Organizational Behaviour 2011

Organizational Behaviour Term Report

Presented to: Mrs. Bushra Akbar Presented by: Affan Khan Anam Maqsood Anuche Babar Anum Naeem Anum Rinch

Date:

10th June 2011

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Contents
ACKNOWLEDGEMENTS .................................................................................. 3 EXECUTIVE SUMMARY .................................................................................. 4 OBJECTIVES ....................................................................................................... 5 RESEARCH METHODOLOGY.......................................................................... 6 LITERATURE REVIEW ..................................................................................... 7 ABOUT THE ORGANISATION ....................................................................... 15 PRIMARY RESEARCH .................................................................................... 15 CONCLUSION ................................................................................................... 22 RECOMMENDATIONS .................................................................................... 23 APPENDIX ......................................................................................................... 25

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ACKNOWLEDGEMENTS
The group is exceedingly grateful to and is appreciative of Mr. Imran Jaka1, the General Manager as well as the Marketing head, for taking out his precious time to entertain our questions that revolved around employee performance at their organization. He undoubtedly proved to be exceedingly helpful in providing our group with the much desired information that it desired. In addition to this, our grateful thanks and appreciation goes to Mrs. Bushra Akbar, for guiding us in the progression and smoothness of the entire term project. Without a shadow of doubt, without her supreme guidance and knowledge, this term project would have not been turned into a reality.

Email: imranjaka@stalliontextiles.com Phone: 0300-2026360

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EXECUTIVE SUMMARY
The sole purpose of this report is to delve deeply and gain a comprehensive understanding of how the employee psyche at Pakistani organizations works and what is it that enables employees to perform up to their capabilities. The organization chosen for this report was Stallion Textiles and it proved to provide an excellent platform to indulge into the various aspects of employee performance. The report commences with the objectives of the report itself, going on to the research methodology used, the literature review of the article that was chosen to use as a guide for the report, then giving a brief introduction of Stallion Textiles, the primary research and finally giving a conclusion to the entire report and our recommendations on it. The end of the report also contains an appendix which includes the questionnaire that was presented to the general manager and the employee survey as well.

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OBJECTIVES
Pakistan the country that was once included in the top 10 growing nations of the world has suffered greatly to come down to the list of the failing states. The economy of the country is not that impressive either, all one can see around is depression and gloominess. The economic conditions have decreased the number of job opportunities available for people and the ones who do have it are not satisfied with it. The overall performance and efficiency has seen a decline over the years with the result being the downfall in the GDP and the economy. In such dire circumstances we decided to study the ways an employer can improve job performance of the employees through the use of feedbacks, goal setting, rewards and positive reinforcement. Job performance has historically been linked with rewards and recognition, with the employers rewarding only those employees who have consistently performed well, especially in the sub-continent region. Job performance has also shown to be influenced by the feedback, both from the superiors and by the sub-ordinates, who point out the flaws about an individual for him to work on. Goal settings has also been proven to improve job performance by providing the individual with a vision and an objective look up to and stay focus to achieve it. The main focus for us was to understand the importance of feedback both from the superiors and sub-ordinates and the significance of setting goals and objectives on job performance. This would help us in pointing towards the use of appropriate methods to improve job performance and thus the overall efficiency and output level of any organization.

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The company that would be studied had to be not only successful in its industry but also should have immense use of and dependence on employees, for example a factory or a manufacturing company. With this mindset we choose Stallion textiles, a highly successful yarn producing company, to compare the ways of improving job performance as perceived by the management and by the employees.

