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Executive Summary of Effects of Positive Practices on Organizational Effectiveness

The companies are facing immense competition to survive in this dynamic and rapidly innovating environment. The leaders are faced with dilemma of increasing the shareholders’ value or keeping the employees satisfied and engaged in the business. The aim of this report is to examine the importance of care and compassion in an organization and the understanding the practise of keeping the employees on the edge in order to encourage innovation is successful for long run growth of business. Moreover, the report emphasizes on the understanding the significance of employer branding and its effect on employee value proposition to ensure sustainable human resource management. The case of Amazon is studied in detail.

Table of Contents

Introduction.

Significance of Care and Compassion for business.

Critics of Care and compassion.

Short run and long run impact of keeping the employees on the edge.

Employer Branding.

Employee Value Proposition.

Sustainable Human Resource Management

Surviving versus Thriving.

Amazon.

Conclusion and Recommendations.

Reference.

Introduction to Effects of Positive Practices on Organizational Effectiveness

Today, companies are facing a challenge that is caused by a rapidly changing business environment. In order to win new markets or to capture new customers organization are required to innovate with their products and provide customers with new products and services, the rising competition and low barriers to entry has made the survival difficult. The driving force behind the operations of the business is domination, aggression, short-term thinking, winning at all costs, and a zero-sum view of the world (Dutton, Sisodia and Worline 2017).Human capital is essential to survive in this competitive environment, as a consequence employers put high pressure on the employees. Humans invest time and energy when they work for an organization An organization is known as a great place to work then they acquire human capital of value, however, an organization that is a high-pressure workplace where competition is soaring, employees just focused on winning and maintain the positions to avoid being a part of layoffs. The aim of this report is to examine the importance of care and compassion in an organization and the understanding the practise of keeping the employees on the edge in order to encourage innovation is successful for long run growth of business. Moreover, the report emphasizes on the understanding the significance of employer branding, employee value proposition to ensure sustainable human resource management. For this study, the case of Amazon is taken.

Significance of Care and Compassion for Business

Employees suffer from the policies of the organization however when employees or leaders adopt compassion the result was, employees were more adaptable and effective processes (Dutton, Sisodia and Worline 2017). Care and Compassion help to increase the employee loyalty as well as a trust; warm and positive relationship at work has a higher impact on the loyalty of employees as compared to the remuneration (Waytz, Review, McKee and Goleman 2017). Also, compassion and care augment willingness to trust. When employees work in fear and do not feel secure, this inhibits their productivity and creativity levels as they experience a high level of stress.Thus, people management strategy of care and compassion is significant for business.

According to a study by Hagel, Brown, and Samoylova (2014), organizations in the US are growing their earnings but are struggling to get returns from their asset base. They can achieve their short term objectives but not the returns on assets. This was supported by another study by Cameron, Mora, Leutscher, and Calarco (2011). According to this study, compassion makes a huge difference in the productivity and financial performance of an organization. Furthermore, the organizations that employees characterized as virtuous experienced higher profitability enhanced productivity, and customer retention.

Critics of Care and Compassion

The critics argue that the economic model emphasizes self-interest, increasing the returns to the business and maximizing the shareholder value, in this situation, the care and compassion do not make sense since the focus is on the number and not values (Sinha Ebury Publishing 2018). The traditional economist suggests that investors when analyzing the performance of the business considers the financial reports of the business, the return to them, and then return to other shareholders, in addition to this, employees may not work at the best of their abilities if they are not pushed. If people are not scared, they will be not competitive and will not be producing the desired results as they are not motivated. Also, the leaders practicing constant compassion may face secondary stress which causes compassion fatigue (Dowling 2018). Businesses operate to earn profits but it is a universally sustainable principle that generating profit should not be at the expense of the prosperity of the business. In order to sustain, the business cannot just rely on the brutal, enormous growth and accumulated wealth but should empower, enrich as well as engaged the lives of others (Sinha Ebury Publishing 2018). The traditional capitalist economic model focussed on maximizing the shareholder's value; however, with increased consumer awareness about the working of the organization, this model is being questioned.

