Last Updated 14 Apr 2020

Organizational Change: the Effect on Employee Morale and Motivation

Category Employee
Essay type Research
Words 9195 (36 pages)

Abstract News of job losses (whether we label them as downsizing, layoffs, or restructuring) reaches us daily. And sometimes the reality hits close to home – loss of a job of a family member, a close friend, a valued coworker or someone you supervise. According to McKinley, Sanchez and Schick (1995), “This process of deliberate personnel reduction has been justified as a cost-cutting measure and as an incentive to increase productivity. However, evidence has shown that downsizing negatively affects employee morale and productivity. While people who lose their jobs can be strongly impacted by loss of financial security, fear for the future, and even decreased self-esteem, it’s important to recognize that people who survive job cuts face their own set of negative consequences. This group of “survivors” may experience stress as well as feelings of anxiety or depression. This paper examines these issues by reviewing the numerous organizational and leadership changes that have taken place at WellPoint, Inc. within the last two years.

In addition, a small sample of WellPoint associates was surveyed to assess the effects that the organizational restructuring and leadership changes have had on employee morale over the last two years. The results of that survey are presented in this paper. Introduction What single change causes the most consternation in the work place? The announcement of job cutbacks. With all the recent staff reduction announcements, this news is all too familiar. With it comes the immediate negative effect on employee morale, both for the laid-off employees and the remaining staff.

Emotional turmoil resulting from an event such as organizational change can leave lasting scars on individuals and organizations. Disruption of normal operation can be short-lived if normal feelings of grief, loss, fear, and even guilt and anger are allowed to be expressed when the organizational change is being announced and/or is occurring. However, if these feelings are not allowed expression, they may be manifested later in more serious and damaging forms such as increased illness; absenteeism and turnover; decreased productivity and morale; and isruption in communication among employees and between employees and managers (Abbasi and Hollman, 1998). This can lead to massive chaos and interruption in the smooth flow of work activities? Abbasi and Hollman. (1998) emphasize the following, “There has been a clear change in corporate philosophy among American firms in the past two decades. Firms which once perceived employees as long-term assets to be nurtured, developed, engaged, and empowered by management, now see them as commodities. Workers are short-term expendable costs to be jettisoned at a moment’s notice when downsizing.

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The steady drumbeat of layoffs in recent years has made many workers feel that the days of career security are gone for good, no matter how dedicated they may be. ” K. Mishra, Spreitzer and A. MIshra (1998) support this idea with the following, “Downsizing has become almost a way of life for U. S. companies. In fact, a first round of downsizing is generally followed by a second round a short time later. Sixty-seven percent of firms that cut jobs in a given year do so again the following year. ”

The outcome of these changes and the resulting impact on employees’ morale is discussed. This paper reviews literature that addresses corporate downsizing, what it is and why it is important. The literature review includes books and various articles. To assess the effect that these changes have had on employee morale, a 15-question survey was given to a small sample of WellPoint associates to measure their current feelings that impact their self-confidence. The results of the survey are offered, along with an analysis of the data, including conclusions. Literature Review

Current business literature supports the idea that although managers implement downsizing to enhance profitability and productivity, research reveals that downsizing does not always result in higher earnings, improved productivity and better customer service and that workforce reductions often adversely affect employee attitude and morale. Abbasi and Hollman (1990) point out that throughout the early 1990s, the newspapers and airwaves were filled with stories of major American companies announcing layoffs of several thousand additional employees.

Companies large and small were cutting jobs at a rate never seen before in American economic history. The trend toward downsizing is so pervasive, and its impact so profound, that it literally shapes the business strategy of many companies. In a study by Watson Wyatt Worldwide, it was reported that fewer than half of the companies it surveyed after the 1990 recession met profit goals after downsizing. Furthermore, study after study has challenged and often contradicted the long-term benefit of staffing cutbacks as a means to return to profitability.

However, according to Carol W. Garnant, “The number one issue that companies immediately face when downsizing is employee morale. ” She adds that “prompt resolution of staffing and organizational issues is essential to the first step in change. The longer the process takes, the more painful it becomes, and the greater the chance of losing key employees in the disruptive environment. ” Abbasi and Hollman (1990) contend that today’s organizations no longer provide workers with a secure and stable workplace.

It’s an unstable environment where workers work for managers who often find their compassion and concern for workers in sharp conflict with the pressures of relentless competition and investor expectations. Over the years, many employees stayed in their organization because the believed it was a good place to work. They believed in the organization, were loyal to it, and had expectations of periodic pay increases and regular opportunities for advancement. Their interests were aligned with those of management. The old paradigm is now gone.

The myth that institutions will take care of their employees has been shattered. Lately, each round of organizational restructuring results in more bodies on the corporate scrap heap. Abbasi and Hollman (1990) agree that one of the biggest problems arising from workforce reduction concerns the devastating impact on employee morale and attitudes. A sense of foreboding usually pervades the workplace where downsizing is being discussed or is in progress. Employees often feel that their long years of work and dedication to the company are not reciprocated.

They may perceive themselves as victims of some abstract management exercise which is outside their control and beyond their capacity to comprehend. Cutting staff doesn’t always work; in fact, it frequently has the opposite effect. The American Management Association surveyed 700 companies that had downsized between 1989 and 1994. Employee morale plummeted in 83% of the companies. Employees who survive the unsettling and disruptive effect of downsizing also tend to experience a disproportionate amount of problems. They feel that management has put them at the very bottom of its priority list.

According to Abbasi and Hollman, they feel betrayed, suffer ebbing morale, become dispirited and self-absorbed, submit a larger number of stress disability claims, become obsessed with layoffs and internal politics, and exhibit various behavioral problems. Many workers are forced to struggle with heavier workloads and become overburdened to the point of burnout. Others experience heightened anxiety as they wonder who will be next to go and if they will be able to make it safely to retirement before being forced out in a subsequent downsizing.

