The effects of organisational practices on psychosocial risks

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Roxane L. Gervais, Health & Safety Laboratory, UK

Introduction

Organisational change is a useful process within an organisation, and could lead to improved practices and procedures. However, it tends to occur to a greater extent during periods of recession or economic turmoil. Regardless as to when it occurs, it is useful to explore the impacts of these changes on occupational safety and health (OSH). This article examines the relationship between various organisational practices (such as, lean production, downsizing and resizing, globalisation, outsourcing, continuous improvement, and process reengineering), and how they affect psychosocial risks in the workplace. In addition, the implications for workers’ health and wellbeing are outlined and discussed.

Defining organisational change and practices

Organisational change has, over the last three decades, become the norm rather than the exception. Due to mergers and acquisitions, at the national and international levels (as well as spin-offs) it is not uncommon for workers to experience at least one major organisational change during their working career. These dynamic change processes are seen to occur for three main reasons: globalisation; constant technological developments; and the volatile economic climate. Change processes create, as a result, a state of constant flux; described by D’Aveni (1994) as hypercompetition[1]. These external changes make it difficult for any organisation not to resort to internal changes to keep pace in maintaining or attempting to maintain a competitive advantage[2]. Despite the frequency of these changes, which intensified with the extensive downsizing processes in the 1970s and the 1980s, there has been limited assessment of their impact on the workers[2] and, more broadly, on OSH; especially on the long-term integrity of OSH management[3]. However, there are some organisations that when reorganising in order to improve the effectiveness of their management systems, take the opportunity to review the effectiveness of their health and safety systems, including the influence of the change(s) on psychosocial risks[4]. It is important to protect workers’ health during any restructuring within an organisation.

Although agreed and generally accepted definitions of organisational change and organisational practices have not been realised to date, it is widely recognised that organisational change is the change process within an organisation that allows it to improve practices and systems[4], but that could have also various levels of impact on its employees[2]. Organisational practices, on the other hand, emerge from the organisation’s history, workers, interests and those actions that over time have become entrenched and accepted as to what the organisation means; moreover, the practices reflect the organisation’s shared knowledge and competence and that which the workers accept[5].

The ways that organisations choose to carry out change is affected by their inherent principles that emerge based on their cultures. For example, organisational work practices that are implemented, inclusive of those carried out during organisational change, tend to influence the development and sustainability of an organisation’s culture[6]. In turn, the cyclical element of this process is obvious as organisational culture may, in turn, influence how organisational change is implemented. Moreover, organisations with a strong safety culture (i.e. wherein safety is the dominant characteristic of the corporate culture) are more likely to consider the impact of safety during organisational change[7].

Organisational change encompasses many different concepts, but this overview considers the impact of the following on psychosocial risks at work:

Business process re-engineering refers to the redefinition of business organisation, its systems and practices for those processes central to the goals of the customer and the organisation[4].

Continuous improvement ensures that organisations are systematic and innovative in their approach to meeting business needs by continuously improving. It arose from the Total Quality Management (TQM) principle, which is an on-going process that ensures senior managers do whatever is required to enable the workers within an organisation to have the necessary resources to establish and achieve the obligatory standards to meet or exceed the customer’s expectations[8]. It requires customer focus, continuous improvement and teamwork, which are achieved through established practices and techniques[2].

Downsizing occurs when an organisation reduces the number of employees within the business to reduce costs. It can occur through voluntary schemes, such as: early retirement; involuntary dismissals (e.g., layoffs); and the displacement of employees through outsourcing[9].

Globalisation although considered as difficult to define, Al-Rodhan and Stoudmann (1996, p. 2) in attempting to rationalise the concept proposed that ‘Globalisation is a process that encompasses the causes, course, and consequences of transnational and transcultural integration of human and non-human activities’[10]. It allows organisations to expand their markets by working across different countries.

