Managing Change

Principles of Management

Explaining Change to Employees

How changes within an organization are understood and perceived is an important aspect of management. Explaining change can make the difference between having employees who are accepting of the change and having employees who feel a lack of control or a lack of trust in management. Effective communication can determine the success or failure of major organizational changes, such as layoffs or the cutting of employee benefits or retirement plans. It is not only important to explain major changes but to explain even minor policy changes as well. Employees understanding why a requirement or standard has been set can decide whether or not that requirement will be accepted and met by employees.

An example of why explaining even small changes such as product requirements or standards is important can be seen in an article titled How Understanding the 'Why' of Decisions Matters from the Wall Street Journal. The article gave the example of a cheese manufacturing company that set a new weight requirement for their large blocks of cheese. The reason they set this weight requirement is so customers could cut the cheese into smaller blocks without having to weigh each piece. At first, the workers met the requirement, but once the management stopped monitoring the weights, the workers went back to producing the cheese as they previously did: producing the cheese as quickly as possible without worrying about the weight. The management never explained to the employees why the requirement was made so the employees assumed that the requirement was unimportant. Ensuring that even small changes like this are adequately explained to employees can be critical to a company's short term success, because according to the article, employees of companies that explained decisions more fully were more than two times more likely to support decisions than workers who received less information. A vice president from the company eventually went in person to the company's cheese plants and explained the decision to workers, and predictably, the cheese went back to being produced with little weight variation. This instance is a good example for why explaining even small decisions matters.

Another example of the importance of explaining decisions from the Wall Street Journal article is the way managers from the company Appleton papers Inc. handled personnel moves. The managers did not explain the reasoning behind personnel moves to employees which led workers to think that the shuffling was random. Employees resent being moved too often especially if they think that they are being moved randomly. A plant manager from the company said that if management doesn't offer explanations, "people will work together to develop their own reason." Much of the time, the conclusion that employees come to on their own is that the upper management of the company is making decisions with little concern for the preferences of the employees.

If employees can't understand the logic behind a new change, they are more likely to resist the change. There are several factors that relate the degree of employee acceptance of a major change. One important piece of information that must be revealed to employees in regard to a change is who was involved in the decision. Employees may assume that unpopular changes were made by uninformed managers who had no concern for the employees who may be inconvenienced by the change. The more people feel that their interests were taken into account, the more likely it is that they will feel that the decision that was made was a sound one. It is also important that middle managers be the first to be informed when a decision is made. This is so the managers will have proper answers to workers' questions. It is better for there to be a unified message coming from the middle management than if it seems that the message concerning the change is only coming from a detached upper management. The upper management should make it clear to employees whether a decision can be changed or not. Telling employees that they are "equally empowered" may lead them to believe that they can influence the final decision. It is better for management to make it clear that the decision for change is final rather than invite feedback from employees with no intentions of actually considering it, because that will lead to even further employee dissatisfaction.

Most management experts say that employees are most likely to be accepting of a decision when they are actually involved in the decision making process. This may not always be possible, but managers should at least make employees feel like they were involved. The way to do this is to fully inform the employees of the 'why' and 'how' behind the decision. This includes how the decision was made, the reasons behinds it, what alternatives were rejected, how the decision fits into the organization's mission and vision, what changes it will mean for the company, and how it affects the employees. Managers may not reveal this information for various reasons, whether it is out of neglect, or because they do not want to disclose sensitive information or arguments that could undermine their decision. It is also important for managers to not oversell their reasoning on employees so as to not come off as disingenuous or not credible.

An important type of change within businesses that has been occurring over the last decade or so is companies cutting the pensions and health benefits for employees when they retire. The problem that companies face in regards to this issue is trying to explain to employees why the decision to cut pensions and health benefits was made. Clearly, the major reason why companies do this is to cut costs, however it is difficult to explain why the change was necessary. Typically, companies that were in financial difficulty were those that would