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Introduction to the Human Resources Discipline of Organizational and Employee Development


Organizational and employee development (OED) is a particularly exciting discipline within human resources because it unites and advances the business objectives of all other functions of an organization. Moreover, the principles associated with OED are universal to organizations large and small in every public- or private-sector industry as well as to governmental, nongovernmental and nonprofit organizations.

The usefulness of organizational development strategies can be categorized under the following focal areas:

  • Organizational effectiveness.
  • Organizational structure.
  • Ongoing performance and productivity initiatives.
  • Organizational learning.

Although these functional categories might suggest that each aspect of OED can be executed independently, the best results are achieved when all aspects are integrated and synchronized.

The strategic plan serves as a critical compass for OED programs; determining the differences between the existing landscape and the desired one provides focus. Once business objectives are established, the business cases and processes associated with achieving them become clear.

Current and Future-Focused, Organization-Wide Talent Management

The concept of talent management involves the process of matching the organization's present and future staffing against its existing competencies and potential. The greater the overlap between the organization's and employees' interests, the more successful talent management initiatives will be.

Career management is an organization-centered view of staffing and talent needs, whereas career development is the employee-centered perspective reflecting individual employees' desires and interests. The talent management "sweet spot" is the overlap between the two sets of interests, representing the organization's and its employees' shared objectives. The greater the overlap, the greater the opportunity for joint satisfaction.

The matching process and overall achievement of talent management objectives can be accomplished through a series of activities:

Identify what is essential to meet business objectives by:

  • Mapping necessary identified tasks to competencies and clarifying performance standards and assessment metrics.
  • Comparing skill set inventories (formal, informal) of the incumbents to the selected competencies.
  • Identifying competency deficiencies.

Deliver development opportunities to existing employees by:

Plan long-term strategies to build organizational talent bench strength by:

  • Establishing a comprehensive performance management program that stresses instituting stretch goals, communicating performance expectations, measuring performance objectively and regularly, and providing candid, honest feedback on a regular basis. See Managing Employee Performance.
  • Developing coaching or mentoring programs to promote knowledge sharing and internal social networks between experienced and more junior employees and among other employee groups. See Coaching in a Business Environment.
  • Identifying the positions for which succession planning (a proactive program designed to keep talent in the pipeline) makes sense. These often include key positions, positions with direct impact on strategic practices and those with lengthy learning curves. See Engaging in Succession Planning.

Maintaining a future-focus on talent management will position the organization to achieve its objectives while ensuring a well-skilled employee population is available positioned for future alterations in strategic direction.

Organizational Effectiveness

Another role of the OED discipline is to assist leaders in ensuring their business units are functioning at peak levels through process improvement programs, as well as through working to build the quality of leader-member relations. Active vigilance is the best approach, as it helps to contain a problem and limit potential damage. Accurately identifying the sources of unacceptable outcomes helps eliminate barriers and create effective practices.

Unfortunately, many OD interventions are incorrectly implemented in response to symptoms of the dysfunction rather than by following a thorough diagnostic analysis, or organizational assessment, to reveal core problems. To avoid this, employers must use caution and make certain a comprehensive data collection process is followed. The most useful assessment information comprises a combination of quantitative and qualitative data from a variety of sources. Many methods of assessment and intervention are available. The ones used will depend on the types of symptoms being observed.

Often, performance or productivity dysfunctions manifest in predictable ways. Most problems fall into the following categories.


Behavioral problems often manifest as communication problems, inadequate team performance levels or performance quality issues. They are frequently the result of inadequate leadership, unclear performance expectations, insufficient communication of performance standards, or inconsistent use of metrics or accountability standards. Education, consistent workplace practices and strong leadership might be appropriate solutions. See Specific Behaviors Increase Job Security.


