MBA 1s sem Organisational Behaviour Notes

Compiled and shared by Suman Poudel 1
ORGANIZATIONAL BEHAVIOR AND LEADERSHIP SKILLS
AREA OF STUDY: CORE
Course Objective:
The course aims to make students well equipped with knowledge and skills in understanding and investigating
the impact of individual, group and structure on the behavior of people at work. It will enable them to apply
such knowledge and skills to adopt appropriate managerial policies and leadership styles to improve
organizational performance and effectiveness in dynamic environment.
Course Details:
Unit I: Introduction to Organizational Behaviour LH 12 hrs. Meaning and Importance of Organizational
Behaviour, Contributing discipline to OB, Three levels of analysis in OB (Individual Level, Group Level, and
System Level), Challenges and Opportunities for OB, Developing an OB Model
Unit II: Foundations of Individual Behaviour LH 10 hrs. Biographical Characteristics and ability, Learning,
Attitudes and Job Satisfaction, Personality, Perception and Individual Decision Making, Motivation
Unit III: Foundations of Group Behaviour LH 8 hrs. Group development and structure, Understanding Work
Teams, Communication, Power and Politics, Conflict and Negotiation
Unit IV: Leadership and Change in Organizations LH 10 hrs. Leadership in Organization (Discuss both
traditional and contemporary leadership theories), Organizational Change (Focus on the behavioural aspect of
change), Role of Leaders in the Change Processes (Focus on leaders as change agents)
Unit V: Structural Perspective of Behaviour LH 8 hrs. Foundations of Organization Structure,
Organizational Designs and behaviour, Work design and technology, Organizational Culture
References:
Luthans, Fred, Organizational Behavior, McGraw Hill, New York
Newsrom J.W. and Davis Keith, Organizational Behavior: Human Behavior at Work, Tata McGraw-Hill
Publishing Company Limited, New Delhi.
Pareek, Udai, Understanding Organizational Behavior, Oxford University Press, New Delhi.
Robbins, S.P., Organizational Behavior, Prentice Hall of India, N. Delhi

“if you dig very deeply into any problem you will get to people.” -- J. Watson Wilson
A Review of Manager’s Job
One common thread runs through the functions, roles, skills, activities, and approaches to management:
Each recognizes the paramount importance of managing people. Regardless of whether it is called “the
leading function,” interpersonal roles,” “human skills,” or “human resource management,
communication and networking activities,” it’s clear that managers need to develop their people skills
if they are going to be effective and successful.
INTRODUCTION TO ORGANIZATIONAL BEHAVIOUR
Behaviour is a way of action. It is basically goal oriented. Human behaviour is generally motivated by
a desire to attain a goal. The specific goal is not always consciously known by the individual. Many
times we wonder “why did I do that”? The reason for our action is not always apparent to the conscious
mind. The knowledge and information explosion, global competition, total quality and diversity are
some of the bitter realities that the managers are facing today. Yet the simple but most profound key to
successful organizations and management is human resources and its behaviour.
The basic unit of behaviour is an activity. In fact, all behaviour is a series of There are many solutions
being offered to deal with these complex challenges. Activities. As a human being, we always do
something; walking, talking, sleeping etc. and sometimes we do more than one activity at a time.
Sometimes we decide to change from one activity to another. Why do we do so? Or why do people
engage in one activity and not another? A manager must understand, predict and control the activities
of a person at a given moment. To predict behaviour, manager must know which motives or needs of
people evoke a certain action at a particular time.
Organization Behavior
Organizational Behavior (OB) is a 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 organization’s effectiveness.
Organization Behavior is concerned with the study of what people do in an organization and how that
behavior affects the performance of the organization.—Stephen P Robbins
Organization Behavior tends to be more theoretically oriented and at the micro level of analysis.
Specifically, OB draws from many theoretical frameworks of behavior sciences that are focused on
understanding and explaining individual and group behavior in organizations.
To sum up, organizational behavior can be defined as the understanding, prediction and management of
human behavior in organization. – Fred Luthans
Organizational behavior can then be defined as: "The study of human behavior in organizational
settings, the interface between human behavior and the organizational context, and the organization
itself."

Organizational behavior (OB) is the study of the many factors that have an impact on how people
and groups act, think, feel, and respond to work and organizations, and how organizations respond to
their environments.
Understanding how people behave in an organization is important because most people work for an
organization at some point in their lives and are affected—both positively and negatively—by their
experiences in it (Jermanwings plane crash).
An understanding of OB can help people to enhance the positive, while reducing the negative, effects
of working in organizations.
Most of us think we have a basic, intuitive, commonsense understanding of human behavior in
organizations because we all are human and have been exposed to different work experiences.
Often, however, our intuition and common sense are wrong, and we do not really understand why
people act and react the way they do.
For example, many people assume that happy employees are productive employees—that is, that high
job satisfaction causes high job performance—or that punishing someone who performs consistently at
a low level is a good way to increase performance or that it is best to keep pay levels secret.
As we will see in later chapters, all of these beliefs are either false or are true only under very specific
conditions, and applying these principles can have negative consequences for employees and
organizations.
The study of OB provides guidelines that help people at work to understand and appreciate the many
forces that affect behavior in organizations.
It allows employees at all levels in an organization to make the right decisions about how to behave
and work with other people in order to achieve organizational goals.
OB replaces intuition and gut-feeling with a well-researched body of theories and systematic guidelines
for managing behavior in organizations.
The study of OB provides a set of tools—concepts and theories—that help people to understand,
analyze, and describe what goes on in organizations and why.
OB helps people understand, for example, why they and others are motivated to join an organization;
why they feel good or bad about their jobs or about being part of the organization; why some people do
a good job and others don’t; why some people stay with the same organization for 30 years and others
seem to be constantly dissatisfied and change jobs every 2 years. In essence, OB concepts and theories
allow people to correctly understand, describe, and analyze how the characteristics of individuals,
groups, work situations, and the organization itself affect how members feel about and act within their
organization.
Although there will probably never be total agreement on the exact meaning of organizational
behavior—which is not necessarily bad, because it makes the field more dynamic and exciting—there
is little doubt that organizational behavior has come into its own field of study, research and
application.

Organisational behaviour is concerned with the characteristics and behaviours of employees in
isolation; the characteristics and processes that are part of the organisation itself; 'and the
characteristics and behaviours directly resulting from people with their individual needs and
motivations working within the structure of the organisation. One cannot understand an individual’s
behaviour completely without learning something about that individual's organisation. Similarly, he
cannot understand how the organisation operates without; studying the people who-make it up. Thus,
the organisation influences and is influenced by individuals. Organizational behaviour integrates the
relevant contents of these disciplines to make them applicable for organizational analysis. e.g. it
addresses issues, which may be relevant to the case, such as the following:
 What facilitates accurate perception and attribution?
 What influences individual, group and organizational learning and the development of
individual attitudes toward work?
 How do individual differences in personality, personal development, and career development
affect individual's behaviours and attitudes?
 What motivates people to work, and how. Does the organizational reward system influence
worker's behaviour and attitudes?
 How do managers build effective teams?
 What contributes to effective decision-making?
 What are the constituents of effective communication?
 What are the characteristics of effective communication?
 How can power be secured and used productively?
 What factors contribute to effective negotiations?
 How can conflict (between groups or between a manager and subordinates) be resolved or
managed?
 How can jobs and organizations be effectively designed?
 How can managers help workers deal effectively with change?

Nature of OB
Organization Behaviour has emerged as a separate field of study. The nature it has acquired by now is
identified as follows:
1. A separate field of study and not a discipline only: OB has a multidisciplinary orientation and
is thus, not based on a specific theoretical background.
2. An inter disciplinary approach: OB is essentially an interdisciplinary approach to study
human behaviour at work. It tries to integrate the relevant knowledge drawn from related
disciplines like psychology, sociology, anthropology etc. ,to make them applicable for studying
and analyzing OB
3. An Applied Science: OB basically does the application of various researches to solve the
organizational problems related to human behaviour.
4. A Normative Science: while the positive science discusses only cause and effect relationship,
OB prescribes how the findings of applied researches can be applied to socially accept
organizational goals.
5. A Humanistic and Optimistic Approach: it applies humanistic approach towards people
working in the organization. It treats people as thinking, feeling human being.
6. Total system approach; The system approach is one that integrates all the variables affecting
organizational functioning. Man’s socio –psychological framework is complex one and the
system approach of OB tries to study this complexity and to find solution to it.
Importance and scope of organizational behaviour
Organisational behaviour offers several ideas to management as to how human factor should be
properly emphasized to achieve organisational objectives. Barnard has observed that an organisation is
a conscious interaction of two or more people. Organisational behaviour provides opportunity to
management to analyse human behaviour and prescribe means for shaping it to a particular direction.
Organisational behaviour helps to analyse 'why' and 'how' an individual behaves in a particular way.
Understanding Human Behaviour Organisational behaviour provides understanding the human
behaviour in all directions in which the human beings interact. Thus, organisational behaviour can be
understood at the individual level, interpersonal level, group level and inter-group level.
Organization Behavior
It studies the three determinants of behavior in the organization:
1. Individuals
2. Groups and
3. Structure

OB applies the knowledge gained about individuals, groups, and the effect of structure on behavior in
order to make organizations work more effectively.
Levels of OB (also called as)
Individual Level
Analyzes how an individual interacts with organizational goals, policies, and practices.
Group Level
Studies about group dynamics, group cohesiveness, leadership.
Organizational Level
Adaptation and interaction with organizational environment.
• Interpersonal Level: Human behaviour can be understood at the level of interpersonal
interaction. Organisational behaviour provides • means for understanding the interpersonal
relationships in an organisation. Analysis of reciprocal relationships, role analysis and transactional
analysis are some of the common methods, which provide such understanding.
• Group Level: Though people interpret anything at their individual level, they are often
modified by group pressures, which then become a force in shaping human behaviour, Thus,
individuals should be studied in groups also.. Research in group dynamics has contributed vitally to
organisational behaviour and shows how a group behaves in its norms, cohesion, goals, procedures,
communication pattern and leadership. These research results are advancing managerial knowledge of
understanding group behaviour, which is very important for organisational morale and productivity.
• Inter-group Level: The organisation is made up of many groups that develop complex
relationships to build their process and substance. Understanding the effect of group relationships is
important for managers in today's organisation. Inter-group relationship may be in the form of co-
operation or competition.
Importance of OB
Why should we study OB?
In our organization there is no title as “Deputy Director of OB” or “Manager of OB”.
Then, aside from fulfilling the requirements of MBA, why the study of OB is essential in our career
and in organization?
It is essential for all of us if we are concerned with what people think, feel, and do in and around
organizations.

