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Impact of organization structure on employee performance

Case of New Era secondary school

Academic Paper 2018 13 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Impact of organization structure on employee performance

Abstract

There is a growing recognition of the importance of organizational structure in aligning the success employee performance of any organization. The main purpose of this study was to investigate the effect of organizational structure on employee performance. It was a case study of New Era Secondary School one of the education institutions in Malawi. Specifically, it focused on the effect of hierarchy on employee performance; identified factors that motivates employees and to evaluate the effect of j ob satisfaction on employee performance. The study found out organization structure has an effect on employee performance. From the results, it also shows that building a good organization structure is important for employee to perform well in their work. This is true as 44% of the respondents from the study indicate that it is necessary for organization to have good organization structure since it helps in motivating employee performance. Furthermore, the results of the study also provide evidence that group decision making help employees to experience achieve job satisfaction. Organization structure affect employees both negatively and positively the findings of this study provide the necessary information to the institution and enhance its endeavor to meet both current and its long-term demands. Since it was a case study, other institutions can refer to the results of this case and apply the results to their organization especially education institution. Data was corrected in line with the research variables and was compared against the employee performance. The research employed a survey research design and targeted the whole population 25 staff of New Era secondary school. The study also used a structured questionnaire to collect data. Both qualitative and quantitative data was analyzed using excel

Key words; Organization, structure, employee, performance

1. Introduction

Organization structure as a component of a business is concerned with an issue of vital importance to the management of operations for example, managing people which facilitates co-ordination and communication both within the operations function and between the organizations other business function. The structuring of organization has been studied extensively by researchers for many years, with the overwhelming conclusion that there is no best way to restructure any organization. The renowned Aston research program (Pugh 1998) concluded that there after three key dimensions of organization structure, centralization the extent at which decision making is concentrated at a single point in the organization. More centralization will lead to tighter managerial control but also got greater inflexibility due to lack of worker autonym, formalization the extent to go which jobs are standardized and governed by rules and procedures. Extensively formalization is one of the main characteristics of a bureaucracy. Greater formalization is likely to improve the efficiency of individuals operations but may lead to increased inflexibility as workers may become incapable of performing non-standard tasks, specialization, and the extent to which the work carried out by the organization is divided up into separate elements. Greater specialization tends to be greater the complexity of organization structures as there is likely to be greater horizontal differentiations (i.e. more groupings of different types of workers) and greater vertical integration. (More hierarchal layers of management) greater specialization may also increase spatial differentiations as the organization may have more sites. Greater specialization can lead to more adaptability as workers can adapt to changing requirements more quickly but may also lead to inflexibility if their area of expertise is very narrow.

2. Theoretical framework

2.1 Modern theories

The research followed organization modem theories. Modem theories tend to be based on the concept that the organization is a system which has to adapt to changes in its environment. In modem theory, an organization is defined as a designed and structured process in which individuals interact for objectives (Hicks and Gullet, 1975). The contemporary approach to the organization is multidisciplinary, as many scientists from different fields have contributed to its development, emphasizing the dynamic nature of communication and importance of integration of individual and organizational interests. These were subsequently re-emphasized by Bemard (1938) who gave the first modem and comprehensive view of management. Subsequently, conclusions on systems control gave insight into application of cybernetics. The operation research approach was suggested in 1940. It utilized the contributions of several disciplines in problem solving. Von Bertalanffy (1951) made a significant contribution by suggesting a component of general systems theory which is accepted as a basic premise of modem theory.

Some of the notable characteristics of the modem approaches to the organization are:

- a systems viewpoint,
- a dynamic process of interaction,
- multi-leveled and multidimensional,
- multi-motivated
- Probabilistic
- multidisciplinary, descriptive,
- Multivariable, and adaptive.

Modem understandings of the organization can be broadly classified into the systems approach socio- technical theory, and a contingency or situational approach.

