Engagement dips at austerity plan announcements

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Drop in employee wellbeing, job satisfaction and engagement before cuts are even implemented

Austerity policies being announced leads to a drop in employee wellbeing, job satisfaction and engagement before the cuts are even implemented, according to research.

The Feeling the squeeze: Public employees’ experiences of cutback and innovation-related organisational changes following a national announcement of budget reductions report also found, however, that if the changes proved innovative once implemented an increase in the above was felt.

The paper looked at the reaction to the 2010 Comprehensive Spending Review’s (CSR) announcement of a budget reduction of 19% over four years to a range of government departments. Compiled by Warwick Business School’s Tina Kiefer, the OU Business School’s Jean Hartley, Royal Holloway’s Neil Conway, and HR magazine columnist and Bath School of Management’s Rob Briner, the report surveyed nearly 750 public sector workers before, two weeks after, and six months after the announcement.

“Our results highlight the importance of understanding employee reactions to nationally instigated policies, rather than merely focusing on what happens within an organisation when organisational changes are implemented,” said Kiefer.

She added that staff responding during the two weeks after the policy announcement reported lower wellbeing and more negative attitudes towards job satisfaction and job security compared with those responding in the two weeks before the announcement.

“This is because participants responding after the announcement would have been exposed to budget debates across the media, as well as in organisational communications and discussions,” she said.

“The announcement was likely discussed in meetings and coffee breaks, shaping a narrative about the impact of the budget reductions and having negative effects on attitudes and wellbeing.”

Kiefer added that the study suggests that public bodies may be more affected by what goes on beyond the organisation than is typically assumed.

“It further highlights the fact that organisational boundaries are permeable and what happens outside them can have a big impact on those inside,” she said.

Regarding the finding that morale and engagement improved when innovative budget saving practices were introduced, Kiefer said: “From an employee perspective, innovation may often be experienced as a more participative process, rather than something that is ’done to me’, and so enhances engagement with the job, satisfaction and positive mood.”

“The study provides a more detailed analysis of the often-stated but ill-founded assumption that people simply do not like change,” she added.

“As public and private organisations face continuing financial constraints in a number of countries, understanding the effects of different types of change on employees may become increasingly important.”

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