Individual Differences in Organizations

MAKING OB WORK FOR ME  

What Is OB and Why Is It Important?  

THE VALUE OF OB TO MY JOB AND CAREER The term organizational behavior (OB) describes an interdisciplinary field dedicated to understanding and managing people at work. To achieve this goal, OB draws on research and practice from many disciplines, including:  Anthropology  Economics  Ethics  Management  Organizational theory  Political science  Psychology  Sociology  Statistics  Vocational counseling

How OB Fits into My Curriculum and Influences My Success A Contingency Perspective—The Contemporary Foundation of OB A contingency approach calls for using the OB concepts and tools that best suit the situation, instead of trying to rely on “one best way.” This means there is no single best way to manage people, teams, or organizations. A particular management practice that worked today may not work tomorrow. What worked with one employee may not work with another. The best or most effective course of action instead depends on the situation. Thus, to be effective you need to do what is appropriate given the situation, rather than adhering to hard-and-fast rules or defaulting to personal preferences or organizational norms. Organizational behavior specialists, and many effective managers, embrace the contingency approach because it helps them consider the many factors that influence the behavior and performance of individuals, groups, and organizations. Taking a broader, contingent perspective like this is a fundamental key to your success in the short and the long term.

How Self-Awareness Can Help You Build a Fulfilling Career The Stanford Graduate School of Business asked the members of its Advisory Council which skills are most important for their MBA students to learn. The most frequent answer was self- awareness.6 The implication is that to have a successful career you need to know who you are, what you want, and how others perceive you. Larry Bossidy (former CEO of Honeywell) and Ram Charan (world-renowned management expert) said it best in their book Execution: “When you know yourself, you are comfortable with your strengths and not crippled by your shortcomings. … Self-awareness gives you the capacity to learnPage 6 from your mistakes as well as your successes. It enables you to keep growing.”9 They also argue that you need to know yourself in order to be authentic—real and not fake, the same on the outside as the inside. Authenticity is essential to influencing others, which we discuss in detail in Chapter 12. People don’t trust fakes, and it is difficult to influence or manage others if they don’t trust you.

As professors, consultants, and authors, we couldn’t agree more! To help you increase your self- awareness we include multiple Self-Assessments in every chapter. These are an excellent way to learn about yourself and see how OB can be applied at school, at work, and in your personal life. Go to

Connect, complete the assessments, and then answer the questions included in each of the Self- Assessment boxes.

Uncommon Sense Let’s return to common sense. At first glance the contingency perspective may look like simple common sense. But it’s different. Common sense is often based on experience or logic, both of which have limits, and it suffers three major weaknesses you need to be aware of and avoid:  Overreliance on hindsight. Common sense works best in well-known or stable situations with

predictable outcomes—what worked before should work again. But modern business situations are complex and uncertain and require adapting to change. Common sense is especially weak in responding to the unknown or unexpected. And because it focuses on the past, common sense lacks vision for the future.

 Lack of rigor. People comfortable with common-sense responses may not apply the effort required to appropriately analyze and solve problems. If you lack rigor, then you are unlikely to define the problem accurately, identify the true causes, or recommend the right courses of action.

 Lack of objectivity. Common sense can be overly subjective and lack a basis in science. In such cases we are not always able to explain or justify our reasoning to others, which is a sign that common sense lacks objectivity.

In BusinessNewsDaily, Microsoft researcher Duncan Watts says we love common sense because we prefer narrative: “You have a story that sounds right and there’s nothing to Page 8 contradict it.” Watts contrasts a more effective, scientific approach in his book Everything Is Obvious Once You Know the Answer: How Common Sense Fails Us. “The difference [in a scientific approach] is we test the stories and modify them when they don’t work,” he says. “Storytelling is a useful starting point. The real question is what we do next.”10 OB is a scientific means for overcoming the limits and weaknesses of common sense. The contingency approach in OB means you don’t settle for options based simply on experience or common practice if another solution may be more effective. Thus the goal of OB is to give you more than common sense and thus enhance your understanding of situations at work and guide your behaviors. This in turn will make you more attractive to potential employers and more effective once hired. Let’s explore this idea in more detail, beginning with the importance of possessing and developing both hard and soft skills.

Employers Want Both Hard and Soft Skills  Hard skills are the technical expertise and knowledge required to do a particular task or

job function, such as financial analysis, accounting, or operations.  Soft skills relate to human interactions and include both interpersonal skills and

personal attributes.  

How OB Fits into My Career  

What It Takes to Get Hired  

What It Takes to Get Promoted

Performance Gives Me Credibility Performance matters because it gives you credibility with your peers and those you may manage. Just be aware that early in your career your bosses will be looking for more. They will evaluate your management potential, and their opinion will affect your opportunities. So even in a line (nonmanagement) position, you need to know how to:  Apply different motivational tools (Chapter 5).

 Provide constructive feedback (Chapter 6).  Develop and lead productive teams (Chapters 8 and 13).  Understand and manage organizational culture and change (Chapters 14 and 16).  

RIGHT VS. WRONG—ETHICS AND MY PERFORMANCE  

Ethics guides behavior by identifying right, wrong, and the many shades of gray in between.

Ethics also gets priority because many OB topics have a direct and substantial influence on the conduct of individuals and organizations. Notably, reward systems (Chapter 6), decision making (Chapter 11), leader behavior (Chapter 13), and organizational culture (Chapter 14) all can powerfully call upon our ethical standards at work.

Cheating The news now routinely reports about cheating in sports, such as alleged match-fixing by a number of professional tennis players and scores of instances of the use of performance- enhancing drugs: the Russian Olympic team’s systematic use and cover-up, cyclist Lance Armstrong’s public confession of drug use during each of his Tour de France victories (legal charges were ultimately filed), and Major League Baseball’s lifetime ban of pitcher Jenrry Mejia for three separate steroid violations. But cheating occurs in every other area of our lives too.  

In early 2016, tennis star Maria Sharapova (left photo) tested positive for a performance-enhancing drug. She quickly admitted to the finding and apologized. Sepp Blatter (right photo), former president of soccer's international governing body FIFA, was at the heart of a scandal that rocked the organization, cost Blatter and others their jobs, and led to formal investigations across the globe. Investigators uncovered a well-entrenched and long-lasting pattern of bribes and other financial misconduct. (Left) © Damian Dovarganes/AP Photo; (right) © Valeriano Di Domenico/AFP/Getty Images

What about cheating at school? Anonymous surveys by the Josephson Institute of more than 23,000 students at private and public high schools across the United States found 59 percent admitted cheating on a test in the past academic year, and 32 percent reported plagiarizing material found on the Internet.22 Fifty-seven percent of participating high school students

agreed with the statement “In the real world, successful people do what they have to do to win, even if others consider it cheating.”23 Page 13The story doesn’t get any better in college. Turnitin.com, the plagiarism-checking service, reported finding 156 million matches between college student papers and previously published Internet material. The two top sources? Wikipedia and Yahoo Answers. As an example, 125 of 279 members of a particular government class at Harvard University were suspected of cheating on a take-home final.24 These are just a few examples and statistics of a very long list. What percentage of students at your school do you think cheat on homework assignments? Exams? Take-home finals?  

Ethical Lapses—Legality, Frequency, Causes, and Solutions The vast majority of managers mean to run ethical organizations, yet corporate corruption is widespread.27 Some of the executives whose unethical behavior bankrupted the organizations they led, destroyed the lives of many employees, and caused enormous losses for employees, investors, and customers in the last few decades are Michael Milken (Drexel Burnham Lambert, 1990), Kenneth Lay and Jeff Skilling (Enron, 2001), Bernie Ebbers (WorldCom, 2002), Bernie Madoff (Madoff Investment Securities LLC, 2009), Hisao Tanaka (Toshiba, 2015), and Sepp Blatter (FIFA, 2015). None of these leaders acted alone.  

Unethical Does Not Mean Illegal While extreme examples of unethical and illegal conduct make headlines, they are the exception. The truth is that very few unethical acts are also illegal, most are not punished in any way, and even if illegal, few are prosecuted. This means you should not rely on the legal system to manage or assure ethical conduct at work. For instance, FoxConn, Apple Computer’s top supplier in China, was in the spotlight for its highly publicized ill-treatment of 1.2 million Chinese employees, who suffered 14-hour workdays, six- to seven-day workweeks, low wages, and retaliation for protesting.28 American Airlines pilots provided another example in 2012 when they created widespread slowdowns in flights to pressure the company in negotiations with their union. American’s on- time performance dropped from 80 percent to 48 percent, versus 77 percent for Southwest and 69 percent for Delta. The slowdowns resulted in enormous costs and inconveniences for thousands of customers.29 None of the conduct in these examples was illegal. The following OB in Action box provides another notable instance of how widespread unethical behavior has resulted in virtually no legal consequences  

Why Ethics Matters to Me and My Employer Criminal or not, unethical behavior negatively affects not only the offending employee but also his or her coworkers and employer. Unethical behavior by your coworkers, including company executives, can make you look bad and tarnish your career.  

Thankfully, research provides us with clear ways to avoid such problems: … sustainable businesses are led by CEOs who take a people-centered, inclusive approach rather than a controlling, target-driven one. They are people who listen, who foster cultures in which employees are not scared to point out problems and in which staff feel they have a personal responsibility to enact corporate values, be they health and safety concerns or putting the client’s interests first.35 Ethical Dilemmas Ethical dilemmas are situations with two choices, neither of which resolves the situation in an ethically acceptable manner. Such situations surround us at work and school. They highlight the fact that choosing among available options is not always a choice between right and wrong. Because such dilemmas are so frequent and potentially consequential, we include an Ethical/Legal Challenge feature at the end of each chapter that asks you to consider what you might do if confronted with difficult ethical choices at work.

What Causes Unethical Behavior?  

What about Unethical Behavior in College and When Applying for Jobs? A study of graduate students in the United States and Canada, including MBAs, found that peer behavior was by far the strongest predictor of student cheating, followed by severity of penalties and certainty of being reported.43 Students are more likely to cheat if their classmates cheat, and/or they think the probability of being caught is small, and if caught that the penalties will not be severe. However, don’t be too quick to blame this bad behavior on your lying, cheating classmates. The same researchers acknowledge that there are many other potential reasons for cheating, such as perceived unfairness in grading. It also is possible that students see different degrees of cheating—for instance, in homework assignments versus on exams. As for job hunting, an analysis of 2.6 million job applicant background checks by ADP Screening and Selection Services revealed that “44 percent of applicants lied about their work histories, 41 percent lied about their education, and 23 percent falsified credentials or licenses.”44 Figure 1.2 highlights some of the most common and most outrageous lies told on résumés. Can you imagine being a recruiter? If you believe these numbers, half the people you interview could be lying to you about something! Many Page 19potential reasons for unethical behavior at work exist, beyond those listed in Table 1.2, such as: 1. Personal motivation to perform (“I must be No. 1”). 2. Pressure from a supervisor to reach unrealistic performance goals along with threats for

underperforming. 3. Reward systems that honor unethical behavior. 4. Employees’ perception of little or no consequences for crossing the line.45  

What Can I Do about It? Like most others, you have or likely will witness questionable or even blatantly unethical conduct at work. You might be tempted to think, This is common practice, the incident is minor, it’s not my responsibility to confront such issues, and loyal workers don’t confront each other. While such rationalizations for not confronting unethical conduct are common, they have consequences for individuals, groups, and organizations. What can you do instead? Here are a few suggestions: 1. Recognize that it’s business and treat it that way. Ethical issues are business issues, just

like costs, revenues, and employee development. Collect data and present a convincing case against the unethical conduct just as you would to develop a new product or strategy.

2. Accept that confronting ethical concerns is part of your job. Whether it is explicit in your job description or not, ethics is everybody’s job. If you think something is questionable, take action.

3. Challenge the rationale. Many lapses occur despite policies against them. If this is the case, ask, “If what you did is common practice or OK, then why do we have a policy forbidding it?” Alternatively, and no matter the rationale, you can ask, “Would you be willing to explain what you did and why in a meeting with our superiors or customers, or during an interview on the evening news?”

4. Page 20Use your lack of seniority or status as an asset. While many employees rely on their junior status to avoid confronting ethical issues, being junior can instead be an advantage. It enables you to raise issues by saying, “Because I’m new, I may have misunderstood

something, but it seems to me that what you’ve done is out of bounds or could cause problems.”

5. Consider and explain long‐term consequences. Many ethical issues are driven by temptations and benefits that play out in the short term. Frame and explain your views in terms of long-term consequences.

