Influence of change management on employee performance in commercial banks Meru county, Kenya

Abstract

Rising market competition and evolving regulatory requirements are driving commercial banks to undergo substantial organizational transformations to sustain their competitive edge. Although ongoing change has become an inherent aspect of the industry, navigating these transitions poses significant management challenges. If not effectively addressed, these challenges could impede the successful realization of intended outcomes. This research focused on exploring how change management influences employee performance within commercial banks located in Meru County, Kenya. The study was guided by four key objectives: to investigate the effects of downsizing, technological advancements, structural adjustments, and organizational culture on employee performance. The theoretical framework of the study was grounded in the Uncertainty Management Theory, Lewin’s Change Management Model, and McKinsey’s 7-S Framework. A literature review aligned with the study’s goals was conducted to establish context. The research adopted a descriptive survey methodology and targeted a sample population of 470 employees across 14 commercial banks in Meru County. From this group, 216 participants were selected using stratified random sampling, which categorized respondents into managerial, supervisory/administrative, and clerical/teller roles. Data collection was carried out through structured questionnaires, and reliability testing using Cronbach’s alpha yielded a score of 0.770, indicating acceptable internal consistency. The collected data were analyzed through both descriptive and inferential statistical methods. The findings revealed that downsizing (β=0.489; p=0.0), technological change (β=0.654; p=0.0), structural transformation (β=0.673; p=0.0), and organizational culture (β=0.435; p=0.0) all had statistically significant impacts on employee performance within the studied banks. Based on these results, the study concluded that effective change management is a crucial factor influencing employee productivity in commercial banks in the region. The research recommended that bank leadership prioritize inclusive leadership styles and effective communication strategies to prepare employees for organizational changes. Additionally, it emphasized the importance of cultivating a learning-oriented environment and encouraging a culture supportive of change. These findings hold practical relevance for banking personnel by enhancing their understanding of organizational changes related to structure, culture, downsizing, and technology. The study also provides valuable insights for future researchers examining the relationship between change management and workforce performance within organizational contexts.