Personnel reduction and growth, innovation, and employee optimism about the long-term benefits of organizational change

What do employees think when their organization’s change programme has led to a growth or reduction in the number of employees in their work unit or workgroup? While we take for granted that employees generally do not respond well to organizational initiatives that reduce the number of personnel, we are less certain about their response to organizational efforts that raise the number of personnel. Using the Australian Public Service Employee Census, containing over 24,600 responses, this research finds that employees’ exposure to a major organizational change that raises or reduces the number of personnel in their workgroup is related to two employee outcomes: (1) implementation of innovation-related change in their workgroup; and (2) optimism about the long-term benefits of the change on their workgroup’s performance. Innovation-related change also moderates the relationship between personnel-related change and optimism about the long-term benefits of change. Points for practitioners: Employees who experience a reduction in the number of personnel in their workgroup may pursue innovation. When employees experience personnel growth in their workgroup, those who implement innovation report higher levels of optimism about organizational change than those who do not implement innovation. Finally, how well leaders manage the change process during personnel-related change can shape the employee implementation of innovation and optimism about organizational change.