Local government reorganization—rules, responsibilities and renegotiating relationships

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Lynette Harris Nottingham Business School The Nottingham Trent University Burton Street, Nottingham, NG1 4BU Alistair McGrady Nottinghamshire County Council Local government reorganization— rules, responsibilities and renegotiating relationships Based on findings from a study of professional employees in a large county council who experienced major organizational restructuring as a result of the most recent local government reorganization, this article discusses; . the key factors which influenced individual perceptions of fairness about the outcomes of the organizational restructuring process and the significance of the existing state of the psychological contract between employer and employee in shaping employee reactions, . the importance of developing processes which not only meet the requirements of procedural justice and equality of treatment but also have the flexibility to allow for sensitive personal interactions which take account of individual circumstances, . how management behaviours in the application and interpretation of organizational rules impact upon the experience of individuals and shape their perceptions of managerial trustworthiness, . insights from the study which could be used to develop future approaches to implementing change in local government. Copyright # 1999 John Wiley & Sons, Ltd. Copyright # 1999 John Wiley & Sons, Ltd. Strategic Change, August 1999 Strategic Change Strat. Change, 8, 287–297 (1999)

Transcript of Local government reorganization—rules, responsibilities and renegotiating relationships

Page 1: Local government reorganization—rules, responsibilities and renegotiating relationships

Lynette HarrisNottingham Business SchoolThe Nottingham Trent UniversityBurton Street, Nottingham, NG1 4BU

Alistair McGradyNottinghamshire County Council

Local governmentreorganizationÐrules,responsibilitiesand renegotiatingrelationships

Based on ®ndings from a study ofprofessional employees in a large countycouncil who experienced majororganizational restructuring as a result ofthe most recent local governmentreorganization, this article discusses;

. the key factors which in¯uencedindividual perceptions of fairnessabout the outcomes of theorganizational restructuring processand the signi®cance of the existing stateof the psychological contract betweenemployer and employee in shapingemployee reactions,

. the importance of developing processeswhich not only meet the requirementsof procedural justice and equality oftreatment but also have the ¯exibility toallow for sensitive personal interactionswhich take account of individualcircumstances,

. how management behaviours in theapplication and interpretation oforganizational rules impact upon theexperience of individuals and shapetheir perceptions of managerialtrustworthiness,

. insights from the study which could beused to develop future approaches toimplementing change in localgovernment. Copyright # 1999 JohnWiley & Sons, Ltd.

Copyright # 1999 John Wiley & Sons, Ltd. Strategic Change, August 1999

Strategic ChangeStrat. Change, 8, 287±297 (1999)

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Introduction

The reorganization of county and districtcouncils in England has, arguably, presentedlocal government management with its great-est managerial challenge of the past 25 years.This article examines the experience andreactions of professional employees to signi®-cant organizational upheaval in one largecounty council as a result of the latest reorgan-ization of local government. In the case studyorganization, the government's decision wasto retain a two tier structure of a countycouncil and a district council to deliverservices except for residents living in thecity area. Establishing the city council as aunitary authority responsible for all the cityservices meant that 30% of the countycouncil's budget, assets and staff would haveto be transferred to the city council. This leftthe county facing a major restructuringexercise to achieve a one third reduction inits workforce of 38,000 employees by the ®rstof April 1998.

The new organizational structure at thecounty council reduced its existing ten depart-ments to ®ve and when the research began atthe council in July 1997 signi®cant compulsoryjob losses seemed a likely outcome. By early1998 it had become apparent that job losseswould not be on the scale originally anticipatedand that compulsory redundancies were likelyto be avoided but the research revealed aparadox. Individuals whose initially stated aimhad been to emerge from the reorganizationwith a job at the same level of pay achievedtheir objective but were still expressing highlevels of anger and frustration about theprocess and their individual experiences. It isintended to explore the key factors whichshaped these employees' attitudes with aparticular examination of

. how the organizational rules adopted tomanage the transition process in¯uencedemployee perceptions about the `fairness'of individual outcomes,

. the signi®cance of managerial behavioursin the application of these rules.

