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9Volume 30 s Number 4 s Winter 2012

Abstract

The global economic crisis of 2008 created rapid social and economic change which shook the foundations of major economies and demanded immediate response; both organizations and employees had to adapt. This study, which formed the basis for this paper, was conducted in Western Australia with the aim of discovering how employees responded to the changed work environment and how organizations managed employee responses. A single case design was used and key findings suggest that organizations responded to the economic crisis through a range of human resource management changes. Employees experienced a range of responses from limited to major uncertainty and voiced both negative and positive responses regarding the way in which their organization responded. As a practical contribution, the authors offer guidelines based on the change model by Kotter (2007) that could be used by organizations facing similar situations.

Introduction

In the 21st century, business environment organizations face a multitude of challenges based on increasingly knowledge-driven, information- based, and service- intensive economies. These demands require speed, flexibility, ongoing renewal, legislative changes, organizational changes such as mergers, acquisitions, restructuring and retrenchment (Barlett & Ghoshal, 2002; Brooks, 2005; Clulow, Gertsman, & Barry, 2003; Khandekar & Sharma, 2005; Pepur, Pepur ,& Viducic, 2010; Price & Chahal, 2006). Society also demands a shift towards more social and

Global Economic Crisis: Employee Responses and Practical Implications for Organizations

Marita Naudé Carolyn Dickie

Bella Butler

Marita Naudé is an Associate Professor at the Curtin Graduate School of Business, Perth, Western Australia where she has been a member of staff since 2001. She teaches (mainly MBA students), develops and delivers corporate

training programs, conducts research and does consultancy, both locally and internationally, in the areas of leadership, organizational change and development, strategic management and sustainable organizational development. Marita has published numerous articles in refereed academic journals, two chapters in a textbook and co-authored 6 textbooks. She has a Masters degree in Education and a PhD in Leadership.

Contact Information Associate Professor Marita Naudé M.Ed, PhD Curtin University GPO Box U1987 Perth 6845, Western Australia Ph: +61 8 9266 7615 Fax: +61 8 9266 3368 [email protected]

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Dr Carolyn Dickie is a Senior Lecturer in Human Resource Management in the School of Management, Curtin Business School, Curtin University. She has been engaged in teaching both under-graduate and post- graduate students in the various HR

topics locally and internationally. She has a particular interest in making the theoretical concepts meaningful to practitioners and it was this interest that prompted the current study. Carolyn has published several textbooks and in journals in Australia, South East Asia and Europe. She has a Masters degree in Education and a PhD in Management.

Contact Information Dr Carolyn Dickie (Corresponding author) M.Ed, PhD Curtin University GPO Box U1987 Perth 6845, Western Australia Ph: +61 8 9266 1367 Fax: +61 8 9266 7897 [email protected]

Dr Bella Butler, PhD, is a Senior lecturer in the School of Management, Curtin University. Bella has more than 17 years of tertiary teaching and research experience, including her international career. Bella’s expertise is built on business strategy in

dynamic markets; partnerships, alliances and networks; inter-firm cooperation in clusters; international business and sustainability of regional economies. She is skilful in the use of both classic and current analytical techniques relevant to her areas of expertise.

Contact Information Dr Bella Butler PhD Curtin University GPO Box U1987 Perth 6845, Western Australia Ph: +61 8 9266 3091 Fax: +61 8 9266 7897 [email protected]

environmental responsibility (Daub & Scherrer, 2009). The global economic crisis added another challenge and demand for rapid change.

The economic crisis (triggered by the U.S. subprime mortgage crisis in late 2007) had a surprisingly rapid and drastic impact at a global scale resulting in dramatic social and macroeconomic consequences (Seabrooke & Tsingou, 2010). These rapid changes shook the foundations of the world economy (Pepur, Pepur ,& Viducic ,2010), many of the major industrial economies plunged into recession and projected growth of emerging market economies were slashed by more than half (Karunaratne, 2010).

