Organizational Behavioral Systems, Assessment Example

The essay below is designed to examine the current organizational behavior within the multinational shoe retailer: Payless Shoes. The company has been selected because it has an international presence on the global market, and more than 4000 brick and mortar stores (Payless,  n.d.). The author of the current research would like to review how the company is able to communicate its values, culture, norms, and ethical principles.  The author will examine how diversity is embraced by the management, and how the company sets behavioral and other norms for its thousands of employees. The below study will examine whether or not the company is able to successfully communicate and develop shared visions and values across borders and cultures.

Using the Integrative Model

Organizational behavior is affected by organizational mechanisms (culture), group mechanisms (leadership styles) and individual characteristics (individuals’ values). It can affect job satisfaction, stress levels, motivation, trust, justice, and organizational learning. In turn, it has a huge impact on job performance and organizational commitment. The more the values and culture of the company are defined and the better they are communicated with stakeholders, the greater engagement the organization can create (Willcoxon & Millett, 2000). The author’s thesis that the below essay is examining is that Payless Stores embraces diversity, however, it is unable to align organizational goals and culture with individual values.

Company Values

The company’s corporate website confirms that “Each one of our teammates is unique, and together we have built an outstanding team and company.”. (Payless, n.d.). This indicates that the organization embraces and values diversity. The company also features its guiding principles as an organization. Some of the most important principles are related to focusing on customer needs, respecting each other, and excellence. The company also has a diversity and inclusion policy, and state that “inclusion is about culture” (Payless, n.d.). The company also has a sustainability pledge, and the organization is committed to reducing waste and energy consumption. The company’s Code of Ethics is designed for worldwide application, and has strict ethical principles regarding confidentiality, fair treatment, and health&safety.

The Culture

Payless Stores has a pluralist culture.  Willcoxon & Millett (2000) talk about this approach in detail. According to the authors, the organization’s culture is defined by “a pattern of shared basic assumptions” (p. 93). Further, it is considered to be valid by most members, and has worked well in the past, so it can be passed on to new employees. Further, the authors also conclude that culture is manifested in recruitment, socialization, performance management, leadership patterns, participation in common initiatives, communication style, and policies. White (1999) defined the connection between multiculturalism, pluralism, and embracing diversity. The author emphasizes the importance of diversity and inclusion in the global world as follows: “An organization’s culture determines the ability of out-group members to perform within the organization. ” It has been found that through embracing diversity, Payless Stores is focusing on increasing its organizational capabilities. The company understands that there is a need for viewing problems from different angles, and diverse employees’ input can improve the company’s communication with customers from various backgrounds.

Authority

According to Warrick (1981, p. 155), the leadership style of the managers can “affect employee performance and satisfaction”. This indicates that the type of authority and leadership approach has a great influence on organizational behavior. Based on the analysis created by GNS Consulting (2011), stating that the company is somewhat disorganized, with authority assigned to higher management, and little responsibility shifted to store management, it is evident that Payless Stores has an autocratic leadership. The higher management determines the goals for national and regional levels, and regional and store managers have little or no influence on organizational goals. While this would indicate that the organization is well managed on a central level, the GNS consulting review warns that this can be a sign of ineffective communication. If people are being controlled directly by human resources managers, instead of store managers who know them and can support their career development, working together, this creates an uncertainty of the future. This is clearly visible in the current case. A former manager of the company (Glassdoor, n.d.) stated that the company is “Only concerned about the bottom dollar” and there is “High stress and no understanding”.

Employee Motivation

According to the findings of the report created by GNS Consulting (2011, p. ), Payless’ weaknesses result from their unorganized stores, hard to find merchandise, a limited product assortment and a lack of motivation from their employees”. This indicates that the company’s current employee engagement programs do not work. Indeed, one of the characteristics of autocratic leadership is that it has a high focus on performance, and low focus on people (Warrick, 1981). McFarlin & Sweeney (2012, p. 42) talks about “power distance”, as a phenomenon that can affect the organization’s performance.

The company has a “Payless College Program” that supports young people to continue with their education while working for the company. It is designed to create career development opportunities for graduate students, but in reality the career advancement options are limited. The reviewer at Glassdoor (n.d.) states that the college reimbursements have recently been taken away, and this further indicates that the company focuses on numbers and performance more than people.

