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Change in a business – What are the effects?

Changes that occur within a work environment can have an impact on employees and those that are involved within a company. These changes can be quite dramatic and may be seen in a positive or negative way according to each individual who works in the company.

Some members of staff or people in a company can be averse to certain changes and may not want or feel the need to alter their approach to situations. However, this is normally a fear of the unknown and thinking that the new way may be more difficult. We will now look at some of the main positive and negative aspects that occur when change is implemented in a business environment. Here we take a look at the common positives and negatives associated with change in a business.

Positive effects of change on people

  • Change can boost morale in a company and make a person’s job more interesting
  • It may involve the use of new products and technology that can be exciting for employees which will make their position easier and enable them to work more efficiently
  • Differences can affect the work environment and improve the conditions for staff
  • Staff may be able to learn new skills and increase their understanding of new technologies and methods

Negative effects of change on people

  • Some staff may completely lose their jobs as they are no longer needed
  • Staff hours may be reduced and this will result in being paid less
  • More training may be required to keep up with change which can be difficult to fit into staff schedules
  • Staff can be anxious or stressed with new situations and changes in the workplace
  • Some members of a team may need to be moved elsewhere if departments restructure
Negative and positive effects of change on business

How change benefits various people

Change in business can be a very uncertain time. Change usually involves some form of risk, and alterations to the workplace can backfire. When change begins, nobody knows what the outcome will be and there have been many instances when businesses have made poor decisions. Poor decisions about change can lead to catastrophic effects on their finances and presence in the market. Despite this, vast numbers of companies can benefit massively from changes to the way they work. Companies who are constantly seeking to improve will give their organisation the edge over competitors.

Changes that benefit businesses

Some of the main benefits of change to an organisation include:

  • Reducing inefficient behaviour and practices. Not working in the right manner can waste a massive amount of energy, resources and hours of labour – this can be avoided through changing systems and processes that are used in a company.
  • Making procedures quicker and easier to run can increase output and make an organisation much more efficient. One of the best examples of this is the automation of billing or accounts procedures, which can save many hours for staff. As well as this, human errors are reduced as computer systems will produce far less mistakes.
  • Companies may take on more tasks and offer new products or services which they may not have had previously. This process is known as ‘diversification’ and can help companies to access new markets and create new revenue streams.
  • Allowing staff to take on more duties can help an organisation as this will cut down the number of people that are required in an organisation. By doing this, wages and salaries can be reduced and the output of a company can remain consistent.
  • Companies can also bring in new technology which allows them to offer products or services that may be new to the market. This will enable the company to charge a large amount for their products as they boast better features and enhancements on the competition.

Not only can change be of benefit to an organisation, it can also help individuals to progress and learn new skills, which will ultimately increase their job satisfaction.

Changes that benefit individuals

Many individuals can benefit from changes in organisations. Certain changes can give people a chance to adapt and learn new skills in the workplace. Some of the main benefits include:

  • Workplace conditions may be improved which can make life more enjoyable in a company. Even small changes in the office can make a big difference to morale and people’s happiness in their jobs, so change can be a great thing even if it does not directly affect the finances of a company.
  • People may receive new training and be given the opportunity to learn new skills that improve their experience with the company.
  • Individuals may be given better equipment or more modern systems that make their job easier and take out some of the stress and hassle that may have been present.
  • Morale may be increased, and when things change to benefit individuals they will feel valued. This will increase job satisfaction and ensure that each person feels content in their position.

Changes that benefit teams

Change does not only benefit the company and individuals. Different teams within a company can benefit massively from change in a number of ways:

  • More resources may be available for teams when changes are implemented. If a company invests in more equipment and materials needed for people, then they will be allowed more freedom to work together and complete tasks in an efficient manner.
  • When thought is put into changes to ensure that they benefit teams of employees, their morale and work ethic will naturally increase.
  • Productivity may be helped with new technologies or communication methods for teams which will enable them to concentrate on their jobs rather than spend time on menial activities.
The benefits of change on a business

Communication and change

Being able to communicate and work as a team is hugely important when change is being implemented. People should be able to express their feelings and be given support and guidance when it is required throughout the change process. The type of support and amount of help that people need will depend on the changes that are made and the job of the individual in question. Types of support may include:

  • IT and tech support – using new systems and technology can be very confusing when you have not worked with them before. When new things are brought into a business there should be adequate support and guidance so that staff are able to work with the new systems and get to grips with things as soon as possible.
  • Emotional support and assistance – when new changes are brought in team members may need support and reassurance that they will be able to adapt to the differences.
  • Redundancy and staffing support – when change comes into play in a business it may be inevitable that staffing changes. Therefore, legal support may be required if some staff are moving, and this may help people to look for new jobs.

