MCom Organizational Behavior Workforce Diversity Study Material Notes
Table of Contents
MCom Organizational Behavior Workforce Diversity Study Material Notes: Implications of workforce diversity Improving and productivity Responding Empowering people Stimulating Innovation and Change coping with temporariness Helping Employees Balance work-life Contacts coming attractions developing and job model :
Multitasking SSC English Question Answer Solved paper 2013
Workforce Diversity
adjust to large influxes of Asian workers. The “new” South Africa is increasingly characterized by blacks’ holding important technical and managerial jobs. Women, long confined to low-paying temporary jobs in Japan, are moving into managerial positions. And the European Union cooperative trade arrangement, which opened up borders throughout much of western Europe, has increased workforce diversity in organizations that operate in countries such as Germany, Portugal, Italy, and France.
MCom Organizational Behavior
Categories of Workforce Diversity Indian organizations have to accommodate a very diverse social group of employees, based on varying socio-economic, ethnic, and linguistic composition. A few of them are determined by the Constitution of India
1 Scheduled Castes and Scheduled Tribes (SCs and STS)
2. Other Backward Castes (OBCs)
3. Bonfire Members of the State
4. Ex-Defense and Paramilitary Personnel
5. Disabled Personnel
6. Displaced Persons
7. Gender Issues
8. Age Factor
9. Temporary/Casual Contracts
1 Scheduled Castes and Scheduled Tribes Scheduled castes and scheduled tribes determined by a notification of the government are given preferences to the extent of 15 percent, and 7.5 percent, respectively. Scheduled castes and scheduled tribes together constitute 22.5 percent of the country’s population.
2. Other Backward Castes Due to a spate of agitations supporting the creation of yet another reserved category, the OBC was created with claims and counterclaims by affected groups. All pending cases in the various High Courts of the country were taken over by the Supreme Court of India. The Supreme Court ruled that reservation should not exceed fifty percent.
3. Bonafide Members of the State The government seeks to provide preferential employment for the local/bonafide members of the state. This is especially so in the case of lower-level jobs, is this would, to a large extent control the problem of migration of people from one state to another and more specifically from rural to urban centers
4. Ex-Defence Personnel and Paramilitary Personnel In order to rehabilitate retiring defense personnel from all ranks, central government-owned public enterprises were asked to give preterence and allocate a percentage of posts to such persons. Reservation for ex-servicemen has been in force on a permanent basis since 1979. Ten percent of the vacancies in Group Cand 20 percent of the vacancies in Group D categories of government jobs are reserved for ex-services men by direct recruitment every year.
5. Disabled Personnel Employees whose capacity to work is limited by their mental or physical abilities have, in the past, been referred to as “handicapped” or “disabled”. Today, the more politically correct term is mentally challenged, for individuals who suffer from mental retardation or serious emotional disturbance, or physically challenged, for those who have hearing speech, visual, orthopedic, or other health impairments,
6. Displaced Persons Very often, large public sector enterprises located in the hinterland require large tracks of land, not merely for setting up of plant but also to provide their employees with basic social infrastructure, given the remote location and consequent lack of facilities, without which the workforce will not be able to sustain itself. The government, as part of its employment generation scheme, promises a factory job to one member of each family displaced by the development of these public sector enterprises. Most of these people have an agrarian background. They are generally illiterate or semi-literate and need to be provided with employment suited to their level of education and skills
6. Gender Issues with an increasing number of women entering the workforce in India, due to a combination of factors like women’s emancipation, increased economic need, greater equality of sexes, education, and so on. additional measures of managing a different set of problems at the workplace arise. However, it should be noted that India is a country full of paradoxes on this issue. Indian women are employed as professionals like engineers, doctors, lawyers, parliamentarians, accountants, commercial pilots, and pilots in the transport and helicopter wings of the Indian Air Force and in other armed forces, especially the technical and education branch of the Indian Army and Navy. Women are also employed to a considerable extent in the service sector, such as banking, insurance, travel, beauty care, nursing, teaching, and so forth. At the enterprise level, administrative issues like maternity leave. child care leave, transfer to the location of his. band’s place of posting, working hours, placement in hard and soft jobs, all tend to cluster and create administrative issues. To attract and retain women, companies provide alternative career paths, extended leave, job sharing, flexitime, and the option of telecommuting.
7. Age Factor The age profile of workers is also a contributory factor leading to diversity at the workplace. Discrimination based on age can apply in case of comparison between workers, aged forty to seventy, with a younger one aged eighteen to twenty-five.
8. Temporary/Casual Contracts in order to overcome the problems of low productivity, difficulty in retention of workmen due to complex labor laws, and wage bill increase as a percentage of operating costs, managements have resorted to outsourcing employees to supplement their workforce needs. A temporary or casual worker is paid the minimum wage fixed by the government on a daily basis. No welfare benefits are offered to this category, which is generally Employed in janitorial, secretarial, and civil construction jobs. Contract laborers are employed prime contractors who negotiate a certain lump sum amount for a job, which includes the mage component. The principal employer is responsible, under the Contract Labor Act for me disbursement of wages and other benefits to his contract employees. As the casual/tempo Fray worker is not a permanent employee of any organization, the terms and conditions of employment are lower than that of the regular employees of an organization.
