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CHAPTER-I

INTRODUCTION

INTRODUCTION

The study of Organizational Behaviour (OB) is very interesting and challenging too.

Organizational behaviour is a field of study, meaning that it is a distinct area of

expertise with a common body of knowledge. It studies the three determinants of

behaviour in organizations; individuals, groups, and structure. In addition, OB applies

the knowledge gained about individuals, groups and the effect of structure on behaviour

in order to make organizations work more effectively. Organizational behaviour is a

field of study that investigates the impact that individuals, groups, and structure have

on behaviour within organization. In other words, the study of organizational behaviour

relates to the expected behaviour of an individual in the organization. No two

individuals are likely to behave in the same manner in a particular work situation. It is

the human factors that contribute in the importance of the study of the human

behaviour. Researchers, management practitioners, psychologists and social scientists

must understand the very testimonial of an individual’s, his background, social

framework, education update, impacts of social group and other situational factors on

behaviour.

OB involves integration of studies undertaken relating to behaviour science like

psychology, economics, social psychology, sociology, anthropology, and political

science. Therefore, organizational behaviour is a comprehensive field of study in which

individual, group and organizational structure is studied in relation to organizational

growth and organizational culture, in an environment where is the great the impact of

modern technology. The aim of the study is to ensure that human behaviour contributes

toward growth of organization and great efficiency is achieved.

Organizational behaviour can be defined as- “the study and application of knowledge

about human behaviour related to other elements of on organization such as structure,

technology and social system- L.M. Prasad. Stephen P Robins defines “organizational

behaviour as a systematic study of the action and attitude that people exhibit within

organization. In other words, “Organizational Behaviours refer to the behaviour of

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individuals and groups within organizations and the interaction between organizational

members and their external environment”.

To sum up the definitions, OB is the study of what people do in an organization and

how heir behaviour affects the organization’s performance. Because organizational

behaviour is concerned specifically with employment-related situation, should not be

surprised that it emphasizes behaviour as related to concerns such as work,

absenteeism, employments turnover, productivity, human performance, and

management. In the other words, the value system, emotional intelligence,

organizational culture, job design and the work environment are important casual

agents in determining human behaviour.

FOUNDATIONS OF ORGANIZATIONAL BEHAVIOUR

Organizational behaviour is based on some fundamental concepts which turn around

the nature of people and organizations. These concepts are not irregular to the field of

OB, even every discipline, to be social science or physical science, will flourish on

definite assumptions. The basic assumptions that distinct to this discipline are as below;

Individual differences- the first foundation is the differences of the individuals, people

have much in common, but each person in this is also individually different. In the

several ways, each one is different from others. Whether it is intelligence, physique,

personality, diction, or any such trait, one can find remarkable differences. OB begins

with the individual, because of individual differences.

Whole person: - with the appointment, not only his/her skill hired even his/her social

background, likes and dislikes, pride and prejudice are also hired. Family of a person

cannot be separate from his or her work life. This is the reason that managers should

endeavour to make the workplace a home away from home.

Human dignity: - Human dignity is more an ethical philosophy than a scientific

conclusion. It confirms that people are to be treated different from other factors of the

production because they are different from other factors and are off a higher order in

the universe. It recognizes that people want to be treated with respect and dignity and

they should be treated. A human dignity concept rejects the old idea of using

employees as economic tools.

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Organizations are social systems:- organizations are social systems, the activities

within the organizations are governed by social as well as psychological laws. As

people have psychological needs, they also have social role and status. The behaviour

of human is influenced by their groups as well as by their individual drives. There are

two types of social systems i.e. formal system and informal system exists in

organizations. The existence of social system implies that the organization environment

is one of dynamic change, rather than a static set of relation as reveled in an

organization chart.

Mutuality of interest: - the statement “organizations needs people and people also

need organizations” represented mutual interest. Organizations are formed and maintain

on the basis of some mutuality of interest among their participants. People consider

organizations as a mean to help them to reach their goals, and at same time,

organizations need people to attain organizational objectives. It makes no sense to try to

assemble a group and develop cooperation in the lacking of mutuality. Mutual interest

provides a super ordinate goal that unites the variety of needs that people bring to

organization.

Need for Management: - There is need for management in an organization because

management is the attainment of organization goals in an effective and efficient manner

through planning, organizing, leading and controlling organization resources, of course

making use of the knowledge about organization behaviour. And they called executives

or managers who, plan, organize, lead and control constitute.

As explain above; these concepts are the foundation of the organizational behaviour.

DISCIPLINES THAT CONTRIBUTE TO THE

ORGANIZATIONAL BEHAVIOUR FIELD

Organization behaviour is an applied behavioural science built on contributions from a

number of behavioural disciplines, mainly psychology, social psychology, sociology,

and anthropology. Psychology contributes mainly at the individual or micro level of

analysis, while other disciplines have contributed to understand macro concepts such as

group processes and organization.

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Figure 1.1 Major disciplines and their contributions to OB

Source: Robbins, S.P. and T.A. Judge, book: Organizational Behavior, 15th

edition.

Psychology

Psychology is an applied science, which attempts to explain human behaviour in a

particular situation and predicts actions of individuals. Psychology concerned with

individuals’ behaviour and has contributed greatly to the intra individual dynamics of

human behaviour. In other words, psychology has contributed toward various theories

on individual decision making, motivation, personality, perception, attitude, job

satisfaction, performance appraisal, opinion, job design, work stress and conflict

management. Studies of these theories can improve personal skills, bring change in

attitude and develop positive approach to organizational systems.

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Social psychology

Generally, social psychology, considered a branch of psychology, blends concepts from

both psychology and sociology to focus on peoples’ influence on one another. The field

has contributed to measuring, understanding, and changing attitude; identifying

communication patterns; and building trust. Finally they have made important

contribution to study of group behaviour, power, and conflict.

Sociology

Psychology focuses on the study of individual behaviour, sociology addresses itself to

the study of group behaviour. Sociology studies people in relation to their social

environment or culture. Sociologists have contributed to organizational behaviour

through their study of group behaviour in organizations, particularly formal and

complex organizations. Sociologists have studied organizational culture, formal

organizational theory and structure, organizational technology, communications,

power, and conflicts.

Anthropology

Anthropology is a field of study relating to human activities in various cultural and

environmental frameworks. It understands difference in behaviour based on value

system of different cultures of various countries. In other words, anthropologists’ work

on culture and environment has helped to understand differences in fundamental values,

attitudes, and behaviour between people in different countries and with in different

organizations.

Political science

Political scientists study the behaviour of individuals and groups within political

environment. Contributions from political scientists for a better understanding of

organizational behaviour are significant. Political scientists concern to conflict

resolution, group coalition, allocation of power, and how people manipulate power in

their self-interest.

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CHALLENGES AND OPPORTUNITIES FOR ORGANIZATIONAL

BEHAVIOUR

There are a lot of challenges and opportunities today for manager to use organizational

behaviour concepts. Today’s challenges bring opportunities for managers to use OB

concepts. In this section, some of critical issues confronting managers for which

organizational behaviour offers solutions or at least meaningful insights toward

solutions.

Responding to globalization

Organizations are no longer constrained by national borders. Growing

internationalization of business has its impact on people management. The management

is required to cope with problems which increase because of globalization. The

management have to cope with problems of unfamiliar laws, languages, practices,

competitors, attitudes, management style, work ethics and many more. The world has

become a global village. In the process, the manager’s job has changed.

Managing workforce diversity

One of the most important challenges for organizations is adapting people who are

different. The definition of diversity for business world means having a workforce that

represents many different viewpoints, background and cultures, individuals with a

variety of physical or psychological abilities. Diversity affects all the areas of

organisation from recruitment to compensation. Managing this diversity is a global

concern. Dealing with the people from different age, gender, race, educational

background, location, culture, income, parental status, religious beliefs, marital status

and work experience can be challenging task for HR managers also. With this,

managing people with different set of ideologies, views, life-style and psychology can

be very risky. Positive attitude of HR managers, effective communication and

adaptability can be helpful in bind the diverse workforce and retain the talents in the

organisation.