6. Suggest solutions—not just complaints. When confronting an issue, you will likely be perceived as more helpful and be taken more seriously if you provide an alternate course or solution. Doing so will also make it more difficult for the offender to disregard your complaint.46

What Role Do Business Schools Play? The researchers asked this question and found that the gender and academic background of deans, along with whether the school was public or private, predicted the likelihood that ethics courses were required. Female deans with a background in management were most likely to require ethics courses, while men with economics and finance backgrounds were least likely. Private and religiously affiliated schools were more likely than public schools to require classes in ethics.48 What is the case at your school? Does it align with these findings?

APPLYING OB TO SOLVING PROBLEMS We all encounter problems in our lives. A problem is a difference or gap between an actual and a desired state or outcome. Problems arise when our goals (desired outcomes) are not being met (actual situation). So it is important to carefully consider what your goal or desired outcome is in order to define the problem appropriately. In turn, problem solving is a systematic process for closing these gaps.

A 3‐Step Approach Basics of the 3‐Step Approach Here are the three steps in our applied approach to problem solving. 1. Step 1: Define the problem. Most people identify problems reactively—after they happen—

which causes them to make snap judgments or assumptions, often plagued by common sense, that incorrectly define the problem and its causes and solutions. All of us would likely benefit from Albert Einstein’s comment, “If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it.” Let’s take Professor Einstein’s advice. The following tip will serve you well when defining problems throughout this course and your professional life.

 Define problems in terms of desired outcomes. Then test each one by asking, “Why is this a problem?” Define problems in terms of desired outcomes or end states— compare what you want to what you have. Resist the urge to assume or infer you “know” what the problem and underlying causes are. Instead, start with available facts or details. Then ask yourself, “Why is this gap a problem?” For example, suppose you are disengaged from your work. How do you know this? What is the evidence? Perhaps you no longer go out of your way to help your coworkers and you stop responding to e-mails after work hours. You’ve defined your problem using evidence (or data). Now ask, “Why is this a problem?” Because when you are engaged, your coworkers benefit from you sharing your knowledge and experience. Coworkers and customers benefit from your responsiveness and willingness to respond to e-mails on their time line, even when it isn’t necessarily convenient for you (after hours).

2. Step 2: Identify potential causes using OB concepts and theories. Essential to effective problem solving, regardless of your approach, is identifying the appropriate causes. So far

you have OB concepts like the contingency perspective and ethics—and many more are coming—to use as potential causes. The more options you have to choose from, the more likely you will identify the appropriate cause(s) and recommendation(s). To improve your ability to accurately identify potential causes, we provide the following tip for Step 2.

 Test your causes by asking, “Why or how does this cause the problem?” Once you have confidently defined the problem in Step 1—disengagement—you need to identify potential causes (Step 2). Ask, “Why am I disengaged?” One common reason, backed by science, is that you perceive you were evaluated unfairly in your recent performance review. “Why or how did this cause disengagement?” Because if you feel unappreciated for what you’ve done, you are not motivated to go the extra mile to help your coworkers or customers. Asking “why” multiple times and following the line of reasoning will lead you to define and identify problems and causes more accurately.

3. Step 3: Make recommendations and (if appropriate) take action. In some workplace situations you will make recommendations, and in others you will also implement the recommendations. Here is a simple suggestion to improve the quality of your recommendations and overall problem solving.

How This Problem‐Solving Approach Develops Throughout the Book Tools to Reinforce My Problem‐Solving Skills  

STRUCTURE AND RIGOR IN SOLVING PROBLEMS The Person–Situation Distinction Person factors are the infinite characteristics that give individuals their unique identities. These characteristics combine to influence every aspect of your life. In your job and career, they affect your goals and aspirations, the plans you make to achieve them, the way you execute such plans, and your ultimate level of achievement. Part One of this book is devoted to person factors.

Situation factors are all the elements outside ourselves that influence what we do, the way we do it, and the ultimate results of our actions. A potentially infinite number of situation factors can either help or hinder you when you are trying to accomplish something (see the following Problem-Solving Application box). This is why situation factors are critically important to OB and your performance. Parts Two and Three of this book are devoted to situation factors.

Which Influences Behavior and Performance More—Person or Situation Factors?  

People and Situations Are Dynamic People change, situations change, and the two change each other. To illustrate:  People bring their abilities, goals, and experiences to each and every situation, which often changes

the situation.  Conversely, because situations have unique characteristics, such as opportunities and rewards, they

change people. What you value in a job will likely differ between now and the time you are trying to make a move to senior management.

 It also is true that the current job market and employer expectations differ from those at the height of the technology bubble in the late 1990s or in the depths of the Great Recession in 2007–2009. In the first scenario employees changed, and in the second the situation or environment changed.

 Finally, your manager—a situation factor—can change what you do, the way you do it, and your effectiveness. You can exert the same influence on your manager.

The bottom-line implication for OB and your work life is that knowledge of one type of factor without the other is insufficient. You need to understand the interplay between both person and situation factors to be an effective employee and manager. How Does the Person–Situation Distinction Help Me Apply OB Knowledge?

Many companies restructure indiscriminately and cut large percentages from their employee ranks. Assume you and five coworkers, who all do the same job, are downsized. You all experience the same event, but your reactions will vary. For instance, you might not feel too bad if you didn’t like the job and were considering going to graduate school anyway. Two of your coworkers, however, may be devastated and depressed. Nevertheless, because the downsizing event was the same for all of you (the situation factors were identical), we can assume that the differences in everyone’s reactions were due to things about you as individuals (person factors), such as other job opportunities, how much each of you likes the job you just lost, your ratio of savings to debt, and whether you have kids, mortgages, or a working spouse. The person–situation distinction, therefore, provides a means for classifying OB concepts and theories into causes of behavior and problems. Page 27

Levels—Individual, Group/Team, and Organization We saw above that OB distinguishes among three levels at work: individual, group/team, and organizational. To illustrate how considering levels helps in solving real-world problems, think about the many reasons people quit their jobs.  Some people quit because their job doesn’t fulfill what they value, such as challenging and

stimulating work (an individual-level input).  Others quit because of conflicts with their boss or because they have nothing in common with their

coworkers (a group/team-level process).

 A common reason people quit is a faulty reward system that unfairly distributes raises, bonuses, and recognition (an organizational-level process).

Understanding and considering levels increases your problem-solving effectiveness and performance. This is highlighted in the problem-solving example in Section 1.6.

Applying OB Concepts to Identify the Right Problem Nothing causes more harm than solving the wrong problem. To illustrate, assume that many people in your department at work are quitting. What could be the reason? The person– situation distinction allows you to consider unique individual factors as well as situation factors that might be the source of the problem. And considering the levels of individual, group, and organization will allow you to look at each for possible causes. For example:  Person factors. Do your departing coworkers have something in common? Is there anything about

their personalities that makes work difficult for them, such as a preference to work collaboratively rather than independently? What about their ages? Gender? Skills?

 Situation factors. Have there been changes in the job market, such as a sudden increase in employment opportunities at better wages? Have working conditions such as promotion opportunities become less attractive in your organization?

 Individual level. Has the job itself become boring and less meaningful or rewarding to the employees who quit?

 Group/team level. Have there been any changes to the work group, including the manager, that might make work less satisfying? How does turnover in your department compare to that in other departments in the organization? Why?

 Organizational level. Has the organization changed ownership, or rewritten company policies, or restructured such that the most desirable positions are now at the headquarters in another state?

By following this approach and asking these questions, you widen your focus and review a larger number of possible causes, increasing the likelihood you will identify the right problem. If you don’t quite follow this example, then have no fear. We analyze a turnover scenario in the last section of this chapter and provide a more detailed application. Stay tuned!  

THE ORGANIZING FRAMEWORK FOR UNDERSTANDING AND APPLYING OB

A Basic Version of the Organizing Framework The foundation of the Organizing Framework is a systems model wherein inputs influence outcomes through processes. The person and situation factors are inputs. We’ve organized processes and outcomes into the three levels of OB—individual, group/team, and organizational. This framework implies that person and situation factors are the initial drivers of all outcomes that managers want to achieve. This is the case because inputs affect processes, and processes

affect outcomes. And because events are dynamic and ongoing, many outcomes will in turn affect inputs and processes. See Figure 1.3. The relationships Page 29 between outcomes at one point in time and inputs and processes at another are shown as feedback loops in the Organizing Framework (the black arrows at the bottom of the figure).

Using the Organizing Framework for Problem Solving You can use the Organizing Framework at all three steps of the problem-solving process to add rigor, intelligently apply your OB knowledge, and in turn improve your performance. 1. Step 1: Define the problem. Problems can be defined in terms of outcomes in the Organizing

Framework, and these outcomes occur at three levels. 2. Step 2: Identify causes. Causes are often best thought of in terms of inputs (person or situation) or

processes at various levels (individual, group/team, organizational). 3. Step 3: Make recommendations. Consider the most appropriate solutions using your OB

knowledge and tools. Then map these onto the causes (inputs or processes).

Selecting a Solution and Taking Action (if appropriate)  

Don’t Forget to Consider Constraints As a matter of practicality, most people lack the time, knowledge, or access to data to routinely follow such a rigorous procedure. Therefore, your selection most often requires you to consider various constraints—on time, money, your own authority, and information—that can occur at different levels. We close this chapter with practical pointers on how to select the best solution.

Applied Approaches to Selecting a Solution You can save time and hassle with the following practical advice from renowned problem- solving expert and professor Russell Ackoff. Ackoff recommends first deciding how complete a response you are looking for. Do you want the problem to be resolved, solved, or dissolved?  Resolving problems is arguably the most common action managers take and simply means choosing

a satisfactory solution, one that works but is less than ideal. Putting on a “doughnut” or temporary spare tire fixes a flat, but it certainly is not ideal and is unlikely to last.Page 32

 Solving problems is the optimal or ideal response. For instance, you could buy a new, high-quality, full-size spare to keep in your trunk (not the typical doughnut or the “run-flats” that manufacturers frequently provide).

 Dissolving problems requires changing or eliminating the situation in which the problem occurs. Keeping with our example, the city you live in could build and utilize effective public transportation and thus remove the necessity of having cars (and tires) altogether.63

Basic Elements for Selecting an Effective Solution After deciding whether to resolve, solve, or dissolve your identified problem, you need to select the most effective solution. A problem-solving expert says: “The essence of successful problem solving is to be willing to consider real alternatives.”64 To help you choose among alternatives identified in Step 2, we distilled three common elements that will help you qualify the best solution: 1. Selection criteria. Identify the criteria for the decision you must make, such as its effect on:

 Bottom-line profits.  You and classmates or coworkers.  Your organization’s reputation with customers or the community.  Your own values.  The ethical implications.

2. Consequences. Consider the consequences of each alternative, especially trade-offs between the pros and the cons, such as:  Who wins and who loses.  Ideal vs. practical options.  Perfection vs. excellence.  Superior vs. satisfactory results.

3. Choice process. Decide who will participate in choosing the solution. (If more than one person, agree on the method. Will you vote? Will the vote be public or secret? Unanimous or simple majority?):  You  Third party  Team

In every case, consider the necessary resources, including which people will be key sources of support for (and resistance to) your ultimate selection. Consider who can help and who can hurt your efforts—what’s in it for them?

PREVIEW AND APPLICATION OF WHAT I WILL LEARN

The 3‐Step Problem‐Solving Approach

Using the Framework for Learning

Breadth and Power of OB  

Hypothetical Problem‐Solving Scenario  

Step 1: Define the Problem Step 2: Use OB to Highlight the Causes Step 3: Generate Effective Recommendations Using OB  

3 INDIVIDUAL DIFFERENCES AND EMOTIONS  

How Does Who I Am Affect My Performance?

THE DIFFERENCES MATTER Individual differences (IDs) are the many attributes, such as traits and behaviors, that describe each of us as a person. IDs are a big part of what gives each of us our unique identities, and they are fundamental to the understanding and application of OB. So, what is it that makes us different? Is it our genetics or our environment? The answer is both.2 And while the way you are raised, along with your experiences and opportunities, indeed helps shape who you are, a large volume of research on twins suggests that genetics matters more. But what is more important at work is recognizing the many attributes that make us unique individuals, regardless of whether they are due to nature or nurture.  