MCom Organizational Behavior
Implications of Workforce Diversity
1 Workforce diversity, in case of gender, socio-economic, ethnicity, age, is here to stay. There is no going back to the demographic setup of organizations as they were twenty years ago. To be successful in this new environment, one has to learn to value and respect cultural styles and ways of behaving that are different from one’s own.
2. Recognize that there are tangible business reasons why managing workforce diversity effectively should be a high priority: (a) it’s an opportunity to serve the needs of customers better and to penetrate new markets, and (b) diverse teams make it possible to enhance creativity, flexibility, and rapid response to changes.
3. To maximize the potential of all members of the workforce, link concerns for diversity to every business strategy viz. recruitment, selection, placement, succession planning, performance appraisal, and rewards.
Embracing Diversity We used to take a melting pot approach to differences in organizations, assuming people who were different would somehow automatically want to assimilate. But we now recognize that employees don’t set aside their cultural values, lifestyle preferences, and differences when they come to work. The challenge for organizations, therefore, is to make themselves more accommodating to diverse groups of people by addressing their different lifestyles, family needs, and work styles. The melting-pot assumption is being replaced by one that recognizes and values differences 14
Haven’t organizations always included members of diverse groups? Yes, but they were a small percentage of the workforce and were, for the most part, ignored by large organizations. Moreover, it was assumed that these minorities would seek to blend in and assimilate
Changing Indian Demographics The number of female workers in the country as a whole has been nearly stagnant and there has also been an absolute reduction in the number of women workers in rural India. This reduction by a little over 1.3 million, is just offset by rise in the number of urban women workers (1.1 million).
Thus, in the country as a whole, while the population is projected to have grown at a little over 1.75 percent per annum (popa) between 1991 and 2000, over the same period, the total (rural plus urban and males plus females) workforce would have grown by just 0.81 pcpa. The estimate of female workers implies virtually to growth in aggregate terms and negative growth for women workers in rural India.
Workforce in terms of age in each of the four segments, age-specific worker population ratio has declined between 1993-94 and 1999-2000 in every single age group (five-year age groups between 5 and 59 years and the open-ended group of 60 years and above’) such that the observed decline in crude worker-population ratio is not merely due to shifts in the age structure of the population. The reduction in worker-population ratio reflects a beneficial rise in the student reflects a beneficial rise in the student-population ratio, not only in the 5-9 and 10-14 age groups covering the primary and middle school system but also in the 15-19 and 20-24 age groups, indicating a rising participation in secondary and higher level education system. These gains have been particularly impressive for rural girls below 90 van
In the case of rural women in 20-24 age group, the decline (from 456 per 1000 in 1993-04 per 1000 in 1999-2000) is much greater than the 10 point rise in the corresponding studen lation ratio from 19 to 29 per 1000. This is also the case for rural males in the three ad 10-14, 15-19, and 20-24; for urban males in the 10-14 and 15-19 age groups, and, to a lesser in the 20-24 age-group.
Workforce diversification in sectors Consequently, in the total (rural plus urban and males plus females) workforce, the share of the agriculture and allied activities sector records a significant decline of over 4 percentage points from 639 per 1000 in 1993-94 to 598 per 1000 in 1999-2000 This reduction in the share of the agriculture sector in the workforce is infact sharp enough to mar ginally reduce the absolute number of workers in agriculture for the first time since independence-from 239 million in 1993-94 to less than 236 million in 1999-2000
The manufacturing sector (excluding repair services) records a minor rise in its share in the aggregate workforce, from 107 per 1000 to 111 per 1000, between 1993-94 and 1999-2000. This is despite al percentage point reduction in its share in the urban workforce and is largely due to rise in the urban share in the total workforce.
In aggregate terms, the biggest gainer in the share of workforce has been the trade, hotel and restaurant sector–from 7.6 percent in 1993-94 to 10.4 percent in 1999-2000. This sector has now emerged as the third largest in terms of workforce-behind the agriculture and the manufacturing sectors. The size of workforce in this sector has grown from 28.5 million to 41 million over the period 1993-94 to 1999-2000, at a compound rate of 6.2 percent per annum
In terms of gains in share of the workforce, the construction sector is second only to the trade, hotel and restaurant sector, with gains in all the four segments and a 12 per 1000) point gain in terms of aggregate. Aggregate employment in this sector too has grown at 6.2 percent per annum in the period between the two surveys-from a little over 12 million in 1993-94 to 17.4 million in 1999-2000
The transport, storage and communications sector have raised their share from 29 to 37 per 1000 in the aggregate terms, though its share in the female workforce has remained virtually unchanged. In rural areas its share has increased by 50 percent–from 11 per 1000 to 21 per 1000—while the increase in its share in the urban work force is a modest 10 percent (from 79 per 1000 to 87 per 1000). In aggregate terms, this sector has absorbed about 20 percent of the incremental workforce.
