In this total guide to organizational behavior, we’ll learn everything that business professionals need to know about this concept.
Among other things, we’ll learn:
- What organizational behavior is
- Why it matters for businesses
- How organizational behavior impacts the organization’s performance
- How to improve organizational behavior
To start with, let’s understand the context by defining organizational behavior and a few other key ideas.
Organizational Behavior: Definitions and Key Concepts
Organizational behavior is an important concept for any organization that wants to understand and improve its workforce.
When discussing organizational behavior, discussions inevitably include other related concepts, such as those defined below:
- Organizational Behavior – Organizational behavior refers to how people behave within an organization.
- Organizational Culture – Organizational culture refers to the set of beliefs, assumptions, and values held by the organization and its workforce.
- Organizational Performance – Organizational performance and effectiveness define how efficiently and successfully an organization can meet its stated goals. An organization’s performance can be affected by several factors, including organizational behavior, the company culture, and the employee experience.
- Organizational Change – Organizational change is the process of intentionally changing certain aspects of an organization, such as its business model or its structure.
- Change Management – Change management is the discipline dedicated to executing and managing organizational change, by mitigating risk, improving project outcomes, and more.
- The Employee Experience – The employee experience, like the customer experience, covers the sum total of people’s interactions with a business. It can affect organizational behavior, and, as a result, organizational performance.
These concepts can help provide a solid foundation for better understanding people’s actions within an organization.
However, organizational behavior is the main focus of this guide, so let’s explore it in a bit more detail.
Organizational Behavior in Detail
Organizational behavior, as mentioned, refers to how people act within an organization.
More specifically, this discipline focuses on:
- How people interact at all levels of the organization – as individuals, within teams, and how the organization itself behaves
- How to improve those interactions in order to improve business performance
- Other factors that contribute to improved business performance, such as improving employee satisfaction, job performance, and management and leadership skills
There are several elements that contribute to behavioral improvements, such as:
- Social elements
- The work environment
- Job skills
- Available tools and technology
Of course, not all of these elements are weighed equally.
A famous study by Elton Mayo, for instance, found that the most important elements revolved around people, rather than their environment.
Mental attitudes, supervision, and workers’ relationships, said the researchers, played a more important role in long-term productivity than environmental improvements.
This study became the foundation of organizational behavior, which today focuses on understanding and improving several areas within a business, such as:
- Office politics
- Individual personalities
- Organizational culture
Later, we will discuss a number of ways to analyze and improve these areas.
But before we do, let’s understand organizational behavior better, by answering some of the most frequently asked questions about this field.
Organizational Behavior FAQ
Here are some of the most commonly asked questions that professionals have about organizational behavior.
Aside from “What is organizational behavior?” the next most pertinent question is:
Why is organizational behavior important?
As mentioned, organizational behavior improvements can positively affect the organization in a number of areas.
Improvements can, for instance, result in:
- Increased employee engagement and satisfaction
- Greater employee productivity levels
- More streamlined work processes
- A better work environment
- A better match between the organization’s culture and its employees
- The organization meeting its goals more efficiently and effectively
For reasons such as these, behavior is an important consideration for business leaders, strategists, as well as employees themselves.
Who manages organizational behavior in an organization?
Typically, HR is tasked with managing organizational behavior.
Though, as mentioned, behavioral improvement programs tend to serve the greater organizational agenda, which is often focused on improving organizational effectiveness.
Depending on the size of an organization, organizational behavior programs may fall under the purview of:
- Human resources
- Employee experience management
- Digital adoption managers
- Training managers
Or cross-functional teams that manage these different aspects of the employee life cycle.
How do you improve organizational behavior?
There are several approaches used to enhance behavior and performance across the organization.
These can include:
- Improving accountability systems
- Training programs that enhance employee skills
- Leadership development programs that improve managerial and leadership skills
- Improvements to the work environment, tools, and technology
- Altering the organization’s culture
- Restructuring the organization
Among many others.
There is no single formula that can improve organizational performance in all circumstances.
Instead, an organization should define its goals, assess its own circumstances, then develop behavioral improvement strategies based on that information.
How does an organizational measure organizational behavior’s impact on the business?
