In any company, your employees are your biggest asset. How they approach and engage with one another and their work impacts everything from productivity to profit.
By understanding organizational behavior, you can learn what’s needed to build a business where people feel happy, engaged and motivated to perform.
In this article, you’ll discover the meaning of organizational behavior, ways to assess it and how to use it effectively to improve your workplace.
“Organizational behavior” definition
Organizational behavior (OB) is the study of how people think, behave and interact within an organization and the effect this has on the company. The goal is to improve efficiency, build better professional relationships and create a positive work environment.
OB examines how people interact as individuals and group dynamics, perform their jobs and react to different workplace events. It also analyzes how leadership, structure and communication impact their behavior.
People often learn about the field of organizational behavior in business schools and schools of social psychology and social sciences. In a workplace setting, understanding OB can benefit any business owner wanting to improve performance and retain talent.
While it’s an evolving area of research, organizational behavior study focuses on four main elements:
| People | Employees, stakeholders and groups within the organization. These form the social system of a business and directly affect productivity and growth. |
| Organizational structure | The rules and practices that determine how work is done – including communication networks, guidelines, policies and procedures. |
| Technology | The tools used to perform tasks and achieve objectives (e.g., software, processes and machinery). |
| Internal and external environment | The social factors in and around the organization can impact behavior. These include cultural, technological, economic, legal and political factors. |
Studying human behavior in each of these four areas helps you understand:
What motivates employees
The overall level of morale in your business
Reasons for conflict and how to resolve problems
Reasons for frustration and how to reduce workplace stress factors
Any changes needed for effective group behavior
Attitudes to leadership and power
Addressing critical issues related to the above insights can drive positive cultural, social and financial change in your business.
Note: Organizational behavior is different from organizational culture (OC). OC is the set of values, beliefs, expectations, practices and goals within a business. You can use elements of organizational behavior to influence OC by studying behavior and making positive changes.
The benefits of understanding organizational behavior
Understanding how people behave gives you key insights into creating a workplace that benefits your business, employees and customers.
Implementing changes based on the principles of organizational behavior can help you:
Increase employee satisfaction
Increase customer satisfaction
Create more effective work processes
Support employee development
Attract and retain top talent
Identify employees who may become leaders
Improve communication
Reduce burnout and foster a healthy work-life balance
Improve alignment on mission and values
Gain a competitive advantage in your industry
The benefits of applying organizational behavior concepts closely relate to employee happiness. This is why OB is integral to human resources management (HR).
If you know why people behave in certain ways, you can provide the guidance, support, tools and environment they need to thrive in their roles.
For example, Google recognized that health, family and well-being were important aspects of its employees’ lives. It invested more in staff support to create an emotionally healthy workplace, including flexible work schedules and free time to explore creative passions.
The result? According to research by the University of Warwick, Google saw a 37% increase in employee satisfaction.
Happy employees are also proven to work harder. The same research by the University of Warwick shows that happiness makes people around 12% more productive.
In other words, if you use organizational behavior to create a happy workforce, you’ll also improve bottom-line outcomes.
When is the right time to prioritize organizational behavior?
Any business that wants to create a positive and productive workplace can benefit from understanding their organizational behavior.
Analyzing the essentials of organizational behavior is particularly useful in times of change or growth.
Here are some scenarios where studying organizational behavior can help you improve organizational effectiveness.
Hiring new employees
What do employees love about your company? What are their feelings about career development, pay and benefits?
Understanding their expectations, processes and satisfaction can help you create a culture that attracts top workers. For example, if you know employees feel more creative when not stuck at a desk, you can design a space that allows them to work wherever they’re comfortable.
It can also help you develop systems for better onboarding and integration of new team members.
Additionally, organizational behavior gives you a clear idea of who’s suitable for your company so you can prioritize candidates who align with your team.
Say you’re hiring a sales manager for a team that thrives on motivational leadership. You might focus on people with a results-oriented mindset who will share their objectives, strategies and progress with the team to foster a sense of purpose.
Nurturing employees for growth and retention
Why do employees leave? What kind of career path do you offer? How do you reward their efforts?
Learning the answers to these questions can help you improve job satisfaction and nurture loyalty.
For example, if your employees leave for more attractive growth opportunities, you can implement better training and career development to increase retention.
Scaling a culture-driven company
A positive company culture thrives on employee engagement, strong communication, clear expectations and enthusiasm from top to bottom.
While it’s easy to maintain these benefits as a small team working out of one office, rapid expansion means more chances for loss of company values.
Understanding organizational behavior can help you integrate employees into your existing culture to build diverse teams and systems without compromising what got you here.
For example, your study of OB in your organization should give you a good idea of how roles work together in your teams.
You could send new employees a welcome package with information about your company values and role details. Help them understand where they fit in and reduce their anxiety about starting a new job.
OB also helps ensure leaders communicate culture consistently to reinforce behaviors so everyone is on the same page.
