Organization design

Organization design is the process of deciding how organizations should be structured

and
function. Organizations are not static things. Changes are constantly taking place in the
business itself, in the environment in which the business operates, and in the people
who
work in the business. There is no such thing as an ideal organization. The most that
can be
done is to optimize the processes involved, remembering that whatever structure
evolves
will be contingent on the circumstances of the organization. n important point to bear
in
mind is that organizations consist of people working more or less cooperatively
together.
!nevitably, and especially at managerial levels, the organization may have to be
ad"usted to
#t the particular strengths and attributes of the people available. The result may not
conform
to the ideal, but it is more likely to work than a structure that ignores the human
element. !t is always desirable to have an ideal structure in mind, but it is e$ually
desirable
to modify it to meet particular circumstances, as long as there is awareness of the
potential
problems that may arise.
!n principle, organization design aims to%
Clarify the overall purposes of the organization & the strategic zz goals which govern
what it does and how it functions.
zz'e#ne how work should be organized to achieve that purpose, including the use of
technology and other work processes.
zz'e#ne as precisely as possible the key activities involved in carrying out the work.
zz(roup these activities logically together to avoid unnecessary overlap or duplication.
zz)rovide for the integration of activities and the achievement of cooperative e*ort and
teamwork.
zz+uild ,e-ibility into the system so that organizational arrangements can adapt $uickly
to new situations and challenges.
zzClarify individual roles, accountabilities and authorities.
!n practice, however, organization design is seldom as considered an a*air as this list of
aims
suggests. This is partly because organizations are run by people & the dominant
coalition &
who do not necessarily react logically to new demands, and are in,uenced by political
pressures and power plays. !t also arises from the dynamic nature of organizations as
they
adapt to ever.changing environmental conditions. This is why organizations often evolve
rather than being designed. The aims stated above will not always be achieved. This is
why
some organizations are ine*ective. /owever, others seem to muddle though, primarily
through the informal processes which have the greatest in,uence on how they function.
Organization development
Organization development 0O'1 is about taking systematic steps to improve
organizational
capability. !t is concerned with process & how things get done. Organization
development aims
to help people work more e*ectively together, improve organizational processes such as
the
formulation and implementation of strategy and facilitate the transformation of the
organization
and the management of change. s e-pressed by +eer 023451, O' operates as
system
wide process of data collection.
The assumptions and values of OD programmes
zz6ost individuals are driven by the need for personal growth and development as
long as their environment is both supportive and challenging.
zzThe work team, especially at the informal level, has great signi#cance for feelings
of satisfaction, and the dynamics of such teams have a powerful e*ect on the
behaviour of their members.
zzO' programmes aim to improve the $uality of working life of all members of the
organization
Organizations can be more e*ective if they learn to di zz agnose their own strengths
and weaknesses.
zz6anagers often do not know what is wrong and may need special help in
diagnosing problems, although an outside process consultant ensures that
decision making remains in the hands of the client.
zzThe implementation of strategy involves paying close attention to the people
processes involved and the management of change.
Organization development programmes
O' programmes are concerned with system.wide change, and have the following
features%
zzThey are managed, or at least strongly supported, from the top, but may make use of
third
parties or change agents to diagnose problems and to manage change by various
kinds
of planned activity or intervention.
zzThe plans for organization development are based upon a systematic analysis and
diagnosis
of the strategies and circumstances of the organization and the changes and problems
a*ecting it.
zzThey use behavioural science knowledge and aim to improve the way the organization
copes in times of change through such processes as interaction, communications,
participation,
planning and con,ict management.
zzThey focus on ways of ensuring that business and /7 strategies are implemented and
change is managed e*ectively.
Organizational behaviour: key learning points
Organizational behaviour de#ned
The study of organizational behaviour focuses on how organizations function and how
people act within the conte-t of their organizations.
/ow organizations function
zzn organization is an entity which e-ists to achieve a purpose through the
collective e*orts of the people who work in or for it. Organizing is the process of
making arrangements in the form of de#ned or understood responsibilities and
relationships to enable those people to work cooperatively.
zzOrganizations can be described as systems which, as a*ected by their
environment, have a structure which has both formal and informal elements
Organizational processes
number of processes take place in organizations which a*ect how they function%
interaction and networking, communication, group behaviour, leadership, power,
politics and con,ict.