On the left-hand side of Figure 3.2 we arrange individual differences on a continuum. At the top of the continuum are intelligence and cognitive abilities, which are relatively fixed. This means they are stable over time and across situations and are difficult to change. At the bottom are attitudes (which we discussed in Chapter 2) and emotions, which are relatively flexible. Emotions change over time and from situation to situation, and they can be altered more easily. To elaborate, you aren't more or less intelligent at school than you are at work or home, although your emotions commonly change within and between all of these places. Of course both your intelligence and emotions, as well as many other individual characteristics influence the many outcomes included in the right side of Figure 3.2. The distinction between relatively fixed and flexible individual differences has great practical value. Wise managers know they have little or no impact on fixed IDs. You can’t change an employee’s level of intelligence or remake an employee’s personality.3 But you can help employees manage their attitudes and emotions. For instance, many effective managers (and their employers) select employees based on positive, job-relevant, butPage 82 relatively stable IDs. This hiring strategy enables managers to capitalize on the personal strengths that someone brings to a job because these stable strengths affect behavior and performance in most every

work situation.4 Intelligence and analytical abilities, for example, are beneficial in front of customers, in teams with coworkers, and when working alone on a project. In contrast, managers can have more influence on relatively flexible IDs that influence individual-level work outcomes, like performance and job satisfaction. They can do this by implementing policies that raise employees’ core self-evaluations, attitudes, and emotions. For example, as a manager you’ll likely see better results from assigning work with new products and new markets to employees who are open to experience than to employees with low levels of this attribute. Similarly, you could help build new employees’ confidence about selling to tough customers if you role-model how to do this effectively, give them experience presenting to easy customers first, and provide verbal encouragement before and constructive feedback after.  

INTELLIGENCES: THERE IS MORE TO THE STORY THAN IQ  

lthough experts do not agree on a specific definition, many say intelligence represents an individual’s capacity for constructive thinking, reasoning, and problem solving. Most people think of intelligence in terms of intelligence quotient or IQ, the famous score on tests we often take as children. Thus many people typically view intelligence and IQ as one big attribute of brainpower. However, intelligence, intelligence testing (for IQ), and related research are more complex. The concept of intelligence has expanded over the years and today is thought of and discussed in terms of general mental abilities. Of course, people are different in terms of such abilities, but this isn’t what is important at work. What is important is to understand intelligence or mental abilities so you can manage people more effectively. Put another way, the reason we highlight intelligence and mental abilities is that they are related to performance at work.5 This section provides a brief overview of intelligence and mental abilities and then highlights practical implications.

Intelligence Matters … and We Have More Than We Think Historically, intelligence was believed to be purely genetic—passed from one generation to another—so you were either born “smart” or not. Do you agree with this belief? What are the implications of believing that intelligence is a gift of birth? Regardless of your personal views, research has shown that intelligence, like personality, can be altered or modified in a number of ways.6 Think about it. No matter who you are or where your starting point in education or experience is, if you engage in more constructive thinking, reasoning, and problem solving, you will get better at these skills. You’ll be more intelligent. If you buy this argument, then after reading this book and studying OB you’ll be more intelligent due to the practice in critical thinking and problem solving you’ll gain. Your intellectual development can also be damaged or diminished by environmental factors such as drugs, alcohol, and poor nutrition.7 Am I More Intelligent than My Parents? If you answer yes to this question, research might just support your claim. A steady and significant rise in average intelligence among those in developed countries has been observed over the last 70 years. Why? Experts at an American Psychological Association conference concluded, “Some combination of better schooling, improved socioeconomic status, healthier nutrition, and a more technologically complex society might account for the gains in IQ scores.”8 So, if you think you’re smarter than your parents and your teachers, despite their saying you don’t know important facts they do, you’re probably right! Page 84

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While many people think of intelligence in general terms, such as IQ, it is more common and more practical to think in terms of multiple intelligences, or an intelligence for something specific. Howard Gardner, a professor at Harvard’s Graduate School of Education, investigated the nature of intelligence for years and summarized his findings in his 1983 book Frames of Mind: The Theory of Multiple Intelligences.9 The eight different intelligences he identified, listed in Table 3.1, include not only mental abilities but social and physical abilities and skills as well.

Many believe the concept of multiple intelligences has important implications for employee selection, training, and performance. For example, one-size-fits-all training programs often fall short when diversity of intelligences is taken into consideration. When clinical training for undergraduate nursing students was designed to draw on and apply their eight intelligences, for example, they acquired greater proficiency in clinical skills. This type of training also enabled them to utilize and develop their interpersonal intelligence, extremely important for effective patient care.13 Near the end of this chapter, you will encounter the concept of emotional intelligence, which managers can apply for employee selection and other purposes. Future breakthroughs in the area of multiple intelligences will attract more OB researchers and practicing managers.

Page 86 Practical Intelligence We can draw practical benefits from Gardner’s notion of multiple intelligences. For instance, Yale’s Robert J. Sternberg applied Gardner’s “naturalist intelligence” to the domain of leadership under the heading practical intelligence. He explains: “ Practical intelligence is the ability to solve everyday problems by utilizing knowledge gained from experience in order to purposefully adapt to, shape, and select environments. It thus involves changing oneself to suit the environment (adaptation), changing the environment to suit oneself (shaping), or finding a new environment within which to work (selection). One uses these skills to (a) manage oneself, (b) manage others, and (c) manage tasks.”14

Practical Implications Many educators and parents have embraced the idea of multiple intelligences because it helps explain how a child could score poorly on a standard IQ test yet be obviously gifted in other ways such as music, sports, or relationship building. It then follows that we need to help each child develop in his or her own unique way and at his or her own pace. Many people make the same arguments about college students and employees. Of course, everybody has strengths and weaknesses. But what is important as a matter of practice is to identify intelligences relevant to the job, and then to select, place, and develop individuals accordingly. What is your view? Do you see any value in testing for various forms of intelligence at work? Why or why not? Not Just Kid Stuff Some Proof?  

PERSONALITY, OB, AND MY EFFECTIVENESS Personality is the combination of stable physical, behavioral, and mental characteristics that gives individuals their unique identities. These characteristics or traits—including the way we look, think, act, and feel—are the product of interacting genetic and environmental influences and are stable over time and across situations and cultures.22 Personality is a person input in the Organizing Framework.

There Is More to Personality Than Liking and Fit Like most people, you may often think of personality in terms of whether you like or dislike someone. For instance, if you’re asked to describe your professor for this class you might say: “She's great. I love her personality.” Or if asked to describe your boss you might say: “He’s a difficult individual, he’s unethical, many of his colleagues won’t associate with him, and he is widely disrespected and should be fired.” If you are recruiting somebody for a job (or your fraternity or sorority) you might say: “I really like his/her personality … I think he/she will fit in great with the rest of us.” What Can I Do with “Like”? Be Precise to Be Effective To be effective at managing people you need to be more precise (and scientific) about personality. This challenge has motivated a tremendous amount of research about personality in psychology and in OB. What we need are more specific definitions of what personality is, tools to measure it, and data about the effect it has on important processes and outcomes across all levels of the Organizing Framework.Page 89

©

The Big Five Personality Dimensions Defining something as complex as personality is quite a challenge. Fortunately, psychologists and researchers have distilled long lists of qualities and characteristics into the Big Five Personality Dimensions that simplify more complex models of personality. The dimensions are extroversion, agreeableness, conscientiousness, emotional stability, and openness to experience.24 Table 3.2 details the five personality dimensions. For example, someone scoring high on extroversion will be an extrovert—outgoing, talkative, sociable, and assertive. Someone scoring low on emotional stability will likely be nervous, tense, angry, and worried. TABLE 3.2 CHARACTERISTICS OF PERSONS SCORING HIGH ON THE FIVE DIMENSIONS

The Big Five Personality Dimensions Personality Characteristic 

1. Extroversion  Outgoing, talkative, sociable, assertive 

2. Agreeableness  Trusting, good‐natured, cooperative, softhearted 

3. Conscientiousness  Dependable, responsible, achievement‐oriented, persistent 

4. Emotional stability  Relaxed, secure, unworried 

5. Openness to experience  Intellectual, imaginative, curious, broad‐minded 

SOURCE: Adapted from M. R. Barrick and M. K. Mount, “Autonomy as a Moderator of the Relationships between the Big Five Personality Dimensions and Job Performance,” Journal of Applied Psychology, February 1993, 111–118.

A person’s scores on the Big Five reveal a personality profile as unique as his or her fingerprints. To discover your own Big Five profile, complete Self‐Assessment 3.1. In the process you’ll learn there is more to personality than just being likable or fitting in. This Self- Assessment will increase your self-awareness and illustrate some of the concepts just described. Many companies use personality profiles for hiring and promotions, so your profile should provide practical insights  

Hail the Introverts Proactive Personality A proactive personality is an attribute of someone “relatively unconstrained by situational forces and who effects environmental change. Proactive people identify opportunities and act on them, show initiative, take action, and persevere until meaningful change occurs.”27 In short, people with proactive personalities are hard-wired to change the status quo. It therefore is no surprise that this particular individual difference has received growing attention from both researchers and managers. Think about it. Companies, and their managers, routinely say they want employees who take initiative and are adaptable. Many argue that today’s hypercompetitive and fast-changing workplace requires such characteristics. Proactive Managers What about your manager? Interesting recent work showed that the ideal scenario is for both you and your manager to be proactive. This results in a better fit and better relationship between the two of you, and it also increases your level of job performance, job satisfaction, and affective commitment.30 The same study also showed that the worst scenario in terms of performance was low proactivity for both you and your manager, followed by a highly proactive manager and a low proactivity follower. Thus proactivity is a highly valued characteristic in the eyes of employers. And being proactive has direct and indirect benefits for your performance. Given these facts, how proactive do you believe you are? How might you increase your proactivity? To help answer these questions, learn about your own proactivity, and explore the potential benefits for you, complete Self‐Assessment 3.2. Proactivity and Entrepreneurs Besides leading to increases in job performance, job satisfaction, and affective commitment (as discussed in Chapter 2), proactive personality is also linked to intentions to be entrepreneurial. This really should not be surprising, but it is helpful to know that scientific OB research substantiates this belief. Building on this, we can say that employees with proactive personalities are more likely to be engaged (again, see Chapter 2) and creative at work.31 Successful entrepreneurs often exemplify the proactive personality. Consider Dan Goldie, former professional tennis player and successful financial adviser. Goldie’s youthful passion was tennis, and his talent led him to junior championship titles, a scholarship at Stanford, and a ranking of 27th on the pro tour. Now he considers himself more successful at managing money than he ever was at tennis. Impressive to be sure.

Personality and Performance Instead of simply assuming personality affects performance, let’s see what research has to say and how this knowledge can make you more effective. First, and most generally, your personality characteristics are likely to have the greatest influence and effect on performance when you are working in situations that are unstructured and with few rules.34 This makes sense. You’re more likely to show your true colors (your personality) when the situation is open and lacks constraints. As for the Big Five, knowledge of these stable personality dimensions can assist in selecting the right people and assigning them responsibilities that will set them up to win.  Conscientiousness has the strongest (most positive) effects on job performance and training

performance. Individuals who exhibit traits associated with a strong sense of purpose, obligation, and persistence generally perform better than those who do not. They also tend to have higher job satisfaction.35This trait has consistently been shown to be the most influential when it comes to performance at work.

 Extroversion is associated with success for managers and salespeople, and more generally for jobs that require social skills. It is also a stronger predictor of job performance than agreeableness, across all professions.

 Introverts have been shown to score their extroverted and disagreeable coworkers more harshly than their similarly introverted coworkers. The implication is that introverts focus on interpersonal skills more than extroverts when evaluating coworkers’ performance.36 How might this affect you in peer evaluations at school and/or work?

 Agreeable employees are more likely to stay with their jobs (not quit). They tend to be kind and get along with others, and thus they often have positive relationships and experiences at work.37

 Openness seems to lead to higher turnover. Open employees are curious and likely to seek out new opportunities, even when they are satisfied with their current jobs.38 This characteristic seems like a double-edged sword for employers. On the one hand they want open and flexible employees, but these are also the same employees who are likely to quit. How might you deal with this as a manager or the owner of a business?Page 94

 Emotional stability, along with conscientiousness and agreeableness, is associated with a greater focus on and practice of workplace safety. Imagine you are a manager in a chemical plant. How might you use this knowledge in selecting new employees? In assigning and training existing employees?

Personality Testing at Work Personality testing is a commonly used tool for making decisions about hiring, training, and promotion. Current estimates are that approximately 76 percent of organizations with more than 100 employees now use some sort of pre- or post-hiring assessment, including personality tests,39 spending more than $500 million annually on such services.40 A few of the major reasons organizations use such tests are that they: 1. Reduce time and cost of recruiting and hiring. 2. Reduce biases in the interview process. 3. Increase the pool of candidates (because such tests can be administered electronically and

remotely). 4. Complement candidate information found in résumés and interviews.41 Personality tests, in particular, are more widely used at the management level than at the entry level (80 percent and 59 percent of the time, respectively).42 However, despite this widespread use, many experts argue that the typical personality test is not a valid predictor of job performance.43 One reason might be that many test takers don’t describe themselves accurately but instead try to guess what answers the employer is looking for.44

APPLYING OB

Wise managers learn about personality and the tools used to measure it before investing in and/or utilizing the data they yield. Table 3.4 provides some insights.