Workforce diversity in organized and unorganized sectors The dimensions and complexities of the problem in India can be better appreciated by taking into consideration the extent of the labor force in the organized and unorganized sectors. The latest NSS survey of 1999-2000 has revealed vast dichotomy between these two sectors. While, as per the 1991 census, the total workforce was about 314 million and the organized sector accounted for only 27 million of this workforce, the NSSO’s survey of 1999-2000 has estimated that the workforce may have increased to about 397 million out of which only 28 million were in the organized sector. Thus, it can be concluded from these findings that there has been a growth of only about one million in the organized sector in comparison to growth of about 55 million in the unorganized sector15
Changing U.S. Demographics The most significant change in the US. labor force during the last half of the 20th century was the rapid increase in the number of female workers. 16 In 1950, for instance, only 29.6 percent of the workforce was made up of women. By 1999, it was 46.6 percent. So today’s workforce is rapidly approaching gender balance. In addition, with women now significantly outnumbering men on U.S. college campuses, we can expect an increasing number of technical, professional, and managerial jobs to be filled by the expanding pool of qualified female applicants.
In the same way that women dramatically changed the workplace in the latter part of the 20th century, the first half of the 21st century will be notable for changes in racial and ethnic composition as well as an aging baby-boom generation. By 2050, Hispanics will grow from today’s 11 percent of the workforce to 24 percent. Blacks will increase from 12 percent to 14 percent. And Asians will increase from 5 percent to 11 percent. Meanwhile, the labor force will be aging in the near term. The 55-and-older age group, which currently makes up 13 percent of the labor force, will increase to 20 percent in just 15 years.
MCom Organizational Behavior
Implications Workforce diversity has important implications for management practice Managers have to shift their philosophy from treating everyone alike to recognizing differences and responding to those differences in ways that ensure employee retention and greater productivity while, at the same time, not discriminating. This shift includes, for instance, providing diversity training and revamping benefits programs to accommodate the different needs of different employees. Diversity, if positively managed, can increase creativity and innovation in organizations as well as improve decision making by providing different perspectives on problems. When diversity is not managed properly, there is a potential for higher turnover, more difficult communication, and more interpersonal conflicts.Improving Quality and Productivity
In the 1990s, organizations around the world added capacity in response to increased demand. Companies built new facilities, expanded services, and added staff. The result? Today, almost every industry suffers from excess supply. Retail suffers from too many malls and shopping centers. In India, the development of shopping malls has literally been a revolution. There are about 250 modern shopping centers and malls and another 250 are being planned. The mall mania is based on an assumption, that people will desert neighborhood retail stores and buy into the promise of a better shopping experience. But this is yet to happen. The initial investments are high and breaking even is difficult. Automobile factories can build more cars than consumers can afford to buy. The telecom industry is drowning in debt from building capacity that might take 50 years to absorb. Introducing new schemes to attract customers frequently are indicators of more capacity than demand. And most cities and towns now have far more restaurants than their communities can support.
Excess capacity translates into increased competition. And increased competition is forcing managers to reduce costs while, at the same time, improving their organization’s productivity and the quality of the products and services they offer. To achieve these ends, managers are implementing programs such as quality management and process reengineering programs that require extensive employee involvement.
As Exhibit 1-5 describes, quality management (QM) is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational processes. It has implications for OB because it requires employees to rethink what they do and become more involved in workplace decisions.
In times of rapid and dramatic change, it’s sometimes necessary to approach improving quality and productivity from the perspective of “How would we do things around here if we were starting from scratch?” That, in essence, is the approach of process reengineering. It asks managers to recon sider how work would be done and their organization structured if they were starting over. Instead of merely making incremental changes in processes, reengineering involves evaluating every process in terms of its contribution to the organization’s goals. Inefficient processes are thrown out and entire new systems are introduced. Importantly, reengineering typically redefines jobs and requires most employees to undergo training to learn new skills.
Today’s managers understand that the success of any effort to improve quality and productivity must include their emplovees. These employees will not only be a major force in carrying out changes but increasingly will actively participate in planning those changes. OB offers important insights into helping managers work through these changes.
MCom Organizational Behavior
Responding to Outsourcing
CFOs and MD of 127 Europe-based and 151 US, based companies that want to increase their out sourcing offer tremendous opportunities to service providers with facilities in India, as they are o effective and provide value to their clients. Growth in this sector will get a further impetus as Indian BPO companies have robust security practices and emphasis is laid on developing trust with clients on this score,20 According to ASSOCHAM, the BPO sector is likely to grow five fold to touch 517 billion in the next four years from the present $3 billion. But the biggest challenge facing this sector is training and retaining its workforce.21 IT sector has crossed one million mark. The highly skilled Indian born talent that had flocked to the U.S. to work are now beginning to come back. The countries such as India and China, through restructuring of their economies are dramatically increasing the skill-set of their work thereby pos ing a challenge to the U.S. leadership in the technology domain. According to AeA (formerly American Electronic Association) this will only make India more competitive and alluring to investors and multinational companies. The U.S. is cutting R&D funding while foreign governments are creating public-private partnerships to invest in R&D projects.