Improving customer service

In recent time, the majority of employees in developed countries work in service jobs

that include technical support representatives, fast-food counter workers, sales clerks,

waiters and waitresses, nurses, automobile repair technicians, consultants, credit

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representatives, financial planners etc. the common characteristics of these jobs is

substantial interaction with an organization’s customers. An organization can’t exist

without customers so management needs to ensure employees do what it takes to please

customers.

Improving people skills

Organizational behaviour represents relevant concepts and theories that can help a

manager to predict and explain the behaviour of at work. In addition, it also provides

insights into specific people skills that can be used on the job.

Improving ethical behaviour

Organizational word is characterized by cutbacks, expectations of increasing

productivity, and tough completions. Many employees feel pressured to cut corners,

break rules, and engage in other questionable practices. Employees face ethical

dilemmas and ethical choice, in which they are required to identify right and wrong

conduct. So managers need to create an ethically healthy climate for his/her employees

where they can do their work with minimal degree of ambiguity regarding what

constitute right and wrong behaviour.

Creating a positive work environment

There are stronger competitive pressures on most of organizations, even than some

organization are trying to realize a competitive advantage by fostering a positive work

environment. A real growth area in organizational behaviour is positive organizational

behaviour, which studies how organizations develop human strengths, foster energy

and unlock potential.

Positive organizational behaviour does not deny the value of the negative

feedback, it does challenge researcher to look at OB through a new lens and pushes

organizations to exploit employees’ strength.

These are some of challenges and opportunities which are faced in organization

behaviour. Although, debate exists about the relative importance of each related

behaviour, organizational behaviour include the core topics of motivation, leader

behaviour and power, interpersonal communication, group structure and process,

conflict, work design, commitment, work stress and organizational effectiveness.

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In the present study, the researcher explained the three core variables of organizational

behaviour i.e. organizational commitment, occupational stress, and organizational

effectiveness.

1.1 ORGANIZATIONAL COMMITMENT

The concept of commitment is regularly associated with both attitudes and emotions.

And commitment in workplace is still one of the most challenging and researched

concepts in the fields of management, organization behaviour, and human resource

management (HRM). Commitment to a relationship, an organization, a goal, or even an

occupation involves emotional attachment, in addition to evaluation of whether current

situation are what one expected or might expected in the future. Becker, (1960)

suggested a cost based commitment, where an individual assesses the perceived gains

associated with continued membership of an organization and perceived cost associated

with leaving and ultimate decision of leaving and staying is made based on its

comparative advantage.

1.1.1 CONCEPT OF ORGANIZATIONAL COMMITMENT

Organizational commitment in the fields of Organizational Behavior and

Industrial/Organizational Psychology is, in a general sense, the employee's

psychological attachment to the organization. It can be contrasted with other work-

related attitudes, such as job satisfaction, defined as an employee's feelings about their

job, and organizational identification, defined as the degree to which an employee

experiences a 'sense of oneness' with their organization. Many definitions exist in the

literature for organizational commitment.

Organizational commitment has been defined as “a psychological state that

characterizes an employee’s relationship with an organization and has implications for

the decision to continue membership of the organization” (Meyer and Allen 1991).

Hall, Schneider and Nygren (1970) defined organizational commitment as the process

by which the goals of the organizations and those of the individual become increasingly

integrated and congruent. Sheldon (1971) defined organizational commitment as an

attitude or an orientation towards the organization, which links or attracts the identity of

the person to the organizations.

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Salancik (1977) gives two approaches to understand organizational commitment-

prospective and retrospective. In prospective, commitment is conceived as an

individual’s psychological bond to the organization or social system as reflected in

his/her involvement with, loyalty for and belief in the value of the organization. In the

retrospective view, commitment results as the individual becomes bound to the

behavioural acts that are chosen voluntarily.

According to Cook and Wall (1980) organizational commitment has three interrelated

components; pride in the organization and internalization of its goal; willingness to

invest personal efforts for the sake of organization; and affection for and attachment to

the organization and a wish to remain a member of the organization. In the context of

this definition, organizational commitment embraces the following three elements.

a) The acceptance of organization goals and a strong belief in these goals.

b) Willingness to perform substantial efforts on behalf of the organization.

c) Having a definite desire to maintain organizational membership. (Allen and

Mayer, 1990).

Mowday, Porter, and Steers (1982) defined organizational commitment as the relative

strength of an individual’s identification with and involvement in a particular

organization. Organizational commitment has been defined as a psychological state that

characterizes an employee’s relationship with an organization and has implications for

the decision to continue membership of the organization (Mayer and Allen, 1991,

Agarwal, 1999).

Organizational commitment has been defined as the strength of an individual’s

identification with and involvement in a particular organization, characterized by;

a) A strong belief in and acceptance of an organization’s goals and value.

b) Willingness to exert considerable efforts on behalf of the organization;

c) A define desire to maintain organizational membership.

These three dimensions refer to what have been described as normative, affective and

continuance commitment. Organizational commitment has been demonstrated to be

better conceptualized as a set of different, more or less independent components instead

of using a single construct. In organizational commitment, an employee identified with

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a particular organization and its goals and wishes to remain a member. Most research

has focused on emotional attachment to an organization.

The multiple commitments consist of an employees’ belief in the organization,

willingness to work hard for it, and desire to continue to work for it. Generally, higher

level of commitment show employees’ desire to staying and lower level of commitment

show employees’ intentions leaving on organization.

The importance of organizational commitment has been reflected in ongoing researches

in the management area. Organizational commitment reveals complex employee

attitude, including emotional attachment to the organization refers as affective

commitment, continuance commitment emphasizing the perceived investment and

costs, and obligation based consideration known as normative commitment.

1.1.2 COMPONENTS OF ORGANIZATIONAL COMMITMENT

In a model of commitment developed recently by Meyer and Allen (1987), the three

components outlined and were labeled affective, continuance and normative

commitment respectively. According to Meyer and Allen (1991) three component

model of commitment indicated that there are three mind set which can characterize an

employee’s commitment to organization.

Affective commitment

Affective commitment is defined as the employee's positive emotional attachment to

the organization. An employee who is affectively committed strongly identifies with

the goals of the organization and desires to remain a part of the organization. This

employee commits to the organization because he/she "wants to". Affective

commitment refers to the employee’s emotional attachment to, identification with and

involvement in the organization and its goals, according to Meyer and Allen, 1991. The

attachment is reflected in one’s role, task management and social interaction in relation

to the organizational goals and value.

Continuance commitment

The individual commits to the organization because he/she perceives high costs of

losing organizational membership including economic costs (such as pension accruals)

and social costs (friendship ties with co-workers) that would be incurred. The employee

remains a member of the organization because he/she "has to". On other words,

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continuance commitment refers to commitment based on the costs and risk the

employees associate with leaving the organization. As such, the fewer alternative

employment opportunities an employee has, the higher the continuance commitment is

perceived. It is argues that individualism is associated positively with continuance

commitment as both constructs emphasis a cost-benefit approach to behavioral

intention.

Normative commitment

The individual commits to and remains with an organization because of feelings of

obligation. These feelings may derive from many sources. For example, the

organization may have invested resources in training an employee who then feels a

'moral' obligation to put forth effort on the job and stay with the organization to 'repay

the debt.' It may also reflect an internalized norm, developed before the person joins the

organization through family or other socialization processes, that one should be loyal to

one's organization. The employee stays with the organization because he/she "ought

to". According to Meyer & Allen, 1991, normative commitment refers to employees’

feelings of obligation, duty or loyalty to remain with the organization, even when the

organization suffers some problems. It is believed that this type of commitment will be

influenced by an individual’s experiences both prior to cultural socialization and

following organizational socialization entry into the organization.

