What is Formalization?
Formalization refers to the degree to which the job and incumbent’s role are standardized through formal documentation by way of procedures, job descriptions, policies, manuals, rules and other similar mechanisms. It represents the degree to which an organization standardizes the thoughts and behaviour of employees. And thus constrain their choices and freedom of action.
A formalized structure directs and controls the employee behaviour, by way of prescribed rules. Thus, employees have little freedom to make decisions.
It facilitates vertical coordination in the organization, by determining the standard behaviour in advance, such as:
- Policies state the basic guidelines and principles within which the employees are supposed to work, to fulfil the organizational objectives. These are formulated after deep thought and deliberation and represent the organizational culture.
- Procedures give a set of instructions, which states the particular method to be followed for performing the process.
- Rules provide the do’s and dont’s at the workplace, along with the punishment for non-compliance.
- Job description, explains the tasks and activities, concerned with a particular job. It states the job requirements, job duties, job responsibilities, skills required, scope and role.
Ways to Formalize Behaviour
There are three ways to formalize the behaviour of employees which are discussed as under:
- Formalization by Job: When formalization is done by the job, the entity attaches the specifications as to the behaviour, to the concerned job, primarily by writing down the same in its job description. Moreover, the jobholder is given instructions about what, when, how, and where the steps are to be taken while performing the job.
- Formalization by Workflow: In this case, the specification is linked to the work itself, i.e. the incumbent will get the document for each work. This is mainly done when the work is of a specific nature.
- Formalization by Rules: The rules for all situations are specified for all the situations, i.e. job, workflow and workers. It clearly states that who is supposed or not supposed to do the particular work.
Need for Formalization
Formalization of Behaviour is needed by the organization due to the following reasons:
- Formalization of Behaviour diminishes variability which facilitates better control of organization activities.
- It removes confusion and hustle, which helps in maintaining coordination in activities.
- Employees clearly and exactly know, what to do in a particular event or situation.
- It ensures consistency in work, resulting in efficient production.
Mechanistic and Organic Structure
The higher the level of formalization in a job, the lesser will be the freedom and discretion of the employee to choose and decide, what is to be done in a particular situation. On the flip side, a less formalized structure will empower the employees to make rational decisions, on case by case basis, because of high freedom of action and choice.
Therefore, a high level of formalization represents a Mechanistic Structure, while a low level of formalization represents the Organic Structure.
Organizations in which there is a high level of formalization, often have a clear-cut job description, several rules and specifically defined procedures, which includes work processes. Contrastingly, in organizations with a low level of formalization, job behaviour is undefined and employees enjoy the freedom to work.
Impact of Formalization
In formalization, the employees are supposed to deal with the situations in exactly a similar manner, with a similar amount of resources, and they have to provide a consistent output. This facilitates top management with more effective control and coordination in the organization.
However, it also opposes the desire of the employees to work freely, resulting in unfavourable outcomes such as low commitment, low morale, low productivity, role stress and higher work alienation. It also hampers employee’s creativity and thinking ability, due to passive working.
So, formalization does not just eliminate the possibility of engagement of employees in alternative behaviours, rather it also eliminates the need to even take those alternatives into account. Hence, a rigid formalization, not only affects the health of the employees but of the firm as well, in the long run.