These are the five real and measurable costs of not managing transition effectively. Remember them the next time people tell you there isn’t time to worry about the reactions of your employees to the latest plan for change. And help such people to see that not managing transition is really a shortcut that costs much more than it saves. For it leaves behind an exhausted and demoralized workforce at the very time when everyone agrees that the only way to be successful is to get more effort and more creativity out of the organization’s employees……

Guilt: Managers (including you) feel guilty that they have had to terminate, transfer, and demote people. Workers who survived when others were cut feel guilty too. Guilt lowers self-esteem and often leads to one of two kinds of overcompensation: permissiveness to make up for the earlier harsh acts, or an even harsher “blaming the victim,” which projects the responsibility for the guilt away from the person who feels it.
Resentment: Everyone, manager and managed alike, feels angry at the organization for the pain that transition causes. This is natural. But when that aspect of the grieving process is not managed sensitively, the anger deepens and lengthens into a continuing resentment that poisons the whole organization. When yesterday’s changes leave such a legacy of resentment, today’s changes are undermined even before they are launched. In addition, resentment leads to sabotage and the subtler forms of pay-back that organizations experience today.
Anxiety: People who are trying to hold on to the past while pieces of it are being cut away are anxious. The strange thing is that some managers believe that anxiety improves motivation. Perhaps a little bit of anxiety does that, but in the quantity that is common in organizations today, anxiety reduces energy, lowers motivation, and makes people unwilling to take the risk of trying new things.
Self-absorption: Anxious people become preoccupied with their own situations and lose their concern for fellow workers or customers. In a game of musical chairs, the only real questions are, “When is the music going to stop?” and “Will there be a chair left for me?” Larger issues of teamwork, good service, and high quality get fuzzy when the focus is so nearsightedly personal as this. Nor do pep talks on the values of teamwork, good service, and high quality do much good when people are self-absorbed. People simply do not absorb inspiration well in that state.
Stress: I’ve already talked about the increase in the rate of illness and accident when people are in transition. Most organizations respond with stress management programs. These programs are certainly better than nothing, but they do little to counter the sources of stress. Creating stress and then trying to “manage” it is like trying to cool your overheated brakes. The only real answer is to stop overheating them.
– From ‘Managing Transitions: Making the Most of Change’