Hawthorne Study-1924

First SessionRobbins, Judge, and VohraOrganizational Behavior14th Edition

ChapterProfile of PMProject Manager AProject Manager BProject Manager CSSC 84 % HSC 82% BE First ClassSSC 92 % HSC 88% BE First Class

SSC 70 % HSC 72% BE First Class

22 Years of Experience18 Years of Experience

16 Years of Experience

English ModerateEnglish High

English Moderate

Experience in existing organization 14Experience in existing organization 10

Experience in existing organization 12

Chapter Learning ObjectivesAfter studying this chapter you should be able to:Demonstrate the importance of interpersonal skills in the workplace.Describe the managers functions, roles, and skills.Define organizational behavior (OB).Show the value to OB of systematic study.Identify the challenges and opportunities managers have in applying OB concepts.Compare the three levels of analysis in this books OB model.

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Organizational BehaviorA field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organizations effectiveness.

1-4The look at managerial activity brings forth the importance of people skills in effective management. The field of organizational behavior is the study of people skills in that it looks at the impact that individuals, groups, and structures have on behavior within organizations. (c) 2008 Prentice-Hall, All rights reserved.4Developing an OB ModelA model is an abstraction of reality a simplified representation of some real-world phenomenon.Our OB model has three levels of analysisEach level is constructed on the prior levelE X H I B I T 1-4

1-5 In Organizational Behavior (OB), we utilize the representation of the world as broken down into three levels. The first level of analysis we will look at is the individual level. At this level we look at individual behavior. Next, recognizing that individuals make up groups, we analyze how group behavior occurs. Finally, organizations are made up of groups of individuals so we analyze the organization at a systems level. (c) 2008 Prentice-Hall, All rights reserved.5

Project Execution PhasesPhase 1

Engg Block (S1)P2/Cafetria(C1)Admin Block( A1)Utility Block (U1)STPGuard Block & Infra. FacilitiesPhase 3

Engg Block (S3)Parking (P3)

Phase 2

Engg Block (S2)Cafeteria (C2)Recreational Block(R1)Guard Block & Infra.Facilities

S1 BUILDINGProject DetailsKey Features Start Date: 23rd July-2009Expected End Date: 23rd april-2013Contract Value:1.Civil works : Rs. 367.3 Crores2. NC works : Rs. 600 CroresType of Contract : Item Rate Total Built-up Area : 31,67,431 Sq ft

Salient Features:Coordination with 46 nos of NC agencies.Project designed for green building- Aiming for platinum rating.Facility has largest data centre in country.Facility to accommodate 25000 seats.Pre insulated duct & waterlineState of the Art-Landscape including reflection pools & water bodies.500 seater auditorium.2300 car parks. Captive power generating capacity of 20 MW.Sewage treatment plant using membrane technology from GE, Europe.

New Project ManagerBefore Three project mangers changed in 15 monthsHigh customer complaints and letter to chairmanEmployee cost 8%Attrition rate 25 %Resources deployed: Average manpower:Total staff: 320Engineers: 95Labor: 5000

AfterEmployee cost almost 2.8%Average manpower:Total staff: 150Engineers: 60Labor: 2500Attrition rate 16 %Appreciation Letter from customer

The Importance of Interpersonal SkillsUnderstanding OB helps determine manager effectivenessTechnical and quantitative skills are important But leadership and communication skills are CRITICAL

Organizational benefits of skilled managersLower turnover of quality employeesHigher quality applications for recruitmentBetter financial performance

