Evaluations of Organizational Effectiveness among HR Managers: Cues and Implications

Article excerpt

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 the concern of researchers, not managers, who make judgments of effectiveness regardless of the criteria available to them (Cameron, 1986). Broadly speaking, "the construct of organizational effectiveness refers to human judgments about the desirability of the outcomes of organizational performance from the vantage point of the varied constituencies directly and indirectly affected by the organization" (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 the only consideration in these kinds of judgments, of course, but it is invariably part of the 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 the success of the strategic management process largely depends on the extent to which the HR function is involved (Butler, et al., 1991). Increased employee involvement also entails increased exercise of discretion by employees. With discretion comes the 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 the 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 the growing roles of HR managers in strategic planning for the organization. We focus on the influence of organizational politics, while also considering autonomy, experience, professional affiliations, performance of the organization in HR matters and of the HR department, and policy "gaps" as factors influencing perceptions of organizational effectiveness. We expect the results to provide information about how HR managers evaluate their departments, their jobs, and their functions within their organizations. The remaining sections of the article discuss the significance of HR managers' effectiveness evaluations and the critical issues arising in assessing effectiveness, followed by a discussion of the specific factors influencing the formation of perceptions of effectiveness. Specific hypotheses to be tested are offered. Next, the methods and results of the study are provided. The article concludes with a discussion of the 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). …