Management Essay

Organizational Change & Innovation CHAPTER 10 333

Hewlett-Packard Is Counting on Organizational Change to Boost Revenue Growth Meg Whitman became CEO of Hewlett-Packard Co. in 2011. Since the time H-P’s revenue peaked in 2011 at $127 billion, it has dropped every subsequent year. On the positive side, the company had two consecutive quarters of growth in 2014. H-P also is trying to right- size and reduce costs by planning to lay off 16,000 em- ployees. H-P earlier decided to lay off 34,000 people, resulting in a total reduction of 50,000 employees.100

Whitman described the job cuts “as an opportunity to streamline the company further and make it more nim- ble. An expected $1 billion in cost savings in fiscal 2016 would allow H-P to invest in new technologies and skills to revive growth.” Others, like UBS analyst Ste- ven Milunovich, believe that these job cuts will erode employee morale and may lead to increased turnover.101

“But fixing the world’s biggest tech company—with $120 billion in annual revenues and 330,000 employees— is a herculean task. Bloated by more than 70 acquisi- tions in the past 15 years, HP isn’t just sprawling and stalled out; it may actually be running in reverse.”102

Whitman decided to change the organizational structure to fuel growth. She created two clusters of businesses. One focuses on corporate technology cus- tomers. This group, which sells servers, storage, and networking, delivered 43% of the company’s overall operating profits according to Forbes. Unfortunately, the software and services that accompany all this hard- ware have not been as successful. H-P tried to build the software side of the business via acquisitions, which according to Forbes have not been very successful. The magazine noted that “when it comes to software acqui- sitions, Autonomy [H-P’s enterprise software com- pany] was merely the most high-profit misstep. All told, over the past decade HP squandered nearly $19 billion to buy myriad outfits that contribute only 7% to overall profit. The services unit, which staffs other companies’ tech projects, is barely at breakeven.”103 H-P is currently “looking for small to midsize acquisi- tion candidates in cloud computing, security, and ana- lytics software.”104

The second structural cluster sells printers, PCs, laptops, and mobile devices to people worldwide. This segment of the business contributed 29% of operating profits in 2013. The problem here is that the lucrative printer business is shrinking. Technology is simply moving more toward ink-free photo and document sharing, which benefits companies like Google, Face- book, and Dropbox.

Strategically, H-P also is trying to get back into the fast-growing tablet market. The company attempted to gain entry in this market in 2011 with the TouchPad

model, but it was a failure. Since February 2013, the company has introduced new models, and they are being well received in the market. In a similar vein, H-P has created an overall vice president for design. This was done to create a strategic focus on product development.

H-P didn’t stop at just a reorganization or a new tab- let strategy, according to Forbes. A survey of the com- pany’s 20,000 salespeople revealed that employees rated the internal sales tools a mere “7” on a scale of 1 to 100. For example, it took HP as much as three weeks to prepare a sales quote, when competitors could do it in a matter of days. The company decided to upgrade its sales process by using new tools from Salesforce.com.

Whitman also took to the road to reassure custom- ers that H-P was doing the “right things.” In the last year, she conducted “305 one-on-one meetings with customers or sales-channel partners, aides say, as well as another 42 roundtable chats with small groups” around the world.

It did not take Whitman long to realize that the or- ganizational culture also needed to be changed to fos- ter consistency between the company’s strategies and culture. According to Forbes, she eliminated the barbed wire fence and locked gates that separated parking lots for the executives and the general em- ployee population. “We should enter the building the same way everyone else does,” she said. She also de- cided to work from a cubicle, like most employees, instead of from a larger, more private location. She keeps a picture of her mother in her office. She also role models when she travels by staying at more mod- estly priced hotels.105

While H-P is positive about the changes taking place, some analysts are more skeptical. Bill Shope, an analyst from Goldman Sachs, concluded that “serial restructuring cannot solve H-P’s secular challenges, particularly following years of underinvestment.” He forecasts that H-P’s revenue might fall to $107 billion in fiscal 2015.106

FOR DISCUSSION

1. Which of the supertrends are driving H-P to change?

2. Which of the forces for change are causing H-P to undertake major organizational change? Explain.

3. How might Meg Whitman have used Lewin’s and Kotter’s models of change to increase the probability of achieving positive organizational change? Provide specific recommendations.

4. To what extent is H-P following the four steps for fostering innovation? Explain.

5. What advice would you give Whitman based on what you learned in this chapter? Be specific.

Management in Action

334 PART 4 Organizing

Should CEOs Fire Employees Based on the Opinions of U.S. Senators? This case involves the controversy surrounding Gen- eral Motors and its response, or lack of response, to the need to recall 1.6 million vehicles that could have faulty ignition switches.

GM’s CEO Mary Barra has now testified before several congressional committees on why it took so long to recall the vehicles with potential ignition problems.107 Barra has apologized for the problem and admitted that something was wrong with their in- ternal processes. The company has also established a fund to compensate victims. Distribution of payments is being managed by Kenneth Feinberg.

In a July 2014 congressional meeting, members questioned Barra about her decision to retain Michael Millikin on her staff. Millikin, who has been with GM since 1977, is the company’s top lawyer. While under oath, he stated that he “didn’t know until February about an ignition-switch defect now linked to at least 13 deaths in Chevrolet Cobalts and similar cars built in the last decade.”

According to The Wall Street Journal, an internal report commissioned by GM found that members of Millikin’s staff were warned repeatedly starting in 2010 that GM could face costly, punitive damage awards over its failure to address safety problems re- lated to the ignition defect. Millikin claims that he did not know about these cases because company law- yers settled the cases for amounts that did not require review by Millikin himself.

The congressional committee is not buying this explanation and some members want Barra to fire Millikin. For example, Senator Claire McCaskill (D., Missouri) said, “How in the world, in the aftermath of this report, did Michael Millikin keep his job? This is either gross negligence or gross incompetence.” Senator Richard Blumenthal (D., Connecticut) accused Millikin “of overseeing a staff that engaged in deceit and potential fraud.” Both Millikin and Barra deny these charges. Barra believes that the company needs a person with Millikin’s experience and integ- rity to help the company work through this crisis.108

SOLVING THE CHALLENGE What would you do about firing Michael Millikin if you were Mary Barra?

1. Nothing. Congress does not have the power to force Barra to fire an employee and it does not know what it takes to run a large company. Termination deci- sions should be left to the company.

2. Continue to investigate the situation and do not fire him if you believe he is exonerated by the internal report.

3. Terminate him even though the internal report sug- gests that Millikin did not know about the issue. He should have known, and his lack of oversight is one cause of this terrible problem.

4. Invent other options.

Source: This case is based on J. Bennett and S. Hughes, “Panel Prods GM for Actions,” The Wall Street Journal, July 18, 2014, p. B3.

Legal/Ethical Challenge

PART 5 LEADING

Managing Individual Differences & Behavior Supervising People as People

Major Questions You Should Be Able to Answer

11.1 Personality & Individual Behavior Major Question: In the hiring process, do employers care about one’s personality and individual traits?

11.2 Values, Attitudes, & Behavior Major Question: How do the hidden aspects of individuals— their values and attitudes—affect employee behavior?

11.3 Perception & Individual Behavior Major Question: What are the distortions in perception that can cloud one’s judgment?

11.4 Work-Related Attitudes & Behaviors Managers Need to Deal With Major Question: Is it important for managers to pay attention to employee attitudes?

11.5 The New Diversified Workforce Major Question: What trends in workplace diversity should managers be aware of?

11.6 Understanding Stress & Individual Behavior Major Question: What causes workplace stress, and how can it be reduced?

11

forecccasst What’s Ahead in This Chapter

This first of five chapters on leadership discusses how to manage for individual differ-

ences and behaviors. We describe personality and individual behavior; values, attitudes,

and behavior; and specific work-related attitudes and behaviors managers need to be

aware of. We next discuss distortions in perception, which can affect managerial judg-

ment. Finally, we consider what stress does to individuals.

Are the 75 million so-called Millennials, born between 1977 and 1994, really so different from earlier genera- tions (the 78 million Baby Boomers, born 1946–1964, and 49 million Gen Xers, 1965–1976)? Do they need to be managed in different ways? The answer to both questions is yes.1

Independent, Tech-Savvy, Diverse, Educated—& Anxious Some major characteristics of Millennials: (1) They are extremely independent, because many were raised as day care or latchkey kids. (2) They are tech- savvy, used to smartphones and the Internet, and ac- customed to a faster pace of life. (3) They are racially and ethnically diverse. (4) They are probably the most educated in American history. (5) They are anxious they can’t meet their financial needs.

How Millennials Want to Be Managed In the workplace, these translate into a skepticism about rules, policies, and procedures; a requirement for more autonomy; and a need for constant stimula- tion. Millennials not only want a good income and good relationships with bosses and coworkers but also challenging daily work, the opportunity for growth, the chance to show off skills and be recog- nized for their accomplishments, casual dress envi- ronment, and flexible schedules for social and personal time. Some tips for managing this group:

• Allow them independent decision making and expression. Millennials are impatient, skeptical, and blunt and expressive, but they are used to adapting and making decisions. Show appreciation for their individuality and let them participate in decision making.

• Train them and mentor them. Millennials are strongly attracted to education and training, the best kind not being classroom training but forms of independent learning. At the same time, they should be given the chance to create long-term bonds with mentors.

• Give them constant feedback and recognition. Millennials need to know they are making an impact and need to be recognized for their workplace contributions. Thus, supervisors should show them how their work contributes to the bottom line. This generation revels in, even craves, constant praise, so managers should provide rewards in the form of praise, flextime, and extra responsibility.

• Provide them with access to technology. To attract and retain Millennial employees, companies need to provide the newest and best technology.

• Create customized career paths. Millennials would most like to be self-employed, but few are able to do it because of high start-up costs. Employers can reinforce the sense of control that this generation desires by providing them with a realistic account of their progress and their future within the organization.

For Discussion As a worker, you might hope to be led by someone who would follow the preceding sug- gestions. But suppose your boss is of the old “tough guy” school and doesn’t manage this way. In a diffi- cult job market, would you stick it out? How would you try to let your supervisor know how you would prefer to be managed?

the manager’s toolbox

Managing the Millennials: What’s Different about Today’s Generation of Younger Workers A

Sociable and assertive. Does it take a certain kind of personality to be a good salesperson? Have you ever known people who were quiet, unassuming, even shy but who were nevertheless very persistent and persuasive— that is, good salespeople?

In this and the next four chapters we discuss the third management function (after planning and organizing)—namely, leading. Leading, as we said in Chapter 1, is de- fined as motivating, directing, and otherwise influencing people to work hard to achieve the organization’s goals.

How would you describe yourself? Are you outgoing? aggressive? sociable? tense? passive? lazy? quiet? Whatever the combination of traits, which result from the interac- tion of your genes and your environment, they constitute your personality. More for- mally, personality consists of the stable psychological traits and behavioral attributes that give a person his or her identity.2 As a manager, you need to understand personality attributes because they affect how people perceive and act within the organization.3

The Big Five Personality Dimensions In recent years, the many personality dimensions have been distilled into a list of factors known as the Big Five.4 The Big Five personality dimensions are (1) extroversion, (2) agreeableness, (3) conscientiousness, (4) emotional stability, and (5) openness to experience.

■ Extroversion. How outgoing, talkative, sociable, and assertive a person is. ■ Agreeableness. How trusting, good-natured, cooperative, and soft-hearted

one is. ■ Conscientiousness. How dependable, responsible, achievement-oriented, and

persistent one is. ■ Emotional stability. How relaxed, secure, and unworried one is. ■ Openness to experience. How intellectual, imaginative, curious, and broad-

minded one is.