Short Run and Long Run Impact of Keeping the Employees on The Edge

In the short run, the companies can attain their mission and fulfil their objectives by keeping the workers on the edge. However, in the long run, these practices hinder the growth of the organization, this can be attributed to certain factors; the first and the fourth most factors that contribute to the growth of the organization is the level of productivity. The productivity of employees decreases when they are dissatisfied. According to a study (Stefanova 2015), the main reason behind the satisfaction level of employees is not compensation or the type of work but the way people are administered; when employees are badly managed by the companies the level of dissatisfaction rises. The dissatisfied employees cause wastage of resources, both human and economic for the organization. When an organization keeps its employees at edge then employees do not consider their work as a long-term career path but view it as just a job, as a consequence, the focus is on protecting oneself and provide with short-term results. Moreover, when employees constantly worry about the performance their loyalty towards the organization falls.

Employer Branding

Employer branding is a recently developed concept that combines two organizational aspects of human resources as well as branding (Gilani and Cunningham 2017). Employer branding can be stated as the selected and target activities performed for the long term that is associated with the perception and awareness about the organization, present employees, potential future employees as well as associated stakeholders (Bi and Inthiyaz2017). The employer branding has a profound and deep effect on brand perception as well as the brand image, this promotes brand retention. In this digital world, employer branding is an effective tool in recruitment (Dowling, Festing and Engle 2013).

Employee Value Proposition

An employee value proposition can be understood as a set of offerings that are provided by the company to an employee for the skills, abilities as well as the experience that the employees bring with themselves to the organization; it is an employee-centred approach (Browne 2012). In the recent time employee value proposition has been gaining attention and is directly linked with the employer branding, an effective employee value proposition helps organization in three aspects, these are, improved attractiveness, significantly increased employee commitment as well as increasing the compensation savings (Browne 2012).

Sustainable Human Resource Management

Moreover, sustainable human resource management can be connected to Employer branding. The sustainable human resource management can promote the addressing of different needs as well as the expectations of the future and the current employees without compromising with the image of the employer (App, Merk and Buttgen 2012).In the long run, Sustainable human resource management benefits the firm as through effective employer branding they can attract and retain good quality employees, this can be ensured as a sustainable human resource management practice takes into consideration the employee value proposition .

Surviving Versus Thriving

Individuals spend significant time working in an organization with the aim to get better opportunities; they are either surviving or thriving in their workplace. Surviving can be understood as what is necessary or essential to work in an organization. Surviving is linked to performing the duties assigned to a person as per his roles however in this competitive and fast-paced organizational culture surviving is not sufficient. In order to attain success in this environment, one needs to thrive. The term thriving signifies the abilities of an individual to prosper and develop in a workplace (Abid 2016). Thriving is seen as an answer to a challenge that promotes learning in individuals. Thriving is an essential component that stimulates innovation in a working environment when employees thrive they learn and acquire expertise on how to do their work more effectively, they become better at finding problems before they arise and simultaneously come up with solutions. Various studies have shown that thriving positively affects the performance of an employee. The employees who practice thriving rather than surviving tend to take more responsibility, gain knowledge, and are able to maintain better relationships with colleagues, overall this improves their performance level.

Amazon

Amazon stock price increased at an exponential rate this can be attributed to the short-term results however employees are an important stakeholder under the practice of keeping employees on the edge will not prove beneficial for the long-term growth of the company. Such companies just address the problem that appears on the surface they do not go to the root cause of the problem this can be seen by constantly laying off workers. Therefore, mitigating the problem only at the surface level will not impact the results in the short run but will erupt in the long run (Stefanova 2015). When organization experiences challenges from this turbulent environment the legal changes, customers complaints then they often tend to ignore the need for compassion and care however when seeking to build an organization that not only performs highly but meets the needs of the 21st-century work environment compassion and care becomes the need of the hour (Dutton, Sisodia and Worline 2017).

