Organizational change at work, employee turnover, and health

Background: Organizational change at work is common. Such changes are often
implemented to meet demands for increased productivity and improved service; however, there seem to be a price to pay among the affected employees. An increasing body of research conclude that organizational changes have a negative impact on the psychosocial work environment, and studies indicate higher rates employee turnover and high risk of adverse health following such changes. Previous research on employee outcomes of organizational
changes has mainly focused on major company restructuring or staff downsizings.
This thesis evaluated the impact of specific types of organizational changes in the work unit and subsequent employee turnover (i.e., employee exit from the work unit and non-disability early retirement) and health (i.e., sickness absence, prescription for psychotropic medication, and incident ischemic heart disease). The mediating (explaining) roles of specific psychosocial factors were assessed for associations with employee exit from the work unit and ischemic heart disease. Potential sex and temporal differences were examined in relation
to prescriptions for psychotropic medication as outcome.
Methods and Materials: Two work-environment surveys were conducted in the periods from 12 January to 9 February 2011 (N=35,560; 81% response) and throughout March 2014 (N=37,720; 84% response) among all employees in the Capital Region of Denmark. One selfreported item assessed perceived stress. Measures of social capital, quality of management, and organizational justice aggregated at the work-unit level were based on 16 self-reported
items. In 2013 and 2016, the managers provided information on specific types of
organizational changes occurring in their work unit between January 2009 through March 2011 (69% response) and in each semester of 2013 (59% response): mergers, demergers/splitups, relocation, change in management (only in the period 2009-2011), employee layoff, and selective budget cuts. The reference groups comprised employees not exposed to any organizational changes. Data on employee exit from the work unit, total and long-term (≥29
days) sickness absence, prescriptions for psychotropic medication (anxiolytics [ATC code: N05B], hypnotics/sedatives [N05C] or antidepressants [N06A]), and ischemic heart disease (ICD-10: I20-I25) in 2014 as well as information on transition to non-disability early retirement between 2011-2012 were extracted via linkage to national research and regional salary registers. Logistic, zero-inflated Poisson, and hazard/survival regression models as well as multilevel techniques analyzed associations between organization changes in 2013 and
employee turnover and health in 2014 (Papers II-III and V-VI), and between organizational changes in 2009-2011 and non-disability early retirement in 2011-2012 (Paper IV) relative to no changes.
Results: This thesis used data from the WHALE cohort (Well-being in Hospital Employees), and a cohort profile was published for reference purposes (Paper I). Some indicators of organizational change, but not all, were associations with 10-50% higher rates of employee turnover relative to no changes (Papers II-IV). Organizational changes were consistently associated with 90-270% higher relative risk of low work-unit social capital. There was an inverse dose-response relationship between lower work-unit social capital and higher employee exit from the work unit. Associations between organizational changes and
employee exit from the work unit did not diminish notably when adjusting for work-unit social capital in the regression models (Paper III). Indeed, associations with non-disability did somewhat reduce when adjusting for work-unit social capital, quality of management, and organizational justice simultaneously (Paper IV). Relative to no change, organizational changes were associated with up to 40% higher risk of sickness absence or prescriptions for psychotropic medication in the following year among employees regardless of sex. Associations with psychotropic prescriptions were strongest for change in management and for prescriptions in the latter semester of the 12-months follow-up period (Papers II and V). Finally, exposure to relocation, change in management, or employee
layoff in the work unit was associated with 120-190% higher risk of incident ischemic Heart disease among employees relative to no changes. Adjusting these associations for potential mediation via perceived stress did not reduce the point estimates notably (Paper VI).
Conclusions: Organizational changes in the work unit were longitudinally associated with higher rates of subsequent employee turnover and higher risks of adverse among employees relative to no changes. There were no convincing indications that specific types of organizational changes were particularly related to all studied employee outcomes, although changes involving employee layoffs were more consistently associated with higher relative risk of adverse employee health. Work-unit social capital did not explain the inconsistent associations between organizational changes and employee exit from the work unit despite
discrete associations between these three factors on the indirect pathway. Indeed, some evidence suggested that the association between organizational changes and non-disability early retirement was partially explained by work-unit social capital, quality of management, and organizational justice. Bias and confounding were not regarded as likely explanations of the current findings. Policy and decision makers should increase prioritization of strategies to
prevent detrimental employee effects of organizational changes as such effects may not only a burden to the individual, but also to society.