Organizations do not operate in a vacuum (Porter & Kramer, 2006), but are integrated with society and this requires managing complexity and change, demonstrating innovation and ingenuity (Laughland & Bansal ,2011). Consequently, organizations had to adapt to these uncertainties and rapid unpredicted changes and insecurity created by the global economic crisis. Jack Welch supported the notion that: ‘When the rate of change outside an organization exceeds the rate of change inside, the end is in sight.’ (Batterley, 2004, p. 30). Darwin’s Adaptability Theory, which is widely accepted in companies and management theory, stipulated that all species need to adapt to their environment to survive (Denton, 2006).

Organizations implemented a range of strategies. One strategy was to focus on survival by cutting costs through employee retrenchment and at the same time expect greater flexibility and creativity from remaining employees (Pepur, Pepur, & Viducic, 2010). Another strategy was that some organizations discontinued training and development, introduced hiring freezes and

encouraged employees to accept retrenchment packages (Howard, 2009). An added pressure was insecurity about whole industries and not only individual jobs (Gillette, 2008).

Not only did organizations have to respond to the rapid unpredicted changes and insecurity but employees had to respond accordingly. Many employees view change as disruptive and stressful (Brenner, 2008; Price & Chahal, 2006; Smollan, Sayers, & Matheny, 2010). Employment changes were quite different across industries during the economic crisis and subsequent slowdown. In Australia, there was a significant shift from full - time to part- time employment as employees demonstrated their flexibility in order to retain some form of employment (Lim et al., 2010). In the U.S., a survey indicated 16% of workers aged 45 and older postponed retirement plans (Gillette, 2008).

Based on this brief discussion (which is extended in the literature review) and for the purpose of this study, three questions arose for the authors:

1. How did employees respond to the organizational changes necessitated by the global economic crisis? 2. How did organizations manage employee responses to the uncertainty created by the changes? 3. What practical guidelines could assist organizations to provide optimum assistance to employees during times of necessitating change?

In order to gain insight into these questions, the overall aim of this study was to develop a deeper understanding of employee responses related to the uncertainty and the changes necessitated by the global economic crisis. A secondary aim was to

provide a set of practical guidelines for organizations to help them manage employee responses at times of uncertainty and change. In addressing the stated aims, the study makes a practical and academic contribution to the current literature as it provides insights and a deeper understanding of employee responses. At a practical level, the contribution is that the emerged insights stimulated the formulation of implementable guidelines for organizations during times of uncertainty and change. The current study was conducted among a selected group of Western Australian companies affected by the global economic crisis.

This paper is structured in five parts. The first part includes a literature review which the authors used as a basis for the arguments and the study. The second part describes the methodology and research process, while the third part reflects and discusses the results from the analysis. The fourth part focuses on the practical guidelines for organizations. Lastly, the authors provide key insights gained from the overall findings.

Literature Review

Changing Business Environment Organizations face daily challenges such as legislative and organizational changes (and others) to remain competitive (Barlett & Ghoshal, 2002; Brooks, 2005; Clulow, Gertsman, & Barry, 2003; Khandekar & Sharma, 2005; Pepur, Pepur, & Viducic, 2010; Price & Chahal 2006). In addition to these challenges, society’s expectations of business are constantly changing and over time there was a shift towards more social and environmental responsibility (Daub & Scherrer, 2009).

Many businesses and people were surprised by the

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magnitude of rapid change and drastic impact caused by the U.S. subprime mortgage crisis in late 2007. In 2008, a financial crisis on a global scale resulting in dramatic social and macroeconomic consequences was evident (Dabrowski, 2010; Goldberg & Petasnick, 2010; Seabrooke & Tsingou, 2010). Many of the major industrial economies plunged into recession, and 2009 was a year of sharp declines in gross domestic product (GDP) and declining output worldwide. Another problem was that the projected growth of emerging market economies was slashed by more than half (Edwards, 2010; Karunaratne, 2010).