RESEARCH METHODOLOGY
The research for this report comprises of both secondary and primary research. The secondary research is based on an extensive literature study that entailed a critical perusal of literature sources relevant to our chosen topic. However the report is based on a research article titled, Expectancy Theory and its implications for employee motivation. (Academic Leadership Journal, Volume 6, Issue 3, 2008). The research article revolves around an empirical study on the relevance of the expectancy theory for employee motivation. It was conducted at Rustenburg Section of Anglo Platinum. Due to time constraints, the researchers used quantitative research methods for data collection and they distributed questionnaires to 50 contractor facilitators in Part-Time ABET. The questionnaire had two sections: Section A dealing with biographical data, and Section B dealing with questions arranged in the 4 point Linkert Scale. The data that were collected was analyzed and recorded in a table showing rank, the mean and standard deviation. The primary research comprises of an extensive questionnaire based interview with the General Manager of Stallion Textiles, Mr. Imran Jaka and an employee survey. The primary research focused on the different aspects that affect the job performance of employees. The

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questionnaire comprised of a mix of open-ended and close-ended questions. The open-ended questions allowed for extensive information gathering about the respondents feelings, attitudes and understanding of the subject. The close-ended questions, on the other hand, allowed for simplicity and easier analysis. The survey presented to the employees comprised of ranking-scale questions; Linkert Scale. The employees were presented with ten statements and were asked to rate them in order of preference.

LITERATURE REVIEW
The article titled, Expectancy theory and its implications for employee motivation, written by Isaac Ramoloko Mathibe show that there is a link between motivation and human productivity and that link is proved by an empirical study. To support the study, individual factors such as goals/expectations, unlocking potential, effort, equity and performance are used. Moreover, it also gives a criterion for motivation which includes different levels of effective leadership, goal setting and attainment of objectives, unlocking/unfolding of potential and effort and equity, valences and incentives.

Introduction
Social theorists are of the view that employees are motivated by their needs and they develop through and in relationship with others2. The implication of the preceding statement is that when there is synergy between employees needs and organizational needs, employees will be more accepting to productive tendencies than when their needs are not gratified.

Dawson, 1993

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Popular incentives include money, power and idyllic investments as well as general incentives that are non-material. Expectancy Theory is that people make decisions among alternative plans of behavior based on their perceptions [expectancies] of the degree to which a given behavior will lead to desired outcomes.

There is a subtle link between expectancy, effort, productivity and reward. Werner states that a person will exert a high effort if he/she believes there is reasonable probability that the effort will lead to the attainment of an organizational goal, and the attainment of the organizational goal will become an instrument through which that person will attain his/her personal goals. If this is the case with employees, one would thus conclude that organizational goals will be elevated above personal goals, and this may account for the use of incentives and rewards to recognize the effort made by employees.

Elements of Expectancy Theory:

1. Goals/Expectations: Clarifying the meaning of goals is necessary for forging a shared understanding of what the organization wants to accomplish. It suffices to state that goals assist in focusing the energy of workers towards attainment of organizational visions. It suffices to state that goals assist in focusing the energy of workers towards attainment of organizational visions. 2. Unlocking potential: Potential is latent excellence which needs to be developed, unlocked or unfurled. Some essentials for unlocking employee potential are mentioned in the following table. Table 1 Essentials for unlocking employees potential

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Communicating The manager keeps his or her team members up-to-date and in the picture on a regular basis The manager allocates work in ways that match staff members capabilities and preferences

Horses for courses

Valuing differences

The manager encourages respect, trust and understanding between team members

Work standards

The manager sets realistic and clear standards for job performance.

Participative decision making

When it is appropriate the manager makes sure that she/he involves team members in those decisions that would affect them and their performance.

3. Effort: The term effort implies the using of energy to get something done, exertion of mental strength, a try, a product or result of working or trying. Effort is related to the action of trying, exertion of strength or endeavor. In most cases effort is linked to a series of actions that have to be performed as indicated by grouping of tasks and the division of work, allocation of duties, authority and responsibility without abdicating responsibility, relationships between people, collaboration and coordination as well as forged common objective or motive to achieve goals. 4. Equity: The Equity theory is based on the view that employees should receive their fair share for input for the attainment of organizational outcomes. It is noted that incongruence and imbalances between the input the output provides ground for inequity and de-motivation. Striking a balance or maintaining a state of equilibrium between input and output is essential for enhancing performance.
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5. Performance: Performance is the realization of goals and meeting of expectations. Performance management is also seen as a continuous cycle of improving job performance with goal-setting, feedback, coaching, rewards and positive reinforcement.

