College Quarterly
Winter 1996 - Volume 4 Number 2

Research Report: The Effect of Organizational Restructuring on Government Employee Locus of Control

by Erin Jones


As with many private organizations today, operations within the federal government are currently undergoing significant changes due to budget cutbacks and technological innovations. These changes need to be managed effectively in order for staff and management to adapt and find new ways to operate effectively within the changing environment.

As Katherine Mezei (Personal Communication, November 1, 1995), a consultant in the Professional Development Department of Humber College, states, "Organizations are great at change, but they are lousy at transition." In the process of implementing organizational change, people can 'drop off' because their losses and grieving due to the change are not acknowledged. Changes taking the form of mergers, reforms, restructurings and downsizings are often planned and implemented before those who will be effected by them have even been informed. As with any organization, this is causing strong feelings of mistrust and apprehension among staff. A study conducted at Sir Sanford Fleming College in June 1994 to determine full-time support staff perceptions during a period of organizational transition, confirms these negative reactions (Milroy, 1995).

Both the speed of technological change and the need to implement cost-effective programs have caused an increase in the use of computer-based services. These shifts in direction call for new demands to be placed on government employees. Some skill sets will become obsolete while other new skill sets will emerge.

If change is not effectively managed, the goals it was intended to produce are threatened. People build up resistance to it, productivity goes down, costs increase and the change itself may be abandoned (Bridges, 1988). The impact of taking on more responsibilities and seeing fewer employees to do the same or more amount of work is compounded by "survivor's syndrome". Feelings of guilt can add to strong feelings of change induced anxiety. Administrators and managers are often unprepared for these reactions. While they may have attained the services of an outplacement company to deal with the trauma of displaced workers, they generally fail to consider the emotional needs of the remaining staff. This can result in significantly reduced morale and productivity leaving the organization worse off than before (Noer, 1994).

Obviously understanding both the demands of the new workplace and what government employees are experiencing are keys to developing effective strategies and programs to assist staff and the federal government as a whole manage their transitions.

Statement of the Problem

The purpose of this study was to determine manager and front-line staff perceptions of their workplace and the impact on their locus of control during the initial phases of a restructuring and merger of two divisions.

People have different perceptions about the factors responsible for what happens to them. These perceptions are defined as a person's locus of control. Those who attribute the cause or control or an event to themselves are said to have an internal locus of control. People who attribute control to outside forces are said to have an external locus of control.

Review of Related Literature

Relatively little attention has been paid to the experience of employees remaining after a major organizational change. The studies that do exist tend to offer conflicting results. Nelson and Cooper (1995) examined the impact of privatization and reorganization of a government organization. They found that there were significant differences between administrative staff, management and manual workers. Job satisfaction declined during the privatization period and increased prior to and following the reorganization. Locus of control was found to be a significant predictor of job satisfaction levels during the period of reorganization. Therefore, for people who exhibit a higher external locus of control, job satisfaction levels are significantly reduced over the period of the reorganization.

Milroy (1995) employed the use of a survey designed to look at five key categories: demographics, sense of multiple loss, degree of difficulty in dealing with change, perceived loss of control, and perceived barriers to success. No difference in perceptions based on gender, age, job classification or campus location was found. The study indicated that staff had a great deal of difficulty in dealing with workplace changes and felt a loss of control. The staff perceived key barriers to their career advancement which included economic forces, lack of necessary skills, reduced opportunities, absence of long-term career plans and lack of a clear vision of the future. The study concluded that all these factors combined contributed to reduced trust and loyalty as well as a fear of the unknown future.

Spector (1982) analyzed a number of studies regarding behaviour as a function of an employee's locus of control. The study's findings suggested that locus of control is related to motivation, effort, performance, satisfaction, perception of the job, compliance with authority and supervisory style. It was also found that an individual's locus of control can be effected by a significant negative event. Shifts in the locus of control for both internals and externals can occur as demonstrated in a field study by Anderson (1977). This study confirmed that in a stress setting, externals respond with much more defensiveness and much less task oriented coping behaviour than internals.