Although Australia had proved resilient, the global financial crisis was clearly a very major challenge to the durability of its prosperity (Edwards, 2010). A fall in trade was expected, the size of the contraction was not, and economists were forced to revise down their forecasts for growth. Even when Australia appeared to have escaped the worst of the worldwide crisis and had avoided a recession, the economy did suffer and the business world was feeling fragile and nervous. One unfortunate outcome was that unemployment rates rose (Swan & Tanner, 2009) and this situation changed the face of the Australian labour market.

According to Borland (2009, p. 234), “the increases in unemployment during recessionary periods in Australia have been associated primarily with declines in male full-time employment ...”. The change of work pattern to part time, contract or contingent working arrangements was forced on organizations and employees alike. The downturn did not affect industries uniformly (Lim et al., 2010) and how organizations responded to the changing business environment was influenced by this reality.

Employee (Individual) Responses to Change Many authors (Boxall, 1996; Boxall & Steeneveld, 1999; DeSaa-Perez & Garcia-Falcon, 2002; Khandekar & Sharma, 2005) view employees as a valuable resource. Human capital is less visible and measurable than financial capital but is the main driver for success and employees are the ‘heart and soul’ of an organization. They have a unique capacity to recognize and deploy other assets (Simmons, 2008). When employees leave (through resigning and/or restructuring) the organization loses knowledge. As a result, retaining employees is crucial to keep the knowledge and experience within the organization contributing to organizational development (Hatch & Dyer, 2004, p. 1157; Khandekar & Sharma, 2005, p. 631; Sun & Tse, 2009). A strategic goal is to attract good employees who will remain long enough in the organization to add value (Saul, 2007). During unstable, changing and challenging times, it is increasingly important to retain employees and their knowledge, skills and experience where possible and to maintain a high level of productivity. Through higher retention rates companies are able to spend time, money and energy on innovation and growth (Agarwala, 2003; Dupré & Day, 2007; Macdonald, 2004; Tyler, 2007). During the global economic crisis it was clear that one strategy organizations used to survive was to cut costs through employee retrenchment and at the same time expect more flexibility from remaining employees (Pepur, Pepur, & Viducic, 2010).

Employees experience positive and/or negative emotions during times of change as they anticipate and experience both the processes and outcomes. Different individuals react differently to change with responses ranging from minor frustration, discomfort, anger, fear, uncertainty and full

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resistance to people who are willing to consider the change and explore new ideas (Brenner, 2008; Price & Chahal, 2006; Smollan, Sayers, & Matheny, 2010). These reactions are not limited to one country or business environment.

According to the Ministry of Industry, Trade and Labor Laws Enforcement (USA), there was no real decline in the violations of labour laws. Conversely, there were 43% fewer employee complaints about labour violations in January to April 2009 compared to the same period in 2008. This drop in complaint numbers seem to result from employees being concerned about losing their jobs because of the economic crisis. Even though some employees did not lodge complaints, there seems to be a decrease in employee engagement and commitment level as employees were no longer willing to contribute extra effort for the benefit of the organization. A national comparative study (USA) between late 2007 and late 2008 indicated that 66% of organizations surveyed experienced a decrease in employee engagement (Anonymous, 2009a; Niv, 2009). A USA survey indicated 16% of workers aged 45 and older made the decision to postpone retirement plans due to the economic crisis; primarily as a result of the fall in interest rates impacting on retirement savings (Gillette, 2008).

Methodology and Research Process

Participants Participants who were able to provide insight into the research questions were required and purposeful sampling (Creswell , 2003) was used. A group of 10 professionals who were members of the Change Management Institute in Western Australia formed the participants of the single case design. This group included managers at different levels in

the organization involved in, or impacted by, the strategic or implementation phases of the change process. For the purpose of this study, the authors accepted the definition by Creswell, (2003) that a case study is an exploration of a system bounded by time and place.