Lean production is seen as challenging to define due to the different perceptions of what it should entail[11]. It has been linked to just in time practices, resource reduction, improvement strategies, standardisation, scientific management and human relations management, but these do depend on who is evaluating the concept and the reason for this evaluation[11]. One perception of the term has it existing at both the strategic level i.e. thinking of and offering value and at the operational level, i.e., getting rid of waste, within organisations; while acknowledging that any definition should only be considered at the time it is used, as it will evolve due to its nature[12]. Based on the literature, the use of lean production within organisations will involve reducing waste in order to work more effectively.

Outsourcing/contracting out involves the purchasing of services from external companies that were undertaken previously by employees of the purchasing organisation[4].

Resizing is considered a more strategic organisational process to allow it to meet its strategic objectives, and, therefore, is seen as less punitive than downsizing. It allows senior management to restructure the organisation to make it more agile, flexible, and proactive; and while it may involve job cuts, it adjusts resources and implements strategic shifts to obtain gains from the constant changing global work environment[9].

All of these processes are linked in various degrees to the concept of TQM, and it must be noted that TQM has not realised its expected benefits, with the reasons suggested, consisting of its highly bureaucratic implementation and lack of managerial support [2]. The goal of organisational change is typically to improve competitiveness and organisational efficiency, and, hence, psychosocial OSH risks are rarely integrated in the planning and implementing phases.

Linking organisational change processes with psychosocial issues

As discussed, safety and health is rarely considered during organisational change. However, it is important to consider such issues, as any organisational change will have short- and long-term effects on the psychosocial health of its workers. The most frequent change in which organisations tend to engage is a reduction in the workforce[4] (i.e., downsizing or resizing); this generally can result in[4]:

  • a loss of skills and knowledge from the organisation;
  • the overloading of the remaining staff;
  • the removing of risk controls;
  • an increased use of temporary contractors;
  • the implementation of formal systems, i.e. structured and recommended as an acceptable approach, that do not take account of the changes occurring within the organisation; and
  • a reduction of morale.

With any change process, there is the potential for psychosocial risks, i.e., those issues that arise due to the design and management of work and may cause either social or physical harm and tend to be linked to work-related stress, workplace violence, and harassment[13], to emerge.

Some of the work hazards that could influence psychosocial risks are listed in Table 1.

Table 1: Work-related psychosocial hazards
Work factor Potential hazard
Job content Lack of variety or short work cycles, fragmented or meaningless work, under use of skills, high uncertainly, continuous exposure to people though work.
Workload & work pace Work overload or under load, machine pacing, high levels of time pressure, continually subject to deadlines.
Work schedule Shift working, night shifts, inflexible work schedules, unpredictable hours, long or unsociable hours.
Control Low participation in decision making, lack of control over workload, pacing, shift working, etc.
Environment & equipment Inadequate equipment availability, suitability or maintenance; poor environmental conditions such as lack of space, poor lighting, excessive noise.
Organisational culture & function Poor communication, low levels of support for problem solving and personal development, lack of definition of, or agreement on, organisational objectives.
Interpersonal relationships at work Social or physical isolation, poor relationships with superiors or co-workers, interpersonal conflict, lack of social support.
Role in organisation Role ambiguity, role conflict, and responsibility for people.
Career development Career stagnation and uncertainly, under promotion of over promotion, poor pay, job insecurity, low social value to work.
Home-work interface Conflicting demands of work and home, low support at work, dual career problems.

Source: Leka & Cox, 2008, p. 2[13]

Due to the potential impact of change, particularly on psychosocial issues it is important for organisations to take account of[4]: 1) The need to retain competent staff. The retention of competent staff allows adequate responses to abnormal, exceptional and emergency events. 2) Having a stronger focus and higher dependence on outsourcing. If organisations use outsourcing they should ensure that ‘new’ contractors are considered as part of the safety management process, and, if necessary, that any process is reviewed to decide if any changes are required to avoid importing risk. The risk would include the risk of any contractor’s injuries and ill health, as well as the risk that contractors may unintentionally have on the safety of the company's plant and workers. 3) The resources required for training needs analysis and training. Training is a crucial and fundamental aspect of any change process, without which the success of the changes cannot be guaranteed. In addition, training ensures that competence is transferred to any new organisational process, taking consideration of new roles and responsibilities.