As with most business analyses, it is important to avoid “vanity metrics” and focus on how a targeted business area specifically impacts an organization’s objectives and goals.
In this case, it is important to understand how organizational behavior affects areas such as:
- Employee productivity and performance
- The efficiency and effectiveness of specific business processes
- The organization’s ability to meet its objectives efficiently
With these clear goals, it is possible to develop quantitative metrics that demonstrate a relationship between behavior and outcomes.
For instance, metrics can focus on.
Next, we will look at a step-by-step approach for analyzing and improving organizational behavior.
How to Improve Organizational Behavior: A Step-by-Step Process
If professionals feel that their business can experience performance gains by improving behavior, then they can follow steps such as those listed below.
1. Perform assessments
The first step is to assess organizational behavior and determine what impact behavior has on workplace performance.
Areas to focus on include:
- Employee sentiment. Employees’ feelings and emotions play a critical role in their behavior and productivity. Workers who are dissatisfied with their jobs or frustrated with their digital tools, for instance, will perform more poorly than those who are fully engaged.
- Employee productivity. Productivity is a crucial factor when it comes to organizational performance. When assessing productivity levels, it is important to understand what factors contribute to those productivity levels. Surveys, therefore, should contain targeted questions that attempt to uncover those factors.
- Existing systems of accountability. How is accountability currently handled in the workplace? Systems of accountability track employee behavior, ensuring that all employees are held responsible for their actions and activities. The best way to do this is through effective communication, enforcing rules consistently, and ensuring that consequences (and rewards) are applied universally.
- Culture. Culture and behavior go hand-in-hand. A culture that is digitally literate, pro-learning, and open to change, for example, will perform better in today’s continually evolving digital business world.
- The employee experience. The employee experience covers the entire employee journey, from pre-hire communications to post-exit surveys. This journey has been mapped out by companies such as Gallup, which claims that optimizing the employee experience can improve organizational performance.
- The digital workplace. The digital employee experience and the digital workplace are other areas to study, especially in the digital age. Tools, product training programs, and digital workflow efficiency, for instance, can all impact – and be impacted by – employee behavior.
These assessments should pay close attention to how these areas impact organizational performance, effectiveness, and efficiency – after all, those are the main areas of concern for most business leaders.
2. Analyze and strategize
Once assessments are complete, it is time to analyze the results.
Among other things, professionals should look at:
- The effect of organizational behavior on organizational performance
- How the employee experience impacts organizational behavior
- Existing employee experience management programs, organization development programs, change management programs, and so forth
Those explorations can then give way to strategies that focus on improving areas such as:
- The employee experience. The employee experience, as mentioned, covers the entire journey a worker has with the organization. Each stage of this journey can be isolated, analyzed, and improved upon. Improving the employee onboarding process, for instance, can increase employee engagement, retention, productivity, and more.
- Training. Employee training is particularly important in the digital workplace. Better training can accelerate time-to-competency, decrease employees’ frustration with their software, improve overall productivity, and so on.
- Culture. Cultures should be changed only if a business culture negatively impacts organizational performance. If assessments reveal this to be the case, then there are several approaches that can work. Enhancing the recruitment and talent management functions, for instance, can ensure that candidates are hired who actually match the company culture.
- The digital workplace. Improving the digital workplace is another way to enhance organizational behavior. The right digital adoption strategy, for example, can streamline digital training efforts, decrease frustration levels, and improve productivity.
At the same time, a set of metrics should be developed in order to measure progress towards these goals.
3. Create a roadmap for change
With a strategy and a goal established, businesses can then move forward and define a stage-based roadmap for change.
This roadmap should include:
- Timelines. Each stage of the project should have a specific timeframe, along with deadlines.
- Stages with descriptions and goals. A roadmap or a journey map is most useful when it can act as a reference document for the involved parties. Each stage, therefore, should include detailed descriptions of what’s involved, the purpose of this phase, and measurable goals.
- Assigned responsibilities. Each stage of the journey should also clarify who is responsible for what. After all, organizational change projects are team efforts, and success relies on the coordinated effort of many parties.
Like any other project, an organizational change initiative should be managed carefully and closely.