No brand is static, it keeps on evolving. The employer brand of Amazon is sustainable or not will depend on the factors that impact the employer brand. In order to evaluate the employer brand, one needs to consider nature as well as the strength of the employee proposition value (Rosethorn 2016). The key factor that impacts the employer brand and ensures the sustainability of the brand depends on the effectiveness of the business to adapt and imbibe the employee value proposition in it. It can include factors such as staff turnover figures, the productivity figures absence of staff figures the customer satisfaction report as well as other external factors. It is difficult to manage the human resource as the organization size increases. For an organization to sustain in this competitive business environment it is not only essential to recruit key talent but to retain the key talent (Shanmugan and Vinoth 2017). The practices that are taken by the firm or the organization to retain its human resource will ensure if the organization flourishes in the long run. The employee and employer follow a psychological contract in which the employee trusts the organization and in exchange for job security, this is the ground for employer branding

As per the New York Times report, it says that the workers that work at Amazon are motivated to compete with each other and roast each other in meetings, to work late and comply with standards that are unreasonably high (Kantor and Streitfeld 2015). Amazon follows a strict policy in which people who couldn’t meet the targets are a part of the losers category and these people are asked to leave. Moreover, the report says that Amazon treats people inhumanely and those who suffered from disease were asked to leave and were not given time to recover . Although, Amazon is doing exceptionally well when considering the profits and innovation, however, an important organizational tool which is human resource management is being neglected.

Since the beginning, Amazon has always operated and practiced a customer-centric approach (ICMR 2017). The focus is on providing maximum customer satisfaction. The Amazon employees were expected to follow the same practice and to provide the best customer satisfaction services. According to the BBC investigation and a survey conducted by the pay scale in 2013 suggested that the tenure median tenure of the employees of Amazon was just one year and only 15% of the employees spend more than five years in this company. The high attrition rate is the reason why the organization was consistent in hiring robustly.

According to the report of Business Insider (2018), although Amazon has gained the reputation of the harsh working environment there are few benefits that an employee gets when they work with Amazon comes (Umbro 2018). Employees suggested that Amazon is full of the opportunities and it is an exciting as well as a dynamic place to work where they can learn a lot every day, in addition to this, the teams are highly supportive and provide them with various opportunities for career growth and development .Although the benefits that the organization offers in terms of compensation is quite high, However, the inconsistency of management and the competitive environment that the organization offers is what makes it difficult for employees to sustain Some of the former people who worked with Amazon said that they were pushed past their limits, there were no work-life boundaries and people were castigated for their shortcomings. Criticism from the bosses negatively impacted the performance and productivity of employees. Women faced gender inequality and were not in the leadership team. Moreover, the attrition rate was quite high. If such practices are followed by the organization then it will not be able to sustain its employer brand. The harsh working conditions not only hampers the productivity of employees but also significantly impacts the performance of the organization as human capital is essential to operate the machines and to properly utilize physical capital.

According to Schein (2020), the blue-collared workers, those people who worked in fulfilment centres, the employer practices the hard power management approach while the white-collar workers, those who work in the high-tech department practices smart power management. The white-collared workers are encouraged to brainstorm and provide ideas to innovate. The employees are encouraged to work hard to grow and develop, they are thriving to work and compete and not just sustain. The workplace policies of Amazon have high standards; they expect the same from people to not just perform but to perform better than their peers. The competition will help encourage employees to work at their best of abilities (Schein 2020).All these factors suggest that Amazon is based on innovation, and it is the demand for an organization that deals in innovation to not just survive but to thrive.

Over the years, Amazon is taking steps to improve the work-life balance. The average company rating on the Glassdoor was 3.4 in 2015 and has grown to 3.8 in 2018 just approximately 19,439 employees suggest they would recommend this organization to their friends and family (Umbro 2018). Moreover, employees said that they are surrounded by highly intelligent as well as intellectual people and that they are encouraged to think out of the box and create something innovative this not only promotes their personality development but helps them to grow.

Conclusion and Recommendations on Effects of Positive Practices on Organizational Effectiveness

Companies are working hard to survive in this rapidly changing business environment. It has become difficult to sustain the employer brand. The care and compassion strategy of business makes sense as it is important for long term growth of the business. The harsh working of Amazon conditions has impacted the attrition rate, however Amazon is taking necessary steps to improve the working conditions and make it more employees friendly. The Amazon workplace culture is based on ensuring the personality development and taking up of challenges; hence this allows people to thrive. Hence, Amazon employees are thriving and not just surviving in the workplace. In order to make the business more sustaining the focus must be on ensuring the care and compassion so as to seek a holistic and long term growth.

