as stressful. Andthe problem is not limited to these shores. In fact, occupational stress has beendefined as a "global epidemic" by the United Nations' International LaborOrganization. While the physical effects of this epidemic are often emphasized,the economic consequences also are alarming. Stress management may bebusiness's most important challenge of the 21st century. According to theHolmes-Rahe Life Events Scale, which rates the levels of stress caused by suchevents, many of the most stressful events are related to the workplace: firings,business readjustments, changes in financial status, altered responsibilities, aswitch to a different line of work, trouble with the boss, variations in work hours orconditions, retirement and vacations. Ingram and Di Pilla (2007) add poor communication and poormanagement to the list and a study by Jehangir, Kareem, Khan, Jan,and Soherwardi(2011) provided a percentage view of the stress sources. Their study of female nursesfound a negative correlation between job stress and job performance. Responses towhat was causing the stress included:

• 97% excessive workload
• 93% insufficient resources

• 92% unhealthy environment

• 90% inadequate pay

• 85% lack of opportunity

• 84% lack of respect and

• 73% conflicting demands

When the effects of stress become disadvantageous, the outcome damages theorganizations ability to continue in a productive and successful manner and can becostly. Identifying the sources of employee stress caused by organizational change andhow the stress affects organizational productivity will be discussed.

Background

Research by Maxon (1999) found that employees work more today than they did25 years ago - the equivalent of a 13th month every year. A study by Richardson andRothstein (2008) found the average work year for a prime age couple has increased700 hours annually in the last twenty years. Staffs are being downsized but the workremains, so workloads are getting upsized. Fifty years ago, the nature of someone's jobdid not change during their entire tenure at that job. Why are organizations changing?McNamera, (2006) listed the following situations as catalyst of organizational change:(a) cuts in funding, (b) major increases or decreases in productivity or services, (c)changes in organizational life cycles, or (d) a continuance or reaction to strategic plans.Research by Turner (n.d.) found that in the late 1960s organizational development wasimplemented in organizations via consultants, but was relatively unknown as a theory ofpractice and had no common definition. Throughout the 1970s and 1980s organizational development evolved through emphasis on training. In the 1990s and 2000s organizational development continued to grow and evolve and its influences could beseen in theories and strategies such as Total Quality Management (TQM), teambuilding, job enrichment, and re-engineering.

Businesses faced even more drastic changes resulting from the Great Recessionin 2007 based on financial needs just to stay out of the red. As organizations developedand changed, so too did the workplace, although not always for the better. Research byWheatley and Kellner-Rogers (1998), reported the following:

In recent surveys, CEOS report that up to 75% of their organizational changeefforts do not yield the promised results. These change efforts fail to producewhat had been hoped for, yet always produce a stream of unintended andunhelpful consequences. Leaders end up managing the impact of unwantedeffects rather than the planned results that didn't materialize. Instead of enjoyingthe fruits of a redesigned production unit, the leader must manage the hostilityand broken relationships created by the redesign. Instead of glorying in the newefficiencies produced by restructuring, the leader must face a burned out anddemoralized group of survivors. Instead of basking in a soaring stock price after amerger, leaders must scramble frantically to get people to work togetherpeaceably, let alone effectively.

Organizational change is here and will stay, it is ultimately therefore, anorganization's administration, whom, when implementing change, need to plan for howthe organization will address employee stress as this will affect productivity.

Problem Statement

The problem addressed in this study was: how employee stress, caused byorganizational change, affects productivity. Organizations are overlooking the impact ofhow strategic changes impact their employees. As a result, the employee’s lack ofinvolvement in the change, and poor communication with what is happening, has haddetrimental effects not only on the employees but ultimately the productivity of theorganization.

Purpose of Study

The purpose of this study was to identify the employee stress factors that are adirect result of organizational change and demonstrate how these stress factors affectthe organizations productivity. Review and findings of current research onorganizational change, employee stress resulting from change, and stress effects onemployees and thus productivity will correlate how the topics are succinctly intertwined.

Research Questions

The following research questions will guide this study:

1. What are the stress factors caused by organizational change?

2. How do the stress factors affect employees?

3. How does the employee stress, caused by organizational change, affectproductivity?

Significance of the Study

The significance of this study was to emphasize how important planning is priorto, and during organizational change. This study reviewed how lack of planning foremployee stress during organizational change can increase employee stress and result in detrimental effects on the organization by increasing costs and reducing productivity.By identifying the negative aspects of stress from a productivity and cost perspective,organizations may be influenced to create procedures which proactively address theissues before change takes place, thus improving the results of the organization changeand productivity.