After all, success is not guaranteed.
The better the management approach, the better the results of the program will be.
4. Implement and optimize
There are several ways to implement any organizational change project. And each implementation will differ, based on the change project, the organization, and the circumstances.
One approach is to roll out the change project all at once to the entire organization.
Another is to implement the project in phases.
Both approaches have advantages and disadvantages.
An organization-wide rollout, for instance, can be implemented more quickly. But it requires more up-front preparation work and often carries greater risks.
A phased rollout may take longer, but it can allow program managers to adjust the program as they implement it.
This type of implementation would include follow steps such as these:
- Run a pilot test. A pilot test is a small version of the program, released only to a small sub-group of employees. For instance, if the change project revolves around implementing a digital adoption platform (DAP) in order to improve employee productivity, then the DAP may be initially tested within a single department.
- Learn. The pilot test will provide valuable information that can then be used to inform future decisions. Early results and employee feedback, for example, can be used to determine the viability of the solution or make changes before continuing with the next stages.
- Roll out across the organization. Once the program has been tested and refined, it can be implemented across the organization. This rollout can take place simultaneously across the entire company, or it can continue in phases.
- Analyze and improve. Even after a change is complete, there is still room for improvement. After all, a business change is designed to be permanent, so it must be reinforced and optimized. For instance, a business should not simply “set and forget” a new software training program – for best results, it should continually analyze and optimize that program.
There are quite a number of approaches that businesses can take when it comes to improving organizational behavior.
Though the specific solutions may vary, the general approach remains the same.
By following steps such as those covered here, an organization can stay focused on what matters most – behavioral improvements that produce measurable results to organizational performance.
Changing Organizational Behavior: Dos, Dont’s, Best Practices, and Tips
Let’s look at a few tips, strategies, and best practices that can help organizations make improvements to both behavior and performance.
Perhaps the most important piece of advice is to stay focused on the main aim.
Don’t change culture for the sake of it – instead, stay focused on the main goal: performance
Organizational culture plays a pivotal role in how employees behave.
However, culture should not be altered “just for the sake of it.”
Instead, cultural improvement programs should aim at larger strategic goals, such as:
- Performance and productivity improvements
- Improving key employee metrics, such as retention
- Helping businesses units better meet their objectives
Today, organizational culture is a hot topic and many professionals want to modernize their business culture.
However, as management and leadership expert Edgar Schein has pointed out, changing organizational culture can be very difficult, psychologically taxing, and costly.
For that reason, cultural changes should only be undertaken when necessary.
Do implement a structured approach to organizational change
Any behavioral improvement project will involve some form of organizational change.
That change may be large, small, or anywhere in between.
However, regardless of the scale of the change, it is important to implement a structured approach to change management.
Change management improves the efficiency and success rates of change projects by focusing on the individual employee.
A typical change management approach, for example, will attempt to:
- Build awareness of the need for change
- Motivate and engage employees
- Provide them with the skills, knowledge, and abilities to change
- Reinforce change to ensure that the change remains permanent
Change managers will also attempt to overcome obstacles to change, such as employee resistance.
An effective change management program can dramatically improve the results of any behavioral improvement project.
Some benefits of implementing change management, covered earlier, include:
- Increased project efficiency
- Improved outcomes
- Greater cooperation from employees and stakeholders
- Shorter project timelines
- Improved risk management
For more information on change management, be sure to read some of the articles on our change management blog.
Don’t ignore employee input
Employee input can provide valuable insight into organizational behavior.
And, in fact, that input can form the basis for behavioral improvement programs.
Many of today’s most popular design approaches, such as user-centered design, put such input at the center of their methodology.
Businesses that approach change from this angle would:
- Continually collect data from employees, such as performance data and feedback
- Analyze that data to better understand organizational behavior, growth opportunities, strengths, and weaknesses
- Design data-driven solutions based on that data
The most effective employee-centered programs would, of course, use employee feedback as well as data and analytics.
Do manage the employee experience
According to Gallup, there are seven stages in the employee life cycle:
Most of the employees’ time will be spent in three stages: engage, perform, and develop.
