When situations change, organisations have to realign themselves to survive in the changed environment. Most of organisations fail to deal with change and previous research has mentioned that the key success factor in change management is an organisation’s employees. Employee performance is the root of support of organisational performance. When employees have a capability to change and generate better employee outcomes, organisations trend to succeed in a changing management. This study aims to demonstrate the relationship of employee capability to change and employee outcomes based on human capital theory and investigate the employees’ willingness to change based on motivation theory. Employees with a higher willingness to change will use their capability to change to generate greater employee outcomes. The theoretical framework to test the relationship for this research was developed from a literature.
This study focused on the Merger and Acquisition (M&A) of large organisations in Thailand. There were three organisation; a state owned enterprise (SOE), a Transportation, and a Food production organisation that were found suitable for this study. This study was divided into three phases. Phase I: was qualitative and aimed to get an overview of the M&A impact on employees by using in-depth interviews and content analysis. There were 19 respondents from the top management, middle management, and operational employee levels of three organisations. Phase II was quantitative and aimed to test the relationship model by using survey questionnaires and structural equation modeling (SEM). After the measurement scales were developed based on literature, reviewed by academics, and verified by practitioners through Q-sort approach, 303 questionnaires were distributed with a 37.88% response rate. This phase applied a two-step of SEM. First, confirmatory factor analysis (CFA) was used to verify the construct validity of the measurement model. Second, three hypotheses were tested without a moderator and one hypothesis was tested with willingness to change as a moderator in the structure model. Phase III: was qualitative and was aimed at understanding the reasons behind phase II results using in-depth interviews and content analysis.
The results indicated that M&A affected both the organisation and its employees. The employee’s capability positively affected employee change and employee change also positively affected both passive and active employee outcomes. Moreover, willingness to change did not exhibit a moderating role in the relationship between employee capability to change and employee change. There were five main reasons of why employees did not use their capability to generate improved employee outcomes when they had high motivation. First, the external factors affected employees more than their internal factors. Second, most employees generally focused on work change, rotation, salary, and job security as their priorities. Third, they lacked a motivation system for both financial and non-financial motivation. Fourth, Employees did not recognise the different benefits between changing and not changing. Finally, organisations did not focus on employee outcomes because they had a system to monitor.
This research provides a contribution to the literature by filling the research gaps because it examines the employee performance perspective in a change situation, extends employee outcome measurements by using both passive and active employee outcomes, shows the opposing view point to motivation theory where an employee with higher motivation or willingness to change does not guarantee that they will use their capability to generate improved employee outcomes. For address the practical implications of these revelations, organisations should consider the employee’s perspective as one of the important indicators for succeeding in managing changes, effectively monitoring passive and active employee outcomes, and consider creating a system to monitor employee outcomes instead of motivating employees to change.