Evaluations of Organizational Effectiveness among HR Managers: Cues and Implications

Abstract

Although being effective seems an obvious requirement of staying in business, organizational effectiveness (OE) has been defined by a variety of effectiveness attributes (Campbell, 1977; Lewin and Minton, 1986). No consensus exists regarding its definition or measurement (Hitt, 1988). However, these issues are largely concern of researchers, not managers, who make judgments of effectiveness regardless of criteria available to them (Cameron, 1986). Broadly speaking, the construct of organizational effectiveness refers to human judgments about desirability of outcomes of organizational performance from vantage point of varied constituencies directly and indirectly affected by (Zammuto, 1984: 614). Individuals make effectiveness judgments regularly when they buy stock, choose a college, take their cars for repairs, etc. Similarly, human resource (HR) managers judge effectiveness in developing training programs and staffing processes, and employees judge effectiveness when they assess their jobs. Organizational effectiveness is not only consideration in these kinds of judgments, of course, but it is invariably part of judgment equation (Cameron, 1986: 88). Today, HR departments are expected to contribute to organizational performance (Ettore, et al., 1996; Fitz-enz, 1994; Mathes, 1993), and many organizations now believe that success of strategic management process largely depends on extent to which HR function is involved (Butler, et al., 1991). Increased employee involvement also entails increased exercise of discretion by employees. With discretion comes possibility of its abuse, allowing critical decisions regarding organizational planning to be influenced by office politics or personal motives. An extensive literature (e.g., Daft and Weick, 1984; Isabella, 1990; Schwenk, 1988) examining how managers evaluate their environments suggests they creatively and actively make sense of their worlds by attending to salient cues (Daft and Weick, 1984; Smircich and Stubbart, 1985). One critical cue for these sense-making activities is a decision maker's perception of how well their unit or organization is performing (McCabe and Dutton, 1993: 624). There is a continuing need to learn more about how managers evaluate their environments (Daft and Weick, 1984; Isabella, 1990; Schwenk, 1988), including impact of specific cues on evaluations of organizational effectiveness. The purposes of this study are to investigate factors which are likely to influence HR managers' evaluations of their organizations' effectiveness and to explore implications for growing roles of HR managers in strategic planning for organization. We focus on influence of organizational politics, while also considering autonomy, experience, professional affiliations, performance of organization in HR matters and of HR department, and policy gaps as factors influencing perceptions of organizational effectiveness. We expect results to provide information about how HR managers evaluate their departments, their jobs, and their functions within their organizations. The remaining sections of article discuss significance of HR managers' effectiveness evaluations and critical issues arising in assessing effectiveness, followed by a discussion of specific factors influencing formation of perceptions of effectiveness. Specific hypotheses to be tested are offered. Next, methods and results of study are provided. The article concludes with a discussion of results and implications for managers. Significance of HR Managers' Effectiveness Evaluations Some researchers have proposed that evaluations of effectiveness should be based on financial measures (e.g., profit), and for years human resource issues have been secondary to such measures. Others, however, argue that pursuing a single objective, such as creation of shareholder wealth, is self-defeating (Clarkson, 1988). …

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