After all, downsizing seems to beget more downsizing. Three out of four firms that downsize in one year plan to do it again in the next year. With some of the surviving employees having trouble getting to work on time and spending their day just going through the motions, no longer enjoying what they do, companies are finding that these employees are suffering from workplace depression. Corporate psychologists coined this phrase to characterize the feelings of suppressed anger and anxiety that are widespread in today’s workplace.

According to Marjorie Whigham-Desair (1993), “The symptoms run form a general lack of enthusiasm and low productivity to high absenteeism coupled with a low rate of voluntary employee turnover. “ This results in delays in projected deadlines and lackluster employees. Psychologists agree that the recent wave of corporate layoffs has taken its psychological toll on the nation’s workforce. When companies eliminate large numbers of workers, those who remain experience anxiety, says Therman Evans (1993), MD. , president and CEO of Whole Life Associates, a stress-management firm based in Elkins Park, PA.

This leads to higher workers’ compensation claims and extremely paranoid employees. “As companies downsize, responsibilities shift to those who remain, this can result in frustration, irritability, fatigue and ultimately burnout, adds Michael D. Cox (1993), Ph. D a psychologist at Baylor College of Medicine in Houston. As authors and human resource consultants Kenneth N. Wexley and Stanley B. Silverman (1993) point out in their book, Working Scared: Achieving Success in Trying Times, organizations that downsize violate two fundamental factors that motivate workers; the need for security and the desire for justice.

Not only do surviving employees distrust the company, they also become more cautious. As a result, innovation and creativity are stifled. People worry about the unknown and need time to prepare for it, says Cox. “They don’t like to be given bad news abruptly; they don’t want to feel out of control. ” Those managers who must implement layoffs suffer too. Two researchers found that managers often become abrasive, narcissistic, withdrawn, alienated, apathetic or depressed. Mishra et al. 1998) found, “the irony is that downsizing companies are unwittingly destroying the very qualities they need for competitive advantage, namely their employees’ trust and empowerment. At the same time they are downsizing, many companies are advocating the implementation of high-involvement work systems and total quality management strategies. Yet employee trust and empowerment, often shattered in the process of downsizing, are the engines that make these initiatives work,” resulting in a decrease in employee motivation and increase employee absenteeism. Mishra et al. 1998) call attention to the fact that “trust between managers and employees is critical for effective work relationships, especially under conditions of high uncertainty and conflict. ” Trust is defined as an individual’s willingness to be vulnerable to another based on the belief that the other party is competent, open, reliable, and concerned about the individual’s own interests. Employee trust and empowerment decline considerably during downsizing. Survivors may no longer trust top management’s openness because communication is not credible or information is withheld.

Survivors may not believe that management cares about employees’ needs if they see that their welfare has been sacrificed for top managers’ personal gain. Survivors’ sense of empowerment may suffer and their competency also may be threatened as they take on the jobs of laid-off coworkers, which often require different skills. Their sense of personal control may suffer because of unclear or constantly changing job responsibilities or frequent layoffs that leave them wondering if they are next. Not surprisingly, their willingness to take risks may decline, and they may become more resistant to change (Mishra et al. 1998). Isabella (1989) suggests, “Companies that downsize may be unprepared for the strong emotions, lengthy adjustment time, diminished morale, and lower productivity experienced by the survivors of massive restructuring. In fact, companies often have surprisingly little information about the adjustments and assessments of those ultimately responsible for revitalizing the company. ” Isabella (1989) adds, “The downsizing also can trigger substantial uncertainty and concern for one’s professional and personal future.

Feelings of security can be of significant concern because years spent in an organization can create a level of familiarity that is difficult to rebuild elsewhere. ” Therefore, it is not uncommon to employees update their resumes and begin seeking employment elsewhere during these stressful times. This certainly has been the case for employees of WellPoint, Inc. Shortly after the Anthem/WellPoint Health Network merger in 2004, when the company became known as WellPoint, Inc. , numerous attempts have been made to reengineer the company and minimize duplication wherever possible.

Even after several rounds of layoffs, WellPoint, Inc. once again decided to trim more positions as it faces a still-sluggish economy and uncertainty from potential health-care reforms coming out of Washington. “As the economic environment changes, WellPoint reviews the size and skills of our work force and makes adjustments as necessary,” WellPoint spokeswoman Kristin Binns said in an email. Job reductions by businesses across the country during the downturn have caused shrinking membership in many of WellPoint’s employer-sponsored health plans.

The company said it is looking for ways to operate more efficiently in 2010. Early this year, WellPoint trimmed about 1,500 jobs in a move that included about 600 layoffs (Lee, 2009). This leads to those who are left behind feeling very uncertain about their own job security, wondering if they will survive the next phase of layoffs. Gibbons and Brenowitz (2001) acknowledge, “Only the luckiest businesses in any industry will survive their entire lifecycles without experiencing the wrath of corporate downsizing. In the aftermath of downsizing, fewer people are left to do the same or increased amount of work.

The organization, once designed for and built around a greater number of people, is now left in a state of imbalance. While survivors usually move from denial to acceptance, they often struggle to get there. ” They further state,” At a time when they’re feeling the lowest, middle management must perform at their best. Although the company appears to be in a state of chaos, managers must seem calm, confident and in control. It’s their job to begin allocating tasks, confirming work objectives, making sure people stay focused on appropriate tasks, and pulling together a new team. What many companies may not realize is that the design of an organization cannot withstand such turbulence without some degree of consequence. Senior management cannot assume to rebalance the company’s design by moving around a few boxes on the organizational chart. The fact is that organization design goes beyond the company structure. It addresses issues more systemic than the lines, boxes and arrangement of people and functions. It includes such factors as information and reward systems, management and decision making processes; mission, vision and values; business strategy and people (Gibbons and Brenowitz, 2001).

