Why Employees Feel Lost After Company Restructuring

An employee takes out a new organizational chart and realizes an anomaly. Their job description is no longer the same; there is a difference in reporting lines and job responsibilities without any prior consultation. However, what might seem like an isolated case happens far more often than most would expect, particularly when reorganizing. According to research by Springer, organizations have a habit of deciding on the restructuring and then informing employees about it at a much later date. Although this process makes decision-making easier, it leaves employees out of the loop for matters concerning their work identity. Employees, therefore, become spectators who have to adjust to a set structure that is alien to them.

Why do organizations act first and explain later?

In the context of management, restructuring might appear unavoidable. As per research cited by Springer, companies tend to move swiftly to adapt to resource changes, market changes, or for reasons related to improving efficiency. In such cases, engaging employees might appear like putting unnecessary hurdles in their way. However, there are serious implications associated with such a management approach. First of all, it is important to note that failing to seek employee consent breaks an unwritten rule known as the 'psychological contract.' The latter refers to a certain implicit assumption about the fair treatment of employees by the employer. Failing to discuss the changes undermines the trustful nature of that contract, resulting in employees viewing managerial decisions as forced upon them.

The workplace impact

However, there is much more at stake than simply being unsure about what needs to be done. According to research, role ambiguity, which occurs when expectations are not clearly set, is a factor that reduces productivity and increases stress. Workers do not know whether it is safe for them to act on their own or whether they have enough authority to undertake a certain action, and the lack of clear guidelines makes them unsure. Furthermore, role ambiguity is said to affect employees' job satisfaction and create high levels of psychological strain due to constant adaptation. Such experiences will decrease the level of trust in management and organizational commitment among employees. People who find themselves excluded from decision-making regarding their positions will start to question themselves and possibly quit their jobs.