Criteria for Motivation

1. Effective leadership: The use of non-coercive influence to direct and co-ordinate activities of group members towards goal accomplishment. Leadership is the set of characteristics attributed to those who are perceived to employ such an influence effectively. 3 2. Goal-setting and attainment of objectives: Managers are expected to set goals which are within the employees performance range, and that is why the potential, aptitude, abilities, skills, knowledge and values of employees should be considered before one is engaged to do the work. For example, employing a traditional and conservative Catholic in an abortion clinic may not be advisable on moral and value-consideration even if that person is a highly skilled surgeon. It is also necessary to bear in mind that goal-setting should also anticipate the outcomes to be attained. Commitment to the tasks at hand becomes easier when one has a mental construct of what the end of the product of the whole undertaking will be. 3. Unlocking/Unfolding of potential and effort: Multi-skilling is the buzz-word in many organizations since it is assumed that it generates a highly developed form of work intensification, flexibility, inter-changeability and mobility in the workforce. 4 Skill obsolescence in the face of globalization and technological advancements also increases the need for unfolding of potential and development diverse skills in employees.
3 4

Moorhead and Griffin (1989, p.347)

Tomaney, 1990, p.37

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4. Equity, valences and incentives: When there is ambivalence about the conditions in an organization, it may generate despondency and lack of motivation5 , even if an organization has attractive incentive schemes and salary structures. One has to caution though, while dependence on incentives schemes to enhance employees motivation may ensure efficiency in the short-term, in the long-term one may proof to be an ineffective mechanism for sustainability in the business. For example, in organizations that set production targets as in mining employees work long hours [over-time] which may compromise safety standards just to reach the target and to get the bonuses. Fatalities in the mines have been recorded due to this practice, and such mines were forced to close for some time in order to upgrade their safety.

Research Methodology
An empirical study on the relevance of the expectancy theory for employee motivation was conducted at Rustenburg Section of Anglo Platinum. Due to time constraints, the researchers used quantitative research methods for data collection and they distributed questionnaires to 50 contractor facilitators in Part-Time ABET. The questionnaire has two sections: Section dealing with biographical data, and Section B dealing with questions arranged in the 4 point Linkert Scale. The data that were collected was analyzed and recorded in a Table 2 showing rank, the mean and standard deviation

Table 2: Mean Score rating

Rank

Item No

Item

Mean

SD

Heystek, 2002

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2 1 Management employees Management has a high expectation for employees 3.99 performance Employees productivity is continuously assessed to 4.27 ensure quality in performance provides strong Leadership to 4.51 0.57

0.15

0.45

Employees are exposed to an appraisal system in 4.65 order to identify and close gaps in performance

0.56

All employees understand the vision, values and 4.30 mission statement of the organization Employees training and development programmes 3.99 are linked to the needs of employees and the organizations

0.49.

0.15

There is constant feedback on performance and the 4.04 stakeholders are informed about successes of the organizations

0.53

The organization uses a management information 4.27 system to record employees performance

0.45

The organizations has a developmental plan for each 4.02 employee

0.40

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8 10 The organization has a well-developed incentive 3.99 programme for recognition of performance 0.15

Main Findings
Managers understand where the organization wants to go [vision], and they point out the direction to their followers. As a result, managers develop communication networks and channels for dissemination of organizational vision, values, mandates and goals to as a strategy for mobilization of employees energy and enthusiasm. In addition, the empirical investigation indicated that management provides strong leadership to employees. Strong leadership implies that aligning diverse views towards a common vision and programme of action. Just as organizational goals direct the actions of both the employers and employees, the role of management is to communicate organizational goals and procedures, to strengthen group cohesion and organizational effectiveness. On the other hand, respondents indicated that all employees understand the vision, values and mission statement of the organization.

