Organizational Effectiveness : A Guide to Boost Work Performance (2023)

Pub: March 22 2021

Upd: June 28 2022

Effective organizations run like a well-designed, well-oiled machine; every part integrates to successfully produce the outcomes the organization sets out to achieve, wasting as little time and resources as possible. Organizational effectiveness is the modern way to measure and guide organizations to reach their goals.

Table of Contents:

  1. Introduction
  2. Why is Organizational Effectiveness Important?
  3. Factors that Impact Organizational Effectiveness
  4. 7 Ways to Improve Work Performance

Organizational effectiveness is defined as a concept to measure the efficiency of an organization in meeting its objectives with the help of given resources without putting undue strain on its employees. It is about how the company can produce the target quota of products and/or services, how efficient its process is, and how much waste is produced.

Organizational Effectiveness : A Guide to Boost Work Performance (1)

We know that performance always improves when leadership is at its best. Leadership plays a great role in setting teams’ direction, the creation of strategies and implementing them in an effective way to achieve goals, efficient communication, alignment of goals across the organization, development of the employees, accountability, and best resource management.

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So, to bullet point it, organizational effectiveness refers to how an organization has achieved full self-awareness due in part to:

  • Leaders setting well-defined goals for employees and outlining ways to efficiently execute those goals.
  • Management implementing clear decision-making processes and communication pipelines.
  • Engaged employees—who are carefully selected and fairly compensated—produce work that prioritizes results.

Why is Organizational Effectiveness Important?

When we think of organization effectiveness, we probably think of examples of successful people like Mark Zuckerberg or Steve Jobs; but in an organizational context, effectiveness becomes significantly harder to define. It's one thing is to have a successful company, but whether it is effective or not is different.

You can be very successful but if you were also effective, your success would increase significantly. The more effective an organization is, the more chances it has to survive and flourish throughout the years. You need to know that implementing organizational processes to become more effective is something that needs to be learned and practiced on a daily basis, it is a commitment that has to be revised and assessed every certain amount of time to see how it’s working and tweak the areas that need improvementto keep a competitive advantage.

A study by Bain & Company makes an interesting comparison between an ongoing commitment to organizational effectiveness and a series of one-time initiatives that might just help cut costs. The first one is comparable to a healthy routine of eating good food and getting regular exercise, while the second one is similar to extreme dieting. Although the latter might work in the short term and gets immediate results, it doesn’t “build the muscles to sustain long-term change.”

Keep in mind that committing to improving organizational performance and effectiveness, should not neglect company health.

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Organizational Effectiveness : A Guide to Boost Work Performance (2)

The benefits of organizational effectiveness can include:

  • Improved Employee Engagement and Performance - Employee productivity is directly tied to the outcomes and performance of individuals. This, in turn, affects the organization’s performance.
  • Better Management - This can mean better manager training, increased communication between managers and employees, updated policies and standard operating procedures (SOP), among other things.
  • Decreased Costs - Effectiveness in any business can decrease costs. Those savings can come from any area that is causing waste – outdated processes, obsolete technology, ineffective workflows, and so on.
  • Improved Customer Engagement & Value - One of the main goals of any business is to maximize customer value. By improving the effectiveness of customer-related departments – such as customer care or the customer experience – businesses can enhance relationships and boost customer value.
  • Better Use of Technology - Nowadays, all organizations use digital software solutions to improve productivity, but they don’t always use them well. Effective digital adoption efforts can improve digital workflows, data insights, business processes, employee training, and many other business areas.
  • Outstanding Organizational Outcomes - It should be apparent that a more effective organization will be better at achieving its goals and strategic priorities. And the better it can achieve its goals, the more profitable it will be.

For business professionals, the main concern around organizational effectiveness isn’t just “What is the importance of organizational effectiveness?” It should be: “How do we improve organizational performance and effectiveness?”