In addition to impacting management, downsizing also has a profound effect on those who survive. Some of the most common challenges survivors of downsizing face include: guilt, some remaining employees may feel guilty that they were “saved” from the job cuts; stress, not only do employees have to cope with the stress of job insecurity, but they also have even more work to do with fewer resources; and anxiety, the anxiety engendered by job cuts doesn’t end with initial layoffs, survivors often live in a state of shock, wondering if the worst is over or still to come (Harris, Rothenberg International, LLC, 2008).

In conclusion, as downsizing continues to become an increasingly normal business practice, managers need to find ways to improve their ability to manage the change. This includes motivating traumatized employees and getting operations back on track. It means addressing the drama of the situation, not denying it. Can-do attitudes are badly needed and understandable goals must be spelled out. Yet, nothing promises post-downsizing success like the practice of open, honest communications? Methodology To determine how the organizational changes have affected employee morale, a survey was administered to a small sample of employees.

Twenty WellPoint employees were surveyed. About the same number of surveys was given to male and female employees. Eight State Sponsored Business and 12 Shared Services employees participated in the survey for a total sample size of 20. The survey was adapted from the 2008 WellPoint Associate Engagement Survey developed by Kenexa and the WellPoint, Inc. EAP website self-assessment tools. Although the original survey created by Kenexa and those found on the EAP website consisted of a number of additional questions, the questions for this survey has been reduced to 15 questions.

Each of the 15 questions was rated according to a five-point Likert scale response, ranging from a numerical score of one, if the respondent strongly disagrees with, to five, if the respondent strongly agrees. A total score of 75 is the maximum possible for the survey. Quantitative results were placed into tables and the mean and standard deviation were calculated for each question. The results were analyzed and interpreted in the Analysis and Conclusion sections of this report. The survey follows. Associate Morale Observation

You are invited to participate in this survey to help Pamela Forrest with a research paper for an MBA class project. Your participation is entirely voluntary and your responses will be kept strictly confidential. If you are willing to participate, please answer all of the questions and return this survey to Pamela by Monday, October 12, 2009. To complete this survey: In the space to the right of each statement below, please place a number from 1 to 5 indicating how true the statement is about your experience working at WellPoint, Inc. using the following scale: =Strongly Disagree 2=Disagree 3=Neither Agree nor Disagree 4=Agree 5=Strongly Agree 1. I feel that I am part of a team. _____ 2. I am involved in decisions that affect my work. _____ 3. My job makes good use of my talents and abilities. _____ 4. I feel overwhelmed trying to keep up with my responsibilities or with trying to please everyone. _____ 5. WellPoint provides me with the opportunity for learning and development. _____ 6. I have the training I need to do my job effectively. _____ 7. I receive the coaching and feedback I need to do my job effectively. ____ 8. I feel that I have limited control over the outcome of my job. _____ 9. I am satisfied with my opportunities for career advancement. _____ 10. I am able to manage my work responsibilities in a way that allows me to maintain a healthy balance between work and home. _____ 11. I regularly receive appropriate recognition for my contributions. _____ 12. I am paid fairly for the work I do. _____ 13. I dread going to work, especially on Sunday night. _____ 14. I receive the information and communication I need to do my job effectively. _____ 15.

My immediate manager does a good job communicating the reasons behind important changes that are made. _____ Thank you for your time and support for this class project! Questionnaire adapted from the 2008 WellPoint Associate Engagement Survey developed by Kenexa and the WellPoint, Inc. EAP website self-assessment tools. Results A total of 20 surveys were distributed to WellPoint associates. Twenty surveys were completed and returned, for an overall response rate of 100 percent. The average total score for the survey, calculated from all 20 respondents, is 51. 5 out of a possible maximum of 75. This equates to an average total rating of 68 percent. The mean was calculated for each of the 15 rating-scale questions. The mean for the results ranges from a high of 4. 25 to a low of 2. 85. The standard deviation was calculated for each of the 15 rating-scale questions. The results range from a high of 1. 459 to a low of . 7539. The results for each of the 15 rating-scale questions are given below. Question 1: I feel that I am part of a team. The mean for the total results is 4. 25 and the standard deviation is . 8507.

The most frequently occurring response given by all respondents for this question is 5, “strongly agree. ” Question 2: I am involved in decisions that affect my work. The mean for the total results is 3. 6 and the standard deviation is . 9947. The most frequently occurring response given by all respondents for this question is 4, “agree. ” Question 3: My job makes good use of my talents and abilities. The mean for the total results is 3. 45 and the standard deviation is 1. 191. The most frequently occurring response given by all respondents for this question is 4, “agree. Question 4: I feel overwhelmed trying to keep up with my responsibilities or with trying to please everyone. The mean for the total results is 3. 15 and the standard deviation is 1. 04. The most frequently occurring response given by all respondents for this question is 3, “neither agree nor disagree. ” Question 5: WellPoint provides me with the opportunity for learning and development. The mean for the total results is 3. 4 and the standard deviation is . 9403. The most frequently occurring response given by all respondents for this question is 4, “agree. ” Question 6: I have the training I need to do my job effectively.

The mean for the total results is 3. 6 and the standard deviation is . 7539. The most frequently occurring response given by all respondents for this question is 4, “agree. ” Question 7: I receive the coaching and feedback I need to do my job effectively. The mean for the total results is 3. 45 and the standard deviation is . 9445. The most frequently occurring response given by all respondents for this question is 3, “neither agree nor disagree. ” Question 8: I feel that I have limited control over the outcome of my job. The mean for the total results is 3. 35 and the standard deviation is 1. 1367.