Employees that are skilled and trained for the jobs do not feel threatened, either by the changes, the job itself or new entrants who happen to be well-trained and skilled in the jobs into the job market. Similarly, lack of motivation from respondents may be ascribed to the Companys lack of planning for employees capacity building and empowerment. Incentives and extrinsic rewards enhance motivation are important since employment relations are based on transactions such as payment for services rendered which occur between employers [providers of employment and reward] and employees [service providers]. In the same vein

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respondents indicated their lack of motivation and poor response to the lack of the lack of a well-developed incentive programme for recognition of performance.

Recommendations
1. Managers should explain the vision, values and missions/goals of the organizations to their subordinates in order to win their confidence and commitment to organizational goals. 2. One should also stress the importance of communication in leadership since it dispels all fears and misunderstandings that may develop between management and employees. 3. There is a need for intensive and expansive programmes aimed at unfolding employees potential. ( Learning Organizations )

Conclusion:
The success of every organization, society and country depends on the direction and Leadership that is provided. Similarly, experience in, and knowledge of contemporary management and Leadership approaches is necessary for upholding the notion of efficacy, quality and motivation in organizations. In the same vein, competitive organizations are led by people who understand that people empowerment raises productivity, operational autonomy and innovation. However, there are economists who argue that organizations cannot grow and expand if employees are poorly skilled, de-motivated and oblivious of organizational goals. On the same note, there are indications that when people have appropriate skills for job performance, and when they understand the rules of the globalised and globalizing industry such as ours, their productive capacity will increase.

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ABOUT THE ORGANISATION

Stallion textiles is a textile spinning unit/mill. The companys philosophy and goal is to be the market leader in the textile spinning industry of Pakistan. They aim to do this by creating systems, technologies and units that make their greatest challenges their strengths. Stallion textiles have been in business since 2004. They produce 30/single blended yarn, which is of premium quality. At the moment they are operating 150000 spindles under one roof. This is the largest yarn producing unit in Pakistan. Their factory is located in Nooriabad and they have two offices. However, at the moment only one head office located in defense is under use. The company hires over 2000 people in their factory alone. The skilled to unskilled ratio of workers is 60:40. They hire workers who are educated and have a good knowledge about their production process and machinery. They also export their product through ALU international, an exporter of fabric and their sales agent. Recently stallion textiles has entered its growth phase after learning the ropes of business and overcoming a large number of problems in an efficient manner by running a small scale unit.

PRIMARY RESEARCH
Questionnaire based:

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The primary research for our report on Stallion Textiles was based on a twenty minute interview with the general manager of Stallion Textiles, Mr. Imran Jaka. Our questionnaire revolved around 17 questions in total, out of which four were objective and thirteen subjective questions. Our group made the questionnaire in light of the research article and the topic that we selected for the report. The following show the results that we were able to collect through the interview based on the different aspects that affect the performance of an employee.

Communication: o The manager stated that there is a lot of communication that takes place between the manager and the employees on a daily basis because their firm is small and their hierarchy structure is flat. o The communication medium that is used within their structure includes face to face and email communication. On the other hand, Mr. Jaka told us that their engineering unit is an independent structure thus, they communicate via telephone calls and frequent visits to the office.

Allocation of work: o The preferences and capabilities of the employees are kept in mind when allocating tasks. o Their job description and role description along with the experience and expertise of the employees guides them of how the work distribution should be done. o Job rotation, especially within the department takes place at times so that employees can fill up for each other if required.
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Teamwork Versus Individual assignments: o Stallion textiles does believe in team work to a certain extent. o However, they believe that they need to allocate specific responsibilities to the individuals so there is accountability. If all work is done as a team, some of the individuals may not perform, affecting the others. o Moreover, Mr. Jaka said that there is not much bonding and maturity at the middle level right now that they can address an issue on their own. o In addition to that, he said that the departments where team work takes place cannot really be specified because some jobs are inter departmental, some are intra departmental and some are individual jobs and how it will be decided of how the work will be carried out depends on however the task can be performed best. o Traits that Mr. Jaka believed are required in an employee for effective teamwork included his ability to coordinate, allocating responsibilities within the team and planning and executing the task.

