Benefits and Limitations of

Organizational Development

Benefits of OD

•Change throughout the organization•Greater Motivation•Higher Job Satisfaction•Reduced absences•Increased Productivity•Lower turnover•Better quality of work•Improved teamwork•Better resolution of conflict•Commitment to Objectives•Increased willingness to change•Creation of learning individuals and groups

Job satisfaction is the extent to which a person is gratified or fulfilled by his or her work.

A satisfied employee tends to be:

• absent less often

• Make positive contributions

• Stay in the organization

A dissatisfied employee tends may be:

• Absent more often

• May experience stress that disrupts co-workers

• Continually look for another job

Environmental impact

Job satisfaction is one part of life satisfaction. The nature of a worker’s environment off that job indirectly influences his or her feelings on the job. Similarly, since a job is an important part of life for many workers, job satisfaction influences general life satisfaction. The result is a spillover effect.

Reduced absencesA satisfied employee tends to be absent less often. Although the connection is not always sharp. Some absences are caused by legitimate medical reasons. Involuntary (medically related) absenteeism can sometimes be predicted (e.g., surgery) are often be reduced through thorough pre-employment physical exams and work-history record checks.

Turnover

proportion of employees leaving an organization during a given time period.

Excessive employee turnover can have several negative effects on an organization

• Separation Costs

• Training Costs

• Vacancy Costs

• Replacement Costs

• Morale Effects

Quality is the total set of features and characteristics of a product or service that determine its ability to satisfy stated or implied needs.

Quality is important because:

• Serves as the basis for competition

• Improving quality tends to increase productivity (making high quality products results less waste and rework)

• Enhancing quality lowers costs

Type of Benefit Specific Benefit Organizational Examples

Enhanced Performance

Increased Productivity Improved Quality Improved customer service

Ampex: On-time customer delivery rose 98%.K Shoes: Rejects Per million dropped from 5,000 to 250Eastman: Productivity rose 70%

Employee Benefits Quality of Work Life Lower Stress

Milwaukee Mutual: EmployeeAssistance program usage dropped to 40% below industry average

Reduced Costs Lower turnover, Absenteeism Fewer injuries

Kodak: Reduced turnover to one- half the industry average.Texas instruments: Reduced costs more than 50%Westinghouse: Costs down 60%

Organizational Enhancements Increased innovation, flexibility

IDS Mutual Fund Operation: Improved flexibility to handle fluctuations in market activity.Hewlett-packard: Innovative order-processing system

Ingredients of Effective Teams• Supportive Environment – involves encouraging team

members to think like a team, providing adequate time for meetings, and demonstrating faith in members capacity to achieve

• Skills and clarity – Team members must be reasonably qualified to perform their jobs and have the desire to cooperate. Members can work together as a team after the members know the roles of all the other whom they will be interacting.

Ingredients of Effective Teams• Superordinate Goals – A major responsibility of

managers is to try to keep the team members oriented toward their overall task. Sometimes, unfortunately, an organization’s policies record-keeping requirements and reward systems may fragment individual efforts and discourage team.

• Team rewards – These may be financial, or they may be in the form or recognition. Rewards are most powerful if they are valued by the team members, perceived as possible to earn, and administered contingent on the group’s task performance.

Potential Team Problems• Changing Composition – too many changes and

personnel transfers interfere with group relationships and prevent the growth of teamwork.

• Social Loafing – (free rider effect) when employees think their contributions to a group cannot be measured, they may lessen their output. The causes includes perception of unfair division of labor, belief that co-workers are lazy and a feeling of being able to hide in a crowd and therefore not be able to be singled out for blame.

Need for Team Building• Interpersonal conflicts among team members or

between the team and is leader.

• Low degree or team morale or low team cohesiveness

• Confusion or disagreement about roles within the team

• Large influx or new members

• Disagreement over the team’s purpose and tasks

James Surowiecki concludes that groups will produce better answers to questions and problems than a single individual can.

To produce the results that he documents, effective groups need four ingredients.

• Diversity of opinion, information and perspective

• Independent opinion not influence by others

• Access to decentralized knowledge and the empowerment to make decisions based on that knowledge

• An aggregative mechanism for producing collective decisions from private judgments.

Conflict resolution - occurs when a manager resolves a conflict that has become harmful or serious.