Organizational culture
Organizational culture is the pattern of values, n zz orms, beliefs, attitudes and
assumptions which may not have been articulated but which shape the ways in
which people in organizations behave and things get done.
zzOrganizational culture is signi#cant because it strongly a*ects the way in which
organizations function and people behave within them.
Organization design
Organization design is the process of deciding how organizations should be structured
and function.
!ndividual di*erences
The development of /7 processes and the design of organizations are often based on
the beliefs that everyone is the same and will behave rationally when faced with change
or other demands. +ut the behaviour of people di*ers because of their characteristics
and individual di*erences, and it is not always rational.
)ersonality
)ersonality is a product of both nature 0so it is hereditary1 and nurture 0the pattern of
life e-perience1. )ersonality can be described in terms of traits or types.
8motional intelligence
8motional intelligence is a combination of skills and abilities such as self.awareness,
self.control, empathy and sensitivity to the feelings of others.
6otivation
zz6otivation is concerned with the strength and direction of behaviour and the
factors that in,uence people to behave in certain ways.
zz distinction can be made between e-trinsic motivation provided by the
employer and intrinsic motivation provided by the work.
zz8-pectancy, e$uity and goal theory are the signi#cant motivation theories.
The psychological contract
psychological contract is a set of unwritten e-pectations which e-ist between
individual employees and their employers.
Organization development
Organization development 0O'1 is about taking s zz ystematic steps to improve
organizational capability. !t is concerned with process & how things get done.
zzOrganization development aims to help people work more e*ectively together,
improve organizational processes such as the formulation and implementation
of strategy, and facilitate the transformation of the organization and the
management of change.
Introduction
The concept of employee engagement has attracted a lot of attention recently. 7eilly
and +rown
095541 noted that the terms "ob satisfaction, motivation and commitment are
generally being
replaced now in business by engagement because it appears to have more descriptive
force
and face validity. s 8mmott 0955:1 commented, 8mployee engagement has become a
new
management mantra & and its not di;cult to see why. 8ngaged employees & those who
feel
positive about their "obs & perform better for their employers and can promote their
organization
as <an employer of choice=.
8veryone believes that engagement is a good thing, but many are vague about what it
really is.
)erhaps this is because all sorts of di*erent meanings are attached to it. !t is often used
loosely
as a notion which embraces pretty well everything the organization is seeking with
regard to
the contribution and behaviour of its employees in terms of "ob performance,
discretionary
e*ort, motivation, commitment to the organization and organizational citizenship. >ome
de#nitions refer to engagement as a condition that is solely related to the "obs people
do. Others
de#ne it as, in e*ect, commitment to the purposes and values of the organization. ?et
others
mi- up "ob and organizational engagement in a way which makes it impossible to
disentangle
which is which 0and therefore di;cult to develop programmes for enhancing
engagement that
distinguish between what is needed to deal with the "ob aspects of engagement as
distinct from
the organizational aspects1. Only +alain and >parrow 095531 make a clear distinction
between
the two. !t is di;cult not to agree with the comment by (uest 095531 that the concept
of
employee engagement needs to be more clearly de#ned@ or it needs to be
abandoned.
+ut the term employee engagement seems to be here to stay, and this chapter
therefore begins
with an attempt to clarify its meaning and de#ne its signi#cance. This leads to an
assessment of
the drivers of engagement, and a discussion of one of the key notions associated with it
& that
of discretionary e*ort. The chapter ends with a review of approaches to engaging
employees.
The meaning of employee engagement
!n their comprehensive study of employee engagement, 6acAeod and Clarke 095531
concluded
that The way employee engagement operates can take many forms. >o can
descriptions of
what it means. There are four approaches to de#nition, described below.
Bob engagement
The term engagement can be used in a speci#c "ob.related way to describe what takes
place
when people are interested in and positive, even e-cited, about their "obs, e-ercise
discretionary
behaviour and are motivated to achieve high levels of performance.