Another reason for selecting a single case study is that the authors wanted to explore the operating structural and dynamic relationships without a level of abstraction. Yin (1984) argued that case study design enabled researchers to retain the holistic characteristics of real-life events. While the results are not generalizable the theoretical propositions are. The motivation for selecting a single case design was that the authors aimed to gain in-depth insight and understanding regarding the responses of both organizations and employees to the rapid changes necessitated by the global economic crisis. The study was conducted within a particular context (Western Australia) and time (April and May, 2009).

Procedure A survey was used for the data collection. In Section A, biographical data were collected through a range of closed questions to provide a context for the analysis and discussion of the findings. A combination of closed and open-ended questions was used in Section B; open-ended questions in this section resembled a written narrative. In an attempt to elicit rich data, participants were asked to provide in their own words their personal perceptions and thoughts regarding the changes. Jabri (2006) postulated that narratives provide insights into, and an understanding of the environment, operating structure, dynamic relationships, real life events, and experiences.

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Analysis Section A (biographical data) was analysed through a quantitative data analysis package and reflected through basic quantitative, descriptive data to sketch the context of the study. For the analysis of Section B, a 3 -step process was followed:

1. An initial read through all the comments for each question helped the authors gain an overall understanding for that specific question. 2. Re-read to identify the key themes and sub- themes for each specific question. 3. Read the participants’ comments and allocate participant comments to the applicable key themes and sub-themes.

This 3 -step process is consistent with ‘thematic analysis’ (Aronson, 1994) used to identify relevant tags (key words), links (codes) and categories (main themes). As the aim was an understanding of the responses only, the authors did not allocate frequencies to categories as there was not a need to identify any statistical significance.

Ethical Considerations The University Human Research Ethics Committee approved and monitored the progress and management of the study ensuring ethical and effective management. No identifying information was requested to ensure participant anonymity and confidentiality. All data were analysed, reflected and discussed in the context of the case only and not the organization and/or participant. Participation in the study was voluntary and consent was assumed when a participant returned the survey. All hard-copy or e-mailed surveys were returned directly to the authors as separate documents attached to the e-mails and were printed and stored separately from e-mails. The e- mails were printed and stored solely for the

purpose of an audit trail as evidence of participation and not for identification purposes.

Results

Industry Representation Participants from a diverse range of industries and focus areas were represented. Industries included construction, financial and insurance services, utility services, health care and social assistance, mining, retail, and transport services. The advantage of the diversity of participants was the potential for a variety of responses.

Participant Profile As demonstrated in Table 1, the profile of research participants was described by five sets of demographic data. With a preponderance of male (7 as to 3 females) participants, they ranged from the 20s to more than 50 years of age. Almost half in the group were aged between 30 and 40 years. The majority (7) of participants worked in upper- management levels compared to only 3 at the middle management/supervisory levels. Half of the participants reported being employed in their organization for 5 years or less, though 6 out of 10 had been in their current job for less than three years.

The remainder of the section on participants’ responses focuses on organizational and individual responses. Nevertheless, because the aim was to understand the responses, the authors did not focus on quantitative values but discussed the key and sub-themes that emerged. Verbatim quotations from the participants have been included in the discussion, to be consistent with recommendations by Jabri (2006), selected to reflect the participants’ perspective and ‘voice’.

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Employee Responses

The employee responses are presented in two parts containing the employee responses and thereafter the management by organizations in relation to these responses.

Individual Employee Responses Table 2 highlights the three key themes that emerged specifically related to employees’ reaction to uncertainty that resulted from organizational changes precipitated by the global economic crisis. The responses ranged from major to limited uncertainty and concern.

Major Uncertainty and Effect The heightened sense of uncertainty and stress felt by some employees was particularly evident in organizations where there was friction and threat of industrial action. Comments from participants included:

1. Not happy. Quite a few lost jobs and they were mates with some who didn’t – this caused a bit of friction and trouble. Also, some were in the union and they caused a bit of disruption to operations for a few days. 2. Staff have been quite unsettled as the redundancy decisions were made on job position basis not on a personal basis.

