Blighted by Chinese whispers, poorly executed plans and bad management, change initiatives can often end up damaging that most fragile of things – trust – the glue so very important for marriages, teeth extractions and employee engagement. Annie Hayes reports on how organisations can achieve their goals and keep staff smiling.

The challenge of change is everywhere and all pervading. We only have to scour Brown’s speeches of recent days and count the number of references to ‘change’, to appreciate the power it has and the rate at which the acceleration button can be administered with frightening consequences.

The pace of change is not slowing, either, when we transfer to the organisational context. The impact of legislation, globalisation and competition coupled with drives for greater performance, profit chasing and more effective delivery all contribute to ‘change’ happening any time and anywhere.

Recent surveys by the Chartered Institute of Personnel and Development (CIPD) show that more than half of all employees say that their organisation has been going through some kind of major change during the last year. So how can employers carry out their plans and ensure that the trust that is built often over the course of many years is not damaged beyond all recognition?

A marriage made in heaven?

The CIPD define the psychological contract as: “The perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other.” The institute goes on to say that it is the psychological contract that effectively tells employees what they can expect from their job and what they are required to do in order to meet their side of the bargain. When change occurs all too often the psychological contract suffers, it falls out of balance reaping havoc and mayhem in its wake.

And to make matters more complicated, over the years the psychological contract has altered as the world of work changes its rules. The Gershon Review is a good example. Such transformations in the public sector have never been more readily felt as pensions and jobs for life disappear, being replaced with ever more transient employee values.

But according to the CIPD, press reports which suggest that UK employees are largely dissatisfied, insecure and lacking in commitment are false. Trust, however, is somewhat in decline. And it is this issue that is affecting the success of many organisations’ change agendas.

Tricks of the trade – communication

Vanessa Robinson, research manager, organisation and resourcing at the CIPD says that what most of this boils down to is communication. “There needs to be clear messages; even where there is nothing to say it is important to communicate that. People are naturally introspective when change occurs. Communication is the main thing that employers can and should do.”

Sarah Denneny, organisational development adviser for the Office of Rail Regulation (ORR) was faced with huge change when the railway outfit took on 200 additional staff from the Health and Safety Executive, located across 22 regional offices. With two sets of terms and conditions and cultures to merge, the challenge was very clear.

Speaking at ORC International’s 12th annual employee research conference at the end of June, Denneny explained how keeping employees in the all important loop was key to making them feel involved and getting their commitment.

ORR set about compiling its first staff survey as a new organisation. This was a crucial part of the early integration programme and provided an opportunity to identify strengths and weaknesses, giving employees the chance to shape the development of the new amalgamation.

Once the weaknesses were identified, action planning workshops were rolled out – for Denneny, employee involvement in these was a major part of the success:

“The ‘moving forward’ workshops took place nine months after the merger. The staff valued having a dialogue and told us that in the other organisations they’d worked in where they’d been exposed to change, they were only given the opportunity to communicate their thoughts early on but not after the change processes had occurred.”

Robinson agrees and says that where employees are given a voice it boosts the chances of the change initiative being successful. But she warns that it shouldn’t just be limited to internal stakeholders: “If any party is left out it can be a case of one party saying to the other ‘I heard you were going bust’ and all the suspicion and chinese whispers start over again.”

Keeping pace

Most change actually occurs over a long period, two to three years, and for many organisations the trick here is to keep commitment from the top down. Robinson explains: “Leaders can lose focus over this kind of time scale, they get busy and become involved in other change initiatives and employees get agitated. Leaders really need to ‘walk the talk’ when this happens.”

At the other end of the scale, frequent introduction of change programmes does occur, including revised mission statements and team working and this in its own way presents problems.

According to Pate, Martin and Staines (2000) it leads to high levels of cynicism among supervisory and shop-floor workers. And according to the CIPD, where change takes place frequently, this may weaken employees’ belief that management know what it is doing and is steering a consistent course. On the other hand, where employees feel they have some control over the changes, they are generally positive about them and feel that the changes are beneficial to them and the organisation.

Hanover, specialists in the design, development and management of housing for older people, learnt this lesson the hard way.

With 1000 staff based in over 550 separate locations, any change programme was going to be challenging. They took the bull by the horns and made two acquisitions in one year. This resulted in numerous differences in terms and conditions. On top of this the board changed, new members wanted to steer the organisation into unchartered waters and by 2005/2006 key players in the corporate management team began to disappear under the pressure.

“These were some of our darkest days,” explains Bobby Davis, group people director, Hanover Group. “There was limited communication and a good dollop of dissatisfaction. We had to eradicate the feeling that the organisation only paid lip-service to consultation.”

A new chief executive was appointed and slowly staff were included – all staff talks ensued, focus groups were rolled out and the organisation began to work with a staff counsel.

“We learnt many lessons – its all about communication – actions speak louder than words. There was a distrust of management; we’ve started to pull that back and we continue to inform and consult,” says Davis.

Education, education, education

Communication only works, however, when the need for change is explained and understood.

US academic Denise Rousseau (1996) suggests that if people don’t understand the reasons for change in the old contract, they are unlikely to see it as legitimate or to contribute usefully to creating a new one. She outlines four stages in the successful transformation of psychological contracts:

1. Challenging the old contract: explaining why change is needed
2. Preparation for change: involving employees and creating transitional structures to manage change
3. Contract generation: helping employees make sense of the new contract
4. Living the new contract: getting consistency in words and actions across the organisation.

Change continues apace. Maintaining trust, engaging staff, getting buy in and understanding for the change are all key elements of keeping a positive psychological contract. Sadly some changes do involve people losing their jobs and, according to CIPD research, where that does happen it’s not just the people that are directly affected that need support but those that are left to work in the organisation once the masses have left.

Change does not and will not stop. Managing it sensitively and with all party involvement should pay dividends for those that want to keep on the right side of the psychological tightrope.