More specifically, the importance of the study is to:
1. Satisfy our needs to understand and predict:
 The interactions between working environment and individuals create complex situations in the
organization.
 When we study OB, it helps to understand both work environment and individuals’ behavior and
predict the consequences of their interactions.
 An understanding of OB helps managers handle the situation more practically.
2. Influence organizational events:
 Whether one is a marketing manager or an operational manager, one can influence the
environment of the work place with an understanding of OB.
 This is because the manager knows how to communicate to individuals or groups and to decide
on leadership style to get the work done by the people.
3. Emphasize both research and practice at work:
 OB emphasize scientific study of individuals, groups, in the context of organization.
 Thus, the findings of research are useful to satisfy people in the organization and at the same
time, to help managers to understand its human resources for their effective utilization.
4. It helps to understand organization and employee in better way
5. Motivate Employee: OB helps managers apply appropriate motivational tools and techniques in
accordance with the nature of individual employee. OB considers individual differences in a proper
way.
6. Prediction and control of human behavior:
7. Effective utilization of human resources: OB disciplines helps managers to manage people behavior
in appropriate way in order to improve the performance so as to achieve organizational goal.
Contributing Disciplines to the OB Field
OB is an applied behavioral science that is built on contribution from a number of behavioral
disciplines.
The predominant areas are:
 Psychology
 Social psychology
 Sociology
 Anthropology
 Economics
 Political science

OB –as an interdisciplinary approach
Organizational behavior is an applied behavioral science that is built on contributions from a number of
behavioral disciplines such as psychology, sociology, social psychology, anthropology and economics.
Let’s see how these disciplines are related to organizational behavior,
A. Psychology. Psychology is the study of human behavior which tries to identify the
characteristics of individuals and provides an understanding why an individual behaves in a particular
way. This thus provides us with useful insight into areas such as human motivation, perceptual
processes or personality characteristics.
B. Sociology. Sociology is the study of social behavior, relationships among social groups and
societies, and the maintenance of social order. The main focus of attention is on the social system. This
helps us to appreciate the functioning of individuals within the organization which is essentially a
socio-technical entity.

C. Social psychology. Social psychology is the study of human behaviour in the context of social
situations. This essentially addresses the problem of understanding the typical behavioral patterns to be
expected from an individual when he takes part in a group.
D. Anthropology. Anthropology is the science of mankind and the study of human behaviour as a
whole. The main focus of attention is on the cultural system, beliefs, customs, ideas and values within a
group or society and the comparison of behaviour among different cultures. In the context of today's
organizational scenario. It is very important to appreciate the differences that exist among people
coming from different cultural backgrounds as people are often found to work with others from the
other side of the globe.
E. Economics. Any organization to survive and sustain must be aware of the economic viability of
their effort. This applies even to the non-profit and voluntary organizations as well.
F. Political Science. Although frequently overlooked, the contributions of political scientists are
significant to the understand arrangement in organizations. It studies individuals and groups within
specific conditions concerning the power dynamics. Important topics under here include structuring of
conflict, allocation of power and how people manipulate power for individual self-interest etc.
There Are Few Absolutes in OB
Two persons often act very differently in the same situation and the same person’s behaviour often
change in same or different situations.
We can not offer reasonably accurate explanations of human behaviour or make valid predictions.
Challenges and Opportunities for OB
1. Responding to Globalization
2. Managing work force diversity
3. Improving quality and productivity
4. Responding to the coming labor shortage
5. Responding to outsourcing
6. Improving customer service
7. Improving people skills
8. Empowering people
9. Stimulating innovation and change
10.Coping with temporariness (organization be fast and flexible to survive)
11.Working in networked organization

12.Helping employees work balance life
13.Improving ethical behavior
Globalization
When organization extends its activities to other parts of the world, actively participates in other
markets and competes against organizations located in other countries.
Important considerations from OB perspective:
Understanding Global Differences
Companies must learn about many different kinds of factors when they operate globally.
First, there are the considerable problems of understanding OB in different global settings. Evidence
suggests that people in different countries have different values, beliefs, and attitudes about the value of
the jobs they perform and the organizations they work for. For example, U.S. employees have an
individualistic orientation toward work while Japanese employees have a collectivist orientation and
this cultural difference affects employees’ personal work behavior, their behavior in groups, and their
commitment and loyalty to an organization.
OB becomes especially complex at a global level because the attitudes, aspirations, and values of the
workforce differ by country. For example, most U.S. employees are astonished to learn that in Europe
the average employee receives from 4 to 6 weeks paid vacation a year. In the United States, a
comparable employee receives only 1 or 2 weeks. Similarly, in some countries, promotion by seniority
is the norm, but in others, level of performance is the main determinant of promotion and reward.
Understanding the differences between national cultures is important in any attempt to manage
behavior in a global organization.
Second, problems of coordinating the activities of an organization to match its environment become
much more complex as an organization’s activities expand across the globe.
Third, in many cases global organizations locate in a particular country abroad because this allows
them to reduce operating costs
Companies like Levi Strauss, which made all their clothing in the United States 20 years ago, now
outsource virtually all their clothing to companies abroad in order to reduce costs and remain
competitive.
GLOBAL LEARNING: The process of acquiring and learning the skills, knowledge, and
organizational behaviors and procedures that have helped companies abroad become major global
competitors.
To respond to the global challenge, more and more companies are rotating their employees and moving
them to their overseas operations so they can learn firsthand the problems and opportunities that arise
when working in countries overseas. Expatriate managers are those who live and work for
companies in countries abroad. There are many ways they can help their companies develop improved
OBs and procedures.

First, expatriate managers can learn about the sources of low-cost inputs and the best places to
assemble their products throughout the world.
Second, expatriate managers in functions such as research and development, manufacturing, and sales
can take advantage of their presence in a foreign country to learn the skills and techniques used by that
country’s companies.
(EXPATRIATE MANAGERS The people who work for a company overseas and are responsible for
developing relationships with organizations in countries around the globe.)
Many companies also use global virtual teams to increase global learning
Global Crisis Management
Extensive global learning allows for more effective responses to the increasing number of crises or
disasters that are occurring from natural or manmade causes or because of international terrorism and
geopolitical conflicts.
Crises that arise because of natural causes include the wave of hurricanes, tsunamis, earthquakes,
famines, and diseases that could devastated.
Manmade crises, such as those that are the result of global warming, pollution, and the destruction of
the natural habitat or environment, also seem to be increasing.
Finally, increasing geopolitical tensions that are the result of the speed of the process of globalization
have upset the global balance of power as different countries or world regions try to protect their own
economic and political interests.
OB has an important role to play in helping people and organizations respond to such crises, for it
provides lessons as to how to manage and organize the resources needed to respond to a crisis. As we
discuss in later chapters, crisis management involves important decisions such as:
(1) creating teams to facilitate rapid decision making and communication,
(2) establishing the organizational chain of command and reporting relationships necessary to
mobilize a fast response,
(3) recruiting and selecting the right people to lead and work in such teams, and
(4) developing bargaining and negotiating strategies to manage the conflicts that arise whenever
people and groups have different interests and objectives. How well managers make these
decisions determines how quickly an effective response to a crisis can be implemented and
sometimes can prevent or reduce the severity of the crisis itself.
Dealing with a Diverse Workforce
A second social and cultural challenge is to understand how the diversity of a workforce affects OB.
Diversity results from differences in age, gender, race, ethnicity, religion, sexual orientation,
socioeconomic background, and capabilities or disabilities.