We then asked him to rate the following options, depending on which factor is the most effective when it comes to motivating employees in their firm and the results showed: 1. Goals 2. Positive reinforcement 3. Feedback 4. Rewards

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The specific standards that they have for work performance as well as for the evaluation of employees: o Personality o How well the employee performs under various situations o Integration with others o Strength and weaknesses o Understanding the organizations culture When evaluating employees on the above given criteria, they use a full evaluation system and then analyze the results to make decisions. Empowering employees: o Employees are asked for their feedback while making decisions o Moreover, the employees are given certain parameters within which they are able to make decisions themselves. If in case their decision requires going beyond those parameters, then they consult their seniors.

In his view, he believed that the effort of employees is based on: 1. Allocation of duties 2. Level of authority and responsibility 3. Grouping of tasks and division of work

Moreover, he also rated the factors that affect employee performance as the following: 1. Capacity to perform 2. Commitment to performance

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3. Motivating environment

The external factor that affects employee performance the most is: o Technological acceleration, this is because it enables their employees to speed up their processes and complete the same task in less time and less effort which can then be put in other tasks that the employee is responsible for completing, therefore, productivity and performance are enhanced.

Goals: o The methods used to convey the goals of the organization clearly are similar to those of the communication methods mentioned previously, which includes face to face and email methods. o Moreover, employees are not provided with any sort of incentives to accomplish their goals. This is because he said that their firm does not contain the culture of rewarding their employees and do not believe in giving rewards. Reason being, giving rewards to employees creates reward expectancy and then employees expect to receive rewards even when their work is not up to the mark.

Positive reinforcement: o Knowing that Stallion textiles does not have a culture of giving rewards, it is evident that they do not use positive reinforcement in through explicit rewards. However, there is reinforcement on doing a good job implicitly for example, acknowledging the employee in front of everyone, clapping for him, patting on his back and so on.
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What techniques are adopted by the company to motivate employees when they fail to do their job? o As a first step, they conduct counselling sessions, open debates, discussions in order to know why exactly the employee failed to do his job and then provide feedback to him. o If talking their way out does not help improving the employees work, then they may using methods restructuring, complimenting their weaknesses with additional resources, training and so on. o Mr. Jaka notified that there are different kinds of employees that they come across and they have to deal with them differently and so no one technique can be quoted to be the best. Where some employees may be competent, some may be competent but do not have the right kind of attitude to perform their job and some may have the competency skills and the attitude to work but may not be able to perform and in that case they may use restructuring, for example.

Employee survey based:

Rank Number Item Mean Standard Deviation 4 6 1 Management provides strong Leadership to employees 2 Management has a high expectation for employees performance 3 3 Employees productivity is continuously assessed to ensure 4.30 0.49 4.27 4.04 0.45 0.53

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quality in performance 8 4 Employees are exposed to an appraisal system in order to identify and close gaps in performance 1 5 All employees understand the vision, values and mission statement of the organization 4 6 Employees training and development programmes are linked to the needs of employees and the organization 2 7 There is constant feedback on performance and the stakeholders are informed about successes of the organizations 7 8 The organization uses a management information system to record employees performance 8 8 9 The organizations has a developmental plan for each employee 10 The organization has a well-developed incentive programme for recognition of performance 3.99 3.99 0.15 0.15 4.02 0.40 4.51 0.57 4.27 0.45 4.65 0.56 3.99 0.15

