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Reveals that public sector organizations across the globe have been subject to cuts in government spending, allied to demands for enhanced efficiency and effectiveness. Consequently many have embarked on radical programmes of change which may adversely affect the psychological wellbeing of employees. Examines linkages between organizational change and the psychological wellbeing of employees within the Swedish social insurance organization “Försäkringskassan”. Gives results which show that the process of organization change is stressful; issues associated with the process of change were linked to employee anxiety and symptoms of being “worn out”. As the pressures facing public sector organizations everywhere bear a high degree of similarity, suggests that management take cognizance of these findings. Argues that when making decisions regarding the planning and implementation of organizational change, the stress factor must receive a prominent place on the change management agenda.

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