Characteristics Variables Frequency

Gender Male Female

7 3

Age Distribution 20-29 30-39 40-49 50+

1 3 4 2

Organizational Level Supervisory Middle management Upper management

Executive

1 2 7 0

Time in Organization Less than 3 years 3-5 Years

6-10 Years 10+ Years

1 4 2 3

Time in Current Job Less than 3 years 3-5 Years

6-10 Years 10+ Years

6 2 1 1

Table 1. Participants’ Profiles

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Therefore we lost some very good people and other staff feel quite threatened – nothing is safe. 3. A lot of unrest and threat of industrial action. Not happy at all as they are used to big salaries and all had commitments.

Moderate Uncertainty and Effect Some employees indicated a moderate degree of stress about job security. Views were:

1. Like everyone else – I was worried then relieved when I didn’t lose my job. 2. I feel a little insecure but I can’t do much about it. Try to stay focused on my job.

Limited Uncertainty and Effect Apart from an increased workload, some employees did not feel particularly affected by changes and the comments indicated there were not many problems. It was clear that many employees understood and accepted the constantly changing nature of business and the special circumstances the global economic crisis created. Comments included:

1. No problems, an increased and heavy workload did cause fatigue though. 2. Retail can be an uncertain business so employees are generally aware of the ups and downs and how that could affect them.

Most feedback related to an employee’s job and organizational security. However, one participant stated ….

There wasn’t a lot of uncertainty in terms of keeping jobs but more about what would happen in the industry as a whole.

It was clear that organizations responded at a strategic and operational level.

Human Resource Management at a Strategic Level Organizations implemented changes at strategic level to manage employees during the global economic crisis and remain viable as an organization.

Within the key theme of human resource management four main strategies surfaced. Firstly,

Table 2. Employee Responses to Uncertainty and Organizational Changes

Key Themes Sub-themes

Major uncertainty and effect Staff feel threatened and worried about jobs; Jobs lost;

Unrest and threat of industrial action.

Moderate uncertainty and effect Concern but understanding; A little stressed.

Limited uncertainty and effect Not really affected except increased workload; Awareness of environment/changes and effect;

Employees reacted well overall; Needed time to reassure and keep staff up-to-date.

organizations focussed on analysing and minimising the longer term impacts and improved efficiencies in relation to the provision of quality human resource planning and implementation.

1. The opportunity to obtain higher quality human resources has been made. 2. Seeking to improve efficiencies by joining some divisions together. 3. We are also looking at how we can reduce the duplication of services.

Secondly, organizations used active strategies (including retrenchment) as methods to reduce staff numbers. In addition, some organizations forced employees to take leave, reduced employment conditions and/or did not pay for overtime. Comments included:

1. Also, more accountability is required from managers in terms of time use. 2. The opportunity was taken to reduce some HR numbers and to reduce some conditions for employees. 3. All employees worked their usual hours and no overtime.

Thirdly, passive methods were used in relation to natural turnover whereby employees leaving the organization were not replaced. Some views were:

1. The only staff reduction has occurred

because of people leaving in the natural course of events. 2. We have not retrenched any staff but we have not replaced any either. We have reduced numbers through natural attrition.

Fourthly, a combined approach to active retrenchment, natural turnover and employing vital, new recruits as planned before the crisis was used by some organizations. Participants’ comments were:

1. We retrenched a number of staff from two particular areas but kept all our maintenance staff. 2. We did not have the need for some types of workers so they were retrenched. Others stayed on. 3. No new recruits were taken on as had been planned before the crisis hit.

Human Resource Management at an Operational Level A summary of the responses that indicated a degree of positive or neutral organizational response at the operational level can be seen in Table 4. It is important to note that the table is not a reflection of what organizations implemented (intended or actual) but only employee responses.

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Key Theme Sub-themes

Human resource management Analysing and minimising the longer term impacts; Improved efficiencies;

Retain quality human resources; Staff reduction (active, passive, combination); More accountability needed from managers.

