UGC NET MBA Unit-2

Organisational Behaviour (OB) & Human Resource Management (HRM)

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1. Organisational Behaviour – Concept and Significance

Definition:
Organisational Behaviour (OB) is the study of how individuals and groups behave within an organization, and how this behavior affects organizational performance.

According to Stephen Robbins:
“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 organizational effectiveness.”

Significance:

1. Improves managerial effectiveness.

2. Enhances motivation and productivity.

3. Promotes teamwork and cooperation.

4. Reduces absenteeism and turnover.

5. Encourages innovation and leadership.

OB is interdisciplinary: draws from psychology, sociology, anthropology, and political science.

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2. Theories of Organisational Behaviour

(A) Classical Theories

• Focused on structure, efficiency, and rationality.

• Example: Scientific Management (Taylor), Administrative Theory (Fayol), Bureaucracy (Weber).

(B) Neo-Classical Theories

• Emphasized human relations and motivation.

• Example: Elton Mayo’s Hawthorne Studies, Maslow’s Human Needs, McGregor’s Theory X and Y.

(C) Modern Theories

• Focused on systems, contingency, and behavioral science.

• Example: Systems Theory, Contingency Theory, Socio-Technical Systems Theory.

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3. Individual Behaviour

Individual behaviour is determined by biological, psychological, and environmental factors.

Key Determinants:

1. Personality

2. Perception

3. Values

4. Attitude

5. Learning

6. Motivation

Let’s understand each briefly 👇

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(a) Personality

• Meaning: Personality refers to the sum total of ways in which an individual reacts to and interacts with others.

• Determinants: Heredity, Environment, and Situation.

• Theories of Personality:

  • Type Theory (Carl Jung, Sheldon): Classifies people as introverts/extroverts.

  • Trait Theory (Allport, Cattell): Focuses on enduring characteristics.

  • Big Five Model:

    1. Openness to Experience

    2. Conscientiousness

    3. Extraversion

    4. Agreeableness

    5. Neuroticism (Emotional stability)

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(b) Perception

• Definition: Process by which individuals interpret and organize sensory impressions to give meaning to their environment.

• Perceptual Process:
  Stimulus → Selection → Organization → Interpretation → Response

• Errors in Perception:

  • Halo effect

  • Stereotyping

  • Selective perception

  • Attribution error

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(c) Values

• Enduring beliefs about what is right or wrong.

• Types:

  • Terminal Values: Desired end-states (e.g., happiness, success).

  • Instrumental Values: Modes of behavior (e.g., honesty, responsibility).

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(d) Attitude

• A learned predisposition to respond positively or negatively toward an object or person.

• Components:

  1. Cognitive (belief)

  2. Affective (feeling)

  3. Behavioural (action)

• Theory: Festinger’s Cognitive Dissonance Theory — inconsistency between beliefs and behavior causes tension.

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(e) Learning

• A relatively permanent change in behavior due to experience.

• Theories of Learning:

  1. Classical Conditioning (Pavlov): Learning by association.

  2. Operant Conditioning (Skinner): Learning through rewards/punishments.

  3. Social Learning (Bandura): Learning through observation and imitation.

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(f) Motivation

• The process of stimulating people to take action to accomplish goals.

Major Theories:

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4. Group Behaviour

A group is two or more people interacting interdependently to achieve common goals.

Types of Groups:

1. Formal Groups: Created by organization (committees, teams).

2. Informal Groups: Socially formed (friendship, interest groups).

Group Dynamics:

• How group members interact and influence each other.

• Stages (Tuckman’s Model):

  1. Forming

  2. Storming

  3. Norming

  4. Performing

  5. Adjourning

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Team Building:

• The process of improving group effectiveness through trust, communication, and collaboration.

Effective Team Characteristics:

• Clear goals

• Open communication

• Mutual trust

• Defined roles

• Participative leadership

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Leadership:

Leadership is the ability to influence others to achieve goals.

Theories of Leadership:

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5. Interpersonal Behaviour & Transactional Analysis

Interpersonal Behaviour:
Mutual actions and communication between individuals in an organization.

Transactional Analysis (Eric Berne):
A method for understanding interpersonal communication.

Ego States:

1. Parent: Authoritative or nurturing.

2. Adult: Rational and logical.

3. Child: Emotional, spontaneous.

Types of Transactions:

• Complementary: Matching ego states → smooth communication.

• Crossed: Ego mismatch → conflict.

• Ulterior: Hidden motives → manipulation.

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6. Organizational Culture and Climate

Organizational Culture:
Shared values, beliefs, and practices that shape behavior in an organization.