Organizational Effectiveness : A Guide to Boost Work Performance (3)

Factors that Impact Organizational Effectiveness:

  • Casual Variables - Independent variables that can be altered by the organization itself, like policies, required skills and behaviors, business strategies, and leadership strategies. Casual variables can determine the course of development within an organization.
  • Intervening Variables - These are motivation, performance goals, attitude, loyalty, and perception of the employees and their capacity for efficient decision-making, communication, and interaction. The intervening variables show the health of an organization.
  • End-result Variables - These are loss, costs, earnings, and productivity. The end-result variables reflect the achievements of an organization.

7 Ways to Improve Work Performance

In order to achieve a better performance, here are the key areas you need to focus on to improve organizational efficiency:

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  1. Leadership - Developing leadership within the company is a critical aspect to improve performance. Good leaders are the ones that create a clear vision for the organization and its teams, they define and execute strategies and processes and lead by example and accountability.
  2. Strategy - A successful strategy involves switching an organization’s identity to include efficiency and effectiveness as core values. As your company becomes more known for its effectiveness by your employees and the market, the more these important values will be intrinsically involved in every goal.

    Organizational effectiveness should simplify and clarify objectives for a company. The clearer the objectives are outlined at a strategic level, the easier it is to align them across the other departments.

  3. Communication - It is well known that every organization needs effective communication so that every piece of information is smoothly and correctly communicated to other people in a precise manner. Every little thing that happens in a company happens because of the exchange of messages within it, and this is why an effective and strategic communication is crucial.

    Good communication reassures that the impact of the message is in alignment with the established strategies so that everything is completely understood. As you communicate, keep track of your words and make sure that your statements are clear. A transparent communication will keep the focus on the main goals and avoid mishaps, late completion of tasks, and excuses.
  4. Accountability - In order to improve work performance, it’s important to realize that organizational effectiveness is greatly dependent on accountability. Every organization should build an environment where every individual is accountable for the objectives and tasks they’re involved in.

    Accountability determines how effective employees perform their tasks, so an organization should have effective accountability systems to maintain clear expectations aligned throughout the organization.

  5. Performance & Metrics - Yes, the HR department is responsible for bringing the best talent and fit to the company, and for training them well to fulfill expectations. But how employees perform doesn't depend just on their skills, their leaders are also responsible for keeping their performance on the right track. The best way to do so is by using proper metrics that will motivate and encourage employees while keeping them accountable. Choosing the right metrics to measure is extremely important, you can get some help by asking the following questions:
    - What are the concretegoals my team members are moving towards?
    - Are they clearly outlined by team leaders?
    - How and by what interval will progress be assessed?

    It is leaders who establish and maintain the measurement system to track progress and review status regularly. Check out our article “Reaping the Benefits of Performance Management” to learn more on this matter.

  6. Behavior - Recurring behavior, either good or bad, is where efforts to achieve organizational effectiveness are most likely to go downhill or uphill, depending on the said behavior. To build a healthy organization where positive behavior stands out, you need to identify specific groundbreaking moments in your daily operation of the company, speak out the ways employees should be changing their behavior in certain moments, and implement systems to reinforce those behaviors and incentivize good choices.
  7. Culture - The level of employee engagement plays an important part to achieve effectiveness and better organizational performance. Motivated employees usually perform way better, so creating a culture that broadly values effectiveness is key. Countless studies have underlined the correlation between employee engagement and overall organizational performance. Employee engagement should always be at the top of your priority list in order to improve organizational performance.

As you can see, each point stated has something to do with the previous one. We sincerely hope that these organizational strategies help you in your quest on achieving organizational effectiveness and improve work performance to reach your organizational goals.Remember Hirebook is here to help you leverage OKRs, KPIs, check-ins, and 1-on-1s so you can start seeing the benefits of performance management in your company.