Maintaining high levels of customer satisfaction
Great customer service often leads to increased revenue and loyalty, while one negative support experience can drive customers away.
As your team grows and demands increase, analyzing organizational behavior helps you spot and quickly address issues that can impact service performance.
Say your customer service department is experiencing unusually high employee turnover rates. Losing reps makes it hard to support your customers consistently. As you analyze the department’s organizational behavior, you might discover the underlying causes of this turnover: poor personnel management and a lack of growth opportunities.
Once you’ve identified the root causes, you can implement targeted solutions such as:
Providing manager training on effective leadership and communication skills
Offering training programs, mentorship or opportunities for internal promotions
Studying organizational behavior can also help you align your teams with customer expectations and equip new employees with the right training, tools and support to maintain quality.
How to assess organizational behavior
Human relations professionals (e.g., HR managers or employee relations specialists) typically assess organizational behavior in a company.
The process is similar to using data to improve marketing or sales results. You gather what’s important, analyze it and make changes based on your insights.
Here’s a simple framework to follow:
1. Collect organizational data
Run surveys or conduct interviews to learn about employee attitudes and perceptions.
Focus your employee feedback questions around these areas:
Sentiment. What team members think about their jobs, tools and leaders
Experience. What your staff thinks about different stages of the employee life cycle, including the hiring process, onboarding, day-to-day work and well-being
Culture. How workers rate different elements of culture, including learning, communication and openness to change
Accountability. How employees feel the company handles accountability, including communication, roles and responsibilities, rewards and consequences
Productivity. Which factors influence job performance, including tools, workflows, training programs, workspace, incentives or rewards and work-life balance
You can learn what you can’t gather about behavior from surveys or interviews by observing employees perform various tasks and building case studies.
For example, tracking the performance of your top sales reps can help you understand the tactics they use to outperform other team members.
2. Analyze results
Once you have your data, look for patterns.
For example, if half of your employees mention communication as a point of frustration, you must address it to improve productivity and job satisfaction.
Use a data analysis tool like Microsoft Excel or Tableau to format and visualize your information. Both tools help you create tables and charts that make it easier to spot interesting insights.
3. Roll out changes
When you’ve identified where a change is needed, introduce it with small focus groups first.
Say a lack of incentives is impacting sales productivity. You can run a pilot test to introduce new rewards to a handful of salespeople outside your top performers.
Tests allow you to measure impact and make adjustments before rolling them out company-wide, either in phases or simultaneously.
4. Measure, adapt and improve
When organizational changes are complete, repeat the process.
All changes affect behavior differently, and only some things you do will have the desired long-term impact.
Collect feedback and measure performance periodically to understand how change impacts sentiment, experience, culture, accountability and productivity. Use the information to run more tests and make incremental gains.
6 tips for using organizational behavior to improve your workplace
To benefit from the positive changes organizational behavior can bring, you need the foundations in place to uncover insights and the right environment to act on them.
Here are six tips to help you develop a productive and happy workplace with a continuous improvement culture.
1. Hire candidates that align with your goals and values
The best employees have the skills to excel at their jobs and the personality to contribute to a thriving work environment. To draw these contenders to your company, clearly define what you’re looking for and communicate this in job advertisements.
Start by asking your team what type of employee they need. Make a list of qualifications, responsibilities and behavioral traits to identify the person who’ll fit in well. This prep work will help you create a job description to attract suitable candidates.
For example, if you’re hiring a sales manager, list specific duties like developing strategies, implementing sales initiatives and creating reports.
Here’s how these duties should appear in a job ad:
Next, show candidates what’s in it for them. List the benefits that make your business a great place to work. For example, medical insurance, 401K, paid holidays and training reimbursement.
Lastly, use behavior-based interview questions to learn how a candidate would act in different situations.
Ask things like:
Tell me about a stressful work situation. How did you handle it?
Have you ever made a mistake at work? How did you handle it?
Give me an example of a conflict you had with a team member. How did you handle it?
Describe a situation when you had to manage time to complete a task. What did you do?
Tell me about how you’ve used leadership skills to motivate others
The candidate’s answers will give you insights into how they’ll perform in your team.
You can also use personality questions to determine a candidate’s strengths, weaknesses and motivations.
At the end of the interview, you’ll have a clear idea of whether the candidate is the right fit for your company.
Tip: Use recruitment CRM software like Pipedrive to efficiently track applications, sort candidates and collaborate in the decision-making process. Try Pipedrive for free.
2. Promote professional development to engage employees
Once you have the right talent, you can identify the most valuable skills and find relevant training opportunities.
For example, if you know that project management is an essential skill for a sales manager, you can identify courses for new hires.
Course opportunities make the role more attractive to candidates and enable current employees to develop their careers.
Adecco Group research shared by Nicolas Behbahani shows that progression is a big motivator for people to stay with a company.
Show all employees how they can grow with your company. For example, a junior marketing executive will likely want to see how they can progress into a senior role and what training you offer to help them get there.