Commitment has usually been studied as an individual level

variable. Studies have also looked at commitment as an organization/ group level

variable. Ostroff (1992) showed that aggregation of commitment scores of individuals

is meaningful when there has been consensus among members of the group. The

correlation between commitment at group level and performance has shown to be

stronger than what was seen at individual level. Such aggregation is more appropriate

when performance is a result of highly interdependent activities of individuals (Ostroff

1992).

1.1.3 CORRELATIONS OF THE ORGANIZATIONAL

COMMITMENT

The correlates of the organizational commitment can be grouped into three major

categories on the base of related literature.

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a) Personal characterizes

b) Role/ Job characteristic

c) Organizational characteristics

Personal characteristics

Organizational commitment is consider as an attitudinal phenomenon by most of the

researchers. Why do employees differ from each other in terms of this attitude?

Whether or not an employee is committed to the organization (if yes, so to what extent)

is recognized by some researchers to his/her personal background and attributes. Thus,

organizational commitment has been found to be positively related to age (Fukami and

Larson, 1984; Balaji, 1986; Alvi and Ahmed, 1987), to job tenure (Fukami and Larson,

1984; Reichers, 1985) and negatively related to education (Fukami and Larson, 1984;

Curry, et.al., 1986; Glisson and Durick, 1988). Managerial respect and job status are

also reported to be related to organizational commitment. The employees who having

high level of managerial respect and having high job status showed greater degree of

organizational commitment than the employees having low level of managerial respect

and job status (Verma,1986). Srivastava and Dolke (1978), locus of control (personal

characteristic) was found to be most important determinants of organizational

commitment and work identification in comparison to organizational variables.

Role/ Job characteristics

Empirical studies have demonstrated that role conflict, role ambiguity and certain other

job characteristics influence the level of organizational commitment. Role conflict was

found to be inversely related to organizational commitment and mixed results emerged

for role ambiguity (Morris and Koch, 1980; Morris and Sherman, 1981). The results of

study conducted by Glisson and Durick (1988) also indicated that job characteristics

primarily role ambiguity and role conflict play a significant but smaller role in

predicting organizational commitment.

Several other studies have found that organizational commitment to be positively

related to job variety (Martin and O’Laughlin, 1984; Wallace, 1995), feedback and task

identity (Steers and Spencer, 1977). According to the results of study conducted by

Rosin and Korabik (1991) revealed that women who described their job as having

limited scope for leadership, responsibility, time flexibility and autonomy, variety

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expressed low job satisfaction and low organizational commitment and had a great

intention to leave.

Organizational characteristics

Organizational commitment has also been found to be positively and significantly

related to many organizational characteristics like, communication (Martin and

O’Laughlin, 1984; Curry, et. al., 1986), promotional and advancement opportunities

(Curry, et. al. 1986; Sharma, 1989; Sharma and Singh, 1991), group cohesion and

training (Martin and O’Laughlin, 1984; Singh, 1990), job security (Wanous, 1980;

Sharma,1989), recognition and appreciation (Sharma, 1989; Sharma and Singh, 1991),

objectivity, rationality, welfare facilities, and grievance handling (Sharma, 1989),

relations with supervisor and interpersonal trust (Cook and Wall, 1980; Fukami and

Larson, 1984), welfare-corporatism (Lincoln and Kalleberg, 1996).

On the other hand, ceratin organizational characteristics like decisional deprivation

(Alutto and Acito, 1974) and perceived inequity (Singh, 1990) have been found to be

inversely related to organizational commitment. The results of a study conducted by

Sheldon (1971) indicated difference in the relationship between occupational position

and organizational commitment and reward-recognition system was not operating as

expected in producing organizational commitment.

1.2 OCCUPATIONAL STRESS

In recent years changing scenario of job life is witnessed from organizational change

that has assumed greater significance due to the entry of multinational companies and

economic globalization as well. The advent of technological revolution in all walks of

life coupled with globalization, privatization policies has radically changed

conventional patterns in all sectors.

The frontiers of knowledge on the concept of stress and its effects are

expanding in all directions. There exists a multiplicity of theories and invalidated

explanations to the term stress. But there is a general acceptance of the concept of stress

as a description of the individual's reactions to the environmental demands and

influences which are potential stressors. Stressors combine to pressure an individual

until stress develops. Hans Selye (1974) defines stress as, the non specific response of

the body to any demand made upon it. Robbins (2001) defines stress as a dynamic

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condition in which the individual is confronted with an opportunity, constraint, or

demand related to what he or she desires and for which the outcome is perceived to be

both uncertain and important. Organizational based factors have been known to induce

job stress for employees at the workplace (Greenhaus and Beutell, 1985). These factors

are termed as organizational stressors since they serve as agents that trigger various

stress reactions (Van Onciul, 1996).

Further, in banks jobs are structured in a way that a worker is simultaneously

exposed to both overload and the employees work under acute time pressure. This

exposes bank employees to greater stress situation which is reacted by them in various

ways. Generally people under stress express their frustration through some common

ways like excessive criticism of management, inability to get along with others or the

joining of militant unions.

1.2.1 CONCEPT OF OCCUPATION STRESS

Occupational stress is stress involving Work Stress is defined in terms of its

physical and physiological effects on a person, and can be a mental, physical or

emotional strain. It can also be a tension or a situation or factor that can cause stress.

Occupational stress can occur when there is a discrepancy between the demands of the

environment/workplace and an individual’s ability to carry out and complete these

demands. Many definitions also exist in the literature for occupational stress. Cobb

(1975) has the opinion that the responsibility load creates severe stress among workers

and managers. If the individual manager cannot cope with the increased responsibilities

it may lead to several physical and psychological disorders among them. Brook (1973)

reported that qualitative changes in the job create adjustmental problem among

employees. The interpersonal relationships within the department and between the

departments create qualitative difficulties within the organisation to a great extent.

Miles and Perreault (1976) identify four different types of role conflict: 1. Intra-sender

role conflict 2. Inter sender role conflict. 3. Person- role conflict; 4. Role overload. The

use of role concepts suggests that job related stress is associated with individual,

interpersonal, and structural variables (Katz and Kahn, 1978).

It is indicated that occupational stress has become an important topic for study of

organizational behaviour for several reasons; Stress has harmful psychological and

physiological effects on employees; Stress is a major cause of employee turnover and

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absenteeism,; Stress experienced by one employee can affect the safety of other

employees; By controlling dysfunctional stress, individual and organisation can be

managed more effectively.

Cooper summarizes (1994) stress as everything that deprives the person of purpose and

zest that leaves him/her with negative feeling about himself/herself, with anxieties,

tension, and a sense of lostness, emptiness and futility. Mc Grath (1976) suggests that

situations have potential for stress when they have demands which are perceived to

threaten to exceed a person’s capabilities to meet them and where there are substantial

differences in rewards and costs from meeting versus not meeting the demands. He

adds, however, that the uncertainty of the rewards and costs also influences a person’s

arousal (an indicator of stress).

The World Health Organization says that stress is a worldwide epidemic. A United

Nations report labeled job stress as “the twentieth-century disease”. According to the

National Institute for Occupational Safety and Health (NIOSH), one-fourth of

employees view their jobs as the number one stressor in their lives and, three-fourths of

employees believe that the worker has more on-the-job stress than a generation ago

(NIOSH. 1999).

1.2.2 FORMS OF STRESS

Stress is not the bane of our existence. When stress starts to interfere with one’s ability

to keep going, it turns into a problem. Indeed certain level of stress can be used as a

positive source of energy like increased self confidence and motivation. Harmful high

levels of stress occur when adverse effects crop up from everyday stress. The important

effects of stress are the body does not distinguish between negative and positive forms

of stress. This means that the same physiological responses can take place whether

individuals are happy or sad about a given situation. The words positive and stress may

not often go together. But there are numerous instances of athletes rising to the

challenge of stress and achieving the unachievable, scientists stressing themselves out

over a point to bring into light the most unlikely secrets of the phenomenal word and

likewise a painter, a composer or a writer producing the best painting, the most lifting

of tunes or the most appealing piece of writing by pushing themselves to the limit.

