The effects of organizational structure on behavior stem from several difference sources. The way the reporting relationships are structured defines who makes the decisions. How the work flow processes are planned affect who is involved and who is responsible for the ultimate product or service. Since employee rewards such as promotions and pay increases may be tied to performance, the organizational structure is realistically the controlling factor.

High Decisions; Low Morale

If the organizational structure is designed for the senior managers to make the decisions, the credit for solutions and creative problem-solving remains at the top. Employees who are actually getting the work done may feel that this reporting structure is unfair. The lack of recognition at the employee level could result in low morale and lack of creative motivation.

Rigid Policies; Lax Performance

Organizational structures that have rigid policies may result in lax performance. Employees want to know they are trusted and appreciated. If the policies are too rigid, it may send a negative message of distrust and suspicion. In return, employees may become lax in their quality of work and adopt attendance and tardiness issues.

Unfair Treatment; Decreased Loyalty

When unfair treatment is perceived by employees, they may experience a decrease in loyalty. In addition, the act of being singled out for things that others are not required to do can possibly lead to lower self-esteem. Employees may begin to care less about their jobs and demonstrate a negative attitude. Some unfair situations could lead to self-termination or legal issues.