For more experienced workers, provide access to refresher courses and tutoring to help them keep pace with current trends and work processes.
3. Prioritize open communication to improve trust and transparency
Good communication keeps everything moving in the right direction. It helps clarify goals, remove silos between departments and strengthen team relationships.
It also creates a culture of trust, which is valuable for understanding organizational behavior. Employees who feel confident communicating are more likely to share opinions and grievances. You can use their feedback to improve your workforce continually.
Here are some ways to promote honest and open communication:
Set aside time each week (virtually or in person) for employees to chat with you, ask questions or get feedback. Jot down any noteworthy remarks and follow up regularly.
Use an anonymous “suggestion box” to collect honest responses from employees who are hesitant to voice issues openly.
Leverage communication tools like Slack, Zoom or email newsletters to connect teams and ensure information flows freely between departments.
Create breakout rooms or shared workspaces where teams can casually chat and build relationships.
Conduct regular in-person meetings to brainstorm ideas and address critical issues. Encouraging your employees to share their opinions makes them feel valued.
Use a workplace wiki to make policies, guidelines and other important documentation easily accessible to employees.
Monitor your efforts and collect feedback to ensure communication channels serve their purpose.
Remember, good communication starts from the top. Lead by example using the tools you promote to interact with your teams and share successes and failures.
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4. Automate labor-intensive work processes to improve productivity
Use automation software to handle lower-level tasks and give teams more time for activities that utilize their skills. Automation tools make processes and your company run more smoothly.
While the most visible benefit of automation is increased productivity, it’s also an essential tool for employee well-being and satisfaction. According to Mental Health UK, streamlining processes helps reduce employee workload – a major cause of burnout and poor mental well-being at work.
For example, Pipedrive’s email marketing software can automatically segment lists and send follow-up emails to your target audience, freeing up your marketers to focus on crafting the messaging.
Automation software can improve workflows, handle sales and lead management, schedule social media posts or manage email marketing campaigns.
The right tool for you depends on your needs. Consult with your team about which tasks take up the bulk of their time and consider which parts you can automate.
Ensure any automation tool you choose integrates with your current content management system (CRM) and sales and marketing software. It should also include training options to help teams get the most out of it. Pipedrive, for instance, has an in-depth Knowledge Base and extensive training videos in the Pipedrive Academy. Resources like these are especially significant for getting new hires up to speed.
Lastly, choose a scalable tool. A solution that supports limited users will quickly become a problem for a growing business. Most automation platforms provide different subscription and pricing tiers so you can upgrade as needed.
5. Use accountability to help employees meet expectations
Accountability is vital in managing employee behavior. It ensures individuals are responsible for their actions, performance and decisions, helps promote clarity and reduces the need for micromanagement.
For example, Apple uses directly responsible individuals (DRIs) to maintain accountability across its organization. Every project gets assigned a DRI who is responsible for its success (or failure).
A DRI might not be the only person working on the project, but it’s up to them to see the work through to completion. By explicitly assigning responsibility, everyone knows what part they play and DRIs are motivated to get results.
Here’s how to make accountability part of your culture:
Set expectations. When you assign a task or goal, see that employees know what’s expected of them. Use SMART goals (Specific, Measurable, Achievable, Relevant and Time-bound) to set clear objectives.
Keep employees informed. Remind employees of their responsibilities and goals, so they’re fully aware of what’s required. Reiterate the rewards for project completion to keep employees engaged and motivated.
Collect feedback. Accountability should be a motivator, not a burden. Check in with employees to learn how they feel about responsibilities and expectations. Also, provide feedback and offer suggestions on how individuals can improve.
Accountability begins at the top, so start by holding yourself accountable. If you hit deadlines, show up to meetings on time and own your mistakes, your team will follow suit.
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6. Reward employees to improve their happiness and performance
People feel valued and motivated when their work is appreciated.
Rewards and recognition can increase productivity, performance and engagement. They’re also important for retention. A workplace appreciation survey by Bonusly shows that 46% of respondents resigned from a job because they felt unappreciated.
Show your appreciation for employees by following the three Rs of employee retention:
Respect. Open communication, feedback and development opportunities go a long way to creating a culture of respect, but it’s also important to promote teamwork and value individual contributions.
Recognition. Go beyond the occasional “well done” by allowing everyone to celebrate and appreciate each other’s successes. Share positive customer feedback, newsletter shoutouts and employee of the week awards to give teams a sense of purpose.
Reward. Celebrate accomplishments and milestones with performance bonuses, gift cards, experiences, merchandise or opportunities for career growth.
Using this framework, you can create a company culture that draws and keeps top talent.
Final thoughts
Studying organizational behavior benefits any business that wants to operate more effectively.
As the above examples of organizational behavior show, when you understand how people act, you can implement systems to create an environment that helps your teams thrive.
The result? Better job satisfaction, increased productivity and long-term career and business success.