Psychologists second the opinion that some stress situation can actually boost

our inner potential and be creatively helpful. Sudha Chandran, an Indian dancer lost

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both of her legs in an accident but the physical and social inadequacies gave her more

impetus to carry on with her dance performance with the help of prosthetic legs rather

than deter her spirit.

Due to inappropriate usage, the word stress has assumed bad connotation in

original sense a stress is neither good nor bad. It becomes good or bad, desirable or

undesirable, healthy or unhealthy depending upon what it does to us. There are

following forms of stress.

I) Distress

The most familiar is the continual feeling of being overwhelmed, oppressed and behind

in one’s task. When the stressor becomes too demanding or when an individual has not

adequate resources to meet the demand, he/she gets stressed up; the stressed up

experience is called a distress. Distress conveys the most common meaning of stress,

usually undesired, unwanted, accompanied with negative feelings e.g. sorrow,

frustration, grief may rise in situations such as failure, death of some loved one,

inevitable catastrophe, notification of a tax audit by (Internal Revenue Service) IRS etc.

Thus distress is bad and unhealthy. Prolonged distress initiates number of reactions at

the level of body and mind.

II) Eustress

This conveys the meaning of good stress. Eustress is a positive stress set off by a

positive event in one’s life. When a stressor put demand on resources and the persons

experience stress not always had to distress. If the stressor is within limits and an

individual has enough resources he/she will be able to cope up with the stress. When a

stress makes individual – up with it. There is a feeling of satisfaction and joy stresses

that make individual – with them culminate in better integration of personality. Such

stresses are called eustress or useful stress. Examples may include winning a

championship, a wedding, winning the lottery. The child, who prepared well for the

examination, wrote it effectively and came out successfully experiences better self

worthy and increased self esteem. The examination though a stress had indeed

beneficial effect on him/her. Thus eustress is the alternative form of stress that is

actually beneficial. Eustress allows individuals to engage with the challenges in the life

that are meaningful and offset boredom.

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III) Neustress

It is a neutral stress – neither good nor bad in which persons remain indifferent. It may

not be a stress like condition. Thought of concern may occupy mind but may not cause

serious fear or arousal, may be in response to news storm hitting barren land.

IV) Acute Stress

Stress that last relatively for a short period of time. It is most common stress. Acute

stress can demand all of one’s energy and leave him/her drained. This stress designates

quantitative dimension duration of the stress, may be an aspect of eustress or distress.

This is usually a reaction to an immediate threat may come from demands and pressure

of the recent past or immediate future. Stressors such as noise, crowding, isolation or

infection may result in acute stress. In some cases, it can even cause anxiety, attack or

state of shock requiring medical attention. Short term health effects of acute stress

include fatigue, irritability, depression and anxiety.

V) Chronic Stress

This is also called long term stress. It is that stress that extends over a long period of

time and is often present to perform one’s daily activities. This is generally a crushing

stress, destroys mind, body and life – overall well being ness of the individual. Often an

individual’s body reacts to this kind of stress slowly and he/she might even become

accustomed to a certain level of tension. This stress is particularly harmful because it

can lead to health problems which include – ulcers, heart diseases, colds, asthma. This

stress is often ignored until the body shows sign of it, such as an increase in the

frequency of headaches or fatigue. Individuals who are prone to chronic stress might

feel depressed or incapable of getting through the day. Chronic stress may lead to

violence, suicide, killings, heart attack and like.

The examples of chronic stressors are highly pressured work, sustained long term

interpersonal relationship, long lasting loneliness etc.

1.2.3 OPTIMUM LEVEL OF STRESS

The concept of an appropriate dosage of stress is highly important. Stress literature

indicates that the ultimate goal is to reduce stress. It may be, but not necessary. For

some people, the level of stimulation is very low; they are bored and need more

excitement and challenge. If stress is a neutral concept, then the goal is to reduce

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distress and maintain eustress. Thus we are concerned with maintaining balance and

equilibrium, realizing that it is a dynamic process. Balance here implies several things.

For examples:

Uncertainty can lead to distress, but so can certainties or over control.

Pressure can produce distress, but so is lack of contract or limbo.

Responsibility can lead to distress, but so can lack of responsibility or insignificance.

Performance evaluation can lead to distress, but so can lack of feedback regarding your

efforts.

Role ambiguity can lead to distress, but so can job descriptions that constrain

individuality.

For these and other factors, the important key is to find out an appropriate amount of

stress for the organization in general and for each individual in particular.

1.2.4 MODELS AND THEORIES OF OCCUPATIONAL STRESS

(I) French, Caplan and Kahn’s Person – Environment Fit (PE-Fit) theory

French, Caplan, Kahn and their colleagues (French and Caplan, 1972; French et al.,

1982; French and Kahn, 1962; Kahn et al., 1964) subsequently integrated Lewin’s

concepts of stress and strain in their Person – Environment Fit (PE-Fit) theory, which is

commonly accepted as a major conceptual framework for research on occupational

stress (Chemers et al., 1985; Edwards and Cooper, 1990). In the context of this

theoretical direction, occupational stress is defined in terms of job characteristics that

pose a threat to the individual resulting from a poor match between the abilities of the

employee and the demands of the job (French and Caplan, 1972). The workplace stress

that occurs as a result of incompatible person- environment fit produces psychological

strain that may contribute to stress-related physical disorders (French et al., 1982).

(II) Stress at Work Model

Cooper and Marshall’s (1976; Marshall and Cooper, 1979) Stress at Work model is

similar to PE-Fit theory, but is more specific in identifying five major categories of job

pressure and lack of organizational support in the workplace that contribute to

occupational stress: (1) pressures intrinsic to the job; (2) the employee’s role in the

19

organization; (3) interpersonal relationships at work; (4) limitations in career

development; and (5) organizational structure and climate.

(III) Karasek’s Demand–Control Model

Karasek’s (1979) Demand–Control model focuses on interactions between the

objective demands of the work environment and the decision autonomy of employees

in meeting these demands (Karasek and Theorell, 1990). According to this model, the

greatest risk to physical and mental health from stress occurs to workers facing high

psychological workload demands or pressures combined with low control or decision

latitude in meeting those demands (Schnall, 1998). The combination of high job

demands with relatively little control contributes to lowered productivity and a greater

risk of health-related problems (Theorell and Karasek, 1996). The Demand–Control

model also recognizes the beneficial effects of social support from supervisors and co-

workers (Karasek et al., 1982; Schnall, 1998).

(IV) Lazarus’ Transactional Process Model

Lazarus’ (1966) Transactional Process model of psychological stress and coping

conceptualizes stress as a process that involves a complex transaction between a person

and her/his environment (Lazarus and Folkman, 1984). In applying this model to

occupational stress, Lazarus (1991) emphasizes the distinction between sources of

stress (‘stressors’) in the workplace and the emotional reactions that are evoked when a

particular stressor is cognitively appraised as threatening. Three types of appraisal

mediate the effects of stressors on emotional reactions. Primary appraisal occurs when

a stressor is evaluated in terms of its immediate impact on a person’s well-being.

Secondary appraisal takes into account the resources of the employee for coping with

the stressor. The third type, reappraisal, incorporates new information resulting from

the worker’s appraisal of the effectiveness of her/his efforts to cope with a particular

stressor.

(V) National Institute for Occupational Safety and Health (NIOSH) Model

National Institute for Occupational Safety and Health (NIOSH) defines job stress in

terms of ‘the harmful physical and emotional responses that occur when the

requirements of the job do not match the capabilities, resources, or needs of the

worker’(NIOSH, 2002). This definition of job stress, as well as the resulting model

20

developed by NIOSH, was primarily influenced by PE-Fit theory. The NIOSH model

explicitly recognizes that exposure to stressful working conditions plays a primary role

in causing job stress and influencing worker safety and health, while ‘individual and

other situational factors can intervene to strengthen or weaken this influence. However,

the NIOSH model gives little attention to the significant influence of the employee’s

cognitive appraisal of sources of stress in the workplace.