Standardized personality tests are used to score people on each dimension to draw a person’s personality profile that is sup- posedly as unique as his or her fingerprints. For example, if you scored low on the first trait, extroversion, you would presumably be prone to shy and withdrawn behavior. If you scored low on emotional stability, you supposedly would be nervous, tense, an- gry, and worried. (An example of a person- ality test is the Myers-Briggs, discussed in Chapter 9; to take a replica of this test for free, go to www.personalitypathways.com/ type_inventory.html.)

Where do you think you stand in terms of the big five? Are you curious? If yes, take Self-Assessment 11.1.

11.1 Personality & Individual Behavior In the hiring process, do employers care about one’s personality and individual traits?

THE BIG PICTURE Personality consists of stable psychological and behavioral attributes that give you your identity. We describe five personality dimensions and five personality traits that managers need to be aware of to understand workplace behavior.

? MAJOR QUESTION

338 PART 5 Leading

Managing Individual Differences & Behavior CHAPTER 11 339

Do Personality Tests Work for the Workplace? As a manager, you would want to know if the Big Five model in particular and personality testing in general can help predict behavior in the workplace. Is a personality test helpful in predicting a match between personality and job performance? Two findings:

■ Extroversion—the outgoing personality. As might be expected, extrover- sion (an outgoing personality) has been associated with success for manag- ers and salespeople. Also, extroversion is a stronger predictor of job performance than agreeableness, across all professions, according to re- searchers. “It appears that being courteous, trusting, straightforward, and soft-hearted [that is, agreeableness] has a smaller impact on job perfor- mance,” conclude the researchers, “than being talkative, active, and asser- tive [that is, extroversion].”5

■ Conscientiousness—the dependable personality. Conscientiousness (strong work ethic) has been found to have the strongest positive correla- tion with job performance and training performance. According to re- searchers, “those individuals who exhibit traits associated with a strong sense of purpose, obligation, and persistence generally perform better than those who do not.”6

The table below presents tips to help managers avoid abuses and discrimination lawsuits when using personality and psychological testing for employment decisions.7 (See Table 11.1.)

Where Do You Stand on the Big Five Dimensions of Personality? This survey is designed to assess your personality, using the Big Five index. Go to connect.mheducation.com and take Self-Assessment 11.1. When you’re done, answer the following questions:

1. What is your personality profile according to the Big Five?

2. Which of the Big Five is most likely going to help you achieve good grades in your classes and to gain employment after graduation?

SELF-ASSESSMENT 11.1 ®

TABLE 11.1 Cautions about Using Personality Tests in the Workplace

• Use professionals. Rely on reputable, licensed psychologists for selecting and overseeing the administration, scoring, and interpretation of personality and psychological tests. This is particularly important, since not every psychologist is expert at these kinds of tests.

• Don’t hire on the basis of personality test results alone. Supplement any personality test data with information from reference checks, personal interviews, ability tests, and job performance records. Also avoid hiring people on the basis of specified personality profiles. As a case in point, there is no distinct “managerial personality.”

• Be alert for gender, racial, and ethnic bias. Regularly assess any possible adverse impact of personality tests on the hiring of women and minorities. This is truly a matter of great importance, since you don’t want to find your company (or yourself) embroiled in a lawsuit at some point downstream.

• Graphology tests don’t work, but integrity tests do. Personality traits and aptitudes cannot be inferred from samples of people’s penmanship, as proponents of graphology tests claim. However, dishonest job applicants can often be screened by integrity tests, since dishonest people are reportedly unable to fake conscientiousness, even on a paper-and-pencil test.

340 PART 5 Leading

Self-efficacy. Erik Weihenmayer, blind since age 13, is a self- described “unrealistic optimist.” He became the first blind climber to scale Mt. Everest. Do you have a personal belief that you can succeed at great things?

The Proactive Personality A person who scores well on the Big Five dimension of conscientiousness is probably a good worker. He or she may also be a proactive personality, someone who is more apt to take initiative and persevere to influence the environment. Research reveals that proactive people tend to be more satisfied with their jobs, committed to their employer, and produce more work than nonproactive individuals.7

Core Self-Evaluations A core self-evaluation represents a broad personality trait comprising four positive in- dividual traits: (1) self-efficacy, (2) self-esteem, (3) locus of control, and (4) emotional stability. Managers need to be aware of these personality traits so as to understand workplace behavior.

1. Self-Efficacy: “I Can/Can’t Do This Task” Self-efficacy is the belief in one’s personal ability to do a task. This is about your personal belief that you have what it takes to succeed.

Have you noticed that those who are confident about their ability tend to succeed, whereas those preoccupied with failure tend not to? Indeed, high expectations of self- efficacy have been linked with all kinds of positives: not only success in varied physi- cal and mental tasks but also reduced anxiety and increased tolerance for pain.8 One study found that the sales performance of life-insurance agents was much better among those with high self-efficacy.9 A meta-analysis involving 21,616 people also found significant positive correlation between self-efficacy and job performance.10 Low self- efficacy is associated with learned helplessness, the debilitating lack of faith in one’s ability to control one’s environment.11

Managing Individual Differences & Behavior CHAPTER 11 341

Among the implications for managers:

■ Assign jobs accordingly. Complex, challenging, and autonomous jobs tend to enhance people’s perceptions of their self-efficacy. Boring, tedious jobs generally do the opposite.

■ Develop self-efficacy. Self-efficacy is a quality that can be nurtured. Employ- ees with low self-efficacy need lots of constructive pointers and positive feed- back.12 Goal difficulty needs to match individuals’ perceived self-efficacy, but goals can be made more challenging as performance improves.13 Small suc- cesses need to be rewarded. Employees’ expectations can be improved through guided experiences, mentoring, and role modeling.14

2. Self-Esteem: “I Like/Dislike Myself” How worthwhile, capable, and ac- ceptable do you think you are? The answer to this question is an indicator of your self- esteem, the extent to which people like or dislike themselves, their overall self-evaluation.15 Research offers some interesting insights about how high or low self- esteem can affect people and organizations.

■ People with high self-esteem. Compared with people with low self-esteem, people with high self-esteem are more apt to handle failure better, to empha- size the positive, to take more risks, and to choose more unconventional jobs.16 However, when faced with pressure situations, high-self-esteem people have been found to become egotistical and boastful.17 Some have even been associated with aggressive and violent behavior.

■ People with low self-esteem. Conversely, low-self-esteem people confronted with failure have been found to have focused on their weaknesses and to have had primarily negative thoughts.18 Moreover, they are more dependent on oth- ers and are more apt to be influenced by them and to be less likely to take in- dependent positions.

Can self-esteem be improved? According to one study, “low self-esteem can be raised more by having the person think of desirable characteristics possessed rather than of undesirable characteristics from which he or she is free.”19 Some ways in which managers can build employee self-esteem are shown below. (See Table 11.2.)

3. Locus of Control: “I Am/Am Not the Captain of My Fate” As we dis- cussed briefly in Chapter 1, locus of control indicates how much people believe they control their fate through their own efforts. If you have an internal locus of control, you believe you control your own destiny. If you have an external locus of control, you believe external forces control you.

Research shows internals and externals have important workplace differences. In- ternals exhibit less anxiety, greater work motivation, and stronger expectations that effort leads to performance. They also obtain higher salaries.20

TABLE 11.2 Some Ways that Managers Can Boost Employee Self-Esteem

• Reinforce employees’ positive attributes and skills.

• Provide positive feedback whenever possible.

• Break larger projects into smaller tasks and projects.

• Express confidence in employees’ abilities to complete their tasks.

• Provide coaching whenever employees are seen to be struggling to complete tasks.

342 PART 5 Leading

These findings have two important implications for managers:

■ Expect different degrees of structure and compliance for each type. Employ- ees with internal locus of control will probably resist close managerial supervi- sion. Hence, they should probably be placed in jobs requiring high initiative and lower compliance. By contrast, employees with external locus of control might do better in highly structured jobs requiring greater compliance.

■ Employ different reward systems for each type. Since internals seem to have a greater belief that their actions have a direct effect on the consequences of that action, internals likely would prefer and respond more productively to incentives such as merit pay or sales commissions. (We discuss incentive compensation systems in Chapter 12.)

4. Emotional Stability: “I’m Fairly Secure/Insecure When Working Under Pressure” Emotional stability is the extent to which people feel secure and unwor- ried and how likely they are to experience negative emotions under pressure. People with low levels of emotional stability are prone to anxiety and tend to view the world negatively, whereas people with high levels tend to show better job performance.

Emotional Intelligence: Understanding Your Emotions & the Emotions of Others Emotional intelligence (EI or EQ) has been defined as “the ability to carry out accurate reasoning about emotions and the ability to use emotions and emotional knowledge to enhance thought.”21 Said another way, emotional intelligence is the ability to monitor your and others’ feelings and to use this information to guide your thinking and actions. The trait of emotional intelligence was first introduced in 1909. Since that time much research has examined the components of EI and its consequences.22

Why High EI Is Important Recent research underscores the importance of devel- oping higher EI. It was associated with (1) better social relations for children and adults, (2) better family and intimate relationships, (3) being perceived more positively by others, (4) better academic achievement, and (5) better psychological well-being. Daniel Goleman, a psychologist who popularized the trait of EI, concluded that EI is composed of four key components: self-awareness, self-management, social aware- ness, and relationship management.23 (See Table 11.3.)

TABLE 11.3 The Traits of Emotional Intelligence

1. Self-awareness. The most essential trait. This is the ability to read your own emotions and gauge your moods accurately, so you know how you’re affecting others.

2. Self-management. This is the ability to control your emotions and act with honesty and integrity in reliable and adaptable ways. You can leave occasional bad moods outside the office.

3. Social awareness. This includes empathy, allowing you to show others that you care, and organizational intuition, so you keenly understand how your emotions and actions affect others.

4. Relationship management. This is the ability to communicate clearly and convincingly, disarm conflicts, and build strong personal bonds.

Sources: Adapted from D. Goleman, R. Boyatzis, and A. McKee, “Primal Leadership: The Hidden Driver of Great Performance,” Harvard Business Review, December 2001, p. 49; and Primal Leadership: Realizing the Power of Emotional Intelligence (Boston: Harvard Business School Press, 2002), p. 39.

Can You Raise Your EI? Is there any way to raise your own emotional intelli- gence, to sharpen your social skills? Although parts of EI represent stable traits that

Managing Individual Differences & Behavior CHAPTER 11 343

are not readily changed, other aspects, such as using empathy, can be developed.24 Two suggestions for improvement are as follows:

■ Develop awareness of your EI level. Becoming aware of your level of emo- tional intelligence is the first step. The self-assessment below can be used for this purpose. (Some companies use the Personal Profile Analysis during the hiring process to provide insights into a person’s EI.25)

■ Learn about areas needing improvement. The next step is to learn more about those EI aspects in which improvement is needed. For example, to im- prove your skills at using empathy, find articles on the topic and try to imple- ment their recommendations. One such article suggests that empathy in communications is enhanced by trying to (1) understand how others feel about what they are communicating and (2) gaining appreciation of what peo- ple want from an exchange.26

Emotional Intelligence: Self-Understanding Should Include “the Good, the Bad, & the Ugly”

Charlotte Beers is a former chairwoman and CEO of advertising agency Ogilvy & Mather Worldwide, but in her early 30s she was a management supervisor and “thought I was really doing well.” Then she heard from a friend that a colleague described her management style as “menacing.” That surprised her be- cause Beers regarded herself as “a friendly, gentle Southern belle,” and the criticism was the exact opposite of the way she thought of herself.27

Learning to Self-Correct. She goes on: “I began to watch myself—something I think we all have to do—and I realized I did end meetings on a threatening note. I created urgency when there was none. I was taking on the persona of ‘I really mean business’

that I had learned from an earlier boss.” After that she learned to watch herself more and to self-correct about talking too much and interrupting other people.

