Resource Reallocations Influence Staff Attitudes in Public Organizations

The Interchange between Democratic Institutions and the Globalisation of the Economy. Policy Brief No. 23, Year 2025 Resource Reallocations Influence Staff Attitudes in Public Organizations Benny Geys1, Sara Connolly2, Hussein Kassim3, and Zuzana Murdoch4 1. Department of Economics, BI Norwegian Business School, Bergen, Norway 2. School of Management, University of Leicester, Leicester, United Kingdom 3. Politics and International Studies, University of Warwick, Warwick, United Kingdom 4. Department of Government, University of Bergen, Bergen, Norway Summary - This policy brief examines how internal staff reallocations in public organizations influence employees’ job attitudes. - The study shows that staff reductions reduce support for organizational goals among the remaining staff members, while managers’ intention to leave the organization falls when their department grows. - Employees and managers may perceive – and respond to – resource decisions as signals about their department’s value to the organization. - These findings have important implications for the design, framing and communication of resource reallocations in public institutions. 2 1. Introduction Organizational reforms in the public sector often involve reallocating resources and staff across departments. While commonly intended to improve efficiency or align institutional priorities, such changes can also have an impact on employees’ job attitudes, including their support for organizational goals, intention to exit the organization, or job satisfaction. Moreover, internal staff reallocations create winners and losers within the same organization. Hence, it is important for the leadership of any public organization to understand how such attitudinal responses play out across the organization and take appropriate action. This policy brief draws on findings from a longitudinal study of a major administrative reform within the European Commission in 2015, which involved a reallocation of staff resources to reflect then-President Juncker’s new policy priorities. Unlike across-the-board cuts, the Juncker reform produced clear ‘winners’ and ‘losers’ since some departments—such as the Secretariat General and the Directorate-General for Justice (JUST)—saw significant increases in staff. Others including the DirectoratesGeneral for Development (DEVCO) and the Directorate-General for Education and Culture (EAC) experienced severe staff reductions. The study argues that such reallocations can function as a signal to employees about their department’s value to the organization. Employees may then (sub)consciously respond to this signal by adjusting their support for organizational aims or re-assessing their employment status in the organization. Such attitudinal responses are important from a managerial perspective, since they carry critical implications for the design, implementation and narration of public sector reforms. 2. Data and Methodology The analysis is based on a two-wave survey of European Commission staff, conducted in 2014 prior to the election of Jean-Claude Juncker as Commission President and in 2018 during the fourth year of his term. It is complemented by administrative data on the 2015 changes in departmental staff allocations. The final dataset comprises 679 individuals who responded to both survey waves and remained in the same department, allowing for within-individual comparisons over time. To measure employee attitudes, the study uses two key indicators: (1) support for the Commission’s supranational goals, and (2) the self-reported intention to leave the organization. The main explanatory variable is the percentage change in staffing resources in a respondent’s department from the year before the reallocation (2014) to the first year after (2015). The study employs regression models to isolate the effect of staff reallocations from broader time trends or unobserved individual characteristics. Additional checks account for outliers, non-linear effects, and robustness across different subgroups of staff (e.g., managers, administrators, assistants). 3 3. Results The findings show that reallocating staff has a clear and immediate impact on the job attitudes of remining employees. Staff in departments that lost resources reported a significant decline in support for the Commission’s supranational goals. By contrast, employees in departments that gained resources showed no corresponding increase in support. When it comes to exit intentions, Figure 1 shows that employees in managerial positions are most responsive to staff reallocations. Managers in departments that gained resources became much less likely to consider leaving the organization. Managers in losing departments display much weaker attitudinal responses. Overall, the evidence supports two key hypotheses proposed by the authors. First, changes in departmental resources act as signals of organizational support (or lack thereof), which shape employee attitudes towards their job. Second, losses matter more than gains, a finding consistent with psychological research on loss aversion. 