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.
Bibliographical noteThe final, definitive version of this paper has been published in the Asia Pacific Journal of Human Resources 49 (2), June 2011 by SAGE Publications Ltd, All rights reserved ©.
- organizational change
- psychological contract