If an organization or group is composed of people who are all of the same gender, ethnicity, age,
religion, and so on, the attitudes and behavior of its members are likely to be very similar.
Members are likely to share the same attitudes or values and will tend to respond to work situations
(projects, conflicts, new tasks) in similar ways.
By contrast, if the members of a group differ in age, ethnicity, and other characteristics, their attitudes,
behavior, and responses are likely to differ as well.
The increasing diversity of the workforce presents three challenges for organizations and their
managers: a fairness and justice challenge, a decision-making and performance challenge, and a
flexibility challenge.
a fairness and justice challenge
Managers are challenged to allocate jobs, promotions, and rewards in a fair and equitable manner.
Increasing diversity can strain an organization’s ability to satisfy the aspirations of all the diverse
groups in its workforce—and this can create problems that, in turn, affect the well-being of employees
and organizational performance.
Deciding how to promote diversity to increase employee well-being and organizational performance
poses difficult ethical problems for managers.
DECISION-MAKING AND PERFORMANCE CHALLENGE
Another important challenge posed by a diverse workforce is how to take advantage of differences in
the attitudes and perspectives of people of different ages, genders, or races, in order to improve
decision making and raise organizational performance.
Many organizations have found that tapping into diversity and taking advantage of the potential of
diverse employees, leads to new and improved OBs and procedures.
FLEXIBILITY CHALLENGE
A third diversity challenge is to be sensitive to the needs of different kinds of employees and to try
to develop flexible employment approaches that increase employee well-being. Examples of some of
these approaches include the following:
● New benefits packages customized to the needs of different groups of employees such as single
employees with no children and families, gays and lesbians in long-term committed relationships, and
employees caring for aged parents or disabled children
● Flexible employment conditions (such as flextime or working from home) that give employees input
into the length and scheduling of their workweek
● Arrangements that allow for job sharing so that two or more employees can share the same job (to
take care of children or aged parents, for example)
● Designing jobs and the buildings that house organizations to be sensitive to the special needs of
handicapped employees (and customers)

● Creating management programs designed to provide constructive feedback to employees about their
personal styles of dealing with minority employees
● Establishing mentoring relationships to support minority employees
● Establishing informal networks among minority employees to provide social support
Improving People Skill
Previously, world economy was based in agriculture and then moved towards industry based.
Today most of the developed country’s economy is based on knowledge and service sector.
This trend has cut backs managerial ranks, decentralized decision making, increased responsibilities to
employees, participation, team work, increased automation and so on.
Increased competition and quality awareness have demanded high level skills and knowledge.
Employees must trained and re-educated.
More importantly, managers must become more responsive to the needs of their skilled employees to
keep them from going to work for the competitor.
Empowerment of Employees
Previously, people worked under the tight control of their bosses, supervisors, or managers.
Today managers are encouraged to work as coaches, advisors, facilitators, team leaders so as to
compte in the market place and to satisfy employee demands.
(give a person a fish, and you feed that person for a day; Teach the person to fish, and you feed that
person for life)
The trend is towards the use of self managed work teams, quality circles, self appraisal, MBO etcs.
Managing Organizational Change
Managers must be prepared to introduce organizational change—a compulsion not a choice.
This has always been concern, but the rapid, constant environmental change faced by businesses today
has made change management even more critical.
Organizations have adopted many different programs like re-organization of departments, disposal of
poor performing units, downsizing, employee outsourcing etcs.
Managers and employees must prepare themselves flexible enough to cope with the change.
The study of OB can provide important insights into helping us better understand a work-world of
continual change, how to overcome resistance to change, how best to create organizational culture that
thrives on change.

Improving Ethical Behavior
It is the individual personal belief regarding what is right and wrong or good and bad.
Members of organizations are increasingly finding themselves facing ethical dilemmas, situation in
which they are required to define right and wrong conduct.
What is ethical in one organization time or place, may not be so in another organization, time or place.
What constitutes a good ethical behavior has never been clearly defined.
To solve this problem, managers are writing and distributing codes of ethics to guide employees
through ethical dilemmas.
They are offering seminars, workshops, and similar training programs to try to improve ethical
behaviors.
 Responding to Globalization
 Increased foreign assignments
 Working with people from different cultures
 Coping with anti-capitalism backlash
 Overseeing movement of jobs to countries with low-cost labor
 Managing people during the war on terror.
 Managing Workforce Diversity
 Embracing diversity
 Changing U.S. demographics
 Implications for managers
 Recognizing and responding to differences
Challenges and Opportunities for OB (cont’d)
 Improving Quality and Productivity
 Quality management (QM)
 Process reengineering
 Responding to the Labor Shortage
 Changing work force demographics
 Fewer skilled laborers
 Early retirements and older workers

 Improving Customer Service
 Increased expectation of service quality
 Customer-responsive cultures
Major Workforce Diversity Categories
What Is Quality Management?
1. Intense focus on the customer.
2. Concern for continuous improvement.
3. Improvement in the quality of everything the organization does.
4. Accurate measurement.
5. Empowerment of employees.
Challenges and Opportunity for OB (cont’d)
 Improving People Skills
 Empowering People
 Stimulating Innovation and Change
 Coping with “Temporariness”
 Working in Networked Organizations
 Helping Employees Balance Work/Life Conflicts
 Improving Ethical Behavior
 Managing People during the War on Terrorism
Developing an OB Model
A model is an abstraction of reality, a simplified representation of some real world phenomenon. E.g.
A/c formula.
The skeleton on which we will construct our OB model.
Developing an OB Model
This proposed that there are three level of analysis in OB and that, as we move from the individual
level to the organization system level.
We add systematically to our understanding of behavior in organizations.
Three basic levels are analogous to building blocks, each level is constructed on the previous level.

Group Concepts grow out of the foundation laid in the individual section.
We overlay structural constraints on the individual and group in order to arrive at OB.
The Dependent Variables
It is the key factor that you want to explain or predict and that is affected by some other factor.
The primary dependent variables of OB?
1. Productivity
2. Absenteeism
3. Turnover
4. Job satisfaction
5. Deviant work place behavior
6. Organizational citizenship behavior.
The Dependent Variables
Productivity: An organization is productive if it achieves its goals and does so by transferring inputs
to outputs at the lowest cost.
Productivity implies a concern for both effectiveness and efficiency.
So, one of the major concern in OB is productivity.
We want to know what factors will influence the effectiveness and efficiency of individuals, groups
and the overall organization.
Efficiency vs. effectiveness
Efficiency
Doing things right
Getting the most output from the least amount of input.
Means (resource uses)
Effectiveness
Doing right things
Completing activities so that organizational goals are attained.
Ends (goal attainment)
Absenteeism: It is defined as the failure to report to work resulting huge cost and disruption on
employers.

It is obviously difficult for an organization to operate smoothly and to attain its objectives if employees
fail to report to their job.
The work flow is disrupted and often important decisions must be delayed.
Are all absences bad????? Probably not…(jobs on which employees needs to be alert)
For the most part, we can assume that organizations benefit when employee absenteeism is low.
Turnover: It is the voluntary and involuntary permanent withdrawal from an organization.
A high turnover rate results in increased recruiting, selection and training costs.
if the right people are leaving the organization, this turnover can actually be positive because it can
create the opportunity to replace underperforming individuals with someone who has higher skills,
motivation and add new and fresh ideas to the organization.
But turnover often involves the cost of people the organization doesn’t want to loose.
When turnover is excessive or when it involves valuable performers, it can be disruptive factor,
hindering the organization’s effectiveness.
Deviant workplace behavior: voluntary behavior that violates significant organizational norms and, in
doing so, threatens the wellbeing of the organization or its members.
Also called antisocial behavior or workplace incivility.
For e.g. playing loud music, insulting others, steal, gossip excessively, engage in sabotage etc.
Deviant workplace behavior is an important concept because it’s a response to dissatisfaction, and
employee express this in many ways.
Controlling one behavior may be ineffective unless one gets to the root cause.
The manager will deal with root causes of problems that may result in deviance rather than solving
surface problem.
Organizational Citizenship Behavior (OCB): it is discretionary behavior that is not part of an
employee’s formal job requirements, but that nevertheless promotes the effective functioning of the
organization.
Successful organization need employees who will provide performance that is beyond expectations.
OCB for e.g: helping others on their team, volunteering for extra work, avoiding unnecessary conflicts,
respecting sprit, following rules and regulation, gracefully tolerating the occasional work-related
impositions.
As a result OB is concerned with OCB as a dependent variable.
Job Satisfaction: Positive feeling about job resulting from an evaluation of its characteristics.
It represents attitude rather than a behavior.

Two reasons behind taking it as dependent variable:
1. Its demonstrated relationship to performance factors.
2. Value preferences held by many OB researchers.
Although, job satisfaction represents an attitude rather than a behavior, OB researchers typically
consider it an important dependent variable.
The Independent Variables
The major determinants of productivity, absenteeism, turnover, deviant workplace behavior, OCB, and
job satisfaction is undoubtedly Independent Variables.
Independent variable is the presumed cause of some change in dependent variable.
OB can be best understood when viewed essentially as a set of increasingly complex building blocks,
the base, or first level , of our model lies in understanding individual behavior, then group and finally
organization system level.
Individual Level Variables: it has been said that managers, unlike parents, must work with used, not
new, human beings.
When individuals enter in organization, they are a bit like used cars(having different mileage).
This means people enter organizations with certain intact characteristics that will influence their
behavior at work.
These are: - personal or biographical characteristics such as age, gender, marital status, personality
characteristics, emotion, values & attitudes, basic ability levels, perception, individual decision making,
learning and motivation.(we will discuss these as independent variables in later chapter)
The Group Level Variables: the behavior of people in group is more than the sum total of all the
individuals acting in their own way.
The complexity of our model is increased when we acknowledge that people behavior when they are in
group.
We discuss, how individuals in groups are influenced by the patterns of behavior they are expected to
exhibit, what the group considers to be acceptable standards of behavior, the degree to which group
members are attracted to each other, communication patterns, leadership, power and politics and level
of conflict affect group behavior.
Organizational System Level Variables: OB reaches its highest level of sophistication when we add
formal structure to our previous knowledge of individual and group behavior.