Major work place transitions place the spot-light on the ability of an organization to adaptand meet the expectations of its employeeswhich are frequently based on past andunspoken sets of expectations that dominateattempts to renegotiate the employmentrelationship (Hendry and Jenkins, 1997). Theorganizational challenge is how to maintainemployee commitment and performancestandards at the same time as implementingchanges in services and resources. Mills andMurgatroyd (1991, p. 101) suggest that organ-izational processes of control and their applica-tion are critical in the insights they provideabout employee responses to organizationalchange.

Local government reorganization

The research concentrated on the attitudes ofa group of professional staff which includedaccountants, lawyers, personnel practitionersand corporate policy of®cers during thereorganization process. The ®ndings aredrawn from several sources: evidence gainedfrom a series of questionnaires sent by anindependent body to 1400 randomly selectedcouncil employees to monitor their attitudesduring the reorganization, `in depth' inter-views at various stages of the process with 30professional staff and the observations of oneof the authors who acted as a facilitator for thefocus groups of professional staff conductedthroughout the restructuring process. As astudy of just one local authority its con-clusions are intended to raise and illuminateissues rather than provide generally applicableconclusions. Nevertheless councils through-out the UK have completed similar restructur-ing exercises and it is hoped that researchevidence will be forthcoming from theseexperiences to inform future changeprocesses.

Organizational processes ofcontrol are critical

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288 Lynette Harris and Alistair McGrady

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Despite the shift in public sector culture to amore commercial approach as a result of com-petition for the provision of certain services,the fundamental organizational principles inlocal authorities have remained largely thoseStewart (1989) identi®ed of functionalism,uniformity and hierarchy: principles that havebeen highly in¯uential in shaping the thoughtprocesses of individuals who have developedtheir careers within local government. Thepresent incumbents of senior managerial roleshave, in many instances, gained personalprogression from employment practiceswhich White and Hutchinson describe as thetraditional `centralised and regulatory model ofpeople management' (1996, p. 195). Compul-sory competitive tendering and budgetaryconstraints have largely been the drivingforce for a restructuring of roles, responsibil-ities and relationships within local governmentand it is argued that adjustments in employeeexpectations and behavioural changes havebeen slow to follow. The motivation for suchchanges is important and the perception inlocal authorities is that these have beenpolitical and externally imposed (Martin,1998).

An essential difference between the mostrecent reorganization of local government inEngland and previous structural changes wasthe lack of direction from central governmentabout the new shape local authorities shouldtake. Structural changes, if any, were recom-mended on a county by county basis by theLocal Government Commission. This resultedin a protracted period of uncertainty which thestudy identi®ed as heightening feelings ofinsecurity among both the managers respon-sible for processing the restructuring and theemployees `at the receiving end' (Mabey et al.,1998, p. 36).

Restructuring and thepsychological contract

As widespread organizational change haschallenged the perceptions and beliefs ofemployees about mutual obligations in theemployment relationship it has given rise to anincreasing interest in the notion of the

`psychological contract' as something distinct,more intangible but no less signi®cant than theformal employment contract. The developingresearch into changing psychological contractsin the workplace (Herriott and Pemberton,1995, Rousseau, 1996) has concluded thatattitude of mind is a signi®cant factor inindividual feelings of insecurity. Sparrow'sstudy of the banking industry (1996) reportedon the particular dif®culties experienced byprofessional employees used to stability intheir working lives in coping with majorworkplace transition. The professionalemployees working for the county councilwere similarly in work roles that had remainedsubstantially unchanged for many years.

Extensive restructuring and ¯atter manage-ment structures which have eroded establishedmodels of hierarchical career progression havechallenged traditional forms of employee com-mitment. The impact of these changes on theindividual will be highly in¯uenced by thenature of their existing organizational commit-ment. Meyer and Allen's (1984) concept of`continuance' commitment describes thenature of many long serving employees' organ-izational attachment which may, in part, beexplained by the extent of individual invest-ment made to an organization over time butalso by an absence of alternative employmentoptions.