(VI) Spielberger’s State–Trait Process (STP) Model

Spielberger’s State–Trait Process (STP) model of occupational stress focuses on the

perceived severity and frequency of occurrence of two major categories of stressor

events, job pressures and lack of support (Spielberger et al., 2002). The STP model

builds on the PE-Fit and Transactional Process models by endeavoring to integrate

these models with the conception of anxiety, anger and depression as emotional states

and personality traits (Spielberger, 1972; Spielberger et al., 1983; Spielberger et al.,

1988). The STP model gives greater emphasis than other models to the effects of

individual differences in personality traits in determining how workplace stressors are

perceived and appraised.

1.2.5 OCCUPATIONAL STRESS DIMENSIONS OF THE STUDY

In the present study, the adaptive version of Occupational stress Index (1981)

developed by A.K. Srivastva and A.P. Singh, has been used. The following study

dimensions have been used to measure the degree of perceived stress arising from

various aspects of the job of the employees. The items relate to almost all relevant

components of the job size which causes stress in some way or the other, such as, role

over-load, role ambiguity, role conflict, unreasonable group and political pressure,

responsibility for others, under participation, powerlessness, poor peer relations,

intrinsic impoverishment, low status, and strenuous working conditions.

I) Role Overload

It is a condition in which the individual is faced with a set of obligations which require

him to do more than he is able to in the time available. It obviously has to do with lack

of time and too many activities. It obviously has to do with lack of time and too many

activities. In the case of too many activities, we speak of quantitative overload; when an

21

individual has to perform tasks that are too difficult for him, we speak of qualitative

overload (French and Caplan, 1972).

II) Role Ambiguity

People in an organization sometimes do not have sufficient information about what

they are expected to do and especially about how they are to perform a task. . It occurs

when the person in a role is uncertain about the role expectation. Research indicates

that role ambiguity may cause loss of confidence in the role sender, low self

confidence, and decrease job satisfaction. Role ambiguity makes people hesitant to act.

In the research on middle management ambiguity emerged as the most powerful

Stressor.

III) Role Conflict

It is the simultaneous occurrence of two or more sets of pressures, such that compliance

with one would make more difficult compliance with the other (Kahn et al., 1964).

Some professions or jobs are characterized by a higher degree of role conflict than

others. People in mediating positions appear to be the most vulnerable because they are

in the centre of a network of pressures. The Personnel Manager, for instance, wants to

belong to the organizational staff, but on the other hand, he must dare to stand up for

the man at a lower level. This forces him to compromise, which results in both parties

mistrusting him.

IV) Group and Political Pressure

This dimension covers the difficulty to adjust with the political and group pressures and

formal rules and instructions, compulsion to perform unwillingly, maintenance of group

conformity, violation of formal procedures and policies, etc.

V) Responsibility for others

This dimension covers such aspects as the thrust of responsibility of other persons, the

responsibility of other employees’ future, responsibility for the progress of

organization, etc. A job that carries responsibility for either the well being or task

performance of others is likely to cause some degree of stress. Mostly people in

supervisory positions are more susceptible to such problems.

VI) Under Participation

22

This dimension covers job areas such as the position of the person in the organization

that with high or low power; the acceptance of suggestions made by other persons, etc.

The difference between one’s desires and actual participation gives a measure of the

potential effectiveness of participation. But the employees can’t participate in activities

they feel stress due to under participation.

VII) Powerlessness

This dimension covers areas such as acceptance of decisions taken by the person

among employees, acceptance of suggestions regarding training programs of

employees, lack of coordination of interest and opinion in making appointments for

important posts, etc. Powerlessness play a huge role in stress found within workplace.

Powerless invest their energy in dysfunctional behavior like avoiding, covering up

difficulties.

VIII) Poor Peer Relations

The area covered under this dimension refers to poor interpersonal relationships with

colleagues, colleagues’ attempt to defame and malign the employee as unsuccessful,

colleagues’ lack of cooperation in solving administrative and industrial problems, lack

of cooperation and team spirit of employees of the organization, etc. Stress can be

generated from poor relations with other employees whether they are boss, peer,

subordinates or workers in other department. Difficult peers can be unpleasant to work

with for a variety of reasons.

IX) Intrinsic Impoverishment

Monotonous nature of assignments, less opportunity to utilize abilities and experience

independently, less opportunity to develop aptitude and proficiency, lack of place of

suggestions in problem solving, etc., are included in this area.

X) Low Status

Status is the measure of relative worth conferred upon an individual by the group. Early

in groups life, status ranking are usually determined by each persons’ status outside the

group. External sources of status include income education, occupation or title. A more

permanent status pattern developed based on contribution, productivity, creativity,

cohesiveness, or some other quality. It also includes the nature of job enhancing the

social status.

23

XI) Strenuous Working Conditions

This dimension covers tense circumstances in which work has to be done, risky and

complicated assignments, unsatisfactory working conditions from the point of view of

welfare and convenience, etc.

Occupational stress is an increasingly important occupational health problem and a

significant cause of economic loss. Occupational stress may produce both overt

psychological and physiologic disabilities.

1.3 ORGANIZATIONAL EFFECTIVENES

The success and sustenance of any organization lies in the ability to utilize the available

resources primarily human resources to maintain an effective level of operations. The

keyword in this notion is effective because the organizational success is ultimately

judged against this concept. Research in the field of organizational effectiveness has

acquired a significant role in modern industrial set up as large amounts of energy,

human resource, finance, etc are invested in organizations everyday and organizations

emerge to fulfill certain individual and societal needs. Organizational effectiveness is

one of the most complex and least tackled in the social organizations. In simple terms,

organizational effectiveness is an organization’s ability to maximize result in the

competitive external environment. The concept of organizational effectiveness is an

important innovation in business management. Organizational effectiveness can be

defined as the extent to which an organization, given certain resources and means,

achieves its objectives without placing undue strain on its members. The 21st century is

deemed as knowledge economy century, in which those who have the technology will

take a lead in the future of the competition. As the future is defined as competition of

knowledge and technology, enterprise knowledge management turns more important in

promoting organizational effectiveness, and effective knowledge management is a key

factor in an enterprise success. Apart from financial performance and business

performance, organizational effectiveness includes resolutions to various conflicts and

satisfaction of goals for people involved both interior and exterior to the organization.

Evaluation method and classification for operation performance could be categorized in

to four types: I) Operation goals refer to which degree the enterprise executes the

operation plans, e.g. annual budget, increase of capitals, extension of plants, joint

investments, merger & acquisition. II) Productivity: the condition of use of plants and

24

equipments. III) Profits: the outcome of proper use of capitals of the enterprise and

reflected by ratio of income on investment, and could be calculated by increase ratio of

profit. IV) Long-term strengths: the base on which the enterprise have sustainable

operation and continuous development.

Promoting organizational effectiveness is one of the goals for all activities and

strategies in business operation. As there doesn’t exist a specified theory applied to

organizational effectiveness, scholars apply multiple scientific methods and models,

such as production management, psychology and economics to search for evaluation

methods. In the present study nine dimensions have been used to measure the

effectiveness of selected banks. These dimensions are organizational attachment, job

involvement, self control, legitimatization, organizational commitment, innovation,

independence, job satisfaction and satisfaction of organizational effectiveness.

1.3.1 CONCEPT OF ORGANIZATIONAL EFFECTIVENESS

Organizational effectiveness is the concept of how effective an organization is in

achieving the outcomes the organization intends to produce. Organizational

effectiveness is an abstract concept and is basically impossible to measure. Instead of

measuring organizational effectiveness, the organization determines proxy measures

which will be used to represent effectiveness.