4. Policy Recommendations The findings of this study carry important implications for the design and implementation of public sector reforms. Most notably, the redistribution of internal resources is not considered a neutral or purely administrative exercise by staff. Instead, it may be interpreted as a signal about organizational priorities and support, and therefore affect staff morale. For this reason, public sector organizations should view internal reallocations not only as strategic policy decisions, but also as events that require careful planning, narrative-making and internal communication to avoid unintended staff-level repercussions. First, public sector organizations should understand that staff reallocations may be perceived as messages about the relative importance of departments and policy areas. To maintain coherence and support across the organization, communication strategies that clearly explain the rationale for reforms are paramount. This includes providing detailed justifications for staffing changes, emphasizing their alignment with broader organizational objectives, and involving affected staff in the process to foster a sense of inclusion and transparency. Second, when departments are negatively affected by staffing decisions, complementary measures should be considered to mitigate any impact on employees’ job attitudes. This could include comprehensive career support, increased professional development opportunities, greater autonomy in departmental planning, or enhanced roles in cross-cutting policy initiatives. These forms of non-material support can help sustain motivation and soften the shortterm distress caused by the perception of being deprioritized. Adoption of such inclusive practices can help ensure the continued effectiveness and unity of the organization and its service provision. Third, special attention should be given to managerial staff, who may be particularly sensitive to changes in departmental prestige and influence. Since managers play a crucial role in interpreting and 4 implementing organizational change, they should be engaged in reform processes at an early stage, allowing them raise concerns and contribute ideas, and help them intermediate between leadership and rank-and-file staff. Fourth, a reform that produces clear ‘winners’ and ‘losers’ risks weakening organizational cohesion and undermining trust. Hence, a gradual and more proportionate approach to resource allocation – possibly accompanied by transitional support for affected units – can prevent morale from deteriorating. Finally, public organizations should invest in an improved understanding of the potential unintended consequences of internal policy decisions. Such unintended side-effects have been known to arise in many domains (see also Vantaggiato et al. 2024), and can work to undermine the effectiveness and inclusiveness of policy decisions. In the current setting, such investments can be related to monitoring and evaluation of how internal resource shifts influence employee attitudes, organizational culture, and policy implementation. What is DemoTrans ? DemoTrans is an impact-driven research project that will provide theoretically and empirically robust recommendations on how to reinvigorate democratic governance by improving the accountability, transparency, effectiveness and trustworthiness of rule-of-law based institutions and policies. References: Connolly, Sara and Hussein Kassim. n.d. The European Commission: Facing the Future. https://warwick.ac.uk/fac/soc/pais/research/pro jects/facingthefuture/the_european_commison _-_facing_the_future-vpeilblh.pdf Durant, Robert. 2008. Sharpening a Knife Cleverly: Organizational Change, Policy Paradox, and the ‘Weaponizing’ of Administrative Reforms. Public Administration Review 68(2): 282-294. George, Bert. 2021. Successful Strategic Plan Implementation in Public Organizations: Connecting People, Process, and Plan (3Ps). Public Administration Review 81(4): 793-8. Hansen, Gustav Egede, Germà Bel and Ole Helby Petersen (2023). The Unequal Distribution of Consequences of Contracting Out: Female, Low-skilled, and Young Workers Pay the Highest Price. Journal of Public Administration Research and Theory 33(3): 434-452. Vantaggiato, F., Z. Murdoch, H. Kassim, B. Geys, and S. Connolly (2024). Intraorganizational Mobility and Employees’ Workrelated Contact Patterns: Evidence from Panel Data in the European Commission. Journal of Public Administration Research and Theory 34(4): 598-610. van der Voet, Joris, and Steven Van de Walle. 2018. How Cutbacks and Job Satisfaction Are Related: The Role of Top-Level Public Managers’ Autonomy? Review of Public Personnel Administration 38(1): 5-23. Further Information: Geys, B. S. Connolly, H. Kassim and Z. Murdoch (2023), Staff Reallocations and Employee Attitudes towards Organizational Aims: Evidence using Longitudinal Data from the European Commission. Public Management Review 25(12): 2323-2343. 5 Figure 1: Staff reallocations and exit intentions Note: The graph displays the mean change in exit intentions among staff members in administrative units gaining 5% or more in staff allocations (‘Big winners’), administrative units losing 5% or more in staff allocations (‘Big losers’), and the remaining administrative units (‘Rest’). We differentiate between all staff members (ALL) and managerial staff (Manager). The relevant survey statement is: “I have seriously considered applying for a job outside the Commission in the last three years” (ranging from 1 (strongly disagree) to 5 (strongly agree)). DemoTrans is funded by the European Union (Horizon Europe Framework, Grant Number 101059288). Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the granting authority. Neither the European Union nor the granting authority can be held responsible for them. Follow us online www.democracy-transparency.eu Follow us on X @DemoTrans Follow us on LinkedIn www.linkedin.com/company/demotrans-project/