Deficiencies in the knowledge or skills employees possess can be remedied through training, which equips employees for their present assignments and development opportunities, or through targeted programs to prepare employees for future assignments. These programs can be conducted through in-person, classroom-based training; distance learning supported by computer, phone- or videoconferencing; formal and informal mentoring programs; and self-study programs, e-learning or on-the-job (OJT) programs.


Problems with the equipment, materials and information used to perform the work, including its accessibility, availability and accuracy, can be alleviated by addressing problems associated with inadequate, inaccessible, faulty or inaccurate equipment, materials, or information employees rely on to perform their jobs.


Problems with how the work is done can stem from inefficient systems, outdated practices, impractical procedures or cumbersome reporting structures. Vigilant review, systems to obtain feedback and regular audits can help identify issues before they become significant obstacles. Process improvement strategies do not need to be huge, organization-wide projects to be effective.


Problems within the workplace atmosphere or environment tend to be the most challenging to remedy. Matters concerning employee satisfaction, leader-employee relationships, leadership styles, corporate responsiveness to change and policy flexibility are all examples of tough cultural changes. Typically, cultural shifts require multifaceted OD interventions. Solutions derived from internal sources may be the most desirable, as credibility and familiarity levels are high. Conversely, using an external tool or facilitator may provide a more holistic and objective perspective, thereby balancing the emotional components associated with internal relationships and past performance history. See Trust Has Never Been More Important.

Each type of problem requires its own remedy. For example, training programs can correct only behavioral and cognitive problems. No amount of training will improve flawed processes or equipment in ill repair.

Organizational Structure

An organization's structure is related to the work the organization does and also to how jobs are designed. Among the most common structural designs are the following.

Functional structure

This structure positions each department so employees report directly to managers within their functional areas, who in turn report to a chief officer of the organization. This structure works best for organizations that remain centralized (i.e., a majority of the decision-making occurs at higher levels) because functional areas (e.g., marketing, production, purchasing, IT) share few concerns or objectives. Given the centralization of decision-making, the organization can take advantage of economies of scale that would not otherwise occur if each independent functional area were to make its own buying decisions.

Divisional structure

This structure is a flexible construct that arranges the organization by product, market or region. For example, a business that sells men's, women's and children's clothing through retail, e-commerce and catalog sales in the northeast, southeast and southwest could use a divisional structure three different ways:

  • Product. Men's wear, women's wear and children's clothing.
  • Market. Retail store, e-commerce and catalog.
  • Region. Northeast, southeast and southwest.

Each structure works because the divisions have shared needs and should collaborate. Collaboration can occur with shared vendors, products, customer bases and distribution processes. Because decision-making authority is pushed to lower levels of the organization, it allows for faster, customized decisions. Moreover, employees have two reporting directions—a straight line reporting to their divisional heads and a dotted-line reporting relationship to their functional managers. This approach provides an opportunity to keep employees' tasks linked to divisional needs as well as to their functional operations and objectives.

Matrix structure

Often the most complicated structure for employees, a matrix structure requires two direct reporting lines: one to the divisional manager and one to the functional manager. Though the business unit arrangement is similar to the divisional structure, the dual chain of command necessitates a great deal of cooperation between the two direct supervisors to determine an employee's work priorities, work assignments and standards of performance.

In practicing global OED, selecting an organizational structure takes on added dimensions. For example, additional considerations that need to be taken into account include the following:

  • Culture of the region where the work is to be performed (such as individualism versus collectivism, power distance, practices for promotion).
  • Degree of integration of work practices between home and international locations.
  • Differences in legal compliance requirements, compensation strategy and performance management practices among regions.

Open Boundary Structure

More recent trends in structural forms remove the traditional boundaries of an organization. Typical internal and external barriers and organizational boxes are eliminated, and all organizational units are effectively and flexibly connected. Teams replace departments, and the organization and suppliers work as closely together as parts of one company. The hierarchy is flat; status and rank are minimal. Boundary-less organizational structures can be created in varied forms, including hollow, modular and virtual organizations.