The most frequently occurring response given by all respondents for this question is 4, “agree. ” Question 9: I am satisfied with my opportunities for career advancement. The mean for the total results is 2. 95 and the standard deviation is 1. 099. The most frequently occurring response given by all respondents for this question was tied between 3, “neither agree nor disagree” and 4, “agree. ” Question 10: I am able to manage my work responsibilities in a way that allows me to maintain a healthy balance between work and home. The mean for the total results is 3. 4 and the standard deviation is 1. 39. The most frequently occurring response given by all respondents for this question is 4, “agree. ” Question 11: I regularly receive appropriate recognition for my contributions. The mean for the total results is 3. 4 and the standard deviation is 1. 0463. The most frequently occurring response given by all respondents for this question is 4, “agree. ” Question 12: I am paid fairly for the work I do. The mean for the total results is 3. 45 and the standard deviation is 1. 1459. The most frequently occurring response given by all respondents for this question is 4, “agree. Question 13: I dread going to work, especially on Sunday night. The mean for the total results is 2. 85 and the standard deviation is 1. 4244. The most frequently occurring response given by all respondents for this question was tied between 1, “strongly disagree” and 3, “neither agree nor disagree. ” Question 14: I receive information and communication I need to do my job effectively. The mean for the total results is 3. 15 and the standard deviation is . 9333. The most frequently occurring response given by all respondents for this question is 4, “agree. ”

Question 15: My immediate manager does a good job communicating the reasons behind important changes that are made. The mean for the total results is 3. 8 and the standard deviation is . 7678. The most frequently occurring response given by all respondents for this question is 4, “agree. ” Analysis The overall survey score of 51. 25 percent indicates that the employee morale for WellPoint associates is average. While these scores could be a little higher, they still are quite positive in light of the major organizational changes that recently have taken place across the company.

In fact, WellPoint is doing better than one would expect considering all of the organizational changes it has experienced within the last couple of years. The survey question with the highest mean score overall (4. 25 mean) was number one, “I feel that I am part of a team. ” This is largely due to the fact that the majority of associates who took part in this survey, work for a highly creative department whose direct management has fostered monthly team-building activities and encouraged collaboration when completing everyday tasks.

The question with the lowest mean score overall (2. 85 mean) was number 13, “I dread going to work, especially on Sunday night. ” Because this question had a negative spin on it, the fact that it received a low mean score actually is a positive indicator. Based on their responses, the majority of associates surveyed enjoy coming to work, even when the week is just getting underway. Consequently, the next lowest mean score overall (2. 95 mean), which actually indicates a considerable amount of discontent is number 9; “I am satisfied with my opportunities for career advancement. This has been a trouble area for quite some time, due, in large part to the fact that a majority of the associates within our department have realized little or no career advancement within the last few years. To further assess this study’s survey results, questions were evaluated based on the percentages of answers for each question, adding together the percentages for response #4, “agree” and response #5, “strongly agree. ” These figures were compared to the sum of the remaining three percentages for response #1, “strongly disagree,” response #2, “agree” and response #3, “neither agree nor disagree. The fact that some of the questions had a negative spin, resulted in reversing the percentages for a more accurate representation. For question 1, “I feel that I am part of a team,” a total of 85% either agreed or strongly agreed as compared to 15% who either strongly disagreed, disagreed or neither agreed nor disagreed. This shows that the team-building efforts initiated by management have had a positive affect on associates. For question 2, “I am involved in decisions that affect my work,” a total of 55% either agreed or strongly agreed as compared to 45% who either strongly disagreed, disagreed or neither agreed nor disagreed.

This shows that associates feel that they have a say in their daily decision-making tasks. For question 3, “My job makes good use of my talents and abilities,” 60% either agreed or strongly agreed as compared to 40% who either strongly disagreed, disagreed or neither agreed nor disagreed. This shows that associates feel that they are utilizing their skills in their daily work routine. For question 4, “I feel overwhelmed trying to keep up with my responsibilities,” 65% either strongly disagreed, disagreed or neither agreed nor disagreed as compared to 35% who either agreed or strongly agreed.

This shows that associates feel that their workload is balanced and they are able to accomplish their daily tasks with a limited amount of stress. Question 5, “WellPoint provides me with the opportunity for learning and development,” primarily was split almost down the middle with 55% either agreeing or strongly agreeing and 45% either strongly disagreeing, disagreeing or neither agreeing nor disagreeing. This reveals the possibility that opportunities for learning and development may not be offered equally to all associates; some associates may be favored to take educational courses over other associates.

For question 6, “I have the training to do my job effectively,” 65% either agreed or strongly agreed as compared to 35% who either strongly disagreed, disagreed or neither agreed nor disagreed. This shows that most associates feel well-equipped to adequately handle their job duties. However question 7, “I receive coaching and feedback to do my job effectively,” predominantly was split down the middle with 45% either agreeing or strongly agreeing and 55% either strongly disagreeing, disagreeing or neither agreeing nor disagreeing.

This shows that management may not be communicating effectively nor providing adequate coaching and feedback on a regular basis. And question 8, “I feel that I have limited control over the outcome of my job,” was split down the middle, 50/50, which shows that associates feel that external factors may have more direct impact on their job than the direct contributions they make on a daily basis. For question 9, “I am satisfied with my opportunities for career advancement,” 60% either strongly disagreed, disagreed or neither agreed nor disagreed as compared to 40% who either agreed or strongly agreed.

This demonstrates the belief shared by a majority of WellPoint associates, that there is little opportunity for upward mobility with the organization. For question 10, “I am able to maintain a healthy work-life balance,” 65% either agreed or strongly agreed as compared to 35% who either strongly disagreed, disagreed or neither agreed nor disagreed. This shows that most of the associates feel that they are maintaining an adequate balance between their work responsibilities and their leisure time.

And question 11, “I regularly receive appropriate recognition for my contributions,” was split down the middle, 50/50, which shows that appropriate recognition may not always be given equally to all associates; some associates may be favored over others. For question 12, “I am paid fairly for the work I do,” 65% either agreed or strongly agreed as compared to 35% who either strongly disagreed, disagreed or neither agreed nor disagreed. This shows that most of the associates feel that they are satisfied with their rate of pay for the work that they do.