3. Methodology

3.1 Research design

The proposed design for this study was a mixed-methods approach, using both quantitative and qualitative methods. Quantitative data collection methods involve the use of a structured questionnaire completed by the respondents during the first phase. During the second phase, qualitative methods was used. During this phase, interviews were conducted with participants of the same group (as in phase one). This is done to get greater clarity and depth on the results of the first phase. Thus, the design was a sequential explanatory design. This method is a two phase design where the quantitative data is collected first followed by qualitative data collection (McMillan & Schumacher, 2010. Qualitative studies, on the other hand, provide the researcher with in-depth knowledge, although this is often not generalizable. Qualitative research explores phenomena in specific contexts, articulate participants’ understandings and perceptions and generates tentative concepts and theories that pertain to particular environments. Hence, by combining both quantitative and qualitative approaches, the researcher builds on the strengths of both. The research study was done at new era girls and boys secondary schools. The sample size included people of ages ranging from those below 20 years old to those above 50 years and shall include both males and females. The sample was generated through random sampling.

3.2 Sample size

Blumberg, (2005) define a research sample as part of the target population, carefully selected to represent a population. Purposive sampling technique was used because the population size was relatively small. Employees who are the top managers, low level managers and all other subordinates for consistent and unbiased results. It encompassed their educational level and their hierarchical position in the organization. In purposeful sampling, according to Schumacher and McMillan (1993), the researcher searches for information-rich key informants, groups, places or events to study. The samples are chosen because the researcher believed the subjects are knowledgeable and informative about the phenomena that the researcher is investigating. The researcher self-administered the questionnaires to respondents. A pilot study was also conducted to ensure credibility of the questionnaire.

3.3 Data analysis

The data was collected using questionnaires. The questionnaire had both open ended and closed ended questions to facilitate respective interviewees with giving information that they feel comfortable with. The use of the questionnaires helped in creating a consistency base in the answering of the research question and it will be easy for data interpretation. Close- ended questions were favorable for efficiency and specifically easier to measure, record and analyze. The open- ended questions helped in the need to measure sensitive or disapproved behavior discover salience. They encourage natural mode of expression. The open ended question also helped to facilitate respective interviewees with giving information that they feel comfortable with. The questionnaire were developed by the researcher and validated for reliability by the supervisor.

During the qualitative phase, participants from the same sample were used. The data that was corrected was filtered and cleaned to eliminate unnecessary data. The data was coded using cluster analysis which is a set of a technique for grouping similar objects or people or factor analysis which is a general term for specific computational techniques. It is used to reduce the number of variables to manage number of variables that belong together (Cooper et al., 2003).The conclusion was based on the highest percentage found by the researcher.

4. Findings

4.1 Summary of dem ographic results

Abbildung in dieser Leseprobe nicht enthalten

4.2 Discussion and Interpretation of the results

The research sample comprised of twenty-five (25) respondents which were purposively selected. The research study used new era secondary schools as a sample academic institution for the study. The study used questionnaires as a data collection tool and the questionnaire had seven (7) questions which are discussed below:

4.2.1 Organization structure and its benefits

The researcher mainly wanted to find out how the organization structure has benefited the employees. 44% of the 25 respondents responded by saying it has helped them in having clearly defined authority and responsibility, 24% of 25 respondents responded by saying it has helped them to have a better team spirit,8% of 25 respondents responded by saying it has helped them having clear promotions and24% responded that it has helped them to be motivated. This showed having a good organization structure will help employees to have clearly defines roles. This is in agreement to what Clif (2008) said that to ensure employees work as efficiently as possible it is important to have clearly defined job roles and responsibilities. This is particularly important in large firms to ensure no part of the workload is overlooked. In smaller organizations job roles may be less structured as employees may be required to take on a variety of tasks and responsibilities. Clear job descriptions and personal remits enable workers to focus on their job-specific tasks. It allows employees to prioritize their workload and reduce the chance of work duplication. In the offshore environment, where safety is a key priority, defined roles and responsibilities ensure that workers are competent and qualified for the tasks they undertake.

