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Organizational culture refers to a system of shared assumptions, values, and beliefs that show
people what is appropriate and inappropriate. These values have a strong influence on employee
behavior as well as organizational performance. Culture is largely invisible to individuals just as
the sea is invisible to the fish swimming in it. Even though it affects all employee behaviors,
thinking, and behavioral patterns, individuals tend to become more aware of their organizations
culture when they have the opportunity to compare it to other organizations.
Sales growth
Profitability
Market share
The current culture of ABC Company is most closely aligned with the clan culture. The culture in
which friendly environment is present. The advantage of this culture is that it has supportive
advantage if any problem occurs then the employees eradicate that problem and the operations
keep on going without any further delay. Even if clan workplaces often make for a positive place
for employees to work, they do have drawbacks relative to more concrete cultures.
Less Structure
By definition, clan cultures exist in less-structured workplaces with fewer rules and policies.
While the intent is to encourage unified vision and flexible decision-making, there is risk that
employees will work outside the scope of their roles and take advantage of flexible policies to
avoid non-preferred work activities. If employees don't get on board with the vision and
directives of leadership, it is easy for departments and employees to get off track.
Control Concerns
The term "clan control" is used to emphasize the extreme risks of a clan culture in which
leadership relies on shared cultural values as a manipulative tool to influence the behaviors of
employees. For instance, control-hungry managers may make use an ingrained employee loyalty
to authority to reject employee input or to insist upon taking a certain approach in a decisionmaking situation.
Internal Focus
Another defining quality of a clan culture organization a high level of internal focus.
Maintenance of a family-friendly culture and cohesiveness are primary points of emphasis.
While this has some merit, it can lead to delays or deficiencies in having the discipline necessary
to quickly assess market conditions and respond to customer or client needs. This can detract
from sales and service performance for a customer-driven organization.
Do you believe that this is the best culture for the organization going forward
Expectancy
Instrumentality
Valence
Having said that, Expectancy is the believe that increased effort will basically lead to increased
performance. In other words, the more the effort put in, the more the performance will be. For
example, an employee assumes that if he works harder the better the performance will be. But
believing that increased effort will lead to increased performance is mainly influenced by factors
such as having the right amount of resources available, having the right skills to carry out the job
and the necessary support of the supervisor etc. Without these, it is unlikely that expectancy
could be achieved.
Expectancy theory is based on found assumptions as per Vroom (1964). These assumptions are:
Assumption No. 1: People accept jobs at organizations with expectations. These expectations
will be about their needs, motivations, and experiences. These will determine how they behave
and react to the chosen organization.
Assumption No. 2: Employee behavior is a result of his / her conscious decision. They are free
to choose their behaviors based on their expectations.
Assumption No. 3: Different people want or expect different rewards from organizations. Some
may want a good salary, some may want job security, some may prefer career advancement, etc.
Assumption No. 4: Employees will choose among reward alternatives in order to optimize
outcomes for their preference.
Likewise, Instrumentality is the believe that if you perform well in a task then the outcome is
going to be good. In other words, a valued outcome is received the more you perform the task
well. At the same time, instrumentality is also influenced by factors such as having a clear
understanding of the relationship between performance and outcome and trusting the people who
will basically decide on the who gets what outcome.
Valence on the other hand is basically the importance that the individuals place on the expected
outcome. In other words, meaning to say that how do the employees take the outcomes offered to
them for their task performance. For example, an employee may be motivated by recognition. If
so the case, then the employee may not value a rise in pay because it is not the most important to
him. At times, they may even go to reduce the effort they put in according to how they value the
outcomes received.
Adams proposed the equity theory in 1963. Equity theory proposes that employees who
perceive themselves as over-rewarded or under-rewarded will experience distress.
Adams indicates that all employees put efforts and collect rewards from employment. The effort
is not only limited to working hours while the rewards are not only salary, which is quite logical.