It might be expected that internals would demonstrate greater job motivation and involvement than would externals because they perceive themselves to have greater control over the environment. Reitz and Jewell (1979) conducted a survey of over 3000 workers in six countries. Their results indicated that locus of control was significantly related to job involvement and motivation.

Statement of the Hypothesis

Since locus of control has been linked to job satisfaction, motivation and performance, it would make sense to monitor this variable during a period of restructuring. Employees who have an internal locus of control tend to demonstrate higher levels of performance than those who have an external focus. Previous studies have indicated that shifts in locus of control are possible during negative events. If the locus of control were to shift to a more external focus, it is assumed that employees' performance, motivation and ability to deal with change would be significantly reduced. Therefore, it was hypothesized that managers and front-line staff, in an organization undergoing reorganization and downsizing will possess lower internal locus of control levels than they did prior to restructuring.

The Null Hypothesis

The null hypothesis was that there is no significant difference between past and present locus of control levels for managers and front-line staff undergoing reorganization.



The target population for this study was 250 federal government employees in a division providing income securities services to the public in 21 offices across Ontario, Canada in March 1995. This population consisted of mainly women in administrative roles and men in managerial roles. The average tenure of the employees was 14 years. This group was selected because senior management indicated that they were the first to experience the organizational changes. Major changes for this group included the following: their section would be incorporated into another division, a major shift in service would mean new roles for them, and ongoing downsizing activities were taking place. For this study, a sample of 30 participants consisting of both managerial and front-line staff was randomly selected from this population to represent each of the offices.


A questionnaire based on the design of Milroy's survey was used as the measuring instrument to determine employees' perception of their locus of control levels in the present situation and five years ago. The questionnaire consisted of 20 questions and used a five-point Likert Scale presenting options ranging from strongly disagree (1) to strongly agree (5) for positively worded questions. Half of the questions were worded positively and the other half negatively to avoid influencing employee responses. The scoring scale was reversed for negatively worded questions.

Semi-structured group interviews ("discovery sessions") were also used to collect descriptive data. Samples of the questions and questionnaire are outlined in the Appendix.

Design and Procedures

A combination of semi-structured group interviews and questionnaires were used to ensure an in-depth understanding of the employees' experiences while using statistical analysis to identify significant trends.

Three discovery sessions were facilitated by the author over the course of 3 weeks. The first group consisted of front line staff only. The second group consisted on managerial staff and the third was a mixed group of both managers and front-line staff. This was done to gauge different responses of participants due to the interaction of the same or different levels.

All staff where informed that these sessions would take place and that a representative sample would be randomly selected. It was stressed that all information would be kept confidential.

The same series questions were asked of each group to ensure consistency and confidentiality of collected data. Participant responses were documented by the investigator during the sessions. Participants were also asked to document their responses at the end of each session on a feedback/review form (included in the Appendix). Colour coded copies of the questionnaire were given to each participant to fill out during the discovery sessions.

The focus of this study was to examine the experiences of remaining employees; however, given the uncertainty of the organization at this time, it is understood that the status of these employees could change at any time.

This study was limited to investigating the perceptions of managers and front-line staff in one division of the Federal Government and therefore, the generalizability of the data beyond the scope of this study is questionable.


A total stratified sample of 30 individuals was randomly selected to participate in the sessions. Twenty-two of the selected individuals came to the sessions. Within the respondent population there were 64% females and 36% males. This accurately reflected the male/female ratio of the entire target population. Staff shortages during peak work periods in some offices made it necessary for the absent eight individuals to forego the sessions. Due to this need for some employees to remain at their offices and possible managerial influence in selection, the final sample was not truly random and therefore, may not be representative of the population.

The locus of control mean score for the total sample in the present situation was 56.68 with a standard deviation of 9.80. The locus of control mean score for employees' perceptions five years ago was 66 with a standard deviation of 8.95.