For question 13, “I dread going to work, especially on Sunday night,” 65% either strongly disagreed, disagreed or neither agreed nor disagreed as compared to 35% who either agreed or strongly agreed. This shows that associates feel content with their jobs and look forward to coming to work. For question 14, “I receive the information and communication I need to do my job effectively,” 60% either strongly disagreed, disagreed or neither agreed nor disagreed as compared to 40% who either agreed or strongly agreed. This reveals that WellPoint needs to improve their channels of communication.

And finally, for question 15, “My immediate manager does a good job communicating the reasons behind changes,” 70% either agreed or strongly agreed as compared to 30% who either strongly disagreed, disagreed or neither agreed nor disagreed. This shows that most of the associates feel satisfied with the way their immediate manager is communicating with them. Conclusion Depending on the scope and size of the organizational change and the number of staff affected, consequences can be disruptive. Employees may find even the act of reporting for work very stressful.

They may have difficulty sleeping or eating. People respond differently and recover at different rates. For most people, the effects of the event will subside within a few weeks as people adjust to the changes. For others, the symptoms may become worse. However, surprisingly, the results of this study refute most of the literature on this subject. While downsizing is a workplace trend that is here to stay and that undeniably creates anger, stress, fear and even trauma for surviving employees, according to the findings in this survey, this has not proven to be the case for WellPoint associates.

This study’s survey results indicate that WellPoint has been reasonably successful to this point. Employee morale and attitudes are at or slightly above national norms, which is rather commendable considering the recurring layoffs that have taken place over the course of the past two years. While the industry trend indicates otherwise, WellPoint associates who have weathered the storm by remaining gainfully employed with the company, increase their engagement while striving to achieve superior performance in their daily work activities.

Evidence can be seen in the high survey rankings reported in this paper on questions such as “I have the training to do my job effectively” and “I am able to maintain a healthy work-life balance. ” Even under the most extreme circumstances of additional impending layoffs, the morale of the surviving associates at WellPoint is surprisingly high. I am inspired by the fact that WellPoint associates have managed to hold onto employee morale in spite of some tough economic conditions.

Some of the survey results that support this include the high survey rankings reported in this paper on questions such as “Associates feel that they are part of a team” and “My job makes good use of my talents and abilities. ” However, the common rationale that downsizing is necessary to financial health and that greater efficiency always follows job cuts is questionable. Therefore, WellPoint also must give attention to alternatives that may cause less turmoil and still achieve the desired economic results.

There are numerous alternatives to downsizing that are far less demoralizing to employees. Some of these alternatives include gearing down to a four-day work week or using job-sharing techniques, where employees lose pay but keep their job. Other alternatives include pay reductions, taking vacations without pay, having fewer paid holidays, retraining or redeploying workers, or providing early retirement buyouts for workers past a certain age. Finally, some other ideas include imposing wage and hiring freezes, restricting the amount of overtime available to employees or cutting back on executive perks.

The negative effects of downsizing can be eased by acknowledging the situation, asking questions and communicating honestly, listening to others and exploring new ideas and ways of doing things. Taking an active, positive role in reducing the trauma of downsizing can enhance WellPoint’s chances of being part of a creative, profitable company and enhance its professional growth and opportunity for the future. In addition, if there don’t seem to be any alternatives to layoffs, WellPoint can make the layoffs seem less arbitrary and cruel by keeping the lines of communication open and explaining with dignity the strategy behind them.

In the opinion of this author, WellPoint needs to turn its attention to cultivating the staff that is ultimately responsible for revitalizing the company by providing more opportunity for learning and development and career advancement as well as expanding the lines of communication. Questions in the survey show that WellPoint is weak in these two key areas. Evidence can be seen in the low survey rankings reported in this paper on questions such as “I am satisfied with my opportunities for career advancement,” and “I receive the information and communication I need to do my job effectively. Therefore, providing more opportunities for associates and improving the flow of communication, not only would be a worthwhile investment for the company, but also a vehicle for providing a worthwhile work environment for the associates. This in turn would result in a direct benefit to the organization by increasing associate engagement and providing the necessary tools for associates to do their job more effectively. This, in turn, would make the most of the human capital available in the 41,000 WellPoint associates.

Appendix A | | | | | | | | | | | | | | | | | | | | | | | | | | | |SSB Survey Results | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Associate Morale Monitor | | | | | | | | | | | | | | | | | | | | | | | | | |Results for WellPoint, Inc. Associates 10. 9. 09 | | | | | | | | | | | | | | | | | | | | | | | | |Question | |Respondent # |1 |2 |3 |4 |5 |6 |7 |8 |9 |10 |11 |12 |13 |14 |15 |16 |17 |18 |19 |20 |Avg. |SD |Mode | |1. Part of a team | | |4 |3 |4 |4 |5 |4 |4 |5 |5 |5 |4 |4 |4 |5 |5 |3 |5 |5 |2 |5 |4. 5 |0. 85 |5 | |2. Involved in decisions affecting work | |2 |3 |3 |3 |4 |3 |5 |5 |4 |4 |4 |4 |3 |4 |5 |3 |4 |2 |2 |5 |3. 6 |0. 97 |4 | |3. Job makes good use of talents & abilities | |1 |1 |4 |2 |3 |3 |5 |4 |4 |4 |3 |4 |4 |5 |5 |2 |4 |3 |4 |4 |3. 45 |1. 19 |4 | |4. Feel overwhelmed trying to keep up | |2 |4 |2 |5 |4 |4 |1 |3 |3 |3 |3 |4 |3 |3 |2 |2 |4 |3 |5 |3 |3. 15 |1. 04 |3 | |5. WellPoint provides opportunity for develop. | |4 |1 |3 |2 |4 |4 |4 |5 |4 |3 |3 |2 |3 |4 |4 |3 |4 |3 |4 |4 |3. 4 |0. 94 |4 | |6.