YOUR CALL The comment about her coming off as menacing, though dev- astating at first to her, was important because “nothing is more helpful than finding out how others see you,” says Beers. “[You need to learn to] keep your own scorecard, and it has to include the good, the bad, and the ugly.” Do you agree? Could you con- duct this kind of research about yourself in an impersonal way to find out how others see you?

EXAMPLE

Both research and our experience suggest that your emotional intelligence can help or hurt your career. Would you like to know where you stand and what you might do to improve your level of emotional intelligence? If yes, take Self-Assessment 11.2. ●

What Is Your Level of Emotional Intelligence? The following survey is designed to assess your emotional intelligence. Go to connect.mheducation.com and take Self- Assessment 11.2. When you’re done, answer the following questions:

1. How do you stand on the five dimensions of emotional intelligence?

2. Use the scores from the items to identify your strengths and liabilities.

3. Identify two things you might focus on to enhance your emotional intelligence.

SELF-ASSESSMENT 11.2 ®

Formal Goals Policies Hierarchy Structure

The Organization

Informal Values Attitudes Personalities Perceptions Conflicts Culture

11.2 Values, Attitudes, & Behavior How do the hidden aspects of individuals—their values and attitudes—affect employee behavior?

THE BIG PICTURE Organizational behavior (OB) considers how to better understand and manage people at work. In this section, we discuss individual values and attitudes and how they affect people’s actions and judgments.

? MAJOR QUESTION

344 PART 5 Leading

FIGURE 11.1 Formal and informal aspects of an organization

If you look at a company’s annual report or at a brochure from its corporate communi- cations department, you are apt to be given a picture of its formal aspects: Goals. Policies. Hierarchy. Structure.

Could you exert effective leadership if the formal aspects were all you knew about the company? What about the informal aspects? Values. Attitudes. Personalities. Per- ceptions. Conflicts. Culture. Clearly, you need to know about these hidden, “messy” characteristics as well. (See Figure 11.1, left.)

Organizational Behavior: Trying to Explain & Predict Workplace Behavior The informal aspects are the focus of the interdisciplinary field known as organiza- tional behavior (OB), which is dedicated to better understanding and management of people at work. In particular, OB tries to help managers not only explain workplace behavior but also to predict it, so that they can better lead and motivate their employ- ees to perform productively. OB looks at two areas:

■ Individual behavior. This is the subject of this chapter. We discuss such individual attributes as values, attitudes, personality, perception, and learning.

■ Group behavior. This is the subject of later chapters, particularly Chapter 13, where we discuss norms, roles, and teams.

Let’s begin by considering individual values, attitudes, and behavior.

Values: What Are Your Consistent Beliefs & Feelings about All Things? Values are abstract ideals that guide one’s thinking and behavior across all situa- tions.28 Lifelong behavior patterns are dictated by values that are fairly well set by the time people are in their early teens. After that, however, one’s values can be reshaped by significant life-altering events, such as having a child, undergo- ing a business failure, or surviving the death of a loved one, a war, or a serious health threat.

From a manager’s point of view, it’s helpful to know that values are those con- cepts, principles, things, people, or activities for which a person is willing to work hard—even make sacrifices for. Compensation, recognition, and status are common values in the workplace.29 However, according to numerous surveys, employees are more interested in striking a balance between work and family life rather than just earning a paycheck.30 For instance, 86% of 550 employees responding to one sur- vey said flexibility to balance their work and personal life was an important aspect of job satisfaction.

Managing Individual Differences & Behavior CHAPTER 11 345

Attitudes: What Are Your Consistent Beliefs & Feelings about Specific Things? Values are abstract ideals—global beliefs and feelings—that are directed toward all objects, people, or events. Values tend to be consistent both over time and over related situations.

By contrast, attitudes are beliefs and feelings that are directed toward specific ob- jects, people, or events. More formally, an attitude is defined as a learned predisposi- tion toward a given object.31 It is important for you to understand the components of attitudes because attitudes directly influence our behavior.32

Example: If you dislike your present job, will you be happier if you change to a different job? Not necessarily. It depends on your attitude. In one study, researchers found that the attitudes of 5,000 middle-aged male employees toward their jobs were very stable over a 5-year period. Men with positive attitudes tended to stay positive, those with negative attitudes tended to stay negative. More revealingly, even those who changed jobs or occupations generally expressed the same attitudes they had previously.33

The Three Components of Attitudes: Affective, Cognitive, & Behavioral Attitudes have three components—affective, cognitive, and behavioral.34

■ The affective component—“I feel.” The affective component of an attitude consists of the feelings or emotions one has about a situation. How do you feel about people who talk loudly on cell-phones in restaurants? If you feel annoyed or angry, you’re expressing negative emotions or affect. (If you’re indifferent, your attitude is neutral.)

■ The cognitive component—“I believe.” The cognitive component of an at- titude consists of the beliefs and knowledge one has about a situation. What do you think about people in restaurants talking on cell-phones? Is what they’re doing inconsiderate, acceptable, even admirable (because it shows they’re pro- ductive)? Your answer reflects your beliefs or ideas about the situation.

■ The behavioral component—“I intend.” The behavioral component of an attitude, also known as the intentional component, refers to how one intends or expects to behave toward a situation. What would you intend to do if a person talked loudly on a cell-phone at the table next to you? Your action may reflect your negative or positive feelings (affective), your negative or positive beliefs (cognitive), and your intention or lack of intention to do anything (behavioral).

All three components are often manifested at any given time. For example, if you call a corporation and get one of those telephone-tree menus (“For customer service, press 1 . . .”) that never seems to connect you to a human being, you might be so irri- tated that you would say:

■ “I hate being given the runaround.” [affective component—your feelings] ■ “That company doesn’t know how to take care of customers.” [cognitive

component—your perceptions] ■ “I’ll never call them again.” [behavioral component—your intentions]

When Attitudes & Reality Collide: Consistency & Cognitive Dissonance One of the last things you want, probably, is to be accused of hypocrisy—to be criti- cized for saying one thing and doing another. Like most people, you no doubt want to maintain consistency between your attitudes and your behavior.

But what if a strongly held attitude bumps up against a harsh reality that contradicts it? Suppose you’re extremely concerned about getting AIDS, which you believe you might get from contact with body fluids, including blood. Then you’re in a life-threatening

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Leon Festinger. In 1957, the psychologist and his associates penetrated a cult whose members predicted that most people on earth would perish in a cataclysmic event except for a handful that would be rescued by aliens in a flying saucer. Festinger found himself standing with cult members on a hilltop awaiting the event, which, of course, did not happen. Later he proposed the term cognitive dissonance to explain how they rationalized the failure of their prophecy. Have you observed people employing this mechanism when the surefire thing they predicted did not occur?

auto accident in a third-world country and require surgery and blood transfusions— including transfusions of blood from (possibly AIDS-infected) strangers in a blood bank. Do you reject the blood to remain consistent with your beliefs about getting AIDS?

In 1957, social psychologist Leon Festinger proposed the term cognitive dissonance to describe the psychological discomfort a person experiences between his or her cogni- tive attitude and incompatible behavior.35 Because people are uncomfortable with incon- sistency, Festinger theorized, they will seek to reduce the “dissonance” or tension of the inconsistency. How they deal with the discomfort, he suggested, depends on three factors:

■ Importance. How important are the elements creating the dissonance? Most people can put up with some ambiguities in life. For example, many drivers don’t think obeying speed limits is very important, even though they profess to be law-abiding citizens. People eat greasy foods even though they know that ultimately they may contribute to heart disease.

■ Control. How much control does one have over the matters that create dis- sonance? A juror may not like the idea of voting the death penalty but believe that he or she has no choice but to follow the law in the case. A taxpayer may object to his taxes being spent on, say, special-interest corporate welfare for a particular company but not feel that he or she can withhold taxes.

■ Rewards. What rewards are at stake in the dissonance? You’re apt to cling to old ideas in the face of new evidence if you have a lot invested emotionally or financially in those ideas. If you’re a police officer who worked 20 years to prove a particular suspect guilty of murder, you’re not apt to be very accepting of contradictory evidence after all that time.

Among the main ways to reduce cognitive dissonance are the following. (See Table 11.4.)

■ Change your attitude and/or behavior. This would seem to be the most obvi- ous, even rational, response to take when confronted with cognitive dissonance.

■ Belittle the importance of the inconsistent behavior. This happens all the time.

■ Find consonant elements that outweigh the dissonant ones. This kind of rationalizing goes on quite often, as when employees are confronted with ethical dilemmas but fear losing their jobs.

TABLE 11.4 Examples of Ways to Reduce Cognitive Dissonance

Sources: R. Plotnik, Introduction to Psychology, 3rd ed. (Pacific Grove, CA: Brooks/Cole, 1993), p. 602; E. Aronson, R. D. Akert, and T. D. Wilson, Social Psychology, 6th ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2006); S. Bok, cited in E. Venant, “A Nation of Cheaters,” San Francisco Chronicle, January 7, 1992, p. D3, reprinted from Los Angeles Times; A. Dobrzeniecki, quoted in D. Butler, “MIT Students Guilty of Cheating,” Boston Globe, March 2, 1991, p. 25.

TECHNIQUE EXAMPLES

Change attitude and/or Gregory Withow once belonged to the White Aryan Resistance and other racist groups. He preached behavior hatred and bashed Japanese tourists in San Francisco. Then he met Sylvia, who rejected his white- supremacist ideas. As he grew to love her, he found himself caught between his ideas and her disapproval. To decrease this cognitive dissonance, he renounced his old racist beliefs and changed his behavior, even becoming a spokesperson for the antiracist Anti-Defamation League.

Belittle importance of All cigarette smokers are repeatedly exposed to information that smoking is hazardous to health. But the inconsistent behavior many belittle the habit as not being as risky as the antismoking messages suggest. (“My grandmother smokes, and she’s in her 80s.”)

Find consonant elements Ethics professor Sissela Bok says students may justify cheating on an exam by saying “I don’t that outweigh usually do this, but here I really have to do it.” As one MIT graduate student said, students see dissonant ones cheating take place and “feel they have to. People get used to it, even though they know it’s not right.”

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Behavior: How Values & Attitudes Affect People’s Actions & Judgments Values (global) and attitudes (specific) are generally in harmony, but not always. For example, a manager may put a positive value on helpful behavior (global) yet may have a negative attitude toward helping an unethical coworker (specific). Together, however, values and attitudes influence people’s workplace behavior—their actions and judgments. ●

How Values & Attitudes Affect Behavior: Thinking Beyond Profit to Create Value for Society

As a manager, would you think most employees would agree that innovation is beneficial—that the original Silicon Valley firms prospered because they were constantly creating new products and services? Employees may have the value, then, that innova- tion is good—that it leads to productivity and profitability.

However, what if employees think that a company’s purpose is to be solely a money-making machine? They might have the attitude that social innovation is unnecessary, even discouraged.