Barnard (1964) believes that effectiveness relates to the accomplishment of the

cooperative purpose which is social and non-personal in character, insisting that

organizations cannot continue to exist without effectiveness and that this effectiveness

can easily be measured.

Mott (1972) defined and elaborated the concept of organizational effectiveness as the

ability of an organization to mobilize its centers of power, for action, production and

adaptation. Effective organizations are those that tend to produce more and adapt more

easily to environmental and internal problems, than do other similar organizations.

Thus effective organizations are characterized by higher production rate besides

symbolic and behavioral adaptability and flexibility. Furthermore, Mott argued that

organizations can be differentiated by means of perceptual criteria such as quality and

quantity of products, efficiency, adaptability, and flexibility.

25

Butler (1991) argues that organizations are constrained by their environments and set

the criteria for effectiveness via performance norms under pinned by essential values.

Malik, et. al. (2011) narrated that organizational effectiveness is the concept of how

effective an organization is achieving the outcomes the organization intends to produce.

Organizational effectiveness is an abstract concept and is basically impossible to

measure. Instead of measuring organizational effectiveness, the organization

determines proxy measures which will be used to represent effectiveness. Proxy

measures used may include such things as number of people served, types and sizes of

population segments served, and the demand within those segments for the services the

organization supplies.

1.3.2 APPROACHES TO ORGANIZATIONAL EFFECTIVENESS

The debates between the advocates of the goal-approach, the system resource approach,

internal process approach have been prominent within the organizational effectiveness

literature. As a results of the lack of agreement on an appropriate definition or

conceptual status of organizational effectiveness, attention has been focused on

elaborated the most popular approaches of evaluating organizational effectiveness. The

following are described as they are considered to be the most popular approaches of

evaluating organizational effectiveness.

Table No 1.1 APPROACHES TO ORGANIZATIONAL EFFECTIVENESS

Approach Definition Condition for use

Goal Attainment It accomplishes its stated goals Goals are clear, consensual,

time bounded, measurable

System Resource It acquires needed resources A clear connection exists

between inputs and

performance

Strategic

Constituencies

All strategic constituencies are at least

minimally satisfied

Constituencies have powerful

influence on the

organization, and it has to

respond to demands.

Competing Values The emphasis on criteria in the four

different quadrants meets constituent

preferences

The organization is unclear

about its own criteria, or

change in criteria overtime of

interest.

26

I) Goal-Attainment Approach

The goal-attainment approach to effectiveness has been most widely discussed

approach in the evaluation of organizational effectiveness (Molnar and Rogers, 1976).

The goal-attainment approach measures organizational effectiveness in terms of

accomplishment of predetermined goals (Etzioni, 1964; Robbins, 1990). This approach

assumes that organizations are deliberate, rational, goal seeking entities and are created

to achieve one or more specified goals (Perrow, 1961; Etzioni, 1964; Price, 1968;

Perrow, 1970). Using this approach to evaluate effectiveness obviously means that

achievement of operating goals has to be measured, if only because they are more

actual rather than unclear official goals. This approach views effectiveness in terms of

its internal organization objectives and performance. According to Perrow (1961), an

organization’s effectiveness is appraised in term of the accomplishment of ends rather

than means. Profit and productivity maximization are include in goal-attainment

criteria. Some researchers insist that goals are essential to understanding of

organizations; while others question whether goals perform any function other than to

justify past actions. Scott (1987) cautiously defines goals as conceptions of desired

ends- conditions that participants attempt to effect through their performance of task

activities. Organizational goals can be determined using either official goals or

operative goals (Perrow, 1961). As such, successful goal accomplishment becomes an

appropriate measure of effectiveness.

This approach has several limitations (Cameron, 1980). When this approach is applied

to measure the effectiveness, whose goals are to be measured? The organizations? The

individuals? (Gaertner and Ramnarayan, 1983; Scott, 1987). The next is that what an

organization states as its official goals do not always reflect the organizations actual

goals (Bardach, 1977). The fact that organizations have multiple goals that can creates

difficulties. The goal-attainment approach assumes consensus on goals. And consensus

may not be possible unless goals are stated in such ambiguous and vague terms as to

allow the varying interest group to interpret them in a way they consider to favourable.

II) System Resource Approach

The system resource approach to effectiveness views organization as an open system.

This approach emphasizes the means needed for the achievement of specific ends in

terms of inputs, acquisition of resources and processes, but not neglects the importance

27

of the ends. The organization acquires inputs, engages in transformation processes, and

generates outputs. It has been argued that defining the effectiveness of an organization

solely in terms of the goal achieved is only a partial measure of the effectiveness

(Molnar and Rogers, 1976). A system approach to organizational effectiveness assumes

that the organization is composed of interrelated subsystems (Kast and Rosenzweig,

1985). If any sub-system from these performs inadequately, it will affect the

performance of the whole system. Thus, effective organizations are those that receive

greater resource inputs from their environment. the organizations survival is dependent

upon having good relations with its constituencies, as they have the power to disturb

the operation of the organization. For the organization to survive it is necessary that it

acquires a steady flow of resources from its environment as they are consumed (Kast

and Rosenzweig, 1985).

The system perspective examines various variables such as: relations with the

environment to assure continued receipt of inputs and favourable acceptance of outputs;

flexibility of response to environment change; the efficiency with which the

organization transfer inputs to outputs; the level of conflicts among groups; the clarity

of internal communications; and the degree of employee job satisfaction (Robbins,

1990). In contrast to the goal attainment approach, the system resource approach

advocates do not negate the importance of specific goals as a determinant of

organizational effectiveness (Yutchman and Seashore, 1967). Rather, they question the

validity of the goals selected and measures used for assessing the progress toward these

goals. The system resource approach to organizational effectiveness does not ignore

end goal; but view them as one element of a set of complex criteria, that will increase

the long term survival of the organization (Yutchman, and Seashore, 1967). In essence,

the system approach focuses not so much on specific ends, but on the means needed for

achieving these ends. Yutchman, and Seashore (1967), suggested that there are five

advantages of the system resource approach:

1) The organization is the frame of reference

2) Relations between organizations are a component of its definitions

3) The general framework can be used in different type of organizations

4) Variability of measurement techniques in comparative evaluation is allowed and

5) Guidelines for selecting empirical measures of effectiveness are provided.

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This approach also has limitations. The limitations of this approach relate to its

measurement of means. Robbins (1990) suggests that measuring specific goals may be

easy compared with trying to measure process variables such as flexibility of response

to environment change or clarity of internal communication. The development of valid

and reliable measures may not be possible while each of these terms may be simple to

understand (Robbins, 1990). The critics of systems resource approach, suggest that its

fundamental limitation is that it focuses is on the means necessary to achieve

effectiveness rather than the organizational effectiveness itself.

III) Strategic Constituencies Approach

This approach broadens the scope of the two previous approaches by adding the

expectation of the various powerful interest groups that gravitate around the

organization. According to Pfeffer and Salanick (1978), the strategic constituencies

approach to organizational effectiveness proposes that an effective organization is one

that satisfies the demands of those constituencies in its environment from whom it

requires support for its continued existence. Under this approach, the organization is

assumed to be an association of political arenas, where the vested interests compete for

control over resources. Consequently, it is assumed that the organization has a number

of constituencies, with different degrees of power, each trying to satisfy its demands.

That is the owners, employees, customers, suppliers, creditors, community and

government represent interest group that must be satisfied in order to ensure the

effectiveness and survival of the organization. In other words, the approach seeks to

satisfy only those in the environment who can threaten the organization’s survival

(Robbins, 1990). Thus effectiveness is defined in terms of the degree to which the

needs and expectations of the strategic constituencies are met by the organization

(Keeley, 1978). Cameron (1981) states that this approach can be viewed either as a

summary measure of the organization’s goals or as a series of different weightings for

specific goals for a variety of constituencies. Furthermore, it is assumed that the

organization pursues specific goals which are representations of particular interest

groups that control the resources necessary for the organization to survive. Researchers

who plan on implementing this perspective may ask members of the dominant coalition

to identify the constituencies they consider to be critical to the organization’s survival.