There Is No “Ideal Employee” Personality Given the complexity of today’s work environments, the diversity of today’s workforce, and recent research evidence, the quest for an ideal employee personality profile is sheer folly. Just as one shoe does not fit all people, one personality profile does not fit all job situations. Good managers take the time to get to know each employee’s unique combination of personality traits, abilities, and potential and then create a productive and satisfying person–job fit. In other words, a contingency approach to managing people is best (recall the discussion of contingency in Chapter 1).  

4 SOCIAL PERCEPTION AND MANAGING DIVERSITY

PERSON PERCEPTION Perception is key to resolving the above questions. Perception is a cognitive process that enables us to interpret and understand our surroundings. Recognition of objects is one of this process’s major functions. But because organizational behavior’s (OB’s) principal focus is on people, our discussion will emphasize person perception rather than object perception. Perception is important to OB because behavior is based on our perception of reality, not on reality itself. Our exploration of this important process begins by considering a model of person perception. The model provides a practical framework for understanding how we form perceptions of others. We then consider the managerial implications of person perception.

A Model of Person Perception

Perception is influenced by three key components: the characteristics of

the perceiver, of the Page 126target—the person or group being observed—and of the situation (see Figure 4.2).7 Let’s take a closer look at how these components

work.

Characteristics of the Perceiver Characteristics of the Target Characteristics of the Situation Managerial Implications of Person Perception

Hiring Interviewers make hiring decisions based on their impression of how an applicant fits the perceived requirements of a job. Unfortunately, many of these decisions are made on the basis of implicit cognition. Implicit cognition represents any thoughts or beliefs that are automatically activated from memory without our conscious awareness. The existence of implicit cognition leads people to make biased decisions without realizing they are doing so.19 A recent study of job applicants’ résumés, for instance, demonstrated that recruiters evaluated women more favorably than men for customer service jobs, probably based on gender-role stereotypes.20

Performance Appraisal Faulty perceptions about performance can lead to inaccurate performance appraisals, which erode morale. Consider the results of a recent study of commanding officers in the US military. The research looked at 193 commanding officers who were assigned legal advisers. The advisers were all professionals with a law degree, and the commanding officers were responsible for conducting their performance evaluations. On average, female advisers received lower performance ratings than males as their pay grade approached that of the boss. Male advisers did not have this experience.21 The only good news from the study is that this form of bias occurred only when evaluators had high social dominance orientation, a personal characteristic in which someone prefers to dominate other groups of people, in this case women.22 Perceptual biases in performance appraisals can be reduced by the use of more objective measures of performance. While this is a good idea, it is hard to implement for jobs that require interdependent work, mental work, or work that does not produce objective outcomes. Companies can also reduce bias by providing managers a mechanism for accurately recalling employee behavior, such as a performance diary. Finally, it would be useful to train managers about perceptual biases and about how they can avoid them in performance evaluations.23 Page 130

Leadership Research demonstrates that employees’ evaluations of leader effectiveness are influenced strongly by their categorical knowledge of what constitutes good and poor leaders. For example, a team of researchers found that the following behaviors are representative of effective leadership: 1. Assigning specific tasks to group members. 2. Telling others they have done well. 3. Setting specific goals for the group. 4. Letting other group members make decisions. 5. Trying to get the group to work as a team. 6. Maintaining definite standards of performance.26

STEREOTYPES “A stereotype is an individual’s set of beliefs about the characteristics or attributes of a group.”27 We need to recognize how stereotypes affect our perception because we use them without intending to or even being consciously aware that we are.28 Unfortunately, stereotypes can lead to poor decisions. Consider people diagnosed with cancer, about 40 percent of men and women living in the United States.29 A recent study of the retail industry showed that managers made discriminatory decisions about individuals whose job applications indicated they were cancer survivors.30 All told, stereotypes can create barriers for women, older individuals, people of color, and people with disabilities, all while undermining loyalty and job satisfaction. Let’s look at examples. Gender. A summary of research revealed that:  Men were preferred for male-dominated jobs (e.g., firefighters), but there was no preference

for either gender in female-dominated jobs (e.g., nurse).  Women have a harder time than men in being perceived as effective leaders. (The exception:

Women were seen as more effective when the organization faced a crisis and needed a turnaround.)

 Women of color are more negatively affected by sex-role stereotypes than are white women or men in general.31

Race. Studies of race-based stereotypes demonstrated that people of color experienced more perceived discrimination and less psychological support than whites.32 Perceived racial discrimination was also associated with more negative work attitudes, physical health, psychological health, and organizational citizenship behavior.33

Age. Another example of an inaccurate stereotype is the belief that older workers are less motivated, more resistant to change, less trusting, less healthy, and more likely to have problems with work–life balance. A recent study refuted all these negative beliefs about age.34

Stereotype Formation and Maintenance We build stereotypes through a four-step process: 1. Categorization. We categorize people into groups according to criteria (such as gender, age,

race, and occupation). 2. Inferences. Next, we infer that all people within a particular category possess the same traits

or characteristics: women are nurturing, older people have more job-related accidents, African Americans are good athletes.Page 132

3. Expectations. We form expectations of others and interpret their behavior according to our stereotypes.

4. Maintenance. We maintain stereotypes by:  Overestimating the frequency of stereotypic behaviors exhibited by others.  Incorrectly explaining expected and unexpected behaviors.  Differentiating minority individuals from ourselves.

Research shows that it takes accurate information and motivation to reduce the use of stereotypes.35

Managerial Challenges and Recommendations The key managerial challenge is to reduce the extent to which stereotypes influence decision making and interpersonal processes throughout the organization. We suggest three ways that this can be achieved. 1. Managers should educate people about stereotypes and how they can influence our

behavior and decision making. Many people may not understand how stereotypes unconsciously affect their perception. For example, people evaluating symphony orchestra musicians for jobs were found to be biased toward men. This unconscious tendency was reduced by using a curtain to block the evaluation committee from seeing applicants. Significantly more females were hired under this unbiased approach.36

2. Managers should create opportunities for diverse employees to meet and work together in cooperative groups of equal status. Social scientists believe positive interpersonal contact among mixed groups is the best way to reduce stereotypes because it provides people with more accurate data about the characteristics of others.

3. Managers should encourage all employees to increase their awareness of stereotypes. Awareness helps reduce the application of stereotypes when making decisions and interacting with others.

CAUSAL ATTRIBUTIONS Attribution theory is based on a simple premise: Rightly or wrongly, people infer causes for their own and others’ behavior. Formally defined, causal attributions are suspected or inferred causes of behavior. Managers need to understand how people formulate these attributions because they profoundly affect organizational behavior. Consider Table 4.1, in which the manager’s understanding of observed behavior leads to very different actions. TABLE 4.1 THE LINK BETWEEN ATTRIBUTIONS AND MANAGERIAL ACTIONS.

Observed Behavior Manager’s Attribution  Managerial Action   

Employee fails to meet minimum standards  Lack of effort  Reprimand   

Employee fails to meet minimum standards  Lack of ability  Training   

Kelley’s Model of Attribution Current models of attribution build on the pioneering work of the late Fritz Heider. Heider, the founder of attribution theory, proposed that behavior can be attributed either to internal factors within a person (such as ability) or to external factors within the environment (such as a difficult task). Following Heider’s work, Harold Kelley attempted to pinpoint some specific antecedents of internal and external attributions. Kelley hypothesized that people make causal attributions by observing three dimensions of behavior: consensus, distinctiveness, and consistency.37 These dimensions vary independently, forming various combinations and leading to differing attributions.

How do these three dimensions of behavior lead to specific attributions? Kelley theorized that people attribute behavior to either internal causes (personal factors) or external causes (environmental factors) depending on the way they rank consensus, distinctiveness, and consistency as shown in Table 4.2: TABLE 4.2 FORMATION OF INTERNAL AND EXTERNAL ATTRIBUTIONS

Attribution Consensus (People)

Distinctiveness (Tasks)

Consistency (Time)

Internal Low Low High

External High High Low

Attributional Tendencies Researchers have uncovered two attributional tendencies that distort our interpretation of observed behavior—fundamental attribution bias and self‐serving bias. Fundamental Attribution Bias The fundamental attribution bias reflects our tendency to attribute another person’s behavior to his or her personal characteristics, rather than to situation factors. This bias causes perceivers to ignore important environmental factors (again refer to the Organizing Framework), which often significantly affect behavior. Such bias leads to inaccurate assessments of performance, which in turn fosters inappropriate responses to poor performance. Self-Serving Bias The self‐serving bias represents our tendency to take more personal responsibility for success than for failure. The self-serving bias suggests employees will attribute their success to internal factors (high ability or hard work) and their failures to uncontrollable external factors (tough job, bad luck, uncooperative coworkers or boss). This tendency plays out in all aspects of life.

Managerial Applications and Implications Attribution models can explain how managers handle poorly performing employees. One study revealed that managers gave employees more immediate, frequent, and negative feedback when they attributed their performance to low effort. Another indicates that managers tended to transfer employees whose poor performance they attributed to a lack of ability. These same managers also decided to take no immediate action when poor performance was attributed to external factors beyond an individual’s control.38

DEFINING AND MANAGING DIVERSITY Do you have any preconceived notions about diversity that are worth considering? Let’s take a reality check:  Assumption: Gender diversity on boards of directors does not affect firm

performance. Wrong, says a team of researchers who aggregated results from 140 research studies. Findings showed that firms were more profitable when women were members of the board of directors.40

 Assumption: Organizations had a hard time finding qualified employees during the 2014–2015 slow‐growth economy. Yes, according to 2015 data from Indeed.com, the top employment-related website in the world. It seems that 56 percent of all job openings remained open after one month, and 33 percent were still active after three months. All told, Indeed.com estimated in 2015 that “over 330 million working hours are lost every month in the United States from unfilled job openings.” The most difficult jobs to fill across all industries were managerial and supervisory.41

 Assumption: Whites will constitute the majority among US racial groups through 2050. No, according to the US Census Bureau. Today whites represent 63 percent of the population, but that will drop below 50 percent in 2043.42

The United States is becoming more diverse in its gender, racial, educational, and age makeup. For example, there are now more working parents, more nonwhites, and more older people, and the consequences are not always what you might expect. Demographics are the statistical measurements of populations and their qualities (such as age, race, gender, or income) over time. The study of demographics helps us better appreciate diversity and helps managers develop human resource policies and practices that attract, retain, and develop qualified employees. In the remainder of this chapter we will further your understanding of diversity and its managerial challenges.

Layers of Diversity Diversity represents the multitude of individual differences and similarities that exist among people, making it an input in the Organizing Framework for Understanding and Applying OB. As you will learn, however, managing diversity also affects a variety of processes and outcomes within the Organizing Framework. Moreover, diversity pertains to everybody. It is not just an issue of age, race, or gender; of being heterosexual, gay, or lesbian; or of being Catholic, Jewish, Protestant, orPage 137 Muslim. Diversity pertains to the host of individual differences that make each of us unique and different from all others. Lee Gardenswartz and Anita Rowe, a team of diversity experts, identified four layers of diversity to help distinguish the important ways in which people differ (see Figure 4.4). Taken together, these layers define our personal identities and influence the way each of us sees the world.

Figure 4.4 shows that the next layer of diversity consists of external influences. These are individual differences over which we have more control, such as where we live, our religious affiliation, our marital and parental status, and our work experience. These dimensions also exert a significant influence on our

perceptions, behavior, and attitudes.

Affirmative Action vs. Diversity Management Affirmative Action Affirmative action is not a law in and of itself. It is an outgrowth of equal employment opportunity (EEO) legislation. The goal of this legislation is to outlaw discrimination and to encourage organizations to proactively prevent discrimination. Discrimination occurs when employment decisions about an individual are based on reasons not associated with performance or related to the job. For example, organizations cannot legally discriminate on the basis of race, color, religion, national origin, sex, age, physical and mental disabilities, and pregnancy. Affirmative action is an intervention aimed at giving management a chance to correct an imbalance, injustice, mistake, or outright discrimination that occurred in the past.

Affirmative action  Can refer to both voluntary and mandatory programs.  Does not legitimize quotas. Quotas are illegal and can be imposed only by judges who

conclude that a company has engaged in discriminatory practices.  Does not require companies to hire unqualified people.  Has created tremendous opportunities for women and minorities.  Does not foster the type of thinking needed to manage diversity effectively. 

Managing Diversity Managing diversity enables people to perform to their maximum potential. Diversity management focuses on changing an organization’s culture and infrastructure such that people work to the highest productivity possible. Ann Morrison, a diversity expert, attempted to identify the types of initiatives 16 companies used to successfully manage diversity. Her results found three key strategies at work: education, enforcement, and exposure. She describes them as follows:  The educational component. Education “has two thrusts: one is to prepare nontraditional

managers for increasingly responsible posts, and the other is to help traditional managers overcome their prejudice in thinking about and interacting with people who are of a different sex or ethnicity.”49

 The enforcement component. Enforcement “puts teeth in diversity goals and encourages behavior change.”50

 The exposure component. Exposing people to others with different backgrounds and characteristics “adds a more personal approach to diversity by helping managers get to know and respect others who are different.”51

In summary, both consultants and academics believe organizations should strive to manage diversity rather than being forced to use affirmative action.