Have training to do job effectively | |3 |4 |3 |4 |2 |2 |4 |3 |4 |4 |4 |4 |4 |4 |5 |4 |4 |3 |3 |4 |3. 6 |0. 75 |4 | |7. Receive coaching and feedback | |3 |3 |3 |3 |2 |2 |4 |3 |4 |4 |3 |2 |3 |5 |5 |4 |4 |3 |4 |5 |3. 45 |0. 94 |3 | |8. Limited control over job outcome | |4 |5 |4 |4 |2 |4 |4 |3 |2 |3 |5 |1 |3 |3 |2 |4 |3 |4 |5 |2 |3. 35 |1. 14 |4 | |9. Satisfied with career advancement opportunity | |2 |1 |3 |1 |2 |4 |3 |3 |4 |4 |2 |2 |3 |4 |5 |2 |3 |3 |4 |4 |2. 95 |1. 1 |3 | |10. Healthy work-life balance | | |4 |4 |4 |3 |2 |1 |5 |4 |4 |4 |4 |1 |4 |4 |5 |4 |2 |5 |1 |3 |3. 4 |1. 1 |4 | |11. Regular recognition for contributions | |3 |2 |4 |2 |2 |2 |5 |3 |4 |4 |3 |2 |4 |5 |5 |3 |4 |3 |4 |4 |3. 4 |1. 05 |4 | |12. Paid fairly for work done | | |4 |1 |4 |4 |2 |5 |5 |3 |4 |3 |3 |1 |4 |4 |4 |4 |2 |4 |4 |4 |3. 45 |1. 15 |4 | |13. Dread going to work | | |3 |5 |3 |5 |3 |2 |1 |1 |1 |3 |4 |2 |4 |2 |1 |4 |5 |3 |4 |1 |2. 85 |1. 42 |3 | |14. Receive info. & communication to do job | |3 |2 |2 |4 |2 |2 |4 |4 |4 |4 |3 |2 |3 |4 |5 |3 |3 |3 |2 |4 |3. 15 |0. 93 |4 | |15. Mgr. effective communicator about changes |4 |3 |4 |3 |2 |3 |4 |4 |4 |4 |3 |4 |4 |5 |5 |4 |5 |3 |4 |4 |3. |0. 77 |4 | | Appendix A | | | | | | | | | | | | | | | | | | | | | | | | |Survey Scores | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Survey Scores | | | | | | | | | | | | | | | | | | | | | | | |Question | |Respondent # |1 |2 |3 |4 |5 |6 |7 |8 |9 |10 |11 |12 |13 |14 |15 |16 |17 |18 |19 |20 | |1. Part of a team | | |4 |3 |4 |4 |5 |4 |4 |5 |5 |5 |4 |4 |4 |5 |5 |3 |5 |5 |2 |5 | |2. Involved in decisions affecting work | |2 |3 |3 |3 |4 |3 |5 |5 |4 |4 |4 |4 |3 |4 |5 |3 |4 |2 |2 |5 | |3.

Job makes good use of talents & abilities | |1 |1 |4 |2 |3 |3 |5 |4 |4 |4 |3 |4 |4 |5 |5 |2 |4 |3 |4 |4 | |4. Feel overwhelmed trying to keep up | |2 |4 |2 |5 |4 |4 |1 |3 |3 |3 |3 |4 |3 |3 |2 |2 |4 |3 |5 |3 | |5. WellPoint provides opportunity for develop. | |4 |1 |3 |2 |4 |4 |4 |5 |4 |3 |3 |2 |3 |4 |4 |3 |4 |3 |4 |4 | |6. Have training to do job effectively | |3 |4 |3 |4 |2 |2 |4 |3 |4 |4 |4 |4 |4 |4 |5 |4 |4 |3 |3 |4 | |7. Receive coaching and feedback | |3 |3 |3 |3 |2 |2 |4 |3 |4 |4 |3 |2 |3 |5 |5 |4 |4 |3 |4 |5 | |8.

Limited control over job outcome | |4 |5 |4 |4 |2 |4 |4 |3 |2 |3 |5 |1 |3 |3 |2 |4 |3 |4 |5 |2 | |9. Satisfied with career advancement opportunity | |2 |1 |3 |1 |2 |4 |3 |3 |4 |4 |2 |2 |3 |4 |5 |2 |3 |3 |4 |4 | |10. Healthy work-life balance | | |4 |4 |4 |3 |2 |1 |5 |4 |4 |4 |4 |1 |4 |4 |5 |4 |2 |5 |1 |3 | |11. Regular recognition for contributions | |3 |2 |4 |2 |2 |2 |5 |3 |4 |4 |3 |2 |4 |5 |5 |3 |4 |3 |4 |4 | |12. Paid fairly for work done | | |4 |1 |4 |4 |2 |5 |5 |3 |4 |3 |3 |1 |4 |4 |4 |4 |2 |4 |4 |4 | |13.

Dread going to work | | |3 |5 |3 |5 |3 |2 |1 |1 |1 |3 |4 |2 |4 |2 |1 |4 |5 |3 |4 |1 | |14. Receive info. & communication to do job | |3 |2 |2 |4 |2 |2 |4 |4 |4 |4 |3 |2 |3 |4 |5 |3 |3 |3 |2 |4 | |15. Mgr. effective communicator about changes |4 |3 |4 |3 |2 |3 |4 |4 |4 |4 |3 |4 |4 |5 |5 |4 |5 |3 |4 |4 | |Sum | | | |46 |42 |50 |49 |41 |45 |58 |53 |55 |56 |51 |39 |53 |61 |63 |49 |56 |50 |52 |56 | |Score (%) | | | |61% |56% |67% |65% |55% |60% |77% |71% |73% |75% |68% |52% |71% |81% |84% |65% |75% |67% |69% |75% | |