Reference for Effects of Positive Practices on Organizational Effectiveness

Abid, G 2016,‘ How does thriving matter at Workplace,’ International Journal of Economics and Empirical Research, vol. 4, no.10, pp. 521 -527. https://www.researchgate.net/profile/Ghulam_Abid/publication/314750463_How_Does_Thriving_Matter_at_Workplace/links/58c55b5192851c0ccbfb8e96/How-Does-Thriving-Matter-at-Workplace.pdf

App, S, Merk, J, andButtgen, M 2012,‘Employer branding: sustainable HRM as a competitive advantage in the market for high-quality employees’ Management Review, vol. 23, no.3, pp. 262-278. http://www.jstor.org/stable/41783721

Bi, S P andInthiyaz, K 2017, ‘A study on employer branding in multinational companies at Hyderabad,‘ International Journal of Engineering and Management Research, vol. 6, pp. 182-187. https://www.ijemr.net/DOC/AStudyOnEmployerBradingInMultinationalCompaniesAtHyderabad.pdf

Browne, R 2012, Employee value proposition, SIBM, Beacon Management Review.[Online].Available at: https://www.sibm.edu/assets/pdf/beacon3.pdf#page=37[Accessed on: 12 September 2020].

Cameron, K, Mora, C Leutscher, T and Calarco, M 2011,‘Effects of positive practices on organizational effectiveness,’The Journal of AppliedBehavioral Science, vol. 47, no. 3, pp. 266 -308. DOI: 10.1177/0021886310395514

Dowling, J P, Festing, M and Engle, Sr D A 2013,International Human Resource Management (Sixth edition), Andrew Ashwin, United Kingdom

Dowling, T 2018,‘Compassion does not fatigue!’ The Canadian Veterinary Journal, vol. 59, no. 7, pp. 749-750. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6005077/

Dutton, J E, Sisodia, R, Worline, M 2017, Awakening compassion at work: the quiet power that elevates people and organizations, United States: Berrett-Koehler Publishers.

Gilani, H and Cunningham, L 2017,‘Employer branding and its influence on employee retention: A literature review,’ The Marketer Review, vol. 17, no. 2, pp. 239-256. DOI: 10.1362/146934717X14909733966209

Hagel III, J, Brown, S J and Samoylova, T 2014, Lessons from the edge: what companies can learn from a tribe in the Amazon. [Online].Available at:https://www2deloitte.com/us/en/insights/topics/talent/lessons_from_the_edge.html[Accessed on: 12 September 2020].

ICMR 2017, Amazon Workplace culture.[Online].Available at: https://www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and%20Organization%20Behavior/HROB187.html [Accessed on: 12 September 2020].

Kantor, J U and Streitfeld, D 2015, Inside Amazon: Wrestling big ideas in a bruising workplace. [Online]. Available at: https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html[Accessed on: 12 September 2020].

Rosethorn, H 2016, The employer brand: Keeping faith with the deal, United Kingdom: Taylor and Francis.

Schein, A 2020,‘Organizational ambidexterity, hard power management, and smart power management at Amazon, A case study,’ Global Business and Economics Review, vol.22 no. 1-2.https://doi.org/10.1504/GBER.2020.105028

Shanmugan, V and Vinoth, K 2017,’The key factors of employer brand and empirical analysis with special reference to IT industry,’Indian Journal of Public Health Research and Development, vol. 8, no. 2, pp. 290. DOI: 10.5958/0976-5506.2017.00128.0

Sinha, G 2018, Compassion Inc.: Unleashing the Power of Empathy in Life and Business, United Kingdom: Ebury Publishing.

Stefanova, K 2015, Is Amazon’s ruthless management culture hurting its stock price?[Online].Available at: https://www.forbes.com/sites/katinastefanova/2015/10/24/why-amazons-management-practices-will-likely-hurt-its-stock-price-in-the-long-run/#9ad7e8277ef8[Accessed on: 12 September 2020].

Umbro, D 2018,What it’s really like to work at Amazon, according to employees. [Online]. Available at: https://www.businessinsider.in/strategy/what-its-really-like-to-work-at-amazon-according-to-employees/articleshow/62762659.cms [Accessed on: 12 September 2020].

Waytz, A, Review, H B, McKee, A, Goleman, D 2017, Empathy (HBR Emotional Intelligence Series), United States: Harvard Business Review Press.

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