Understanding Organizational Behavior and Motivation

Posted on Feb 27, 2025 in Energy Resources, Fuels, and Explosives Engineering

Definition of Organizational Behavior

Organizational Behavior (OB) is the study of individuals, groups, and structures within organizations to improve effectiveness. Its goals are explanation, prediction, and influence.

Intuition vs. Systematic Study

  • Intuition: Gut feeling, based on experience.
  • Systematic Study: Uses data, evidence, and scientific methods to predict behaviors. It avoids outdated knowledge, dogma, and blind mimicry of successful companies.

Levels of Analysis

  • Individual Level: Personality, motivation, perception.
  • Team Level: Group dynamics, communication, leadership.
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  • Organizational Level: Culture, structure, HR practices.

Research Methods in OB

  • Field Research: Surveys, archival data, quasi-experiments, ethnography.
  • Lab Experiments: Controlled conditions.

Correlation (r): Measures the relationship between two variables (ranges from -1 to +1).

Key OB Topics

  • Motivation
  • Leadership
  • Decision-making
  • Communication
  • Teamwork
  • Organizational culture

Future Workforce Skills (IFTF, 2011)

  • Critical Thinking (Sense-making)
  • Social Intelligence
  • Creativity (Novel & Adaptive Thinking)
  • Cross-Cultural Competency
  • Computational Thinking
  • Design Mindset
  • Cognitive Load Management
  • Virtual Collaboration

Importance of Employee Relations

  • A 1% increase in high-performance work practices leads to 7% lower turnover, $27K more sales/employee, and $3.8K more profit/employee.
  • Best workplaces outperform the market.

Contingency Variables (Moderators): “It depends”—situational factors affect relationships between variables.

Case Analysis Approach

  • Identify the problem (listening).
  • Interpret and integrate evidence (argument).
  • Develop an action plan (solution).

Critical Thinking in OB

  • Question assumptions.
  • Use logic and evidence.
  • Recognize biases.

Individual Differences

Individual differences are behavioral and cognitive similarities and differences among people. They are influenced by social demographics, work experiences, personality traits, and cultural values.

Personality Traits

Personality traits are universal and measurable. They remain stable over time but can be influenced by life experiences and age.

MBTI vs. Scientific Personality Models

MBTI lacks empirical support, forces binary categories, and does not predict performance. The Big Five (OCEAN) and HEXACO models are scientifically validated and widely accepted.

Big Five Model (OCEAN)

  • Openness to Experience: Creativity, curiosity, adaptability.
  • Conscientiousness: Organization, discipline, dependability.
  • Extraversion: Sociability, assertiveness, energy levels.
  • Agreeableness: Cooperation, empathy, kindness.
  • Neuroticism: Emotional instability, anxiety, moodiness.

HEXACO Model

Adds Honesty-Humility to the Big Five.

  • Engagement: Openness, Conscientiousness, Extraversion.
  • Altruism vs. Antagonism: Honesty-Humility, Agreeableness, Emotionality.

Stability & Change

  • Cumulative continuity principle: Personality stabilizes with age.
  • Maturity principle: Older individuals are more conscientious, agreeable, and emotionally stable.

Impact on Job Performance

  • Conscientiousness is the best predictor of job performance across industries.
  • Extraversion is linked to leadership and sales success.
  • Openness correlates with creativity.
  • Agreeableness benefits relationship-oriented jobs.
  • Honesty-Humility predicts ethical behavior and teamwork.

Personality in Context

Personality interacts with situational factors (Trait Activation Theory, Situational Strength Theory). Nature (40%) and nurture (60%) influence personality.

Cultural Influences on Personality

National culture affects personality traits (e.g., Hofstede’s dimensions, GLOBE project). Cultural values shape reasoning styles and communication.

Definition of Motivation

Internal forces that drive individuals to achieve goals. Behavior is energized (effort intensity), directed (goal choice), and persisted (duration of effort).

Theories of Motivation

Content Theories

(What motivates people?)

