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A Review of Organization Change Management and Employee Performance

Article in Xi'an Dianzi Keji Daxue Xuebao/Journal of Xidian University · February 2022
DOI: 10.37896/jxu16.1/043

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Journal of Xidian University https://doi.org/10.37896/jxu16.1/043 ISSN No:1001-2400

A Review of Organization Change Management and Employee

Performance
Gohar Ali
Ph.D. Scholar, Greenwich University,
Karachi, Pakistan

Dr. Masood Hassan

Ph.D. Institute of Business Management (IoBM), and
Visiting Faculty, Greenwich University,
Karachi, Pakistan

Abstract:
The competition among the organizations around the world is moving at the leaf due to
change in their work process product and services. The change management leaders have to
highlight the needs of change in the organizations by establishing employee readiness.
Managing the change process is as important as change itself. Employee willingness, change
in their attitude and behavior are the important for change adaptation. Change is the planned
tools for the changeover of the individual or groups and firms from their current state to a
needed future state. This study therefore examines the empirical change management and its
impact on employee performance of Pakistani organizations. Change management has a
significant impact on employee performance. Employee willingness, readiness, change in
attitude and behavior are the important factors required good organizations outcome through
change management. The organizations can get competitive advantages through their
employee good performance by adopting change and maintain it by change management.

Keywords: change, change management, employee, organization, willingness, performance,

readiness.

1. Introduction:

The term "change management" refers to a management style that tries to help organisations
and individuals adapt to and deal with the constant flux of their working environments.
(Green, 2007). An organization's aims and goals are dependent on the success of its
employees. There are many ways in which things may change; for example, something might
be altered in a planned and unplanned manner. Change is the act of becoming different or the
effect of something being modified (Schnackenberg et al., 2019). To get out of our comfort
zone, we have to accept that we will have to accept change (Sidikova, 2011). Kitur (2015)

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believes that an organization's transformation happens in various forms, including mergers,

acquisitions, joint ventures, new leadership, technology implementation, organizational
restructuring, and changes in goods or regulations. An organization's employees can have a
beneficial or negative impact on its success. In the year 2010, the University of Eldoret went
from being a diploma teaching college to a fully pledged university (CUE, 2015). There are
times when a business undergoes changes like downsizing or merging that cause employees
to feel anxious, worried and unsure of their own abilities. The reality is that workers are
reluctant to embrace change, despite the fact that it is a necessary process.

2. Change Management Model

Organizational structure and performance are linked in a model established by Csaszar

(2008). Armstrong (2019) defined business change as the redesign of company processes, the
enhancement of its goods and/or services, and organizational changes to organizational
structure and/or culture that are believed required for greater performance in the workplace.
Decision-making structures among a group of people were conceived as organizational
structure. Over 150,000 stock-picking selections were made by 609 mutual funds in the
empirical context. An organization's ability to function well depends on its structure,
according to the research. On the basis of evidence from China and Austria (Hao, Kasper and
Muehlbacher 2012), they examined the link between organisation structure and performance,
particularly through organizational learning and innovation. An organization's change process
is complete when it has returned to a state of stability (refreeze) and its advantages have been
achieved, which is required for gaining confidence for future changes. Managerial
encouragement in the form of praise, prizes, and other forms of positive reinforcement are
essential for both individual and organizational growth (Adair, 2006). However, Lewin's
further emphasised that the change cannot be regarded to be frozen until it has been
assimilated into the culture. The Causal Model of Organizational Change and Performance,
often known as the Burke-Litwin model, proposes links between external and internal factors
that impact performance (Bulling, 2019). It was established by Burke and Litwin in 1989 and
provides a helpful framework for examining the elements of the environment and the
organisation that are critical to an effective transformation.

3. Leadership in Change Management

Effective leadership, according to Hurduzeu (2015), is a combination of the following:

motivation, management, monetary compensation, and analytical skills. Achieving corporate

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goals and objectives is impossible without the use of human resources. Technological
advances, the ageing baby boomer demographic, and less-than-honest global competitiveness
have all had an effect on change management in the global market economy. Employers
scrambled to reduce the size of their businesses after the severe financial shock of late 2008.
Every aspect of today's corporate world has become evidently dynamic (Olubayo, 2014).
Using the Kubler-Ross change curve, a company may go from initiating a change to
achieving its long-term objectives. Understanding how individuals deal with change is quite
beneficial. In order to speed up the process of adapting to the shift, it is important to provide
support systems for individuals. Many people experience feelings of loss throughout the
transition (Anastasia, 2015). Change is often viewed as a three-stage process, according to
Lewin's (1951) paradigm, which proposes that the status quo must be unfrozen first, followed
by the desired future state, and finally, the new state must be refrozen (Vakery & Antonio,
2010). Since most businesses have more than one culture, establishing enduring change is
challenging, according to Porras and Robertson (1992). This is why organisations must work
to alter individuals' behaviours, rituals, and values in order to achieve long-term change. The
BCG's Agile Transformation Management model promotes leaders' insight into the full
change portfolio, flexibility to re-calibrate plans, and responsibility (Backx et al., 2019).