A T-test was run on the total scores of employee locus of control for the present situation and five years ago. This study indicated that there was a significant difference [t = 3.54, p = .05] between locus of control today and five years ago for both front-line staff and managers. Therefore, the null hypothesis is rejected.

Interview comments in each of the sessions were consistent. Discontent was expressed by the majority of participants. They discussed their grieving of the loss of their co-workers who had taken voluntary severance packages or had been declared surplus. Many comments related their experience to being "wounded survivors in a war where the people on either side of you have been killed". There was a great deal of uncertainty as to whether they, as survivors of the first phases of the reorganization, were "winners" or "losers". Trends in their conversations indicated staff discontent with the lack of organizational communication, inconsistent leadership, role ambiguity, overwork due to staff shortages, no policies and procedures to support the team concept and inconsistent access to technology to support their current training. Repeated remarks were made about being "taken over by the other division" and having no control over one's job.

Interestingly, 91% of respondents indicated that they enjoy change. This was supported by their remarks that they felt the changes were "long overdue". However, 77% of respondents indicated that they felt their futures were insecure. Discussions revealed that many of them were the key breadwinners in their families and their jobs were vital to their financial well-being.

The majority of participants in each session indicated that they felt the discovery sessions were "therapeutic" and were glad to know that other employees were experiencing the same problems they were. While this is a beneficial effect, it must be taken into consideration that this may have influenced participant responses. Having been "heard", many of the participants indicated that they felt more in control and this may have effected their scores on the questionnaire.


The results of the questionnaire indicate that employee locus of control can be shifted during a period of reorganization and uncertainty. The comments made by the participants in each session support this finding. In addition, the interviews indicate that a shift to toward a more external locus of control is related to reduced employee commitment to the job. However, the relation between locus of control and job commitment was not statistically examined in this study and it is an area recommended for further exploration.

While some initial work has begun to acknowledge the need to manage remaining employees in organizational transition, much more needs to be done. The majority of activities that have taken place have been short term workshops and activities. The development of an integrated transition strategy has yet to be fully implemented. Examining the effects of a transition management intervention on the locus of control, commitment and motivation of employees is another suggested area for further exploration.

As indicated by this study, careful consideration must be given to the human aspects before implementing any organizational changes. Supportive measures should be implemented to acknowledge the workers' losses, allow them to gain insight into the nature of loss and help them understand the new workplace and how to function in it.


Anderson, C. (1977). Locus of control, coping behaviors, and performance in a stress setting: A longitudinal study. Journal of Applied Psychology, 62 (4), 466-451.

Begley, T.M., and Czajka, J.M. (1993). Panel analysis of the moderating effects of commitment on job satisfaction, intent to quit, and health following organizational change. Journal of Applied Psychology, 78 (4), 552-556.

Bridges, W. (1991) Managing Transitions. Massachusetts: Addison-Wesley Publishing Company.

Loss in the workplace: a look at the effects of organizational change upon college support staff Study conducted at Sir Sandford Fleming College.

Nelson, A., and Cooper, C. (1995). Uncertainty amidst change: the impact of privatization on employee job satisfaction and well-being. Journal of Occupational and Organizational Psychology, 68, 57-71.

Levin, J.S. (1993) Colleges as organizations of change. ASHE Annual Meeting Paper. (ERIC Document Reproduction Service No. ED 375 706).

London, M. (1987) Employee development in a downsizing environment. Journal of Business and Psychology, 2 (1), 60-73.

Spector, P. (1982) Behavior in Organizations as a function of employee's locus of control. Psychological Bulletin, 91 (3), 482-497.

Stockton, James J. (1993, July). A comparison of levels of satisfaction regarding human resource development among employees of North Arkansas community/technical college. Comparative analysis (ERIC Document Reproduction Service No. ED 384 379).