(allup 095531 de#ned engagement as The individuals involvement and satisfaction
with as
well as enthusiasm for work. +alain and >parrow 095531 noted that a number of other
wellknown
applied research and consultancy organizations have de#ned engagement on similar
lines, often emphasizing the importance of discretionary behaviour as the key outcome
or
distinguishing feature of an engaged employee. n academic de#nition based on
research by
6aslach et al 095521 referred to engagement as positive, ful#lling, work.related state
of mind
that is characterized by vigour, dedication, and absorption.
n engaged employee was de#ned by +evan et al 0233C1 as someone who is aware of
business
conte-t, and works closely with colleagues to improve performance within the "ob for
the
bene#t of the organization. 6urlis and Datson 095521 de#ned engaged performance
as result
that is achieved by stimulating employees enthusiasm for their work and directing it
towards
organizational success. This result can only be achieved when employers o*er an
implied contract
to their employees that elicits speci#c positive behaviours aligned with the
organizations
goals. Towers )errin 095541 adopted a similar approach when it de#ned employee
engagement
as the e-tent to which employees put discretionary e*ort into their work, beyond the
minimum
to get the "ob done, in the form of e-tra time, brainpower or energy.
Organizational engagement
Organizational engagement focuses on attachment to the organization as a whole. The
Conference +oard in the Enited >tates 0955:1 de#ned employee engagement as a
heightened
connection that an employee feels for his or her organization. 7obinson et al 0955F1
emphasized
the organizational aspect of engagement when they de#ned employee engagement
as a positive attitude held by the employee towards the organization and its values.
This de#nition of engagement makes it more or less indistinguishable from the
traditional
notion of commitment. )orter et al 023CF1 de#ned this as the relative strength of the
individuals
identi#cation with, and involvement in, a particular organization. The three
characteristics of
commitment identi#ed by 6owday et al 023491 are%
a strong desire to remain a m zz ember of the organizationG
zza strong belief in and acceptance of the values and goals of the organizationG
zza readiness to e-ert considerable e*ort on behalf of the organization.
Organizational engagement is associated with the notion of organizational citizenship
behaviour,
which Hatz and Hahn 023::1 de#ned as innovative and spontaneous activity directed
toward
achievement of organizational ob"ectives, but which goes beyond role re$uirements.
(eneral de#nitions
(eneral de#nitions of engagement tend to describe what it does rather than what it is.
good
e-ample is this one by Truss et al 0955:1%
Engagement is about creating opportunities for employees to connect with their
colleagues,
managers and wider organization. t is also about creating an environment where
employees are motivated to want to connect with their work and really care about
doing
a good !ob" t is a concept that places #e$ibility, change and continuous
improvement
at the heart of what it means to be an employee and an employer in a twenty%&rst
century workplace.
nother e-ample is provided by 7obinson 095541, who stated that n engaged
employee
e-periences a blend of "ob satisfaction, organizational commitment, "ob involvement
and
feelings of empowerment. !t is a concept that is greater than the sum of its parts.
6acAeod and Clarke 095531 also de#ned engagement generally as a workplace
approach
designed to ensure that employees are committed to their organizations goals and
values,
motivated to contribute to organizational success, and are able at the same time to
enhance
their own sense of well.being.
nalytical de#nitions
)erhaps the most illuminating and helpful approach to de#nition is to analyse the
concept
speci#cally in terms of "ob and organizational engagement. good e-ample of this is
the e-planation
by +alain and >parrow 095531, based on the work of >aks 0955:1, of the antecedents,
types
and conse$uences of engagement. !t is shown in Table 3.2.
Table 9.1 ntecedents, types and conse$uences of engagement
Antecedents of engagement Types of employee
engagement
Consequences
8nriched a zz nd challenging "obs
0"ob characteristics1.
zzIuality of the employee&
organization relationship
0perceived organizational
support1.
zzIuality of the employee&
supervisor relationship
0perceived supervisor support1.
zz7ewards and recognition.
zzJairness in the processes that
allocate resources or resolve
disputes 0procedural "ustice1.
zzDhat is considered "ust or right
in the allocation of goods in a
society 0distributive "ustice1.
zzBob engagement.
zzOrganizational
engagement.
zzBob satisfaction.
zzOrganizational
commitment.
zzAevel of intention to $uit.
zzOrganizational
citizenship behaviour.
>ource% +alain and >parrow 095531.
iscretionary behaviour
There is a close link between high levels of employee engagement and positive
discretionary
behaviour or e*ort. )urcell et al 0955K1 described discretionary behaviour as referring to
the
choices that people at work often have on the way they do the "ob and the amount of
e*ort,
care, innovation and productive behaviour they display. !t can be positive when people
go the
e-tra mile to achieve high levels of performance. !t can be negative when they e-ercise
their
discretion to slack at their work. 'iscretionary behaviour is hard for the employer to
de#ne,
monitor and control, but positive discretionary behaviour can happen when people are
engaged
with their work. On the basis of their longitudinal research )urcell et al suggested that
the
following conditions are re$uired for discretionary behaviour to take place.