BUILDING THE BUSINESS CASE FOR MANAGING DIVERSITY Business Rationale The rationale for managing diversity is more than the fact that it’s legally, socially, or morally desirable. Quite simply, it’s good business. The OB in Action box illustrates how companies can gain competitive advantage by producing products targeted at specific demographic groups—in this case, men who do laundry. An access‐and‐legitimacy perspective on diversity is based in recognition that the organization’s markets and constituencies are culturally diverse. It therefore behooves the organization to match the diversity in parts of its own workforce as a way of gaining access to and legitimacy with those markets and constituent groups.58

Women Break the Glass Ceiling—but Navigate a Labyrinth Coined in 1986, the term glass ceiling identifies an invisible but absolute barrier that prevents women from advancing to higher‐level positions. Various statistics support the existence of the glass ceiling. Take the pay gap between men and women, for example. In 2014, the median weekly income in full-time management, professional, and related occupations was $1,346 for men but $981 for women. Even among female and male MBA graduates who made about the same upon graduation in 2007–2009, by 2014 a gap had opened—women earned $140,000 and men $175,000.61 Some people think these pay differences come about because women leave the workforce to raise children, or because men perform better on the job. Although women are more likely than men to take time off to raise children, research spanning 30 years demonstrated that pay differences were not due to differences in performance evaluations.62 Other unknown causes are behind the gender pay gap. Alice Eagly and Linda Carli conducted a thorough investigation into the organizational life of women and in 2007 published their conclusions that women had finally broken through the glass ceiling.63 We’ve updated the data reported in Eagly and Carli’s book that led them to their conclusion. In 2016 there were many more female CEOs (21 within the Fortune 500 and two more expected by late 2016) and more women in managerial, professional, and related occupations than in the 1980s and 1990s.64 Statistics further showed that women had made strides along several measures. 1. Educational attainment: Women earned the majority of bachelor’s and master’s degrees in

2014. 2. Seats on boards of directors of Fortune 500 firms: Women held 9.6 percent of seats in 1995

and 19.7 percent in 2015. 3. Leadership positions in educational institutions and Congress: In 2016 women

represented 23 percent of college presidents, and in 2014, 100 women served in Congress— the largest number ever.

4. Federal court appointments: In 2016, 35 percent of federal courts of appeals judges were female.65

You can interpret the above statistics in one of two ways.  No Change. On the one hand, you might see proof that women remain underpaid and

underrepresented in leadership positions, victims of discriminatory organizational practices.  Positive Change. Or you can agree with Eagly and Carli’s conclusion that “men still have

more authority and higher wages, but women have been catching up. Because some women have moved into the most elite leadership roles, absolute barriers are a thing of the past.”66

Racial Groups Face Their Own Glass Ceiling and Perceived Discrimination The US workforce is becoming increasingly diverse. Between 2012 and 2060, the Census Bureau predicts the following changes in ethnic representation:  Growth: The Asian population will grow from 5.1 percent to 8.2 percent of the total.  Growth: The Hispanic population will grow from 17 percent to 31 percent.  Mild growth: The African American population will rise from 13.1 percent to 14.7 percent.  Decline: Non-Hispanic whites will drop from 63 percent to 43 percent.67

In 2060 so-called minority groups will constitute approximately 57 percent of the workforce, according to the Census Bureau.68 And yet three additional trends suggest that current-day minority groups are stalled at their own glass ceilings: Smaller percentage in the professional class. Hispanics, or Latinas/os, and African Americans have a smaller relative hold on managerial and professional jobs compared with whites. Women of color generally do better than men of color. More discrimination cases. The number of race-based charges of discrimination that were deemed to show reasonable cause by the US Equal Employment Opportunity Commission increased from 294 in 1995 to 678 in 2015. Companies paid a total of $88.4 million to resolve these claims without litigation in 2015.69 Lower earnings. Minorities also tend to earn less personal income than whites. In 2015 median weekly earnings for workers 16 years and older were $847, $643, $1,091, and $624 for whites, blacks, Asians, and Hispanics, respectively. Asians had the highest median income.70 Sexual Orientation: LGBTQ People Become More Visible The term LGBT is a widely recognized acronym to represent lesbian, gay, bisexual, and transgender. However a fifth letter has been gaining acceptance—Q—which according to the Human Rights Campaign can mean either “questioning” or “queer.”

Q for “questioning” refers to someone in the process of exploring his or her sexual identity. “People use the term queer because it’s not specific to sexual orientation or to gender identify but is more of an umbrella term that can encompass a lot of people.” You may want to avoid using the term queer because it is offensive to some in the LGBT community.71 We are discussing sexual orientation because organizations cannot afford to allow between 1.2 and 6.8 percent of the workforce to feel disenfranchised. This represents the estimated number of people who identify as LGBT.72 Because LGBTQ employees often experience a lack of inclusion, their engagement, performance, and retention can be affected. A study by the Human Rights Campaign Foundation, for instance, revealed that unwelcoming environments can lead to a 30 percent decrease in employee engagement and an increase in turnover. Nine percent of LGBT employees reported leaving a job because of unwelcoming work environments.73 The good news is that a majority of Fortune 500 companies offer workplace protections on the basis of sexual orientation and gender identify. In contrast, 29 states do not offer such protections.74

Physical and Mental Abilities: People with Disabilities Face Challenges Approximately 20 percent of Americans have a physical or cognitive disability, according to the US Census Bureau. The Americans with Disabilities Act prohibits discrimination against those with disabilities and requires organizations to reasonably accommodate an individual’s disabilities.75 Not surprisingly, some people with disabilities have difficulty finding work. The US Bureau of Labor Statistics found that 10.4 percent were unemployed in July 2015, much higher than the 5.4 percent rate for those without disabilities. Contrary to negative Page 144 stereotypes about hiring the disabled, such as that making reasonable accommodation is expensive, many organizations are finding this group of people to be a valuable source of talent. Walgreens, for example, is dedicated to hiring people with disabilities. Forty percent of the workforce at two of its distribution centers have disabilities.76 Generational Differences in an Aging Workforce The US population and workforce are getting older, and the workforce includes greater generational differences than ever before. We already see four generations of employees working together, soon to be joined by a fifth (see Table 4.3). Managers need to deal effectively

with generational differences in values, attitudes, and behaviors. Many companies, including IBM, Lockheed Martin, Ernst & Young LLP, and Aetna, address this issue by providing training workshops on generational diversity. TABLE 4.3 GENERATIONAL DIFFERENCES

TRADITIONALIST S 

BABY BOOMERS  GEN XERS 

MILLENNIAL S (GEN Y)  GEN 2020 

Birth Time  Span  1925–1945  1946–1964  1965–1979  1980–2001  2002– 

Current  Populatio n  38.6 million  78.3 million  62 million  92 million  23 million 

Key  Historical  Events 

Great Depression,  World War II,  Korean War, Cold  War era, rise of  suburbs 

Vietnam War;  Watergate;  assassination s of John and  Robert  Kennedy and  Martin Luther  King, Jr.;  women’s  movement;  Kent State  killings; first  man on the  moon 

MTV, AIDS  epidemic, Gulf  War, fall of  Berlin Wall,  Oklahoma City  bombing,  1987 stock  market crash,  Bill Clinton– Monica  Lewinsky  scandal 

September 11  terrorist  attack, Google,  Columbine  High School  shootings,  Enron and  other  corporate  scandals, wars  in Iraq and  Afghanistan,  Hurricane  Katrina,  financial crisis  of 2008 and  high  unemploymen t 

Social media,  election of  Barack  Obama,  financial crisis  of 2008 and  high  unemploymen t 

Broad  Traits 

Patriotic, loyal,  disciplined,  conformist,  possessed of a high  work ethic and  respect for authority 

Workaholic,  idealistic,  competitive,  materialistic,  possessed of  a high work  ethic, in  search of  personal  fulfillment 

Self‐reliant,  adaptable,  cynical,  independent,  technologicall y savvy,  distrustful of  authority, in  search of  work–life  balance 

Entitled, civic  minded, close  parental  involvement,  cyberliteracy,  appreciate  diversity,  multitasking,  in search of  work–life  balance, 

Multitasking,  online life,  cyberliteracy,  communicate  fast and online 

technologically  savvy 

Defining  Invention  Fax machine 

Personal  computer  Mobile phone 

Google and  Facebook 

Social media  and iPhone  apps 

SOURCE: Adapted from J. C. Meister and K. Willyerd, The 2020 Workplace (New York: Harper Collins, 2010), 54–55; and R. Alsop, The Trophy Kids Grow Up (San Francisco: Jossey-Bass, 2008), 5.

Table 4.3 summarizes generational differences using common labels: traditionalists, baby boomers, Gen Xers, Millennials/Gen Ys, and the incoming Gen 2020s. We use such Page 145 labels (and resulting generalizations) for sake of discussion. There are always exceptions to the characterizations shown in Table 4.3.77 Educational Levels: Mismatch between Education and Organizational Needs There are three potential education–work mismatches:  College graduates may be in jobs for which they are overqualified. The US Census Bureau

estimates that 26.8 percent of the US workforce has at least a college degree.80 Unfortunately, about a half a million college graduates are working minimum-wage jobs—260,000 with bachelor’s degrees and 200,000 with associate’s degrees.81 These graduates are underemployed, working at jobs that require less education than they have such as waiting tables, tending bar, painting, and other work that someone with less education could perform. Underemployment is associated with poorer work attitudes, job performance, job satisfaction, motivation, and psychological well-being.82

 College graduates may not have the skills desired by employers. Recent studies show that college graduates, while technically and functionally competent, lack teamwork skills, critical-thinking ability, oral communication skills, and analytic reasoning.83 There is also a shortage of college graduates in technical fields related to science, math, and engineering.

 High‐school dropouts and others may not have the literacy skills needed for many jobs. A recent study revealed that 7 percent of all US students between 16 and 24 dropped out of high school in 2013.84 The dropout rate is higher for males. This statistic, along with the fact that 14 percent of US adults read below a basic level, is a real problem for employers, because about 70 percent of on-the-job reading materials are written at or above a ninth- grade level.85

BARRIERS AND CHALLENGES TO MANAGING DIVERSITY MAJOR QUESTION

What are the most common barriers to implementing successful diversity programs? THE BIGGER PICTURE Wouldn’t you rather know what obstacles lay ahead, instead of discovering them too late? We share 11 common challenges to effectively managing diversity. The following is a list of the most common barriers to implementing successful diversity programs:86 1. Inaccurate stereotypes and prejudice. Mistaken perceptions manifest themselves in the

belief that differences are weaknesses and that diversity hiring means sacrificing competence and quality. As a reporter for The Wall Street Journal noted, “Studies show that

negative stereotypes about aging—for example, that older people inevitably grow less productive and more depressed—are as pervasive as they are inaccurate.”87 Inaccurate stereotypes like this limit the promotability and job satisfaction of older workers.

2. Ethnocentrism. The ethnocentrism barrier is based on the feeling that our cultural rules and norms are superior to or more appropriate than the rules and norms of another culture.

3. Poor career planning. Lack of opportunities for diverse employees to get work assignments that qualify them for senior management positions can stunt careers.

4. A negative diversity climate. We define organizational climate in Chapter 7 as employee perceptions about an organization’s formal and informal policies, practices, and procedures. Diversity climate is a subcomponent of an organization’s overall climate and is defined as the employees’ aggregate “perceptions about the organization’s diversity‐ related formal structure characteristics and informal values.”88 Diversity climate is positive when employees view the organization as being fair to all types of employees, which promotes employee loyalty and overall firm performance.89 It also enhances psychological safety. Psychological safety reflects the extent to which people feel free to express their ideas and beliefs without fear of negative consequences. As you might expect, psychological safety is positively associated with outcomes in the Organizing Framework like innovation.90

There are over 11 different types of lightning. This is an anvil crawler. It travels horizontally and generally at high altitudes. A lightning storm like this can be dangerous and we must be careful to avoid being struck. The same is true for an organization's diversity climate. It signals the extent to which an organization's “internal climate” supports diversity initiatives. Bad climates, like bad lightning storms, result in people taking cover by withholding effort and talent. Have you ever worked in a company with a negative diversity climate? © Jason Weingart Photography RF

5. Page 147A hostile working environment for diverse employees. Hostile work environments are characterized by sexual, racial, and age harassment and can be in violation of Equal Employment Opportunity law, such as Title VII of the Civil Rights Act.91 Whether

perpetrated against women, men, older individuals, or LGBTQ people, hostile environments are demeaning, unethical, and appropriately called “work environment pollution.” You certainly won’t get employees’ best work if they believe the work environment is hostile toward them. The Applying OB box illustrates how Chicago-based online lender Enova International Inc. is trying to create a work environment supportive of Millennials.