The Thinking behind Great Companies. Great companies, suggests Rosabeth Moss Kanter of Harvard Business School, have broader values—and attitudes. Firms such as IBM, Pep- siCo, and Procter & Gamble, she says, “work to make money, of course, but in their choices of how to do so, they think about building enduring institutions. . . . Society and people are not afterthoughts or inputs to be used and discarded but are core to their purpose.”36 Balancing public interest with financial in- terest means that CEOs must expand their investments beyond profit-maximizing activities such as marketing, research and development, and the like, and include employee empower- ment, emotional engagement, values-based leadership, and related social contributions.

Ways of Creating Value. “Affirming purpose and values through service is a regular part of how great companies express their identities,” Kanter believes. Thus, on the 100th anniversary of its founding, International Business Machines offered a global ser- vice day, with 300,000 IBM employees signing up to perform 2.6 million hours of service to the world, such as giving schools training in software tools. In West Africa, Procter & Gamble set up Pampers mobile clinics to reduce infant mortality by having

health care professionals teach postnatal care, examine babies, and hand out Pampers diapers. “The emotional tugs for P&G em- ployees are strong,” says Kanter; “they feel inspired by the fact that their product is at the center of a mission to save lives.”

YOUR CALL Where do you think the inspiration for giving a firm a motivat- ing purpose and values beyond making money should come from? Does it have to come from a company’s leaders? Do you think it could begin as voluntary activity, as with employees finding each other through company chat rooms and sharing ideas in their free time?

EXAMPLE

Service day. IBM employees in New York City work with NYC CoolRoofs to try to reduce energy usage and lower greenhouse gases.

11.3 Perception & Individual Behavior What are the distortions in perception that can cloud one’s judgment?

THE BIG PICTURE Perception, a four-step process, can be skewed by four types of distortion: stereotyping, the halo effect, the recency effect, and causal attribution. We also consider the self-fulfilling prophecy, which can affect our judgment as well.

? MAJOR QUESTION

If you were a smoker, which warning on a cigarette pack would make you think more about quitting? “Smoking seriously harms you and others around you”? A blunt “Smoking kills”? Or a stark graphic image showing decaying teeth?

This is the kind of decision public health authorities in various countries are wres- tling with. (One study found that highly graphic images about the negative effects of smoking had the greatest impact on smokers’ intentions to quit.37) These officials, in other words, are trying to decide how perception might influence behavior.

The Four Steps in the Perceptual Process Perception is the process of interpreting and understanding one’s environment. The pro- cess of perception is complex, but it can be boiled down to four steps.38 (See Figure 11.2.)

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1. Selective attention “Did I notice something?”

2. Interpretation & evaluation “What was it I noticed & what does it mean?”

3. Storing in memory “Remember it as an event, concept, person, or all three?”

4. Retrieving from memory to make judgments & decisions “What do I recall about that?”

FIGURE 11.2 The four steps in the perceptual process

In this book, we are less concerned about the theoretical steps in perception than in how perception is distorted, since this has considerable bearing on the manager’s judg- ment and job. In any one of the four stages of the perception process misunderstand- ings or errors in judgment can occur. Perceptual errors can lead to mistakes that can be damaging to yourself, other people, and your organization.

Four Distortions in Perception Although there are other types of distortion in perception, we will describe the follow- ing: (1) stereotyping, (2) the halo effect, (3) the recency effect, and (4) causal attribution.

1. Stereotyping: “Those Sorts of People Are Pretty Much the Same” If you’re a tall African American man, do people make remarks about basketball players? If you’re of Irish descent, do people believe you drink a lot? If you’re Jewish, do people think you’re money-oriented? If you’re a woman, do people think you’re automatically nur- turing? All these are stereotypes. Stereotyping is the tendency to attribute to an individual the characteristics one believes are typical of the group to which that individual belongs.39

Principal areas of stereotyping that should be of concern to you as a manager are (1) sex-role stereotypes, (2) age stereotypes, and (3) race/ethnicity stereotypes. (People with disabilities, discussed in Section 11.5, are also apt to be stereotyped.)

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Sex-Role Stereotypes A sex-role stereotype is the belief that differing traits and abilities make males and females particularly well suited to different roles. Although research shows that men and women do not differ in stereotypical ways, the stereo- types still persist.40 Thus, for example, people tend to prefer male bosses and generally view women leaders as being less effective than men.41

Some good news is that there doesn’t seem to be a pro-male bias in hiring recommen- dations or in performance ratings.42 Unfortunately, promotional decisions may still be affected by sex-role stereotyping. A study of a multinational Fortune 500 company, for example, revealed that men received more favorable evaluations than women in spite of controlling for age, education, organizational tenure, salary grade, and type of job.43

Age Stereotypes Age stereotypes tend to depict older workers as less involved in their work, less satisfied, less motivated, and less committed than younger workers.44 This may be why workers over age 55 found it harder to get jobs than younger col- leagues during the 2009 recession year.45 But in fact research shows that as employ- ees’ age increases, so does their job involvement and satisfaction, work motivation, and organizational commitment.46

Stereotypes also depict older workers as being less creative and more accident prone; however, this is not borne out.47 Finally, the stereotype that older workers have higher absenteeism—when an employee doesn’t show up for work—is not supported by the research; if anything, managers should focus more attention on absenteeism among younger rather than older workers.48

Because the median age of Americans is currently 37.6 years—the oldest in our history—it seems clear that managers will probably be dealing with an older workforce.49 Moreover, by 2050, about one-fifth of the population will be over age 65, but many, whether by choice or by necessity, will continue working.50 World-famous heart surgeon Michael DeBakey, for instance, who was born in 1908, continued to work into his late nineties.51

Race/Ethnicity Stereotypes Race/ethnicity stereotypes don’t bear repeating here, but it is noteworthy that there are not a lot of Hispanic and African American man- agers in the United States. For example, in 2014, only 20.7% of Hispanics and Latinos held managerial, professional, and related jobs and only 29.1% of blacks, compared with 38.7% of whites and 49.5% of Asians.52 An encouraging sign, incidentally, is that analysis of census data found that in 14 of the 25 largest metropolitan areas, including Boston, New York, and San Francisco, more immigrants (who can be of any race, of course, but are often stereotyped as racial minorities) were employed in white-collar occupations than in lower-wage work, such as construction or cleaning.53

2. The Halo Effect: “One Trait Tells Me All I Need to Know” Do you think physically attractive people have more desirable traits than unattractive people—that they are happier, kinder, more successful, more socially skilled, more sensitive, more interesting, independent, exciting, sexually warm, even smarter and nicer? All of these traits have been attributed to attractive people.54 This situation is an example of the halo effect, in which we form an impression of an individual based on a single trait. (The phe- nomenon is also called the horn-and-halo effect, because not only can a single positive trait be generalized into an array of positive traits but the reverse is also true.)

As if we needed additional proof that life is unfair, it has been shown that attractive people generally are treated better than unattractive people. Attractive members of Congress get more TV coverage, and attractive political candidates win more often.55 Attractive students have higher expectations by teachers in terms of academic achieve- ment.56 Attractive employees are generally paid higher salaries than unattractive ones are, and attractive CEOs are paid more than less appealing CEOs.57 (Male CEOs also tend to be taller—6 feet compared to an average man’s 5-feet-10.5 inches, in one Swedish study.58) Clearly, however, if a manager fails to look at all of an individual’s traits, he or she has no right to complain if that employee doesn’t work out.

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Handsomely compensated. Attractive employees are generally paid better than unattractive ones are. Why do you think that is? Do you think it’s inevitable?

EXAMPLE The Halo Effect: Do Good Looks Make People Richer & Happier? Are attractive employees paid more than ordinary (or unattrac- tive) people for the same work? Are they happier? That would seem to be the case, according to a 2011 study involving more than 25,000 people worldwide.59

$250,000 More. Five large surveys conducted from 1971 to 2009 in the United States, Britain, and Germany found that beautiful people earn an extra $250,000 during their careers than the least attractive people. In addition, says University of Texas economist Daniel Hamermesh, leader of the study, the best-looking people are more likely to remain employed, get promoted, find a higher- earning (and better-looking) spouse, and even get better deals on home loans.60 Hamermesh is also author of Beauty Pays: Why Attractive People Are More Successful.61 “In economic terms, beauty is scarce. People distinguish themselves and pay attention to beauty,” he says. “Companies realize that hiring better-looking people helps in various ways. In every market, whether it’s jobs or marriage, beauty matters.” The result of all this is that beautiful people are generally happier people than ordinary folks. “The ma- jority of beauty’s effect on happiness works through its impact on economic outcomes,” says Hamermesh.62

Do Good Looks Produce Confident Communicators? Another study produces additional insights:63

• Although beautiful people are no better than ordinary peo- ple at solving puzzles such as mazes, they are more self- confident about their abilities. “Being good looking,” says

one article about the study, “seems to be strongly associ- ated with self-confidence, a trait that is apparently attrac- tive to employers.”64

• When study subjects pretending to be employers looked only at resumes, physical appearance had no effect on their judgments, as you might expect. When photos, in-person interviews, and even phone interviews were involved, employers showed higher estimates for beautiful people’s productivity—especially when they had face-to- face interviews but even with telephone-only interviews, the result, apparently, of the effect of self-confidence that came across on the phone.

• Good-looking people are good communicators, which also contributes to employers’ positive perceptions.

The Halo Misperception. In sum, “Employers (wrongly) expect good-looking workers to perform better than their less-attractive counterparts under both visual and oral interaction,” said the re- searchers, “even after controlling for individual worker character- istics and worker confidence.”

YOUR CALL Are you yourself influenced in your judgment of people by how attractive they are? Do you think as a manager you could look beyond people’s physical appearances to be a good judge of their competence? Why?

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3. The Recency Effect: “The Most Recent Impressions Are the Ones That Count” The recency effect is the tendency to remember recent information better than earlier information, perhaps because when you activate your recall, the later recol- lections are still present in working memory.65 You see this misperception often operat- ing among investors (even professionals), who are more likely to buy a stock if they see something about it in the news or if it has a high one-day return.66

The Recency Effect: Can You Use It to Get a Better Performance Review?

If you work for a firm that does employee performance re- views only once a year, as is common in India, maybe you should take your vacation during the first six months and work your hardest during the second six months—those preceding your annual appraisal. “The recency effect has a lot to do with the [amount] of the bonus you make,” says one Indian man- ager. “It’s often what you have done or achieved in the last three to six months that drives your bonus.”67 In 2012, Adobe

Systems, maker of Photoshop and other software, which has 10,000 employees, 2,000 of them in India, announced it was giving up the once-a-year performance review, in part be- cause of the recency effect.68

YOUR CALL What decision(s) would you admit to making in which you were influenced by the recency effect?

EXAMPLE

4. Causal Attributions Causal attribution is the activity of inferring causes for observed behavior. Rightly or wrongly, we constantly formulate cause-and-effect ex- planations for our own and others’ behavior. Attributional statements such as the fol- lowing are common: “Joe drinks too much because he has no willpower; but I need a few drinks after work because I’m under a lot of pressure.”

Even though our causal attributions tend to be self-serving and are often invalid, it’s important to understand how people formulate attributions because they profoundly affect organizational behavior. For example, a supervisor who attributes an employee’s poor performance to a lack of effort might reprimand that person. However, training might be deemed necessary if the supervisor attributes the poor performance to a lack of ability.

As a manager, you need to be alert to two attributional tendencies that can distort one’s interpretation of observed behavior—the fundamental attribution bias and the self-serving bias.