Where there has been an expectation of a`steady state' in organizational life and a priororientation of employees to seek out suchstability, a re-negotiation of career expectationsdue to extensive organizational change can beregarded by the individual as a major `violation'of the psychological contract (Robinson et al.,1994). In studies of redundancy programmessurvivors have been found to be less negativeabout the outcomes when there has been anemphasis on procedural justice particularly inthe face of diminishing career opportunities(Brockner, 1988).

It is suggested that local government, heavilyin¯uenced by a strong trade union presenceand a concern to demonstrate equality oftreatment across its employment practices, ispredisposed to pay ample attention to theprocedural justice of any restructuring

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programme. The dif®culty lies in designingprocedures which can be universally appliedbut are also responsive to the circumstances ofindividual employees and allow managerssome scope in decision making withoutbreaching agreed rules. A preoccupation withthe equity of the process can lead to theimportance of personal interactions beingunderestimated. Put another way a concernwith interactional justice aimed at sustainingindividual dignity and enhancing self esteem inorganizational interactions (Lind and Tyler,1988) appears to be undervalued in terms ofits in¯uence on individual perceptions offairness (Tyler and Bies, 1990). A conceptthat is particularly salient in encounters wherea renegotiation of the employment relationshipis necessitated by organizational restructuring.

Although local government reorganizationhas stemmed from central government policyand not from local initiatives, it emerged fromthe study that the county council were seeking,in common with other employers, increasedorganizational ¯exibility as an outcome of re-structuring. Kessler and Undy (1996) observethat in the process of creating `leaner organisa-tions' there are three particular areas ofconcernÐthe loss of jobs for life, a breakdownin degrees of loyalty from employees due to aloss of trust in the employer's commitment tohonour their side of the bargain and a lack ofemployee involvement. Flatter structureswhich erode job ladders and wider careeropportunities have meant that employees haveto adjust their expectations of a long termorganizational future. Where `delayering' iscombined with a low organizational invest-ment in career development, which hasarguably been the case in the `cash squeezed'public sector, the perceptions of employeescan be that there is a reluctance to invest in theworkforce unless driven to do so by a speci®cskills shortage.

The growing literature on the psychologicalcontract suggests that there are broadly twotypes of contracts (Rousseau, 1996). These canbe summarized as:

. relational contracts that are built on longterm relationships based on an implicit

mutual commitment in which Herriotand Pemberton (1996, p. 762) observe`perceptions of equity and honour'become more pronounced over time,

. transactional contracts based on a purelyinstrumental exchange with a focus onoutcomes and distributive justice.

The case study illustrates the dif®culty forprofessional staff faced with the possibility ofentering into a more transactional form ofpsychological contract with their employer.The problems were particularly evident wherean individual's specialism had locked them intoa career in the public sector and their expecta-tions were of continuing job security and longterm progression, options that were reducingas opportunities decreased across the sector.

An optimistic view is that the psychologicalcontract can be re-negotiated to one whereenlightened employers offer, as a means of

compensating for their inability to offer a longterm organizational future, increased opportu-nities for individual training and developmentto ensure a greater employability in the openmarket. A model that the public sector may, intheory, be willing to develop but, in practice,®nds itself unable to deliver because ofinadequate resources. The emergent messageis that employers have to become more skilledat offering and presenting interventions toincrease job satisfaction. The procedures toenable such an approach and the `change agentskills' (Guest, 1987) of individual managers intheir application becomes crucial in therestructuring of employee expectations andthe formulation of new forms of employmentrelationships.

Managerial responsibilities

The devolvement of human resourcemanagement (HRM) responsibilities from the

The psychological contractcan be re-negotiated

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290 Lynette Harris and Alistair McGrady

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personnel specialist to line management hasbeen the subject of considerable debate inrecent years. One of the characteristics ofHRM and part of its claim to be distinctivefrom traditional personnel management is theincreased role for line managers for HRactivities. In theory where line managershave been given more authority to improveservices and responsibilities for staf®ng therole of the personnel specialist has changedfrom that of `watchdog of corporate policyand procedures to one of advisor to servicemanagers' (White and Hutchinson 1996,p. 197). Kessler (1991) in a survey of localauthorities in 1990 found that 63% had orwere planning to devolve more responsibilityfor personnel issues to their line management.How complete the devolvement of personnelactivities has been in practice is debatable in asector which retains high union membershipand where collective agreements limit theautonomy of decision making by individualmanagers.