Conflict stimulation – the creation and constructive use of conflict by a manager.

Methods used to stimulate conflict under controlled conditions

• Altering the physical location of groups

• Training programs

• Devil’s advocate – person who challenges the ideas of others, probes for supporting facts, provides constructive criticism and challenges logic so as to improve the quality of group decision.

Conflict Management

Conflict has become disruptive. Too much time and effort are spent on conflict rather than on productive efforts. Conflict focuses on internal goals of the group rather than on organizational goals

Work groups are stagnant and comfortable with the status quo. Consensus among groups is too easily reached. Groups are not creative or motivated to challenge traditional ideas. Change within the organization is needed for it to remain competitive

Use Resolution under these Condition

Use Resolution under this Condition

ORGANIZATIONCHARACTERISTICS

•Structure

•Information systems

•Human resource practices

•Culture

•leadership

Organization Learning Processes:

•Discovery

•Invention

•Production

•Generalization

OrganizationKnowledge

•Explicit

•Tacit

Organization

Performance

CompetitiveStrategy

Organization Learning Knowledge Management

How Organization Learning Affects Organization

Performance

Organization Learning

enhances and organization’s capability to acquire and develop new knowledge.

They draw heavily on the social sciences for conceptual grounding and on OD intervention such as team building, structural design and employee involvement.

Learning is organizational to the extent that:

• It is done to achieve organization purpose.

• It is shared or distributed among members of the organization.

• Learning outcomes are embedded in the organization systems, structures and culture

Knowledge Management

Focuses on how knowledge can be organized and used to improve performance.

They are rooted conceptually in the information and computer sciences and in practice, emphasize electronic forms of knowledge storage and transmissions such as intranets, data warehousing and knowledge repositories.

Structure

Organization structures emphasize teamwork, few layers, strong lateral relations and networking across organizational boundaries both internal and external to the firm. These features promotes the information sharing involvement in decision making, system thinking and empowerment.

Information Systems

Organization learning involves gathering and processing information and consequently the information systems of learning organizations provide and infrastructure for OL. These system facilitate rapid acquisition, processing and sharing of rich, complex information and enable people to manage knowledge for competitive advantage.

Human Resource practices

Human resources, including appraisal, rewards and training, are designed to account for long term performance and knowledge development; they reinforce the acquisition and sharing of new skills and knowledge.

Organization Culture

Learning organizations have strong cultures that promote openness, creativity and experimentation among members. These values and norms provide the underlying social support needed for successful learning. They encourage members to acquire, process and share information; they nurture innovation an provide the freedom to try new things, tor risk failure, and to learn form mistakes.

Leadership

Like most interventions aimed at organization transformation. OL and KM depend heavily on effective leadership throughout the organization. The leaders of learning organization actively model the openness, risk taking, and reflection necessary for learning. They also communicate a compelling vision of the learning organization and provide the empathy, support, and personal advocacy needed to lead others in that direction.

Organization Learning Processes

Discovery

Learning starts with discovery when errors or gaps between desired and actual conditions are detected.

Organization Learning Processes

Invention

Aimed at devising solutions to close the gap between desired and current conditions; it includes diagnosing the causes of the gap and creating appropriate solutions to reduce it.

Organization Learning Processes

Production

This process involves implementing solutions, and generalization includes drawing conclusions about the effects of the solutions and extending that knowledge to other relevant situations.

Three types of learning1. Single Loop Learning – focused on improving the status

quo. This is the most prevalent form of learning in organizations and enables members to reduce errors or gaps between desired and existing conditions.

2. Double - Loop Learning – (generative learning), aimed at changing the status quo. It operates at more abstract level than does single loop learning because members learn how to change the existing assumptions and conditions within which single loop learning operates.

3. Deuterolearning – involves learning how to learn. Here learning is directed at the learning process itself and seeks to improve how organization perform single and double loop learning.

Structuring Activities to Maximize Learning

(French and Bell)1. Include people affected by the problem or the

opportunity.

2. Set in motion processes to help people clarify the goals and ways to reach the goals.

3. Ensure that the expectation are realistic.

4. Involve both people strong on experience and those with good conceptual understanding to bring in multiple perspectives.