Improving Customer Service
American Express recently turned Joan Abraham’s worst nightmare into a non-event. It was 10 P.M. Joan was home in Mumbai, packing for a week-long trip, when she suddenly realized she had left her AmEx Gold Card at a restaurant in Colaba, Mumbai earlier in the evening. The restaurant was 30 miles away She had a flight to catch at 7:30 the next morning and she wanted her card for the trip. She called American Express. The phone was quickly answered by a courteous and helpful AmEx customer service representative.
He told Ms. Abraham not to worry. He asked her a few questions and told her “help was on the way.” To say Joan was flabbergasted would be an understatement when her doorbell rang at 11:15 M.-less than 2 hours after she had called AmEx. At her door was a courier with a new card. How the company was able to produce the card and get it to her so quickly still puzzles Joan. But she said the experience made her a customer for life.
Today, the majority of employees in developed countries work in service jobs. For instance, 80 percent of the U.S. labor force is employed in service industries. In Australia, 78 percent work in service industries. In the United Kingdom, Germany, and Japan the percentages are 69, 68, and 65, respectively. Examples of these service jobs include technical support representatives, fast-food counter workers, sales clerks, teachers, waiters or waitresses, nurses, automobile repair technicians, con sultants, credit representatives, financial planners, and flight attendants. The common characteristic of these jobs is that they require substantial interaction with an organization’s customers. And since an organization can’t exist without cus tomers whether that organization is DaimlerChrysler, Merrill Lynch. LL. Bean, a law firm, a museum, a school, or a government agency-management needs to ensure that employees do what it takes to please its customers. OB can help in that task
Improving People Skills
We opened this chapter by demonstrating how important people skills are to managerial effectiveness. We said that this book has been written to help both managers and potential managers develop those people skills.”
As you proceed through this book, we’ll present relevant concepts and theories that can help you explain and predict the behavior of people at work. In addition, you’ll also gain insights into specific people skills that you can use on the job. For instance, you’ll learn ways to design motivat ing jobs, techniques for improving your listening skills, and how to create more effective teams.
Empowering People
If you pick up any popular business periodical nowadays, you’ll read about the reshaping of the relationship between managers and those they’re supposedly responsible for managing. You’ll find managers being called coaches, advisers, sponsors, or facilitators. For example in Marriott, W.L. Gore and National West Minister Bank employees are now called associates. And there’s a blurring between the roles of managers and workers. Decision-making is being pushed down to the operating level, where workers are being given the freedom to make choices about schedules and procedures and to solve work-related problems. 26 In the 1980s, managers were encouraged to get their employees to participate in work-related decisions. Now, managers are going considerably further by allowing employees full control of their work. An increasing number of organizations are using self-managed teams, in which workers operate largely without bosses.
What’s going on? What’s going on is that managers are empowering employees. They are putting employees in charge of what they do. And in so doing, managers are having to learn how to give up control, and employees are having to learn how to take responsibility for their work and make appropriate decisions. In later chapters, we’ll show how empowerment is changing leadership styles, power relationships, the way work is designed, and the way organizations are structured.
Stimulating Innovation and Change
Whatever happened to Montgomery Ward, Woolworth, Smith Corona, TWA, Bethlehem Steel, and WorldCom? All these giants went bust. Why have other giants, such as Sears, Boeing, and Lucent Technologies implemented huge cost-cutting programs and eliminated thousands of jobs? To avoid going bust.
Today’s successful organizations must foster innovation and master the art of change or they’ll become candidates for extinction, Victory will go to the organizations that maintain their flexibility continually improve their quality, and beat their competition to the marketplace with a constant stream of innovative products and services. Domino’s single-handedly brought on the demise of thousands of small pizza parlors whose managers thought they could continue doing what they had been doing for years. Amazon.com is putting a lot of independent bookstores out of business as it proves you can successfully sell books from an Internet Web site. Dell has become the world’s largest seller of computers by continually reinventing itself and outsmarting its competition.
An organization’s employees can be the impetus for innovation and change or they can be a major stumbling block. The challenge for managers is to stimulate their employees’ creativity and tolerance for change. The field of OB provides a wealth of ideas and techniques to aid in realizing these goals.
Coping with “Temporariness
With change comes temporariness. Globalization, expanded capacity, and advances in technology have combined in recent years to make it imperative that organizations be fast and flexible if they’re to survive. The result is that most managers and employees today work in a climate best character iced as “temporary Evidence of temporariness is everywhere in organizations. Jobs are being continually redesigned; tasks are increasingly being done by flexible teams rather than individuals; companies are relying more on temporary workers: jobs are being subcontracted out to other firms, and pensions are being redesigned to move with people as they change jobs.