See Understanding Organizational Structures.

Ongoing Performance and Productivity Initiatives

Organizational development involves more than just specialized interventions; its practice should be integrated into the organization's daily operations. One of the simplest tools OED practitioners use is the ADDIE model. Simply put, the model is used to accomplish the following:

AAssess the difference between the present and desired performance levels and determine what is contributing to the gap.
DDesign the intervention/solution, keeping in mind who the end user/target audience is, what the business objectives are and how outcomes will be measured.
DDevelop the intervention, and identify who should be involved, who has credibility and in what manner information about the intervention should be delivered.
IImplement the intervention.
EEvaluate the intervention by measuring the outcomes against objectives.

This flexible and adaptable model can be used to assess the differences between existing and desired performance at three levels:

  • Organizational. A macro-level, wide-scope need.
  • Task. Skills needed to perform the requisite job duties.
  • Individual. Enhancing employee competencies.

An accurate data collection process must occur as part of the "assessment" phase. Properly identifying a problem is critical to recommending a sustainable solution and to developing a consistent measurement of that solution. During the design phase when project objectives are established, the standards (what success will look like) and metrics (measurements used to gauge success) are determined. Taking the time and effort to identify standards and metrics ensures the evaluation phase findings will be useful. (Did the intervention work to achieve the objective?)

Each action creates a new outcome. This dynamic sustains the organizational effectiveness process cycle of continuous assessment, implementation and evaluation. Managing change at any of the three levels becomes a process integrated into daily operations. Successful organizations understand that all practices need to be seen as in a constant state of evolution; successful managers model enthusiasm for this evolution and show teams how to embrace the opportunities brought about by the changes. Organizations that do not proactively manage change risk failing to achieve business objectives due to decreased levels of productivity, poor engagement and increased attrition. See How to Avoid Common Mistakes in Change Management.

Organizational Learning

Employees' cognitive skills and positive behaviors are often the only factors separating one organization from its competitors. Responsibility for developing the behavioral and cognitive skills of an organization's workforce is shared at all levels and should be an ongoing business objective.

Advancing organizational learning can be performed in a number of ways:

  • Create a "learning culture" by which opportunities for formal and informal learning can occur among employees throughout the organizational chart. See Training: Don't Forget Your Deskless, Night and Weekend Workers.
  • Ensure personal development remains a key performance objective for everyone.
  • Build learning opportunities into every post-project evaluation.
  • Create cross-disciplinary learning opportunities.
  • Match the competencies needed for achieving business objectives against the skill inventories of incumbents.
  • Keep the development and advancement of subordinates a meaningful metric for the assessment of leaders.
  • Monitor performance appraisal tools for trends in employee development needs.
  • Consider the value of knowledge management programs to identify, harvest, archive, retrieve and transfer organizational knowledge.

The key to any organizational learning concept and proposal being granted efficacy and credibility is to explain the positive return on investment (ROI) when making the business case for intervention. The calculation is a simple equation that shows that the return is measurably greater than the investment, but the trickier part is actually defining the terms "return" and "investment" for a particular business unit and then quantifying them. For example:


  • Sample returns. Average value of increased production or service units; increased quality of units; proficiency; reduced occurrence of errors, accidents, waste, damage, repetition and down time; reduced absenteeism; reduced time spent by other employees instructing or waiting for others; and improved customer/employee/public relationships.
  • Sample investments. Finances (costs of delivery and lost opportunities), time (time invested versus time spent), reputation, and relationships.


In addition to investing in learning for current employees, employers should also identify the necessary skills for current and future needs that may not be readily available within the organization. Understanding the skills gaps and talent shortages that may exist in the short- and long-term, and creating a plan to fill these gaps, is critical for organizational success. See Employers Partner with Community Colleges to Fill the Talent Pipeline and The Reskilling Imperative.

Like the other OED categories, organizational learning is of most value when it becomes a part of routine business operations.