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Managers need a whole cadre of skills to create a productive workplace, including technical and quantitative skills. However, leadership and communication skills are critical to organizational success. When managers have solid interpersonal skills, there are positive work outcomes for the organization. These outcomes include lower turnover of strong employees, improved recruitment pools for filling employment positions, and a better bottom line.(c) 2008 Prentice-Hall, All rights reserved.10Luthans Study of Managerial ActivitiesFour types of managerial activity:Traditional ManagementDecision making, planning, and controllingCommunicationExchanging routine information and processing paperworkHuman Resource ManagementMotivating, disciplining, managing conflict, staffing, and trainingNetworkingSocializing, politicking, and interacting with others1-11A group of researchers, led by Fred Luthans, researched the link between managerial activity and managerial success. They looked at four types of managerial activity. These activities included traditional management, which is made up of decision making, planning, and controlling; Communication consisting of the exchange of information; Human Resource Management that incorporates motivation, discipline, and training; and Networking which utilizes socializing and politicking. (c) 2008 Prentice-Hall, All rights reserved.11Successful vs. Effective Allocation by Time

E X H I B I T 12 Managers who got promoted faster (were successful) did different things than did effective managers (those who did their jobs well)1-12What they found was that the link was not necessarily evident. With successful (defined as speed of promotion) managers, it was determined that networking was the most important activity. Effective managers (defined as quality and quantity of performance and satisfaction of their employees) relied more on communication as the largest contributor to their effectiveness.(c) 2008 Prentice-Hall, All rights reserved.12Employee Engagement Web Search Trend

13Leadership Development Web Search Trend

14Its Now a Board Room Topic

Employee Engagement is now considered a concrete management issue, much like other hard data business counterparts - revenue growth and strategy development.15Employee EngagementCaterpillar Engagement is the extent of employees' commitment, work effort, and desire to stay in an organization.Development Dimensions International Engagement is the extent to which people enjoy and believe in what they do, and feel valued for doing it.

An individuals level of engagement is a snapshot of a point in time not a defining characteristic of the person

POTENTIAL OUTCOMES OF A HIGHLY ENGAGED WORKFORCE

EPS growth rate2.6x increase (Gallup)Productivity78% more productive (Hewitt)Attrition40% reduction in expensive staff turnover than their peersCustomer Satisfaction2% increase in customer satisfaction for every 1% increase in employee satisfaction (Manpower/SQM)ORGANIZATIONSUCCESSVision, Goals, CultureINDIVIDUALSUCCESSValues, Needs, GoalsJOBMaximum ContributionMaximum Satisfaction

18ORGANIZATIONSUCCESSValues, Goals, StrategyINDIVIDUALSUCCESSValues, Goals, StrategyJOBMaximum ContributionMaximum SatisfactionThe DisengagedThe EngagedThe Crash & BurnersThe Honeymooners& HamstersThe AlmostEngaged19Types of Study VariablesIndependent (X)The presumed cause of the change in the dependent variable (Y).This is the variable that OB researchers manipulate to observe the changes in Y.

Dependent (Y)This is the response to X (the independent variable).It is what the OB researchers want to predict or explain. The interesting variable!

1-20The dependent variable is the key factor that you want to explain or predict. The independent variable is the factor that affects change in the dependent variable. By seeing how X impacts Y we will be able to better predict behavior. (c) 2008 Prentice-Hall, All rights reserved.20Interesting OB Dependent VariablesProductivityTransforming inputs to outputs at lowest cost. Includes the concepts of effectiveness (achievement of goals) and efficiency (meeting goals at a low cost).AbsenteeismFailure to report to work a huge cost to employers.TurnoverVoluntary and involuntary permanent withdrawal from an organization.Deviant Workplace BehaviorVoluntary behavior that violates significant organizational norms and thereby threatens the well-being of the organization and/or any of its members.

1-21Some key variables that we are concerned about when studying organizations are work outcome variables. These include productivity, absenteeism, turnover, and deviant workplace behavior.(c) 2008 Prentice-Hall, All rights reserved.21

More Interesting OB Dependent VariablesOrganizational Citizenship Behavior (OCB)Discretionary behavior that is not part of an employees formal job requirements, but that nevertheless promotes the effective functioning of the organization.Job SatisfactionA general attitude (not a behavior) toward ones job; a positive feeling of one's job resulting from an evaluation of its characteristics.

1-22Additional behaviors we want to more fully understand are organizational citizenship behavior (OCB) and job satisfaction.