If the survival is important for an organization, then the most important constituencies

that affect the organization’s survival should be identified. Robbins (1990) suggests

29

that even if the strategic constituencies in the environment can be identified and are

assumed to be relatively stable, then what separates the strategic constituencies from

the almost strategic constituencies? Furthermore, Hitt (1988) suggests that different

constituencies are likely to rate an organization in different way. Separate

constituencies may develop greatly different rating of organizations effectiveness.

Although, to overcome this difficulty Hitt (1988) suggests that constituents rating must

be weighted according to their importance to organization.

IV) Competing Value Approach

This approach constitutes a mixture and an extension of the various approaches. It

views the assessment of organizational effectiveness as an exercise grounded in values.

The competing values approach assumes that there is no best criteria that is valued and

used in assessing organizational effectiveness (Quinn and Rohrbaugh, 1981).

According to competing values approach there is no specific set of criteria that best

reflects organizational effectiveness and it therefore combines diverse preference under

competing approach. According to Robbins (1990) this approach assumes that people

within the organization have diverging goals and therefore can not arrive at a consensus

on which goals take precedence over others. This is because goals may be based on

personal value, preferences, and interest (Robbins, 1990; Scott, 1987). From these

criteria Quinn and Rohrbaugh (1981) identified certain variables that could coupled

together to create three basic set of competing values. These are as follows:

1) Flexibility versus control; these two variables are incompatible dimensions of

an organization’s structure (Robbins, 1990). Flexibility values innovation,

adaptation and change. Whereas control favours stability, order and

predictability.

2) People versus the organization; these two variables place an emphasis on the

well-being and development of people in the organization. Whereas the

organization or is concerned with its own well-being and development. The

people-organization is also incompatible dimension of an organization’s

structure: the concern for the feelings and needs of the people within the

organization versus the concern for productivity and task accomplishment

(Robbins, 1990).

30

3) Means versus ends, these two variables relate internal processes and final

outcomes. The former can be considered to be a long term variable, the latter

final a short term variable. This set of competing value approach can be

compared to the goal-attainment approach which focuses on the ends and

systems resources approach which emphasizes the means.

Each one of these competing value sets can be defined and consolidated into

organizational effectiveness model. The selection of an approach for evaluating

organizational effectiveness depends on the information the decision-maker requires.

1.4.3 ORGANIZATIONAL EFFECTIVENESS MODELS

There had been several model developed to capture the richness of the organizational

effectiveness construct. Organizational effectiveness has the following model;

1) The Rational Goal Model

2) The Open System Model

3) The Human Relations Model

4) The Internal Process Model

1) The Rational Goal Model

The goal model represents the most basic model of effectiveness and one of from which

many future models expanded. This model is based on the common sense idea that all

organizations have goals, which become the criteria used to measure effectiveness. This

is a popular theory but it has limitations. Some people argue that people have the goals

not organizations. This goal would not be mentioned in a mission statement, but is

essential to organizational effectiveness.

In other words, according to the rational goal model of effectiveness, an organization is

effective to the extent that it accomplishes its stated goals.

2) The Open System Model

According to this open system model of organizational effectiveness, an organization is

effective to the degree that it acquires inputs from its environment and has outputs

accepted by its environment. This model focuses on commitment to experimentation,

individual initiative, adaptations, readiness, insight etc. and producing cutting edge

output, fosters growth and gains external support. Competent managers who are open to

experimentations inspire competent employees to take individual initiatives and focuses

31

on fostering creativity to produce edge outputs. And individual employee’s

competencies help them to work productively in this environment and achieve the

desired goals.

3) The Human Relations Model

The human resource model focuses on the development of the personnel of the

organization. It focuses on discussion, participation, and consensus among the

employees for the day to day tasks in the organization. The management following this

model stresses on teamwork and pays importance to employee development. Because

of this, employee morale gets boost and increase employees’ commitment to the

company. To be the successful of this model, collaboration and cooperation among

employees as well as between the employees and the management are crucial.

4) The Internal Process Model

The internal process model emphasizes on the effectiveness of the internal

transformation process. This model stresses on formalized and structured way of

management and focuses on standardized decision making. And this results in timely

completion of tasks, increasing stability and efficiency of the organization. With this

competence of the employees and management is necessary for increasing the efficacy

of the internal processes and to produce competitive products or to provide super

services and that is why competencies of the workforce is important for being

successful in this model. The existence of formal and structured communication

process across the organization helps quick and reliable flow of information across the

organization and it ensures proper flow of command from top to bottom as well as

actual flow of feedback from bottom to top. These results, enables timely task

completion across all levels and increase the information management capacity of the

organizations. So the competencies of the employees as well as management and the

existence of formal communications structure in the organizations are the critical

success factors which help the organizations following the internal process model to be

effective.

Since there is absence of a singular theory and unified framework within which

to study organizational effectiveness. Some authors claim that multiple models of

organizational effectiveness are required as there is no universal theory of

organizations. And these multiple models of organization with their own espoused

32

criteria of effectiveness need to be systematically compared and integrated with one

another.

1.3.4 FACTORS AFFECTING/ INFLUENCING

ORGANIZATIONAL EFFECTIVENESS

There are many way to measure the success, a number of factors consistently show up

in effectiveness metrics. There are some factors which influencing the organizational

effectiveness.

I) Organizational characteristics

It is observed that organizational characteristics in terms of functional, specialization,

size, and centralization of decision making and formalization is likely to increase

productivity and efficiency. Job satisfaction of employees is related to the structural

dynamics and has the influence to increase the effectiveness of organizations.

Delegations of authority and responsibility, equal division of work, and proper

direction are likely to generate the feeling of the satisfaction among the employee at

work.

II) Casual Factors

Casual factors are those factor that cause or influence development within the

organization. These factors are the independent variables that determine the course of

development within the organization. The casual variable can be changed by the

organization and its management. Organizational structure, managerial policies,

leadership style and skills are the example of casual factors.

III) Organizational Environment

According to Malik, et. al., (2011) organizational environment reflects from the culture

composition, rules and regulations, freedom of work etc. the organizational

environment is that forces that make an impact on organizational effectiveness.

Organizational environment determines the manner and extent to which roles, power,

and responsibilities are delegated, controlled, and coordinated, and how information

flows between levels of management. Malik, et. al., (2011) narrated that environment is

made of the administrative, technology, political, economic, socio-cultural, and

stakeholder factors. And organization may have many arrangements to receive the

33

information regarding environment changes appropriately in time from the economic

revenue division, research and development (R & D) department, management

consultants or legal adviser.

IV) Intervening Factors

Intervening factors are those factors which get their reflection in the internal state of

organization. Casual factors are cause dominant variables. Intervening factors include

the factors like attitude, motivation, performance goals and communication so on.

According to Kamery, (2004) of Nova Southeastern University employees may be

motivated on the job by many things, such as a sense of achievement, recognition,

enjoyment of the job, promotion opportunities, responsibility, and the chance for

personal growth. Employee motivation and performance are tied directly to the style of

management that is applied and to principles of positive or negative support. Kamey,

(2004) also quote some examples of motivators used by various organizations including

education assistance programs, stock option, and saving plan benefits all programs are

designed to increase worker satisfaction and effectiveness of organization.

V) Managerial Policies and Practices

Managerial style, policies and practices are also related to effectiveness of organization.

Strategic goal setting, resource acquisition and utilization, performance environment,

leadership, decision-making, and organization’s adaptation and innovation are included

in the managerial policies and practices. Leadership, or how leader behave, has a direct

relationship to overall perception of organizational effectiveness, or how organization

will perform.

VI) End-result Factors

Production, sales, earning etc., are the example of end-result factors. These are the

factors caused by causal and intervening factors and are often in terms of factors which

managers use to measure effectiveness of organization.