5. Shape the mood and climate in such a manner that individuals feel “freed up” rather than anxious or defensive.

Structuring Activities to Maximize Learning

(French and Bell)6. Design the process in a manner that the participants learn

7. Individuals should learn about both task and process.

8. Ensure that individuals are engaged as whole persons, not segmented persons.

Ways how to Sequence Activities

1. Maximize diagnostic data

2. Maximize effectiveness

3. Maximize efficiency

4. Maximize speed

5. Maximize relevance

6. Minimize psychological and organizational strain

OUTPUTS OF OD INTERVENTION THAT HAVE A BEARING ON CAPABILITY BUILDING

1. Feedback. People learn new things about themselves, others, group processes.

2. Awareness of changing socio-cultural norms or dysfunctional current norms. People tend to modify their behavior, attitudes and values when they become aware of changes in the norms.

3. Increased interaction and communication. When individuals and groups have an opportunity to communicate with people that they do not normally interact with, changes in attitudes and behavior can result.

OUTPUTS OF OD INTERVENTION THAT HAVE A BEARING ON CAPABILITY BUILDING

4.Confrontation. This term refers to surfacing and examining differences in beliefs, feelings, attitudes, values or norms to remove obstacles to effective interaction.

5.Education and participation. Development of knowledge, skills and attitudes and increasing the number of people involved in problem solving, goal setting and generating new ideas increases the quality and acceptance of decisions, increases job satisfaction and promotes employee well being.

OUTPUTS OF OD INTERVENTION THAT HAVE A BEARING ON CAPABILITY BUILDING

6.Increased Accountability. This result form activities that clarify people’s responsibilities and that monitor performance related to those responsibilities.

7.Increases energy and optimism. Activities that energize and motivate people through visions of new responsibilities contribute to effective problem solving and learning

Limitation of OD•Major time requirements•Substantial expense•Delayed payoff period•Possible failure•Possible invasion of privacy•Possible Psychological harm•Potential conformity•Emphasis on group processes rather than performance•Possible conceptual ambiguity•Difficulty in evaluation•Cultural incompatibility

RIGHTS OF PRIVACY – primarily are related to organizational invasion of a person’s private life and unauthorized release of confidential information about a person in a way that would cause emotional harm or suffering.

Business Activities that may involve Employee Right to Privacy

Lie Detectors Treatment of drug abuse

Personality Test Surveillance devices

Location Trackers Computer data banks

Medical examination Confidential records

Treatment of Alcoholism Genetic screening/biometric data

Monitoring of employee lifestyles Inquiry into personal relationships

• Employers are using email to test to test employee loyalty (as in the case of the manager who sent false emails to his workers, pretending to be a recruiter from a competing firm. Any employee who responded to that email positively were passed over for promotion)

• New and more sophisticated software can be legally used by the supervisors to monitor their employees email. If this practice is used inappropriately employees right to privacy can be infringed. Forty six percent of employers monitor employees emails, most without the knowledge of their employees.

Policy Guidelines Relating to Privacy• Relevance – Only necessary, useful information should be

recorded and retained

• Recency – obsolete information should be removed periodically

• Notice – No personal data system unknown to an employee should be used.

• Fiduciary duty – the keeper of the information is responsible for its security

• Confidentiality – information should be released only to those who have a need to know

• Due process – the employees should be able to examine records and challenge them if they appear incorrect.

• Protection of psyche – the employees inner self should not be invaded or exposed unless with prior consent

Some forms of surveillance device• Electronic sensor devices – are microcomputers in

clip-on ID cards, which emit infrared signals. Employees wearing these badges can have their location monitored by sensors scattered throughout a building .

• Electronic monitoring – takes many forms, including automatic counting of keystrokes made by data entry clerks, remote observation s of the screens of desktop computer operators, surreptitious reading of an employee’s electronic mail, and voice recording systems to assess the effectiveness of stockbrokers, travel agents, or other customer service personnel

References

Cummings & Worley. Organizational Development and Change (8th ed) (pp. 497-501) Southwestern, Thomson Corp.

Griffin R.W., Moorhead G. (2004). Organizational Behavior (2004) (pp. 44,99,262,319,303-304) Houston Mifflin Company

Newstron J.W. (2007). Organizational Behavior (12th ed) (pp.204-212,228-229,307-310,345) Mc Graw Hill Inc.

Nilakant V., Ramnayan S. (2006) Change Management (pp.274-277)