For this reason, many employee experience professionals focus heavily on improving engagement, performance, and skills.
However, every stage of the employee journey is important, and each should be managed closely.
- Attracting and hiring are critical pieces in the talent management process, which can affect organizational culture and behavior
- Onboarding sets the tone for the rest of the employee journey, impacting how employees view a business, how long they stay with the company, and more
- Departure procedures, such as exit surveys, can offer important insights into the employee’s experience and their reasons for departure
As with user experiences, product experiences, and other human-centered processes, the employee experience can be designed and improved upon.
Ultimately, the better the experience, the better the impact on organizational behavior.
Improve organizational communication
Organizational communication is another important area that can affect organizational behavior.
In the context of a business or an institution, organizational communication refers to:
- Coworker interactions
- The interactions between supervisors and subordinates
- Informal social interactions among employees
Naturally, effective communication is desirable and will enhance organizational behavior.
Though an organization cannot control informal communication between employees, it can affect formal communication mechanisms.
- Internal correspondence, such as memos, emails, and newsletters
- Documentation, such as documentation of procedures, protocols, behavioral requirements, and products
- Meetings, either online, on the telephone, or in person
Every business should do its best to improve its formal communications mechanisms.
Doing so can help improve many areas of the organization, including employee sentiment, performance, and behavior.
Don’t try to change people – change the organization instead
Systems of accountability, rules, procedures, guidelines, and protocols can be very effective ways to manage employee behavior.
However, too much control can create frustration, friction, and resistance on the part of employees.
The result: engagement, satisfaction, retention, and other employee metrics will decrease.
Ultimately, organizational behavior and performance can be negatively affected.
Instead of micro-managing the workplace, the culture, and employees, improve the workplace by improving the organization and its systems.
Such top-down improvements can focus on areas such as:
- The digital work environment
- The workplace experience
- Organizational communication
- Training and career development programs
- Corporate well-being programs
In other words, ask not what your employees can do for the organization, ask what your organization can do for the employees.
5 Ready-to-Deploy Plans for Improving Organizational Behavior
Earlier, we looked at a step-by-step process for improving organizational behavior.
Though assessments may reveal a unique solution to enhancing workplace behavior, such solutions are not always self-evident.
Below, we will look at five ready-to-deploy strategies that can help a business enhance behavior across the organization … and, more importantly, its performance.
1. Redesign systems of accountability
Systems of accountability are fundamental to managing and regulating employee behavior.
There are several components that must be included for a system to be effective:
- Expectations. First and foremost, employees must know what is expected of them. If they are to be held accountable for something, such as a task or a quota, then they must know what that expectation is and articulate it clearly.
- Consistency. Consistency means: consistently enforcing the rules, consistently communicating, and maintaining consistency in terms of the rewards and consequences. Inconsistent behavior on the part of managers will quickly deteriorate employees’ trust and confidence in their leaders … and, as a result, the organization itself.
- Feedback. Feedback around performance helps employees understand how their behavior measures up. It also reminds them that their actions do matter and that they do have consequences. Of course, the most potent reminder of this fact is by actually delivering those consequences.
- Consequences. All actions have consequences. But if consequences don’t materialize, employees won’t experience those consequences for themselves – and behavior can deviate as a result. Consequences, of course, can be either positive or negative, and they should be consistently applied in order for an accountability system to stay effective.
An assessment of the organization’s existing systems of accountability should reveal its strengths and weaknesses.
If there are deficiencies, then apply the concepts just listed in order to make improvements and get better results.
2. Implement a three-pronged plan for improving organizational communication
Improving organizational communication is another way to enhance organizational behavior.
Miscommunication is, after all, the cause of many problems in the workplace.
Improving communication among employees can help:
- Create a better, smoother work environment
- Improve teamwork and goodwill
- Increase the efficiency of the workplace
- Build stronger relationships between managers and subordinates
Among other things.
While a business cannot totally transform behavior by improving organizational communication, it can see substantial gains – particularly when communication is poor.
A three-pronged assessment and plan for improvement can focus on these areas:
- Downward communication. Downward communication refers to the ways in which supervisors communicate to employees. This can include mechanisms such as performance reviews, giving orders, providing feedback, holding discussions, and more. Assess currently existing procedures and protocols, survey employees, then look for ways to make improvements.