The strong feature that we discuss equity theory is comparison and sense of fair treatment among
other staff. This fair treatment determines the level of motivation along with the effort and
rewards. The effort and reward ratio is the factor, which is usually compared by employees
between each other to determine the fair treatment. This helps us identify why people are
strongly affected by situations of peers, friends, and partners in establishing their sense of equity
at the workplace. For example, a younger member with less experience can overtake a senior
with more experience. The senior employee can feel distressed and can react by ways of
resignation, involving in internal politics, etc.
We can identify four propositions, which highlight the objectives of equity theory.
1. Individuals evaluate their relationship with others by assessing their effort to return ratio
in comparison with others in the workplace.
2. If the comparative ratio seems unequal, a sense of inequity can be formed.
3. The greater the inequity the employee perceives, the more he / she is dissatisfied.
4. The effort put in by the employee to restore equity. The restoration can be anything from
distortion of effort or rewards, changing comparison with others or even terminating the
relationship.
Individual
o Base pay, incentives, benefits
o Rewards attendance, performance, competence
Rewarding Individuals
1. Individual pay systems: - with this type of system the individuals will get higher salaries
if they perform well. The salaries are very individualistic and two people doing the same
job may have different salaries due to how well they perform
2. Performance Based pay: - when a company has got performance-based pay they base
their rewards on how the employees perform instead of paying the employees for, for
example their knowledge or competency. Something that is very positive about individual
performance-based rewards is that the organization can easily communicate what results
are of highest priority and at the same time motivate the employees to improve these
specific results. The main disadvantage with individual performance-related pay are that
there is no clear connection between performance and reward and this can lead to that the
employees do not feel that the value of the reward is worth putting down effort for.
1. Organization wide incentive plans reward employees on the basis of success of the
organization over a specified time period. These plans seek to promote a culture of
ownership by developing a senses of belongingness, cooperation and teamwork among
all employees. There are three basic types of organization wide incentive plans; Profit
sharing, Gain sharing & Employees stock ownership plans
A. Profit sharing: Profit sharing is a scheme whereby employers undertake to pay a
particular potion of net profits to their employees To strengthen the on
compliance with certain service conditions. The purpose: The shareloyalty of
employees to the firm by offering them an annual bonus.
Merits: 1) inspires the management and the worker to be sincere, devoted and
loyal to the firm. 2) It helps in supplementing the remuneration of workers and
enables them to lead a rich life. 3) It is likely to induce motivation in the workers
and other staff for quicker and better work. 4) Workers do not require close
supervision as they are self-motivated to put in extra labour for the prosperity of
the firm. 5) It attracts talented people to join the ranks of a firm with a view to
share the profits.
Demerits: 1) Workers may get nothing if the business does not succeed. 2)
Management may dress up profit figures and deprive the workers of their
legitimate share in the profits. 3) Workers tend to develop loyalty towards firms
discounting their loyalty towards trade unions, thus, impairing the unity of trade
unions
measures
Rewards only performance improvement
Enhances employee focus and awareness
Enhances the level of involvement, teamwork and cooperation
Aligns employees to organization goals
Promotes morale, pride, and more positive attitudes toward the
organization
Disadvantages of Gainsharing
C. Employee stock ownership plan originated in the USA in early 90s. Stock
option plan implies the right of an eligible employee to purchase a certain amount
of stock in future at agreed price. The eligible criteria may include length of
service, contribution to the department/division where employee works. The
company may even permit employees to pay the price of stock allotted to them in
instalments or even advance money to be recovered from their salary every
month. The allotted shares are generally held in trust and transferred to the name
of the employee whenever he or she decides to exercise the option.
Benefits by ESOP
Employees remain loyal and committed towards company.
ESOP foster a long term bond between the employee and the
company.
Reduced employee turnover
Lesser supervision
Demerits of ESOP
Only profitable companies can use the tool
Falling share price could mean losses for employees
Sometimes employee feel forced to join
Intrinsic rewards actually fulfills employees intrinsic factors or motivators and thus motivates
him. Examples include; giving challenging task, involving in decision making process, giving a
higher rank in hierarchy etc all these rewards do not required to have increased salary as well and
employee may be working at higher management rank without an increase in the salary and still
more motivated.
