The current research tested a theoretical model of employee adjustment during organizational change based on Lazarus and Folkman's (1984) cognitivephenomenological framework. The model hypothesized that psychological climate variables would act as coping resources and predict improved adjustment during change. Two variations of this model were tested using survey data from two different organizational samples: 779 public hospital employees and 877 public sector employees. Confirmatory factor analyses and structural equation analyses were conducted in order to evaluate the models. Results showed that employees whose perceptions of the organization and environment in which they were working (that is, psychological climate) were more positive, were more likely to appraise change favourably and report better adjustment in terms of higher job satisfaction, psychological well-being, and organizational commitment, and lower absenteeism and turnover intentions.Effective management of the psychological transition of employees is integral in the achievement of successful organizational change (Bennett & Durkin, 2000;St. Amour, 2001 The research reported in this article was supported by an Australian Research Council Strategic Partners Industry, Research and Training grant held by V. Callan, C. Gallois, E. Jones, and P. Bordia. Financial support from the Department of Management and the School of Applied Psychology at Griffith University is also acknowledged. In addition, many thanks are due to Stephen Cox for his assistance with the structural equation analyses and Bernadette Watson for her assistance with data collection.Correspondence should be addressed to Dr Angela J. Martin, School of Management, University of Tasmania, Hobart, Australia. Email: Angela.Martin@utas.edu.au EUROPEAN JOURNAL OF WORK AND ORGANIZATIONAL PSYCHOLOGY 2005, 14 (3), in higher levels of enthusiasm for future change, providing opportunities for learning and growth. Alternatively, poor adjustment to change is characterized by feelings of threat, uncertainty, frustration, alienation, and anxiety, particularly in relation to issues of job security, status, work tasks, co-worker relations, and reporting relationships (Ashford, 1988). Organizational change is a major source of workplace stress and is associated with a wide range of negative behavioural, psychological, and physiological outcomes (Ashford, 1988;Lokk & Arnetz, 1997;Roney & Cooper, 1997;Schabracq & Cooper 1998). A lack of attention to employees' psychological responses to organizational change is implicated in the failure of change programs (Kotter, 1995) and other important organizational outcomes such as impaired productivity, and increased levels of absenteeism, industrial dispute, and turnover (Eby, Adams, Russell, & Gaby, 2000;Mack, Nelson, & Quick, 1998).Little research attention has been paid to the development and testing of theory-based models of the psychological experiences of employees during organizational change. Such knowledge has important implications for improved chan...