Emotional Quotient

The main problem with Payless Stores’ culture and organizational behavior is that it uses an autocratic leadership approach, where communication is designed to be one-way. This means that the higher management creates goals and values without involving employees. This makes aligning personal goals and values with the company’s mission. Low emotional quotient (Najafi & Setareh, 2012) results in the lack of motivation and low employee retention rates. Warrick (1981) states that there are several negative consequences of autocratic leadership as: “hostile attitudes, a suppression of conflict, distorted and guarded communications, high turnover and absenteeism, low productivity and work quality, and preoccupation with rules, procedures, red tape, working conditions, status symbols” (p. 162).

In those circumstances, the local managers lack clear directions, and – as the company’s vision is not clearly communicated – they are busy with administration, policies, and compliance, while they fail to recognize stressors that affect employees. This results in a high employee turnover and low job satisfaction.

Communication Methods

The means of communication at Payless consist of one-way target and directive description. According to the company’s website and reviews on popular pages, higher management communicates with regional and branch leaders through email. It is regional managers’ responsibility to communicate the targets and messages towards every employee. According to reviews, the messages are factual, general, and do not include any type of vision. This means that the company has a low ability to communicate vision towards all employees, and one manager on the Glassdoor site (n.d.) stated that he was not even fully aware of the direction the company was going. This also indicates that employees feel like they are being told by the upper management what the new standard is. Instead of completing employee surveys or seeking feedback (democratic leadership approach), the company does exercise strong authority over both store managers and employees working for them.

McFarlin & Sweeneey (2012, p. 100) state that relying solely on electronic communication is not a good approach towards motivating employees and communicating vision or company mission. Considering the diversity of employees working for the more than 4000 Payless Stores, it is impossible to talk to every age and ethnic group in the same manner. One previous employee in a management position stated on the Glassdoor website (n.d.) that the company leadership should “understand the demands you are asking of employees, communicate better, compensate for our hard work, better benefits”. Without trying to understand employees’ motivations, preferences, styles, and challenges at work, it is impossible to improve the performance of the company and gain commitment for new projects.

Culture Communicated towards the Public

The company’s Facebook page is designed to deliver promotions and marketing messages to customers. It does lack information about any of the corporate social responsibility projects, which would be suitable to create a brand image and deliver the culture of the company. The organizational behavior of the company is not clearly communicated towards employees or the public. Similarly, when looking at the “About” and “Corporate” pages of the company’s website, it is clearly visible that there is no shared goal, vision, and value system within the organization.

Conclusion

Since the publication of some of the reviewed literature and publications, Payless Stores has gone into administration and has been rescued. This indicates that the authoritative management style led to low employee engagement and high turnover. In the midst of a recession, retail companies that are unable to clearly communicate their vision, brand image, and cultural values lose more customers than others. Further, high employee turnover increases human resources and training costs. The impact of poor communication and leadership does not only affect employees, though. In the case of Payless Stores, it has endangered the existence of the company. Lack of clear vision, and engagement with the public or employees can affect performance. Store workers who are stressed and do not share the values of the company lack motivation. This affects customer experience. Customers cannot connect with employees or the brand’s identity on an emotional level. The reputation of the firm decreases, and the company starts losing its market share and competitive advantage. This happened with Payless Stores, and it is important that the new management adapts a more effective communication and engagement approach and rebuilds the corporate culture to improve the organization’s behavior.

It is recommended that the company keeps its diversity policy, but places more emphasis on integration. Payless should focus on understanding both customers and employees in order to create a culture that is appealing for both groups of stakeholders. The communication methods should be redesigned to include meaningful cultural messages and increase emotional quotient. This way, the company can embrace diversity, make the management more democratic, increase retention and employee motivation rates.

References

Anon. (2014) “Unrealistic Expectations” Retrieved from http://www.glassdoor.com/Reviews/Employee-Review-Payless-ShoeSource-RVW4090105.htm

GNS Consulting (2011) Company Focus: Payless ShoeSource. Retrieved from http://nateneal.files.wordpress.com/2011/12/gns-consulting.pdf

McFarlin, D. & Sweeney, D. (2012) International Organizational Behavior: Transcending Borders and Cultures Routledge.

Najafi, M. & Setareh, M. (2012) Studying the effect of emotional quotient on employee’s job satisfaction (the case of Isfahan University of Medical Sciences). Interdisciplinary Journal Of Contemporary Research In Business. June 2012 Vol 4, No 2

Payless. (2012) Website. Retrieved from http://www.paylesscorporate.com/

Warrick, D. (1981) Leadership Styles and Their Consequences. Journal of Experiential Learning and Simulation 3-4: 155-172(1981)

Willcoxson, L. & Millett, B. (2000) The management of organisational culture. Australian Journal of Management & Organisational Behaviour, 3(2), 91-99