■ Fundamental attribution bias. In the fundamental attribution bias, people attribute another person’s behavior to his or her personal characteristics rather than to situational factors.

Example: A study of manufacturing employees found that top managers attributed the cause of industrial back pain to individuals, whereas workers attributed it to the environment.69

■ Self-serving bias. In the self-serving bias, people tend to take more personal responsibility for success than for failure.

Example: The way students typically analyze their performance on ex- ams shows self-serving bias. “A” students are likely to attribute their grade to high ability or hard work and “D” students blame factors such as bad luck, unclear lectures, and unfair testing.70

Another example: Europeans blamed Wall Street for the 2010 economic collapse in Greece. However, a Wall Street Journal article points out that a close look at Greece’s finances “over the nearly 10 years since it adopted the euro shows not only that Greece was the principal author of its debt problems, but also that fellow European governments repeatedly turned a blind eye to its flouting of rules.”71

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The Self-Fulfilling Prophecy, or Pygmalion Effect The self-fulfilling prophecy, also known as the Pygmalion (“pig-mail-yun”) effect, describes the phenomenon in which people’s expectations of themselves or others lead them to behave in ways that make those expectations come true.

Expectations are important. An example is a waiter who expects some poorly dressed customers to be stingy tippers, who therefore gives them poor service and so gets the result he or she expected—a much lower tip than usual. Research has shown that by raising managers’ expectations for individuals performing a wide variety of tasks, higher levels of achievement and productivity can be achieved.72

The lesson for you as a manager is that when you expect employees to perform badly, they probably will, and when you expect them to perform well, they probably will. (In the G. B. Shaw play Pygmalion, a speech coach bets he can get a lower-class girl to change her accent and her demeanor so that she can pass herself off as a duch- ess. In six months, she successfully “passes” in high society, having assumed the at- tributes of a woman of sensitivity and taste.) ●

PRACTICAL ACTION How Can Managers Harness the Pygmalion Effect to Lead Employees?

Luke Iorio, president of The Institute for Professional Excellence in Coaching, says that employees want to use their knowledge and experience to contribute to the value of the organization. “Employees have many answers [managers] haven’t thought of,” he says. “The main thing is to see people as they can be, and to expect great things of them.”73 And more often than not, they’ll deliver.

Research in a variety of industries and occupations shows that the effect of the self-fulfilling prophecy can be quite strong.74 That is, managerial expectations powerfully influence employee behavior and performance. Managers can harness this effect by building a hierarchical framework that reinforces positive performance expectations throughout the organization. The foundation of this framework is employee self-expectations. In turn, positive self-expectations improve interpersonal expec- tations by encouraging people to work toward common goals. This cooperation enhances group-level productivity and pro- motes positive performance expectations within the work group.

How to Create a Pygmalion Effect Because positive self-expectations are the foundation for cre- ating an organizationwide Pygmalion effect, let us consider how managers can create positive performance expectations.

This task may be accomplished using various combinations of the following:

1. Recognize that everyone has the potential to increase his or her performance.

2. Instill confidence in your staff.

3. Set high performance goals.

4. Positively reinforce employees for a job well done.

5. Provide constructive feedback when necessary.

6. Help employees advance through the organization.

7. Introduce new employees as if they have outstanding potential.

8. Become aware of your personal prejudices and nonverbal messages that may discourage others.

9. Encourage employees to visualize the successful execution of tasks.

10. Help employees master key skills and tasks.75

YOUR CALL How can you put the Pygmalion effect to use in college organi- zational life?

11.4 Work-Related Attitudes & Behaviors Managers Need to Deal With Is it important for managers to pay attention to employee attitudes?

THE BIG PICTURE Attitudes are important because they affect behavior. Managers need to be alert to the key work-related attitudes having to do with engagement, job satisfaction, and organizational commitment. Among the types of employee behavior they should attend to are their on-the-job performance and productivity, absenteeism and turnover, organizational citizenship behaviors, and counterproductive work behaviors.

? MAJOR QUESTION

“Keep the employees happy,” we often hear. It’s true that attitudes are important, the reason being that attitudes affect behavior. But is keeping employees happy all that managers need to know to get results? We discuss motivation for performance in the next chapter. Here, let us consider what managers need to know about key work- related attitudes and behaviors.

Three types of attitudes managers are particularly interested in are (1) employee engagement, (2) job satisfaction, and (3) organizational commitment.

1. Employee Engagement: How Connected Are You to Your Work? Research on job involvement has evolved into the study of an individual difference called employee engagement, defined as an individual’s involvement, satisfaction, and enthusi- asm for work.76 Engaged employees are expected to have feelings of urgency, intensity, and enthusiasm, as well as focus, which make them more committed to their employer and to put more effort into their jobs.77 In other words, such employees “give their all” at work.

Some consulting firms have collected data to support the practical value of em- ployee engagement.78 For example, when an employee is engaged, it can take 10 times as much money to lure him or her away as a disengaged employee, according to some data.79 Case studies further suggest that employee performance increases 10% when employees are highly engaged and increase 50% when they have both high engage- ment and high enablement (such as a supportive environment).80

People who are positive or optimistic, proactive, conscientious, and mindful (focused in the present, not daydreaming) are thought to be more likely to be more engaged em- ployees.81 Employees are also more likely to become engaged when an organization has the kind of culture that promotes employee development, recognition, and trust between management and employees.82 Job security and feelings of psychological safety (when employees feel free of fear in trying new ideas) also propel job engagement.83

Do you want to achieve higher grades in your classes? If yes, you will find that be- ing engaged in your studies will help. You can determine your level of engagement with your studies by completing Self-Assessment 11.3. Results can be used to develop an engagement improvement plan.

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To What Extent Are You Engaged in Your Studies? The following survey was designed to assess your level of en- gagement in your studies. Go to connect.mheducation.com and take Self-Assessment 11.3. When you’re done, answer the following questions:

1. What is your level of engagement?

2. Find your three lowest-rated items. Based on the content of these items, what can you do to improve your level of engagement? Hint: doing this requires you to identify the cause of the low ratings for each item.

SELF-ASSESSMENT 11.3 ®

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2. Job Satisfaction: How Much Do You Like or Dislike Your Job? Job satisfaction is the extent to which you feel positive or negative about various aspects of your work. Most people don’t like everything about their jobs. Their overall satisfac- tion depends on how they feel about several components, such as work, pay, promo- tions, coworkers, and supervision.84 Among the key correlates of job satisfaction are stronger motivation, job involvement, organizational commitment, and life satisfaction and less absenteeism, tardiness, turnover, and perceived stress.85

Reportedly only 47.7% of U.S. workers were satisfied with their jobs in 2013, down from 61.1% in 1987, according to a study of 5,000 households.86 But another survey found that employee job satisfaction in 2013 was 81%, down from a high of 86% in 2009 but up from a low of 77% in 2002.87 Job satisfaction today is much better, of course, than in the aftermath of the 2007–2009 recession. Then Americans were forced to work longer hours and often for the same or less pay, and many struck back by suing employers for violating wage-and-hour laws, as by forcing them to work off the clock or without overtime pay.88

But what is the relationship between job satisfaction and job performance—does more satisfaction cause better performance or does better performance cause more satisfaction? This is a subject of much debate among management scholars.89 One comprehensive study found that (1) job satisfaction and performance are moderately related, meaning that employee job satisfaction is a key work attitude managers should consider when trying to increase performance; but (2) the relationship between satis- faction and performance is complex and it seems that both variables influence each other through a host of individual differences and work-environment characteristics.90

How satisfied are you with the job you are in now, if you have one, or the last job you had? To get an idea, complete Self-Assessment 11.4.

How Satisfied Are You with Your Present Job? The following survey was designed to assess how satisfied you are with your current job, or a previous job, if you’re not pres- ently working. Go to connect.mheducation.com and take Self-Assessment 11.4. When you’re done, answer the following questions:

1. What is your level of satisfaction with recognition, compensation, and supervision?

2. If you have low to medium satisfaction with any aspect of the job, identify what can be done to increase your job satisfaction. Be sure to consider what you can do, what your boss might do, or what the organization might do. Be specific.

SELF-ASSESSMENT 11.4 ®

3. Organizational Commitment Organizational commitment reflects the extent to which an employee identifies with an organization and is committed to its goals. For instance, some managers question whether mothers with children can be fully commit- ted to their jobs, although one survey found that only 4% of more than 2,612 women said that their bosses think that they are not as committed to their jobs because they have children.91 Research shows a strong positive relationship between organizational commitment and job satisfaction and a moderate association with job performance.92 Thus, if managers are able to increase job satisfaction, employees may show higher levels of commitment, which in turn can elicit higher performance.93 It can also reduce employee turnover.94

Important Workplace Behaviors Why, as a manager, do you need to learn how to manage individual differences? The answer, as you might expect, is so that you can influence employees to do their

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Thriving employees. Zingerman’s, an Ann Arbor, Michigan, community of food- related businesses, encourages employees to thrive through such devices as information sharing and experimenting with ways to solve problems on their own. Employees with high job satisfaction can help organizations grow.

best work. Among the types of behavior are (1) performance and productivity, (2) absenteeism and turnover, (3) organi- zational citizenship behaviors, and (4) counterproductive work behaviors.

1. Evaluating Behavior When Em- ployees Are Working: Performance & Productivity Every job has certain expectations, but in some jobs performance and productivity are easier to define than in others. How many contacts should a tele- marketing sales rep make in a day? How many sales should he or she close? Often a job of this nature will have a history of ac- complishments (from what previous job holders have attained) so that it is possible to quantify performance behavior.

However, an advertising agency account executive handling major clients such as a carmaker or a beverage manufacturer may go months before landing this kind of big account. Or, as we’ve mentioned, a researcher in a pharmaceutical company may take years to develop a promising new prescription drug.

In short, the method of evaluating performance must match the job being done.

