Organizational Climate and Company Productivity - Literature review Example

?Running head: Business: sustained writing   International Business Strategy Case Insert Insert Insert 23rd. Aug.2011 Sustained Writing Financial review education newspaper Analysis According to Lebihan (2011, p.27), the author of the above article, the well-being of employees and business is being viewed as demand in organizations, this research is mainly being conducted by universities; for instance, “the university of Wollongong which incorporated the Australian institute of business wellbeing as its Sydney’s business school in April” (Lebihan, 2011 p27). The employees and businesses’ wellbeing is a social need; social needs vary from working conditions and education among others, however, these needs are met by social innovation. Social need can be defined as a problem that a society experiences, which requires response. The author further adds that, despite being wealthy, the gross domestic product does not rhyme with people’s wellbeing. Therefore, social innovation comes in as demand for the wellbeing programs at the workplace, which has led majority of employers to seek strategies that will aid the wellbeing programs. The article further adds that, research on employees’ wellbeing has previously focused on the quality of job, the balance of work life and employee satisfaction. In addition, those employees who are given more space in the office have low stress rat and high sense of wellbeing. Indeed, the growing productivity in the place of work in Australia can be related to employees’ wellbeing. Social Need: Employee and Business Well-Being as Organizations Demand According to Lebihan (2011, p.27), numerous research programs of organization and employees wellbeing are being launched; this can only mean that employees’ wellbeing has become a social need that needs to be attended to. Employees’ wellbeing includes satisfaction, job quality and the balance of work life, while organization’s wellbeing includes organization change, strength, and organizations dynamics. Nevertheless, for an organization to succeed there is need for a healthy and focused workforce that will drive the organization towards a competitive advantage. Importantly, employees’ quality of life should be improved so as to yield to organization’ effectiveness and allow employees increase their performance and productivity level. Studies have proved that when employees achieve job satisfaction, the level of absence reduces work related accidents, and the level of retention is high, thus productivity increases since employees are committed to work. Boezeman & Ellemers (2009, P.898) define job satisfaction as the attitude one has concerning his job; this attitude determines the employees’ output. According to Lebihan’s article, research is yet to proof that workers with high level of well-being are more productive thus resulting to a more profitable and functional organization. Social innovation in relation to employee wellbeing In this 21st century, imbalance contributes to the sustainability of business as usual, especially due to scarcity of resources and the increase in costs; hence, a change in the expectations of employees and customers is experienced. Therefore, social innovation should be directed towards social needs, for instance, organizations should find new strategies that not only contribute to the well being of employees but to organization’s productivity. Lebihan’s article, states that there is increasing demand of well being programs from employers who emphasize on proof that supports such programs. The result is leaving researchers with a task of proofing how wellbeing workers contribute to high productivity. Social innovation incorporates the developments and implementation of new ideas that will match the social needs. One arising need in this article is the employee and business wellbeing. However, social innovation is associated with the challenge of cost; nevertheless, it still contributes to the wellbeing of the society. Employee well being is a debated field, which requires more proof to support its credibility. Nevertheless, according to Currivan (1999, p.497), job satisfaction, job commitment and turnover are related, such that, employees turnover is determined by the level of employee satisfaction and job commitment. According to the author, job satisfaction contributes to job commitment in that, when an employee is content with his/ her job, he gives his all to that particular job, thus practicing loyalty and commitment. It is however evident that social innovation increase productivity as it encourages workers’ development and contributes to flexible working. Social innovation also contributes to job satisfaction by making work more flexible and by contributing to a healthier working environment. Employees are the backbone of an organization; hence, an organization cannot operate without staff members. However, if these employees are not motivated, they end up viewing their job unsatisfactory and the results of their attitudes could be the downfall of the organization. According to Lebihan (2011, p.27), traditional