Enova International Provides a Millennial Supportive Environment Enova was founded by two brothers in 2004 and grew rapidly. Soon it experienced challenges in retaining its technologically savvy employees because they were in high demand in the job market. The company then developed a three-part retention strategy targeted at Millennials:

1. Development. Millennials like to know their career game plan. According to a freelance writer for HR Magazine, “Enova offers employees workshops on technology and soft skills, such as how to develop a professional presence and how to increase their emotional intelligence.” The company displays charts on its website that show career paths for employees. 2. Recognition. Millennials are known to like frequent and clear feedback. Enova addresses this desire by using a “game-like recognition system in which employees can award points to their colleagues, whether peers or subordinates, for a job well done," according to HR Magazine. Employees then cash the points in for prizes that include iPods and designer purses. 3. Perks. Millennials seem to prefer collaboration and the opportunity to stay connected with friends. Enova tried to accommodate these needs by building the “chill hub,” a room that contains a waterfall wall, board games, massage chairs, and exercise balls. Once a month employees are allowed to volunteer during the workday for a nonprofit of their choice. The company also offers a host of personal perks that include onsite dry cleaning services, yoga classes, snacks and beverages, and Weight Watchers classes.92

6. Diverse employees’ lack of political savvy. Diverse employees may not get promoted

because they do not know how to “play the game” of getting along and getting ahead in an organization. Research reveals that women and people of color are excluded from organizational networks that could help them rise.93 Some organizations attempt to overcome this barrier by creating employee-resource groups that encourage individuals with similar backgrounds to share common experiences and success strategies. American Express has 16 network groups and Cisco has 11.94

7. Difficulty balancing career and family issues. Women still assume most of the responsibilities associated with raising children. This makes it harder for them to work evenings and weekends or to travel. Even without children in the picture, household chores take more of a woman’s time than a man’s.

8. Page 148Fear of reverse discrimination. Some employees believe diversity management is a smoke screen for reverse discrimination. This belief leads to very strong resistance because it makes people feel one person’s gain is another’s loss.

9. Lack of organizational priority for diversity. Low priority for diversity leads to subtle resistance in the form of complaints and negative attitudes. Employees may complain about the time, energy, and resources devoted to diversity that could have been spent doing “real work.”

10. A poor performance appraisal and reward system. Performance appraisals and reward systems must reinforce the need to effectively manage diversity. Success must thus be based on a new set of criteria. For example, General Electric evaluates the extent to which its managers are inclusive of employees with different backgrounds. These evaluations are used in salary and promotion decisions.95

11. Resistance to change. Effectively managing diversity entails significant organizational and personal change. Sometimes this resistance is a function of cross-cultural values. In Japan, for example, women have a difficult time being promoted to senior management positions because of the practice of lifetime employment and age-based promotions. This tradition still holds at both large and small companies.96

ORGANIZATIONAL PRACTICES USED TO EFFECTIVELY MANAGE DIVERSITY MAJOR QUESTION

What are organizations doing to effectively manage diversity, and what works best? THE BIGGER PICTURE Whether you manage a diverse work group or find yourself managed within a diverse work group, you’ll do better by understanding the various ways in which organizations attempt to manage diversity. You’ll be able to review eight options in the following section. Hint: We recommend mutual adaptation. What are organizations doing to effectively manage diversity? We can answer this question by first providing a framework for categorizing organizational initiatives.

Framework of Options One especially relevant framework was developed by R. Roosevelt Thomas Jr., a diversity expert. Thomas identified eight generic action options that organizations can use to address any type of diversity issue. After describing each option, we discuss relationships among them.97 Option 1: Include/Exclude Include/exclude is an outgrowth of affirmative action programs. Its primary goal is to either increase or decrease the number of diverse people at all levels of the organization. Shoney’s restaurant chain attempted to include diverse employees after settling a discrimination lawsuit. The company subsequently hired African Americans into positions of dining-room supervisors and vice presidents, added more franchises owned by African Americans, and purchased more goods and services from minority-owned companies.98 Option 2: Deny People may deny differences exist, saying that all decisions are color-, gender-, and age-blind and that success is determined solely by merit and performance. Novartis Pharmaceuticals agreed to a $152 million settlement in a gender discrimination lawsuit. Holly Waters, one of the plaintiffs, charged that “she was not only paid less than her male equivalents at Novartis, but was fired when she was seven months pregnant after taking a few weeks off on advice of her doctors.” Waters was the highest performer in her district.99 Novartis denied that gender discrimination was a companywide issue despite the fact that 5,600 women received compensation in the settlement.100 Option 3: Assimilate The idea behind assimilation is that, given time and reinforcement, all diverse people will learn to fit in or become like the dominant group. Organizations initially assimilate employees through their recruitment practices and through orientation programs that describe their preferred values and standard operating procedures. Employees then are encouraged to refer to policies and procedures when confused about what to do in a specific situation. These practices create behavioral homogeneity among employees. Page 150

These U.S. soldiers of the 101st Airborne Division are a great illustration of assimilation. Note the uniform dress  and structured approach toward marching. Assimilation techniques used by the military create homogeneity in  dress, behavioral expectations, and many other aspects of military life. Do you think nonmilitary organizations  desire the same type of homogeneity?© Zoom Dosso/AFP/Getty Images

Option 4: Suppress Differences are squelched or discouraged when suppression is the diversity strategy. Managers and peers tell employees to quit whining and complaining about issues. Saying, “You’ve got to pay your dues” is another way to suppress differences and promote the status quo. Option 5: Isolate Isolation maintains the status quo by setting the diverse person off to the side. Then he or she is unable to influence organizational change. Managers can isolate people and entire teams and departments by putting them on special projects, creating functionally independent entities often referred to as silos. Option 6: Tolerate Toleration entails acknowledging differences but not valuing or accepting them. This live-and- let-live approach allows organizations to give lip service to the issue of managing diversity. It differs from isolation in that it allows for the inclusion of diverse people, but differences are still not truly valued or accepted. Option 7: Build Relationships Relationship building is based on the premise that good relationships can overcome differences. It addresses diversity by fostering high-quality relationships—characterized by acceptance and understanding—among diverse groups. Marriott, for example, has paired younger and older employees in teams so they can more effectively capitalize on their strengths and weaknesses.101 Option 8: Foster Mutual Adaptation Mutual adaptation allows people to change their views for the sake of creating positive relationships with others. Employees and managers alike must be willing to accept differences and, most important, agree that everyone and everything is open for change. Diversity training is one way to kick-start mutual adaptation. Research shows that such training can positively enhance people’s attitudes and feelings about working with diverse employees.102

Conclusions about Action Options Although the action options can be used alone or in combination, some are clearly more effective than others. Exclusion, denial, assimilation, suppression, isolation, and toleration are the least preferred options. Inclusion, building relationships, and mutual adaptation are preferred. That said, Thomas reminds us that mutual adaptation is the only approach that unquestionably endorses the philosophy behind managing diversity.

Choosing how to best manage diversity is a dynamic process and is influenced by the context. For instance, some organizations are not ready for mutual adaptation. The best they might be able to achieve is the inclusion of diverse people.

How Companies Are Responding to the Challenges of Diversity We close this chapter by sharing some examples and models that demonstrate how companies are responding to the emerging challenges of managing diversity. Compare these to Thomas’s framework and you’ll find the greatest activity around Options 7 and 8, building relationships and fostering mutual adaptation. Page 151

Response: Paying Attention to Sexual Orientation The Transgender Law Center estimates that about 2 percent of the population is transgender. The term transgender applies to anyone whose gender identity or gender expression is different from sex at birth. Although 61 percent of Fortune 500 firms forbid discrimination based on gender identity, transgender people are protected against discrimination in only 17 states and the District of Columbia.103 More companies recognize that they don’t want to alienate this segment of the population, however, and are implementing programs to help them transition. Aetna, for example, has developed a policy that covers issues involving leave benefits, restroom use, and the transitioning employee’s preferred pronouns and names. It also includes medical coverage for therapy and surgery. Companies including Alcatel-Lucent and Glassdoor have addressed the needs of transgender employees by trying to create an inclusive culture. Mariah DeLeon, Glassdoor’s vice president of people, noted, “The phrase we have here is ‘Bring your whole self to work.’”104

Response: Addressing Changing Customer Demographics A Citizens Union Bank branch in Louisville, Kentucky, was designed and staffed with the goal of attracting more Latina/o customers. The interior contains “bright, colorful walls of yellows and blues, large-scale photos of Latin American countries, comfortable couches, sit-down desks, a children’s play area, a television tuned to Hispanic programming, and even a vending area stocked with popular Latin American-brand soft drinks and snacks.” The branch also took on a new name: Nuestro Banco, Spanish for “Our Bank.” Branch deposits are setting records, and the CEO is planning to repeat the model in other locations.105 Response: Helping Women Navigate the Career Labyrinth Organizations can make career navigation easier by providing flexible work schedules and the developmental assignments that prepare women for promotional opportunities. According to a business writer, the Boston Consulting Group “focuses heavily on recruiting and retaining women, offering part-time options, mentoring and professional-development programs.” On‐ ramping programs encourage people to reenter the workforce after a temporary career break. Companies such as McKinsey & Co. and Goldman Sachs Group offer these to women in particular. Goldman, for example, instituted “returnship” programs that offer short-term job assignments to former employees.106

Response: Helping Hispanics Succeed Miami Children’s Hospital and Shaw Industries Inc. in Dalton, Georgia, hope to raise employee productivity, satisfaction, and motivation by developing customized training programs to improve the communication skills of their Spanish-speaking employees.107 Research reveals that retention and career progression of minorities can be significantly enhanced through effective mentoring. Response: Providing Community and Corporate Training to Reduce the Mismatch between Education and Job Requirements To combat education gaps on a more global level, JPMorgan started The Fellowship Initiative (TFI) in New York in 2010 and expanded it to Chicago and Los Angeles in 2014. The goal is to provide intensive academic and leadership training to young men of color. Jamie Dimon, chair and CEO of JPMorgan, is committed to the program. “These young men need access to high quality education and positive role models in and outside the classroom,” he said. Michael Bloomberg, then New York City’s mayor, applauded JPMorgan’s effort by concluding, “We need more civic-minded companies and organizations to step up and join this work, and I congratulate JPMorgan Chase for being a leader in this effort and for making a real difference in the lives of young men of color in our city.”108 At the individual corporate level, companies, including Wheeler Machinery Co. in Salt Lake City, have instituted specialized training programs that enable less-qualified people to perform more technically oriented jobs. Lockheed Martin and Agilent Technologies also offer paid apprenticeships or internships to attract high-school students interested in the sciences.109 Page 152

Response: Retaining and Valuing Skills and Expertise in an Aging Workforce Here are seven initiatives that can help organizations to motivate and retain an aging workforce: 1. Provide challenging work assignments that make a difference to the firm. 2. Give employees considerable autonomy and latitude in completing a task. 3. Provide equal access to training and learning opportunities when it comes to new

technology. 4. Provide frequent recognition for skills, experience, and wisdom gained over the years. 5. Provide mentoring opportunities whereby older workers can pass on accumulated

knowledge to younger employees. 6. Ensure that older workers receive sensitive, high-quality supervision. 7. Design a work environment that is both stimulating and fun.110 You’ll see a number of these tactics being used by BAE, a multinational defense and aerospace company, according to a writer for Bloomberg Businessweek. “When BAE learns that an employee with deep institutional knowledge plans to retire, whether in a few months or a couple of years, a knowledge-transfer group of about a half-dozen people of varying ages working in the same area is formed. The teams meet regularly over months to talk and exchange advice. Younger workers elicit tips, and in some cases older ones gradually hand off tasks to junior employees.”111 Some companies, such as Staples, have encountered problems managing older employees; see the Problem‐Solving Application box.

PROBLEM‐SOLVING APPLICATION 64‐YEAR‐OLD MALE SUES STAPLES FOR WRONGFUL TERMINATION AND AGE DISCRIMINATION Bobby Nickel, a 66-year-old facilities manager for Staples Contract and Commercial, Inc., and Staples, Inc., was fired. He claims the company

discriminated against and harassed him and ultimately terminated him due to his age.

From 2002 to 2008 Nickel worked for Corporate Express, which Staples then acquired. He received positive performance evaluations for nine years before his termination.