MCom Organizational Behavior
Employees need to update their knowledge and skills to continue to perform new job requirements. For example, employees at nationalized banks like the State Bank of India, Punjab National Corporation Bank now need to know how to operate computers. That was not part of eir job description 20 years ago. Workgroups are also in a state of flux. In the past, employees were assigned to a specific workgroup, and that assignment was relatively permanent. There was a considerable amount of security in working with the same people day in and day out. That predictability has been replaced by temporary workgroups, teams that include members from different departments and whose members change all the time, and the increased use of employee rotation to fill constantly changing work assignments. Finally, organizations themselves are in a state of flux. They continually reorganize their various divisions, sell off poorly performing businesses, downsize operations, subcontract noncritical services and operations to other organizations, replace permanent employees with temporary workers, and outsource various activities.
Today’s managers and employees must learn to cope with temporariness. They have to learn to live with flexibility, spontaneity, and unpredictability. The study of OB can provide important insights into helping you better understand a work world of continual change, how to overcome resistance to change, and how best to create an organizational culture that thrives on change.
MCom Organizational Behavior
Working in Networked Organizations
Computerization, the Internet, and the ability to link computers within organizations and between organizations have created a different workplace for many employees-a networked organization. I allows people to communicate and work together even though they may be thousands of miles apart. It also allows people to become independent contractors, telecommuting via computer to work places around the globe, and changing employers as the demand for their services change. Software programmers, graphic designers, systems analysts, technical writers, photo researchers, book editors and medical transcribers are just a few examples of jobs that people can now perform from home on other non-office location.
The manager’s job is different in a networked organization, especially when it comes to man aging people. For instance, motivating and leading people and making collaborative decisions “online” requires different techniques than does dealing with individuals who are physically pre sent in a single location.
As more and more employees do their jobs linked to others through networks, managers need to develop new skills. OB can provide valuable insights to help with honing those skills.
MCom Organizational Behavior
Helping Employees Balance Work/Life Conflicts
The typical employee in the 1960s or 1970s showed up at the workplace Monday through Friday and did his or her job in 8 or 9-hour chunks of time. The workplace and hours were clearly specified Which’s no longer true for a large segment of today’s workforce. Employees are increasingly complaining that the line between work and non-work time has become blurred, creating personal conflicts and stress.27
A number of forces have contributed to blurring the lines between employees’ work life and personal life. First, the creation of global organizations means their world never sleeps. At any time and on any day, for instance, thousands of General Electric employees are working somewhere. The need to consult with colleagues or customers 8 or 10 time zones away means that many employees of global firms are “on call” 24 hours a day. Second, communication technology allows employees to do their work at home, in their cars, or on the beach in Tahiti. This lets many people in technical and professional jobs do their work any time and from any place. Third, organizations are asking employees to put in longer hours. For instance, in the recent past, the average working hours have increased. There is an unwritten extension of office hours by 3 to 4 hours every day, in most organizations. Finally, fewer families have only a single breadwinner. Today’s married employee is typically part of a dual-career couple. This makes it increasingly difficult for married employees to find the time to fulfill commitments to home, spouse, children, parents, and friends.
Employees are increasingly recognizing that work is squeezing out personal lives, and they’re not happy about it. For example, recent studies suggest that employees want jobs that give them flexibility in their work schedules so they can better manage work/life conflicts. In fact, evidence indicates that balancing work and life demands now surpasses job security as an employee priority, 29 In addition, the next generation of employees is likely to show similar concerns. A majority of college and university students say that attaining a balance between personal life and work is a primary career goal. They want “a life” as well as a job. Organizations that don’t help their people achieve work/life balance will find it the field of OB offers a number of suggestions
MCom Organizational Behavior
Improving Ethical Behavior
In an organizational world characterized by cutbacks, expectations of increasing worker productive ity, and tough competition in the marketplace, it’s not altogether surprising that many employees feel pressured to cut corners, break rules, and engage in other forms of questionable practices.
Members of organizations are increasingly finding themselves facing ethical dilemmas, situations in which they are required to define right and wrong conduct. For example, should they “blow the whistle” if they uncover illegal activities taking place in their company? Should they follow orders with which they don’t personally agree? Do they give an inflated performance evaluation to an employee whom they like, knowing that such an evaluation could save that employee’s job? Do they allow themselves to play politics” in the organization if it will help their career advancement?
