effects of Organizational Values on Organization Performance

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Organizations are bodies or groups of people with a common goal, this body functions as an entity with its own culture and sets of values. An organizational culture is the belief system that projects the 'personality' and identity of an organization. While organization cultures are formed through ritual, practices, stories and tradition, it is heavily influenced by sets of organizational values that are deliberately planned out or developed over time through practices and personal beliefs of members.

Many have failed to realize that while human talents are important to determine the success of organizations, talents that have different sets of personal values that conflict with values of the organization may lead to diversion of the organization from its intended pathway, and in worst cases, lead to the downfall of the organization. Hence, it is evident that value alignment between members and the organization is crucial.

The objective of this report is to explore the existence of organizational values in general as well as the influence of organizational values on human resource processes namely recruitment and retention.

1.2 Scope

The scope of this report will cover two major elements namely the general overview on organizational values and employee recruitment and retention.

2.0 Organizational Values

2.1 Definition

Organizational values is generally defined as the acceptable standards of which governs behavior of organization member in which, without will cause individuals to behave with accordance to their personal belief and value systems which may lead to undesirable behavior within the organization.

H.M Trice and J.M Beyer, writers of "Studying Organizational Cultures through Rites and Ceremonials" Academy of Management Review 9 defined Values as life directing attitudes that serves as behavioral guidelines, in which, when applied to an organization becomes the beliefs and attitudes that serves as organizational behavioral guidelines.

Jamie Grady, writer of 'A Simple Statement: A Guide to Nonprofit Arts Management and Leadership', defines organizational values as abstract ideas that guide organizational thinking and actions and represent the foundation on which the company is formed.

2.2 Key Organizational Value

The key organization values are the values the organization hold which form the foundation on their conduct as well as performance. Key organization values are not descriptions of the work its members do or the strategies the organization employ to accomplish their mission. The values underlie members' work, how member of the organization interact with each other, and which strategies the organization employs to fulfill their mission.

Organizations have various ways of developing their own sets of values. UMW Corporation for example, underwent tremendous changes during their corporate rebranding, in which they have developed a set of four key organization values namely Honourable, Vibrant, Unshakeable and Pioneering.

2.2.1 Honourable

Honourable is the belief system in which they uphold to behave in utmost integrity to produce quality products and services that withstands the test of time. UMW takes pride in producing world class products ans services, their pride is reflected with this values, which they feel represents their integrity and ethics.

2.2.2 Vibrant

Vibrant is organization's practice of open minded approach to new ideas to inspire fresh solutions for their partner and businesses. The business world is dynamic and ever changing, hence UMW wish to instill the value of being open minded in accepting new ideas.

2.2.3 Unshakeable

Unshakable is the value indicating their commitment to their customers, partners, employees as well as the community at large. They take pride to persevere and strive for excellence in all their undertakings. The business world provides an ever challenging landscape, being easily shaken and one may lose out in competition. UMW dedicates its efforts in being unshakeable no matter what challenges the situation throws at them, to deliver the best to their stake holders.

2.2.4 Pioneering

The organization opts to be the leader with bold ideas that would shape the future of the industry. UMW have been the automotive industry leader for decades, their aim is to grow beyond the label of leaders in car manufacturing but to pioneer and lead in the industries that they diversify to.

2.3 Source & Origin

The four key organizational values of UMW are the product of their corporate rebranding efforts. The values are obtained through the vigorous brainstorming and idea pooling that involved organization members. A special corporate rebranding committee tested each idea through debates and discussion to obtain the most suitable values to be presented to the organization's top management for decisions on the values to be set as values for this organization.

3.0 Advantages & Disadvantages of Organizational value

3.1 Advantage

3.1.1Development of Norms

Norms are the common practices among members of a community, an in this case, an organization. While values does not indicate details of how work and decisions are carried out in an organization, organizational values influences the development of norms of practices which serves as unwritten directions and guidelines for members to accord while carrying out their job within the organization. Hence, members of the organization will be required to align their practices and work ethics with the organization's wants and needs which helps to avoid personal values that are undesired by the organization.

3.1.2 Decision Making

Decision making process is crucial part of the business especially when it indicates the direction that the organization will head. Organizational values plays a major role in decision making process for organizations as the decisions made need to be aligned with the organization's mission and vision as well as systems of beliefs. Although organizational values do not connote the outcomes of the decisions, it serves as a guideline to indicate important considerations when it comes to making the decisions.

3.2 Disadvantage

3.2.1 Influences of undesirable values.

The influence of organizational values is undeniably one of the major keys of indicating the success or failure of an organization, hence the importance of the nature of the values are crucial. As not all organizational values are properly planned, there lies a disadvantage of having organizational values that does not garner the success of an organization.

