Importance or Significance of OB

1. Understand employees: The study of OB helps the manager to understand employees of the organization. It
involves the study of psychology of each individual employee and also their group behaviour. The
development of understanding between manager and employees facilitates to solve problems in operation
through mutual consent. It is supportive for smooth functioning of the organization.

2. Improve better labour relations: OB emphasizes that employees working in the.organization must be treated
as a human being. They should not be taken from mechanistic approach. It helps to overcome the root cause of
problem in the organization. In such environment employees consider themselves as a member of
organization. It helps to improve better industrial relations in the organization which is essential for smooth
performance. .

3. Motivate employees: OB encourages the employees to devote their duty according to their best of ability and
knowledge. It helps the manager to use appropriate tool and technique to motive employees on the basis of
effectiveness. The tools of encouragement may be extrinsic or intrinsic rewards. Motivated employees
perform their work uniformly which helps to minimize supervision cost. It also supports for proper use of
physical resources.

4. Predict and management of human behaviour: OB is one of the important tools of predicting and managing
human behaviour in the organization. It involves the study of individuals and groups working in the organization. It
helps to know their attitude, perception, learning, value, and behaviour in the organization. It facilitates the manager
to take right decision at the right time. The proper management of human resource facilitates for organizational
effectiveness. Introduction to Organizational Behaviour

5. Effective utilization of human resources: Human resource is the dynamic resource of the organization. OB
provides guideline to the manager for effective utilization of human resources by inspiring them. The proper use of
human resource supports for proper use of ‘other physical resources consisting of money, materials and machines. It
helps to minimize cost and ‘ maximize productivity. Ultimately it helps for achieving goals.

6.Improve productivity: Productivity is concerned with best utilization of organizational resources to improve
quantity and quality of products or services. OB emphasizes for effective utilization of human effort by motivating
employees. The proper use of human resources supports for minimization of wastages of physical resources which
helps to improve productivity of the organization.

7. Goal integration: OB helps to integrate both organizational and individual goals of the employees. At the
primary stage it motivates the employees for best utilization of their efficiency to achieve organizational goals. The
achievement of organization goals helps to fulfill individual goals of the employees. For instance, when organization
earns planned profit then certain part of profit is distributed among the employees as bonus.