What constitutes good ethical behavior has never been clearly defined. And, in recent years, the line differentiating right from wrong has become even more blurred. Employees see people all around them engaging in unethical practice selected officials are indicted for padding their expense accounts or taking bribes corporate executives inflate their company’s profits so they can cash in lucrative stock options and university administrators “look the other way” when winning coaches encourage scholarship athletes to take easy courses to stay eligible in place of those needed for graduation. When caught, you hear these people giving excuses such as “everyone does it pr “you have to seize every advantage nowadays. Is it any wonder that employees are expressing decreased confidence and trust in management and that they’re increasingly uncertain about what constitutes appropriate ethical behavior in their organizations.
Managers and their organizations are responding to this problem from a number of directions. They’re writing and distributing codes of ethics to guide employees through ethical dilemmas. They’re offering seminars, workshops, and similar training programs to try to improve ethical behaviors. They’re providing in-house advisors who can be contacted, in many cases anonymously, for assistance in dealing with ethical issues. And they’re creating protection mechanisms for employees who reveal internal unethical practices.
Today’s manager needs to create an ethically healthy climate for his or her employees, where they can do their work productively and confront a minimal degree of ambiguity regarding what constitutes right and wrong behaviors. In upcoming chapters, we’ll discuss the kinds of actions managers can take to create an ethically healthy climate and to help employees sort through ethically ambiguous situations. We’ll also present ethical dilemma exercises at the end of each chapter that will allow you to think through ethical issues and assess how you would handle them.
MCom Organizational Behavior
Coming Attractions: Developing an OB Model
We conclude this chapter by presenting a general model that defines the field of OB, stakes out its parameters, and identifies its primary dependent and independent variables. The end result will be a “coming attraction of the topics making up the remainder of this book.
MCom Organizational Behavior
An Overview
A model is an abstraction of reality, a simplified representation of some real-world phenomenon. A mannequin in a retail store is a model. So, too, is the accountant’s formula: Assets + Liabilities = Owners’ Equity. Exhibit 1-6 presents the skeleton on which we will construct our OB model. Il proposes that there are three levels of analysis in OB and that, as we move from the individual level to the organization systems level, we add systematically to our understanding of behavior in organizations. The three basic levels are analogous to building blocks: each level is constructed on the previous level. Group concepts grow out of the foundation laid in the individual section; we overlay structural constraints on the individual and group in order to arrive at organizational behavior.
MCom Organizational Behavior
The Dependent Variables
A dependent variable is a key factor that you want to explain or predict and that is affected by some other factor. What are the primary dependent variables in OB? Scholars have historically tended to emphasize productivity, absenteeism, turnover, and job satisfaction. More recently, a fifth variable-organizational citizenship–has been added to this list. Let’s briefly review each of these variables to ensure that we understand what they mean and why they’ve achieved their level of distinction.
Productivity An organization is productive if it achieves its goals and does so by transferring input to outputs at the lowest cost. As such, productivity implies a concern for both effectiveness and efficiency
A hospital, for example, is effective when it successfully meets the needs of its clientele. It is when it can do so at a low cost. If a hospital manages to achieve higher output from its present staff by reducing the average number of days a patient is confined to a bed or by increasing the number of staff-patient contacts per day, we say that the hospital has gained productive efficiency. A business firm effective when it attains its sales or market share goals, but its productivity also depends on achieving those goals efficiently. Popular measures of organizational efficiency mer investment profit per dollar of sales, and output per hour of labor
We can also look at productivity from the perspective of the individual employee. Take the cases Mike and Ramnik, who are both long-distance truckers. If Mike is supposed to haul his fully loaded rig from New Delhi to its destination in Bangalore in 75 hours or less, he is effective if he makes the 3,000mile trip within that time period. But measures of productivity must take into account the cost incurred in reaching the goal. That’s where efficiency comes in. Let’s assume that Mike made the New Delhi to Bangalore run in 68 hours and averaged 7 miles per gallon, Ramnik, on the other hand, made the trip in 68 hours also but averaged 9 miles per gallon (rigs and loads are identical). Both Mike and Kamnik were effective-they accomplished their goal-but Ramnik was more efficient than Mike because his rig consumed less gas and, therefore, he achieved his goal at a lower cost.
Organizations in service industries also need to include “attention to customer needs and requirements in assessing their effectiveness. Why? Because in these types of businesses, there is a clear chain of cause and effect running from emplovee attitudes and behavior to customer attitudes and behavior to an organization’s revenues and profits. Sears, in fact, has carefully documented this chain. The company’s management found that a 5 percent improvement in employee attitudes leads to a 1.3 percent increase in customer satisfaction, which in turn translates into a 0.5 percent improvement in revenue growth. More specifically. Sears found that by training employees to improve the employee-customer interaction, it was able to improve customer satisfaction by 4 percent over a 12-month period, which generated an estimated $200 million in additional revenues.
In summary, one of OB’s major concerns is productivity. We want to know what factors will influence the effectiveness and efficiency of individuals, of groups, and of overall organization.
