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Pais, J. (2017). Intergenerational neighborhood attainment and the legacy of racial residential segregation: A causal mediation analysis. Demography54(4), 1221-1250. https://www.proquest.com/docview/1926844582/fulltextPDF/EB0C84C22D284A96PQ/1?accountid=12085

Pick, D., & Teo, S. T. (2017). Job satisfaction of public sector middle managers in the process of NPM change. Public Management Review19(5), 705-724. https://www.researchgate.net/profile/Stephen-Teo-2/publication/305217934_Job_satisfaction_of_public_sector_middle_managers_in_the_process_of_NPM_change/links/5aeed6d20f7e9b01d3e23928/Job-satisfaction-of-public-sector-middle-managers-in-the-process-of-NPM-change.pdf

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Job satisfaction of public sector middle managers in the process of NPM

change

Article  in  Public Management Review · July 2016

DOI: 10.1080/14719037.2016.1203012

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Job satisfaction of public sector middle managers in the process of NPM change

David Pick & Stephen T. T. Teo

To cite this article: David Pick & Stephen T. T. Teo (2016): Job satisfaction of public sector middle managers in the process of NPM change, Public Management Review, DOI: 10.1080/14719037.2016.1203012

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Job satisfaction of public sector middle managers in the process of NPM change David Pick a and Stephen T. T. Teo b

aSchool of Management, Curtin University of Technology, Perth, Australia; bSchool of Management, RMIT University, Melbourne, Australia

ABSTRACT This study examines how middle managers in public sector organizations experienced ‘New Public Management’ (NPM)-related change initiatives. Data from 486 Australian middle managers in state public sector agencies are analysed and the hypothesized model is tested using partial least squares (PLS) structural equations modelling (SEM) on two samples. The cross-validation model analysis brings a new focus on middle managers experience of change via the linkages between the provision of change information, change-induced stressors and the job satisfaction of employees. The ‘need for information’ is an important element in understanding the consequences of change.

KEYWORDS Middle managers; job satisfaction; change management; PLS modelling

This study examines how change initiatives associated with New Public Management (NPM) affects the well-being of middle managers in the Australian public sector. The characteristics of NPM change well-documented in the literature (e.g. Christensen and Lægreid 2011) but little is understood about how these changes affect middle managers. Middle managers are those in the layers at least two levels below CEO with supervisory responsibility for at least two levels of subordinates (for example line- workers and professionals) (Hassard, McCann, and Morris 2009; Huy 2001). In this article, we aim to increase our theoretical understanding of the mechanisms of job satisfaction among middle managers in the process of NPM-inspired change and in doing so provide insights that are useful to practitioners.

The implementation of NPM reform carries with it the risk of compromising job satisfaction among public sector workers that in turn has serious implications for the sector. Research suggests that rise of NPM-inspired change has had a range of negative effects on public sector managerial work including reduced well-being, loyalty and job security leading to losses to organizational competence and perfor- mance (Lindorff, Worrall, and Cooper 2011). Drawing on existing research on participation and information in change, stress, well-being and job satisfaction in general, we aim to extend the understanding of how change affects middle managers in the public sector.

CONTACT Stephen T. T. Teo [email protected] Both authors contributed equally to this article and authorship is arranged in alphabetical order. © 2016 Informa UK Limited, trading as Taylor & Francis Group

PUBLIC MANAGEMENT REVIEW, 2016 http://dx.doi.org/10.1080/14719037.2016.1203012

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While middle managers in public sector organizations are usually responsible for initiating and implementing NPM change (Fernandez and Pitts 2007), they are also subject to it. There are both positive and negative effects of NPM-related change on middle managers. Positive impacts of NPM-related change included flexibility (e.g. Moen et al. 2011) while negative effects include work intensification (McCann, Morris, and Hassard 2008) and an increase in the range of responsibilities (Farrell and Morris 2013). For middle managers, this has had a number of negative implica- tions. Workloads and stress have increased (Conway and Monks 2011) as have working hours, while morale and job satisfaction have decreased (Farrell and Morris 2013). In spite of these problems, little empirical evidence exists on how they experience change (Fernandez and Pitts 2007).

It has been argued that middle managers often inhibit organizational change and should be removed (see Hassard, McCann, and Morris 2009). This perspective is not entirely accurate (Hassard, McCann, and Morris 2009; Huy 2001). Middle managers have been found to be critical in ensuring the success of large-scale change (Huy 2002). This is because they can be important in the change process as they make organizations run and can be a source of new ideas (Osterman 2009). Some effective middle managers tend to have sound ideas about implementing change, they have extensive formal and informal networks, they are closely tuned to employee attitudes and they can act as a moderating influence preventing inertia on the one hand and chaotic change on the other (Huy 2001).