Just as groups are more than the sum of their individual members, so are organizations more than the
sum of their member groups.
The design of formal organization, the organization’s internal culture, organization's human resource
policies and practices.
All have an impact on the dependent variables which we will discuss in later chapter too.

MODELS OF ORGANISATION BEHAVIOUR
Organizations differ in the quality of organizational behaviour that they develop. These differences are
substantially caused by different models of organizational behaviour that dominant management's
thought in each organization. The model that a manager holds usually begins with certain assumptions
about people and thereby leads to certain interpretations of organizational events.
The following four models of organizational behaviour are as follows:
A. Autocratic model
B. Custodial model
C. Supportive model
D. Collegial model
Autocratic Model
In an autocratic model', the manager has the power to command his subordinates to do a specific job.
Management believes that it knows what is best for an organization and therefore, employees are
required to follow their orders. The psychological result of this model on employees is their increasing
dependence on their boss. Its main weakness is its high human cost.
Custodial Model
This model focuses better employee satisfaction and security. Under this model organizations satisfy
the security and welfare needs of employees. Hence, it is known as custodian model. This model leads
to employee dependence on an organization rather than on boss. As a result of economic rewards and
benefits, employees are happy and contented but they are not strongly motivated.
Supportive Model
The supportive model depends on 'leadership' instead of power or money. Through leadership,
management provides a climate to help employees grow and accomplish in the interest of an
organization. This model assumes that employees will take responsibility, develop a drive to contribute
and improve them if management will give them a chance. Therefore, management's direction is to
'Support' the employee's job performance rather than to 'support' employee benefit payments, as in the
custodial approach. Since management supports employees in their work, the psychological result is a
feeling of participation and task involvement in an, organization.
Collegial Model
The term 'collegial' relates to a body of persons having a common purpose. It is a team concept.
Management is the coach that builds a better team. The management is seen as joint contributor rather
than as a boss. The employee response to this situation is responsibility. The psychological result of the
collegial approach for the employee is 'self-discipline'. In this kind of environment employees normally
feel some degree of fulfillment and worthwhile contribution towards their work. This results in
enthusiasm in employees' performance.

It is wrong to assume that a particular model is the best model. The selection of model by a manager is
determined by a number of factors such as, the existing philosophy, vision and goals of manager. In
addition, environmental conditions help in determining which model will be the most effective model.
Limitations of organizational behaviour.
1. Organizational behaviour cannot abolish conflict and frustration but can only reduce them. It is a
way to improve but not an absolute answer to problems.
2. It is only one of the many systems operating within a large social system.
3. People who lack system understanding may develop a 'behavioral basis', which gives them a
narrow view point, i.e., a tunnel vision that emphasizes on satisfying employee experiences while
overlooking the broader system of an organization in relation to all its public.
4. The law of diminishing returns also operates in the case of organizational behaviour. It states,
that at some point increase of a desirable practice produce declining returns and sometimes, negative
returns. The concept implies that for any situation there is an optimum amount of a desirable practice.
When that point is exceeded, there is a decline in returns. For example, too much security may lead to
less employee initiative and growth. This relationship shows that organizational effectiveness is
achieved not by maximizing one human variable but by working all system variables together in a
balanced way.

UNIT-2: Foundation of Individual Behavior
All organizations are composed of individuals. No organization can exist without individuals. Human
behavior, which is; considered a complex phenomenon, is very difficult to define in absolute terms. It
is primarily a combination of responses to external and internal stimuli. These responses would reflect
psychological structure of the person and may be results' of the combination of biological and
psychological processes, which interpret them, respond to them in an appropriate manner and learn
from the result of these responses.
Psychologist Kurt Levin has conducted considerable research into the human behavior and its causes.
He believes that people are influenced by a number of diversified factors, which can be both genetic
and environmental. The influence of these factors determines the pattern of human behavior.
An individual makes a variety of contributions to an organization in the form of—efforts, skills, ability,
time, loyalty and so forth. These contributions presumably satisfy various needs and requirements of
the organization. In return for contributions, the organization provides incentives such as pay,
promotion, and job security to the employee. Just as the contributions available from the individual
must satisfy the organization's needs, the incentives must serve the employees' needs in return.
If both the individual and the organization consider the psychological contract fair and equitable, they
will be satisfied with the relationship and are likely to continue it. If either party perceives an
imbalance or iniquity in the contract, it may initiate a change. A major challenge faced by an
organization, thus, is to manage the psychological contracts.
One specific aspect of managing psychological contracts is managing the person-job fit. The 'person-
job fit' is the extent to which the contributions made by the individual match the incentives offered by
the organization. The behavior of individuals in organization is the primary concern of management
and it is essential that the managers should have an understanding of the factors influencing the
behavior of the employees they manage. The figure 5.1 identifies five sets of factors that have an
impact upon individual behavior in organizations.
NATURE OF INDIVIDUAL DIFFERENCES
Individual differences are personal attributes that vary from one person to another. Individual
differences may be physical and psychological. The following figure shows the attributes of physical
and psychological differences.
Physical Differences Psychological Differences
Height Personality
Weight attitudes
Body Shape Perception
Appearance Motivation
Complexion Learning

Foundation of Individual Behavior
• People of course differ in many ways, so those differences results varying degree of individual
behaviors.
• Ability, Personal or biographical characteristics such as age, gender, tenure, personality
characteristics, emotion, values & attitudes, basic ability levels, perception, individual
decision making, learning and motivation.
Ability: an individual’s capacity to perform the various tasks in a job.
• An individual’s overall abilities are essentially made up of two sets of factors: intellectual and
physical
Intellectual abilities: the capacity to do mental activities– thinking, reasoning and problem solving.
• People in most societies place a high value on intelligence.
• Generally smart people earn more money and attain higher level of education and also emerge
as a leader.
• the more complex a job is in terms of information processing demands the more intelligence will
be necessary to perform a job.
Why intellectual people are better performer?
• They are more creative,
• They learn jobs more quickly,
• They are more adaptable to changing circumstances
• They are better at inventing solutions that improve performance
(you can teach smart or intelligent people anything)
• The seven most frequently cited dimensions making up intellectual abilities are :
• Explanation
Intellectual abilities:
Interestingly, while intelligence is a big help in performing a job well, it doesn’t make people happier
or more satisfied with their jobs.
• The correlation between intelligence and job satisfaction is almost about zero.
• Research suggests that although intelligent people perform better and tend to have more
interesting job.
• Thus smart people have it better, but they also expect more.

Some researchers believe that intelligence can be better understood by breaking it down into
four sub parts.
i. Cognitive intelligence: the psychological result of perception and learning and reasoning–
classical based.
ii. Social intelligence: person’s ability to relate effectively to others.
iii. Emotional intelligence: the ability to identify, understand, and manage emotion.
iv. Cultural intelligence: awareness of cross cultural differences and ability to function successfully
in cross-cultural situations.
Physical Abilities: the capacity to do tasks demanding stamina, dexterity(skill of using one’s hands),
strength and similar characteristics.
• Specific physical abilities gain importance for successfully doing less-skilled jobs.
• Research on the requirements needed in hundreds of jobs has identified, nine basic abilities
involved in the performance of physical tasks are:
• Nine Physical Abilities
• Explanation
• The Ability-Job Fit
Ability--Job Fit
• Our concern is with explaining and predicting the behavior of people at work.
• Employee performance is enhanced when there is a high ability-job fit.
• The specific intellectual or physical abilities required for adequate job performance depend on
the ability requirements of the job.
Ability--Job Fit (e.g.)
• Airline pilot need strong spatial visualization abilities,
• Beach lifeguards need both strong spatial visualization and body coordination
• Senior executive need verbal abilities
• Journalist need strong reasoning abilities

Factors Influencing Individual Behaviour
1. Personality-personality traits
2. Economic factors-wage rate, technological change, the job, economic outlook, employment
opportunity etc.
3. Socio-cultural factors-social environment consist of relation with friends, relatives, co-workers,
superiors, subordinates etc.
4. Cultural factors- basic values, perceptions, work ethics, preferences etc.
5. Organizational factors- structure, hierarchy, resources, leadership, support etc, from organization
6. Motivation- internal motivation (individual skill, ability, intelligence etc.) external
(incentives, training etc.)
7. Attitudes- perception favorably or unfavorably.
8. Values- personally or socially preferable.
9. Abilities- actual skills and capabilities of a person and physical-mental ability
10. Perception- is the viewpoint which one interpret a situation.
11. Personal factors- age, sex, education, intelligence, marital status, religion etc.
Foundation of Individual Behavior
Biographical Characteristics/Personal Characteristics
• Biographical characteristics would be an employee’s age, gender, race and length of service
with an organization.
• Fortunately, there is a sizable amount of research that has specifically analyzed many of these
biographical characteristics.
Age
• The relationship between age and performance is likely to be an issue of increasing importance
because:
i. There is widespread belief that job performance declines with the increasing age.
ii. The workforce is young or aging.
What is the perception of older workers?