!t is more likely to occur when individuals are committed zz to their organization
and L or when they feel motivated to do so and L or when they gain high levels of "ob
satisfaction.
zzCommitment, motivation and "ob satisfaction, either together or separately, will be
higher when people positively e-perience the application of /7 policies concerned
with creating an able workforce, motivating valued behaviours and providing
opportunities
to participate.
zzThis positive e-perience will be higher if the wide range of /7 policies necessary to
develop ability, motivation and opportunity are both in place and are mutually
reinforcing.
zzThe way /7 and reward policies and practices are implemented by front.line
managers
and the way top.level espoused values and organizational cultures are enacted by them
will enhance or weaken the e*ect of /7 policies in triggering discretionary behaviour by
in,uencing attitudes.
zzThe e-perience of success seen in performance outcomes helps reinforce positive
attitudes.
!hy engagement is important
'avid (uest 095531 suggested that%
Employee engagement will be manifested in positive attitudes ' for e$ample !ob
satisfaction,
organizational commitment and identi&cation with the organization( and
behaviour 'low labour turnover and absence and high citizenship behaviour( on the
part of employees) and evidence of perceptions of trust, fairness and a positive
e$change within a psychological contract where two%way promises and
commitments
are ful&lled.
8mployee engagement is important to employers because a considerable amount of
research
indicates that high levels of engagement result in behaviours such as ma-imizing
discretionary
e*ort, taking initiative, wanting to develop, or aligning actions with organizational
needs.
These deliver a range of organizational bene#ts, for e-ample%
higher productivity L performance & engaged employees perform zz 95 per cent better
than
the average 0Conference +oard, 955:1G
zzlower sta* turnover & engaged employees are 4C per cent less likely to leave
0Corporate
Aeadership Council, 955F1G
zzimproved safety 0Mance, 955:1.
(allup 0955:a1 e-amined 9K,325 business units and compared top $uartile and bottom
$uartile #nancial performance with engagement scores. They found that%
zzThose with engagement scores in the bottom $uartile averaged K2& N2 per cent more
employee turnover, N2 per cent more inventory shrinkage and :9 per cent more
accidents.
zzThose with engagement scores in the top $uartile averaged 29 per cent higher
customer
advocacy, 24 per cent higher productivity and 29 per cent higher pro#tability.
second (allup study in 955:0b1 of earnings per share 08)>1 growth in 43 organizations
found that the 8)> growth rate of organizations with engagement scores in the top
$uartile was
9.: times that of organizations with below.average engagement scores.
rivers of engagement
The following drivers of engagement were listed by 6acAeod and Clarke 095531%
zzleadership which ensures a strong, transparent and e-plicit organizational culture
which gives employees a line of sight between their "ob and the vision and aims of the
organizationG
"T#AT$%I$" &O# $'(A'CI'% $'%A%$)$'T
8ngagement strategies can be developed under the headings of the factors
a*ecting engagement set out above.
The work itself
!ntrinsic motivation through the work itself, and therefore engagement,
depends basically on the way in which work or "obs are designed. Three
characteristics have been distinguished by Aawler 023:31 as being re$uired in
"obs if they are to be intrinsically motivating%
l *eedback & individuals must receive meaningful feedback about their
performance, preferably by evaluating their own performance and
de#ning the feedback. This implies that they should ideally work on a
complete product, process or service, or a signi#cant part of it that can be
seen as a whole.
l +se of abilities & the "ob must be perceived by individuals as re$uiring
them to use abilities they value in order to perform the "ob e*ectively.
l ,elf%control 'autonomy( & individuals must feel that they have a high
degree of self.control over setting their own goals and over de#ning the
paths to these goals.
These approaches may be used when setting up new work systems or "obs,
and the strategy should include provision for guidance and advice along
8mployee engagement strategy l 2FN
these lines to those responsible for such developments. +ut the greatest
impact on the levels of engagement arising from the design of work systems
or "obs is made by line managers on a day.to.day basis. The strategy should
therefore include arrangements for educating them as part of a leadership
development programme in the importance of good work and "ob design,
the part they can play and the bene#ts to them arising from thereby
enhancing engagement. )erformance management, with its emphasis on
agreeing role e-pectations, is a useful means of doing this.