  • Maslow’s Hierarchy of Needs: Physiological (basic survival: food, water, shelter), Safety (security, stability), Belongingness (social connections), Esteem (respect, recognition), Self-Actualization (personal growth). Limitations: Needs don’t always follow a strict order; can be simultaneous.
  • Herzberg’s Two-Factor Theory: Hygiene Factors (Prevent dissatisfaction but don’t motivate: salary, status, security, work conditions). Motivator Factors (Drive satisfaction & motivation: achievement, recognition, responsibility, growth). Limitations: Job satisfaction ≠ Motivation, factors may overlap.
  • McClelland’s Acquired Needs Theory: Need for Achievement (desire to excel, goal-setting, feedback-seeking), Need for Affiliation (need for belonging, relationships), Need for Power (influence and control over others). Needs are learned and independent; one is usually dominant.
  • Alderfer’s ERG Theory: Existence (E) (basic material needs), Relatedness (R) (interpersonal relationships), Growth (G) (personal development). Unlike Maslow, needs can be pursued in any order.

Process Theories

(How motivation works)

  • Goal-Setting Theory (Locke & Latham): Challenging goals enhance performance (Goldilocks Rule: not too easy/hard). SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound). Downsides: Can lead to tunnel vision, unethical behavior, or neglect of non-goal tasks.
  • Equity Theory (Adams): Motivation is influenced by fairness in social comparisons. Ratio of inputs (effort) vs. outputs (rewards) compared to others. Responses to inequity: change inputs, change outcomes, cognitive reevaluation, or leave.
  • Organizational Justice: Distributive justice (fairness of rewards), Procedural justice (fair processes), Interpersonal justice (respect and treatment), Informational justice (transparent communication).
  • Expectancy Theory (Vroom): Expectancy: Effort → Performance (Can I do it?). Instrumentality: Performance → Rewards (Will I get a reward?). Valence: Value of reward (Do I care?). Motivation = Expectancy × Instrumentality × Valence. Fixing motivation issues: Training, fair evaluations, desired rewards.

Additional Motivation Concepts

  • Over-Justification Effect (Cognitive Evaluation Theory): Extrinsic rewards can reduce intrinsic motivation (e.g., paid hobbies may feel less enjoyable).
  • Income-Targeting Behavior: People work only until they reach a financial goal (e.g., taxi drivers stopping early on busy days).
  • Self-Fulfilling Prophecy: High expectations + support = better performance due to increased self-efficacy.
  • Performance Pressure & Choking (Ariely et al.): Too much incentive = stress & performance drop.
  • Risk transfer: Firms use pay-for-performance, shifting risk to employees.

Equity Theory

Motivation is influenced by social comparisons and fairness perceptions. People compare their input-to-output ratios to others.

Ratio Comparisons

  • Inequity: If a person’s ratio is lower or higher than another’s, they may feel under- or over-compensated.
  • Equity: A balanced ratio leads to fairness perception.

Organizational Justice

  • Distributive justice: Fairness of outcomes.
  • Procedural justice: Fairness in decision-making processes.
  • Interpersonal justice: Respect and treatment by others.
  • Informational justice: Clarity in communication.

Expectancy Theory

People choose behaviors based on expected outcomes.

Key Elements

  • Expectancy: Effort → Performance (belief that effort will lead to success).
  • Instrumentality: Performance → Reward (belief that performance will result in rewards).
  • Valence: Value of reward (how desirable the reward is).

Motivation Problems & Fixes

  • Low expectancy: Provide training, clear performance metrics.
  • Low instrumentality: Ensure fair and transparent reward policies.
  • Low valence: Offer meaningful and personalized rewards.

Pay for Performance (PFP)

PFP rewards individuals or groups based on performance.

Types of PFP

  • Individual: Piece rate, merit pay, bonus.
  • Collective: Profit sharing, gain sharing, employee stock ownership plans (ESOPs).

Pros & Cons of PFP

  • Can drive high performance when well-designed.
  • Can reduce intrinsic motivation if overused.
  • Can create risk and stress for employees.

Self-Determination Theory (SDT)

Intrinsic and extrinsic motivation exist on a continuum.

Key Needs for Motivation

  • Competence: Feeling capable in tasks.
  • Autonomy: Having control over actions.
  • Relatedness: Connection with others.

Intrinsic vs. Extrinsic Motivation

  • Intrinsic motivation: Doing something for personal satisfaction.
  • Extrinsic motivation: Doing something for external rewards.

Job Design & Motivation

Work structure impacts employee motivation and performance.

Job Enrichment

Enhancing job roles to be more engaging and fulfilling.

Job Characteristics Model

  • Skill variety: Range of skills required.
  • Task identity: Completing a whole, meaningful task.
  • Task significance: Impact of work on others.
  • Autonomy: Control over work.
  • Feedback: Information about performance.

Netflix Case Study

Netflix’s compensation and talent strategy focuses on hiring top talent, offering flexibility, and fostering autonomy.