Extrinsic rewards actually fulfills employees extrinsic factors or hygiene factors and thus do not
let him start thinking about leaving the company. Examples include; pay rise, bonuses, paid
leaves, annual recreational plans etc.
Lower-order needs:
Higher-order needs:
Deficit principle
Progression principle
A need at one level does not become activated until the next
lower-level need is satisfied.
ERG theory
Frustration-regression principle.
Two-factor theory
Hygiene factors:
Satisfier factors:
"divinely inspired gift". In leadership, charisma is a special quality of leaders whose purposes,
powers, and extraordinary determination differentiate them from others
3. Transformational:
These types of leaders focus on influencing attitudes and assumptions of staff. Building
commitment to the mission and always try to achieve the objective of the organisation
Comparison Chart
BASIS FOR
TRANSACTIONAL
COMPARISON LEADERSHIP
TRANSFORMATIONAL
LEADERSHIP
Meaning
Concept
Nature
Reactive
Proactive
Settled Environment
Turbulent Environment
Works for
Style
Bureaucratic
Charismatic
Focused on
Innovation
BASIS FOR
TRANSACTIONAL
COMPARISON LEADERSHIP
putting their own self
interest in the first place.
TRANSFORMATIONAL
LEADERSHIP
group interest as a priority.
2.
3.
4.
5.
6.
7.
two leadership styles. In our opinion, there is no standard leadership style which
is best suited in all the circumstances. So, an organization should not rely on a
single leadership style. It must employ the requisite leadership style as per its
needs and prevalent conditions.
If you are searching for the best leadership style between transactional and
transformational leadership, then you will end up saying that both are having its
merits and demerits. It depends on the situation which leadership style will be
most appropriate to it.
the change, any disgruntled employees will view it as having a negative impact on both
the organization and them personally.
2. Bad Communication Strategy: This is another crucial reason why employees resist
change. The way in which any change process is communicated to employees within
the organization is a critical factor in determining their reactions. If you cant
communicate what, why, how, when, who and what success will look like or how
success is going to be measured, then, expect resistance!
If employees do not understand the need for change, why ask for a buy in the first
place? Especially from those who strongly believe the current way of doing things works
welland has done for the past twenty-five years! When upper management plans and
communicates early and effectively with all employees and explains the reasoning
behind the change, employees are much more likely to buy into it.
Changes that are mandated with little or no communication, on the other hand, are often
poorly received, since employees may feel that the change is being shoved down their
throats. When it comes to change management theres no such thing as too much
communication. If there is no immediate information to communicate during change,
telling employees that there is no update regarding the ongoing change is
communication! Dont just keep quiet; this is also the time to maintain an open door
policy regardless of where you are placed in the organisation.
Be present and available for questioning. Miscommunication is if you communicate
insignificant or insensitive information. You cant communicate too much significant,
substantial information.
3. Shock and Fear of the Unknown: This is another important reason why employees
resist change. Employees responses to organizational change can range from fear and
panic to enthusiastic support. During periods of change, some employees may feel the
need to cling to the past because it was a more secure, predictable time. If what they
did in the past worked well for them, they may resist changing their behaviour out of fear
that they will not achieve as much in the future. The less the organization knows about
the change and its impact on them, the more fearful they become.
Leading change also requires not springing surprises on people! The organisation
needs to be prepared for the change. In the absence of continuing a two-way
communication with leadership, grapevine rumours will fill the void and sabotage any
change effort.
4. Loss of Control: This is another key reason why employees resist change. Familiar
routines help employees develop a sense of control over their work environment. Being
asked to change the way they operate may make employees feel powerless and
confused. People are more likely to understand and implement changes when they feel
they have some form of control.
Keeping the doors of communication open and soliciting input, support and help from
employees lets them know that their contributions matter. Involve them, elicit their
feedback, let them volunteer for participatory roles in the change and all of these in turn,
will help give them a sense of control during periods of change.