4. Leader-Member Exchange

According to Larkin and Larkin (1994), the immediate supervisor has a significant impact on
whether or not employees are able to accept change. Relationship quality between a change
agent and the members of the organisation was shown to be a crucial element in determining
commitment, according to Nystrom (1990). According to Eisenberger et al. (1990), member
perceptions of worth and caring in an organisation had a significant impact on
innovativeness. It was found that confidence in the change agent was critical in the adoption
of a new performance assessment system by Buller and McEvoy (1989). The constant
presence of both operational and strategic change is a constant in the world of business,
according to Burnes (2004). Organizations now have the difficulty of advocating for changes
that affect the performance of workers as a result of inevitable environmental changes.
Organizational competitiveness is positively influenced by effective leadership in a research
by Gakure et al. (2014) utilising public universities in Keyan.

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5. Organization Challenges

In today's business world, organisations are being asked to advocate for reforms that affect
employee performance. In order to boost an organization's effectiveness, it must shift from its
current condition to a desired future state (Lunenburg, 2010). As a result, senior management
must guarantee that performance-related aspects are taken into account. As a creative and
methodical flow of information, management may be described as the effective use of people
and other resources in order to accomplish high-quality results (Drucker, 2003). Employee
Performance is defined by Wright and McMahan (2011) as the tasks a worker is required to
perform for his or her employer and how successfully those tasks are carried out. It was
observed by Madan, Jasleen and Bajwa (2016) in their study in India that without personnel,
an organization's goals are unlikely to be met. It has a significant impact on whether or not
the workplace is a pleasant and healthy place for people to work (Tsai, 2011). In many
people's minds, effective change requires strong leadership (Ganz, 2010). Schein (2010)
asserts that leadership change management aims to benefit both individuals and the group as
a whole at the same time. Because of the inevitability of change, most businesses have had to
adapt and accept it as a fact of life (Jalagat, 2016). Some employees find it difficult to
embrace change. As a result, a firm that relies on competent management that includes people
who are adaptable and willing to change when necessary is at a disadvantage (Rafferty and
Griffin, 2008). Employees' natural reaction to change, according to Cornescu (2016), is
resistance. When it comes to preparedness to change, Visagie and Steyn (2011) found that
organizational commitment can play a role Organizations that fail to grasp the necessity of
change are compelled to close their doors because of the tremendous competition they face
(Hannagan & Bennett, 2005). Additionally, the ever-increasing pace of change in global
markets and governments has led to a notable focus on the necessity for enterprises to
establish dynamic, competitive strategies on a continuous basis (McHugh, 1997).

6. Organization Transformation

Since the 21st century is a new era, organisations must shift from traditional management
practices, as outlined by Kotter (1996), to contemporary management practises that include
attributes like quality mindset, stakeholder focus, speed orientation, innovativeness, flat
structures and cross-functionality (Wind & Maine, 1999). The change must be implemented
by middle and lower management once it has been approved by political and senior
management. When it comes to describing changes in hospitality firms and their employees'

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attitudes and conduct, the term "change" is used (Anwar & Shukur, 2015). When it comes to
transforming and improving organisations, change receivers' attitudes and capacity to
successfully plan, schedule, and implement organizational change are critical to the success
of any transformation or improvement project (Anwar, 2017). The view of change
management holds that nothing can be changed without the participation of change
beneficiaries (Anwar & Qadir, 2017). Organizational changes necessitate employees to step
out of their comfort zones. For the change effort's task, it is expected that people would give
up their old habits and processes and adopt new ones that are more in line with the new ones
that are being implemented (Abdullah et al., 2017). There are others who argue that
"organisations cannot develop effectively unless employees change—people must alter their
thinking, beliefs and behaviours" (Ali, 2020). Technical-rational change management aims to
reduce conflict, establish order and regulate chaos while simplifying all of the intricacies of
the environment. Change initiatives in the Fortune 100 were studied by Harvard Business
School and found to have had a limited impact on the bottom line, with just 30% of
businesses achieving improvements that outweighed their cost of capital between 1980 and
1995. (Pascale et al., 1997). Around 70% of transformation programs fail, according to Beer
and Nohria (2000). For example, it's difficult to achieve and maintain meaningful
organizational transformation if you don't modify the way people think about the
organization's core values (Senge et al., 1999). Companies have a strong emotional response
to new information that they don't want to hear (Martin, 1998). In order to successfully
implement change, leadership is required, and it can be stressful for both the individual and
the business (Goodstein & Burke, 1995).