No overtime; Staff forced to take leave;

Table 3. HR-Related Responses at a Strategic Level

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Several participants experienced positive responses and support while others experienced neutral, or even, negative responses.

Positive Response and Support Positive responses included aspects such as both open communication and dialogue while consultation strategies seemed to be common practice. Comments included:

1. Retain an open dialogue. 2. We use a consultative, inclusive model for making major organizational changes and we have numerous ‘open space’ meetings to allow wide ranging contributions. 3. Usually consultation with union reps.

Neutral/Negative Response and Support Neutral or negative responses ranged from no action, a lack of care and concern to avoidance strategies:

1. Even a blind person could have seen we’d be hit once the mining slowed down. 2. In general, when there is uncertainty around change. The predominant culture is to ‘avoid’ and then, when required to address, do so in a more aggressive way. 3. Mostly avoided it. Not many communication sessions and a lot of rumour.

Based on the feedback from this group of participants, it was evident that employees demonstrated a range of reactions and received a differing level of support from the organization. The research highlighted that there is value in practical guidelines in managing employee stress and uncertainty during times of insecurity.

Practical Guidelines

This last section provides practical guidelines for managers to assist employees during times of uncertainty necessitating change. These practical guidelines are based on lessons learned from the feedback of participants in this study and by drawing on the works of the following authors: Anonymous (2009b), Cummings and Worley (2008), Howard (2009), Naudé (2004), Price and Chahal (2006), Zink, Steimle, and Schröder (2008), Petasnick (2008), Goldberg, and Petasnick (2010).

Kotter (2007) provides a general model for change containing 8 steps. The authors will use the general model of Kotter as a basis and focus on human resource management related guidelines. The motivations for selecting the model by Kotter as a framework are as follows:

1. It was developed in 1995 and has withstood the test of time;

Table 4. Organizational Management at an Operational Level

Key Themes Sub-themes

Positive response Retain open dialogue; Uses an inclusive, consultative model;

Neutral/negative response No plan or not much concern demonstrated; Predominant culture is ‘avoid’ and later respond

aggressively;

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Kotter (2007) Suggested guidelines for practical implementation

1. Establish a sense of urgency • Examine market and competitive realities • Identify and discuss crises, potential crises, or major opportunities

• This first and crucial step prepares the organization for the impending change. An intensive analysis of both the internal and external drivers for the change is needed to be linked to the new desired organizational state. • A coordinated, integrated and holistic approach is needed during the examining of markets. • The global economic crisis created different risks. It also provided different and new opportunities for business to use new ideas and business models. These new ideas and business models need to be supported by human resource management strategies.

2. Form a powerful guiding coalition • Assemble group with adequate power to lead the change • Encourage group to work as a team

• Care should be taken to assemble an implementation team. To form a powerful and guiding coalition, the positive thinkers and the opinion leaders within the organization should be engaged as they most often motivate others towards involvement. • Leaders (as the guiding coalition) should be enabled and supported to manage the crisis.

3. Create a vision • Create a vision to direct the planned change • Develop strategies to achieve the vision

• There needs to be a clear direction for the future even when the future does not seem to be very bright. Employers need to work with, and engage employees to set a clear and compelling direction for the future. • Different strategies are needed by different organizations. While retrenchments and downsizing are sometimes unavoidable, retaining employees who will add value to the organization and enable it to succeed into the future is vital.

4. Communicate vision • Use different methods to communicate new vision and strategies • Teach new behaviors by the example of the guiding coalition

• Internal communication is vital to keep employees informed as employees are concerned regarding their own job security and on a larger scale concerned about the industry. Even in organizations that are performing well during the crisis, there needs to be discussions about what it all means. Open and honest communication (including bad news) combined with employee engagement is appreciated by employees. • Members of the guiding coalition need to model the expected behavior that will create the conditions and climate for change and future success. The change agent should be a positive role model and lead by example as ‘actions speak louder than words’. As the role model, the members of the guiding coalition are expected to demonstrate ownership of, and commitment to, the change process.