Measures of organizational effectiveness vary, depending upon its mission,

environment, nature of work, the production, and customer demands. And various

factor influence and affected the effectiveness of organization. Thus the first step in

evaluating organizational effectiveness is to understand organization itself and evaluate

according to demands of situation.

34

1.3.4 ORGANIZATIONAL EFFECTIVENESS DIMENSIONS OF THE

STUDY

In the present study, the adaptive version of Organizational Effectiveness Scale (1983)

developed by C.N. Daftuar has been used. The following dimensions have been used to

measure the effectiveness of selected banks.

I) Organizational attachment

Organizational attachment is defined as an individual’s psychological and behavioral

involvement in a social group or unit of which he/she is member. Lowered

organizational attachment is one of many possible outcomes of demographic

heterogeneity.

II) Job involvement

The term job involvement is a more recent addition in organizational behavior

literature. A workable definition state that job involvement measure the degree to

which a person identifies psychologically with his/ her job and considers his/her

perceived performance level important to self worth. Employees with a high level of

job involvement strongly identify with and really care about the kind of work they do.

III) Self-control

Self-control is the ability to control one's emotions, behavior and desires in order to

obtain some reward later and is the capacity of efficient management to the future. In

psychology it is sometimes called self-regulation. Exerting self-control through the

executive functions in decision making is held in some theories to deplete one's ability

to do so in the future.

IV) Legitimatization

Legitimating is the act of providing legitimacy. Legitimating in the social sciences

refers to the process whereby an act, process or ideology becomes legitimate by its

attachment to norms and values within in given society. It is the process of making

something acceptable and normative to a group or audience.

V) Organizational commitment

Organizational commitment is defined as a state in which an employee identifies with

a particular organization and its goals and wishes to maintain membership in the

35

organization. Organizational commitment has been defined as “a psychological state

that characterizes an employee’s relationship with an organization and has implications

for the decision to continue membership of the organization” (Meyer and Allen 1991).

VI) Innovation

The term innovation derives from the Latin word innovatus, which is the noun form of

innovare "to renew or change Although the term is broadly used, innovation generally

refers to the creation of better or more effective products, processes, technologies, or

ideas that are accepted by markets, governments and society. In the organizational

context, innovation may be linked to positive changes in efficiency, productivity,

quality, competitiveness, market share, and others.

VII) Independence

Independence means the condition of being free; the power to act or speak or think

without externally imposed restraints. Manage your time, be a self-starter, be

trustworthy and constantly learn are way of gaining independence at work.

VIII) Satisfaction of organizational effectiveness

Satisfaction of organizational effectiveness is defined as the degree to which employees

are satisfied with the organizational effectiveness.

IX) Job satisfaction

The term job satisfaction refers to an employee’s general happiness with his or her job.

Job satisfaction defines as a pleasurable or positive emotional state resulting from the

appraisal of one’s job experience.

Organizational effectiveness is the extent to which an organization has met its stated

goals and objective and how well it performed in the process. In the present study,

these variables used to measure the organizational effectiveness of selected

organization.

1.4 SIGNIFICANCE OF THE STUDY

Organizations pay a special attention to work output and it can be possible through the

performance of the employees. Researches in banking sector keep an important place;

its structure and working are integral to a country’s financial performance and

economic growth. The banks play an important and active role in the economic

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development of a country, if the banking system in a country is effective, efficient and

disciplined; it brings about a rapid growth in the various sectors of the economy. Thus

the Indian banking industry plays an important role in the economic development of the

country and is the most dominant segment of the financial sector.

Organizations ability to cope, survive and make progress determines how

effective they are. Organizational effectiveness has been identified, in earlier theories,

with maximization of profits or high productivity or efficient service and good

employee morale. Organizational commitment has been implicated as a major

contributing factor to growing organizational effectiveness. There is positive

relationship between organizational commitment and organizational effectiveness. It

was found that organizations whose members were strongly committed had both high

participation and high effectiveness. In other words, committed bank employees make a

significant contribution to increasing the effectiveness of banks. On the other hand,

occupational stress impacts not only on the employees’ health but also their abilities to

cope with the job demands. Further, in banks jobs are structured in a way that a worker

is simultaneously exposed to both overload and the employees work under acute time

pressure. This exposes bank employees to greater stress situation which is reacted by

them in various ways.

Keeping in view the pressure of stress on employee’s health and the effectiveness of

organization, such researches on the specific sector and specific title become much

more important as they are.

Research literature amply demonstrates the impact of various organizational variables

and processes on organizational effectiveness. And it is evident from the literature that

most of the earlier attempts concentrated on investigating relationship between

organizational effectiveness and other organizational variables separately. Finally, after

going through the related literature, no study has been found which include these three

variables i.e. organizational commitment, occupational stress and organizational

effectiveness this is another reason to undertake this study.

The present study attempts to study the perceived organizational effectiveness in

relation to organisational commitment and occupation stress in banking sector, with the

hope that the results of the study will provide useful inputs to the increase the perceived

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organisational effectiveness by increasing the organisational commitment and reducing

the occupational stress of employees.

Given this, the problem of present study can be stated as under:

“A STUDY OF PERCEIVED ORGANIZATIONAL EFFECTIVENESS IN

RELATION TO ORGANIZATIONAL COMMITMENT AND

OCCUPATIONAL STRESS IN BANKING SECTOR

(A COMPARATIVE STUDY)”

1.5 OBJECTIVES OF THE STUDY

• To study and compare the organizational commitment of employees in selected

banks.

• To study and compare occupational stress of employees in selected banks.

• To study and compare the perceived organizational effectiveness of employees

in selected banks.

• To measure the impact of organizational commitment and its components on

perceived organizational effectiveness of employees in selected banks.

• To measure the impact of occupational stress and its components on perceived

organizational effectiveness in selected banks.

• To study and compare the level of organizational effectiveness, organizational

commitment, occupational stress of employees in selected banks on the basis of

psycho-demographic variables.

• To compare the level of perceived organizational effectiveness, organizational

commitment and occupational stress of employees of selected public and private

banks.

• To give the workable suggestion for enhancing the organizational effectiveness

through increasing organizational commitment and reducing occupational

stress.

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1.6 HYPOTHESES

• There is no significant difference in the level of perceived Organizational

commitment of employees in selected banks.

• There is no significant difference in the level of perceived occupational stress

of employees in selected banks.

• There is no significant difference in the level of perceived organizational

effectiveness of employees in selected banks

• Organizational commitment of employees is not significantly related to

perceived organizational effectiveness of employees in selected banks.

• Occupational stress is not significantly related to perceived organizational

effectiveness of employees in selected banks.

• There is no significant difference of perceived organizational effectiveness,

organizational commitment and occupational stress of employees of selected

banks on the basis psycho-demographic variables.

• There is no significant difference in the level of perceived organizational

effectiveness, organizational commitment and occupational stress of employees

of selected public and private banks.

1.7 DELIMITATIONS OF THE STUDY

The present study was conducted by an individual scholar and consequently, it would

be completed under certain constraints in terms of availability of time, financial

resources, universe and sample of proposed study. It is important to highlight the

limitations of a work especially in case of research. Research studies always have some

constraints and impediments and this study also suffered from limitations as follow:

1) The study was confine to the study of employees of only two public and two

private sector banks.

2) The study is also delimited to the study of bank employees of Haryana. It would

have been better if the study would have been extended beyond Haryana.

3) As this study was confined to find out the implications of organizational

commitment and occupational stress on perceived organizational effectiveness,

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literature review suggested that there are numerous issues that might have

impact on perceived organizational effectiveness.

4) Only three psycho-demographic variables had been considered in the present

study, although all other variables may have impacted on the variables

considered.

5) All the finding are based on the primary data collected through questionnaire

method and in such method there is a major scope of the potential biasness and

unfairness of the people involved. Also the study was based on perception of

employees regarding organizational effectiveness.