MODULE 1 FUNDAMENTALS OF compensation structures, or changing methods of
ORGANIZATIONAL BEHAVIOR performance evaluation.
The fundamental concepts of organizational behavior
are; (IPAMTTHOMH)
 Individual Differences. Every individual in the world is
different from others
 Perception. Peoples’ perceptions are also different when
they see an object.
 A Whole Person. An employee’s personal life is not
detached from his working life
 Motivated Behavior. An employee has so many needs
inside him. So, they want to fulfill those needs
 The desire for Involvement. the organization should
provide them a chance to express their opinions, ideas,
and suggestions for the decision-making problem. A
meaningful involvement can bring mutual benefit to both
parties.
 The value of the Person. An employee wants to be
treated separately from another factor of production
 Human Dignity. Every person needs to be treated with
dignity and respect, whether it’s the CEO of the
company or labor.
 Organizations are Social System. From sociology, we
learn that organizations are social systems; consequently,
activities therein are governed by social laws as well as
psychological laws.
 In fact, two types of social systems exist side by
side in organizations. One is a formal system, and
the other is the informal social system.
 Mutuality of Interest. Mutual interest is represented by
the statement that organizations need people and people
also need organizations.
 Holistic Concept. When the fundamental concepts of
OB are placed together, a holistic concept emerges
Understanding Organizational Behavior (OB) The
study of organizational behavior includes areas of
research dedicated to improving job performance,
increasing job satisfaction, promoting innovation, and
encouraging leadership. Each has its own recommended
actions, such as reorganizing groups, modifying
Organizational Behavior Origins
 The study of organizational behavior has its roots in the
late 1920s, when the Western Electric Company
launched a now-famous series of studies of the behavior
of workers at its Hawthorne Works plant in Cicero, Ill.
 It was more important, for example, that people got
along with their co-workers and felt their bosses
appreciated them. Those initial findings inspired a series
of wide-ranging studies between 1924 and 1933.
 The Hawthorne Effect which describes the way test
subjects' behavior may change when they know they are
being observed—is the best-known study of
organizational behavior.
 Organizational behavior was not fully recognized by the
American Psychological Association as a field of
academic study until the 1970s.
4 Elements of Organizational Behavior (PSTE)
 People
 Structure
 Technology
 External environment
3 Levels of Organizational Behavior (IGO)
 Individual level- involves organizational psychology
and understanding human behavior and incentives
 Group level- involves social psychology and
sociological insights into human interaction and group
dynamics
 Organizational level- top level; where organization
theory and sociology come into play to undertake
systems-level analyses and the study of how firms
engage with one another in the marketplace.
Some Common Problems that Organizational
Behavior Tries to Solve
 Lack of direction or strategic vision for a company
 Difficulty getting employees on board with that vision
 Pacifying workplace conflict or creating a more
amenable work environment
 Issues with training employees
 Poor communication or feedback
MODULE 2 INDIVIDUAL DIFFERENCES,
PERCEPTION AND ATTRIBUTES
 Individual differences can be divided into two categories
 Personality differences
 Capacity differences
Personality refers to the relatively stable patterns in the
thinking, feeling, and behavior of a person. It is an
important factor in explaining the behavior of people
within an organization and in the favorable or
unfavorable attitude towards the job and the
organization.
SOURCES OF PERSONALITY
 Personality is partly biologically determined (nature);
approximately 50% of personality can be explained by
hereditary factors.
 The other half can be explained by life experience
(nurture). Personality can change through experience
but not in the short term. As the definition makes clear, it
is after all relatively stable traits.
ASA model (Attraction-Selection-Attrition)
ASA model explains why similar people are selected by
organizations, while inconsistent people are likely to
leave these organizations due to attrition.
 organization attracts persons with corresponding
personalities (attraction)
 and selects them (selection)
 while rejecting other types of personalities
(attrition)
THE BIG FIVE PERSONALITY MODEL
(EINACO)
 Extraversion is the tendency to experience positive
affect and to feel good about the self and the world.
 Introversion the other side of the continuum is
associated with less positive feelings and less social
interaction. Extraversion is associated with more career
satisfaction in the workplace.
 Neuroticism means that there is a tendency to
experience negative feelings about the self and the
world. People with strong neurotic traits experience
stress more quickly and are critical of themselves. This
can be a vulnerability but also a force. Because of their
critical attitude, they are driven to improve their
performance and are able to reflect critically during
group discussions. So, it is not just a negative trait.
 Altruism (agreeableness) refers to the property to be
able to get along well with others. Low scorers on this
personality trait are antagonistic and suspicious. In some
cases, this property may be useful, for example in debt
collecting where social skills are greatly needed.
Altruism is also characterized by selflessness and
concern for the well-being of other.
 Conscientiousness refers to care and perseverance. A
tendency to be organized and dependable, to show self-
discipline, to aim for achievement, and to prefer planned
rather than spontaneous behavior.