Types (Charles Handy):

1. Power Culture – centralized authority.

2. Role Culture – defined hierarchy and roles.

3. Task Culture – team and project-based.

4. Person Culture – individual-oriented.

Organizational Climate:
The perception of the work environment by employees (e.g., friendly, innovative, rigid).

Difference:
Culture = Deep-rooted values; Climate = Surface-level perceptions.

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7. Workforce Diversity & Cross-Cultural Behaviour

Workforce Diversity:
Differences in employees based on gender, age, ethnicity, nationality, and background.

Benefits:

• Innovation and creativity

• Global competitiveness

• Broader talent base

Challenges:

• Communication barriers

• Stereotyping and prejudice

Cross-Cultural OB:
Understanding how culture influences behavior (important in MNCs).

Model:
Hofstede’s Cultural Dimensions:

1. Power Distance

2. Individualism vs Collectivism

3. Masculinity vs Femininity

4. Uncertainty Avoidance

5. Long-term Orientation

6. Indulgence vs Restraint

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8. Emotions and Stress Management

Emotions:
Intense feelings directed toward someone or something.

Emotional Intelligence (EI):
Ability to understand and manage one’s own and others’ emotions.
Proponent: Daniel Goleman.
Components:

1. Self-awareness

2. Self-regulation

3. Motivation

4. Empathy

5. Social skills

Stress:
A state of physical or mental tension caused by perceived challenges.

Types:

• Eustress: Positive stress (motivating).

• Distress: Negative stress (harmful).

Management Techniques:

• Time management

• Relaxation and meditation

• Support groups

• Counselling

• Organizational support programs

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9. Organisational Justice and Whistle Blowing

Organisational Justice:
Employee perception of fairness in workplace decisions.

Types:

1. Distributive Justice: Fairness in outcomes (pay, rewards).

2. Procedural Justice: Fairness in processes and policies.

3. Interactional Justice: Respectful treatment and communication.

Whistle Blowing:
Revealing unethical or illegal practices within the organization.

• Internal Whistle-blowing: Reporting within the organization.

• External Whistle-blowing: Reporting to outside agencies.

• Protected under the Whistle Blowers Protection Act (2014) in India.

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10. Human Resource Management (HRM)

Concept:
HRM involves planning, organizing, directing, and controlling the procurement, development, compensation, and maintenance of human resources.

Objectives:

1. Effective utilization of human talent.

2. Employee motivation and satisfaction.

3. Organizational growth and harmony.

Functions:

1. Managerial Functions: Planning, Organizing, Directing, Controlling.

2. Operative Functions: Procurement, Development, Compensation, Integration, Maintenance.

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Perspectives of HRM

• Hard HRM: Focus on quantitative, business needs, control, and cost reduction.

• Soft HRM: Focus on people, development, and motivation.

Influences on HRM:

• Legal framework, globalization, technology, workforce demographics, culture.

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Recent Trends in HRM

• Talent management

• E-HRM and HR analytics

• Flexible working & gig workforce

• Diversity & inclusion

• Employer branding

• Strategic HRM

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11. Human Resource Planning (HRP)

Definition:
HRP ensures the right number of people with the right skills are available at the right time.

Process:

1. Assess current HR inventory

2. Forecast future HR needs

3. Analyze gaps

4. Develop HR strategies

5. Monitor and evaluate

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12. Recruitment and Selection

Recruitment: Process of attracting potential candidates.
Sources:

• Internal (promotion, transfers)

• External (advertisements, job portals, campus recruitment)

Selection: Choosing the most suitable candidate.
Steps: Application → Tests → Interviews → Reference check → Medical exam → Job offer.

Induction (Orientation): Introducing the new employee to the organization’s culture and values.

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13. Training and Development

Training: Short-term process to improve skills for current job.
Development: Long-term process for managerial growth.

Methods:

• On-the-job: Coaching, job rotation, apprenticeship.

• Off-the-job: Lectures, case study, simulation, workshops.

Evaluation: Kirkpatrick’s 4 levels – Reaction, Learning, Behavior, Results.

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14. Job Analysis, Evaluation, and Compensation

Job Analysis: Systematic study of job contents and requirements.
→ Outputs: Job Description + Job Specification.

Job Evaluation: Determining relative worth of jobs to establish fair pay.
Methods:

1. Ranking

2. Classification

3. Point system

4. Factor comparison

Compensation Management:
Designing and managing pay structures and benefits to reward employees fairly.

Components:

• Basic Pay

• Incentives

• Fringe Benefits

• Perks

• Non-monetary Rewards