Models of organizational behavior

 McGregor’s Theory X and Theory Y, alternative sets of assumptions about employees

Theory X Theory Y
The typical person dislikes work and will Work is as natural a play or rest.
avoid it if possible.
The typical person lacks responsibility, People are not inherent lazy. They have
has little ambition, and seek security become that way as a result of
above all. experience.
Most people must be coerced, People will exercise self-direction and
controlled, and threatened with self-control in the service of objectives to
punishment to get them to work. which they are committed.
People have potential. Under proper
conditions they learn to accept and seek
responsibility. They have imagination,
ingenuity, and creativity that can be
applied to work
With these assumptions, the managerial With these assumptions, the managerial
role is to coerce and control employees role is to develop the potential in
employees and help them release that
potential toward common objectives

 Five models of organizational behavior

Autocratic Custodial Supportive Collegial System
Basis of Power – those Economic Leadership – Partnership Trust,
model who are in resources management community,
command provides a meaning
must have the climate to
power to help
demand, employees
meaning that grow and
an employee accomplish
who does not in the
follow orders interests of
will be the
penalized organization
the things of
which they
are capable.
Managerial Authority – Money Support Teamwork Caring,
orientation assumes that compassion
employees
have to be
directed,
persuaded,
and pushed
into
performance,
 and such
prompting is
management’
s task.
Management
does the
thinking; the
employees
obey the
orders.
Employee Obedience Security and Job Responsible Psychological
orientation benefits performance behavior ownership
Employee Dependence Dependence Participation Self- Self-
psychological on boss on – employees discipline motivation
result organization may say
“we” instead
of “they”
when
referring to
their
organization
Employee Subsistence Security Status and Self- Wide range
needs met recognition actualization
Performance Minimum Passive Awakened Moderate Passion and
result cooperation drives enthusiasm commitment
to
organizational
goals