All changes in a business must be monitored and evaluated before, during and after they are implemented. Without this monitoring process it is very hard to determine if the changes have been successful or not. Communication with other members of staff is vitally important to ensure they are comfortable with the changes that have been made.

Benefits of good communication with others

Good communication is important within all areas of a company and it is especially important when changes are being made. Without the ability to talk with staff and other members of the organisation, it can be difficult to ensure change has been implemented successfully.

Before, during and after changes are made there should be a constant flow of information between the employees and management. This information should be very clear and relevant to the situation so that the organisation in question is able to assess the outcome. Communication must always be a two-way path. It is vital that information can be passed between different members of staff, even though they may be on various levels within the organisation. This communication during times of change will be of benefit so that:

  • All employees receive the same message and information throughout the process so that everyone is on the same page
  • Information is able to travel to different people in the organisation and can be passed to a variety of people so that they can relay their feedback and experiences
  • Things that need to be changed can be done so in a clear and easy to manage way
  • Information can be passed to people quickly and easily
  • People are kept informed as to what is happening and what they need to do

Information during times of change

Data and feedback during times of change must be very accurate and relevant to the situation. Without this clear and accurate information, it can be almost impossible to assess if the changes were successful. Not knowing whether changes implemented are successful can have potentially damaging consequences to an organisation.

Information that is incorrect or does not reflect the true situation can be damaging for those who need to assess the success of changes. Staff can be affected by rumours or scare stories and this negative spreading of information can cause team members to become averse to change and cause them to be dubious of why alterations are being made.

Problems that can occur in times of change in a company

Whenever things change in a work environment there is always the risk that it may not go to plan. Things that are altered may be planned and assessed prior to the changes being made, but when it comes down to the alterations coming into effect, it may be the case that they simply do not work. When this happens it can be incredibly frustrating and, at times, incredibly expensive for organisations. Problems can occur in a number of ways such as:

  • Staff not knowing how to use new systems and being given inadequate training – this will reduce productivity and most likely increase stress for people in the company as they are unable to carry out their duties efficiently.
  • Errors and issues with new equipment – sometimes it may be the case that new equipment can be faulty or may be installed incorrectly. When this happens it can take a long time to ensure that the equipment used is right for the task and running correctly.
  • Staffing issues – when new staff are taken on or old staff are moved after a change it may be hard to get teams to work together productively. This may be that new employees are not able to gel with existing ones right away or that certain people relied on outgoing members of staff for certain tasks and are unable to perform them on their own.

When errors of judgement occur during times of change it can be quite hard to come up with solutions and learn how to solve this issue. Most of the time it can be quite difficult for people to realise that they have made an error and that the decision to make a change was a mistake. This can also take a lot of effort to change as people may be quite stubborn about their input and unwilling to change their mind on the matter.

Some of the negative effects that change can have, which must be anticipated and minimised, include:

  • Poor staff morale – people’s morale may be lower at times of change as they could feel undervalued or fear for their jobs. It can also be the case that a person is unable to do their job correctly after a change takes effect and this can leave them feeling disheartened.
  • A fall in productivity – when new changes are implemented productivity can fall for a little while as people get used to the new way of doing things. This could be from mistakes and errors made by staff members as well as the time it takes for new systems to start working efficiently.
  • A rise in error rates and mistakes – when using something that is new and relatively unknown people will make mistakes and this can be costly to a company. Staff training can be key to avoid these issues.
Problems that occur when businesses change

Responding to change in a business

Being able to alter your approach and adapt to changes is very important for a company. Some organisations can spend huge amounts of money on changing the way in which they work and expect it to pay off in the long run, otherwise, it is just money wasted. Change contributes to the improvement of a company the majority of times and management will often have very strict deadlines and reasons for implementing their different ways of doing things. Improving efficiency or the way in which things are done in a business, as well as the products or services that are on offer, is very important for the vast majority of companies. Changes will usually fall into two categories:

  • Those that improve the income for a company (such as offering new products or expanding into new markets).
  • Those that reduce the amount of money being spent by a business (also known as cost cutting).

Both of these categories can have massive impacts on a company’s revenue, and people should be able to see the bigger picture when changes are put in place that affect their jobs.

Changes that affect your values

People with experience in an industry or a specific company will usually become accustomed to doing things in a certain way. When this changes, it can pose a risk to a person’s own values and ethics. Employees may need to rethink their ideas and methods when changes are brought into action in order to keep up with the new developments. New processes can be established which might reduce the quality of products that are offered or cut the support given to clients, which may cause employees to become concerned. Changes can be very sudden in business or done gradually over a period of time. Once these changes are made it might be that people feel this is a good idea or a bad one and begin to react in a way that clearly shows this. Even if changes are put in place which you completely disagree with you should always ensure that you keep up the same levels of professionalism that is expected by the company.