4.2.2 Formal organization structure

The researcher wanted to find out if it is necessary to have good formal organization structure. From the study, 44% responded that good organization structure help in motivating perfonnance.24% responded it help them in sharpening their skills, another24% of the employee responded by saying it has help it helps in increasing the productivity of the organization and 8% responded by saying a good organization structure helps workers to learn new skills. Hence, this means that most of the respondents new why is important to have a good organization structure. This is in support to what Ingram said (2012) Organizational structure provides guidance to all employees by laying out the official reporting relationships that govern the workflow of the company. He also said a formal outline of a company's structure makes it easier to add new positions in the company, as well, providing a flexible and ready means for growth. Without a formal organizational structure, employees may find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what. Organizational structure improves operational efficiency by providing clarity to employees at all levels of a company. By paying mind to the organizational structure, departments can work more like well-oiled machines, focusing time and energy on productive tasks. A thoroughly outlined structure can also provide a roadmap for internal promotions, allowing companies to create solid employee advancement tracks for entry-level workers.

4.2.3 Hierarchy of decision making

The researcher wanted to find the hierarchy of the decision making system especially the ones who makes most decision for the institution. The 52% responded by saying it is the top level, 24% responded by saying it is middle level, 8% responded by saying it is low level and 16% responded by saying everyone is involved in the decision making system. Therefore the results shows that it is the top level who makes most decision. This is in line with what Zaineb (2011) wrote on some advantages of centralized decision in organizations. She indicated the following as some of advantages and disadvantages;

1. Reduced cost; the standardized procedure and method helps in considerably reduction of office cost. Office cost is reduced as it does not emphasizes on more specialists, and more departmental machines and equipment.
2. Uniformity in action; Uniformity in action is established throughout the organization because of central administrative control. The same executive supervises the work and same type of office equipment’s are used which ensure uniform performance of activities.
3. Personal leadership; Centralization encourages and permit personal leadership. The introduction of personal leadership facilitates quick action, aggressive marketing and attainment of pin-pointed objective or purpose,
4. Flexibility; Centralization permits flexibility and adaptability of the organization to the changed circumstances. Occasional pressure of extra clerical work is handled with the existing staff.

Some of the disadvantages were indicated as follows;

Delay in work; Centralization creates loss of man-hours and delay in performance of work because of transmission of records from and to the central control room. Quick decision is not possible which also results delay in office work.

2. Remote control; Better supervision is not possible as the executives are under heavy pressure of work. Slackness in work is developed in the absence of better control and supervision.

4.2.4 Job satisfaction

The researcher wanted to find out from the respondents if they are satisfied with current job position. From the study, 36% responded that there are satisfied with their current job position, 12% indicated that not satisfied with their job position and 52% responded that there are partly satisfied with their job position. Therefore, this means that most employees are partly satisfied with their current job position. Locke (1976) defined job satisfaction as a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences” (p. 1300). Olson and Zanna (1993) discuss that, while the view of attitudes as cognitions, affective reactions, and behaviors provides a useful framework for examining attitudes, not every attitude must contain each of these three components. Rather, specific attitudes toward the same object may be based on either cognitive, affective, or behavioral antecedents. The three major dimensions of justice have been consistently linked, in a positive way, to job satisfaction such that employees who experience organizational justice also tend to report greater job satisfaction than those who do not experience organizational injustice. Furthermore, satisfaction with one’s pay level has been strongly related to procedural justice.