7. Organization Change

Higher education institutions' organizational structure is judged by academic and

administrative units' competency, according to their roles and scopes of influence, according
to Kovats (2018). A number of notable instances may be found in the development of new
organizational units and cadres, as well as the rise of programs and projects in prominence.
Work done by workers in an organisation or a measure of their capacity to perform their
duties and obligations, it is not an individual trait but one that may occur in the day-to-day
functioning of the business. There is evidence that companies that seek to retain or promote a
specific managerial style can choose to affect situational factors, according to Burnes (1996).
He proposes a choice-based strategy instead of forcing a company to adapt to the external
environment. One of the most common issues confronting public sector companies is

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declining employee performance, which is a significant contributor to the public sector's

underperformance in comparison to the private sector (Shah, Ali, Najabat & Zulfiqar, 2015).
incompatibility of new change with existing organizational structure, information
technological innovations, political interferences, social factors, and consumer behaviour
were among key challenges that Coca Cola Company in Kenya faced when implementing
strategic change management practises (Kimathi 2016). There is a growing body of research
showing that the people who work in public organisations are crucial to making necessary
changes to governance, design, and delivery of public services (Van der Voet, Kuipers, and
Groeneveld, 2016). It was revealed that Moran East Africa Publishers' personnel, processes,
and performance were all influenced by organizational culture in a research by Auma (2014),
which used an examination of current empirical studies and models to quantify organizational
culture. Kiiru (2014) studied the impact of organizational culture on the performance of
Kenyan hospitals. Most of those surveyed felt that organizational values, workers' attitudes
toward work, and cultural attributes all had a beneficial impact on different areas of their
performance, such as employee happiness, the quality of their services, revenue growth, and
overall productivity.

8. Employee Willingness

As a member of an organisation, one must have a strong desire to remain a part of it, as well
as a belief in and acceptance of the organization's ideals and aims (Mowday, Porter, & Steers,
1982). An organization's management should be made up of people who are adaptable and
willing to adjust when the situation calls for it. It's because workers have an active part in
formulating and delivering a solution to change (Rafferty & Griffin, 2008). Employee
contentment, emotional engagement, sense of purpose, and desire to refer others are all
enhanced by an ethical workplace culture. This is based on the work of Ruiz- Palomino
(2013). When you have access to other people's abilities and willingness through
relationships, you have access to their relational resources (Bake, 2000; Baker et al., 2003;
Ibarra, 1992; Granovetter, 1973; Uzzi, 1997). In order for workers to be more committed to
their companies and more willing to embrace organizational change, the more they identify
with them (Cordery et al., 1993). According to Guest (1987), an organization's openness to
tolerate change is a sign of its dedication to its mission.

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9. Employee Readiness

When it comes to preparedness to change, Visagie and Steyn (2011) found that organizational
commitment can play a role Cameron Visagie and Carly Steyn (2011) tried to address the gap
by investigating whether levels of organizational commitment are connected to employee
attitudes toward change, and if these attitudes are related to the way in which workers
perceive the process of change. An electronic survey was used to gather information from
113 employees. Affective and normative commitment has been found to be positively linked
to preparedness for change, as well as personal and organizational valence. Employees'
attitudes toward change communication and training are positively correlated with their
preparedness for change, personal valence, and organizational valence. Resistance to
organizational change may be overcome by preparing the organisation for it (Armenakis et
al., 1993). There's a presumption here that opposition to change begins at the beginning.
equilibrium, denial, anger, bargaining, chaos, despair, resignation, openness, preparedness,
and re-emergence are some of the emotional states that a person might experience throughout
transition processes (Perlman & Takacs, 1990). According to Cunningham and colleagues
(2002), interpersonal interactions in the workplace do not play a significant role in predicting
preparedness to adapt to organizational change.