Appendix A | | | | | | | | | | | | | | | | | | | | | | | | | | | |Survey Results Sorted by Mean | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Results Sorted by Mean | | | | | | | | | | | | | | | | | | | | | | | | | | |Question | |Respondent # |1 |2 |3 |4 |5 |6 |7 |8 |9 |10 |11 |12 |13 |14 |15 |16 |17 |18 |19 |20 |Mean | | |1. Part of a team | | |4 |3 |4 |4 |5 |4 |4 |5 |5 |5 |4 |4 |4 |5 |5 |3 |5 |5 |2 |5 |4. 5 | | | |2. Involved in decisions affecting work | |2 |3 |3 |3 |4 |3 |5 |5 |4 |4 |4 |4 |3 |4 |5 |3 |4 |2 |2 |5 |3. 6 | | | |3. Job makes good use of talents & abilities | |1 |1 |4 |2 |3 |3 |5 |4 |4 |4 |3 |4 |4 |5 |5 |2 |4 |3 |4 |4 |3. 45 | | | |4. Feel overwhelmed trying to keep up | |2 |4 |2 |5 |4 |4 |1 |3 |3 |3 |3 |4 |3 |3 |2 |2 |4 |3 |5 |3 |3. 15 | | | |5. WellPoint provides opportunity for develop. | |4 |1 |3 |2 |4 |4 |4 |5 |4 |3 |3 |2 |3 |4 |4 |3 |4 |3 |4 |4 |3. 4 | | | |6.

Have training to do job effectively | |3 |4 |3 |4 |2 |2 |4 |3 |4 |4 |4 |4 |4 |4 |5 |4 |4 |3 |3 |4 |3. 6 | | | |7. Receive coaching and feedback | |3 |3 |3 |3 |2 |2 |4 |3 |4 |4 |3 |2 |3 |5 |5 |4 |4 |3 |4 |5 |3. 45 | | | |8. Limited control over job outcome | |4 |5 |4 |4 |2 |4 |4 |3 |2 |3 |5 |1 |3 |3 |2 |4 |3 |4 |5 |2 |3. 35 | | | |9. Satisfied with career advancement opportunity | |2 |1 |3 |1 |2 |4 |3 |3 |4 |4 |2 |2 |3 |4 |5 |2 |3 |3 |4 |4 |2. 95 | | | |10. Healthy work-life balance | | |4 |4 |4 |3 |2 |1 |5 |4 |4 |4 |4 |1 |4 |4 |5 |4 |2 |5 |1 |3 |3. | | | |11. Regular recognition for contributions | |3 |2 |4 |2 |2 |2 |5 |3 |4 |4 |3 |2 |4 |5 |5 |3 |4 |3 |4 |4 |3. 4 | | | |12. Paid fairly for work done | | |4 |1 |4 |4 |2 |5 |5 |3 |4 |3 |3 |1 |4 |4 |4 |4 |2 |4 |4 |4 |3. 45 | | | |13. Dread going to work | | |3 |5 |3 |5 |3 |2 |1 |1 |1 |3 |4 |2 |4 |2 |1 |4 |5 |3 |4 |1 |2. 85 | | | |14. Receive info. & communication to do job | |3 |2 |2 |4 |2 |2 |4 |4 |4 |4 |3 |2 |3 |4 |5 |3 |3 |3 |2 |4 |3. 15 | | | |15. Mgr. effective communicator about changes |4 |3 |4 |3 |2 |3 |4 |4 |4 |4 |3 |4 |4 |5 |5 |4 |5 |3 |4 |4 |3. | | | | Appendix A | | | | | | | | | | | | | | | | | | | | | | | | | | | |Survey Results Sorted by Standard Deviation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Results Sorted by Standard Deviation | | | | | | | | | | | | | | | | | | | | | | | | |Question | |Respondent # |1 |2 |3 |4 |5 |6 |7 |8 |9 |10 |11 |12 |13 |14 |15 |16 |17 |18 |19 |20 |St. Dev. | | |1. Part of a team | | |4 |3 |4 |4 |5 |4 |4 |5 |5 |5 |4 |4 |4 |5 |5 |3 |5 |5 |2 |5 |0. 507 | | | |2. Involved in decisions affecting work | |2 |3 |3 |3 |4 |3 |5 |5 |4 |4 |4 |4 |3 |4 |5 |3 |4 |2 |2 |5 |0. 9947 | | | |3. Job makes good use of talents & abilities | |1 |1 |4 |2 |3 |3 |5 |4 |4 |4 |3 |4 |4 |5 |5 |2 |4 |3 |4 |4 |1. 191 | | | |4. Feel overwhelmed trying to keep up | |2 |4 |2 |5 |4 |4 |1 |3 |3 |3 |3 |4 |3 |3 |2 |2 |4 |3 |5 |3 |1. 04 | | | |5. WellPoint provides opportunity for develop. | |4 |1 |3 |2 |4 |4 |4 |5 |4 |3 |3 |2 |3 |4 |4 |3 |4 |3 |4 |4 |0. 9403 | | | |6.

Have training to do job effectively | |3 |4 |3 |4 |2 |2 |4 |3 |4 |4 |4 |4 |4 |4 |5 |4 |4 |3 |3 |4 |0. 7539 | | | |7. Receive coaching and feedback | |3 |3 |3 |3 |2 |2 |4 |3 |4 |4 |3 |2 |3 |5 |5 |4 |4 |3 |4 |5 |0. 9445 | | | |8. Limited control over job outcome | |4 |5 |4 |4 |2 |4 |4 |3 |2 |3 |5 |1 |3 |3 |2 |4 |3 |4 |5 |2 |1. 1367 | | | |9. Satisfied with career advancement opportunity | |2 |1 |3 |1 |2 |4 |3 |3 |4 |4 |2 |2 |3 |4 |5 |2 |3 |3 |4 |4 |1. 099 | | | |10. Healthy work-life balance | | |4 |4 |4 |3 |2 |1 |5 |4 |4 |4 |4 |1 |4 |4 |5 |4 |2 |5 |1 |3 |1. 3139 | | | |11.