Professionalism

Ensuring that you work effectively and keep the same high standards of work is very important when changes are made. It may be that you completely disagree with what is being done and feel that the changes are an incredibly bad idea but you should still be respectful and do your job to the best of your abilities. This professionalism will filter into different areas of your work as well as be reflected by your colleagues who will do the same.

Career progression

Change is part of life and it is inevitable that things will change. Change can occur in a small or a large way, and may differ from time to time. Your career will depend on your ability to adapt to new situations, and the way you cope with new and different ways of doing things is very important. Even if you believe that your career is not going to be in the position which you are currently occupying for very long, it is very important to remember that you can still pick up new skills and prove yourself going into your future career. Being a good role model and always giving your best will ensure that you can work to any needs and show existing or future employers that you have what it takes to reach the top.

Positive thinking

Very often the mindset of each individual will have a massive impact on how effective changes are in the workplace. The way that people react to changes in their job and the levels of resistance that they put up will vary but the ones which think positively and tackle change with a good attitude will often benefit the most.

Reviewing the effects of change

Businesses need to review and check the effects of change often so that things can be monitored and you can ensure changes have been beneficial. New working practices can be a very large investment for companies and will often have specific targets on the amount of money that needs to be made. This makes the reviewing of effectiveness even more important as shareholders and managers must be able to see a return on the investment they have put into a company.

Reviews can be evaluated in many different ways and people should take into account a variety of aspects to review the effectiveness of change including:

  • The difference in revenue
  • An increase in productivity
  • A reduction in waste
  • A reduction in people being absent
  • The skills of the workforce
  • Staff morale and performance
  • Stress and working conditions

Staff morale

The morale of staff can be affected by change in a variety of ways and can either be reduced, increased or stay the same. A reduction in staff morale may not seem like an immediate issue, but it will quickly have an adverse effect on many different areas of the business. Low staff morale can lead to negative effects on most areas of business. This includes the quality of products and services, productivity and, ultimately, the finances of the company. Staff turnover can also be increased when morale is low; the average cost of replacing a single member of staff for a company is around £4,000, which takes into account money spent on recruitment, legal bills, time during this process and the dip in productivity while a new staff member gets incorporated into the company.

Skills gaps

Gaps in skills are a very common problem for companies when they implement changes as new ways of doing things and equipment are introduced. This will usually lead to new skills being needed and even new members of staff that are required to operate any new machinery and technology.

Performance

The performance of staff must be monitored at all times to ensure that they are able to meet targets and complete their duties to the best of their ability. People should look deeply into the performance of staff during times of change especially as it may be that people begin to struggle with their tasks and do not like to tell people about this.

Reviewing change in a business

The effects of change on processes, people and outcomes

Change can have a massive impact on the processes used in a business. This is why they should be monitored at all times, to ensure that the new way of doing things has had a positive effect on the business as a whole. These monitoring processes should be continuous and not just a one-off activity that is taken by management. This will ensure that the monitoring of change is implemented in a way that is usable and will have a good effect on the business. Monitoring how change affects various different things will enable a business to:

  • Identify areas for improvements to be made to the productivity of business and increase the amount of income for the company.
  • Identify any shortcomings or areas where results may not have gone according to plan. This will help the business to target new areas to change and give a positive impact on the company.

Being able to review the effects of change on individuals can sometimes be a little trickier than monitoring the effects on things like productivity. This is because there may not be a specific numerical value that can be consulted. Instead, the effects on individuals can be seen through:

  • Interviews
  • Questionnaires
  • Group discussions
  • Performance evaluations

Interviews

Conducting interviews with specific members of staff to deduce how they have found change and are coping with any alterations to their working life, is a very effective way of measuring how successful a change has been. This will also allow staff to give feedback that is impartial and not in the presence of any other members of staff – which can be daunting if their opinion involves others in the workforce.

Questionnaires

The use of questionnaires can be very beneficial to gauge how well changes have affected an organisation. This can be done anonymously so that people do not have to give their verdict in front of others, which will encourage honesty. A questionnaire can be completed in as much depth as needed so each business can create this to suit the need of the situation. The main drawback of this method is that people cannot communicate with each other so it is hard to have a two-way discussion on the outcomes of change.

Group discussions

Holding discussions between small or large groups is a very good way to encourage dialogue in a business. This can be a very useful thing to do and will enable people to give feedback and discuss how things have been going with honest feedback and communication between various members of the team. Meetings can also be a very quick method of collecting information from a large number of parties and can save time when seeing how effective changes have been.

Performance evaluations

The vast majority of the time, changes in a business will have a direct influence on the way that people perform. So a company can look at the way that people have performed and evaluate how change has impacted on their performance. This may include looking for changes in:

  • The number of tasks someone completes
  • The number of customers someone speaks to or sales made
  • The number of products made
  • The number of issues resolved
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