MCom Organizational Behavior
Absenteeism is defined as the failure to report to work. And absenteeism has become a huge cost and disruption to employers. For instance, a recent survey found that the average direct cost to U.S. employers of unscheduled absences is $789 a year per employee and this doesn’t include lost productivity or the additional costs for overtime pay or hiring temporary employees to cover for absent workers Comparable costs in the UK are also high-approximately $694 a year per employee. In Sweden, an average of 10 percent of the country’s workforce is on sick leave at any given time, 50 It’s obviously difficult for an organization to operate smoothly and to attain its objectives if employees fail to report to their jobs. The work flow is disrupted, and often important decisions must be delayed. In organizations tha evels of absenteeism beyond the normal range heavily on assembly-line production, absenteeism can be considerably in any organization have a direct impact on that more than a disruption; it can result in a drastic reduction in the quality
Are all absences bad? Probably not. Although most absences have a negative impact on the organization, we can conceive of situations in which the organization may benefit by an employee’s voluntarily choosing not to come to work. For instance, illness, fatigue, or excess stress can significantly decrease an employee’s productivity. In Jobs in which an employee needs to be alert-surgeons and airline pilots are obvious examples-it may well be better for the organization if the employee does not report to work rather than show up and perform poorly. The cost of an accident in such jobs could be prohibitive. Even in managerial jobs, where mistakes are less spectacular, performance may be improved when managers absent themselves from work rather than make a poor decision under stress. But these examples are clearly atypical. For the most part, we can assume that organizations benefit when employee absenteeism is low.
MCom Organizational Behavior
Turnover is the voluntary and involuntary permanent withdrawal from an organization high turnover rate results in increased recruiting, selection, and training costs. What are those costs? They’re higher than you might think. For instance, the cost for a typical information technology com pany in the United States to replace a programmer or systems analyst has been put at $34,100 and the cost of a retail store to replace a lost sales clerk has been calculated at $10.445. In addition high rate of turnover can disrupt the efficient running of an organization when knowledgeable and experienced personnel leave and replacements must be found and prepared to assume positions of responsibility.
All organizations, of course, have some turnover. The U.S. national average, in fact, is 15 percent. If the “right” people are leaving the organization–the marginal and submarginal employees turnover can actually be positive. It can create the opportunity to replace an underperforming individual with someone who has higher skills or motivation, open up increased opportunities for promotions, and add new and fresh ideas to the organization. In today’s changing world of work. reasonable levels of employee initiated turnover facilitate organizational flexibility and employee independence, and they can lessen the need for management-initiated layoffs.
But turnover often involves the loss of people the organization doesn’t want to lose. For instance, one study covering 900 employees who had resigned their jobs found that 92 percent earned perfor mance ratings of satisfactory or better from their superiors. 40 So when turnover is excessive, or when it involves valuable performers, it can be a disruptive factor, hindering the organization’s effec tiveness
A BPO survey by the Indo-American Chamber of Commerce and Ernst and Young quoted that while attrition range between 40 percent and 25 percent for voice and non-voice services, respectively, absenteeism varied between 2 to 8 percent on a daily basis.
Organizational Citizenship Organizational citizenship behavior (OCB) is discretionary behavior that is not part of an employee’s formal job requirements, but that nevertheless promotes the effective functioning of the organization.
MCom Organizational Behavior
Successful organizations need employees who will do more than their usual job duties who will provide performance that is beyond expectations. In today’s dynamic workplace, where tasks are increasingly done in teams and where flexibility is critical, organizations need employees who’ll engage in good citizenship behaviors such as helping others on their team, volunteering for extra work, avoiding unnecessary conflicts, respecting the spirit as well as the letter of rules and regulations, and gracefully tolerating the occasional work-related impositions and nuisances.
Organizations want and need employees who will do those things that aren’t in any job description. And the evidence indicates that the organizations that have such employees outperform those that don’t.” As a result, OB is concerned with organizational citizenship behavior as a dependent variable.
Job Satisfaction The final dependent variable we will look at is job satisfaction, which we define as a collection of feelings that an individual holds toward his or her job. Unlike the previous four vari ables, job satisfaction represents an attitude rather than a behavior. Why, then, has it become a primary dependent variable? For two reasons: its demonstrated relationship to performance factors and the value preferences held by many OB researchers.
The belief that satisfied employees are more productive than dissatisfied employees has been a basic tenet among managers for years. Although much evidence questions that assumed causal rela tionship. it can be argued that advanced societies should be concerned not only with the quantity of life—that is, concerns such as higher productivity and material acquisitions—but also with its quality. Those researchers with strong humanistic values argue that satisfaction is a legitimate objective of an organization. Not only is satisfaction negatively related to absenteeism and turnover, but they argue, organizations have a responsibility to provide employees with jobs that are challenging and intrinsically rewarding. Therefore, although job satisfaction represents an attitude rather than a behavior OB researchers typically consider it an important dependent variable.
MCom Organizational Behavior
The Independent Variables
What are the major determinants of productivity, absenteeism, turnover, OCB, and job satisfaction? Our answer to that question brings us to the independent variables. An independent variable is the presumed cause of some change in the dependent variable. Consistent with our belief that organizational behavior can best be understood when viewed essentially as a set of increasingly complex building blocks, the base, or the first level, of our model, lies in understanding individual behavior.