OCB is the discretionary behavior of the employee that is not a formal job requirement, but still helps to enhance work outcomes. This could include team building activities, noticing flaws in the work process, or covering for a sick colleague.

Job satisfaction is the general attitude toward the job.

(c) 2008 Prentice-Hall, All rights reserved.22The Independent VariablesThe independent variable (X) can be at any of these three levels in this model:IndividualBiographical characteristics, personality and emotions, values and attitudes, ability, perception, motivation, individual learning, and individual decision makingGroupCommunication, group decision making, leadership and trust, group structure, conflict, power and politics, and work teamsOrganization SystemOrganizational culture, human resource policies and practices, and organizational structure and design1-23 When utilizing the OB model, it is important to understand that the independent variable can be at any of the three levels, individual, group, or organization.(c) 2008 Prentice-Hall, All rights reserved.23OB Model

E X H I B I T 15Independent Variables (X)Dependent Variables (Y)Three Levels1-24This graph is a pictorial representation of the OB Model. It breaks out the three levels where independent variables will be found and shows a sampling of the dependent variables in which there is interest in the field of study called Organizational Behavior.

(c) 2008 Prentice-Hall, All rights reserved.24Contributing Disciplines See E X H I B I T 13 for detailsMany behavioral sciences have contributed to the development ofOrganizationalBehavior1-25Organizational Behavior (OB) is interdisciplinary in nature as it is an applied behavioral science. The theory in OB relies on contributions from multiple behavioral disciplines. These disciplines include Psychology, Social Psychology, Sociology and Anthropology.(c) 2008 Prentice-Hall, All rights reserved.25Responding to Economic PressuresWhat do you do during difficult economic times?Effective management is critical during hard economic times.Managers need to handle difficult activities such as firing employees, motivating employees to do more with less, and working through the stress employees feel when they are worrying about their future.OB focuses on issues such as stress, decision making, and coping during difficult times.1-26

During economic difficulties, the need for effective managers is heightened. Anyone can manage during good times; it is much tougher to manage through economic struggles. Often when there are economic pressures, managers are forced to make decisions based on resource constraints. These situations may include laying off employees, motivating employees when there are limited resources, and encouraging employees when they are stressed about their futures.(c) 2008 Prentice-Hall, All rights reserved.26

Responding to GlobalizationIncreased foreign assignments

Working with people from different cultures

Overseeing movement of jobs to countries with low-cost labor1-27 Organizations now exist in an environment with no national borders. As a result, the managers job has changed. They need to have a broader perspective when making decisions.

As foreign assignments increase. you will need to be able to manage a workforce that is different than what you may be used to and may bring different needs, aspirations and attitudes to the workplace.

You will also have individuals coming to work in your own country that come from different cultures and you will need to find ways to accommodate their needs and help them assimilate to your workplace culture.

You may also need to do the difficult task of moving jobs outside of your country to a country with lower labor costs. This is a difficult process logistically but also emotionally for the workers who will be losing their jobs.(c) 2008 Prentice-Hall, All rights reserved.27Managing Workforce Diversity The people in organizations are becoming more heterogeneous demographicallyEmbracing diversityChanging demographicsChanging management philosophy Recognizing and responding to differences

