Organizational Change and Employee Stress

Abstract

This article analyzes the relationship between organizational change and employee health. It illuminates the potentially negative outcomes of change at the level of the employee. In addition, it relates to the ongoing debate over how employees react to and respond to organizational change. I hypothesize that change increases the risk of negative stress, and I test this hypothesis using a comprehensive panel data set of all stress-related medicine prescriptions for 92,860 employees working in 1,517 of the largest Danish organizations. The findings suggest that the risk of receiving stress-related medication increases significantly for employees at organizations that change, especially those that undergo broad simultaneous changes along several dimensions. Thus, organizational changes are associated with significant risks of employee health problems. These effects are further explored with respect to employees at different hierarchical levels as well as at firms of different sizes and from different sectors. This paper was accepted by Jesper Sørensen, organizations.