The results of the questionnaire have been summarized in the table. The employees rated item 5 at 1 with a mean of 4.65 and standard deviation of 0.56. This shows that the employees feel they share the same vision as the management and hence are able to understand values and mission statement of the organization. This helps the company achieve its goal with little correction and motivational activities to bring the employees on path and the items which relate to these management tactics are also highlighted by the employees ranking them at highly. However the employees have a rated three of the items poorly and have ranked these items at 8, which is the lowest rank that the employees have used. The items that have been ranked at
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8 are 4 Employees are exposed to an appraisal system in order to identify and close gaps in performance, 9 The organizations has a developmental plan for each employee and 10 The organization has a well-developed incentive programme for recognition of performance. This shows that the employees are not being judged on the basis of their contributions to the company, with no appraisal or incentive program designed for them. They feel as though their work is going un-noticed.

CONCLUSION
Questionnaire based:
After interviewing Mr. Imran Jaka, the impression that we have got of employee performance and how it is improved in Stallion Textiles, from the point of view of the General Manager is that the goals are believed to be the most important in motivating employees and getting them to work. These goals are communicated through effective methods of virtual and personal communication; however, more emphasis is placed on personal communication such as face to face instructions, feedback and appraisal. This is because the company itself is small and so, they believe it is to their benefit to take advantage of the small size and directly communicate with employees. The second and third most important techniques to improve employee performance is to positively reinforce employee behaviour but only through implicit rewards such as acknowledging their effort and feedback, respectively. The least important factor in improving employee performance in this company is rewards, as they tend to create reward expectancy.

Employee survey based:

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This seems as a start of dissatisfaction which may lead to a decrease in job performance, as the employees may start lazing off and not working to their potential. If this happens, it will result in a decrease in productivity and possible financial consequences for the company. The company should realize the importance of having an appraisal and recognition system to applaud the employees who have performed well and encourage others to follow suit.

RECOMMENDATIONS
Employee performance is an important building block of an organization and factors which lay the foundation for high performance must be analyzed by organizations. The findings of our research vary considerably from the findings of the research article. Although the organizations in our country appear to be Western outwardly, if one focuses on them internally they are quite different from the Western ways of management practices and thus in dealing with employee performance. Moreover Stallion Textiles is a relatively small firm with a flat hierarchical structure. Therefore, this difference in business culture and structure of the organization means that the management must take a different set of measures to improve employees job performance to enhance their productivity and successfully attain strategic goals of the organization. Businesses these days are focusing on job enrichment to enhance employee performance by means of job rotation. This enables employees to perform a variety of tasks and gives the firms more flexibility in covering tasks when employees are absent. However, job rotation can also hinder job performance of employees. Having to know several different jobs in order to rotate can prevent employees from becoming proficient at any particular job. Therefore, the advantages and disadvantages of job rotation as an enrichment strategy have to be carefully weighed. The absence of an effective strategy
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execution process can lead to a reinforcing loop between teamwork and accountability. This reinforcing loop can only be eliminated through translating the organizations strategic plans into concisely defined tasks assigned to each employee. Managers must also focus on effective feedback as part of a comprehensive performance management program. Therefore, feedback should be given to coach improvement, and not just for final results. Also feedback should be paired with explicit expectations for improvement in the future. An organizations performance management system will benefit considerably if specific performance standards for each job group are clearly defined and communicated to employees on an individual basis. Evaluating management staffs understanding of performance standards is essential to ensure an effective performance management system. The management must ensure that job descriptions and specifications are reviewed to develop performance standards. Moreover levels that delineate excellent to satisfactory to poor performance must be established. Each job function must be looked into in order to determine what must be done to meet, exceed or fail to meet expectations. Finally, these performance standards must be transferred to performance appraisal forms and explained in detail to the employees. The root of a performance problem must be determined before the management can fully address it. Ability and motivation go together to impact performance, and the most successful performance improvement efforts combine strategies for improving each. This creates a positive environment where employees feel supported to reach their performance potential; and feel valued, knowing that the organization wants to find a good fit for their abilities.

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APPENDIX

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