1-28As the borders are disappearing, we are seeing more and more heterogeneity in the workplace. Managers today need to embrace diversity and find ways to manage it effectively. The changing demographics have shifted management philosophy in a way that recognizes and utilizes differences to create productivity, profitability, and welcoming cultures.(c) 2008 Prentice-Hall, All rights reserved.28History OBAdam Smiths Wealth of Nations-1776A workmen not educated to do this business , could scarce, perhaps with utmost industry, make one pin a day and the important business of making pin is divided into about eighteen distinct operations I have seen a small factory , where ten men only were employed (who) could when they exerted themselves make among them about twelve pounds of pins in a day. There are in a pound upwards of four thousands pins Robert OwenPeople were the product of their surroundings and were therefore improvable.He experimented paternalistic management by providing his workforce free housing, free housing, subsidized village store, reduced working hours 12 to 10 and increased children edge, punished drunken with finesHis work was taken further Charles Babbage-1832 who was concerned with the social costs of increasing mechanization and urbanization .He developed profit sharing schemeInfluence of mass production on construction industryUntil the industrial revolution the construction industry was essentially craft based and founded on simple and tried technologies and production methodsDue to large demands during industrialization, new innovations happened such as cement mixers etcMoreover innovations in the science of materials such as steel and concrete, led to structural engineering and specialist subcontracting and to the growth of the construction professions such as architecture and quantity surveyingDue to increased specialization and fragmentation resulted greater need of management of the construction process in order to regenerate these increasingly disparate components into a cohesive working team Scientific ManagementHis early opinion of work as a machinist shaped his low opinion of other people.His belief was human being had an inherent dislike of work and responsibility & most people preferred to be directed, primarily motivated by monetary and materialistic needBeing an engineer and having experienced sciences success in the manipulation of physical materials, he strove to apply the same principles to the control of people.Taylors ideal organization was a goal seeking machine-like entity with parts working in harmony towards commonly recognized set of objectivesProblems were caused by an inability to deal with uncertainty which produce conflict between managers and workers.For masters degree he developed the task system. At the centre of this approach was time study. This evolved braking jobs into the simple task and constructing standard time for them, based on the people observations of peopleEfficiency could be increased by setting targets , closely supervising people to ensure their attainment and paying people accordingly Frank GilbrethFrank Gilbreth, a bricklayer by trade and prominent member of ASMEHe was intimately involved in the development of first mechanized concrete mixer , conveyors and reinforcing bars . Extended Talors work into detailed study of peoples movements.End result of a motion study was a set of perceptive flow chartsHe argued that by slavishly following such flowcharts, wastage and bad practices could be eradicated from the construction industryHenry Gant-1919Motivated by similar value the inventor of side rule was also disciple of Taylorism He developed Gant chart which has become largely influential in construction planningGant moderated talyors ruthless emphasis on efficiency with grater attention to training and method as opposed to accurate measurement.Henri FayolHis scientific management differed from scientific management in that it focused on managerial efficiency rather than workers efficiencyAccording to him managers were the supreme co-ordinating authority with ultimate responsibility for preventing problems According to him there were two levels of managerial activities namely day to day and governanceDay to day management involvement six activities : technical, commercial, financial, ,security, accounting and managerial. Governance refer to overall coordination of these activities.Max WeberMax Weber-1947 the father of bureaucratic management was a political economist and the first to recognize the importance of organizational power and authority He conceived the ideal organization as one in which people would do exactly as specified out of respect for authorityHis claim was for effective functioning of organization there should be chain of command , employees should be hired and fired based on performance appraisal and tests mangers should specialize in management , and there should rules and procedure at all organizational levels.Hawthorne Study-1924Two groups selected experimental and control groupRelay Assembly experiment -1927AttentionPiece workGroup affiliationGroup norms20000 employees interviewed- 1928Structured interviewsOpportunity given to worker to share what they want

Past and Present ManagersManagers in eighteenth century were largely uneducated in the filed in the discipline of managementIn eighteenth century concern was primarily with production capacity and technology were little embraced with little concern for their human implicationsIn essence Modern managers and workforce are more educated than their predecessors.In response to this changing industrial environment management has developed considerably since the pioneering work of Smith , Owen and Babbage.Three broad themes emerge Production efficiency , human behavior and organizational systemsSummary and Managerial ImplicationsManagers need to develop their interpersonal skills to be effective.OB focuses on how to improve factors that make organizations more effective.The best predictions of behavior are made from a combination of systematic study and intuition.Situational variables moderate cause-and-effect relationships, which is why OB theories are contingent.There are many OB challenges and opportunities for managers today.The textbook is based on the contingent OB model.1-39The OB Model is critical to your understanding of how organizations behave. The remainder of this book we will be utilizing that model to look at behavior on an individual, group, and organizational level. (c) 2008 Prentice-Hall, All rights reserved.39