“Because Corporate Express’ pay scale had been higher than the pay scale for employees hired by Staples, Nickel alleged in his complaint that his managers noted that they needed to ‘get rid of’ older, higher paid employees. Nickel’s complaint also explained how he became the regular butt of jokes at staff meetings and was referred to as ‘old coot’ and ‘old goat," according to blogger Larry Bodine.112 Further, Nickel claimed that Lionel Marrero, his fulfillment center manager, regularly made harassing statements like, “Take a closer look at the older people. They are starting to drag and are slowing down. If they are not top performers, write them up and get rid of them.” It was also alleged that Marrero said, “We need young, energetic people. Walk around the facility with the older workers and if they cannot keep up, then get rid of them.… We need to get rid of old people because they are slow. And we can get younger people to work cheaper.”113 Nickel was ultimately pressed by a manager to resign. When he didn’t, he experienced increased incidents of harassment from coworkers and a manager. “This included being written up and suspended for ‘stealing,’ after taking a bell pepper valued at 68 cents from the company cafeteria.” A receptionist Page 153 told Nickel she had been instructed by management “to provide a false statement about Nickel’s conduct but she refused to do so, said blogger Larry Bodine.114 Counsel for Staples contended that the company had cause to suspend Nickel because he violated “the company’s zero-tolerance policy when it came to ‘dishonesty of any kind, including theft or misappropriation of company property.’”115 APPLY THE 3‐STEP PROBLEM‐SOLVING APPROACH 1. Step 1:Define the problem in this case.  2. Step 2:Identify the OB concepts or theories that may be causing the problem. For example, are stereotypes, 

diversity climate, or frameworks for managing diversity causes of the problem?   3. Step 3:Recommend what you would do to correct the situation. Think both short term and long term.   Response: Resolving Generational Differences

What Did I Learn? You learned that person perception and managing diversity are essential for success. Why? Person perception helps you better understand the perception process, improve the way you are perceived, and adjust your own perception to avoid common perceptual errors. Managing diversity (represented by both diversity and demographics in our Organizing Framework) lets you better optimize diversity’s effect on individual and group/team outcomes. Reinforce your learning with the Key Points below. Then consolidate your learning using the Organizing Framework. Finally, challenge your mastery of the material by answering the Major Questions in your own words.

Key Points for Understanding Chapter 4 You learned the following key points.

4.1 PERSON PERCEPTION  Perception is a mental and cognitive process that enables us to interpret and

understand our surroundings.  Person perception is influenced by three components: characteristics of the

perceiver, characteristics of the target, and characteristics of the situation.  Person perception affects a wide variety of organizational activities including

hiring decisions, performance appraisals, and leadership. 4.2 STEREOTYPES  Stereotypes represent generalized beliefs about the characteristics of a group.  Stereotypes are not always negative, and they are not always inaccurate.  Common stereotypes exist about gender, race, and age.  Stereotyping is a four-step process that consists of categorization, inference,

expectation formation, and maintenance.  We maintain stereotypes by (a) overestimating the frequency of stereotypic

behaviors exhibited by others, (b) incorrectly explaining expected and unexpected behaviors, and (c) differentiating minority individuals from ourselves.

4.3 CAUSAL ATTRIBUTIONS  Causal attributions are suspected or inferred causes of behavior.  According to Kelley’s model of causal attribution, we make external attributions

when consensus and distinctiveness are high and consistency is low. We make internal (personal responsibility) attributions when consensus and distinctiveness are low and consistency is high.

 The fundamental attribution bias emphasizes personal factors more than situation factors while we are formulating attributions. In the self-serving bias we personalize the causes of our success and externalize the causes of our failures.

4.4 DEFINING AND MANAGING DIVERSITY  Diversity represents the individual differences that make people unique from

and similar to each other.  Diversity varies along surface-level characteristics like race, gender, and age

and along deep-level characteristics such as attitudes, opinions, and values.  Affirmative action is an outgrowth of equal employment opportunity legislation

and is an intervention aimed at giving management a chance to correct past discrimination.

 Managing diversity entails enacting a host of organizational changes that enable all people to perform to their maximum potential.

Page 155

4.5 BUILDING THE BUSINESS CASE FOR MANAGING DIVERSITY  Managing diversity is predicted to be good business because it aims to engage

employees and satisfy customers’ unique needs.  There are six key demographic trends: (a) women are navigating a labyrinth

after breaking the glass ceiling, (b) racial groups are encountering a glass ceiling and perceived discrimination, (c) recognition of sexual orientation is growing in importance, (d) people with disabilities face challenges, (e) generational differences are growing in an aging workforce, and (f) a mismatch exists between workers’ educational attainment and organizational needs.

4.6 BARRIERS AND CHALLENGES TO MANAGING DIVERSITY  There are 11 barriers to successfully implementing diversity

initiatives: (a) inaccurate stereotypes and prejudice, (b) ethnocentrism, (c) poor career planning, (d) a negative diversity climate, (e) a hostile working environment for diverse employees, (f) diverse employees’ lack of political savvy, (g) difficulty balancing career and family issues, (h) fears of reverse discrimination, (i) lack of organizational priority, (j) the need to revamp the organization’s performance appraisal and reward systems, and (k) resistance to change.

4.7 ORGANIZATIONAL PRACTICES USED TO EFFECTIVELY MANAGE DIVERSITY  Organizations have eight options for addressing diversity

issues: (a) include/exclude the number of diverse people at all levels of the organization, (b) deny that differences exist, (c) assimilate diverse people into the dominant group, (d) suppress differences, (e) isolate diverse members from the larger group, (f) tolerate differences among employees, (g) build relationships among diverse employees, and (h) foster mutual adaptation to create positive relationships.

The Organizing Framework for Chapter 4 As shown in Figure 4.5, you learned that diversity, demographics, and stereotypes serve as key person factors, while diversity climate is an important situation factor. You also know there are relevant processes across the individual level (perception, Page 156attributions, and psychological safety), the group/team level (group/team dynamics), and the organizational level (options to manage diversity). These inputs and processes have critical outcomes.

FIGURE 4.5     Organizing Framework for Understanding and Applying OB

© 2014 by Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without express permission of the authors. 

Challenge: Major Questions for Chapter 4 1. How do I form perceptions of others? 2. How can I use awareness of stereotypes to make better decisions and manage

more effectively? 3. How do I tend to interpret employee performance? 4. How does awareness about the layers of diversity help organizations effectively

manage diversity? 5. What is the business rationale for managing diversity? 6. What are the most common barriers to implementing successful diversity

programs? 7. What are organizations doing to effectively manage diversity, and what works

best? IMPLICATIONS FOR ME We see four additional things you can do to apply this chapter’s lessons. First, remember that your personal and professional success depends upon others’ perceptions of you. Because perceptions can override your good work, it is important to gain feedback on what others’ think about you. Second, it is normal to be affected by stereotypes. It would be helpful to reflect on your stereotypes and to try to avoid letting them bias your decisions and perceptions of others. Third, consider how you will respond when you hear negative or disparaging things about diverse people. It’s going to happen, and your response can make the difference in stopping such statements. Finally, celebrate your uniqueness, but remember that some people are uncomfortable with individual differences among people. We encourage you to just be yourself. IMPLICATIONS FOR MANAGERS There are three key implications for managers. First, because managers make many types of judgments about people, it is important to try to make these judgments without being biased or using stereotypes. This can be difficult because

such cognitive errors are a natural and normal part of how we process information. Second, the fundamental attribution bias can lead to inaccurate interpretations of someone’s suitability for a job or a performance evaluation. Be aware of this attributional error, and try to consider both personal and situation factors when evaluating others. Third, managing diversity is good for individual employees, managers, and organizations as a whole. Organizations, whether local or global, will compete more effectively when all employees feel included, supported, and valued. We all should try our best to be understanding and supportive of people who are different from the majority.

Problem‐Solving Application Case White, Male, and Asian: The Diversity Profile of Technology Companies Managing diversity is a hot topic among technology companies, some of which have started to display  transparency by publishing their diversity profiles.

Google’s diversity report showed its workforce is 70 percent male and 30 percent female. Ethnicity data for its US  workforce indicated 61 percent white, 30 percent Asian, 4 percent of two or more races, 3 percent Hispanic, 2  percent black, and 1 percent other. This pattern is similar to those of Apple (30 percent female and 55 percent  white, and US ethnicity data showing 15 percent Asian, 11 percent Hispanic, 7 percent black, 2 percent of two or  more races, 1 percent other, and 9 percent undeclared) and Facebook (31 percent female, and US ethnicity data  of more than half white, 41 percent Asian, 3 percent Hispanic, and 1 percent black).116  Executives within the technology industry have started to implement a variety of programs and policies to change  the demographic profiles of their companies. For example, Intel established a 2015 hiring goal of 40 percent new  hires from diverse backgrounds and 22.7 percent of technical employees who are female. Pinterest established a  2016 goal to have 30 percent of new engineering hires in engineering roles be female and 8 percent from  underrepresented ethnic minorities.117  Is setting diversity hiring goals fair? While companies that set them note they are not meant to be quotas, some  managers may perceive them that way. This would likely create feelings of reverse discrimination, fueling  resistance to hiring diverse employees. 

What has led to the skewed demographics at technology companies? Some experts believe the root cause goes  back to patterns and norms in elementary and high school, where girls are not encouraged to focus on the STEM  subjects (science, technology, engineering, and math). If this is true, female high‐school students are not  developing the proficiency that would help them major in STEM subjects in college. Further, a writer  for Forbes concluded that an unconscious bias exists “that science and math are typically ‘male’ fields while  humanities are primarily ‘female’ fields, and these stereotypes further inhibit girls’ likelihood of cultivating an  interest in math and science.”118  A related issue is the “information gap.” High‐school students simply do not know which jobs are in high demand.  For example, research shows that 24 percent of high‐school seniors “have no idea of what career they want to  pursue. Of high school seniors who have pinpointed a desired profession, 23 percent said they made their career  choice based on something they saw on TV or in a movie.”119 This is a problem because TV shows often depict  technology‐oriented people as geeky males. Who wants to be a geek?  Others claim the industry has a pipeline problem. In other words, not enough females and minorities are  majoring in STEM subjects in college. Statistics conflict on this subject. Some data indicate that females earn  fewer than 20 percent of college degrees in computer science, even though they achieve the majority of  bachelor’s degrees in the United States.120 In contrast, other studies show that there is not a pipeline issue.  According to Forbes writer Bonnie Marcus, there is “an equal number of high‐school girls and boys participating 

in STEM electives." Marcus also notes that 50 percent of the introductory computer science students at Stanford  and Berkeley are women.121 USA study further showed that “top universities graduate black and Hispanic  computer science and computer engineering students at twice the rate that leading technology companies hire  them.”122 There must be some reason these students are not being hired.  If the above data are accurate, then it is possible that companies have a systemic problem based on hiring  managers’ beliefs, stereotypes, or unconscious biases. This occurred at Pinterest, for example, when it tried to  increase the number of women and minorities being hired. Although recruiters found qualified applicants “from  nontraditional backgrounds, managers often continued to prioritize people from places like Stanford and MIT,  which have less broad student bodies. And while Adam Ward, Pinterest’s head of recruiting, and Abby  Maldonado, its diversity‐programs specialist, had encouraged colleagues to pass along résumés form a range of  candidates, most of the referrals were still white or Asian," according to FastCompany.123 Pinterest founder Evan  Sharp believes technology companies may not be giving diversity the same type of attention given to product  development initiatives.  Page 158There may also be more overt causes of the underrepresentation of female and minority tech  employees. Consider results from an interview study of 716 women who had held technology positions. These  women left the industry after seven years, and 27 percent cited “discomfort working in these companies.” Other  top reasons were perceived discrimination in regard to gender, race, or sexual orientation, lack of flexible hours,  and unsupportive work environments.124  Could something as subtle as gender‐based communication contribute to the problem? The answer is yes  according to a recent report presented in Fortune. A study of 1,100 technology résumés from 512 men and 588  women uncovered gender‐related differences that may affect a recruiter’s perceptions. For example, “women’s  résumés are longer, but shorter on details…. Yet when it comes to providing details about previous jobs, the men  present far more specific content than the women do,” according to the Fortune report. Women were also found  to “lead with their credentials and include more personal background. On average, the women’s résumés cite  seven personal distinctions apiece, while the men’s cite four.” Overall, women tend to use more narrative while  men are more precise about their experiences.125  Assume you are a senior leader at a technology company. What does the information in this case tell you about  managing diversity?  

Apply the 3-Step Problem-Solving Approach to OB

Step 1: Define the problem. A. Look first at the Outcome box of the Organizing Framework in Figure 4.5 to help identify the important 

problem(s) in this case. Remember that a problem is a gap between a desired and current state. State your  problem as a gap, and be sure to consider problems at all three levels. If more than one desired outcome is  not being accomplished, decide which one is most important and focus on it for steps 2 and 3. 