The work environment
strategy for increasing engagement through the work environment will be
generally concerned with developing a culture that encourages positive attitudes
to work, promoting interest and e-citement in the "obs people do and
reducing stress. Aands 8nd believes that sta* who are en"oying themselves,
who are being supported and developed and who feel ful#lled and respected
at work will provide the best service to customers. The thinking behind why
the company wants to inspire sta* is straightforward & employees willingness
to do that little bit e-tra arises from their sense of pride in what the organization
stands for, ie $uality, service and value. !t makes the di*erence between
a good e-perience for customers and a poor one.
The strategy also needs to consider particular aspects of the work environment,
especially communications, involvement, work&life balance and
working conditions. !t can include the formulation and application of talent
relationship management policies, which are concerned with building
e*ective relationships with people in their roles, treating individual
employees fairly, recognizing their value, giving them a voice and providing
opportunities for growth.
Leadership
The leadership strategy should concentrate on what line managers have to
do as leaders in order to play their vital and immediate part in increasing
levels of engagement. This will include the implementation of learning
programmes that help them to understand how they are e-pected to act and
the skills they need to use. The programmes can include formal training
0especially for potential managers or those in their #rst leadership role1, but
more impact will be made by blending various learning methods such as elearning,
coaching and mentoring.
!t should also be recognized that a performance management process can
provide line managers with a useful framework in which they can deploy
their skills in improving performance though increased engagement. This
applies particularly to the performance management activities of role de#.
2F: l /7 strategies
nition, performance improvement planning, "oint involvement in monitoring
performance, and feedback. The strategy should therefore include the
steps re$uired to make performance management more e*ective by
increasing the commitment of managers to it and developing the skills they
re$uire.
Opportunities for personal growth
strategy for providing development and growth opportunities should be
based on the creation of a learning culture. This is one that promotes learning
because it is recognized by top management, line managers and employees
generally as an essential organizational process to which they are committed
and in which they engage continuously. 7eynolds 0955F1 describes a learning
culture as a growth medium that will encourage employees to commit to a
range of positive discretionary behaviours, including learning, and that has
the following characteristics% empowerment not supervision, self.managed
learning not instruction, and long.term capacity building not short.term
#-es. !t will encourage discretionary learning, which >loman 0955K1 believes
takes place when individuals actively seek to ac$uire the knowledge and
skills that promote the organizations ob"ectives.
>peci#cally, the strategy should de#ne the steps re$uired to ensure that
people have the opportunity and are given the encouragement to learn and
grow in their roles. This includes the use of policies that focus on role ,e-ibility
& giving people the chance to develop their roles by making better and
e-tended use of their talents. This means going beyond talent management
for the favoured few and developing the abilities of the core people on whom
the organization depends. The philosophy should be that everyone has the
ability to succeed, and the aim should be to achieve e-traordinary results
with ordinary people. !t includes using performance management primarily
as a developmental process with an emphasis on personal development
planning.
The strategy should also cover career development opportunities and how
individuals can be given the guidance, support and encouragement they
need if they are to ful#l their potential and achieve a successful career with
the organization in tune with their talents and aspirations. The actions
re$uired to provide men and women of promise with a se$uence of learning
activities and e-periences that will e$uip them for whatever level of responsibility
they have the ability to reach should be included in the strategy.
Opportunities to contribute
)roviding people with the opportunity to contribute is not "ust a matter of
setting up formal consultative processes, although they can be important. !t
8mployee engagement strategy l 2FC
is also about creating a work environment that gives people a voice by
encouraging them to have their say, and emphasizes as a core value of the
organization that management at all levels must be prepared to listen and
respond to any contributions their people make.
)$A"*#I'% $'%A%$)$'T
Dhen developing engagement strategies the #rst step is to establish what is
happening now and in the light of that determine what should happen in
each of the areas described above. This means measuring levels of
engagement regularly in order to identify successes and failures and analyse
any gaps between what is wanted and what is actually going on. This can be
done through published surveys such as those operated by (allup, which
enable benchmarking to take place with the levels of engagement achieved
in other organizations. lternatively organizations can develop their own
surveys to suit their circumstances. n e-ample of such a survey is provided
in the >/76 toolkit in )art F of this book