Limitations

Limitations in the study included finding research and studies that includes allthree topics of discussion including organizational change, employee stress caused byorganizational change and how employee stress, caused by change affects productivity.Further limitations would include how productivity is measured. Many organizations areservice related or do not have a defined or measureable product. Productivity includesmany variables and is often job specific. Furthermore, qualitative measurements of jobperformance and work quality diminishment are often difficult to quantify from a costperspective. Additional limitations include research of relevant studies within the lastfive years.

Definitions

Organizational change: Company or organization going through a transformation.Organization change occurs when business strategies or major sections of anorganization are altered. Also known as reorganization, restructuring and turnaround.

Employee stress: An internal state or reaction to anything we perceive as athreat, either real or imagined.

Productivity: The resulting increasing or decreasing amount of output/effort byan organization comprised of job performance, quality of work and costs.

Workplace Stress: The harmful physical and emotional responses that canhappen when there is a conflict between job demands on the employee and the amountof control an employee has over meeting the demands.

  Literature Review

This study identifies employee stress factors that are a direct result of organizational change and demonstrate how these stress factors affect the employees and the organizations productivity.

Organizational changes for employees often include: layoffs, hiring freezes,increased workloads, changes in reporting relationships, erosion of effectivecommunication and interaction and employees having to acquire new skills. When the organizational changes form and start to take effect,employee reactions vary. Employee’s feelings, attitudes, performance and health are susceptible to these changes and can induce stress.

Method

The purpose of this study was to identify employee stress factors that are a directresult of organizational change and find how the resulting employee stress affects productivity. An analysis of research on organizational change, employee stress andorganizational productivity was conducted. Articles were reviewed and relevantinformation was sorted into matrixes by key subjects. The matrixes helped identifysimilar and contrasting information on subjects. Onwuegbuzie, Leech and Collins(2012), state this type of research as a between-study analysis comparing and contrasting information from two or more sources. Similar reports were funneled into informational sections within this study.

Review of related literature

More than 85% of Fortune 500 companies have downsized in the last 5 years and 100% plan to downsize in the next 5 years. Seventy-four percentof Americans classify work as the most substantial source of stress due to heavyworkloads, uncertain job expectations, long hours, downsizing and job insecurity. Findings by Babatunde, Manning and Preston (2003),Samartha, Lokesh and Karkera (2010), Ussahawanitchakit and Sumritsakun (2008),Sakvik, Tvedt, Nytro, Andersen, Andersen, Buvik and Torvath (2007) add the additionalsources of stress: lack of meaningfulness, constant change, job burnout, loss of faith inthe organization, performance problems, having to acquire new skills, feelings nocontrol, loss of personal power, low morale, motivation and performance. Research by Crouter and Manke (1994) agree, and explained it is a combination of the sources invarying levels that have the most influence on workplace stress.

Effects of stress on employees

Not all stress is negative; small amounts of stress motivate individuals to workefficiently and quickly. Research by Mirela (2011) examined the different types of stressand describes the following: Eustress is a positive stress, a pressure to complete work,but not harmful. Acute stress is an intense short lived stress with symptoms includingheadaches, hypertension and stomach problems. Chronic stress is the most serious;this is a stress that extends over a long period of time. Samartha, Lokesh and Karkera(2010). A study by Ussahawanitchakit and Sumritsakun (2008) found organizationalchange has a negative influence on stress resulting in feeling psychologically andphysically drained and the effects on employee’s health are detrimental. What happenswhen employees feel stress? Research by Ingram and Di Pilla (2007) described the response.

Stress creates a fight or flight response in the brain. The stress hormones then circulate throughout the bloodstream causing arteries to narrow and blood sugarto rise, digestion is also inhibited. Chronic stress signals the body to store fat,impairs the immune system and increases susceptibility to colds and infections.