Organizational Effectiveness : A Guide to Boost Work Performance (4)

(Video) Dave Ulrich Presents New Organization Effectiveness Diagnostic and Guidance System

Photo credit - pressfoto

(Video) Leadership: Cultivating Organizational Effectiveness, Segment 1

FAQs

What are the 5 strategies to improves organization effectiveness? ›

5 Strategies to Improve Organizational Effectiveness
  • Make Use of Human Resources. The human resources department of any company plays a key role in the organizational effectiveness of a company. ...
  • Focus on Education and Growth. ...
  • Keep the Customers in Mind. ...
  • Work on Quality Services or Products. ...
  • Use Technology.
Aug 18, 2016

What is an example of organizational effectiveness? ›

Leadership, employee productivity, teamwork, and the alignment of business units are a few examples. These human-driven factors all play a major role in organizational performance and effectiveness. A systematic approach is key to successful improvement.

What would make our organization more effective? ›

While there have been numerous attempts to define organizational effectiveness over the years, in general, the collaboration of resources, people, and processes to achieve certain objectives is what makes up organizational effectiveness. This is particularly true in a municipal setting that is not profit focused.

What are organizational effectiveness goals? ›

Organizational effectiveness refers to how an organization has achieved full self-awareness due in part to: Leaders setting well-defined goals for employees and outlining ways to efficiently execute those goals. Management implementing clear decision-making processes and communication pipelines.

What are the strategies for improving performance and workplace productivity in the organization? ›

How To Increase Workplace Productivity
  • Onboard Effectively to Set Up for Success.
  • Align and Communicate Company Goals to Individual Goals and Outcomes.
  • Inform Employees in Engaging Ways.
  • Establish a Work Environment That Supports Efficiency.
  • Empower Employees to be Productive.
  • Invest in Well-being During Work Hours.

Why is organizational effectiveness? ›

Why is organizational effectiveness important? Organizational effectiveness is important in determining whether a company may experience long-term success. The more a company can reach its goals, the more profitable it becomes.

What is the best measure of organizational effectiveness? ›

The goal approach gauges effectiveness by measuring to what degree the organization reaches the goals it set out to achieve. This is the most traditional way of measuring organizational effectiveness.

What are the 4 perspective of organizational effectiveness? ›

According to Balduck and Buelens (2008), the issue of effectiveness in organizations revolves round four main approaches: the system resource approach, the goal approach, the strategic constituency approach and the internal process approach.

How do you evaluate organizational effectiveness? ›

Here are some of the most important indicators to watch when evaluating organizational effectiveness:
  1. Management. ...
  2. Workforce Performance and Productivity. ...
  3. Accountability. ...
  4. The Employee Experience. ...
  5. Organizational Performance. ...
  6. Organizational Strategy. ...
  7. Tools and Technology.
Nov 12, 2019

How do you manage an organization effectively? ›

The 10 Golden Rules of Effective Management
  1. Be consistent. ...
  2. Focus on clarity, accuracy and thoroughness in communication. ...
  3. Set the goal of working as a team. ...
  4. Publicly reward and recognize hard work. ...
  5. Be the example. ...
  6. Never go with 'one-size-fits-all. ...
  7. Remain as transparent as possible. ...
  8. Encourage all opinions and ideas.
Jan 11, 2016

What is organizational effectiveness and development? ›

Organizational effectiveness and development (OE&D) is a systematic approach for enhancing the performance of an organization and its employees through planned interventions. Such interventions may focus on team performance, employee development, operational efficiency, organization structure, and productivity.

What are top 3 ways to improve on performance at work? ›

Top 3 ways to improve work performance
  • Limit distractions. According to Udemy In Depth: 2018 Workplace Distraction Report: ...
  • Split your tasks into milestones. ...
  • Stop multitasking, prioritize your work.
Jan 17, 2022

What are 7 strategies for improving staff performance? ›

Top 7 Strategies for Helping Your Employees Reach Their Goals and Improve Employee Performance
  • Track Individual Progress. Get to know your employees inside out. ...
  • Set SMART Goals. ...
  • Empower Your Employees. ...
  • Reward High Performance. ...
  • Foster a Positive Working Environment. ...
  • Increase Job Satisfaction. ...
  • Encourage Regular Communication.
Aug 6, 2019

Why is change important for organizational effectiveness? ›

Organizational change is necessary for companies to succeed and grow. Change management drives the successful adoption and usage of change within the business. It allows employees to understand and commit to the shift and work effectively during it.