 Openness is the extent to which an individual is open to
new experiences and risks, has broad interests and is
original. This is an advantage in companies in which
creativity and innovation are desired.
Other personality traits
(LSS)
 Locus of control is the extent to which an individual
believes to have control over the situation in which
he/she is located.
 An internal locus of control means that events
are attributed to personal factors and therefore
that responsibility is taken for the consequences
of their own behavior.
 An external locus of control means that events
are attributed to situational factors. Employees
with an internal locus of control need less
supervision than employees with an external
locus of control because they are more
independent.
 Self-monitoring refers to the extent to which a person
actively tries to influence how he/she presents himself to
others. A high degree of self-monitoring leads to strongly
socially acceptable behavior. These people are often
accommodating and good at impression management.
High self-monitoring is associated with good
adaptability, which is beneficial in situations where
positive interaction with others is needed. Low self-
monitoring is beneficial when open and honest feedback
or criticism must be given.
 Self-confidence/self-esteem (self-esteem) is the extent
to which someone is satisfied with themselves and their
own skills. Self-confidence has different implications for
behavior in organizations. High self-esteem is related to
choosing challenging work, setting high goals and
stimulating the development of the organization
Which three needs does almost everyone have?
 According to McClelland, there are three characteristics
that everyone has to vary:
 Need for success is the desire to perform well in
challenging situations and to meet a high standard.
 Need for solidarity/commitment in efforts to build and
maintain good relationships with others.
 Need for power is the strong need for emotional and
behavioral control over others.
TYPES OF CAPACITIES
 Cognitive capacities can be defined in various ways.
The broadest definition is cognitive capacity as general
intelligence.
 Physical capacity, a distinction can be made between
motor capacity (the ability to deal effectively with
objects) and physical capacity (condition and strength).
Physical capacity can best be measured by performing
work-related physical activity.
Emotional intelligence is a specific type of
capacity. It refers to the ability to understand and
deal with one's own and other's feelings.
3 FUNDAMENTAL METHODS FOR MAKING
THE MATCH BETWEEN JOB AND EMPLOYEE
(SPT)
 Selection, potential employees can be tested for the
required characteristics.
 Placement, employees who are hired are placed in a
suitable position within the organization may be
promoted to higher positions
 Training, the focus is on nurture instead of nature, and
the capacities of the employee are strengthened.
PERCEPTION IN ORGANIZATIONAL
BEHAVIOR
Perception is simply defined as how a person perceives
the world around them and interprets that information.
THE COMPONENTS OF PERCEPTION
(SARTBPS)
 Stimuli– The receipt of information is the stimulus,
which results in sensation. Knowledge and behavior
depend on the senses and their stimuli. The physical
senses used by people are sight, hearing, touch, smell
and taste. Intuition and hunch are known as the sixth
sense. These senses are affected by a large number of
stimuli, which can be actions, information, thoughts and
feelings etc.
 Attention– People engage in stimuli selectively. Some
stimuli are reacted to while others are ignored without
attention. The stimuli to which attention is given purely
depend on the selectivity of the people and the intensity
of the stimuli
 Recognition: – After noticing the stimuli, employees try
to identify whether the stimuli are worth feeling.
Messages or incoming stimuli are recognized before they
are transmitted in practice.
 Translation: – The stimuli are evaluated before they are
converted into actions or behaviors. The evaluation
process is translation.
 Behavior: – Behavior is the result of a cognitive
process. It is a response to changes in sensory inputs,
i.e., stimuli. This is an obvious and covert response.
 Performance: – Appropriate behavior leads to high
performance. High performers become a source of
excitement and inspiration to other employees. A
performance-reward relationship is established to
motivate people.
 Satisfaction: – Higher performance gives more
satisfaction. The level of satisfaction is calculated from
the difference between performance and expectation
MAJOR PERSONALITY ATTRIBUTES
 Locus of control is the center of control of an
individual’s code of conduct. People can be grouped into
two categories.
 People who consider themselves as the masters of
their own fates are known as internals
 Those who affirm that their lives are controlled by
outside forces known as externals
 Machiavellianism is being practical, emotionally
distant, and believing that ends justify means.
Machiavellians are always wanting to win and are great
persuaders.
 Self-Esteem is directly related to the expectations of
success and on-the-job satisfaction. Individuals with
high self-esteem think that they have what it takes to
succeed. So, they take more challenges while selecting a
job. On the other hand, individuals with low self-esteem
are more susceptible to external distractions.
 Self-monitoring is the capability of regulating one’s
behavior according to social situations. Individuals with
high self-monitoring skill easily adjust their behavior
according to external, situational factors. Their impulsive
talents allow them to present public personae which are
completely different from their private personalities.
 Risk taking- generally, managers are reluctant on taking
risks. However, individual risk-taking inclination affects
the bulk of information required by the managers and
how long it takes them to make decisions. Thus, it is
very important to recognize these differences and align
risk-taking propensity with precise job demands that can
make sense