10. Employee Performance

Workers should be able to shift course under the leadership of a management. This is
particularly critical in businesses and institutions that are undergoing transformation, as the
efficiency of employee performance depends on ongoing inspiration and instructions
(McLagan, 2002). Employee performance can be affected by changes in leadership. If a
leader is skilled and competent, he or she can more efficiently and successfully manage an
organisation or the process of organizational transformation (Asghar, 2010). Two studies
demonstrated a favourable correlation between change management elements and employee
performance. Employee performance was found to be unrelated to technological changes by
Dauda and Akingbade (2011). Employee performance was positively correlated with changes
in the organization's structure, technology, and employees, according to the findings of Al-
Jaradat, Nagresh, Al-Shegran, and Jadellah (2013). This includes things like the sort of
changes, the organization's structure and individual changes of individuals, as well as
technology developments. This research focuses on the university's technological,
organizational, cultural, and leadership developments. In Kuwaiti educational institutions,

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Zamanam (2021) investigated the influence of change management on workers' performance

by modifying the role of organizational culture. There is a considerable influence on
employee performance in Kuwaiti educational institutions of technical, structural, and human
change as a result of this study. According to the findings, the organizational structure of the
Kuwaiti educational institution has been shaped by shifts in worker attitudes, beliefs, and
behaviours. Statistical disparities in the influence of change management on employee
performance via the changed role of organizational culture, which might be a development in
functional connections and as well as values, motives and aspirations played a major part.
Thomas (2014) studied the impact of change management on the Nigerian telecoms
industry's performance. The study focused on Nigeria's telecommunications business and
relied on the random selection of 300 Airtel, Nigeria employees. Using a scientific tool for
social sciences, a questionnaire was utilised to gather data, and descriptive statistics were
employed to analyse it. Management and technological shifts have a substantial impact on
change management, it was found. To facilitate a seamless transition to the new system, it
was suggested that management take a proactive approach in a competitive atmosphere.
There are observational gaps in the study that point to the necessity of including additional
aspects of change management, such as communication. Change management and employee
performance were examined by Wanza and Nkuraru (2016) in the context of the University
of Eldoret in Kenya, with a sample of 121 workers selected through the use of simple random
selection from a total of 403 people. Primary data was gathered using structured
questionnaires and interview schedules. Using laptops in meetings, class presentations,
research and lectures, among other places, university staff and students have been able to
perform their daily tasks and learn more effectively thanks to the widespread availability of
computer technology, which has improved the quality of services provided to university staff
and students. In order to get the most out of their work, employees with better talents and
higher requirements should be more inclined to try to improve their surroundings. In a similar
vein, employers aim to get the most out of their workforces. Consequently, firms should be
willing to assign more complex positions to individuals who have the ability to do these new
tasks and learn from them, thereby making them more likely to succeed (Ortega, 2001).
Companies are always looking to encourage and keep their most talented employees, but
resources are scarce, so they tend to prioritise those who have a high demand for supplies in
the first place (Lyness & Heilman, 2006). According to Wambugu (2014), there is a
favourable correlation between the culture of a business and the performance of its
employees. The study also found that the leadership's attitude and conduct have a significant

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impact on the performance of their staff. Organizations are shaped either favourably or badly
by the conduct of its leaders. An investigation was conducted by Osei-Bonsu (2014) to
determine the level of employee engagement in the change management process, the
influence of change management on employee job satisfaction, and the attitude of workers
following organizational transformation.

11. Conclusion

Companies in the 21st century must have a strategy for dealing with change, since if some of
them don't adapt the new technology, they will become obsolete. In today's corporate world,
the term "change management" is well-known. To some extent, the effectiveness of a
company's change management efforts is dependent on the type of organisation. Change
management is the implementation of planned process and steps to enable the employee and
group to bring changes in the present state to the future state to achieve their required results.
Any kind of change within organization is not an easy task for the firm as well for the
employees. Initially employee resistance is the main factor for change implementation, and
obviously this resistance is going to impacts on employee performance. Employee
performance ultimately is one of the worst causes for organization better performance.
Organizations cannot change anything without the involvement of employee. Employee
readiness is the key for successful adaptation of organizational change for the efficient
growth of organization. Change management can be implemented through employee
willingness, change their behavior and attitude through by training, and to motivate them to
come out from their comfort zone for organizational change. Leadership role plays important
role while implemented organizational change. Leaders can create a supportive and friendly
environment for the employee where they can easily participate in decision making or others
organization matters, when employee morals remain high, the better their performance will
be and the same way they will never be hesitate to adopt the change or ready themselves for
any kind of organizational change. Organizational change can be better possible in the way as
the firms needed by getting the employees willingness first for change then get the
confidence of employee for their readiness for change and ultimately this is going to effect on
employee performance and organizations growth and productivity.

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