“Physical effects can include: headaches, sickness, insomnia, musculoskeletal problems, palpitations and can also be connected to more serious conditions such ashigh blood pressure, heart disease, strokes and even cancer”. Crampton, Hodge, Mishra and Price (1995), found that too much pressure or stress can result in negative physical or psychological behavioral responses stating“Physiological responses include: heart disease, high blood pressure, strokes,migraines, cancer, heartburn, ulcers, asthma, diabetes and multiple sclerosis.Psychological effects include: anxiety, depression, job dissatisfaction, and chemicaland/or alcohol abuse.” Ingram and Di Pilla(2007) agreed and also included workplace injury, suicide, and impaired immune functions. Research by Bhagat,McQuaid, Lindholm and Segovis (1985) found employees are so averse to extreme jobstress they will withdraw physically and/or psychologically with lateness, absenteeism orquit their jobs. Cordes and Dougherty (1993) define this extreme job stress as a separate type of stress job burn out.

Effects on productivity resulting from employee stress

Too little pressure or stress will minimize work efforts, too much stress orpressure has negative effects, however stress at a manageable level will improveperformance. This relationship is demonstrated in the form of an Inverted-U diagram.Peak performance is when stress and productivity are at the peak of the Inverted-Umodel Adaramola (2012) and Herbers (2012). Research by Jacobs, Tytherleigh,Webb,and Cooper (2007) supports the negative relationship between stress levels andproductivity. Findings from the self-reported study showed a negative relationshipbetween stress and productivity and organizational measures of performance.Employee reactions to the mental and physical stresses include absenteeism, reducedproductivity and employee turnover costing U.S. industries $300 billion annually, with 1million workers absent on an average workday Ingram and Di Pilla, (2007).Maxon(1999) found that 60% of lost workdays each year can be attributed to stress. Stressed employees make more mistakes, are disorganized, have trouble concentrating, areangry, burned out and have a higher turnover rate. Occupational stress absences in theworkplace are 4 times higher than other occupational injuries and absences, accountingfor a median average of 23 days per year. White collar workers reported 66% of theirdays off were attributable to stress, whereas blue collars reported 50% of their occupational illnesses and injuries were attributable to stress.

Productivity and performance

Productivity and performance can be difficult to measure, most studies use self-reported methods for measuring performance and production levels or measure one ortwo aspects of production or performance such as how organizational change affectscommitment. Determining what is included in productivity and performance andmeasuring the levels can vary. A study on productivity costs related to illness byKoopmanschap, Meerding, Brouwer and Severens (2005) defined productivity costs as“the productivity lost and/or costs incurred to maintain productivity as a result of a worker’s illness and itstreatment”. This applies to presenteeism (ill but at workand less productive), absence from work, long-term disability and mortality. Additionalcost factors include length and frequency of absence and presenteeism, compensationsby fellow employees making up for lost work and replacement costs of searching, hiringand training new workers. Extended absences have the opportunity to have areplacement employee fill in, but short term absences do not provide this opportunitymaking short term absences, ten days or less the most expensive.

Productivity can also be influenced by staffing levels. Organizational changesoften include a reduction in staff, either through layoffs, attrition or hiring freezes. Thismeans a higher workload for the remaining employees. The higher workload may besustainable for a while, but eventually takes a toll on the remaining staff both mentallyand physically, resulting in lower production. Research by Love, Tatmanand Chapman (2010) concurs that hiring freezes means more work for existing staff andfound that the stress from the work overload can spill out of the work environment andaffect family time creating not only work overload but family overload.

Regarding job performance, Manning and Preston (2003) found that poor jobperformance may appear as yet another consequence of organizational stress, therebyreducing productivity. The stress effects of strained interpersonal relationships andpoor communication diminish teamwork and collaboration. Lowered job performancecan also reduce productivity and lead to a lack of confidence in leadership. Thecompromise of an organizations reputation can damage employee retention and theirability to recruit high quality employees. In 2012, Smith’s study on workplace stressfound 66% of employees have difficulty focusing on tasks at work because of stress.Twenty one percent stated they had difficulties with focusing on tasks at work and thatstress was responsible for errors and/or missed deadlines. Reduced performance as aresult of workplace stress was confirmed in studies by Jamal bothstudies reported negative relationships between job stress and job performance.Baruch-Feldman, Brondolo, Ben-Dayan and Schwartz (2002) also reported negativerelationship between stress and productivity. The author ’s study of job stress effects on productivity of traffic enforcement agents reported a seven percent reduction inproductivity.

Effects on cost.