Individual-Level Variables It has been said that “managers, unlike parents, must work with used, not new, human beings–human beings whom others have gotten to first.” When individuals enter an organization, they are a bit like used cars. Each is different. Some are “low-mileage”-they have been treated carefully and have had only limited exposure to the realities of the elements. Others are “well worn,” having been driven over some rough roads. This metaphor indicates that people enter organizations with certain intact characteristics that will influence their behavior at work. The more obvious of these are personal or biographical characteristics such as age and gender personality characteristics; an inherent emotional framework: values and attitudes, and basic ability levels. These characteristics are essentially in place when an individual enters the workforce, and, for the most part, there is little management can do to alter them. Yet they have a very real impact on employee behavior. Therefore, each of these factors-biographical characteristics, ability, values. attitudes, personality, and emotions will be discussed as independent variables in Chapters 2 through 4.
There are four other individual-level variables that have been shown to affect employee behavior for perception, individual decision making, learning, and motivation. Those topics will be introduced and discussed in Chapters 2, 5, 6, and 7.
Group-Level Variables The behavior of people in groups is more than the sum total of all the individuals acting in their own way. The complexity of our model is increased when we acknowledge that people’s behavior when they are in groups is different from their behavior when they are alone Therefore, the next step in the development of an understanding of OB is the study of group behavior.
Chapter 8 lays the foundation for an understanding of the dynamics of group behavior. That chapter discusses how individuals in groups are influenced by the patterns of behavior they are expected to exhibit, what the group considers to be acceptable standards of behavior, and the degree to which group members are attracted to each other. Chapter 9 translates our understanding of groups to the design of effective work teams. Chapters 10 through 14 demonstrate how commu. nication patterns, leadership, power and politics, and levels of conflict affect group behavior.
Organization Systems Level Variables Organizational behavior reaches its highest level of sophis. tication when we add formal structure to our previous knowledge of individual and group behavior. Just as groups are more than the sum of their individual members, so are organizations more than the sum of their member groups. The design of the formal organization; the organization’s internal culture and the organization’s human resource policies and practices (that is, selection processes, training and development programs, performance evaluation methods) all have an impact on the dependent variables. These are discussed in detail in Chapters 15 through 17.
MCom Organizational Behavior
Toward a Contingency
OB Model Our final model is shown in Exhibit 1-7. It shows the five key dependent variables and a large number of independent variables, organized by level of analysis, that research indicates have varying effects on the former. As complicated as this model is, it still doesn’t do justice to the complexity of the OB subject matter. However, it should help explain why the chapters in this book are arranged as they are and help you to explain and predict the behavior of people at work.
For the most part, our model does not explicitly identify the vast number of contingency variables because of the tremendous complexity that would be involved in such a diagram. Rather, throughout this book we will introduce important contingency variables that will improve the explanatory linkage between the independent and dependent variables in our OB model.
Note that we have included the concepts of change and stress in Exhibit 1-7. acknowledging the dynamics of behavior and the fact that work stress is an individual, group, and organizational issue. Specifically, in Chapter 18 we will discuss the change process, ways to manage organizational change. key change issues currently facing managers, consequences of work stress, and techniques for managing stress.
Also, note that Exhibit 1-7 includes linkages between the three levels of analysis. For instance, the organizational structure is linked to leadership. This link is meant to convey that authority and leadership are related: management exerts its influence on group behavior through leadership. Similarly, communication is the means by which individuals transmit information; thus, it is the link between individual and group behavior
MCom Organizational Behavior
Summary and Implications for Managers
Managers need to develop their interpersonal or people skills if they are going to be effective in their jobs. Organizational behavior (OB) is a field of study that investigates the impact that individuals. groups, and structure have on behavior within an organization, and then it applies that knowledge to make organizations work more effectively. Specifically, OB focuses on how to improve productivity reduce absenteeism and turnover, and increase employee citizenship and job satisfaction
We all hold generalizations about the behavior of people. Some of our generalizations may provide valid insights into human behavior, but many are erroneous. Organizational behavior uses systematic study to prove preteens of behavior that would be made from intuition alone nu because people are different, we need to look at OB in a contingency framework, using variables to moderate cause-and-effect relationships.
Organizational behavior offers both challenges and opportunities for managers. It offers species insights to improve a manager’s people skills. It recognizes differences and helps managers to see the value of workforce diversity and practices that may need to be changed when managing in different countries. It can improve quality and employee productivity by showing managers how to empower their people, design and implement change programs, improve customer service, and help employees balance work/life conflicts. It provides suggestions for helping managers meet chronic labor shortages. It can help managers to cope in a world of temporariness and to learn ways to stimulate innovation. Finally, OB can offer managers guidance in creating an ethical health work climate.