2. Evaluating Behavior When Employees Are Not Working: Absenteeism & Turnover Should you be suspicious of every instance of absenteeism? Of course, some absences—illness, death in the family, or jury duty, for example—are legitimate. However, a lot of no-show behavior is related to job dissatisfaction.95 One study of 700 managers found 20% called in sick simply because they didn’t feel like going to work that day. The top three reasons for employees taking bogus sick days are for doing personal errands, catching up on sleep, and relaxing.96

Absenteeism may be a precursor to turnover, when employees leave their jobs. Every organization experiences some turnover, as employees leave for reasons of family, better job prospects, or retirement. However, except in low-skill industries, a continual revolving door of new employees is usually not a good sign, since replacement and training is expensive.97 For an hourly employee, experts estimate the cost of turnover is about 30% of annual salary and for professional employees it is up to 150%.98

Experience demonstrates five practical ways to reduce turnover: (1) Base hiring decisions on the extent to which an applicant’s values fit the organization’s values. (2) Provide post-hiring support, which is referred to as onboarding. Onboarding programs help employees to integrate and transition to new jobs by making them familiar with corporate policies, procedures, culture, and politics by clarifying work-role expectations and responsibilities.99 (3) Focus on enhancing employee engagement. (4) Incorporate realistic job previews (RJPs, discussed in Chapter 9) into the hiring process. (5) Offer employees benefits, such as flexible work hours (discussed in Chapter 12), that meet their needs and values.100

3. Evaluating Behavior That Exceeds Work Roles: Organizational Citizen- ship Behaviors Organizational citizenship behaviors are those employee behav- iors that are not directly part of employees’ job descriptions—that exceed their work-role requirements. Examples, according to one description, include “such ges- tures as constructive statements about the department, expression of personal interest in the work of others, suggestions for improvement, training new people, respect for the spirit as well as the letter of housekeeping rules, care for organizational property, and punctuality and attendance well beyond standard or enforceable levels.”101

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Research demonstrates a significant and moderately positive correlation between orga- nizational citizenship behaviors and job satisfaction, productivity, efficiency, and cus- tomer satisfaction.102

4. Evaluating Behavior That Harms the Organization: Counterproductive Work Behaviors The flip side of organizational citizenship behaviors would seem to be what are called counterproductive work behaviors (CWB), types of behavior that harm employees and the organization as a whole. Such behaviors may include absen- teeism and tardiness, drug and alcohol abuse, and disciplinary problems but also ex- tend beyond them to more serious acts such as accidents, sabotage, sexual harassment, violence, theft, and white-collar crime.103 Some 96% of workers say they have experi- enced uncivil behavior, and 98% have witnessed it.104

Clearly, if an employee engages in some kind of CWB, the organization needs to respond quickly and appropriately, defining the specific behaviors that are unacceptable and the requirements for acceptable behavior.105 It is more desirable, however, to take preventive measures. One way is to screen for CWB during the hiring process. For in- stance, it’s been found that applicants scoring higher on cognitive ability (intelligence) tests are less likely to be involved in violence and property damage after they are hired.106 Employees are also less likely to engage in CWB if they have satisfying jobs that offer autonomy or that don’t require them to supervise too many people.107 ●

EXAMPLE Extreme Counterproductive Work Behaviors: Violence in the Workplace A fairly common kind of CWB is bullying, which we described in Chapter 9. Bullying, harassment, or unfair treatment can be inflicted on subordinates, coworkers, and even customers. Indeed, in one survey of U.S. employees, 45% said they had had a boss who was abusive.108 Such behavior is especially toxic to the organization because when employees are intimidated, hu- miliated, or undermined by an abusive manager, they say they are more likely to quit their jobs or to retaliate with CWB aimed at that manager or their fellow workers.109

Post Office Massacres. In Murder by Proxy: How America Went Postal (2010), filmmaker Emil Chiaberi takes a look at how hostile work environments, along with societal changes and economic downturns, have contributed to shooting sprees in post offices, businesses, and schools in the last quarter century. A focus of the documentary is Royal Oak, Michigan, letter carrier Thomas McIlvane, who was written up for taking lunch at inappropriate locations, ordered to have his vehicle inspected for a brake-light problem everyone could see didn’t exist, and then eventually dis- missed for swearing at a supervisor. McIlvane later fired 100 rounds at postal employees, killing four and injuring four

before turning the gun on himself. A congressional committee de- termined McIlvane “was a powder keg ready to blow because of petty, intimidating, even ‘reprehensible’ managers at the Royal Oak Post Office,” according to one account.110

Recognizing Potential Violence. “Violence rarely begins with someone walking in and shooting others,” says psychiatrist Roger Brunswick. “Violence usually builds slowly and starts with bully- ing, intimidation, and threats.”111 Newspaper stories about mass shootings by disgruntled or mentally ill employees (or students, as in 2014 at the University of California, Santa Barbara) have made organizations more aware that erratic behavior has to be spotted and dealt with early. Pitney Bowes, for instance, set up a hotline that employees may call anonymously to report any such con- cerns, and it has trained managers in identifying signs of troubling behavior.112

YOUR CALL If a coworker of yours said something like, “I could KILL my boss for [something he or she did],” how would you take it? What would you do?

11.5 The New Diversified Workforce What trends in workplace diversity should managers be aware of?

THE BIG PICTURE One of today’s most important management challenges is working with stakeholders of all sorts who vary widely in diversity—in age, gender, race, religion, ethnicity, sexual orientation, capabilities, and socioeconomic background. Managers should also be aware of the differences between internal and external dimensions of diversity and barriers to diversity.

? MAJOR QUESTION

Might you hold a few preconceptions that are worth examining? Here’s a reality check:

■ Assumption: Illegal immigrants dramatically impact the U.S. economy. No, says a study by the Migration Policy Institute. Undocumented immigrants represent only about 5% of the workforce and contribute just 0.03% of the U.S. gross domestic product.113

■ Assumption: Customer bias favoring white men has just about disap- peared. Unfortunately not, suggests a study of college students, which found that people give higher ratings for customer satisfaction to white men than to women and members of minorities.114

■ Assumption: Young workers earn less than they used to. Yes, evidently. In the decade ending 2011, the average inflation-adjusted hourly wage for male college graduates dropped 11% and for female college graduates 7%, and it hasn't got much better since.115

The United States is becoming more diverse in its ethnic, racial, gender, and age makeup—more nonwhite, more single, more working parents, and so on—and the consequences are not always what you would expect.

In the view of Scott E. Page, professor of complex systems, political science, and economics at the University of Michigan, diversity and variety in staffing pro- duces organizational strength.116 “Diverse groups of people bring to organizations more and different ways of seeing a problem,” he told an interviewer, “and, thus, faster/better ways of solving it. . . . There’s certainly a lot of evidence that people’s identity groups—ethnic, racial, sexual, age—matter when it comes to diversity in thinking.”117

Diversity may have its benefits, but it can also be an important management chal- lenge. Let’s consider this.

How to Think about Diversity: Which Differences Are Important? Diversity represents all the ways people are unlike and alike—the differences and similarities in age, gender, race, religion, ethnicity, sexual orientation, capabilities, and socioeconomic background. Note here that diversity is not synonymous with differ- ences. Rather, it encompasses both differences and similarities. This means that as a manager you need to manage both simultaneously.

To help distinguish the important ways in which people differ, diversity experts Lee Gardenswartz and Anita Rowe have identified a “diversity wheel” consisting of four layers of diversity: (1) personality, (2) internal dimensions, (3) external dimensions, and (4) organizational dimensions. (See Figure 11.3, next page.)

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Let’s consider these four layers:

Personality At the center of the diversity wheel is personality. It is at the center because, as we said in Section 11.1, personality is defined as the stable physical and mental characteristics responsible for a person’s identity.

Internal Dimensions Internal dimensions of diversity are those human differences that exert a powerful, sustained effect throughout every stage of our lives: gender, age, ethnicity, race, sexual orientation, physical abilities.118 These are referred to as the primary dimensions of diversity because they are not within our control for the most part. Yet they strongly influence our attitudes and expectations and assumptions about other people, which in turn influence our own behavior.

What characterizes internal dimensions of diversity is that they are visible and sa- lient in people. And precisely because these characteristics are so visible, they may be associated with certain stereotypes—for example, that black people work in menial

Organi zational Dimensions

Management status

Functional level/ classification

Union affiliation

Geographic location

Age Marital status

Parental status

Ethnicity

Appearance

Work experience

Work location

Educational background

Religion

Physical ability

Sexual orientation

Recreational habits

Income

Personal habits

Work content/

field

Division/ department/

unit group

Gender

Seniority

Race

Exter nal Dimensions

Inte rnal Dimensions

Personality

FIGURE 11.3 The diversity wheel Four layers of diversity

Source: From Diverse Teams at Work by Lee Gardenswartz and Anita Rowe. Copyright 2003, Society for Human Resource Management, Alexandria, VA. Used with permission. All rights reserved.

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jobs. For instance, an African American female middle manager reports that, while on vacation and sitting by the pool at a resort, she was approached by a 50ish white male who “demanded that I get him extra towels. I said, ‘Excuse me?’ He then said, ‘Oh, you don’t work here,’ with no shred of embarrassment or apology in his voice.”119

External Dimensions External dimensions of diversity include an element of choice; they consist of the personal characteristics that people acquire, discard, or modify throughout their lives: educational background, marital status, parental status, religion, income, geographic location, work experience, recreational habits, appear- ance, personal habits. They are referred to as the secondary dimensions of diversity because we have a greater ability to influence or control them than we do internal dimensions.

These external dimensions also exert a significant influence on our perceptions, behavior, and attitudes. If you are not a believer in the Muslim religion, for exam- ple, you may not perceive the importance of some of its practices—as did Abercrombie and Fitch subsidiary Hollister, which told college student Hani Khan that she had to remove her hijab (Islamic headscarf) to work at its San Mateo, California, store, then fired her when she refused. The Equal Employment Opportunity Commission sued the company in 2011 on Khan’s behalf, since headscarves did not affect her job performance.120

Organizational Dimensions Organizational dimensions include management status, union affiliation, work location, seniority, work content, and division or department.

Trends in Workforce Diversity How is the U.S. workforce apt to become more diverse in the 21st century? Let’s examine five categories on the internal dimension—age, gender, race/ethnicity, sexual orientation, and physical/mental abilities—and one category on the external dimension, educational level.

Age: More Older People in the Workforce The most significant demographic event, the late Peter Drucker suggested, “is that in the developed countries the number and proportion of younger people is rap- idly shrinking. . . . Those shrinking numbers of younger people will have to both drive their economies and help support much larger numbers of older peo- ple.”121 Particularly in Europe and Northeast Asia, and to a lesser extent in the United States, an aging popula- tion is “a looming economic and social burden,” says a 2014 report.122

The United States, suggested Drucker, is the only de- veloped economy to have enough young people, and that is only because immigrants to the United States still have large families. Even so, the median age of the American worker is predicted to reach 42.8 by 2020, up from 34.3 in 1980.123 Indeed, workers ages 55 and older are expected to make up over one-quarter of the labor force in 2022.124

Do you have much experience being around older people? How do you feel about the idea of working with them? To find out, try Self-Assessment 11.5.

Diversity enriches. A diverse population in a company can provide ideas, experience, and points of view that strengthen the business culture. What has been your experience, if any, with a diverse workplace?

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Gender: More Women Working Since the 1960s women have been flooding into the workplace in great numbers, with about 75% of women ages 25–54 in the workforce, up from about 40% in the late 1950s.125 In addition, more and more busi- nesses are now owned by women—businesses where women were owners or half- owners represented 45.7% of all firms.126 Finally, women are gaining ground in the top rungs of business. In 2014, 24 Fortune 500 companies were run by women (up from 15 in 2009); in percentage terms, 4.8% of CEOs of Fortune 500 and 5.1% of Fortune 1000 companies were women.127

But if pay discrepancies between women and men have improved slightly, as of 2012 (as we noted in Chapter 9) women overall still earned only 77 cents to every $1 for a man.128 Traditionally, women have earned roughly the same pay as men only in jobs pay- ing $25,000–$30,000 a year, but the farther up the pay scale and the higher the education level, the wider the earnings gap. Recently it was found that, for every dollar a man earns, a woman cashier earns 92 cents, a registered nurse 91 cents, and an administrative assistant 87 cents. But for a woman physician or surgeon, it is 68 cents, a woman lawyer or judge 75 cents, a woman college professor 77 cents, and a woman psychologist 77 cents. In financial services, women earn as little as 66 cents to a man’s dollar.129

The obstacles to women’s progress are known as the glass ceiling—the metaphor for an invisible barrier preventing women and minorities from being promoted to top executive jobs. For instance, at Fortune 500 companies in 2013, females accounted for only 14.6% of executive-officer positions.130

What factors are holding women back? Three that are mentioned are negative ste- reotypes, lack of mentors, and limited experience in line or general management.131 For women who have become vice president or higher in Fortune 1000 companies, four strategies were identified as critical to their success: consistently exceeding per- formance expectations, developing a style with which male managers are comfortable, seeking out difficult or challenging assignments, and having influential mentors.132

Interestingly, however, several studies have suggested that female managers outshine their male counterparts on almost every measure, from motivating others to fostering communication to producing high-quality work to goal-setting to mentoring employ- ees.133 Indeed, one study, by Catalyst, an advocacy group for women in business, found that companies with more women executives have better financial performance.134 In Chapter 9 we mentioned that venture capital firms that invested in women-led compa- nies during the decade 2000–2010 outperformed those that didn’t.135 We discuss women in leadership further in Chapter 14 and women and communication in Chapter 15.