The effects of stress included for costs are: turnover, burnout and absenteeism,presenteeism, healthcare, accidents/workman’s compensation and illness. The costsare staggering. Mitchell and Bates (2011) research on measuring health-relatedproductivity loss, estimated employers lost $260 billion annually to decreasedproductivity, employee absence and health care costs due to stress. Research byCrampton, Hodge, Mishra and Price (1995) estimated the effects of stress includingabsenteeism, accidents, healthcare costs and lowered productivity costs organizations$100 - $300 billion annually. On average, employees lose 16 days a year due to stressfrom emotional exhaustion or depression. The authors also report stress to be thesource of 75% -90% of all primary doctors’ visits and half of the 555 million workdayslost due to absence. These results vary from other research. Treven and Treven(2011) estimated 100 million workdays are lost worldwide due to stress and 50% - 75%of illnesses are stress related. Findings by Ingram and Di Pilla (2007) state one millionworkers are absent on an average workay, stress effects costs American industries $26bililon a year in disability and medical costs and the average worker takes 20 days off ayear due to stress. Research by Avey, Luthans and Jensen estimatedhealthcare cost are 50% higher for stressed employees and 20% of an organizationspayroll is used to deal with stress related problems. Ingram and Di Pilla found73% of workers are affected by stress and job-related stress claims, including mentaland psychological claims which have risen by 88% from 2000- 2007.

Regarding turnover and burnout, Manning and Preston (2003) state the following:

Turnover ’s significant monetary costs are accrued in recruiting, hiring, training,and loss of productivity. The American Management Association believes the cost of finding an employee’s replacement is 30% of that employee’s salary.Turnover also causes additional work and stress on other employees who haveto fill in during the recruitment period, thus leading to burnout. Burnout isexhibited in a number of ways by employees including increases in absenteeismand illness; increases in the use of employee assistance programs, as well asprescription and medical insurance plans; and increases in workplace accidents,which in turn lead to increases in workers’ compensation claims.Employeessuffering from burnout are likely to affect the productivity of other employees,causing an overall reduction in the quality and quantity of work produced.Communication and teamwork suffer, collaborative efforts diminish, and theexchange of information is minimized.

In regards to presenteeism and absences, a study by Mitchell and Bates determined productivity costs range from $15 to $1601 more per year for employees with 2or more health conditions/risks than employees without health conditions/risks.This means an employer with 10,000 employees could face nearly $3.8 million inproductivity loss each year in addition to the medical costs for these conditions.

Stress costs are being measured worldwide and a report on the Confederation of Finnish Industries in 2009 by Pietila and Lahdensaari-Natt (2011) found on average,sickness and accidents reduce working hours by 4.5%. Research by Richardson andRothstein (2008) stated the number of workers calling in sick to work due to stress,tripled from 1997– 2001 and stress was a major factor in 80% of work related injuriesand 40% of turnovers. Findings by Adaramola (2012) were similar, stating 60%-80% ofall accidents at work are stress related. Work related accidents are a liability fororganizations as are diseases caused by stress. The Occupational Safety and Health Act of 1970 declared employers could be held liable for stress related illnesses of theiremployees Crampton, Hodge, Mishra and Price (1995). Research by Esler, Schwarzand Alvarenga (2008), proved stress, including workplace stress, can cause coronaryheart disease and hypertension. Their research had far reaching implications and couldbe used to hold the employer financially responsible.

Analysis

The first step was to search for and review articles and research studies usingkey words in databases and online. Key words included: organizational change,employee stress, stress effects and productivity. These articles often referenced otherresearch articles and sources to search for additional findings. During the secondstage, an analytical research design was used on the articles to identify the importantfindings from each article. Findings were summarized onto a matrix. The matrixeswere grouped by key words and themes including: productivity, employee stress,organizational change, history of change and statistics. Henning (2011) refers to the use of matrixes as a “grid of common points”, sourcing material into specific categories the help the writer organize the paper. Information from each matrix group was reviewed,synthesized, summarized and/or directly quoted into the research paper. Similar information was synthesized and funneled into central concepts as was contrastinginformation. This information was then reviewed to prove, disapprove or bring intoquestion additional concepts on the subjects. When analyzing matrix information, it wassorted into what was relevant for the research, findings or conclusions.

Findings

The following information presents findings on: (a) organizational change andwhy it is a source of employee stress, (b) employee stress factors caused byorganizational change, (c) how the employee stress affects productivity. Asorganizations change, data on the negative effects of the changes are highlighting howthe processes affect employees mentally and physically. When employees are notfunctioning at optimal levels, productivity is negatively affected.