4.2.5 Structure Vs Job satisfaction

The researcher wanted to find out through what ways the organization structure has helped employees achieve job satisfaction. From the study, 32% responded that through delegation of work they have achieved job satisfaction, 20% indicated that they have achieved job satisfaction through promotion, another 32% indicated that they have achieved job satisfaction trough receiving benefits and 16% said they have achieve job satisfaction through recognition. The results of this question show that most of the employee’s achieved job satisfaction through delegation of work and receiving benefits. Bill (1995) said delegation is assigning responsibility and authority to someone in order to complete a clearly defined and agreed upon task while you retain ultimate responsibility for its success. Delegation incorporates empowering your teammates through effective leadership, and may be directed in any direction and used in any organization. The following are also underlined as importance of delegation;

Efficiency

Delegation improves efficiency when it allows work to be transferred to people whose skills are a better match for the work. You are in charge of planning and strategizing the next steps for your team. When your teammates are able to carry out most of the routine activities required of your team, it will allow you the time and effort needed to plan for your team’s next move.

Development

As a team leader, you possess important skills and abilities that you can pass on to your team members. The best way of doing this is to coach them in the new skills and then delegate tasks to them so that they may use those new skills. Delegating is a great way of encouraging your team members to develop themselves and for you to develop coaching and mentoring skills.

4.2.6 Structure preference

The researcher wanted to find what kind of decision structure the employees preferred for them to experience job satisfaction. 8% of the respondents opted for centralized decision making, 36% indicated that there is a need for decentralized decision making system, 52% responded that group decision making would help workers in achieving job satisfaction and remaining 4% responded that individual decision making would help workers in achieving job satisfaction. Therefore, the results shows that’s for teachers/ staff to experience job satisfaction in relation to experience decision making structure there is a need for a group decision making. Chand( 2011) outlined the advantages and disadvantages of group decision making as follows;

1. More information:

A group is better equipped as far as information is concerned. An individual cannot have all the information that is available to a group as it consists of several individuals.

2. Diversity of views:

A group always has the advantage of varied views. This is because a group always has more than one member, and since every member is unique, there is bound to be a variety in their views also. This is also the reason why there are varied approaches to solving a problem. As group decisions tend to cover a greater area, they provide a better insight for decision-making.

3. Greater acceptability:

The views expressed by a group have more acceptance than those from an individual. This is because the decisions are not imposed, but are part of a larger consensus (general agreement). A group decision is automatically assumed to be more democratic, and the decision of an individual can be perceived as being autocratic (dictatorial).

4. Expert opinions:

There may be some group decisions that require expert opinion. The group can either include experts or can call them from outside to form a separate group to take a decision on a particular issue.

Disadvantages:

1. Time-consuming:

A group involves several individuals. Getting them organized, planning and coordinating their meetings, defining and explaining to them the purpose of a meeting and the goals, and finally reaching a solution or arriving at a decision can be quite cumbersome. Making decisions in a group can, thus, be time­consuming. The time loss involved in group dynamics cannot be ignored.

2. Lack of onus:

It is difficult to fix responsibility in a group. In an organization, it is often essential to fix responsibility before a problem can be solved. It is difficult to do so if anything goes wrong with a decision made by a group.

3. Individual domination:

Quite often, discussions in a group are dominated by a few members. Although a group discussion means a collective discussion, some people usually manage to usurp (draw to them) a position of informal leadership owing to their personality or style of participation.

This position can also be because of the position held within the organisation or simply because of self­confidence generated by previous experiences. Sometimes only a few individuals dominate and the others fade away in a group, thereby defeating the very purpose of group discussion.

4. Compromise decisions:

The need to arrive at a group decision sometimes results in a compromise. The solution offered is not essentially the best. It is, instead, a compromise acceptable as a mid-point to all concerned. There are different demands and social pressures, and members may agree to a proposal without really evaluating it. Such support may not be wholehearted.