Employers hold mixed feelings
• They see a number of positive qualities that older workers bring to their job:
• Specifically, experience, judgment, a strong work ethic, and commitment to quality.
• But older workers are also perceived as lacking flexibility and as being resistant to new
technology.
What effect does age actually have on turnover, absenteeism, productivity, and satisfaction?
Age-turnover relationship
• The older you get, the less likely you are to quit your job.
• As the worker gets older, they have fewer alternative job opportunities because their long tenure
tends to provide them with higher wage rates, longer paid vacations, and more attractive pension
benefits.
Age-absenteeism relationship
• If older workers are less likely to quit, won’t they also demonstrate higher stability by coming to
work more regularly? Probably not..
• In general, older employees have lower rates of avoidable absence than do younger employees.
• They have higher rates of unavoidable absence, probably due to the poorer health associated
with aging and the longer recovery period that older workers need when injured.
Age-productivity relationship
• There is widespread belief that productivity declines with age.
• It is often assumed that an individual’s skills– particularly speed, agility, strength, and
coordination– decay(a gradual decrease) over the time.
 But other reviews of research find that age and job performance are unrelated.
 Their conclusion is that if there is some decay due to age, it is offset by gains due to experience.
Age- job satisfaction relationship
• Most studies indicate a positive association between age and satisfaction at least up to 60.
• Other studies have found a U-shaped relationship.
• When two types(professional and nonprofessional) are separated, satisfaction tends to
continually increase among professional as their age, where as it falls among nonprofessionals
during middle age then rises again in the later years.

Gender
• The research on working women in general tells us that there are very few differences between
men and women that affect job performance.
• Thus, men and women show no consistent differences in their problem-solving abilities,
analytical skills, competitive drive, motivation, learning ability, or sociability.
• However, women are reported to have lower expectations of success than men do.
• And, women’s absenteeism rates tend to be higher than those of men.
• One issue that does seem to differ between genders, especially when the employee has preschool
age children, is preference for work schedules.
• Working mothers are more likely to prefer part-time work, flexible work schedules, and
telecommuting in order to accommodate their family responsibilities.
TIPS IN DEALING WITH MALE AND FEMALE MANAGERS
• Do not assume that male and female managers differ in personal qualities.
• Make sure that policies, practices, and programs minimize gender differences in managers’ job
experiences.
• Do not assume that management success is more likely for either females or males.
• Recognize that there will be excellent, good, and poor managers within each gender.
• Understand that success requires the best use of human talent, regardless of gender.
Race: biological heritage people identify themselves.
• Race has been studied quite a bit in OB, particularly as it relates to employment outcomes such
as personal selection decisions, performance evaluation, pay and workplace discrimination.
• Doing justice to all of this research is not possible.
• In employment settings, there is a tendency for individuals to favor colleagues for their won race
in performance evaluation, promotion decisions and pay, and workplace discrimination.
• There are substantial racial differences in attitude toward affirmative action.
• The major dilemma faced by employers who use mental ability tests for selection, promotion,
training, and similar personnel decision is concern that they may have a negative impact on
racial and ethnic group.
• E.g. African American generally face worse than the Whites in employment decisions– African
American receive lower ratings in employment interviews, are paid less, and are promoted less
frequently.
• However, the issue of racial differences in performance ability continue to be hotly debated.

Tenure
• The last biographical characteristic we will look at is tenure.
Impact of seniority on job performance
• If we define seniority as time on a particular job, we can say that a positive relationship between
seniority and job productivity.
• So tenure, expressed as work experience, appears to be a good predictor of employee
productivity.
• The research relating tenure to absence is negatively related.
• Turnover– the longer a person is in a job, the less likely he or she is to quit.
• Job satisfaction– tenure and job satisfaction are positively related.
THEORIES OF LEARNING
Learning is an important psychological process that-determines human behavior. Simple way,
“learning is something we did when we went to school “it is permanent changing behavior through
education and training, practice and experience. Learning can be defined as “relatively permanent
change in behavior that occurs as a result of experience or reinforced practice". There are four
important points in the definition of learning:
1. Learning involves a change in behavior, though this change is not necessarily an improvement
over previous behavior. Learning generally has the connotation of improved behavior, but bad
habits, prejudices, stereotypes, and work restrictions are also learned.
2. The, behavioral change must be relatively permanent. Any temporary change in behavior is not
a part of learning.
3. The behavioral change must be based on some form of practice or experience.
4. The practice or experience must be reinforced in order so as to facilitate learning to occur.
Any relatively permanent change in behavior that occurs as a result of practice and experience.
• If we want to explain and predict behavior, we need to understand how people learn.
• We infer that learning has taken place if an individual behaves, reacts, responds as a result of
experience (Observation, Practice or reading) in a manner different from the way he/she
formerly behaved.
• In this section, we define learning, present three different popular learning theories, and describe
how managers can facilitate employee learning.
Definition of Learning
Generally accepted definition of learning: Any relatively permanent change in behavior that occurs as
a result of experience.

Kingley and Garry:- learning is the process by which behavior (in the broad sense) is originated or
changes through practice or training
Kingley and Garry:- learning is the process by which behavior (in the broad sense) is originated or
changes through practice or training.
Henry p. smith: - learning is the acquisition of new behavior or strengthening or weakening of old
behavior as the result of experience.
To Learn - to gain knowledge or skill by studying, practicing, being taught, or experiencing
something.
To Study - to read, memorize facts, attend school, etc., in order to learn about a subject.
It seems that studying is the action to reach the goal of learning.
Learning
• In order to cope with changing environment and new technology, employers have to be prepared
by making employee more competitive.
• Learning is directly related to the development, maintenance and change of employee work
behaviors to achieve the goal of the organization.
• When desired behavior deviates from the desired goals of the organization, it is necessary to
control such behavior with the help of training and development– a learning process.
• However, learning is more than training and development, the powerful learning comes from
direct experience.
Factors Influencing Learning
1. Distribution of knowledge and information: senior managers have more access to knowledge and
information about the organization and its resources.
• Attitude of senior managers largely determines individual learning in organization.
2. Reward for learning: employees’ learning should be rewarded giving opportunity to work in
challenging jobs, by promoting upward position and personality development.
• The role of manager is important to reward learning in a job.
3. Support for learning: organizational climate influences job-related attitudes and behavior.
• Employees working in organization respond with proper job attitude when organizational
climate is favorable and thus it helps to individual learning.
• In an organizational culture learning is to lead to innovation and long term performance
improvement.
4. Motivation and prior experience:

• An individual’s motivation to learn and his experience on the job determine learning
willingness.
• Individual motivation to engage in the process of learning is also determined by available of
information of information and supportive learning environment.
5. Opportunities to practice:
• to achieve a higher level of skill, there is a need for workers to acquire knowledge and have
opportunities to practice
Significance of Learning for People
• For people, learning changes the behavioral orientation such as knowledge, skills, values,
personality and competency etc.
• Through learning individual re-create himself.
• Through learning individual able to do something he/she never was able to do.
1. To understand and predict behavior of the people at work
2. To manage and work in diversity
3. To adapt to the changing technology
4. Total quality management
5. To facilitate organizational change and development
Learning Theories
How do we learn? Three theories have been offered to explain the process by which we acquire
patterns of behavior. These are:
1. Classical Conditioning
2. Operant conditioning
3. Social learning
4. Cognitive Learning
Classical Conditioning
• Experiment done by the Russian Physiologist Ivan Pavlov in early 1900s.
• Experiment was interlinked with the salivation of dog with the conditional stimulus(bell) and
unconditional stimulus (Meat).
•

Key Concepts
 Unconditioned stimulus e.g. Meat
 Unconditioned response e.g. Salivation
 Conditioned stimulus e.g. bell, artificial stimulus
 Conditioned response e.g. salivation after bell rang
Explanation
• When Pavlov presented the dog with a piece of meat, the dog exhibited a noticeable increase in
salivation.
• When he withheld the presentation of and merely rang a bell, the dog did not salivate.
• Then Pavlov proceeded to link the meat and the ringing of the bell.
• After repeatedly hearing the bell before getting the food, the dog began to salivate as soon as the
bell rang.
• After a while, the dog would salivate merely at the sound of the bell even if no food was offered.
• In effect, the dog had learned to respond – i.e., to salivate – to the bell.
Examples in OB (Classical Conditioning)
• At one manufacturing plant, every time the top executives from the head office were scheduled
to make a visit, the plant management would clean up the administrative offices and wash the
windows. This went for years. Eventually, employees would turn on their best behavior and look
prim and proper whenever the windows were cleaned – even in those occasional instances when
the cleaning was not paired with the visit from the top brass. People had leaned to associate the
cleaning of the windows with a visit for the head office.
• Classical conditioning is passive. Something happens and we react in a specific way (stimulus
then only response).
• It is elicited in response to a specific, identifiable event.
• As such, it can explain simple behaviors. But most behavior – particularly the complex behavior
of individuals in organizations – is ignored rather than elicited.
• That’s why classical conditioning is also called as SR(stimulus– response) model
• It is voluntary rather than reflexive.
• The learning of those behaviors is better understood by looking at operant conditioning (R-S).

