Personnel reduction and growth, innovation, and employee optimism about the long-term benefits of organizational change
| DOI | http://doi.org/10.1177/0020852320934536 |
| Published date | 01 September 2022 |
| Date | 01 September 2022 |
| Subject Matter | Articles |
Article
Personnel reduction
and growth, innovation,
and employee optimism
about the long-term
benefits of
organizational change
Jeannette Taylor
University of Western Australia, Australia
Abstract
What do employees think when their organization’s change programme has led to a
growth or reduction in the number of employees in their work unit or workgroup?
While we take for granted that employees generally do not respond well to organiza-
tional initiatives that reduce the number of personnel, we are less certain about their
response to organizational efforts that raise the number of personnel. Using the
Australian Public Service Employee Census, containing over 24,600 responses, this
research finds that employees’ exposure to a major organizational change that raises
or reduces the number of personnel in their workgroup is related to two employee
outcomes: (1) implementation of innovation-related change in their workgroup; and (2)
optimism about the long-term benefits of the change on their workgroup’s perfor-
mance. Innovation-related change also moderates the relationship between
personnel-related change and optimism about the long-term benefits of change.
Points for practitioners
Employees who experience a reduction in the number of personnel in their workgroup
may pursue innovation. When employees experience personnel growth in their work-
group, those who implement innovation report higher levels of optimism about orga-
nizational change than those who do not implement innovation. Finally, how well
Corresponding author:
Jeannette Taylor,School of Social Sciences, The University of Western Australia, 35 Stirling Highway, Crawley,
WA 6009, Australia.
Email: jeannette.taylor@uwa.edu.au
International Review of Administrative
Sciences
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DOI: 10.1177/0020852320934536
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2022, Vol. 88(3) 607–625
International
Review of
Administrative
Sciences
leaders manage the change process during personnel-related change can shape the
employee implementation of innovation and optimism about organizational change.
Keywords
cutback, downsizing, human resource management, innovation, organizational change
Introduction
Organizational change is now a common phenomenon in the public sector across
many countries (Cejudo, 2008; Rochet et al., 2008; Van der Voet and Vermeeren,
2017). Organizational change often involves a change in the number of employees.
What do employees think when their organization’s change programme has led to
a growth or reduction in the number of employees in their immediate unit or
workgroup? Although there are numerous studies on cutback management
(Brockner et al., 1985; Kickert et al., 2015; Raudla et al., 2015), studies on per-
sonnel growth, especially employee responses to it, are scarce.
On the one hand, the addition of new personnel into a workgroup may be well
received by its members, particularly when they are understaffed or it is a result of
a prioritization of a particular policy domain. Under such conditions, employees
may respond positively to personnel growth in their workgroup, as suggested by
the psychological contract theory (Coyle-Shapiro and Conway, 2005). On the
other hand, employees may view personnel growth as disruptive. The addition
of new personnel to perform new roles may cause structures to change. If the
organization is facing a turbulent environment, then such structural changes
may further destabilize it (Boyne and Meier, 2009a) and undermine performance,
as suggested by the structural inertia theory (Hannan and Freeman, 1977).
Here, employees may not respond positively to personnel growth.
This study examines the work attitudes of Australian federal government
employees who have been directly affected by changes in the number of personnel
within their workgroup as a result of major organizational changes. Most employ-
ees may not be fully aware of changes occurring across their organization, but they
are likely to notice organizational changes that have recently been implemented in
their immediate unit or workgroup. This study compares employee perceptions of
major organizational changes that are linked to personnel growth with those that
are linked to personnel reduction at the workgroup level.
The objectives of this study are twofold. First, it examines the relationships
between perceived major organizational changes that raise and reduce the
number of personnel (henceforth called personnel-related changes) and two
employee outcomes. The first outcome is perceived implementation of
innovation-related changes. Organizational innovation is broadly defined as the
adoption of a new idea or practice in an organization (Damanpour, 1992).
608 International Review of Administrative Sciences 88(3)
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