Race & Ethnicity: More People of Color in the Workforce The non-Hispanic white population is projected to peak in 2024, then to slowly decrease. By 2060, whites are projected to change from 78% in 2012 to 69%, African Americans from 13.1% to 14.7%, Asians from 5.1% to 8.2%, Hispanics or Latinos from 17% to 31%, and American Indian/Alaskan Native from 1.2% to 1.5%.136 We already mentioned that people of color have hit the glass ceiling, with whites holding more of the mana- gerial and professional jobs. In addition, there are two other trends that show that American businesses need to do a lot better by minority populations.

What Are Your Attitudes about Working with Older Employees? The following survey was designed to assess your attitudes about working with older employees. Go to connect.mheducation .com and take Self-Assessment 11.5. When you’re done, answer the following questions:

1. What is the quality of your relationships with older employees? How about your satisfaction with working with older people?

2. How might the quality of relationships with older employees affect your performance and promotability?

3. To what extent might your satisfaction with working with older people impact your performance and promotability?

SELF-ASSESSMENT 11.5 ®

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First, minorities tend to earn less than whites. Median household income in 2009 (a re- cession year) was $38,409 for African Americans and $39,730 for Hispanics. It was $62,545 for whites. (Asians and Pacific Islanders had the highest median income, at $75,027.)137

Second, a number of studies have shown that minorities experienced more perceived discrimination, racism-related stress, and less psychological support than whites did.138

Sexual Orientation: LGBT People Become More Visible In a Gallup survey of more than 120,000 U.S. adults, 3.4% answered “yes” when asked if they identified as lesbian, gay, bisexual, or transgendered (LGBT).139 Despite a changing social and legal landscape, however, over half (53%) of LGBT workers nationwide say they hide who they are at work, according to a recent report.140 (The corporate suite is one of the last frontiers for LGBT civil rights, as former BP oil giant CEO John Browne, who is gay, made clear in his 2014 book The Glass Closet.141) LGBT workers report higher levels of stress compared with other workers, stress that can be alleviated with LGBT- supportive workplace policies.142 Finally, gay and bisexual male workers were found to earn 10%–32% less than equally qualified heterosexual counterparts.143

How important is the issue of sexual orientation? Once again, if managers are con- cerned about hiring and keeping workplace talent, they shouldn’t ignore the motiva- tion and productivity of 3.4% of the workforce. Many employers are recognizing this: 88% of Fortune 500 companies include sexual orientation in their nondiscrimination policies, and more than 60% offer domestic partner health benefits for same-sex cou- ples, according to the Human Rights Campaign.144 No doubt things will change further now that 19 states have legalized same-sex marriage and that protection for gay and transgender workers has been signed into law.145

People with Differing Physical & Mental Abilities About 18.7% of civilian, noninstitutionalized Americans have a physical or mental disability, according to the U.S. Census Bureau.146 Since 1992 we have had the Americans with Disabilities Act, which prohibits discrimination against the disabled and requires organizations to reasonably accommodate an individual’s disabilities.147

Even so, disabled people have difficulty finding work. The Census Bureau found less than half (41.1%) of disabled people ages 21–64 were employed, compared to 79.1% of abled people.148 Here, too, is a talent pool that managers will no doubt find themselves tapping into in the coming years. (Disability studies, incidentally, has become a hot subject on college campuses.149)

Educational Levels: Mismatches between Education & Workforce Needs Two important mismatches between education and workplace are these:

■ College graduates may be in jobs for which they are overqualified. Al- most a half a million college graduates are working minimum-wage jobs— 260,000 with bachelor’s degrees, 200,000 with associates degrees.150 In other words, a great many college graduates are underemployed—working at jobs that require less education than they have—such as tending bar, stocking clothes at Target, or other jobs that someone with less education could do.

■ High-school dropouts and others may not have the literacy skills needed for many jobs. A recent study found that 7% of all people in the United States between the ages of 16 and 24 had dropped out of high school in 2012.151 Men make up 56% of such dropouts. If, as has been alleged, more than two-thirds of the American workforce reads below ninth-grade level, that is a real problem for employers, because about 70% of the on-the-job reading materials are written at or above that level.152

Barriers to Diversity Some barriers are erected by diverse people themselves. In the main, however, most bar- riers are put in their paths by organizations.153 When we speak of “the organization’s

Disability. Everyone recognizes the wheelchair as signifying that a person is disabled, but other disabilities are not easily identified—and may not invite understanding. Do you think that mental disabilities, for example, should be accommodated in employment? If you were subject to mood swings, would you think that would prevent you from doing your job effectively?

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Woman manager. On the job she might be a high-powered manager of scores of people, but at home she may still be expected to be the principal manager of an important few— the children.

barriers,” we are, of course, referring to the people in the organization—especially those who may have been there for a while—who are resistant to making it more diverse.

Resistance to change in general is an attitude that all managers come up against from time to time, and resistance to diversity is simply one variation. It may be ex- pressed in the following six ways:

1. Stereotypes & Prejudices Ethnocentrism is the belief that one’s native coun- try, culture, language, abilities, or behavior is superior to those of another culture. (An example was the “Linsanity” or surprised enthusiasm expressed by sports fans in 2012 over pro basketball player Jeremy Lin, a Harvard-educated economics graduate of Chinese descent, who defied racial stereotypes by scoring at least 23 points—in one case 38 points—in his first four games with the New York Knicks. Before Lin, many people assumed that blacks and whites were better basketball players than Asian Americans.154) When differences are viewed as being weaknesses—which is what many stereotypes and prejudices ultimately come down to—this may be expressed as a concern that diversity hiring will lead to a sacrifice in competence and quality.

2. Fear of Discrimination against Majority Group Members Some em- ployees are afraid that attempts to achieve greater diversity in their organization will result in bias against the majority group—that more black or Asian employees will be promoted to fire captain or police lieutenant, for example, over the heads of suppos- edly more qualified whites.

3. Resistance to Diversity Program Priorities Some companies, such as PepsiCo, IBM, and Deloitte & Touche, have taken aggressive diversity approaches, such as offering special classes teaching tolerance for diversity and seminars in how to get along.155 Some employees may see diversity programs as distracting them from the organization’s “real work.” In addition, they may be resentful of diversity-promoting policies that are reinforced through special criteria in the organization’s performance appraisals and reward systems.

4. Unsupportive Social Atmosphere Diverse employees may be excluded from office camaraderie and social events.

5. Lack of Support for Family Demands In 2013, there were over 34.4 million married couples with children under 18 in the United States. In 59.1% of such fami- lies, both parents worked; in 31%, only the father worked; and in 6.3%, only the mother worked.156 But more and more women are moving back and forth between be- ing at-home mothers and in the workforce, as economic circumstances dictate.157 Yet in a great many households, it is still women who primarily take care of children, as

well as other domestic chores. When organiza- tions aren’t supportive in offering flexibility in hours and job responsibilities, these women may find it difficult to work evenings and weekends or to take overnight business trips.

6. Lack of Support for Career-Building Steps Organizations may not provide diverse employees with the types of work assignments that will help qualify them for positions in senior management. In addition, organizations may fail to provide the kind of informal training or men- toring that will help them learn the political savvy to do networking and other activities required to get ahead. ●

11.6 Understanding Stress & Individual Behavior What causes workplace stress, and how can it be reduced?

THE BIG PICTURE Stress is what people feel when enduring extraordinary demands or opportunities and are not sure how to handle them. There are six sources of stress: individual differences, individual task, individual role, group, organizational, and nonwork demands. We describe some consequences of stress and three ways to reduce it in the organization.

? MAJOR QUESTION

Stress is the tension people feel when they are facing or enduring extraordinary de- mands, constraints, or opportunities and are uncertain about their ability to handle them effectively.158 Stress is the feeling of tension and pressure; the source of stress is called a stressor.

There’s no question that work is stressful. Indeed, a 2013 study by the American Psy- chological Association found that almost two-thirds (65%) of American adults cite work as a significant source of stress, with 35% saying they typically felt tense or stressed out during the workday.159 Low-paid workers are particularly apt to suffer stress more than those on top.160 Commonly cited causes of work stress include low salaries (54%), lack of opportunities for growth or advancement (53%), lack of recognition (53%), and dis- satisfaction with their employer’s work-life balance practices (43%).161

The Toll of Workplace Stress The American Institute of Stress estimates that workplace stress costs the U.S. econ- omy over $300 billion a year in health care, missed work, and stress-reduction treat- ment.162 Stress can cause conflicts at work, make you fatigued all the time, and generate problems like insomnia, backaches, headaches, and chest pain.163

Work stress can also, as you might guess, put managers at risk. Men who suppress anger at work are two to five times more likely to suffer heart attacks or die from heart disease as those who express their “desk rage.”164 Losing one’s job is, as you might imagine, a very stressful event, being associated with decreased psychological and physical well-being.165 A Yale study found that layoffs more than doubled the risk of heart attack and stroke among older workers.166

Workplace stress diminishes positive emotions, job satisfaction, organizational commitment, and job performance and increases alcohol and illicit drug use, overeat- ing, and job turnover.167 Indeed, historically researchers have generally believed that there is an inverted U-shaped relationship between stress and performance. That is, low levels of stress lead to low performance (because people are not “charged up” to perform), but high levels of stress also lead to an energy-sapping fight-or-flight response that produces low performance. Optimal performance, according to this hypothesis, results when people are subjected to moderate levels of stress.

How Does Stress Work? Stress has both physical and emotional components. Physically, according to Canadian researcher Hans Selye, considered the father of the modern concept of stress, stress is “the nonspecific response of the body to any demand made upon it.”168 Emotionally, stress has been defined as the feeling of being overwhelmed, “the perception that events or circumstances have challenged, or exceeded, a person’s ability to cope.”169

Stressors can be hassles, or simple irritants, such as misplacing or losing things, concerns about one’s physical appearance, and having too many things to do. Or they

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Stressful No. 7. Many jobs are stressful, some because people’s lives are at stake (military personnel, firefighters, police officers), some because they are highly deadline-driven (event coordinators, public relations executives). Senior corporate executives ranked No. 7 on CareerCast’s 2014 list of 10 most stressful jobs. If you hate stress, what kind of job should you have?

can be crises, such as sudden occasions of overwhelming terror—a horrible auto ac- cident, an incident of childhood abuse. Or they can be strong stressors, which can dramatically strain a person’s ability to adapt—extreme physical discomfort, such as chronic severe back pain.

Stressors can be both negative and positive. That is, one can understand that being fired or being divorced can be a great source of stress but so can being promoted or get- ting married. As Selye writes, “It is immaterial whether the agent or the situation we face is pleasant or unpleasant; all that counts is the intensity of the demand for adjustment and adaptation.”170 In addition, Selye distinguished between bad stress (what he called “dis- tress”), in which the result of the stressor can be anxiety and illness, and good stress (“eustress,” pronounced yu stress), which can stimulate a person to better coping and adaptation, such as performing well on a test.171 In this discussion, however, we are mainly concerned with how stress negatively affects people and their performance.