Managing Communication
 Communication is the transfer of information and understanding from one person to another. It
involves at least two people – a sender and a receiver.
 Importance of communication
o Organization cannot exist without communication.
o When communication is effective, it tends to facilitate better performance and improve
job satisfaction.
o Open communication contributes transparency.
 The two-way communication process (MAKE FIGURE)
o Develop an idea
o Encode – convert the idea into suitable words, charts or other symbols for transmission.
o Transmit – by method such as memo, phone call, or personal visit.
o Receive – in this step, the initiative transfers to the receiver, who tunes in to receive the
message.
o Decode
o Accept – once the receiver has obtained and decoded a message, that person has the
opportunity to accept or reject it.
 o Use – the receiver may discard it perform the task as directed, store the information for
the future or do something else.
o Provide feedback – feedback completes the communication loop.
 Potential problems in communication
o People may become polarized - taking extreme positions
o Engaged in defensive reasoning – when threatened with the potential embarrassment
of losing argument, people tend to abandon logic and rationality. They blame others,
selectively gather and use data, seek to remain in control, and suppress negative
feelings.
o Cognitive dissonance – this is an internal conflict and anxiety that occurs when people
receive information incompatible with their value systems, prior decisions, or other
information they may have.
o Face-saving – an attempt to preserve or even enhance our valued self-concept when it is
attacked.
o Voice – problems arises when individual do not use appropriate tone when expressing
thoughts and feelings.
 Challenging voice – hostile, tactless, and angry tone
 Supportive voice - warmer, softer, and more tentative in nature.
 Communication barriers
o Personal barriers – emotions, listening, and psychological distance (feeling of being
emotionally separated.
o Physical barriers – noise and geographical distance
o Semantic barriers – symbols
 Communication symbols
o Words
o Pictures – nonverbal communication
 Downward communication – the flow of information from higher to lower levels of authority.
o Communication overload – employees receive more communication inputs than they
can process or more than they need.
o Acceptance of a communication
o Communication needs of employees – job instruction, performance feedback and social
support (perception that they are cared for, esteemed, and valued.)
 Upward communication
o Difficulties – delay, filtering, need for a response and distortion
o Practices
 Questioning
 Listening – active listening (stop talking, put the talker at ease, show a talker
that you want to listen, remove distractions, empathize with a talker, be patient,
keep your cool, avoid being confrontational, ask relevant questions and stop
talking.
 Employee meetings
 Open-door-policy
 Participation in social groups
 Other forms of communication
o Lateral communication
o Social networking and electronic communication
 E-mail
  Blogs
 Telecommuting – work from home, making use of internet and the telephone
 Virtual offices
 Informal communication
o Grapevine
 Rumor – is a grapevine information that is communicated without secure
standards of evidence present. It could by change be correct, but generally it is
incorrect; thus, it is presumed undesirable.
 Historical and explanatory – they attempt to make meaning out of
incomplete prior events.
 Factors that encourage grapevine activity
 Work that allows conversation
 A job that provides information desired by others
 Personality of communicator
 Excitement and insecurity
 Involvement of friends and associates
 Recent information
 Procedure that brings people into contact.
 Guidelines for control of rumor
 Remove its causes in order to prevent it
 Apply efforts primarily to serious rumors
 Refute rumors with facts
 Deal with rumors as soon as possible
 Emphasize the face-to-face supply of facts, confirmed in writing if
necessary
 Provide from reliable sources
 Refrain from repeatin;g rumor while refuting it
 Encourage assistance of informal and union leaders if they are
cooperative
 Listen to all rumors in order to understand what they mean
Social System and Organizational Culture
 Understanding a Social System
o Social system – a complex set of human relationships interacting in many ways.
 Social Equilibrium – a system is said to be in social equilibrium when its
interdependent parts are in dynamic working balance.
 Effects of Change (functional and dysfunctional)
 Psychological Contract (the condition of each employee’s psychological
involvement – both contributions and expectations – with the system) and
Economic Contract (time, talent, and energy are exchanged for wages, hours,
and reasonable working conditions)
Employee
 Expected Gains If expectations are met:
 Intended contributions  High job satisfaction
 High performance
 Continuance with the
organization
If not met:
 Low job satisfaction
 Low performance
 Possible separation
Employer
 Expected gains If expectations are met:
 Rewards offered  Employee retention
 Possible promotion
If not met:
 Corrective action; discipline
 Possible separation
 Social Culture – are often portrayed as consistent within a nation, thereby producing a national
culture. At the simplest level, national cultures can be compared on the basis of how their
members relate to each other, accomplish work, and respond to change.
o Cultural diversity
 Job related (organizationally created. Type of work rank etc.)
 Non-job related (those related to culture, ethnicity, socioeconomics, sex and
race)
o Social Culture Values
 Work ethic – meaning they view work as very important, morally correct, and as
a desirable goal in life.
 Social responsibility – is the recognition that organizations have significant
influence on the nation’s social system and that influence must be properly
considered and balanced in all organizational actions.
 Role – the pattern of actions expected of a person in activities involving others. Role reflects a