The political dimension and sheer visibilityof local government has meant that manypolicy issues in personnel matters are still dealtwith centrally and at council member level.Although the level of political control dependson local circumstances, along with the extentof collective bargaining it has a heavy in¯uenceon the degree of autonomy granted to the linemanager in dealing with staf®ng matters. Ear-lier research conducted by the author (Harris,1999) found that the tensions between `riskavoidance' and exercising managerial discre-tion were particularly acute for managers in asector where employment practices are heav-ily in¯uenced by public accountability, ideol-ogy and external levels of regulation. Centrallydeveloped personnel procedures wererevealed as the key means of ensuring manage-rial consistency to minimize the risk of litiga-tion when devolving operational HRresponsibilities.

In an examination of line managers' role inimplementing change across 45 establish-ments, Cunningham and Hyman (1995) foundparticular problems of devolution in localauthorities where there was a reported reluct-ance of line managers to take on new

responsibilities `because of a lack of decisionmakers and a tendency to refer problemsupwards'. It is argued that this can result notonly in tensions between personnel specialistsand line managers about the application ofcentrally determined procedures, but also todiffering perceptions about each other'srespective HR responsibilities. The negotia-tions involved in any major organizationalchange bring these issues to the fore as thepractices of line managers impact directly ontolevels of employee commitment. Where suchareas of ambiguity are left unaddressed it islikely to have negative outcomes. One recentlyreported study of the complete devolvement ofthe personnel function (Thornhill and Saun-ders, 1998) raised a fundamental question`what if line managers don't realise they areresponsible for HR?' In the case study theboundaries of the HR responsibilities of theline managers emerged as far from clear.

The extent to which employees identify a`perceived breach' (Morrison and Robinson,1997) in the ful®lment of employer's obliga-tions will be heavily in¯uenced by theirperceptions of managerial behaviours in hand-ling the change process. Whitener et al. (1998)identify ®ve categories of behaviour as particu-lar in¯uences on employees' perceptions ofmanagerial trustworthiness. These are:

1. behavioural consistency2. behavioural integrity3. sharing and delegation of control4. communications (e.g. accuracy, explana-

tions and openness)5. demonstration of concern.

This suggests that employers have theopportunity to develop change processeswhich reinforce and even enhance trustworthi-ness in managerial behaviours. The organiza-tional dilemma is how to balance the degree of

How to balance the degree of¯exibility against the needfor close monitoring and

central control

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¯exibility to be given to line managers inhandling the process against the need for closemonitoring and central control. To develophigh levels of interpersonal trust means thatmanagers have to be given the freedom to actwithin certain de®ned parameters. Yet press-ures to ensure consistency of application,demonstrate procedural justice and avoidclaims of self interest may result in theseconcerns emerging as the overriding priorities.

The existing state of thepsychological contract

There is an absence of ®rm evidence on theimpact changes in local government have hadon the state of the psychological contract(Kessler and Coyle Shapiro, 1998). A survey byKessler and Undy reported in 1996 that onlyone ®fth (21%) of local authority employeestrusted their organization to keep its promisesto employees compared to a cross sectorsample average of 26%. An earlier survey byMORI into employee attitudes in local govern-ment (1994) reported widespread job satisfac-tion but also revealed some signi®cantconcerns with major differences betweenthe perceptions of senior and principal of®cergrades compared to manual employees. Feel-ings of job insecurity and negative feelingsabout working for local authorities increasedaccording to grade seniority. White collar andprofessional staff were found to be the mostcritical of their long term career prospects andarrangements for progression within thecouncil.

Employees did not rate local authoritieshighly for the way change was handled and65% believed they were poor at gainingemployee commitment pointing to inadequatecommunication and involvement as areas forimprovement. Despite evidence of sizeablepessimism about staff morale and concernsabout employment prospects, the mostimportant job factors for local authorityworkers were, in order of priority, interestingwork, pay and achieving something worth-while followed by job security. The mostdisliked aspect of working for a council was

the `excessive level of bureaucracy and redtape'.