4.2.7 Motivation and incentives

The researcher wanted to find out what institution should do to satisfy their employees. From the results, 36% responded by saying institution should give incentives to teachers/staff. 12% opted for delegation of work, another 20% responded that there is a need for salary increment and 32 % responded that they should clearly define roles in there organization structure. Therefore, the results of the study indicate that with the introduction of incentives and clearly define roles institutions will be able to satisfy their employees ·This is in coherence to what McQuerrey (2011) on importance of incentives. She underlined the following as importance of incentives

1 Motivational Tool

Incentive programs motivate employees to push and challenge themselves to achieve higher degrees of productivity. This ultimately translates to increased earnings for your company. When incentive plans are

in place, employees recognize that significant effort on their behalf will be acknowledged and rewarded. This can increase the amount of time, effort and energy a staffer is willing to put forth on your company’s.

2 Promoting Teamwork

Incentive plans tied to teamwork or group initiatives can help promote collaborative work efforts in your business. Staffers working in teams that collectively rely on each other’s' productivity for the group to receive a bonus or award may support and encourage each other to perform at top levels. Peer pressure may also encourage additional degrees of performance from underperforming staffers who don't want to let their team members down.

3 Morale Boosters

Incentive plans have the potential to raise morale and increase job satisfaction in a company. Employees see a direct correlation between their work effort and their earning potential. Higher workplace morale can decrease turnover, which saves your company money associated with recruiting, hiring and training new staffers. Additionally, staffers with high levels of job satisfaction often exhibit lower degrees of absenteeism, which can also help improve a company's bottom line.

5 What do the results say?

The major reason of this research study was to assess the impact of organization structure. From the results of the research study, it shows that organization structure has an effect on employee performance. The results also show that a good organization structure is so beneficial to employees for them to experience job satisfaction hence improve their performance.

5.1 What do the results mean?

From the results, it also shows that building a good organization structure is in important for employee to perform well in their W0rk44% of the respondents from the study indicate that it is necessary for organization to have good organization structure since it helps in motivating employee performance. Furthermore, the results of the study also provide evidence that group decision making help employees to experience job satisfaction. If it is not well established that there is no delegation of work and employees are not receiving benefits in the structure then workers will leave for well-organized or work in other industries where they will experience job satisfaction, but if good organization structure are established it will motivate the performance of employees.

5.2 Limitation of the study

This research study was mainly looking at the impact of organization structure on employee performance However, the sample for the study was too small as it was only done in one academic institution. Due to the small sample used for the study, the results of the study cannot be generalized however they may be applicable to organization with similar characteristics. The sample size comprised of 25 respondents and therefore the sample was not enough to make accurate inferences. The study was also limited because it was only done in one academic institution therefore the results cannot be applied to each and every academic institution in the country.

The researcher therefore identified that there is a need to conduct research on a large scale so as to generalize the results and make valid and accurate conclusions. In addition, the researcher also recommended that a

similar research but should focus on another institution, not on an academic instruction and should be conducted but using different data collection tools.

5.3 Practical contribution

Although the study was done in one organization, it still provides insights on why organization should focus on having good organization structure. It further provides knowledge on what institution should do to help employees achieve job satisfaction.

5.4 Conclusion

According to the results from the study, it shows that organization structure has an impact on the employee performance; a poor organized organization structure means that there will be low productivity, less delegation of work, no incentives provided and centralized decisions. In the end this affects how employees are satisfied with their work hence affect their performance.

In addition, the study also found out that a good organization structure helps in improving the performance of employees and motivates them to work hard which in the end increase productivity. Therefore, management must develop skills on how to develop their structures, they need to focus on what there can include in there structure or coming up with a new organization structure because this plays a great role for workers to experience job satisfaction ·If organization develop a good structures they have satisfied employees who works had not only to achieve organization goals but also individual goals and hence achieving both individual and organization goals.

Acknowledgements

I am indebted to many individual for their support and contributions towards the successful and timely completion of this research work. My deep appreciation goes to my supervisor, Chisomo Ngala for the professional support, guidance, encouragement and commitment that made it possible for me to complete the research paper in good time.

Appendix

Information on interview

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2018
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Title: Impact of organization structure on employee performance