What are the elements of organizational effectiveness? ›

The Six Systems of Organizational Effectiveness:
  • Leadership. To achieve high performance or sustain results, leaders must define and refine key processes and execute them with daily discipline. ...
  • Communication. ...
  • Accountability. ...
  • Delivery. ...
  • Performance. ...
  • Measurement.
Mar 5, 2022

What is organizational effectiveness and efficiency? ›

Organizational efficiency: Process of using fewer resources, as well as less time and less money, to achieve the same goal. Organizational effectiveness: Ability to attain the goal by doing the “right things.”

What are the 6 techniques for improving performance? ›

6 Employee Performance Improvement Techniques
  • 1 – Increase Employee Engagement. Engaged employees are the hidden treasure of successful organizations. ...
  • 2 – Foster Collaboration. ...
  • 3 – Share the Vision. ...
  • 4 – Practice Continuous Learning. ...
  • 5 – Give (and Receive) Frequent Feedback. ...
  • 6 – Recognize Achievement.
Nov 21, 2014

What are the six steps to improving employee performance? ›

There are six key steps to improving performance:
  1. Clarify expectations of good performance. ...
  2. Explain consequences of poor performance. ...
  3. Monitor performance and provide specific feedback. ...
  4. Provide advice for improvement. ...
  5. Give them time to improve. ...
  6. Follow through on your consequences.
Sep 23, 2015

How can organizational development be improved? ›

Aligning long term vision and plans. Upgrading workplace structure. Good people management. Analytics and metrics for change.

What do managers do to help organizations achieve top performance? ›

Managers perform a variety of functions in organizations, but amongst one of the most important functions they perform is communicating with direct reports to help their organizations achieve and exceed goals.

What is meant by organizational performance? ›

Organizational performance is the ability of an organization to reach its goals and optimize results. In today's workforce, organizational performance can be defined as a company's ability to achieve goals in a state of constant change.

What are organizational strategies? ›

What Is Organizational Strategy? At its most basic, an organizational strategy is a plan that specifies how your business will allocate resources (e.g., money, labor, and inventory) to support infrastructure, production, marketing, inventory, and other business activities.

Which of the following four general steps to improve the effectiveness and efficiency of an organization's activities would be performed first? ›

4 Steps for an Effective Business Process Improvement Cycle
  • Identify the need for change: The first step in the BPI process is to identify the need for change. ...
  • Analyze current process: ...
  • Obtain commitment and support: ...
  • Create improvement strategy:
Oct 17, 2013

Which do you think is the best strategy to attain organizational success? ›

Organizations need to engage in the following to optimize organizational success: Analyze “what” is being done well and “what” opportunities are available. Create accountability cross-departmentally and launch a plan to strengthen organizational weaknesses and threats on revenue/performance, productivity, and growth.

What is the most important strategy in an organisation? ›

The key to identifying the most important elements of a strategic plan is to choose goals and objectives that expand your potential without straining your resources or creating too much risk.

What is the best way to organize your organization strategy? ›

How to get organized for success
  1. Declutter your space. First things first, get your workspace and tools in order. ...
  2. Document and store your workflows. If you want to be organized, things need to be clear and consistent. ...
  3. Automate, automate, automate. ...
  4. Create templates. ...
  5. Manage your workload with ease.
Apr 7, 2021

What are the 5 organizational strategies? ›

'The strategy wheel model' includes five types of organization strategy: shared, hidden, false, learning and realized.

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