Operant Conditioning (R-S)
A type of conditioning in which desired voluntary behavior leads to a reward or prevents a punishment.
• Developed by Harvard psychologist B.F. Skinner
• It argues that behavior is a function of its consequences.
• People learn to behave to get something they want or to avoid something they don’t want.
• Operant behavior means voluntary or learned behavior in contrast to reflexive or unlearned
behavior as in S-R.
• This learning model assumes that individuals engage in certain behavior repeatedly when
behavior is reinforced from time to time.
• People will most likely engage in desired behaviors if they are positively reinforced for doing
so.
• Rewards are most effective if they immediately follow the desired response.
• In addition, behavior that is not rewarded, or is punished, isles likely to be repeated.
Example:
• Assume that your boss tells you that if you will work overtime during the next three-week busy
season, you will be compensated for it at the next performance appraisal.
• However, when performance appraisal time comes, you find that you are given no positive
reinforcement for your overtime work.
• The next time your boss asks you to work overtime, what will you do? You’ll probably decline!
Your behavior can be explained by operant conditioning:
If a behavior fails to be positively reinforced, the probability that the behavior will be repeated
declines.
Behavior which is reinforced tends to be repeated (i.e. strengthened); behavior which is not reinforced
tends to die out-or be extinguished (i.e. weakened).
• Skinner’s Box
Learning: Social Learning Theory
Social Learning Theory: the view that people can learn through observation and direct experience.
• Individuals also can learn by observing what happens to other people and just by being told
about something, as well as by direct experiences.

• For e.g., much of what we have learned comes from watching models—parents, teachers, peers,
motion picture and television performers etc.
• This view that we can learn through both observation and direct experience is called social
learning theory.
The influence of models is central to the social-learning viewpoint.
Four processes have been found to determine the influence that model will have on an individual.
1. Attention process: People learn from a model only when they recognize and pay attention to its
critical features.
• We tend to be most influenced by models that are attractive, repeatedly available, important to
us or similar to us in our estimation.
2. Retention process: a model’s influence will depend on how well the individual remembers the
model’s action after the model is no longer readily available.
3. Motor reproduction process: after a person have seen a new behavior by observing the model, the
watching must be converted to doing.
• This process then demonstrates that the individual can perform the modeled activities.
4. Reinforcement process: individuals will be motivated to exhibit the modeled behavior if positive
incentives or rewards are provided.
• Behavior that are positively reinforced will be given more attention, learned better, and
performed more often.
REINFORCEMENT: The process by which the probability that a desired behavior will occur is
increased by applying consequences that depend on the behavior.
Cognitive Learning
Here the primary emphasis is on knowing how events and objects are related to each other. Most of the
learning that takes place in the classroom is cognitive learning. Cognitive learning is important because
it increases the change that the learner will do the right thing first, without going through a lengthy
operant conditioning process.
Learning: Shaping, A Managerial Tool
Shaping, A Managerial Tool
Because learning takes place on the job as well as prior to it, managers will be concerned with how
they can teach employees to behave in ways that most benefit the organization.
• We shape behavior by systematically reinforcing each successive step that moves the individual
closer to the desired response.
• Reinforcement would increase as responses more closely approximated the desired behavior.

Methods of Shaping Behavior (four ways)
• Positive reinforcement (Employee is praised for cleaning up work station)-increases the
probability of desired behavior
– Providing a reward for a desired behavior.
• Negative reinforcement (Supervisor complains about messy work station and stops only when
worker cleans it)- increases the probability of desired behavior
– Removing an unpleasant consequence when the desired behavior occurs.
• Punishment (Manager criticizes subordinate for telling disruptive jokes when the two have
important matters to discuss)- decreases the probability of undesired behavior
– Applying an undesirable condition to eliminate an undesirable behavior.
• Extinction (Manager refrains from laughing at a subordinate’s disruptive jokes when the two
have important matters to discuss)- decreases the probability of undesired behavior
– Withholding reinforcement of a behavior to cause its cessation.
When behavior is not reinforced it tends to be gradually extinguished.
Schedules of Reinforcement
1. Fixed-interval: when rewards are spaced at uniform time intervals.
• The critical variable is time, and it is held constant.
E.g. compliments by boss.
2. Variable interval type: if rewards are distributed in time so that reinforcements are unpredictable.
• E.g. a series of randomly timed unannounced visits to a company office by the corporate audit
staff.
3. Fixed-ratio: after a fixed or constant number of responses are given, a reward is initiated.
e.g. a piece rate incentive plan.
4. Variable-ratio: when the reward varies relative to the behavior of the individual.
e.g. salespeople on commission, i.e. number of successful call.

Behavior modification in organization (OB Mod)
• Learning theory alone has important implications for managers, but organizational behavior
modification has even more practical applications.
• Organizational behavior modification is an important application of reinforcement theory some
managers use to enhance motivation and performance.
• OB Mod in organizations is the application of reinforcement theory to people in organizational
settings.
• Reinforcement theory says that we can increase the frequency of desirable behaviors by linking
those behaviors with positive consequences.
• OB mod characteristically uses positive reinforcement to encourage desirable behaviors in
employees.
• Implementing an OBM program, steps
– Step 1: Identify desired performance behaviors
– Step 2: Determine the base rate of performance
– Step 3: Identify existing contingencies
– Step 4: Select an intervention strategy
– Step 5: Evaluate
1. Identify performance related behavioral events: i.e. desirable and undesirable behaviors.
2. The manager measures baseline performance:
3. Identify the existing behavioral contingencies: if an employee works hard, does he/she get a reward
or just get tired?
4. Manager develops and applies an appropriate intervention strategy: some elements of
performance—reward linkage to make high level of performance more rewarding. Various kinds of
positive reinforcement are used.
5. The manager again measures performance to determine whether the desired effect has been
achieved. If not, the manager must redesign the intervention strategy. if performance has increased, the
manager must try to maintain the desirable behavior through some schedule of positive reinforcement.
6. Finally, the manager looks for improvements in individual employees’ behavior. Here the emphasis
is an offering significant longer term rewards, such as promotions and salary adjustments, to sustain
ongoing efforts to improve performance.

ATTITUDE AND PERCEPTION
In simple words, an "attitude" is an individual's point of view or an individual's way of looking at
something. To be more explicit, an "attitude" may be explained as the mental state of an individual,
which prepares him to react or make him behave in a particular pre-determined way. it is actually
acquired feeling.
An attitude is defined as, "a learned pre-disposition to respond in a consistently favourable or
unfavorable manner with respect to a given object".(Katz and Scotland)
Attitude is the combination of beliefs and feelings that people have about specific ideas, situations or
other people. Attitude is important because it is the mechanism through which most people express
their feelings.
COMPONENTS OF ATTITUDE
• Affective component
• Cognitive component
• Intentional component
The affective component of an attitude reflects 'feelings and emotions' that an individual has towards a
situation. The cognitive component of an attitude is derived from 'knowledge' that an individual has
about a situation. Finally, the intentional component of an attitude reflects how an individual 'expects to
behave' towards or in the situation. For example, the different components of an attitude held towards a
firm, which supplies inferior products and that too irregularly could be described as follows:
 I don't like that company"—Affective component.
 "They are the worst supply firm I have ever dealt with"—Cognitive component.
 "I will never do business with them again"'—Intentional component.
People try to maintain consistency among the three components of their attitudes. However,
conflicting circumstances often arise. The conflict that individuals may experience among their own
attitudes is called 'cognitive dissonance.
Attitude has three components, which are as follows:
Attitudes are evaluative statements –either favorable or unfavorable concerning objects, people or
events.
• Attitudes are complex. If you ask people about their attitude toward ….you may get a simple
response, but the reasons underlying the response are probably complex.
• In order to fully understand attitude, we need to consider their fundamental properties.
• Attitude

We will discuss six questions about attitude that will help us to understand better.
1. What are the main components of attitude?
2. How consistent are attitude?
3. What are the major job attitude?
4. How are employee attitude measured?
5. What is the importance of attitudes to workplace diversity?
What are the main components of attitude?
• Typically, researchers have assumed that attitudes have three components
1. Cognitive component
2. Affective component
3. Behavioral component
Cognitive component: (evaluation)
• It refers that's part of attitude which is related in general know how of a person,
• for example, he says smoking is injurious to health, the belief that discrimination is wrong
• Such type of idea of a person is called cognitive component of attitude.
(my supervisor gave a promotion to a coworker who deserved it less than me. My supervisor is unfair.)
Affective component: (feeling)
• This part of attitude is related to the statement which affects another person.
• For example, in an organization a personal report is given to the general manager. In report he
point out that the sale staff is not performing their due responsibilities.
• It is emotional or feeling segment of an attitude and is reflected in the statement “I don’t like
HIM” because he discriminates against minorities.
• This can lead to behavioral outcomes.
(I dislike my supervisor!)
The behavioral component: (action)
• It refers to an intention to behave in a certain way toward someone or something.
• I might choose to avoid HIM because of my feeling about him.
(I’m looking for another work, I’ve complained about my supervisor to anyone who would listen.)