While the vast majority of research into the effects of change on middle managers has focused on the private sector, there is a small but growing body of studies of the public sector. This research is important because public sector workers have a distinct ‘predisposition to respond to motives grounded primarily or uniquely in public institutions and organizations’ (Perry and Wise 1990, 368). This ‘public service motivation’ distinguishes public sector workers from their counterparts in the private sector. The research about the effect of NPM change on public sector middle managers though remains limited. Conway and Monks (2011) and Currie and Procter (2005) report that increased workloads and stress among middle managers and Falkenberg et al. (2009) report change can create feelings of powerlessness and lower job satisfaction among middle level employees. More needs to be understood about the impact of NPM-inspired change on the health and attitudes of public sector middle managers, the people who are generally responsible for its implementation (Fernandez and Pitts 2007). It is important then to undertake studies into this important group of public sector workers.

The existing research into middle managers and change in general raises a number of theoretical and conceptual problems about the nature of change and how change affects middle managers. In the context of public sector work this study contributes to furthering our understanding of organizational change and its affects on middle managers by examining the nature of NPM-inspired change and how the negative effects of such change can be ameliorated. In this study, we go some way to delineating the dimensions of NPM-inspired change and their relative significance. We also find that while the provision of information about change is connected to a reduction in stressors during change, participation in change is not. This finding means that we should examine in more detail the connections between stressors, participation and the provision of information in public change programmes. These findings are important because they highlight the need to undertake more research

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into middle managers in public sector organizations in general and more specifically to address the need for more research about how change connects to information and participation, and in turn how these impact on job satisfaction.

In the remaining sections, we first develop eight hypotheses and a theoretical model that we use to examine connections between NPM change, participation, the provision of information, stress, well-being and job satisfaction. In the second sec- tion, we describe the methods used in the collection and analysis of the data. We then describe the results of the study and conclude the article with a discussion of the implications for theory and practice.

Organizational change and participation

NPM change is characterized by devolution and delegation of authority and auton- omy (Christensen and Lægreid 2011), including privatization (Falkenberg et al. 2009), which is part of the broader shift to ‘post-bureaucratic’ forms of organizations driven mainly by the need to cut costs as well as increase efficiency and flexibility (Diefenbach 2009; Farrell and Morris 2013; McCann, Morris, and Hassard 2008). These changes have included cost reduction, delayering, and redundancy, reorgani- zation, merger or downsizing, culture change, increased use of temporary and agency staff, culture change, outsourcing, offshoring, and mergers (Lindorff, Worrall, and Cooper 2011). In many ways NPM reform has also driven public sector organizations to mimic practices in the private sector (Hood 1991; Subramaniam et al. 2013). These trends are evident in a range of public sector contexts including Australia (Lindorff, Worrall, and Cooper 2011), the United Kingdom (O’Reilly and Reid 2011), the United States (Yang and Kassekert 2009) and Scandinavia (Ibsen et al. 2011).

Research into public sector organizations suggests that staff participation in change is closely connected to employee well-being (West et al. 2011). Michie and West (2004) further found that two important factors that affect organizational performance are people management (including HR practices and employee involve- ment) and resulting psychological consequences (including well-being, stress and job satisfaction). Various studies also suggest that information is closely connected to participation in change, an important element in the change process (Oreg, Vakola, and Armenakis 2011; Whelan-Berry and Somerville 2010). Miller, Johnson, and Grau (1994) argue that change information without participation will not be effective because participation creates a sense of ownership of the proposed change. Both participation and information create acceptance and support for change and tend to lower levels of anxiety among employees (Bordia, Hobman, et al. 2004). Similarly, Allen et al. (2007) conclude that it is important to connect information with parti- cipative strategies to assist in the successful implementation of change. Others such as Lindorff, Worrall, and Cooper (2011) have shown that clear communication is an important element in improving how organizational change is handled in public sector organizations. In light of these research findings, we hypothesize:

Participation provides employees with a feeling of empowerment and control in the change process (Amiot et al. 2006) while change-related communication is also recognized as allowing change agents to build understanding of the need for change (Whelan-Berry and Somerville 2010). Hence, during organizational change, relevant information provides a sense of urgency and updates for employees, which minimizes negative outcomes associated with organizational change (Amiot et al. 2006; DiFonzo

PUBLIC MANAGEMENT REVIEW 3

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and Bordia 1998), and participation increases understanding about change and commitment to change (Whelan-Berry and Somerville 2010). Therefore, providing information and encouraging commitment are important and interrelated organiza- tional resources to be deployed during change (Korunka et al. 2003). Information and consultation appear to help facilitate change in that information (communication) and participation (consultation) work together to increase acceptance for change (Stewart and Kringas 2003). Thus, we hypothesize the following relationships:

Hypothesis 1. Implementation of NPM change initiatives are positively associated with middle managers’ participation in the change management decision-making processes.