Employee Stress and Organizational Change

Organizational changes are radical shifts in business strategies and may includechanges in values and/or missions, restructuring staffs and/or operations, mergers,layoffs, rightsizing, new management, new technologies and fundamental changes offunctions McNamara (2006), and Ussahawanitchakit and Sumritsakun (2008), and Yu(2009). Most organizational changes include downsizing staff and running lean on staffhurts. Overworked, stressed out employees eventually start to break down, hurt bothphysically and mentally Hagel (2013). During the organizational change process,executives tend to overlook the softer skills needed to make the change successful.These “soft” skills can inspire staff, promote collaboration and help embrace change Smet, Lavoie and Hioe (2012).It is unfortunate that most change projects don’t work.Research by Sakvik, Tvedt, Nytro, Andersen, Andersen, Buvik and Torvath (2007)found the success rate for intended change to meet financial and strategic objectives is 25%-50% with 75%-83% of all mergers and acquisitions failing to reach targetedobjectives. Wheatley and Kellner-Rogers (1998), concur stating:

In recent surveys, CEO’s report that up to 75% of their organizational changeefforts do not yield the promised results. These change efforts fail to producewhat had been hoped for, yet always produce a stream of unintended andunhelpful consequences. Leaders end up managing the impact of unwantedeffects rather than the planned results that didn't materialize. Instead of enjoyingthe fruits of a redesigned production unit, the leader must manage the hostilityand broken relationships created by the redesign. Instead of glorying in the newefficiencies produced by restructuring, the leader must face a burned out anddemoralized group of survivors. Instead of basking in a soaring stock price after amerger, leaders must scramble frantically to get people to work togetherpeaceably, let alone effectively.

The intent to change and improve productivity does not always materialize and can endcausing resistance and resentment with staff Cameron (1994).Specific sources of stress include: lack of skills, support, meaning and trust, workoverload, long hours, poor communication and management, job insecurity, loss ofcontrol and power, low morale and motivation, fear of failure and job loss, and jobburnout Avey, Luthans and Jensen (2009), Babatudne (2013), Darling and Heller(2011), Ingram and Di Pilla (2007), Manning and Preston, (2003), Samartha, Lokeshand Karkera (2010), Sakvik, Tvedt, Nytro, Andersen, Andersen, Buvik and Torvath(2007), and Ussahawanitchakit and Sumritsakun (2008).

Employee Stress Factors

The stress factors can be physical or mental stress felt by theemployee due to changes in the organization. It has been documented that smallamounts of stress or pressure can be good and actually improve performance. Toomuch stress however can results in negative responses.

The effects of these stressors manifest themselves in a variety of ways – physically, mentally and through actions. Physical reactions can include heart disease,high blood pressure, strokes, migraines, cancer, heartburn, ulcers, asthma, diabetesheadaches and insomnia Crampton, Hodge, Mishra & Price (1995) and EmployeeBenefits (2008). Psychological reactions include anxiety, depression, mentalreclusiveness and burnout Cordes (1993) and Ingram and Di Pilla (2007). Reactionsmay include withdrawing, lateness, absenteeism, presenteeism or quitting the jobBhagat, McQuaid, Lindholm and Segovis (1985).

Stress Effects on Productivity

The mental and physical effects of stress affect the employee’s ability to work productively and efficiently. Employees may (a) be present but not involved or workingefficiently (presenteeism), (b) not be present, therefore missing days of work and worknot being completed or work is completed by another and not completed correctly and,(c) taking medications or being treated for ailments caused by the stress, therefore increasing cost to the employer through increases in health insurance, workman’s compensation or disability costs. (d) retire, leave the job (turnover) or die Ingram and DiPilla (2007) and Bureau of Labor Statistics (1997).

Reports on productivity and costs to the organizations vary considerably.Reporting agencies, associations and studies do not use a single standard whencalculating productivity or costs. For example:

• One million workers are absent on an average workday Ingram and Di Pilla(2007).
• Sixty percent of lost workdays each year can be attributed to stress Maxon(1999).
• Worldwide, 100 million workdays are lost due to stress Treven and Treven(2011).
• Employers lose $260 billion dollars annually to decreased productivity, employeeabsence and health care costs due to stress Mitchell and Bates (2011).
• Absenteeism, accidents, healthcare costs and lowered productivity costemployers $100 -$300 billion annually Crampton, Hodge, Mishra and Price(1995).
• Absenteeism, reduced productivity and turnover cost the U.S. industry $300billion annually Ingram and Di Pilla (2007).
• American employers spend $26 billion annually in disability and medical costsIngram and Di Pilla (2007).
• Stress is major factor in 80% of work related accidents Richardson and Rothstein(2008).
• Of all accidents at work, 60% - 80% are stress related Adaramola (2012).

