Organizational Designs and Employee behavior

A review of the evidence linking organizational structure to employee performance and satisfaction leads to a pretty clear conclusion – you can’t generalize!

Not everyone prefers the freedom and flexibility of organic structures. Some people are most productive and satisfied when work tasks are standardized and ambiguity is minimized that is, in mechanistic structure. So any discussion of the effect of organizational design on employee behavior has to address individual differences. To illustrate the point, let us consider employee preferences for work specialization span of control and centralization.

The evidence generally indicates that work specialization contributes to higher employee productivity, but at the price of reduced job satisfaction. However, this statement ignores individual differences and the type of job tasks people do. Work specialization is not an unending source of higher productivity. Problems start to surface and productivity begins to suffer, when the human diseconomies of doing repetitive and narrow tasks overtake the economies of specialization. As the workforce has become more highly educated and desirous of jobs that are intrinsically rewarding, the point at which productivity begins to decline seems to be reached more quickly than in the past decades.

Although more people today are undoubtedly turned off by overly specialized jobs than were their parents or grandparents, it would be naive to ignore the reality that there is still a segment of the workforce that prefers the routine and repetitiveness of high jobs. Some individuals want work that makes minimal intellectual demands and provides the security of routine. For these people high work specialization is a source of job satisfaction. The empirical question, of course, is whether this represents 2 per cent of the workforce or 52 per cent. Given that there is some self selection operating in the choice of careers it might include that negative behavioral outcomes from high specialization are most likely to surface in professional jobs occupied by individuals with high needs for personal growth and diversity.

A review of the research indicates that it is probably safe to say there is no evidence to support a relationship between span of control and employee performance. Although it is intuitively attractive to argue large spans might lead to higher employee performance because they provide more distant supervision and more opportunity for personal initiatives, the research fails to support this notion. At his point, it’s impossible to state that any particular span of control is best for producing high performance or high satisfaction among employees. Again, the reason is probably individual differences. That is, some people like to be left alone, while others prefer the security of a boss who is quickly available at all times. Consistent with several of the contingency theories of leadership it is expected that factors such as employee experiences and abilities and the degree of structure in their tasks to explain when wide or narrow spans of control are likely to contribute to their performance and job satisfaction. However, there is some evidence indicating that in a manager’s job a job satisfaction increases as the number of employees supervised increases.

It is found fairly strong evidence linking centralization and job satisfaction. In general, organizations that are less centralized have a greater amount of participative decision making. And the evidence suggests that participative decision making is positively related to job satisfaction. But again individual differences may surface. The decentralization satisfaction relationship is strongest with employees who have low self esteem. Because individuals with low self-esteem have less confidence in their abilities, they place a higher value on shared decision making which means that they are not held solely responsible for decision outcomes.