For local government embarking on a majorchange programme these ®ndings containedcrucial messages about paying attention to theneeds of individuals for interesting work in therestructuring of work roles, the importance ofavoiding excessive bureaucracy as well asensuring that staff are kept informed of whatis happening.

The restructuring process

A major feature of the local governmentreorganization of the 1990s was the length oftime that elapsed between the review takingplace and the implementation of any recom-mendations for change. The timetable forreorganization at the council was that the®nal change recommendations publishedin December 1994 were not accepted by theSecretary of State and the revised recommen-dations were not approved until February1996. By June 1997 the positions of thecouncil's senior managers from 1 April 1998(known as `vesting day') had been con®rmed.In an attempt to maintain stability the processfollowed what Kessler and Coyle Shapiro(1998) describe as the `highly stylised andinstitutionalised approach' traditionally takento the procedural and substantive regulationof the employment relationship in localgovernment. On the issue of compulsoryredundancies the county and the city counciljointly published an enabling paper on6 November which stated that

`All staff who wished to remain in post will

be placed in accordance with the National

Agreement with either the City or County

Councils on vesting day which in effect

means that there will be no compulsory

redundancy relating to local Government

reorganisation on vesting day.

Based on present knowledge the City

and the County Council do not intend

making any one compulsorily redundant

after vesting day as a result of local govern-

ment reorganisation and will utilise the

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292 Lynette Harris and Alistair McGrady

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range of measures commended within the

national joint agreement.'

Although the trade unions objected to thiswording on the grounds that there was noguarantee that compulsory redundancieswould not follow shortly after 1 April 1998,only ten employees were still waiting to beplaced in permanent posts four months aftervesting day. No compulsory redundancynotices had been issued and no compulsoryredundancies were envisaged.

The council's enabling paper addressedissues of staff displacement due to the reorgan-ization. It stated that `by the end of October1997 most employees will be aware of theirposition', i.e.

. have attained a post in the city or thecouncil

. have requested and been accepted forvoluntary redundancy

. are unplaced but are being considered forredeployment and retraining.

The reality for many professional staff wasthat by the end of November 1997 they still didnot know who their employing authoritywould be, if applications for voluntary redund-ancy had been accepted or whether theywould have a permanent post at the ®rstof April in either authority's new structure.This was partly caused by a delay in the newunitary city council publishing their newstaf®ng structures. For many employees theirfuture employment was still uncertain threemonths before the reorganization date whichwas running into the period for issuing noticesof redundancy. These lengthy periods ofuncertainty certainly contributed to staff'sfrustration and feelings that their psychologicalcontracts with their employer were being`violated' as it challenged their expectationthat the employer would protect their employ-ment prospects and deliver the promise of `nocompulsory' redundancies.

The protracted time scale, however, hadbene®ts as well as disadvantages. On the onehand it placed continuing pressures onmanagers to handle the effects of destabiliza-

tion and continuing uncertainty over jobsecurity but on the other it provided greateropportunities to assimilate people to posts inthe new structure, an opportunity that had notbeen available in a number of other authoritiesin England working to tighter deadlines. One ofthe ironies of the very processes designed toensure `fair' treatment for all employees wasthat extended delays could be caused by staffobjections against the inclusion of their postsin the statutory transfer orders. Most of thesewere resolved through negotiation but, forexample, one employee in the policy unitexercising his right to appeal signi®cantlydelayed the con®rmation of gradings for 41staff in the new structure until the appealsprocess had been exhausted.

Where staff could not be directly assimilatedinto the new departments, existing job titlesand descriptions were cancelled and individ-uals had to apply for rede®ned posts in the newstructure. Appointments were made accordingto skills and pay was protected but if at a lowerlevel than before this meant certain employeeslost future salary increments. A constant themeof the interviews, focus groups and question-naires was not just the fear of compulsoryredundancy but also of demotion. The stigmaof enforced redeployment or demotion gener-ated fresh anxieties and uncertainties. Hand-ling changing decisions about their futureemployment exacerbated feelings of distressand negativity especially when individuals wereunsuccessful in an application for their `ownjob'. Hallier and Lyon (1996) observed thesame impact of continuing uncertainty on thework values, attachments and expectations ona group of engineering middle managers facingpotential job loss even when the ®nal outcomewas a reprieve from individual job loss.

