Organizational Psychology

Question: How does organizations like Wet Seal manage change and why does wet seal relate to industrial/organization psychology? Answer: Introduction Industrial and organizational psychology apply to the scientific study of human behaviour at the workplace by applying psychological theories to individuals at the workplace. The organization analyzed for studying this paper is Wet Seal. Wet Seal is a young women's clothing retailer carrying low budget and company designed apparel. The company is headquartered in Foothill Ranch, California. Currently, there are 173 stores in 42 states and online operations in the company (The Florida Times-Union, 2015). The company is closing down its stores across the state and lays-off thousands of workers. The company filed for Chapter 11 bankruptcy protection for keeping its remaining stores open. The retailer won the court approval in a deal to keep at least 140 of its stores open (Brickley, 2015). Change Management For implementing new procedures and processes, a company needs to understand the structure and employees that can handle changes. Wet Seal has suffered management upheaval and financial losses for years. The poor financial conditions of the company leave them no option but closing down the stores. Every organization must manage change effectively by following a few steps. Wet Seal analyzes its business operations and determines the areas where change is needed. Wet Seal collects information and data on the proposed changes arranging in the order of priority (Hayes, 2014). After the information is presented to executives, adjustments to the plan are made. The change plan must be introduced to the employees at least 60 days before the estimated change taking place (Hayes, 2014). The workers must be encouraged to give input and contribute ideas on the plan. However, when the management made the decision of closing down stores and laying-off employees, there was no information provided to them. The employees left a protest sign as they were given no notice. The sign suggested that the mission statement of Wet Seal is to hide the fact from employees. The employees also stated their grievances as they were given no compensation and severance pay. The employees were not permitted to look for other jobs. The employees were not happy with the change management knowing that the company had the right to do so. But the change management was considered unethical by the employees as the company even declined to comment to several news outlets (Phillip, 2015). According to Taylor (2015), nearly 3,700 employees lost their part-time and full-time jobs as two-thirds of the locations were shut. The CEO at Wet Seal stated that the decision of closing down the stores was very difficult, but the financial condition left them with no option but close the stores. The decision made by Wet Seal does not justify their acts on not being transparent with the employees and not giving their rightly deserved pay. Even the customers were agitated with the action, and Wet Seal lost the respect of millions of customers. The customers stood with the rights of the employees supporting them and holding the organization accountable for not providing compensation and notice (Taylor, 2015). Relation with Industrial and Organizational Psychology Industrial and organizational psychology have various theories and principles linked with the relationship between employees and employers. The principles related to organizational psychology are work design, work motivation, leadership, performance management, organizational justice, effectiveness and various others. The organizational psychological theory that can be linked with Wet Seal is organizational justice. Organizational justice judges the behaviour of management leading to changes in employee attitudes and perceptions (Cohen, 2015). The reports reveal that the gross profit margin, revenue and share prices are declining due to under performance. The firm's growth rate is lower in comparison with industry average (The Street Wire, 2012). The data and figures as stated in the previous section reflect that the employees of the organization are agitated as the change management was not conducted appropriately by Wet Seal. The theory of organizational justice can be related to the scenario. There are three types of organizational justice- distributive, procedural, and interactional justice (Cohen, 2015). Two out of the three main components of organizational justice can be related to Wet Seal. The first principle that can be related with Wet Seal is distributive justice. Distributive justice deals with the employees concerns due to the fairness they receive in tangible or intangible factors. The perceptions of distributive justice can be fostered if the employees receive sufficient to pay, compensation and vacations (Cohen, 2015). In this case, we see that the employees at Wet Seal were not provided with severance pay or compensation to the store managers or employees. Wet Seal offered $300 in severance pay to store managers and $100 to other employees if they worked until the store closed (Suddath, 2015). However, Thomas Hillebrandt, Wet Seal Chief Financial Officer, was about to receive a $95,000 raise (Maynard, 2015). Clearly, the case is unjust, and Wet Seal does not follow the principle of organizational justice. The second principle that can be related with Wet Seal is interactional justice. The employees in an organization have the right to obtain information and receive sensitive news. Every organization must provide an explanation to the employees regarding truthfulness, timeliness and specificity (Cohen, 2015). The employees of Wet Seal did not receive any information regarding the stores closing and that their jobs would be laid-off. No transparency of information was provided. Instead, they were asked not to look for other jobs. No notice period was provided to the employees so that they could start looking for other jobs (Taylor, 2015). Conclusion The above paper states the manner in which a bankrupt organization Wet Seal dealt with the change management. It is concluded that the organization did not manage the change effectively as it treated the employees unjustly. The poor financial conditions of the company leave them no option but closing down the stores. The decision made by Wet Seal does not justify their acts by not being transparent with the employees and not giving their rightly deserved pay. The organization did not follow the principle of organizational justice thereby losing respect and suffered work productivity. References Brickley, P. (2015).Wet Seal Wins Bankruptcy Court Approval for Sale to Versa.WSJ. Retrieved 30 March 2016, from https://www.wsj.com/articles/wet-seal-wins-bankruptcy-court-approval-for-sale-to-versa-1427906503 Cohen, A. (2015).Fairness in the workplace. UK: Palgrave Macmillan. Hayes, J. (2014).The theory and practice of change management. Basingstoke [England]: Palgrave Macmillan. Maynard, M. (2015).Wet Seal closes stores without notice, screws employees, gives CFO a $95,000 raise.Mark Maynard. Retrieved 30 March 2016, from https://markmaynard.com/2015/01/wet-seal-closes-stores-without-notice-screwing-employees-giving-cfo-a-95000-raise/ Phillip, A. (2015).Angry Wet Seal employees refuse to take layoffs quietly.Washington Post. Retrieved 30 March 2016, from https://www.washingtonpost.com/news/national/wp/2015/01/07/angry-wet-seal-employees-spoiled-the-companys-store-closure-announcement/ Suddath, C. (2015).Wet Seal to Employees: SurpriseYou're Out of a Job.Bloomberg.com. Retrieved 30 March 2016, from https://www.bloomberg.com/news/articles/2015-01-07/wet-seal-employees-say-company-layoffs-were-a-surprise Taylor, V. (2015).Wet Seal closes 338 stores, lays off almost 3,700 employees.Nydailynews.com. Retrieved 30 March 2016, from https://www.nydailynews.com/life-style/fashion/wet-seal-closes-338-stores-lays-3-700-employees-article-1.2069336 The Florida Times Union,. (2015).Mall retailer Wet Seal closing over 300 stores, including Regency Square Mall location.The Florida Times Union. Retrieved 30 March 2016, from https://jacksonville.com/breaking-news/2015-01-07/story/mall-retailer-wet-seal-closing-over-300-stores-cutting-nearly-3700# The Street Wire,. (2012).Wet Seal Inc. Stock Downgraded (WTSLA).TheStreet. Retrieved 30 March 2016, from https://www.thestreet.com/story/11770687/1/wet-seal-inc-stock-downgraded-wtsla.html