Further, the definitions of the different change concepts illustrate that organisational changes are meant to address business management, but the resolving of the challenges of business management may not necessarily result in the resolving of any safety and health issues that may exist[4].

The impact on staff

Any change, through its nature, will have some sort of impact (either positive or negative) on employees, as well as on the organisation. The employees may choose to reflect this impact through conflict, resistance or tension[2]. Within the European Union (EU), the Fifth European Working Conditions Survey (EWCS) in assessing the level of organisation change to which workers were subjected in respect of ‘new processes or technologies’ and ‘substantial restructuring or reorganisation’ showed that in 2010, 25% of employees noted that they had experienced both types of organisational change at their workplace[14]. The survey noted also that an additional 17% had new processes or technologies introduced at their workplace, with a further 9% having experienced restructuring or reorganisation. Overall, just over half of the respondents had experienced some type of organisational change at their workplace in the three years prior to the survey.

Organisational changes may happen fairly frequently or infrequently, but frequent change that seems not to have a finite end may cause employees to become ‘change-weary’, cynical, and lose energy, and commitment for their work[2]. These lethargic outcomes may be reflected also in ‘survivors’ syndrome’. Extensive research has reflected the heavy emotional and physical toll that occurs with employees who survive job reductions and are categorised as experiencing ‘survivors’ syndrome’[2]. Survivors’ syndrome could result in decreased management credibility, decreased employee morale, increased absenteeism, and increased turnover[2]; with downsizing tending to increase sickness absence levels among employees[15].

Another consequence of the changes within an organisation is a lower belief in the ‘psychological contract’. The psychological contract is an ‘invisible’ contract, which employees have accepted traditionally as an agreement by management to safeguard employees’ wellbeing and job security [2]. In turn, organisations expect commitment and productivity from workers. The psychological contract is a term promoted extensively by Rousseau (1995) to outline the ‘unwritten’ relationship between employers and employees[16].

Resizing specifically has been shown to have a strong negative impact on organisational effectiveness and employee wellbeing[17][18][19][20][21]. Organisational effectiveness may be influenced by role ambiguity, as a result of resizing[9]. Further, resizing can lower the self-esteem and sense of fairness that employees may feel. For example, while employees may justify the loss of a colleague’s job due to poor performance, with such perceptions based on, e.g., his/her being constantly late for work or failing to meet production standards, it is more difficult for them to justify the loss of jobs that occur among productive and diligent colleagues, due to an economic downturn[9]. Resizing may increase employee stress as they may ruminate about the job, and are unable, therefore, to detach from the job and thereby recover; while a high degree of pressure combined with a perceived lack of control will cause high anxiety [9]. Stress can in turn affect wellbeing, especially as workers surviving a transition have been found to: increase their drug and alcohol intake; to have trouble falling asleep at night; to experience headaches and back pain; to start smoking after having stopped; and to have increased tension and conflict at home and on the job [9]. Moreover, the implementation of resizing and the way it is managed could impact negatively on the regard and respect that workers have for their organisations and leaders[21][22][23].

The impact on the organisation

Although there is limited research on the OSH impact from organisational change, one case study showed that positive or static results are possible if OSH is considered as part of the change process. Wright (1996, a, b) [4][24] examined ten organisations on their approaches to change and found that many of the organisations reported improvements in safety and health performance, inclusive of:

  • a power generation company reporting an 85% reduction in accident frequency rate over a five year period; and
  • a drinks manufacturer noting its 45% reduction in the number of lost time injuries, and reduction in the annual lost time accident rate from 1.8/100,000 to 0.28/100,000.

Although three of the organisations were unable to provide OSH statistics, they felt that their performance in the listed areas were static.

Wright’s results highlight that considering safe and healthy work practices during organisational change could minimise organisational risks.

One of the potential adverse effects of organisational change among employees is increased stress levels. High stress levels that exist within organisations, when undergoing change have been proposed as one of the reasons for organisations not being able to close the productivity gap[2].