The in¯exibility of the rules was illustrated inthe observation of one accountant who hadbeen seconded from a substantive post for aperiod of four years.

`I spent four years on secondment, doing a

favour for the council. In that time I have

seen other accountants at my level pro-

gress to more senior posts. Now I am told

that I have to return to the post I held

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Local government reorganization 293

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before the secondment and take a big pay

cut as well. There is no way I am going to

do that.'

This particular comment illustrated one ofthe restrictions imposed by the procedures ofthe Local Government Staf®ng Commissionfor appointing employees to jobs post re-organization. The Commission's detailed guide-lines required that each employee had to beconsidered in the light of his or her substantivepost which was the job for which they had asigned, written and permanent contract. Thismeant that any operational arrangements foremployee secondments or acting up in moresenior posts were automatically disregarded, arule that was a major source of discontent.These arrangements had frequently come to beregarded as permanencies which bene®ted allparties as illustrated by the employee whocommented `I have been told that my former

department has to resolve my position but I

know they have no post for me. I am happy

where I am and have no desire to go back.'Taking no account of current work roles,

status and pay grades led to an erosion of trustnot only for those who experienced the rules at®rst hand but also among those who observedtheir experiences. For an organization whichhad stated to all its employees that it wanted toachieve greater staf®ng ¯exibility post re-organization a failure to recognize pastemployee cooperation was hardly conduciveto gaining future cooperation and commitment.Reduced opportunities for progression andwidening personal experience was a sourceof concern to professional employees. Theirpredicament was summed up by the policyof®cer who commented

`I took a pay cut when I joined this

organisation. The reason for this was that

my manager promised that the range of

work I would undertake would enable me

to make progress. However this has not

occurred and with the new structure I now

expect that my present level will be the one

on which I eventually retire.'

Disappointment at shrinking career pro-spects was not helped by a perception that

chief of®cers and senior of®cers had safe-guarded their own interests as these appoint-ments were resolved at a very early stage in theprocess. This action was explained by onesenior personnel of®cer as strategically import-ant on the grounds that

`senior staff needed a guarantee that they

had a future with the County Council. Had

we not done that, they may have felt it

necessary to seek employment elsewhere.'

Unfortunately this approach, justi®ed as itmay have been, created an impression that

`Chief and Senior Of®cers looked after

themselves. They made sure their positions

were sorted out almost immediately. Every

one else had to endure several months of

uncertainty not knowing whether we

would have jobs at all.'

This was by no means a universal view and anumber of employees saw it as appropriate toestablish these posts ®rst but the issue ofemployer-employee trust was, nevertheless, animportant in¯uence on employee's percep-tions of the ®nal outcomes and managerialbehaviour emerged as a key ingredient. Pastmanagerial inadequacies were identi®ed asleading to the reorganization highlighting anumber of individuals in jobs above the levelsof their ability but who had been in these postsfor years. Now faced with applying for `theirjobs' only to be told they were unsuitable wasdescribed by a senior personnel of®cer as a`real shock'.

The quality of management and their abilityto respond to individual cases was critical,managers expressed frustration at their lack ofcontrol over the process typi®ed by the seniormanager who commented

`the problem was I had absolutely no

control over the process for reorganisation

A perception that chiefof®cers and senior of®cershad safeguarded their own

interests

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294 Lynette Harris and Alistair McGrady

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so I could not give any individual a 100%

guarantee that they would have a job in

the reduced organisation. I could tell them

not to worry, that I was con®dent they

would have jobs but this was not enough.

Why don't they trust us?

