Why will learning about organizational behavior help you to get a better job and a better career?

1. Career development
2. What Is Organizational Behavior?

By Indeed Editorial Team

Updated September 14, 2021 | Published February 4, 2020

Updated September 14, 2021

Published February 4, 2020

Organizational behavior is the study of human behaviors in organizations. Business cultures may differ by company, industry and even location, but most share a goal to have a positive, productive organization balanced with employee satisfaction. Leaders often use studies like organizational behavior (OB) to understand how teams work together, how the organization behaves and how individuals act. In this article, we discuss what organizational behavior is, its methods and how to apply them in the workplace.

What is organizational behavior?

Organizational behavior is a multidisciplinary study of how people interact within groups on social, psychological and economic levels. These studies have been taking place for almost 100 years and have created the foundation of today's human resources field. The findings of OB studies have formed the principles typically applied in workplaces to encourage more effective business operations. Researchers and consultants study organizational behavior in terms of the following topics:

• Leadership

• Work performance

• Employee motivation

• Job satisfaction

OB studies have produced various theories relating to the institutional dynamics of an organization, each with its own set of recommendations for taking action differ depending on the area of study and can include actions such as a reorganization within subgroups of the organization, changing compensation structures and changing the way job performance is evaluated. The study of organizational behavior has evolved to consider cultural aspects of a workplace, such as the effects of race, gender and economics on productivity and workplace socialization, in decision-making.

Organizational behavior is studied both academically and practically, taking inspiration from fields such as leadership studies, anthropology and psychology to create methods and models used to explore innovative ways to improve the overall workplace experience. Specifically, subtopics, including negotiation, decision-making, stereotyping and other related topics are studied in the broader context of social systems, relationships and economics. In the workplace, these studies can produce findings that are useful to the organization's leadership in terms of understanding the overall company culture and the positive and negative effects on employee satisfaction and productivity as well as employee retention. These studies are broken up into groups:

• Personality: Productivity and social interaction are largely dependent on individual personality. These studies aim to understand individual personalities to determine compatibility with the culture of the company.
  

• Leadership: As a hotly debated topic in the OB field, leadership is found to be all over the place in terms of overall categorization and studies produce wildly diverse conclusions. Some of these conclusions find that leadership is part of a person's personality, while others find it decision-based, resulting from being given authority.
  

• Politics: Navigating the interconnection between authority and politics in the workplace is said to be key in creating a culture of cohesion and productivity.

Related: Guide to Company Culture

Advantages of organizational behavior

A strong organizational model can help to improve a company's culture, educate managers about how the culture contributes to employee productivity and retention and enable human resources personnel to accurately evaluate a job candidate's skills and personality during the hiring process in order to find the most compatible personalities for the company. Of course, when assessing human behavior, there is no singular way to draw accurate conclusions all the time, but OB helps to set guidelines that can help HR personnel put the right people in the right positions.

OB serves as a major factor in understanding what motivates employees using metrics such as proper working conditions, emotionally intelligent management and fair compensation. Again, this is not an exact science, but it's been found that understanding employee motivation can help company leaders reorganize company policies surrounding compensation structure, departmental hierarchies and evaluating performance to facilitate job satisfaction among the majority of workers, which ideally translates to increased productivity and profitability. Organizational behavior can also help to improve an organization in the following areas:

• Better customer service

• Cooperative teamwork

• Creativity and innovation

• Effective leadership

• Ethical behavior among staff and management

• Job performance

• Positive, upbeat atmosphere

Outcomes of organizational behavior are widely varied, as each organization is its own entity with many diverse personalities shaping it, but more and more companies are focusing on providing healthy, productive work environments in which employees are invested in the success of the company and inspired to remain part of the organization for a much longer time.