One of the effects of downsizing on organisations is decreased international competitiveness, due to the reduction in essential resources that make it difficult to compete with international organisations[25]. Other negative impacts on organisations are those on stock price, which may show an initial increase, but within a few years do tend to decrease[26]. In addition, the legal costs to employers, which include risks of neglecting or violating labour and civil legislative acts can be substantial. The risk is relatively high when taking into account the size and the hastiness of many downsizing initiatives. Some of the risks described by Atwood and colleagues (1995)[27] are: discrimination by age, race, gender, handicap and disability, breach of contract, lack of advance notice, employee benefits improperly terminated or withheld, and tort claims. Further, ‘lean’ organisations may show decreased innovation and creativity potential, and when extensive job cuts are made, they may lose crucial skills for long-term growth[25]. Moreover, if the workers perceive that the organisational changes have resulted in extensive job loss, unfair termination practices, uncertainty, and absence of trust and motivation; these may result in the alienation of skilled employees the most valuable for the company's future who are the survivors of the downsizing[25].

The organisational outcomes listed above, due to downsizing, could in turn adversely contribute to psychosocial risks. These include poorer physical and mental health of those who survived the downsizing[25]. Research from the United States of America (USA) has shown also increased medical-related claims for stress-related disorders, such as mental health problems, substance abuse, high blood pressure, cardiovascular problems; with organisations that experienced downsizing having a higher rate of workers with stress-related disability[25].

Good practice and prevention

Workers are inherent to organisations but healthy human capital is rarely assessed as an organisational investment[28]. For example, the full impact on the workers is rarely considered, especially during organisational change processes, and, as shown above, such changes could negatively impact both the worker and the organisation. It is useful therefore for organisations to consider how best to reduce any potential adverse effects on workers. Some of the ways in which this could be achieved are presented below.

Risk assessment and prevention

The risk assessment process

Employers in the European Union (EU) are required to evaluate the risks to the safety and health of workers and to take the appropriate action to prevent or control those risks, as outlined in the Framework Directive 89/391/EEC[29]. This risk assessment includes the assessment of psychosocial risks to workers’ health which is especially important when undergoing an organisational change process.

Managing the change process

During organisational change, employers should invest in ensuring that the change is occurring in an open, transparent and safe manner. Employees should be well informed and consulted on the planned changes, and should be given the option to raise their concerns, for example through employee or trade union representatives. The following checklists and techniques would work to identify the issues that should be addressed to ensure that psychosocial risks are considered as part of the change process.

At the organisational level

Participating in the change initiative

At the organisational level, and focusing on line managers, who would be involved in some aspect of the change process, it would be useful for the line managers to involve members of their team in the change process. The line managers would need to be supportive of the change process but should also be able to give support to their teams. As such, for line managers taking part in the change process, this will mean:

  • Working with champions at all levels, i.e. those senior managers within organisations who are responsible for promoting any specific change process.
  • Being involved in working groups at all levels - gain involvement.
  • Breaking the change project down into bite-sized chunks.
  • Integrating the change into staff’s personal objectives.
  • Demonstrating the future - see it/touch it (not just relying on statistics).
  • Selling the positives to their team with enthusiasm.
  • Seeking ideas from all concerned.
  • Moving from a one-way ‘telling and selling’ exercise to using genuine two-way communication.
  • Creating a team vision for change.

Source: Holbeche (2006) [2], p. 380

At the organisational level also, organisations should ensure that: 1) the change is an opportunity for improving psychosocial risks, and 2) psychosocial risks affected adversely due to unforeseen effects of changes are minimised[4]. One of the ways this could be achieved is by reviewing and measuring health and safety performance both during and after the change process to identify any unexpected trends and develop any required actions by[4]:

  • Formulating a clear set of safety and health objectives in respect of the change process.
  • Demonstrating the commitment of senior management to the recognition, assessment and management of safety and health issues arising from reorganisation.
  • Reinforcing commitment by a pattern of consistent decision making and communication.
  • Recognising the potential impacts on safety and health at a sufficiently early stage to allow the completion of any required assessment and the identification of any appropriate actions.
  • Defining the terms of the review before the change process plans have been formulated.