The Sources of Job-Related Stress There are six sources of stress on the job: (1) demands created by individual differ- ences, (2) individual task demands, (3) individual role demands, (4) group demands, (5) organizational demands, and (6) nonwork demands.

1. Demands Created by Individual Differences: The Stress Created by Genetic or Personality Characteristics Some people are born worriers, those with a gene mutation (known as BDNF) that Yale researchers identify with people who chronically obsess over negative thoughts.172 Others are impatient, hurried, deadline-ridden, competitive types with the personality characteristic known as Type A behavior pattern, mean- ing they are involved in a chronic, determined struggle to accomplish more in less time.173 Type A behavior has been associated with increased performance in the work of professors, students, and life insurance brokers.174 However, it also has been associated with greater cardio- vascular activity and higher blood pressure, as well as to

heart disease, especially for individuals who showed strong feelings of anger, hostility, and aggression.175

2. Individual Task Demands: The Stress Created by the Job Itself Some occupations are more stressful than others.176 Being a retail store manager, for in- stance, can be quite stressful for some people.177 But being a home-based blogger, paid on a piecework basis to generate news and comment, may mean working long hours to the point of exhaustion.178

Low-level jobs can be more stressful than high-level jobs because employees often have less control over their lives and thus have less work satisfaction. Being a barista, day care teacher, hotel concierge, or purchasing agent, which don’t usually pay very well, can be quite stressful.179

3. Individual Role Demands: The Stress Created by Others’ Expectations of You Roles are sets of behaviors that people expect of occupants of a position. Stress may come about because of role overload, role conflict, and role ambiguity.

■ Role overload. Role overload occurs when others’ expectations exceed one’s ability. Example: If you as a student are carrying a full course load plus work- ing two-thirds time plus trying to have a social life, you know what role over- load is—and what stress is. Similar things happen to managers and workers.

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De-stressing. Experts say that exercise can be a tremendous stress reliever. Many companies maintain physical-fitness centers not only as an employee perk but also because they realize that exercise helps to improve stamina and endurance while reducing tension.

■ Role conflict. Role conflict occurs when one feels torn by the different expec- tations of important people in one’s life. Example: Your supervisor says the company needs you to stay late to meet an important deadline, but your fam- ily expects you to be present for your child’s birthday party.

■ Role ambiguity. Role ambiguity occurs when others’ expectations are un- known. Example: You find your job description and the criteria for promotion vague, a complaint often voiced by newcomers to an organization.

4. Group Demands: The Stress Created by Coworkers & Managers Even if you don’t particularly care for the work you do but like the people you work with, that can be a great source of satisfaction and prevent stress. When people don’t get along, that can be a great stressor. Alternatively, even if you have stress under control, a coworker’s stress might bother you, diminishing productivity.180

In addition, managers can create stress for employees. People who have bad managers are five times more likely to have stress-induced headaches, upset stomachs, and loss of sleep.181

5. Organizational Demands: The Stress Created by the Environment & Culture The physical environments of some jobs are great sources of stress: poultry processing, asbestos removal, coal mining, fire fighting, police work, ambu- lance driving, and so on. Even white-collar work can take place in a stressful environ- ment, with poor lighting, too much noise, improper placement of furniture, and no privacy.182

An organizational culture that promotes high-pressure work demands on em- ployees will fuel the stress response.183 The pace of information technology cer- tainly adds to the stress. “For example,” says Michael Patsalos-Fox, chairman of the Americas region for consulting firm McKinsey & Company, “you used to have media companies and you used to have telecom [telecommunications] companies, right? . . . The problem is that they are encroaching on each other. The onset of a lot of technologies is blurring the boundary between industries that were quite separate, creating opportunities for industries to attack each other.”184 Such rapidly changing technologies and financial pressures are what keep top executives awake at night.

6. Nonwork Demands: The Stresses Created by Forces Outside the Orga- nization As anyone knows who has had to cope with money problems, divorce, support of elderly relatives, or other serious nonwork concerns, the stresses outside one’s work life can have a significant effect on work. Even people with ordinary lives can find the stress of coping with family life rugged going.

The Consequences of Stress Positive stress is constructive and can energize you, increasing your effort, creativity, and performance. Negative stress is destructive, resulting in poorer-quality work, dissatisfaction, errors, absenteeism, and turnover.

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Symptoms of Stress Negative stress reveals itself in three kinds of symptoms: ■ Physiological signs. Lesser physiological signs are sweaty palms, restless-

ness, backaches, headaches, upset stomach, and nausea. More serious signs are hypertension and heart attacks.

■ Psychological signs. Psychological symptoms include boredom, irritability, nervousness, anger, anxiety, hostility, and depression.

■ Behavioral signs. Behavioral symptoms include sleeplessness, changes in eating habits, and increased smoking/alcohol/drug abuse. Stress may be re- vealed through reduced performance and job satisfaction.

Burnout “When you keep investing more energy and the return remains low, that’s when you burn out,” suggests Michael Staver, founder of an executive training company.185

Burnout is a state of emotional, mental, and even physical exhaustion, expressed as listlessness, indifference, or frustration. The Maslach Burnout Inventory lists 22 ele- ments, including emotional exhaustion, cynicism or depersonalization, and reduced personal efficacy.186 Clearly, the greatest consequence of negative stress for the organi- zation is reduced productivity. Overstressed employees are apt to call in sick, miss deadlines, take longer lunch breaks, and show indifference to performance. However, some may put in great numbers of hours at work without getting as much accom- plished as previously.187

Alcohol & Other Drug Abuse Have an employee who’s often late? Who fre- quently calls in sick on Mondays? Who is somewhat sloppy? Whose memory is slip- ping?188 Maybe he or she is afflicted with alcoholism, a chronic, progressive, and potentially fatal disease characterized by a growing compulsion to drink. Alcoholics come from every occupation and social class, from students to college professors to priests to airline pilots. Alcoholism may not interfere with a person’s job in an obvious way until it shows up in absenteeism, accidents, slipshod work, or significant use of a company’s medical benefits.

Alcohol is the most common drug of abuse, but the misuse of others may also affect a person’s productivity—legal drugs such as tranquilizers or illegal drugs such as mar- ijuana, Ecstasy, cocaine, or heroin. If you as a manager think you might be dealing with an employee with a substance-abuse problem, it’s suggested you not try to make accusations but firmly point out that productivity is suffering and that it’s up to the subordinate to do something about it. While not doing any counseling yourself, you can try steering the employee to the Human Resources Department, which may have an employee assistance program that may help employees overcome personal prob- lems affecting their job performance.

Incidentally, although many people swear by 12-step programs, such as that offered by Alcoholics Anonymous, an examination of several studies found that such pro- grams were no more and no less successful than any other interventions in reducing alcohol dependence and alcohol-related problems.189

Reducing Stressors in the Organization There are all kinds of buffers, or administrative changes, that managers can make to reduce the stressors that lead to employee burnout. Examples: Extra staff or equip- ment at peak periods. Increased freedom to make decisions. Recognition for accom- plishments. Time off for rest or personal development. Assignment to a new position. Three- to 5-day employee retreats at off-site locations for relaxation and team-building activities. Sabbatical leave programs to replenish employees’ energy and desire to work.

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Some general organizational strategies for reducing unhealthy stressors are the following:190

■ Roll out employee assistance programs. Employee assistance programs (EAPs) include a host of programs aimed at helping employees to cope with stress, burnout, substance abuse, health-related problems, family and marital issues, and any general problem that negatively influences job performance.191

■ Recommend a holistic wellness approach. A holistic wellness program fo- cuses on self-responsibility, nutritional awareness, relaxation techniques, physical fitness, and environmental awareness. This approach goes beyond stress reduction by encouraging employees to strive, in one definition, for “a harmonious and productive balance of physical, mental, and social well-being brought about by the acceptance of one’s personal responsibility for develop- ing and adhering to a health promotion program.”192

■ Create a supportive environment. Job stress often results because employees work under poor supervision and lack freedom. Wherever possible, it’s better to keep the organizational environment less formal, more personal, and more supportive of employees.

■ Make jobs interesting. Stress also results when jobs are routinized and boring. Better to try to structure jobs so that they allow employees some freedom.

■ Make career counseling available. Companies such as IBM make career planning available, which reduces the stress that comes when employees don’t know what their career options are and where they’re headed. ●

Good times—for now. Office stress can certainly lead to “a few drinks after work” becoming a regular pastime—and then almost a necessity, for some people. More than 30% of American adults have abused alcohol or suffered from alcoholism at some point in their lives. Those who get treatment first receive it, on average, at about age 30—eight years after they developed their dependency on drinking. Only 24% of alcoholics, however, receive any treatment at all. Do you find alcohol helps relieve your stress? Are you concerned about it?

Key Terms Used in This Chapter

absenteeism 349 affective component of an

attitude 345 Americans with Disabilities Act 361 attitude 345 behavior 347 behavioral component of an

attitude 345 Big Five personality

dimensions 338 buffers 366 burnout 366 causal attribution 351 cognitive component of an

attitude 345 cognitive dissonance 346 core self-evaluation 340 counterproductive work

behaviors (CWB) 356

diversity 357 emotional intelligence 342 emotional stability 342 employee assistance programs

(EAPs) 367 employee engagement 353 ethnocentrism 362 external dimensions of

diversity 359 fundamental attribution bias 351 glass ceiling 360 halo effect 349 holistic wellness program 367 internal dimensions of diversity 358 job satisfaction 354 learned helplessness 340 locus of control 341 onboarding 355 organizational behavior (OB) 344

organizational citizenship behaviors 355

organizational commitment 354 perception 348 personality 338 proactive personality 340 recency effect 351 roles 364 self-efficacy 340 self-esteem 341 self-fulfilling prophecy 352 self-serving bias 351 stereotyping 348 stress 363 stressor 363 turnover 355 Type A behavior pattern 364 underemployed 361 values 344

Key Points

11.1 Personality & Individual Behavior • Personality consists of the stable

psychological traits and behavioral attributes that give a person his or her identity. There are five personality dimensions and five personality traits that managers need to be aware of to understand workplace behavior.

• The Big Five personality dimensions are extroversion, agreeableness, conscientiousness, emotional stability, and openness to experience. Extroversion, an outgoing personality, is associated with success for managers and salespeople. Conscientiousness, or a dependable personality, is correlated with successful job performance. A person who scores well on conscientiousness may be a proactive personality, someone who is more apt to take initiative and persevere to influence the environment.

• A core self-evaluation represents a broad personality trait comprising four positive individual traits: (1) Self-efficacy is the belief in one’s personal ability to do a task. Low self-efficacy is associated with learned helplessness, the debilitating lack of faith in one’s ability to control one’s environment.

(2) Self-esteem is the extent to which people like or dislike themselves. (3) Locus of control indicates how much people believe they control their fate through their own efforts. (4) Emotional stability is the extent to which people feel secure and unworried and how likely they are to experience negative emotions under pressure.

• Emotional intelligence is defined as the ability to monitor your and others’ feelings and use this information to guide your thinking and actions.

11.2 Values, Attitudes, & Behavior • Organizational behavior (OB) is dedicated to

better understanding and managing people at work. OB looks at two areas: individual behavior (discussed in this chapter) and group behavior (discussed in later chapters).

• Values must be distinguished from attitudes and from behavior. Values are abstract ideals that guide one’s thinking and behavior across all situations.

• Attitudes are defined as learned predispositions toward a given object. Attitudes have three components. The affective component consists of the feelings or emotions one has about a situation. The

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