Managers’ well-being and perceptions of organizational change in the UK and Australia

Abstract

This paper examines the well-being and perceptions of organizational change of 1560 UK and 1414 Australian managers using the frame of psychological contract theory. We hypothesize change, particularly hard change which includes cost-cutting, redundancies and delayering, has the potential to breach relational psychological contracts, thus causing reduced well-being for managers, reduced employee job security and loyalty, and competence loss, reduced effectiveness, profitability and performance for organizations. The results support these hypotheses, and demonstrate all change is difficult, but hard change is most detrimental. Directors are more positive than lower level managers about their job and organization, and are more positive about change. Negative effects of change are strongest in the public sector and Australian managers are more satisfied than UK managers with their job and the organization they work within. The role of the psychological contract, and implications for human resources, are considered.