person’s position in the social system, with its accompanying rights and obligations, power and
responsibility.
 o Role perceptions – managers and workers alike are guided by their role perceptions –
that is, how they think they are supposed to act in their own roles and how others
should act in their roles.
o Mentors – a role model who guides another employee (protégé) by providing historical
perspectives and sharing valuable advice on roles to play and behaviors to avoid.
 Tips for protégé using mentors
 Select more than one mentor
 Consult them periodically
 Brief them on your progress, current issues, and problems you are
facing
 Seek feedback from them.
 Share a summary of your own strengths and weakness, and your action
plan for overcoming your limitations.
 Ask your mentors to watch for new opportunities opening up that might
use your skills.
 Seek their advice on career-building moves that will enhance your
promotionability.
 Tips for mentors who have protégés
 Identify protégé strengths, and help them build on them.
 Foster self-discovery by asking insight-generating questions.
 Let the protégé make decisions, for that will increase ownership.
 Choose your words carefully; avoid being directive or judgmental
 Listen; watch from a distance; intervene only when necessary
 Don’t place yourself on a pedestal; avoid sounding like an expert
 Be real; be authentic; be supportive; eliminate signs of power.
 Be open to alternative views and choices; help the protégé refine them
 Reverse mentoring – these practices occurs when a person who has more
general depth of experience requires assistance in an area of special expertise,
and a newer employee can provide.
o Role conflict – when others have different perceptions or expectations of a person’s
role, that person tends to experience role conflict. Such conflict makes it difficult to
meet one set of expectations without rejecting another.
o Role ambiguity – roles are inadequately defined or are substantially unknown. People
are not sure how they should act in situations of this type.
 Status – social rank of a person in a group.
o Status relationships (high-status people within a group usually have more power and
influence than those with low status)
 In a work organization, status provides a system by which people can relate to
one another as they work. Without it, they tend to be confused and spend much
of their time trying to learn how to work together. Though status can be abused,
normally it is beneficial because it helps people interact and cooperate with one
another.
o Status symbol – these are the visible external things that attach to a person or
workplace and serve as evidence of social rank. The status system becomes most visible
through its use of status symbols.
 Typical symbols of status
 Furniture
  Interior decorations
 Location of workplace
 Quality and newness of equipment used
 Type of clothes normally worn
 Privileges given
 Job title or organizational level
 Employees assigned
 Degree of financial discretion
 Organizational membership
o Sources of status
 Major sources of status on the job
 Working conditions
 Education
 Job level
 Abilities
 Job skill
 Occupation
 Pay
 Seniority
 Age
 Method of pay
o Significance of status
 It is the source of employee problems and conflicts that management needs to
solve.
 It influences the kinds of transfers that employees will take.
 It helps determine who will be an informal leader of a group
 It definitely serves to motivate those seeking to advance in the organization.
 Organizational Culture – it is the set of assumptions, beliefs, values, and norms shared by an
organization’s members. Organizational cultures are important to a firm’s success for several
reasons. They give an organizational identity to employees – a defining vision of what the
organization represents. Riverwood Healthcare Center identified five key values that are meant
to be used as daily guidelines for employee behavior:
 Integrity
 Customer service
 Unity
 Respect and compassion
 Excellence and passion
o Characteristics of cultures
 Distinctive – each has its own history, patterns of communication, systems and
procedures, mission statements and visions, and stories and myths.
 Stable – cultures are stable in nature, usually changing only slowly overtime.
 Implicit
 Symbolic – we seldom read a description of a firm’s culture. More frequently,
employees make inferences about it from hearing stories about the way things
are done, from reading slogans that portray corporate ideals, from observing
key artifacts, or from watching ceremonies in which certain types of employees
are honored.
 o Measuring organizational culture
 Systematic measurement and comparison of cultures is difficult at best
 Examination of stories, symbols, rituals, and ceremonies to obtain clues
and construct a composite portrait.
 Interviews and open-minded questionnaires in an attempt to assess
employee values and beliefs.
 Examination of corporate philosophy statements has provided insight
into the espoused culture.
 Survey employees directly and seek their perceptions of the
organization’s culture.
 To become a member of the organization and engage in participant
observation.
 Any attempt to measure organizational behavior culture can be only an
imperfect assessment. In reality, many organizational cultures are in the process
of changing and need to be monitored regularly and by a variety of methods to
gain a truer picture.
o Communicating and changing culture
 Formal communication vehicles for transmitting organizational cultures
include executive visions of the firm’s future, corporate philosophy
statements, and codes of ethical conducts.
 Informal means involve publicly recognizing heroes and heroines,
retelling historical success stories.
 Cultural communication acts may be lumped under the umbrella of
organizational socialization (the continuous process of transmitting key
elements of an organization’s culture to its employees).
 Formal method – corporate orientation training for new employees
 Informal means – role modeling provided by mentors