Regular recognition for contributions | |3 |2 |4 |2 |2 |2 |5 |3 |4 |4 |3 |2 |4 |5 |5 |3 |4 |3 |4 |4 |1. 0463 | | | |12. Paid fairly for work done | | |4 |1 |4 |4 |2 |5 |5 |3 |4 |3 |3 |1 |4 |4 |4 |4 |2 |4 |4 |4 |1. 1459 | | | |13. Dread going to work | | |3 |5 |3 |5 |3 |2 |1 |1 |1 |3 |4 |2 |4 |2 |1 |4 |5 |3 |4 |1 |1. 4244 | | | |14. Receive info. & communication to do job | |3 |2 |2 |4 |2 |2 |4 |4 |4 |4 |3 |2 |3 |4 |5 |3 |3 |3 |2 |4 |0. 9333 | | | |15. Mgr. effective communicator about changes |4 |3 |4 |3 |2 |3 |4 |4 |4 |4 |3 |4 |4 |5 |5 |4 |5 |3 |4 |4 |0. 7678 | | | |

Appendix A | | | | | | | | | | | | | | | | | | | | | | | | | | | |Survey Results – Percentage of Answers for Each Question | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Percentage of Answers for Each Question | | | | | | | | | | | | | | | | | | | | | | | | |Question | |Percentage for Each Response | | | | | | |% Ans. 1 |% Ans. 2 |% Ans. 3 |% Ans. 4 |% Ans. 5 |Total | | | | | | | | | | | | |1. I feel that I am part of a team. | | | | | | | |0 |5 |10 |40 |45 |100 | | | | | | | | | | | | |2. I am involved in decisions that affect my work. | | | | | |0 |15 |30 |35 |20 |100 | | | | | | | | | | | | |3. My job makes good use of my talents and abilities. | | | | | | |10 |10 |20 |45 |15 |100 | | | | | | | | | | | | |4. I feel overwhelmed trying to keep up with my responsibilities. | | | | |5 |20 |40 |25 |10 |100 | | | | | | | | | | | | |5. WellPoint provides me with the opportunity for learning and development. | | |5 |10 |30 |50 |5 |100 | | | | | | | | | | | | |6. I have the training to do my job effectively. | | | | | | | |0 |10 |25 |60 |5 |100 | | | | | | | | | | | | |7. I receive coaching and feedback to do my job effectively. | | | | |0 |15 |40 |30 |15 |100 | | | | | | | | | | | | |8. I feel that I have limited control over the outcome of my job. | | | | |5 |20 |25 |35 |15 |100 | | | | | | | | | | | | |9. I am satisfied with my opportunities for career advancement. | | | | |10 |25 |30 |30 |5 |100 | | | | | | | | | | | | |10. I am able to maintain a healthy work-life balance. | | | | | | |15 |10 |10 |50 |15 |100 | | | | | | | | | | | | |11. I regularly receive appropriate recognition for my contributions. | | | | |0 |25 |25 |35 |15 |100 | | | | | | | | | | | | |12.

I am paid fairly for the work I do. | | | | | | | |10 |10 |15 |55 |10 |100 | | | | | | | | | | | | |13. I dread going to work, especially on Sunday night. | | | | | | |25 |15 |25 |20 |15 |100 | | | | | | | | | | | | |14. I receive the information and communication I need to do my job effectively. | | |0 |30 |30 |35 |5 |100 | | | | | | | | | | | | |15. My immediate manager does a good job communicating reasons behind changes. | |0 |5 |25 |55 |15 |100 | | | | | | | | | | | | | Appendix B Charts of Results for Each Survey Question Sources Consulted Abbasi, Sami M. Hollman, Kenneth W. (1998). The myth and realities of downsizing. Records Management Quarterly, 32. n2, 31(6). (Document ID: A20776055). Business Editors. (2000). Workforce Growth Averages 5. 9%, Annual AMA Survey Finds. Business Wire. Retrieved from http://findarticles. com/p/articles/mi_m0EiN/is_2000_Oct_25/ai_6632 Canada and the World Backgrounder. (1996). Downsizing or dumbsizing? Canada and the World Backgrounder, 62. n2, 12(1). (Document ID: A18927954). Cummings, Thomas G. & Worley, Christopher G. (2005). Organization Development & Change. Ohio. Thomson South-Western. See pages 287-297. ) Garnant, Carol W. (2001). Who re-moved my cheese? Responding to staff reductions. Tax Executive, 53. 4, 283. (Document ID: A79052297). Gibbons, Tracy & Brenowitz, Randi S. (2001). The Impact of Downsizing on Corporate Culture. Data Center Management. Harris, Rothenberg International, LLC. (2008). Helping Employees with Organizational Change: A Guide for Managers. Retrieved from www. wellpoint. com. Harris, Rothenberg International, LLC. (2008). Managing in Uncertain Times. Retrieved from www. wellpoint. com. Harvey, Don & Brown, Donald R. 1996). An Experiential Approach to Organizational Development. New Jersey: Prentice-Hall, Inc. Isabella, Lynn A. (1989). Downsizing: survivors’ assessments. Business Horizons, 32. n3, 35(6). (Document ID: A7739163). Lee, Daniel. (2009). WellPoint Says Economy Could Prompt It to Cut More Jobs. The Indianapolis Star. Retrieved from http://www. istockanalyst. com/article/viewiStockNews/articleid/3499717. McKinley, William, Sanchez, Carol M. & Schick, Allen G. (1995). Organizational downsizing: constraining, cloning, learning. The Academy of Management Executive, 9. 3, 32(13). (Document ID: A17452339). Mishra, Karen E. , Spreitzer, Gretchen M. & Mishra Aneil K. (1998). Preserving employee morale during downsizing. Sloan Management Review, 39. n2, 83(13). Retrieved from http://find. galegroup. com/ips/start. do? prodID=IPS. Noer, David M. Healing The Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations. New York. Jossey-Bass Inc. , 1993. (See pages 3, 4, 10-12. ) Whigham-Desir, Marjorie. (1993). Strategies for coping with workplace depression. Black Enterprise, 24. n2, 77(4). (Document ID: A13287127).

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