- Upward communication. Upward communication refers to the way in which information travels up the hierarchy. It can include employee feedback, suggestions, reports, proposals, discussions, and more. Look for existing mechanisms and procedures, then identify areas for growth by surveying employees and managers.
- Horizontal communication. Horizontal communication takes place between coworkers on the same level. To improve this type of communication, organizations can examine existing communication procedures, protocols, requirements, and guidelines.
Additionally, organizations can attempt to improve informal communication – how employees interact socially, for instance – through social gatherings, corporate retreats, and other informal activities.
Naturally, none of these approaches is a “magic bullet” that can revolutionize organizational behavior overnight.
However, over time, enhanced organizational communications can have a very positive effect on the behavior of employees.
3. Use digital adoption platforms (DAPs) to streamline key stages in the employee life cycle
Digital adoption platforms (DAPs) are digital training tools that can dramatically improve the employee experience.
WalkMe’s DAP, for instance, can help:
- Accelerate employee onboarding
- Boost employee engagement
- Increase employee proficiency and productivity
- Automate digital training programs
- Decrease frustration that arises from learning new digital workflows
- Minimize resistance to change, digital adoption, and digital transformation
Among other things.
It accomplishes these aims through a key set of features, including:
- Contextualized, in-app guidance
- Step-by-step walkthroughs
- Software analytics
- Task automation
In the right hands, DAPs can have a profound impact on workforce productivity levels throughout an organization.
To learn more about these platforms, visit WalkMe’s blog or the main WalkMe website.
4. Apply change management concepts and frameworks to maximize cooperation and enhance the work environment
Change management is a discipline that can add significant value in the workplace.
When it comes to organizational behavior, the benefits include:
- Improved cooperation and support from employees, a core aim of most change management approaches
- More motivation and engagement, since change managers make a point of building change projects around workers’ needs
- A greater understanding of the need for organizational change projects, which becomes even more relevant when including behavioral improvement projects
- Greater organizational agility and adaptability in the workforce
These benefits are highly desirable as far as organizational behavior goes.
After all, a workforce that is more supportive, more engaged, and more flexible will be more valuable in terms of organizational performance.
Since most organizations today are driven by change, it only makes sense to incorporate change management into the organization’s normal business model.
And this is even more true when we consider the benefits that change management thinking can add to the workforce’s behavior.
5. Cultivate a culture that is pro-learning and open to change
As mentioned above, dramatic cultural changes can be taxing and difficult.
However, implementing certain systems and mechanisms within a business can help cultivate desirable traits over the long term.
A few such traits include:
- A pro-learning mentality. Cultures built around learning will be better suited to surviving the digital age. They will be ready and able to learn new skills, new ideas, and new business processes.
- Openness to change. Likewise, a culture that is open to change will be more flexible and ready to support organizational changes.
- Customer-centricity. Today, customer-centered design is a fundamental tenet of many business models. When a customer-centric culture is adopted within organizations, behaviors will align and support such business models.
- Digital-first. The digital revolution is just beginning, and organization’s should cultivate a culture that is fit for the digital era. The more that organizations build their businesses around a digital-first mindset, the more likely they will be to succeed in the coming years and decades.
Edgar Schein pointed out that rapid cultural changes can only be accomplished by disassembling teams and restructuring them.
Naturally, this type of approach can be quite destructive and prone to failure.
However, with the right mechanisms, it is possible to introduce certain changes without overburdening the workforce.
Here are a few examples:
- Digital adoption platforms (DAPs), mentioned earlier, can help organizations build digital-first, pro-learning mentalities into the fabric of their organizations
- Implementing agile business processes can help organizations build a culture that is customer-centric and more open to change
- Creating talent management programs that target candidates that are the right fit for the organization can help cultivate a culture that matches the organization’s vision
Steps such as these can help an organization introduce and grow key behavioral traits that are highly beneficial in today’s dynamic digital economy.
Also, with the right approach, such mechanisms can be introduced gradually enough so that they will not overburden the business or create too much resistance from the workforce.