Motivation
 Work Motivation – is the result of a set of internal and external forces that cause an employee
to choose an appropriate course of action and engage in certain behaviors.
o Work motivation is a complex combination of psychological forces within each person,
and employers are virtually interested in three elements of it:
 Direction of the behavior
 Positive factors (Dependability, Creativity, Helpfulness, Timeliness)
 Dysfunctional factors (tardiness, absenteeism, withdrawal and low
performance)
 Level of the effort provided (making a full commitment to excellence versus
doing just enough to get by)
 Persistence of the behavior (repeatedly maintaining the effort versus giving up
prematurely or doing it just sporadically)
 Motivational drives
o David C. McClelland research on drives focused on the following:
 Achievement Motivation – drive to accomplish objectives and get ahead
 Affiliation motivation – drive to relate to people effectively
 Power motivation - drive to influence people and situations
 Human Needs
 o Types of needs
 Primary – basic physical needs
 Secondary – social and psychological needs

Maslow’s Hierarchy of needs Herzberg’s two-factor model Alderfer’s E-R-G model

Maintenance factors Motivational factors

5. Self-Actualization and Work itself Growth needs
fulfillment needs Achievement
Possibility of Growth
Responsibility
4. Esteem and status needs Advancement Relatedness Needs
Recognition

Status
3. Belonging and social needs Relations with supervisors
Peers relations
Relations with subordinates
Quality of supervision
2. Safety and security needs Company policy and Existence needs
administration
Job security
1.Physiological needs Work conditions
Pay

 Behavior Modification
o OB Mod relies heavily on the law of effect
 Law of Effect – states that a person tends to repeat behavior that is
accompanied by favorable consequences (reinforcement) and tends not to
repeat behavior that is accompanied by unfavorable (or lack of) consequences.
 Two conditions are required for successful application of OB Mod
o The manager must be able to identify some powerful
consequences.
o Must be able to control and administer them in such a way the
employee will see the connection between the behavior to be
affected and the consequences.
o OB Mod places great emphasis on the use of rewards and alternative consequences to
sustain behavior.
Application Positive
Punishment
reinforcement
Manager’s use
Negative
Extinction
Withdrawal reinforcement

