Managing (in) Times of Uncertainty: The Effects of Leadership Sensemaking on Employee Well-Being in Dynamic Business Environments

Abstract

Leadership behavior is an important factor for employee well-being. Research about occupational health promotion has shown that the support of managers is crucial to the success of measures for improving employee health and well-being. However, little interest has been paid to the psychological effects of dynamic environments on employee and management health. To address this gap, we will review publications concerning the interplay of environmental dynamism, employee uncertainty, leadership sensemaking, and employee well-being. We argue that change(s) in economic systems promotes personal uncertainty, which affects employee well-being. More specifically, we focus on leadership behaviors that diminish uncertainty in times of dynamic environments. In this chapter, we will describe two alternative routes for leadership influence on employee well-being and argue that environmental change has to be actively managed. Possible implications that can be derived from our concepts are: (1) that preserving employee well-being through leadership sensemaking in turbulent economic times could contribute to maximizing employee performance; and (2) that especially designed leadership trainings could provide organizations with means of dealing with employee uncertainty stemming from rapidly changing economic environments.