In addition, Table 2 presents possible solutions to potential outcomes from organisational change. For example, to address a reduction in the workforce, it is useful to consult said workforce to identify a solution.

Table 2: Assessing impact and providing potential solutions to organisational change
Possible Results of Organisational Change Potential Problems Suggested Solutions
In general, the problems likely to arise are increased risk because the ‘new’ organisation has:
a) A smaller overall workforce: smaller teams doing the same work Overload - personnel are given more or different types of tasks. They may need to be ‘multi-skilled’ or more flexible in the work they can do - this will require additional training. Consult with the workforce and develop ideas jointly with those subject to the changes proposed.
Teams may need to be ‘self-managed’ - they will need new skills and self-discipline. Plan the change by ‘mapping’ existing tasks onto the new organisation. ‘Old’ tasks may either: i) disappear (because no longer needed) ii) be automated or iii) be done by contractors.
b) Fewer layers of supervision and management Reporting lines are unclear. An individual or team might receive instructions from several ‘managers’. Make it clear who works for whom even if this changes between or even during shifts. Empower individuals to question conflicting instructions or unreasonable demands.
c) More automated plant New teams will need to learn new skills in using any automated plant and to learn new procedures. Make sure all tasks are accounted for, especially safety-related tasks. Consider the following: 1) infrequent tasks (e.g. start up and shutdown) and emergencies 2) staff numbers needed to cover for sickness and holiday absences 3) new skills that individuals will need.
Systems that worked well with a large workforce may not be suitable for a smaller workforce e.g., a simpler permit system may be preferred when that occurs. Arrange training and other ways of gaining the competence needed including: management and supervisory skills, technical skills and knowledge. More trainers may be needed and allow time for learning.
d) Increased its reliance on contractors Contractors may lack the skills and experience of full time employees; employees may need to develop skills in supervising contractors and this may add to their workload. Plan contractor time on plant to make sure they maintain current knowledge and skills.

Source: HSE, no date, [30]

As well, Figure 1 outlines three steps that could be used when considering organisational change. These are: 1) getting organised, involving senior management; 2) completing a risk assessment; and 3) implementing and monitoring the changes.

Figure 1: Managing organisational change

Managing organisational change

Source: HSE, no date, p. 2[31]

At the individual level

At the individual level, employees could use the checklist that follows[30], p. 2, to identify what is required to ensure OSH is maintained on the agenda. If workers perceive that the communication or transparency of the change process could be improved, they should have the possibility to raise any respective issue with the dedicated employee representative or trade union representative within the organisation.

Our company manages change well because management:

  • Tells the workforce when changes are likely to be made to the organisation.
  • Explains why these changes are necessary.
  • Consults with staff and involve them in planning changes.
  • Listens to workforce ideas and concerns.
  • Communicates throughout the change process.
  • Clearly understands the risks involved in the change.
  • Do all they can to reduce the risk.
  • Considers the potential for work overload in the new organisation.
  • Considers possible losses of skills and experience from the organisation.
  • Has sound procedures to manage the transition.
  • Arranges the training needed for anyone moving to a new role.
  • Continually checks to see if the changes have been successful.
  • Makes contingency plans if the change has not been successful.
  • Can cope with sudden unexpected change e.g., the sudden loss of key staff.
  • Learns from each change programme so that the next change will be better.

Conclusions

Organisational change is needed if organisations are to survive and maintain their competitive edge. However, the ways in which these are undertaken should be carefully considered at senior management level, due to the negative impact they may have on both employees and the organisation. Further, OSH systems should be reviewed at the same time as when other corporate systems are being reviewed in anticipation of any change, to ensure that any potential OSH risks, including psychosocial risks are identified.

References

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Links for further reading

HSE - Health and Safety Executive, Development of a multiskilling life cycle model, HSE Contract Research Report 328/2001. Available at: [9]

HSE - Health and Safety Executive, Human factors: Organisational change, No date. Retrieved 13 March 2013, from: [10]