Last Updated 27 Jul 2020

The Day They Announced The Buyout

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Diane Fox was happy with her job at Rolling Hills Bank. She had started as a temporary employee and eventually moved on to accept a human resources position there full time and had put her education in the back seat, taking school only part time during the evenings. Diane was always prepared for whatever happened within the workplace due to confidential information from her supervisor and from her dad who also worked at the bank. However, one crucial day Diane arrived at work unprepared to find the workplace in turmoil over a potential situation that could take place in the near future.

Another bank had made an offer to buy out her workplace! People at Rolling Hills reacted in different ways to the news. For example, throughout the entire day, Diane was preoccupied with feelings of fear, confusion, anger and resentment. On the other hand, her father was much calmer concerning the matter. He was not jumping to conclusions as to whether or not he would lose his job; or even whether the bank would be sold at all. A few explanations could account for this difference in reaction. Firstly, personality plays a large role in dictating a person's response to situations. Diane's father is older and more conservative in his attitudes.

His perspective is to tackle each problem as it arises. Conversely, Diane lets her emotions control her thoughts. Fear and anger over potentially losing her job causes her to lose sight of the fact that the offer still has not been accepted as of yet and there is no immediate need for panic. As well, an optimistic person would react more positively towards the situation than a pessimistic individual. A second explanation is that people who have a high need for security would react more strongly and negatively towards potential change because they will find their security threatened.

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Those who have a family to support would most likely react more heatedly towards the buyout than those who were more financially independent. Finally, people in the different departments probably reacted differently to the announcement. For example, the administrative staff would be more worried regarding their job security than those in the in the service center and data processing department. This is due to the fact that California State Bank did not have its own service center or data processing department.

However, they already had all the administrative functions filled and did not need more staff in that particular department. Productivity suffered that day because employees were shocked by the news, preoccupied with worry and consequently, could not concentrate on their duties. The resistance to change was very immediate. From the moment Diane walked into the work environment, employees were already gossiping and complaining about the buyout. The gossiping and complaining took time and effort away from job duties and resulted in decreased productivity.

Less overt changes in the employees' response that effected productivity were decreased motivation and less commitment to their jobs. Additionally, due to the uncertainty of the situation, many employees were sitting around talking about the "what ifs" instead of doing their jobs. In times of crisis, people generally turn to each other for support and comfort. This is what happened in this situation, albeit, at the expense of productivity. Most people reacted negatively to the situation because in general, individuals and organizations are very resistant to change.

Once individuals have gotten into some routine, which they regard as the status quo, they feel comfortable with this state. Change, threatens to undermine their habits and people become defensive. Employees may have also reacted negatively because they found their job security threatened. Although the company did not formally announce that workers were to be laid off, the potential of the situation occurring was present and when the President could not guarantee that all the jobs would be retained, employees became even more vulnerable.

Not only is job security threatened, but for the employees who had greatest potential to lose their jobs, financial security is also threatened. "What's going to happen now? " "Who will pay the bills if I lose my job? " "How long will it be before I can find another job? " "Will my family and I be able to cope during my period of unemployment? " These are very common questions that would probably be running through the minds of many of the workers. The buyout potentially threatens not just the employees' job, but also their financial stability as well as their lifestyle.

For employees who are retained, they may resist the change of entering a new organization. These employees would most likely be concerned with whether the change will lead to a loss of income. Would the new company compensate them in the same way? Would they continue to receive all the benefits that they received in their present position? They may also be resistant to change because there would be new procedures to be learned and perhaps they would not be up to the new challenge. Moreover, hearing others relay their worry about their jobs and future influences other workers and causes them to worry as well.

Another reason why employees may have reacted negatively to the buyout was because of how the shareholders would benefit from their loss. The president, who had already defaulted in his promise to advise the employees of any potential change, would have the most to gain. Employees felt betrayed and became angry and resentful of the greedy owners. Finally, the way in which employees found out about the buyout and the uncertainty surrounding it would be a major source of dissatisfaction among employees.

Employees found out about the buyout from other coworkers, who heard it from the branch manager, who in turn, read it from a newspaper article. The president had promised to always let the employees know what was going on with the organization but in this situation, he faltered. This stirred distrust of management within the employees. Workers wanted reassurance that they were not going to lose their jobs, but they did not get it. The uncertainty caused many workers to jump the gun and imagine the worst possible situation. Whenever there is change within an organization, there will always be some resistance.

At the organizational level, bureaucratic organizations, such as the one illustrated here, are especially opposed to modifications of their structured systems. At the individual level, people will be resistant to change because change brings uncertainty and uncertainty brings stress. Sometimes effective communication can help ease the negative feelings associated with change. In this situation however, employees were not invited to participate in the planning for change. It was just dropped on them. When companies face financial difficulties, employees take from the message of downsizing that people don't matter in the organization.

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