• Viewing attitudes as made up of three components –cognition, affect, and behavior—is helpful
in understanding their complexity and potential relationship between attitude and behavior.
• In organizations, attitudes are important because of their behavioral component.
• If workers believe for e.g. that supervisors, auditors, bosses etc are all in conspiracy to make
employees work harder for the same or less money, it makes sense to try to understand how they
might be changed.
ATTITUDE FORMATION AND CHANGE
Individual attitude are formed over time as a result of repeated personal experiences with
ideas, situations or people. One of the very important ways to understand individual behaviour
in an organization is that of studying attitude, which is situational specific and learned.
An attitude may change as a result of new information. A manager may have a negative attitude
about a new employee because of his lack of job-related experience. After working with a new
person, a manager may come to realize that he is actually very talented and subsequently may
develop a more positive attitude toward him.
Work-Related Attitudes
People in an organization form attitude about many things such as about their salary, promotion
possibilities, superiors, fringe benefits, food in the canteen, uniform etc. Especially some
important attitudes are job satisfaction or dissatisfaction, organizational commitment and job
involvement.
Job Satisfaction
Job satisfaction is an attitude reflects the extent to which an individual is gratified or fulfilled .by
his or her work. Extensive research conducted on job satisfaction has indicated that personal
.factors such as an individual's needs and aspirations determine this attitude, along with group
and organizational factors such as relationships with co-workers and supervisors, working
conditions, work policies and compensation.
A satisfied employee also tends to be absent less often, makes positive contributions, and stays
with the organization. In contrast, a dissatisfied employee may be absent more often may
experience stress that disrupts co-workers, and may keep continually look for another job.
Organizational factors that influence employee satisfaction include pay, promotion, policies and
procedures of the organizations and working conditions. Group factors such as relationship with
co-workers and supervisors also influence job- satisfaction. Similarly, satisfaction depends on
individual factors like individual's needs and aspirations. If employees are satisfied with their
job, it may lead to low employee turnover and less absenteeism and vice-versa.
Organizational Commitment and Involvement
Two other important work-related attitudes arc organizational commitment and involvement.
Organizational commitment is the individual's feeling of identification with and attachment to an
organization. Involvement refers to a person's willingness to be a team member and work beyond the

usual standards of the job. An employee with little involvement is motivated by extrinsic motivational
factor and an employee with strong involvement is motivated by intrinsic motivational factors.
There are a number of factors that lead to commitment and involvement. Both may increase with an
employee's age and years with the organization, with his sense of job security and participation in
decision-making. If the organization treats its employees fairly and provides reasonable rewards and
job security, employees are more likely to be satisfied and committed. Involving employees in
decision-making can also help to increase commitment. In particular, designing jobs, which are
interesting and stimulating, can enhance job involvement.
Sources of attitude
1. Direct personal experience
2. Association
3. Family and per groups
4. Neighborhood
5. Economic status and occupation
6. Mass communication
Attitude: Consistency
How consistent are attitudes?
Did you ever notice how people change what they say so it doesn’t contradict what they do?
• Research has generally concluded that people seek consistency between their attitude and their
behavior.
• Can we also assume from this consistency principle that an individual’s behavior can always be
predicted if we know their attitude on a subject?
• E.g. if an employee views the company’s pay level as too low, will the substantial increase in
his pay change his behavior, that is, make him work harder?
The answer to this question is, unfortunately, more complex than merely a YES or NO.
• In the late 1950s, Leon Festinger proposed the theory of cognitive dissonance (inconsistency).
• This theory explains the linkage between attitude and behavior.
Cognitive dissonance: any incompatibility between two or more attitudes or between behavior and
attitude.
• He argued that any form of inconsistency is uncomfortable and that individuals will attempt to
reduce the dissonance i.e. discomfort.
• Therefore individual will seek a stable state in which there is a minimum of dissonance.

No individual of course can completely avoid dissonance.
The desire to reduce dissonance is determined by :
1. The importance of the elements creating dissonance (attitude on pollution may result loss to the
company)
2. The degree of influence the individual believes he/she has over the elements, and
(because of no choice)
3. The rewards that may be involved in dissonance.
Organizational implications of the theory of cognitive dissonance
• It can help to predict the propensity to engage in attitude and behavioral change.
• E.g., if individuals are required by the demands of their job to say or do things that contradict
their personal attitude, they will tend to modify their attitude in order to make it compatible with
the cognition of what they have said or done.
• In addition, the greater the dissonance –after it has been moderated by importance, choice, and
reward factors—the greater the pressures to reduce it.
Attitudes: Behavior
Does Behavior Always Follow from Attitudes?
• More recent research has demonstrated that attitudes significantly predict future behavior and
confirmed that the relationship can be enhanced by taking moderating variables.
Moderating variables
• The most powerful moderators of the attitudes-behavior relationship are
i. Importance of the attitude: important attitudes are ones that reflect fundamental values, self-
interest or identification with individuals or groups that a person values.
• Attitudes that individuals consider important tend to show a strong relationship to behavior.
ii. Its specificity: the more specific the attitude and the more specific the behavior, the strong
relationship between the two.
e.g. asking someone specifically about her intention to stay with the organization for the next 6 months
is likely to better predict turnover for that person than if you asked her how satisfied she was with her
pay.
iii. Its accessibility: attitudes are easily remembered are more likely to predict behavior than
attitudes that are not accessible in memory.
• You are much likely to remember attitudes that are frequently expressed.

iv. Social pressures: discrepancies between attitudes and behavior are more likely to occur when
social pressures to behave in a certain ways hold exceptional power.
v. Direct experience: the attitude—behavior relationship is likely to be much stronger if an attitude
comes from direct personal experience.
What are the Major Job Attitude?
• A person can have thousands of attitudes, but OB focuses our attention on a very limited number
of work related attitudes.
• Most of the research in OB has been concerned with three attitudes;
i. Job satisfaction.
ii. Job involvement.
iii. Organizational commitment.
iv. Perceived organizational support.
v. Employee engagement.
Job Satisfaction: a positive feeling about one’s job resulting from an evaluation of its characteristics.
• A person with high level of job satisfaction holds positive feelings about the job, while a person
who is dissatisfied holds negative feelings about the job.
Job Involvement: the degree to which a person identifies with a job, actively participates in it, and
considers performance importance to self—worth.
• It measures the degree to which people identify psychologically with their job.
• Employees with high level of job involvement strongly identify with and really care about the
kind of work they do.
(involving in decision, making them feel their work is important, and giving them discretion)
Attitudes: Major Job Attitudes
Organizational Commitment: the degree to which an employee identifies with a particular organization
and its goals and wishes to maintain membership in the organization.
Three separate dimensions to organizational commitment
1. Affective Commitment: an emotional attachment to the organization and a belief in its value.
2. Continuance Commitment: the perceived economic value of remaining with an organization
compare to leaving it.
3. Normative Commitment: an obligation to remain with the organization for moral or ethical
reasons. E.g. new initiative may remain with employer.

Perceived Organizational Support(POS): the degree to which employees believe the organization
values their contribution and cares about their well being.
Employee Engagement: an individual’s involvement with, satisfaction with, and enthusiasm for the
work they do.
Attitudes: Attitude Measurement
How Are Employee Attitude Measured?
• As we have seen, knowledge of employee attitudes can be helpful to managers in attempting to
predict employee behavior.
• How does management get information about employee attitudes?
• The most popular method is through the use of attitude surveys.(as in the case of VSP)
Attitude Survey: eliciting responses from employees through questionnaires on how they feel about
their jobs, work, groups, work groups, supervisors and organization.
A typical attitude survey presents the employee with a set of statements or questions with a rating scale
indication the degree of agreement.
e.g.
1. This organization’s wage rates are competitive with those of other organization.
2. My job makes the best use of my abilities.
3. I know what my boss expects of me.
• Using attitude surveys on a regular basis provides managers with valuable feedback on how
employees perceive their working conditions.
Job Satisfaction
Job Satisfaction: The term job satisfaction refers to an individual’s general attitude toward his or her
job.
• Different People have different attitudes towards different things.
• They will have different attitudes about current salary and rewards, promotion, behavior of
supervisor, working conditions and performance evaluation system of the organization.
• Some employees are really gratified with company’s policies and practices while some are not.
• A person with a high level of job satisfaction holds positive attitudes toward the job, while a
person who is dissatisfied with his or her job holds negative attitudes toward the job.
In this section we will discuss:
i. How to measure job satisfaction?

ii. How satisfied are employees in their job?
iii. What causes an employee to have a high level of job satisfaction?
iv. How do dissatisfied and satisfied employees affect an organization?
Measuring Job Satisfaction
The two most widely used approaches are:
i. Single global rating
ii. A summation score made up of a number of job facets.
Single Global Rating
• Asking individuals to respond to one question, such as “All things considered, how satisfied are
you with your job?”
• Respondents then reply by circling a number between 1 and 5 that corresponds to answer from
“Highly satisfied” to “Highly dissatisfied”.
A summation of Job Facets:
• It identifies key elements in a job and asks for the employee’s feelings about each.
• Typical factors that would be included are: nature of work, supervision, present pay, promotion
opportunities, relation with co-workers.
• These factors are rated on a standardized scale and then added up to create an overall job
satisfaction score.
How Satisfied are People in Their Jobs?
• Research shows that satisfaction levels vary a lot depending on which facets of satisfaction we
talking about.
• Those facets may be: nature of work, supervision, present pay, promotion opportunities, relation
with co-workers.
• Independent studies, conducted among US workers over the past 30 years, indicates that
majority of workers are satisfied with their job.
What Causes Job Satisfaction?
• Out of the major job satisfaction facets (work itself, pay, advancement opportunities,
supervision, coworkers), enjoying the work itself is almost always the facet most strongly
correlated with high level of overall job satisfaction.
• Interesting jobs that provide training variety, independence, and control satisfy most employees.