Hypothesis 2. Implementation of NPM change initiatives are positively associated with the provision of change information to middle managers.

Previous research suggests that NPM-inspired change has various internal and external dimensions (e.g. Dunford et al. 2007; Ibsen et al. 2011). In our study, we suggest that internal-focused change includes reduced internal boundaries, reduced external boundaries, flexible work groups and empowerment while external-focused change includes disaggregation, outsourcing, short-term staffing, and creating net- works and alliances. Studies of change in public sector organizations suggest that it has a direct impact on stressors and stress (Dahl 2010). For public sector managers increased stress has been found to result in cynicism, fatigue and burnout (Doyle, Claydon, and Buchanan 2000, S64). Others have shown that organizational change in the public sector results in an increasing level of change-induced stressors (e.g. Noblet and Rodwell 2009a; Noblet et al. 2005). While the evidence for the presence of change-induced stressors is apparent, there is little research about those stressors arising from the specific organizational conditions within which the change is taking place – the ‘context- specific’ stressors. Somerfield and McCrae (2000) suggest that such detail is especially useful in understanding and theorizing about workplace stress. For middle managers, specifically, research suggests that change affects on this group of workers in parti- cular ways. These include an intensification of work (McCann, Morris, and Hassard 2008), and increases in the range of responsibilities, working hours, with a corre- sponding decrease in morale and job satisfaction (Farrell and Morris 2013). In addition, career prospects have stagnated and entitlements have declined along with job security, compromising the psychological contract (Hassard, Morris, and McCann 2012) and employee loyalty (Lindorff, Worrall, and Cooper 2011).

On the other hand, there is evidence that change can have positive effects. Research suggests that up-skilling, increased responsibility and autonomy, coupled with increased pay, have improved the workplace for some middle managers (McCann, Morris, and Hassard 2008). In the wider literature on change, many contend that positive change is a relevant although sometimes controversial concept. The concept of positive change has been used to include seizing opportunities for improvement and motivating people to perform better (Bouckenooghe 2010) as well as change that focuses on encouraging positive deviance (extraordinary perfor- mance), virtuousness, affirmative bias, building strengths (Cameron 2008) and diver- sity (Stevens, Plaut, and Sanchez-Burks 2008). Given the range of research findings about change and stress, we test the following hypothesis:

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Hypothesis 3. There is an association between the type of NPM change initiative and change-induced stressors for public sector middle managers.

Change initiatives and change-induced stress

Recent research suggests that stress arising from NPM-inspired change can be ameliorated through the provision of information about change but the effects of participation in change are not yet clear (Teo et al. 2016). There are some studies which examine the association between public sector change and rising stress levels, lower well-being and rising job dissatisfaction (Diefenbach 2009; Ibsen et al. 2011). Noblet and Rodwell (2009b) argue that change may be associated with stress but that good and timely information ameliorates such stress. Inadequate consultation during change management creates a negative workplace environment for line managers (Noblet et al. 2005). The lack of consultation, both in terms of participation and provision of information, could lead to a sense of managers losing control over the situation. Since information and participation are closely connected, we hypothesize that on-going access to information and input into decision-making is closely associated with the extent of the stressful working conditions that arise during change. Thus we hypothesize the following:

Hypothesis 4. There is a negative association between the extent to which public sector middle managers participate in the change management decision-making processes and change-induced stressors.

Hypothesis 5. There is a negative association between the amount of change informa- tion received by public sector middle managers and change-induced stressors.

Change initiatives and employee outcomes

Noblet et al. (2005) noted that public sector employees experience several stressors relating to change (such as lack of resources to accomplish tasks, insufficient time to complete work on time and to the standard expected, fast-paced workloads, unrea- listic performance targets and inadequate consultation). How people respond to potentially stressful situations varies considerably. One person might perceive a situation to be stressful while another in the same situation might see it as a challenge and source of stimulation. That said, it is generally accepted that high levels of workplace stress negatively affects the physical and mental well-being of employees (Smith 2001).

Job stress theories such as the stress appraisal process (Lazarus and Folkham 1984) have long recognized this individual variability and have posited that access to external resources (such as information, guidance and discretionary decision- m

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