Sullivan, L., and Silverstein, R. (1993). Intervention During Downsizing: A Clinical Model for Restructuring. HR Focus, 70 (3), 23.

Reitz, H.J., and Jewell, L.N. (1979) Sex, locus of control, and job involvement: a six-county investigation. Academy of Management Journal, 22, 72-80.


Appendix A: Sample Group Interview Questions
  • When did the first signals of the reorganization occur?
  • How did you feel when the changes began? What was your experience as the changes continued?
  • How did you feel when the first people acknowledged that they took the severance package and left? How was work at that time? Is it different now?
  • What could we do to make the workplace more joyful given the current constraints?
  • What things can you do yourself to make the workplace more joyful given the current constraints?

Appendix B: Sample Discover Session Questionnaire

Thank you for taking a moment to fill in this questionnaire. Do not take too much time reflecting on the questions. The first response that comes to mind is likely the most useful.

All information gathered from this questionnaire will be kept confidential. It will be compiled and analyzed with all other responses to help us better understand your experiences.

Section One

(Optional - this helps us analyze the data more accurately):

  1. Are you [ ] Male [ ] Female?
  2. What is your age group?
    20 - 29 [ ] 30 - 39 [ ] 40 - 49 [ ] 50 - 59 [ ] 60 plus [ ]
  3. What is your job classification?
    Managerial Staff [ ] Front-line Staff [ ]

Section Two

Instructions: Please read each of the statements below and for each indicate whether you: Strongly agree (SA), Agree (A), Are uncertain or neutral (N), Disagree (D), or Strongly disagree (SD) Please try to avoid an uncertain or neutral answer (N) where possible.

No. Statement SA A N D SD
4 I feel my life goals are achievable.          
5 I do not know how to direct my energies to get what I want for the future.          
6 My future is less secure than it used to be.          
7 I can identify the skills that I will need in the future.          
8 I need more time to get used to the new ways.          
9 I am fearful about my future job/career.          
10 I have a formal plan for reaching my goals.          
11 I think the changes concerning my job are in my control.          
12 Restructuring has opened up new opportunities for me in my career.          
13 I wish things would not change.          
14 I adapt easily to change.          
15 Changes are beyond our control.          
16 I give my input because I feel my opinion counts.          
17 The pace of change is too rapid.          
18 I am troubled by the recent changes that are happening around me.          
19 I have control over my life situation.          
20 I enjoy change.          

Please Stop Here.

Section Three:

Instructions: Please answer each of these questions again but as you would have 5 years ago. For each indicate whether you would have: Strongly agreed (SA), Agreed (A), Been uncertain or neutral (N), Disagreed (D), Strongly disagreed (SD). Please try to avoid an uncertain or neutral answer (N) where possible.

No. Statement SA A N D SD
4 I feel my life goals are achievable.          
5 I do not know how to direct my energies to get what I want for the future.          
6 My future is less secure than it used to be.          
7 I can identify the skills that I will need in the future.          
8 I need more time to get used to the new ways.          
9 I am fearful about my future job/career.          
10 I have a formal plan for reaching my goals.          
11 I think the changes concerning my job are in my control.          
12 Restructuring has opened up new opportunities for me in my career.          
13 I wish things would not change.          
14 I adapt easily to change.          
15 Changes are beyond our control.          
16 I give my input because I feel my opinion counts.          
17 The pace of change is too rapid.          
18 I am troubled by the recent changes that are happening around me.          
19 I have control over my life situation.          
20 I enjoy change.          

APPENDIX C: Sample Discovery Session Feedback/Review Form

What useful points were raised for you today?

What have we missed?

Other comments.

Thank you for your participation.

Erin Jones, B.Sc.

Erin Jones is a Training & Development Consultant with The Independent Order of Foresters in Don Mills, Ontario.


• The views expressed by the authors are those of the authors and do not necessarily reflect those of The College Quarterly or of Seneca College.
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1996 - The College Quarterly, Seneca College of Applied Arts and Technology