Negative Positive
Nature of consequences
 Positive reinforcement – provides a favorable consequence that encourages
repetition of a behavior.
  Negative reinforcement – occurs when behavior is accompanied by removal of
unfavorable consequences.
 Punishment – is the administration of an unfavorable consequence that
discourages a certain behavior.
 Extinction – is the withholding of a significant positive consequences that were
previously provided for a desirable behavior.
o Schedules of reinforcement
 Continuous reinforcement – occurs when reinforcement accompanies each
behavior by an employee.
 Partial reinforcement – occurs when only some of the correct behaviors are
reinforced – either after a certain time or after a number of correct responses.
 Goal Setting
o Goals – targets and objectives for future performance.
o Goal setting – works as a motivational process because it creates a discrepancy between
current and expected performance
o Elements of goal setting
 Goal acceptance – effective goals need to be not only understood but also
actively accepted.
 Specificity – goals need to be as specific, clear, and measurable as possible so
employees will know when a goal is reached.
 Challenge – most employees work harder and achieve more when they have
difficult goals to accomplish rather than easy ones.
 Performance Monitoring (observing behavior, inspecting output, or studying
performance indicators) and Feedback (timely provision of data or judgement
regarding task related results)
Appraising and Rewarding Performance
 A complete program
o Many types of pay are required for a complete economic reward system.
 Job analysis and wage surveys – rate jobs, comparing one job with another to
determine base pay
 Performance appraisal and incentive – rate employees on their performance
and reward their contribution.
 Profit sharing – rates the organization in terms of its general economic
performance and rewards employees as partners in it.
 (Together, these three systems – base pay, performance rewards, profit sharing
– are the incentive foundation of a complete pay program.)
o Relating pay to objectives
 Base pay and skill-based pay motivate employees to progress to jobs of higher
skills and responsibility.
 Performance pay is an incentive to improve performance on the job.
 Profit sharing motivates workers toward teamwork to improve organization’s
performance.
 Other payments, primarily nonincentive in nature, are added to the incentive
foundation.
 Seniority pay – made to reward workers for extended service and to
encourage them to remain with their employer.
 Overtime, working on day off – workers are paid extra for the
inconvenience.
 Holidays and vacations – subject to guaranteed pay.
 Money as a means of rewarding employees
o Certainly, money is valuable because of the goods and services it will purchase. This
aspect is its economic value as a medium of exchange for allocation of economic
resources; however, money also is a social medium of exchange. Money has status value
when it is being received and when it is being spent.
o Application of the motivational models
 Drives (David McClleland)
 Achievement-oriented
o Monitors they pay and compare it with others.
o Pay is a measure of their accomplishments
 Affiliation
o Use money to buy their way into expensive clubs
 Power
o Give them capacity to influence others, such as political
contributions.
 Needs
 Herzberg model – pay is viewed primarily as a hygiene factor, although
it may have at least short-term motivational value as well.
  In other need-based models – pay is most easily seen in its capacity to
satisfy the lower-order needs.
 Expectancy
 If money is to act as a strong motivator, an employee
o Must want more of it. (valence)
o Must believe that effort will be successful in producing desired
performance. (expectancy)
o Must trust that the monetary reward will follow better
performance. (instrumentality)
 Behavior modification
 Desired conditions for applying contingent rewards. Employees can see
that there is a direct connection between performance and reward.
 Undesirable, where rewards are withheld from high performers or
given to low performers.
 When these conditions are allowed to occur, many employees will at
least be confused about how to perform and may even be highly
dissatisfied with the reward system.
 Equity
 Cost-reward comparison, similar to the break-even analysis.
 Employees consider all the costs of higher performance, such as effort,
time acquisition of knowledge and new skills, and the mental energy
that must be devoted to innovation and problem solving. Then they
compare those costs with all the possible rewards, both economic and
non-economic.
o Additional considerations in the use of money
 Extrinsic and intrinsic rewards
 Money is essentially an extrinsic reward rather than an intrinsic one.
However, it also has all the limitations of extrinsic benefits. No matter
how closely management attaches pay to performance, pay is still
something that originates outside the job and is useful only away from
the job.
 Compliance with the law
 Labor Law
 BIR
 Organizational behavior and performance appraisal
o Management by Objectives – a cyclical process that often consists of four steps as a way
to attain desired performance.
 Objective setting – joint determination by manger and employee of appropriate
levels of future performance for the employee.
 Action planning – participative or even independent planning by the employee
as how to reach those objectives.
 Periodic review – joint assessment of progress toward objectives by manager
and employee, performed informally and sometime spontaneously.
 Annual evaluation – more formal assessment of success in achieving the
employee’s annual objectives coupled with a renewal of the planning cycle.
o Performance appraisal – it is the process of evaluating the performance of employees,
sharing that information with them, and searching for ways to improve their
performance. Appraisal is necessary in order to:
 Allocate scarce resources in a dynamic environment
 Motivate and reward employees
 Give employees feedback about their work
 Maintain fair relationships within groups
 Coach and develop employees
 Comply with regulations
o Appraisal philosophy – modern philosophy emphasizes present performance and future
goals, it also stresses employee participation in mutually setting goals with the
supervisor and knowledge of results.
 Performance orientation – it is not enough for employees to put forth effort;
that effort must result in the attainment of desired outcomes.
 Focus on goals or objectives – employees need to have a clear idea of what they
are supposed to be doing and the priorities among their tasks. “If you know
where you want to go, you are more likely to get there.”
 Mutual goal setting between supervisor and employee – this is the belief that
people will work harder for goals or objectives that they have participated in
setting.
 Clarification of behavioral expectations – brief descriptions of outstanding, very
good, acceptable, below average, and unacceptable behaviors are specified for
each major dimension of a job, thus cueing the employee in advance regarding
the organization’s expectations.
 Extensive feedback systems – employees can fine-tune their performance better
if they know how they are doing in the eyes of the organization, and receive thin
information regularly and candidly.
o Appraisal interview
 This is a session in which supervisor provides feedback to the employee on past
performance, discusses any problems that have arisen, and invites a response.
 The two parties set objectives for the next time period.
 In some organizations, the employee is then informed about his future salary; in
others, pay issue is delayed until several months.
 It provides rich opportunity to motivate employees.
 Some organizations in both the private and public sectors include, as a formal
process, self-appraisal.
 This is an opportunity for the employee to be introspective and to offer
a personal assessment of his or her accomplishments, strengths, and
weaknesses.
o What kind of problems have you had?
o What has gone extremely well for you during this period?
o What ideas do you have for improving your contributions?
 Problems can arise in self-appraisals, however. Some poor performers
tend to diminish their level of difficulties and attribute their problems to
situational factors around them, and a few will rate themselves too
leniently.
o Performance feedback – leads to both improved performance and improved attitudes –
if handled properly by the manager.
 Guidelines for effective performance feedback
 Make it well-timed – given soon after a critical event
 Be specific – must clearly point the way toward clear goals
 Establish priorities for change
 Check for understanding
 Focus on a few items
 Allow choice
 State it objectively
 Determine if it is desired
 Include positive factors to praise
 Relate it to the job
 Appraisal problems
 Confrontational – each party is trying to convince the other that her or
his view is more accurate.
 Emotional – manager calls for a critical perspective, employee desires to
save face easily leads to defensiveness
 Judgmental – manager must evaluate the employee’s behavior results
and this aspect places employee in a clearly subordinate position
 Complex – it is a complex task for managers, requiring job
understanding, careful observation of performance, and sensitivity to
the needs of employees.
 Nature of attributes – attribution is the process by which people interpret and
assign causes for their own and other’s behavior.