3.2.2 Resistance to change

Organizational values are strong beliefs that are upheld by its members through long term practices. This makes it a major resistance to change. In the business world, adaptation to change is a crucial factor to compete. In the era of globalization, change is crucial as older values may no longer be suitable as the pattern of competition and market practices are shifting to accommodate the dynamics of trade. Organizational values in this case, will become a strong resistance to change as the beliefs are already deeply rooted among member. Management scholars have acknowledge this factor of resistance in change management as an disadvantage, in fact Change Management Guru John Kotter labeled organizational values as 'Attractor of Chao' in his paper Organizational Values as "Attractors of Chaos": An Emerging Cultural Change to Manage Organizational Complexity. It is clear that strong organizational values could escalate the barrier for an organization to move forward.

4.0 Recruitment

4.1 Definition

Recruitment in general definition simply refers to the process of attracting, screening, and selecting qualified people for a job at an organization or firm.

4.2 Aim of recruitment

The aim of recruitment is to not only find a person to fill in the position but also fulfil the following criteria:

Qualified candidate

Many positions requires certain level of qualifications to enable a person to handle the job. By the term qualification does not limit to paper qualifications but also job related experiences as well as personal attributes. Although not all jobs requires full fledge qualifications , there are certain professional positions that requires paper qualifications and licenses to be able to carry out the job. The aim of recuitment is to fill in positions with candidates that are qualified.


Qualifications are not the only determinant when it comes to recruitment. The candidate should also be competent to carry out his function on the job, there is no general 'template' to measure a person's suitability for the job as different job requires different competency area and level. The key is to hire a candidate whose competency area and ability suites the position.

Personal Values

Personal values are the beliefs of individuals that are learned through life's experience and strongly influences the mindset and attitude of the person. Hence it is not easy to change and mold into an organization's desired value. The one of the aim of recruitment is also to find candidates whose personal values that are in line with the organization's values or to the very least similar to the organization's values. This is to avoid future conflicts in undertakings with regards to the organization as well as the job.

4.3 Influence of Organizational Value in Recruitment

Organizational value plays a major role in determining the culture of the organization. The culture of the organization projects the image of the organization. An organization with positive values will project an image of professionalism, which is one of the key image job seekers want to be associated with. Furthermore, job seekers also seek to find employment in firms whose values and beliefs are similar to their own. Hence, positive organizational values attract talents that hold the same beliefs and those who envision success.

This theory can be observed within global companies such as Johnson & Johnson and Google. Johnson & Johnson was voted most popular company among job seekers in Forbes 2010 job market survey while Google ranked at no 8. Google, one of the most dynamic search engine providers venture further into Internet businesses and attracted thousands to seek emplooyment every year, their following 10 philosophies projects positive business image which makes it highly attractive to be associated with:

Focus on the user and all else will follow

It's best to do one thing really, really well

Fast is better than slow

Democracy on the web works.

You don't need to be at your desk to need an answer.

You can make money without doing evil.

There's always more information out there.

The need for information crosses all borders

You can be serious without a suit.

Great just isn't good enough.

5.0 Development & Retention

5.1 Definition

Gary Dessler, author of Human Resource Management (10th Edition), Prentice Hall 2005, defines Organizational development as a special approach to organizational change whereby employees themselves formulate and implement changes required. He further explains that this effort usually involves action research that applies behavioral science knowledge and involves changing the attitudes, values, and beliefs of employees that changes the organization in a particular direction.

5.2 Aim of development & retaining

Human capital is an asset to the organization, talents can be recruited , however in order to grow the business, the organization needs to grow and further develop its human capital. Growing human capital not only involves recruiting more talents, but also further developing the existing talents. Talents may be hired, however, as the business grows and moves forward, existing skills and knowledge and skills may no longer be sufficient, furthermore with advancing technology, new skills are required to optimize job performance.

Talent retainment is the challenge of every organization as talents are the assets of the organization. Organizations spend thousands and even millions to develop their human capital every year, it is viewed as an investment on its human capital for future growth, however many companies faces the problem of talent outflow after investing on their talent development. The aim of talent retention is to retain its talents before and after investing in them as human talents are the pillars of business operations, furthermore suitable talents are not easy to hire as not all talents fulfills the company needs and have aligned values with the organization.

5.3 Influence of Organizational Values on Development and Retention

Organizational values are among the determinant in the direction the company is heading, and future decisions are made to align with these values. The role of organization values plays in developing talents may not seem obvious on the surface, however should one probe deeper into this matter , it will be apparent that they do make an impact in decisions to develop talents. Take Google for example, their second philosophy (It's best to do one thing really, really well) explores the importance of being highly skilled on the job. Such values rises the needs of training and developments for its staff to equip them with sufficient knowledge as well as skills to carry out their job.