Related: Human Resource Management and Their Role in Your Job Search

Disadvantages of organizational behavior

As mentioned previously, OB is not an exact science and will work differently for different companies. As part of the whole of society, OB has limitations when it comes to leadership that doesn't seek the improvement of workplace culture, job satisfaction or employee retention. Specifically, OB has three marked drawbacks:

• Behavioral bias: Most bias in the workplace is unconscious, affecting decision-making in subtle ways that the decision-maker is not even aware of. As a result, certain individuals are viewed, and thus treated, unfairly when compared to the whole of the company workforce. These biases unfairly consider irrelevant circumstances such as age, gender or ethnicity in performance-based assessments. This can have a dangerous influence over the future of the employee with the company and beyond. The way to reduce biased influence is to identify it and consciously remain aware of it in an attempt to avoid creating and feeding into these biases.
  

• The law of diminishing returns: This economic term applies to organizational behavior using the principle of equilibrium, which states that when a desirable point is reached, in this case, the optimal relationship between employee satisfaction and productivity, adding more of the desirable facet will result in diminished output. Continuing to increase the desirable thing will continue to diminish output until it reaches zero and even turn into negative returns. In other words, too much of a good thing is still too much. The concept rationalizes that regardless of the situation, there is an optimal level of that desirable thing, and that level is the equilibrium point. Adding more of the thing will create an unbalance that leads to deterioration of all aspects in the company.

• Unethical manipulation: While organizational behavior provides valuable information, methods and techniques to help individuals within an organization grow and develop their potential, there is a glaring concern regarding unethical use of this information. This concern revolves around those in positions of authority manipulating others into performing immoral, illegal or disloyal actions within the workplace. This can involve abusive behavior, theft of time or resources or other violations of company policy.

Related: Using Performance Management in the Workplace

Organizational behavior methods

As with any field of study, organizational behavior uses a variety of research methods to get the clearest picture of the overarching topic as well as the finer details. Some methods used include:

1. Computer simulation

One of the most common methods in organizational behavior, computer simulation has many uses, including understanding organizational and individual behavior at the micro- and macro-levels as well as hypothesizing about interpersonal communication and the processes and behaviors that facilitate teamwork.

2. Quantitative research

Statistical models such as correlation, variances, time series analyses and more are quite commonly used in OB research.

3. Qualitative research

Qualitative research inherently consists of research methods focused on the quality or usefulness of the information observed. These methods can include individual materials like interviews, case studies and written research.

What affects organizational behavior?

Several factors influence behavior in the workplace that can motivate employees or discourage them. Influencing factors can include things such as the interpersonal communications, leadership structure of the company, the company's policies, individual members of management and more. In improving company culture and thus increasing productivity, the company itself can become more competitive and create a workplace that is overall a much more harmonious environment. The following are a few ways that companies can improve the culture of the workplace?

Understand the influence of existing culture

New employees learn about company culture from their colleagues, which causes them to behave similarly in an attempt to be accepted by the group. This creates a cycle that doesn't end until something drastically changes. Taking this into consideration, it's helpful to implement an overall feeling of freedom of expression in the workplace, in which employees can feel free to express their unique ideas instead of keeping their (potentially ground-breaking) thoughts to themselves. Providing encouragement to contribute innovative ideas or even a simple opinion will instill new confidence in your employees and change the overall tone of the work environment.

Reward success

As a competitive company, you need people who feel motivated to innovate and improve consistently. It's true that people come to work to earn a paycheck, but offering other incentives can help pique their interest in the company's success. Defining a connection between effort and reward is one of the most important steps in reinvigorating employee motivation and increased performance. Set SMART (specific, measurable, achievable, realistic, timely) goals and regularly check in. Most importantly, follow through with the incentives. When the employees reach the goals you've set for them, they anticipate receiving the promised rewards for their efforts.

Allow employees to have a say

Accepting or even soliciting employee input in areas of the business which they are either directly affected or have an operational knowledge of is another form of incentive to work harder, be happier and remain with the company. People crave feelings of importance, so enabling avenues of communication between upper management and employees will not only encourage said communication, it'll also inspire the employees to understand their business more thoroughly so they can make informed suggestions.

Respond to change

Companies across every industry are affected by changing markets, to which they must respond appropriately to remain competitive. Technological advances and consumer preferences will continuously evolve as well, also initiating changes in the way businesses run. Implementing necessary changes should be accompanied by a frank discussion and an open-door policy for employees to ask questions so that they can find it less difficult to adapt.