• Most people prefer work that is challenging and stimulation over work that is predictable and
routine.
• This findings does not applicable in poor countries and people with under the line of poverty
where pay matters a lot.
The impact of Dissatisfied and Satisfied Employees on the Workplace.
How Employees Can Express Dissatisfaction
Four types of behavior result:
• Exit. Actively attempting to leave the organization, including looking for a new position as well as
resigning. This is a destructive action from the point of view of the organization.
• Voice. Actively and constructively trying to improve conditions, including suggesting improvements,
discussing problems with superiors, and some forms of union activity.
• Loyalty. Passively but optimistically waiting for conditions to improve, including speaking up for the
organization in the face of external criticism and trusting the organization and its management to do the
right thing.
• Neglect. Passively allowing conditions to worsen, including chronic absenteeism or lateness, reduced
effort, and increased error rate.
Job Satisfaction and Job Performance
• Job Satisfaction and OCB
• Job satisfaction and customer satisfaction
• Job satisfaction and absenteeism
• Job satisfaction and turnover
• Job satisfaction and workplace deviance
Motivation
• How to make people work more or work better? This is an issue that requires an understanding
of what motivates people to work.
• Literally motivation means inducement to act or move. It is an inner impulse that induces a
person to act in a certain way.
• In an organizational setting, motivation means to make an employee act in a desired manner.
• It implies not only that the employees should act in a disciplined manner, but also that should
act in an efficient and productive manner.

Types of Motivation
Intrinsic Motivation: related to job one is doing.
• When a skilled operative performs a job well, he or she derives a sense of satisfaction. Intrinsic
motivation satisfies the creative instinct in an individual.
Extrinsic Motivation: this motivation is external to the job or task.
• Financial incentives for doing a job well may motivate the employee. Other: praise, recognition,
admiration, working conditions, other facilities.
Indicators of Motivation
• One who want to come to work willingly.
• When at work, he or she gives his or her best.
• He or she has a definite sense of belonging and pride in the organization.
Indicators of Demotivation:
• Increased absenteeism
• Excessive turnover
• Low output and productivity
• An increasing rate of wastage of raw materials
• Frustration and unrest in the workplace.
• Violent behavior of the employees– strikes etc.
•
What is Motivation?
Importance of Motivation
1. Understand the employee behavior
2. Productivity improvement
3. Quality improvement
4. Employee retention
5. Creativity promotion
6. Low employee turnover
7. Better employee discipline
8. Reduced employee grievances

(self motivation is the best motivation)
Theories of Motivation
Early Theory of Motivation
i. Hierarchy of Needs Theory
ii. Theory X and Theory Y
iii. Two—Factor Theory
Contemporary Theory of Motivation
i. McCelland’s Theory of Needs
ii. Cognitive Evaluation Theory
iii. Goal—Setting Theory
iv. Self-Efficacy Theory
v. Reinforcement Theory
vi. Equity Theory
vii. Expectancy Theory
Hierarchy of Needs Theory
• Physiological: Includes hunger, thirst, shelter, sex, and other bodily needs
• Safety: Includes security and protection from physical and emotional harm
• Social: Includes affection, belongingness, acceptance, and friendship
• Self-Esteem: Includes internal esteem factors such as self-respect, autonomy, and
achievement; and external esteem factors such as status, recognition, and attention
• Self-actualization: The drive to become what one is capable of becoming; includes
growth, achieving one’s potential, and self-fulfilment
Maslow’s Hierarchy of Needs

Implications of Maslow’s theory
• Higher and lower order needs
• Lower order needs can be satisfied by offering higher salary and wages, pleasant working
conditions, medical insurance and retirement benefits.
• Higher order needs can be satisfied by participation in decision making and providing
challenging and meaningful jobs.
• Satisfaction progression process
Theory X and Theory Y
• Douglas McGregor, an American social psychologist, proposed in 1960 "McGregor's XY
Theory". This theory still remains central to organizational development, and to improving
organizational culture.
• This theory is a useful and simple reminder of the natural rules for managing people, which
under the pressure of day-to-day business are all too easily forgotten.
Douglas McGregor said that managers hold one of two sets of assumptions about human nature: either
Theory X or Theory Y. Seeing people as irresponsible and lazy, managers who follow Theory X
assume the following:
1. Employees inherently dislike work and will try to avoid it.
2. Since employees dislike work, they must be coerced, controlled, or threatened to achieve goals.

3. Employees avoid responsibilities and seek formal direction, if possible.
4. Most workers place security above all other work-related factors and will display little ambition.
Since they see people as responsible and conscientious, managers who follow Theory Y assume the
following:
1. Employees can view work as being as natural as rest or play.
2. When committed to their objectives, people will exercise self-direction and self-control
3. The average person can learn to accept, even seek responsibility.
4. Many workers besides managers have innovative decision-making skills.
No hard evidence confirms that either set of assumptions is universally true. It is more likely that the
assumptions of Theory X or Theory Y may or may not be appropriate, depending on the situation at
hand.
Difference between these theory
• Theory X
o Most people dislike work inherently
o Not ambitious, little desire for responsibility & prefer to be directed
o Little capacity for solving organizational problem
o Motivation occurs only at the physiological and safety level
o People to closely monitored and even coerced.
• Theory Y
o Work is like a play if condition is favorable
o Exercise self direction and self control
o Imaginative and original
o Motivation occurs at the social, self esteem and self actualization level
o Self directed and creative at work.
• IMPLICATIONS FOR MANAGERS:
• Theory X assumes that lower-level needs dominate individuals.
• Theory Y assumes that higher-level needs dominate individuals.
• McGregor himself held to the belief that Theory Y assumptions were more valid than Theory X.
• There is no evidence to confirm that either set of assumptions is valid.

Either theory X or theory Y assumptions may be appropriate in a particular situation.
Herzberg's Motivator - Hygiene (Two-factor) Theory
• Frederick Herzberg and his associates developed the dual-structure theory in the late 1950s and
early1960s.
• He began by interviewing approximately two hundred accountants and engineers in Pittsburgh.
He asked them to recall time when they felt especially satisfied and motivated by their job and
times when they felt particularly dissatisfied and unmotivated. The responses to the questions
were recorded and later subjected to the content analysis.
• Intrinsic factors are related to job satisfaction, while extrinsic factors are associated with
dissatisfaction.
• Herzberg’s Motivation-Hygiene Theory
• Motivators
 Achievement
 Recognition
 Work itself
 Responsibility
 Advancement & Growth
Created condition of satisfaction or no satisfaction
• Hygiene Factors
 Supervision
 Working conditions
 Interpersonal relations
 Pay and security
 Company policy and administration
Creates conditions of dissatisfaction or no dissatisfaction
• Herzberg’s Motivation-Hygiene Theory
Events that led to extreme dissatisfaction
Events that led to extreme satisfaction
• Contrasting Views of Satisfaction and Dissatisfaction

• Herzberg concluded:
– The opposite of satisfaction is not dissatisfaction.
– Removing dissatisfying characteristics from a job does not necessarily make the job
satisfying.
• CRITICISMS OF THE THEORY:
– The procedure that Herzberg used is limited by its methodology (content analysis).
– The reliability of Herzberg’s methodology is questioned.
– No overall measure of satisfaction was utilized.
– Herzberg assumed a relationship between satisfaction and productivity, but the research
methodology he used looked only at satisfaction, not at productivity.
– Original sample of accountants and engineers may not represent the general working
population.
– The theory fails to account for individual differences.
– The theory varies across cultures.
ERG Theory
• The theory was developed in the 1969 by a psychologist Clayton Alderfer. It is an extension of
Maslow's theory.
• Existence Needs
– Provides our basic material existence requirements
– They include Maslow’s physiological and safety needs.
• Relatedness Needs
– The desire we have for maintaining important interpersonal relationships
– These social and status desires require interaction with others.
– They align with Maslow’s social need and the external component.
• Growth Needs
– An intrinsic desire for personal development
– These include the intrinsic component from Maslow’s esteem category and the
characteristics included under self-actualization.
• Alderfer’s ERG theory also differs from Maslow’s in that:

– More than one need may be operative at the same time.
– A lower motivator need not be substantially satisfied before one can move onto higher
motivators.
– ERG theory does not assume that there exists a rigid hierarchy. A person can be working
on growth even though existence or relatedness needs are unsatisfied, or all three need
categories could be operating at the same time.
• ERG theory also contains a "frustration-regression" dimension. It notes that when a higher-order
need level is frustrated, the individual’s desire to increase a lower-level need takes place.
• In contrast, Maslow's theory includes a satisfaction-progression component. It suggests that after
satisfying one category of needs, a person progresses to the next level.
David McClelland’s Theory of Needs
• David McClelland’s Theory of Needs
1. Need for Achievement (nAch)
– The drive to excel, to achieve in relation to a set of standards, to strive to succeed. They
have the desire to do something better or more efficiently than it has been done before.
Characteristics of high-need achievers:
– They have a strong desire to assume personal responsibility for performing a task for
finding a solution to a problem.
– They differentiate themselves from others by their desire to do things better and more
efficiently.
– They tend to set moderately difficult goals and take calculated risks.
– They have a strong desire for performance feedback.
– High achievers perform best when they perceive their probability of success as 50-50.
They dislike succeeding by chance.
2. Need for Power (nPow)
– A desire to control and influence others’ behaviours.
The high need for power is characterized by:
– A desire to influence and direct somebody else.
– A desire to exercise control over others.
– A concern for maintaining leader-follower relations.

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