Talent retention too is influenced by the organizational values. Positive values of an organization are deemed attractive to its employees who want to be associated with that value. People take prides in being associated with organizations with positive image and will not easily opt out of that organization. Furthermore, an organization with positive values places high importance in acknowledging their people. Talents are recognized and appreciated, this not only motivates their people to continue to stay on the job no matter what challenges the job brings, but also gives their people a sense of belonging to the organization which yields positive attitude on serving the organization.

6.0 Motivation & Long term benefits

6.1 Motivation

Motivation is the processes that account for an individual's intensity, direction, and persistence of effort toward attaining a goal. According to Maslow's Hierarchy of needs ,when basic needs such as physiological and safety are fulfilled, social, esteem, and self-actualization becomes the more dominant traits to motivate individuals. Organizational values are able to influence the higher hierarchical needs of motivation.

Employment provides individuals their basic physiological and safety needs, however, when these needs are fulfilled, they become less dominant in attractiveness. Hence, the monetary factor in causes of talent outflow is lessens. People then seeks fulfillment in their social aspect, esteem and self actualization from the job.

6.2 Roles of Positive Values in Motivation

6.2.1 Recruiting

Positive organizational values projects positive organization image which makes the organization sought after by top talents who wish to build their repertoire and be associated with the organization. This advantages the organization in the long run as the pool of candidates will be bigger and more choices in selecting the most suitable people for the organization. The main motivation here is beyond monetary, but more on social status and self esteem boost which makes the organization highly sought after by talents as fulfills their needs of social status and self esteem.

6.2.2 Developing

Organizations with positive values places high emphasize in seeking ways to improve, they are more willing to invest in building and developing their human capital to equip their members with knowledge and skills. Members will be able to grow with the organization, which becomes a source of motivation when members are able to achieve self-actualization as their mentality grows together with their skills and knowledge.

6.2.3 Retaining

An organization needs to retain its talents as talents are the main assets to an organization. Talent retention is highly influenced by positive organizational values as the effect of monetary factors are limited, once the basic needs of physiological and security needs of individuals are fulfilled, they seek higher level of needs in social, esteem and self actualization, which factors are associated with positive organizational values. Positive values projects positive image, association as such will provide individuals with social status as well as boosts the self esteem. Ability to fulfill higher level of needs renders the organization 'worth' the stay and which, individuals will not decide to leave easily. In the long run, the organization will be able to retain their talents.

6.3 Long Term Benefits

6.3.1 Cost Saving in managing human capital Recruitment

The attractiveness of an organization renders the organization popular among job seekers and top notch talents who wish to be associated with the organization. This is evident when candidates pour in for job applications when top organizations even when there are no vacancies announced. These organizations can pool together the applications and select the most suitable candidates for future vacancies. Vacancy advertisements can be kept to the minimum as interested candidates are always on the lookout for announcement. This eliminates the needs of cost heavy agents and external parties to search for their ideal candidates. Developing and Retaining

Many companies lose out when their talent outflow is larger then inflow, the inability to retain talents subjects the company to the cycle of recruiting new members to fill in vacant positions, the recycling process of finding screening and recruiting new members are costly. Furthermore, company's investments in developing their talents are wasted when the outflow of talents bring their skills and knowledge to other companies. The ability to retain talents not only eliminates the cost of recruiting new members, it exponentially benefits the company when they retain and further train their existing members to be highly skilled and could serve the company better.

6.3.2 Differentiating from Competitors

The cycle of obtaining talents from competitors from the same industry is common practice in the current status quo. Among the top motivations behind the outflow of talents to competitors in that members of the organization cannot grow in terms of career advancement in the same company and sees job hopping as the only way to climb the corporate ladder. This cycle causes organizations to lose their skilled work force to competitors who offer advancement plans.

The influence of positive organizational values can influence the break of job hopping cycle and retain talents. This can be achieved when organizations are able to fulfill the needs to motivate their members. When positive reinforcements are used together with the influence of positive organizational values, the organization can establish an image being an organization that enables growth, rendering the organization attractive employers. This enables the organization to differentiate itself from its competitors whose practice encourages job hopping, as a high performing HR asset.

7.0 Conclusion

Organization values have strong influences on the overall function of the organization. Positive organization values help project positive image for the organization. The influence of positive organizational values in human resource functions are proven beneficial. Not only is ensures the smooth execution and process of functions such as recruitment and human resource development, it also saves organization cost by encouraging the retaining of existing talents by providing motivations.

Although the benefits of having a strong organizational culture are abundant, there are disadvantages to having strong influences in the organization. Strong belief systems prevents organizations from undergoing changes, many writers and scholars found that one of the strongest resistance to change within an organization is the existing organizational values, even if the values is deemed outdated and no longer suitable to compete in the dynamic business environment.