research on employee wellbeing focused on job quality, balance in work life and job satisfaction, however, the article further adds that organizational wellbeing refers to organizational change, strength and dynamics. However, due to the change in economy, most workers work for long hours to meet the organization’s goals. Nevertheless, organizations with flexible working hours for employees not only have motivated employees, but also achieve increased productivity. Motivation can occur in various ways - monetary incentive involves the use of money as a reward tool in motivating employees. However, it may be short-lived if not accompanied with non-monetary incentives, which may include letters of recommendation, training, and praises for a job well done. Corporate governance effects on employee and organization wellbeing Corporate governance relates to the exercise of rules, systems, laws, and processes of organizations. All these affect the way an organization is run and controlled. It is through fairness and transparency that top management ensures that a company relationship is formed with customers, employees, community, and government among others (Stolt, 2010 p2). Lebihan’s article indicates that employers are demanding proof indicating that motivated workers perform well, hence leading to the productivity of an organization. Various researches have been conducted regarding this matter; for instance, corporate governance enables organizations to curb labor turnover and increases productivity. This results from employee satisfaction and wellbeing, thus contributing to an organization’s wellbeing as well. According to Patterson, Warr and West (2004, p.194), organizational climate determines employee performance. In addition, a research conducted indicated that an organizational climate that allows employees involvement in decision-making contributed to motivation and organizational success. The way an organization is run has major effects on employees, which could be either positive or negative. Collaboration of top management and the staff increases productivity since there is transparency in the organization’s operations. Effective and transparent communication channels also assist in fast and timely decision-making. Organizations should embrace corporate governance, as it aids in guaranteeing employee security, however, it should be noted that poor corporate governance could also be fatal to an organization, as it could demotivate employees, hence leading to high labor turnover, which may result to low productivity. Nevertheless, according to Hoskisson et al, (2001, p.4), corporate governance and innovation strategies work hand in hand, such that, an organization’s governance determines the type of social innovation strategies to be used. The authors further add that corporate governance mechanisms are important in determining an organization’s operations that lead to profit maximization. They emphasize on monitoring as a tool that yields in increasing effectiveness; nevertheless, the type of innovation decided upon should be a solution to the pressing need of an organization. Good corporate governance guarantees an organization’s success and development. In addition, it considers employees needs in terms of training and promotions when necessary. As a result, the organization is run according to the interest of all the involved parties. Theoretical issues Employee well - being in relation to organization’s performance. There is growing demand in research of the relationship between individual wellbeing and organizational performance (Lebihan, 2011, p.27). Nevertheless, research indicates that organizational performance is directly related to employee’s attitudes and motivation. According to Harter, Schmidt & Keyes (2002, p.2), employees spend more time at the workplace compared to other places; therefore, satisfaction is vital for employees, which ranges from the nature of work to performance. However, employers should be willing to provide benefits to employees in order to retain them. The author further adds that the wellbeing of employees should be an employer’s priority, as employees’ productivity affects the organization. Satisfied employees are more co-operative, punctual, and rarely absent from work, hence working for an organization for the longest time possible. In addition, the emotional wellbeing of employees matters a lot, as it is evident in turnover rates, performance, and productivity. Employee’s satisfaction An organization should understand what motivates employees if they aim at achieving customer’s satisfaction. First, employees’ satisfaction automatically yields to loyalty, which in return yields to productivity. Employees’ productivity yields to value of the organization, which contributes to customer’s satisfaction, hence, the customers develop loyalty towards the organization. When a firm gains customers loyalty, profitability is a guarantee. Customers pay to receive quality services; however, with the presence of unhappy employees, this is an impossible mission. The Adam’s equity theory provides that there should be a balance between employees’ inputs, for instance, hard work and an employee’s output, which involves salaries and benefits. A fair balance between inputs and outputs contributes to increased organization’s productivity, and motivated employees. An employer should make sure that the employees are not frustrated with the outputs they receive. In addition, he should ensure that their hard work rhymes with their outputs. When an employee is treated with justice, there is a high possibility that he will yield positive outcome in terms of performance. This theory campaigns for flexibility, fairness, job security in relation to employee motivation and satisfaction (Pahl, Hinze & Richter, 2009, p.7). Employee engagement Employee engagement refers to the level in which an employee is attentive to his work, hence evident in their performance. Therefore, it involves both emotions and attitudes towards a job. However, employee’s attitude towards a job may change and take a negative turn if he is not motivated. Hertzberg hygiene-motivator theory explains that hygiene issues include salaries, supervision, policies among others. These issues can contribute towards dissatisfaction if handled poorly, whilst motivators include achievement recognition, promotions, and advancement, among others. Therefore, this theory emphasizes on reducing dissatisfaction of employees by improving on the hygiene issues and maintaining the motivators. Moreover, increasing employees’ engagement in the organization can be an important step towards motivation (Pahl, Hinze & Richter, 2009, p.7). Employee turnover is triggered by demotivating factors in the place of work, for instance, the quality of employees’ relationship with the supervisors and the work environment. Therefore, job satisfaction and turnover are related, whereby, job satisfaction has a greater effect on employee turnover rate. Conclusion Social innovation plays a vital role in organizations and the society. This may include new strategies that aim at meeting the organizational needs. In this study, social need that arose was the demand of research in employee wellbeing and organization’s performance. The study concludes that various researches prove the importance of job satisfaction in relation to organization’s productivity. An organization literally relies on employee’s productivity, which yields to profit maximization. However, unhappy employees cannot contribute to positive organization performance, since their inputs will be low. Adam’s equity theory elaborates more on fairness between inputs and outputs. He adds that an employee may possibly give depending on what he receives; therefore, equity is important in the workplace. Job satisfaction contributes to motivation of employees who in return increase on performance, which leads to productivity and profitability for an organization. It is therefore important that employers harbor happy employees. References Boezeman, E. and Ellemers, N. (2009). Intrinsic need satisfaction and the job attitudes of volunteers versus employees working in a charitable volunteer organization. Journal of Occupational and Organizational Psychology, 82, 897–914. The British Psychological Society. Retrieved from: http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=6&hid=110&sid=3660eb64-fe1c-4ce9-a4ee-a0cb7221db5a%40sessionmgr104. Currivan, D. (2000). The causal order of job satisfaction and organizational commitment in models of employee turnover. Human Resource Management Review. Volume 9, Number 4, Elsevier Science Inc. retrieved from http://mres.gmu.edu/pmwiki/uploads/Main/Currivan1999.pdf Harter, J. Schmidt, F. and Keyes, C. (2002). Well-being in the workplace and its relationship to business outcomes: a review of the Gallup studies. American psychological association, Washington DC. Inc. retrieved from http://media.gallup.com/documents/whitePaper--Well-BeingInTheWorkplace.pdf Hoskisson, R. E. et al. 2001. Conflicting voices: the effects of institutional ownership heterogeneity and internal governance on corporate innovation strategies. Retrieved from http://www.aom.pace.edu/amj/August2002/hoskisson.pdf Lebihan, R. (2011). Education: studies of business well- being in vague. Pahl, N. Hinze, A. and Richter, A. (2009). Options for Variable Compensation. Berlin: GRIN Verlag Publishers. Retrieved from: http://books.google.co.uk/books?id=aAITZ0dm4-wC&pg=PA7&dq=adam%27s+equity+theory+and+herzberg+motivation+theory&hl=en&ei=ir9UTo-PFcbsOdnisZoG&sa=X&oi=book_result&ct=result&resnum=1&ved=0CC4Q6AEwAA#v=onepage&q=adam%27s%20equity%20theory%20and%20herzberg%20motivation%20theory&f=true. Patterson, M. Warr, P. and West, M. (2004).Organizational climate and company productivity: The role of employee affect and employee level. Journal of Occupational & Organizational Psychology. Retrieved from Ebscohost. Stolt, R. (2010). Corporate Governance in Hong Kong. Berlin: GRIN Verlag Publisher. Retrieved from http://books.google.com/books?id=vKERkcVkO6MC&pg=PA2&dq=definition+of+corporate+governance&hl=en&ei=3ohUTuuoFoL0-gauy-THBg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CDMQ6AEwAA#v=onepage&q=definition%20of%20corporate%20governance&f=true Read More