The focus groups and interviews revealedconsiderable differences in the lengths individ-ual managers were prepared to go to pro-tect their staff. Although the trade union

contribution was widely acknowledged assupportive and positive, most managers felttheir hands were tied and were fearful of thetrade union reaction if they set a precedent inany staf®ng decision. There were managerswho were seen to promote their staff'sinterests more actively than others but in a

`no win situation' this led to claims that somedepartments were getting more favourabletreatments than others. Ultimately the rigidityof the restructuring rules resulted in a form of`abdication management' (Beaver and Harris,1996) where the systems were perceived asresponsible for the outcomes rather then themanagement of the organization.

Figure 1 sets out the main factors theresearch identi®ed as in¯uencing employeeattitudes. Whilst the weightings given to thedifferent factors will vary according to eachindividual, as a `bundle' of issues they highlightthe key areas to be addressed by an organiz-ation embarking on a major change pro-gramme.

Conclusions

Although no compulsory redundancies tookplace before or after `vesting day' the researchrevealed the negative impact on employees of

Why don't they trust us?

Figure 1. Key in¯uences on employee perceptions of the change process.

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Local government reorganization 295

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a restructuring exercise that was characterizedby the rigidity of its rules. The degree of angerand frustration expressed by many of theemployees in the study can only be partiallyexplained by the changes they experiencedand their pessimism about future prospectsfor personal progression. Expectations thattheir employer would look after and `safe-guard' their interests had in many instancesnot been met and there was a strong sensethat levels of trust between employer andemployee had been badly damaged. Thecouncil, despite its very considerable endea-vours to act as a `good employer' by concen-trating on avoiding job loss and ensuringconsistency of treatment, had overlooked thesigni®cance of the psychological contracts ofindividual employees. The transactionalapproach adopted to renegotiating theemployment relationship took no account ofthe real strengths and `goodwill' that existedin informal structures and departmentalarrangements. The absence of supportiveand integrated HR practices such as promo-tion boards and, in many instances, personaldevelopment programmes reinforced employ-ees' feelings of bleakness about their organiza-tional future.

The observed managerial behavioursappeared to have fallen short in all thecategories Morrison and Robinson (1997)identi®ed as crucial to perceptions of manage-rial trustworthiness but above all in a demon-stration of concern for the individual. The lackof freedom to act responsively to speci®ccircumstances and an absence of delegationto line managers reinforced their perceived`helplessness' to contribute positively tothe process. This fuelled employee percep-tions that the restructuring was providing anopportunity to address the legacy of a weakmanagement reluctant to tackle performanceissues.

The evidence from the case study supportedSinnott's view (1997, p. 104) of local govern-ment reorganization

`that the interests of staff need better

consideration. The local government

review has seen the jobs and careers of

thousands of staff bedevilled by uncer-

tainty or worse. Local government has lost

a wealth of experience, through enforced

retirement in many cases.'

There were, however, some real grounds foroptimism in the study's ®ndings. The ques-tionnaire and interviews revealed a profes-sional staff committed to delivering a qualityservice with 89% supportive of the council'squest for new working practices and a `will-ingness to change' that the authority will haveto maximize to the full if it is to effectively meetthe challenge of the next round of changesproposed in the Government's White Paper`Modern Local Government: In Touch WithThe People'. If lessons are to be learnt from thisrestructuring exercise then councils will needto share their experiences and develop thecon®dence to move away from the rigidity ofrecent employment practices to adopt moreinnovative, ¯exible approaches at a local level.Such initiatives will need to take properaccount of the in¯uence personal interactionshave in shaping employee attitudes and thepivotal role managerial behaviours play in thechange process.

Biographical note

Lynette Harris is currently the Director ofProfessional HR Development at NottinghamBusiness School and an active researcher andauthor of articles on contemporary issues inhuman resource management in bothacademic and practitioner journals. She is ajoint editor of a new text `Strategic HumanResourcing: Principles, Perspectives and Prac-tices in HRM,' published in April 1999.

Alistair McGrady has worked in local govern-ment for ten years and is currently based in thepolicy division of a large local authority. Heactively researches current local governmentissues and, in 1998, co-researched a studyreport on community involvement with theWarwick University Local Authorities' Consor-tium.

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296 Lynette Harris and Alistair McGrady

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