5. Lack of Competence:This is a fear that is difficult for employees to admit openly. But
sometimes, change in organizations necessitates changes in skills, and some people
will feel that they wont be able to make the transition well. Therefore, the only way for
them to try and survive is to kick against the change.
Some employees are just hesitant to try new routines, so they express an unwillingness
to learn anything new. They say things like, I already know all that I need to know to do
the job, or I am good at what I do why rock the boat. Resisting employees who have
already made up their minds that the change wont work or who are reluctant to learn
something new will impede the organizations growth and adaptation to change. Frankly,
they also hinder their own personal growth and development.
6. Poor Timing:Change must be introduced when there are no other major initiatives
going on. Sometimes it is not what a leader does, but it is how, when and why she or he
does it that creates resistance to change! Undue resistance can occur because
changes are introduced in an insensitive manner or at an awkward time.
For any significant organizational change effort to be effective, organizational leadership
must come out of their mahogany panelled air conditioned offices, roll up their sleeves,
and prepare a comprehensive change strategy from the onset to address barriers. If
they cant do it, then, they should delegate or hire a change management agent to
design an effective change management strategy with the help of some of the
organisations managers.
7. Lack of Reward:There is a common business saying that managers get what they
reward. Organizational employees will resist change when they do not see anything in it
for them in terms of rewards. Without WIIFM or a reward, there is no motivation to
support the change over the long run. This often means that organizational reward
systems must be altered to support the change that management wants to implement.
The reward does not have to always be major or costly.
8. Office Politics:Every organisation has its own share of in-house politics. So, some
employees resist change as a political strategy to show or prove that the change
decision is wrong. They may also resist showing that the person leading the change is
not up to the task. These employees are committed to seeing the change effort fail.
9. Loss of Support System: Employees already in their comfort zones, working with
the managers they get along with, and who are operating within predictable routines
know their support system will back them up during challenging times. Changing the
organizational structures may shake their confidence in their support system. They may
worry about working for a new supervisor, in a new team, or on unfamiliar projects
because they fear that if they try and fail, there will be no one there to support them.
10. Former Change Experience: Our attitudes about change are partly determined by
the way we have experienced change in the past. For instance, if in your organisation,
you have handled change badly in the past, the employees will have good reasons for
rebelling. Again, in personal lives, how employees families reacted to change during
their early years is going to affect the way they view change. Employees, who live in the
same house, shop at the same stores, visit the same social club, and drive the same
routes daily throughout their formative years may have more difficulty dealing with
change than people who grew up in several different neighbourhoods. In the same way,
those who become accustomed to associating with people who have the same values
and ethics may find it more difficult to appreciate the diversity of todays work force.
An employee who was raised in a family that viewed change as a challenge to
be tackled will probably have a more optimistic outlook about change than a person who
was raised in a home that considered change an unwanted experience that upset the
predictable family routine.
11. Empathy and Peer Pressure:Whether we are introverted or extroverted, we are
still social creatures. Organizational stakeholders will resist change to protect the
interests of a group, team friends, and colleagues. It is normal for employees to resist
change to protect their co-workers. This could be purely because they sympathise with
their friends because of the change that has been thrusts at them. Managers too will
resist change to protect their work groups or friends. All these behaviours can sabotage
the success of any change.
12. Lack of trust and support:Successful organizational change does not occur in a
climate of mistrust. Trust, involves faith in the intentions and behaviour of others. In
organizations where there is a high degree of trust and each individual employee is
treated with respect and dignity, there is less resistance to change.
Mutual mistrust will be the bane of an otherwise well planned change initiative. If an
organisation is seen as being untrustworthy as demonstrated sometime in the past, so
why would any employee trust such an organisation? Any sweeping changes on the job
can cause employees to fear for their roles in the organisation. For this reason, a well
planned outplacement support should be in place to mange and assist employees.
Employees resist change because they are worried that they may not find another job
easily and quickly.