Table 5. Suggested Guidelines for Practical Implementation

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2. Kotter is a credible academic and a world renowned author and speaker; 3. The framework provides a detailed, step- by-step process; 4. The first author of this article has implemented Kotter’s model effectively and with positive outcomes in a range of very diverse organizations.

Table 5 summarizes the suggested guidelines for

implementation.

Conclusions

As the result of this case study, the authors offer a deeper understanding of the responses of both employees and organizations related to the changes necessitated by the global economic crisis. Although this is a once only case (limited to a particular context and time) and the insights cannot

Kotter (2007) Suggested guidelines for practical implementation

5. Empower others to act on vision • Remove obstacles to change • Change undermining systems or structures or processes • Encouraging risk taking and nontraditional ideas, activities, and actions

• Employees need to be enabled and empowered through education and training to handle the expected changes. Short workshops and training sessions assist employees to gain new or different competencies, knowledge and skills. •The focus on training and development of employees need to be maintained, even in difficult times. While it might be necessary to wind back training and development during the height of the crisis, it should never be completely canceled. Furthermore, employees should be developed as leaders for the future.

6. Plan for and create short-term wins • Plan for and create visible performance improvements • Recognize and reward employees involved in improvements

•The initial excitement and energy might evaporate when people encounter problems or change is implemented over a long period. To ensure the momentum is maintained, training, education and support systems are provided to sustain the change. • Employees usually respond positively to recognition and rewards, however small. There are many types of rewards that might be offered including celebratory morning tea or small monetary incentives.

7. Consolidate improvements and create additional change • Use increased credibility to change ineffective systems, structures, and policies • Reinvigorate the process with new projects, themes, and change agents

•Effective evaluation of the implemented changes is needed throughout and at the end of the change implementation. Timelines and methods (informal and formal) for the evaluation need to match the strategies implemented for the change. Evaluation is a continuing process with the outcomes of one process driving the implementation of new processes.

Table 5. Suggested Guidelines for Practical Implementation (continued)

be blindly extrapolated and generalized to all other contexts, the surfaced information and developed practical guidelines could be used to inform and enable effective management of organizational processes and employees during times of uncertainty and change.

Feedback from the participants in this study provided three key findings. The first key finding elucidated that organizations responded to the economic crisis through a range of strategies. One of the key strategies was related to the implementation of different human resource management changes. A second key finding indicated that employees experienced a range of responses from limited to major uncertainty. A third key finding highlighted that employees

voiced both negative and positive responses, regarding the way in which their organization managed their responses.

In addition to the key insights, the authors provided practical guidelines (based on literature and the feedback from the participants) to assist organizations to implement human resource management changes during times of rapid change and insecurity.

References

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Kotter (2007) Suggested guidelines for practical implementation

8. Institutionalize new approaches • Articulate links between new behaviors and corporate success • Develop the means to ensure leadership development and succession

•Institutionalization (or ‘making the change stick’) forms the last step in the change process. There are two important parts involved in institutionalization. Firstly the process to facilitate institutionalization. This process involves different aspects including socialization, ongoing distribution of information regarding preferences and norms (especially to new employees), commitment to the new outcomes from all levels of employees), allocation of rewards linked to new behaviour, effective changes in the applicable systems, detecting deviations from expected outcomes and take corrective action. Secondly, there are specific indicators reflecting institutionalization. These indicators include a consistent demonstration of knowledge and skill of the expected new behaviour, acceptable productivity levels are maintained, employees prefer the “new” to the ”old”, and employees support the underlying values related to the change. •While it might be needed to wind back some of the basic training and development during the height of the crisis, leadership development needs to focus on leaders’ and managers’ capability around core business vital to address and effectively lead in the new business environments.

Table 5. Suggested Guidelines for Practical Implementation (continued)

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