The process of making and using attribution

Observation/description Understanding Prediction/control
Employee behavior occurs: Attributes are made to Future behavior is
personal or situational predicted; methods to
factors such as: assure it are implemented
 Functional  Ability
 Dysfunctional  Effort
 Task difficulty
 Luck

 Related ideas – attribution illustrate the effects of perceptual set

 Perceptual set – where people tend to perceive what they expect to
perceive.
o Self-fulfilling prophecy – it suggests that a manager’s
expectations for an employee may cause the manager to treat
the employee differently and that employee will then respond
in a way that confirms the initial expectations.
 Other perceptual problems
 Perceptual distortions
 o Halo effect – allowing an appraiser’s overall assessment of an
employee (whether positive or negative) to affect the rating of
specific performance factors.
o Central tendency – the act of avoiding the use of very high or
very low ratings, such that the vast bulk of individual ratings fall
into the middle of the scale.
o Leniency effect – the distortion or skewing of most ratings
toward high end of the scale, either consciously (to make one’s
employees, and therefore oneself look good to others), or
unconsciously (to avoid conflict when giving feedback).
o Harshness effect – this is the opposite of leniency; it is the of
ratings toward the low end of the scale. It may be to avoid
appearing soft or it may be used to catch the attention of an
employee who needs substantial improvement.
o Recency effect – this is the act of allowing employee behaviors
or accomplishments that occurred just before the appraisal to
have more impact than earlier factors during the appraisal
period.
o First impression – this occurs when a manager initially like (or
dislikes) an employee and his/her behavior, and then clings to
that same assessments despite actual declines (or
improvements across time.
 Managerial effects
 Face to face interview encourages managers to be more specific about
identifying each employee’s abilities, interest, and motivation.
 Managers often begin to perceive that each employee is truly different
and must be treated that way.
 However, managers sometimes avoid giving appraisals because they do
not want to disrupt an existing smooth relationship with an employee
by providing negative feedback.
 Economic incentive systems
o Incentives linking pay with performance
Incentive Measure Example
Amount of output Piece rate; sales commission.

Quality of output Piece rate only for pieces meeting the

standard; commission only for sales that
are without debts.

Success in reaching goals Bonus for selling an established number

of items during a predetermined time
span.
Amount of profit
Profit sharing
Cost efficiency
Gain sharing
Employee skills
 Skill-based pay

o Wage incentives – basically, wage incentives, which are a form of merit pay, provide
more pay for more output or results, are often referred to as pay for performance.
o Profit sharing – a system that distributes to employees some portion of the profits of
business, either immediately (cash bonuses) or deferred until later date (employee-
owned shares)
o Gain sharing – measures improvements and shares the gains with employees on some
formula basis.
 Inventory levels
 Labor hours per unit of product
 Usage of materials and supplies
 Quality of finished goods
o Skilled based pay – rewards individuals for what they know how to do.