Treven and Treven (2011) offer a three level organizing strategy for classifyingcosts. At the individual level, include loss of income and costs of treatment. At theorganizational level include costs from absenteeism, early retirement,replacement/turnover, legal fees, damaged equipment, lowered productivity andlowered reputation (ability to hire quality staff). The authors acknowledge these costsare hard to quantify at the national level and estimate .5– 3.5 of the gross national product.

Discussion, Recommendations and Conclusions

Discussion

Organizations are changing and will continue to change. Research onorganizational change supports the need for continued investigation into thepsychological aspects and results of change on employees. Organizations change inorder to improve their processes and increase their net incomes. Overlooking or nottaking into account how the change will affect their employees is a serious issue.Productivity is a key element for any organization and when your employees are absent,ill or not performing well, it will affect the bottom line. Findings by Williams (2010)supports the research from this study “Leaders today must understand and apply the knowledge of behavioral psychology and the lessons from brain science to manageorganizational change successfully. In the past, efforts at organizational change whichhas focused on the structural aspects of organization have systematically failedbecause they have neglected the reality that change doesn’t happen without individual people changing their thinking, beliefs and behavior.” Research from this studysupports a negative correlation between organizational change and employee stressand also between employee stress and productivity. Findings also presented a highfailure rate for organizational change a major source of why employee stress isincreasing.

Recommendations

What are the effects of stress from organizational change? It is clear the effectscan be physically and psychologically detrimental to the health of employees, and costlyfor the organization. It is also clear that unhealthy employees affect the productivity of the organization. What is unclear is how to measure these costs. Association andgovernment agency reports do not use consistent measures and some measures aresubjective such as self-reported reasons of illness. Recommendations for furtherstudies include:

• Consistent reporting methods for measuring the cost of stress effects. Thiswould include which illnesses will or will not be included as stress related illness.

• Consistent inclusion of what is included to measure cost of productivity.

• Research on human resources and management's role in organizational changein regards to staff management during the process.

• Further research and recommendations of how to successfully implementorganizational change a set of fundamental rules or steps.

• Recognize that “employee health programs” organized to assist employees with stress are treating the symptoms, not the source.

Conclusion

Every organization is selling something an idea, a product or a service.Organizations, especially those undergoing changes, have become so focused on theresults; they are forgetting how to get there. The current business climate no longerplaces a high priority on the valuing of employees. Pietila states“The labor force is the most essential resource of a company. Increasing the employee’s well being is a financial benefit to the company” (p. 12). If employees are indeed, such a valuableresource to an organization, then why are employee health concerns, not a priority?The Cost of Stress (2012-2013) states What many employers don’t know is that stress is, by far, the greatest impediment to employee well-being and productivity. When people report feelingoverwhelmed and out of control due to work/life conflict, jobs and home stress,and chronic worry about their job performance decreases and absenteeism,presenteeism, and stress-related physical and psychological illnesses increasedriving up healthcare costs.Atkinson (2004) found it is not lack of knowledge that employees are stressed, rather denial. “few(executives) appreciate its potentially devastating long term effects”A participative management style could play a major role in how employeesperceive and react to change. This type of management style is not new, Douglas McGregor’s Theory X and Theory Y originated in the 1960’s,The Economist (2008)states “Theory Y gives management no easy excuse for failure. It challenges them toinnovate, to discover new ways of organizing and directing human effort, even thoughwe recognize that the perfect organization, like the perfect vacuum, is practically out of reach”.

In order to plan for successful organizational change, management must takeinto account plans for how employees will react before during and after the changes. As stated by Thornton (2009) “ Money is scarce. Markets are volatile. Morale is harder to boost in an atmosphere of anxiety. Acknowledge to yourself and your team that theworld has changed”. This “soft”skill” management is critical to the success oforganizational change. Identifying sources of stress and reducing or eliminating thesefactors will help not only the employee’s but also productivity.