B. Cases have protagonists (key players), and problems are generally viewed from a particular protagonist’s  perspective. You need to identify the perspective—employee, manager, team, or the organization—from  which you’re defining the problem.  

C. Use details in the case to identify the key problem. Don’t assume, infer, or create problems that are not  included in the case.  

D. To refine your choice, ask yourself, Why is this a problem? Explaining why helps refine and focus your  thinking. Focus on topics in the current chapter, because we generally select cases that illustrate concepts in  the current chapter. 

Step 2: Identify causes of the problem by using material from this chapter, which has been summarized in the  Organizing Framework shown in Figure 4.5. Causes will appear in either the Inputs box or the Processes box.  A. Start by looking at Figure 4.5 to identify which person factors, if any, are most likely causes of the defined 

problem. For each cause, explain why this is a cause of the problem. Asking why multiple times is more likely  to lead you to root causes of the problem. For example, if you think demographics—an input in the  Organizing Framework—is a cause, ask yourself why. This might lead to the conclusion that there are not 

enough females and minorities who are taking STEM majors in college. In turn, this might lead to the  conclusion that a poor pipeline is a root cause of demographics at technology companies. Then ask yourself  why this is happening. The cause might go all the way back to elementary and high school. By following this  process of asking why multiple times, you will be more likely to arrive at a more complete list of causes. 

B. Now consider the Processes box shown in Figure 4.5. Consider whether perception, attributions,  psychological safety, group/team dynamics, or options to manage diversity are causes of the problem. For  any concept that might be a cause, ask yourself, Why is this a cause? Again, do this for several iterations to  arrive at root causes. 

C. Follow the same process for the situation factors.    D. To check the accuracy or appropriateness of the causes, be sure to map them onto the defined problem.    Step 3: Make recommendations for solving the problem. Consider whether you want to resolve it, solve it, or  dissolve it (see Section 1.5). Which recommendation is desirable and feasible?  A. Given the causes identified in Step 2, what are your best recommendations? Use the content

in Chapter 4 or one of the earlier chapters to propose a solution. B. Potential solutions may be found in the OB in Action and Applying OB boxes within the chapter.

These features provide insights about how other individuals or companies are handling the topic at hand.

C. Create an action plan for implementing your recommendations.

Legal/Ethical Challenge Swastikas and Neonatal Care This case describes an incident that occurred at Hurley Medical Center in Michigan and resulted in a lawsuit.

Tonya Battle, a veteran black nurse in Hurley’s neonatal intensive care unit, was taking care of a baby when a  man with a swastika tattoo walked into the unit and reached for the baby. Battle stopped him and asked to see  the hospital wristband that identified him as the baby’s parent. “He abruptly told her he wanted to see her  supervisor, who then advised Battle she should no longer care for the child," according to USA Today.126 The man  had requested that no African American nurses should take care of his child.  A note was subsequently put on the assignment clipboard saying, “No African American nurse to take care of  baby.” Battle was “shocked, offended, and in disbelief that she was so egregiously discriminated against based on  her race and reassigned, according to the lawsuit, which asks for punitive damages for emotional stress, mental  anguish, humiliation, and damages to her reputation," according to a reporter from the Arizona Republic.127 Battle could not understand why the hospital would accommodate the man’s request. Although the  note was later removed, black nurses were not allowed to care for the child for about a month.  The Arizona Republic newspaper reported that the “American Medical Association’s ethics code bars doctors  from refusing to treat people based on race, gender, and other criteria, but there are no specific policies for  handling race‐based requests from patients.” Further, a survey of “emergency physicians found patients often  make such requests, and they are routinely accommodated. A third of doctors who responded said they felt  patients perceive better care from providers of shared demographics, with racial matches considered more  important than gender or religion.”128 

Your Views

What would you have done if you were a medical administrator at the time the request was made?

1. I would not have honored the man’s request. I would have explained why Tonya Battle and other African American nurses are best suited to take care of his child.

2. I would have done exactly what the hospital did. The man has a right to have his child taken care of by someone of a race or gender of his choosing.

What would you do about the lawsuit? 

1. Fight it. It’s ridiculous that someone would feel emotional stress and humiliation from simply being reassigned.

2. Settle it and create a policy that prohibits honoring future requests like this. 3. Settle it but hold a hospitalwide meeting explaining the rationale for continuing

5 FOUNDATIONS OF EMPLOYEE MOTIVATION VATION How Can I Apply Motivation Theories? MAJOR TOPICS I’LL LEARN AND QUESTIONS I SHOULD BE ABLE TO ANSWER

1. 5.1 THE WHAT AND WHY OF MOTIVATION 

MAJOR QUESTION: What is motivation and how does it affect my behavior? 2. 5.2 

CONTENT THEORIES OF MOTIVATION 

MAJOR QUESTION: How would I compare and contrast the content theories of motivation? 3. 5.3 

PROCESS THEORIES OF MOTIVATION 

MAJOR QUESTION: How would I compare and contrast the process theories of motivation? 4. 5.4 

MOTIVATING EMPLOYEES THROUGH JOB DESIGN 

MAJOR QUESTION: How are top‐down approaches, bottom‐up approaches, and “idiosyncratic deals” similar and different? The Organizing Framework for Understanding and Applying OB shown in Figure 5.1 summarizes what you will learn in this chapter. Although Chapter 5 focuses on motivation, an individual-level process, a host of person and situation factors influence it. There are more situation than person factors in the figure. This reinforces the simple fact that managers significantly affect our motivation because they have more control over situation than person factors. Figure 5.1 further shows that processes across the individual, group/team, and organizational level influence a variety of important outcomes. FIGURE 5.1 Organizing Framework for Understanding and Applying O

B

Winning at Work Discussing Pay at Work Ever wonder how your pay compares to that of a coworker? Brian Bader did. Bader had just been hired for a technology-support job at Apple for $12 per hour and was told not to discuss salary with other employees. This requirement made him curious, so he decided to ask coworkers about their salary and found that most people were being paid between $10 and $12 per hour.

Pay Inequity Bader was not upset about his relative pay level at first, but it later became the reason he decided to quit his job. He learned from performance data shared with work teams that he was twice as productive as the lowest performer on the team yet earned only 20 percent more. “It irked me. If I’m doing double the work, why am I not seeing double the pay?” he said when interviewed for The Wall Street Journal.1 In OB we see Bader’s situation as an example of pay inequity. How do Companies Handle Decisions about Pay? Many companies tell employees not to discuss pay with coworkers. Some threaten to fire those who do. Why? Quite simply, when such disparities become public, they lead to feelings of inequity, which in turn lowers employee engagement, motivation, and performance. Dr. Kevin Hallock, dean of industrial and labor relations at Cornell University, said companies keep pay secret because they “aren’t very good at explaining to employees why they’re being paid what they’re paid, or what they must do to earn more.”2 Pay secrecy does not sit well with younger employees like Millennials, who are more willing than earlier generations to talk about pay and even discuss it on social media. Some companies, such as Whole Foods Market, SumAll, and Buffer, are less secretive. Buffer, a small social media marketing and analytics firm, posts all employees’ salaries online, including their names, along with revenue, sales, and the company’s formula for setting salaries.3 Would you like to work at Buffer?

The Wall Street Journal recently offered advice for how companies should handle pay secrecy. Based on OB research covered in this chapter, the writer suggested companies should open up about pay and allow employees to freely talk about their pay concerns. This includes showing pay data on company intranets and performance information by unit. Showing the link between pay and performance is one way to make pay decisions transparent.4 Should You Discuss Pay While at Work? The answer depends on your role and position. Experts contend that the National Labor Relations Act prohibits companies from stopping the rank and file (employees paid by the hour) from discussing salary and benefits packages outside work time. “Outside work time” means on social media as well. T-Mobile was recently found guilt of violating national labor laws by prohibiting employees from talking with each other about wages. The rules are different, however, for managers and supervisors, who can legally be prevented from discussing their pay.5 If you decide to discuss pay at work, keep the following recommendations in mind: (1) understand your company’s policy on the matter, (2) restrict your conversations to people you trust, and (3) don’t brag about your pay.

What’s Ahead in This Chapter There are far too many dysfunctional organizations where managers don’t seem to have a clue about how to motivate workers. OB supplies proven methods of how to motivate employees. These aren’t just abstract theories. All spring from observation and study of the workplace, and they have been validated in real-life testing. Business professionals treasure them as tools for making work better and more productive. We’ll show you how these methods operate and give practical tips and suggestions for implementing them.

THE WHAT AND WHY OF MOTIVATION MAJOR QUESTION

What is motivation and how does it affect my behavior? THE BIGGER PICTURE Motivation is a key process within the Organizing Framework for Understanding and Applying OB. Understanding the principles of motivation can help you both achieve personal goals and manage others in the pursuit of organizational goals. Motivation theories help us understand our own behaviors in organizational settings and provide us tools for motivating others.

Motivation: What Is It? Motivation explains why we do the things we do. It explains why you are dressed the way you are right now, and it can account for what you plan to do this evening.

How Does It Work? The term motivation derives from the Latin word movere, meaning “to move.” In the present context, motivation describes the psychological processes “that underlie the direction, intensity, and persistence of behavior or thought.”6 “Direction pertains to what an individual is attending to at a given time, intensity represents the amount of effort being invested in the activity, and persistence represents for how long that activity is the focus of one’s attention.”7

Bindi Irwin, on the left, and Derek Hough won the 2015 Dancing with the Stars competition. The smiles on their  faces show the intrinsic motivation that performers in many fields feel during and after competing. Performers in 

many arenas—not just competitive dancing—are motivated to excel by extrinsic factors, such as prize money,  praise, recognition from others, and titles. However, often the key motivators are also, or instead, intrinsic, like a  feeling of challenge and accomplishment.© Amanda Edwards/WireImage/Getty Images

There are two types of motivation: extrinsic and intrinsic.

 Extrinsic motivation results from the potential or actual receipt of external rewards. Extrinsic rewards such as recognition, money, or a promotion represent a payoff we receive from others for performing a particular task. For example, the Air Force is offering a bonus to drone pilots if they extend their commitment to remain in the military. These pilots can earn a $15,000 annual bonus by extending for either five or nine years, and they have the option to receive half the total bonus up front. The Air Force is doing this because the demand for drone pilots exceeds the supply.8

 Intrinsic motivation occurs when an individual is inspired by “the positive internal feelings that are generated by doing well, rather than being dependent on external factors (such as incentive pay or compliments from the boss) for the motivation to work effectively.”9 We create our own intrinsic motivation by giving ourselves intrinsic rewards such as positive emotions, satisfaction, and self-praise. Consider the intrinsic motivation of the 2015 winners of Dancing with the Stars—Bindi Irwin and Derek Hough. The joy on their faces demonstrates the engagement and fun they are having while dancing.

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The Two Fundamental Perspectives on Motivation: An Overview Researchers have proposed two general categories of motivation theories: content theories and process theories. Content theories identify internal factors such as needs and satisfaction that energize employee motivation. Process theories explain the process by which internal factors and situational factors influence employee motivation.10 It's important to understand both motivational perspectives because they offer different solutions for handling motivational problems. The following two sections discuss several theories for each theoretical perspective.

CONTENT THEORIES OF MOTIVATION MAJOR QUESTION

How would I compare and contrast the content theories of motivation? THE BIGGER PICTURE Five OB theories deal with the internal factors that motivate individuals. Several come from other disciplines. So you may have already encountered Maslow’s hierarchy of needs and related content theories such as McGregor’s Theory X and Theory Y, acquired needs theory, self‐determination theory, and Herzberg’s motivator‐hygiene theory. Most content theories of motivation are based on the idea that an employee’s needs influence his or her motivation. Content theorists ask, “What are the different needs that activate motivation’s direction, intensity, and persistence?” Needs are defined as physiological or psychological deficiencies that arouse behavior. They can be strong or weak and are influenced by environmental factors. This tells you that human needs vary over time and place. Content theories include:  McGregor’s Theory X and Theory Y.  Maslow’s need hierarchy theory.  Acquired needs theory.

 Self-determination theory.  Herzberg’s motivator-hygiene theory.

McGregor’s Theory X and Theory Y Douglas McGregor outlined his theory in his book The Human Side of Enterprise.11 Drawing on his experience as a management consultant, McGregor formulated two sharply contrasting sets of assumptions about human nature. Theory X is a pessimistic view of employees: They dislike work, must be monitored, and can be motivated only with rewards and punishment (“carrots and sticks”). McGregor felt this was the typical perspective held by managers. To help them break with this negative tradition, McGregor formulated his own Theory Y. Theory Y is a modern and positive set of assumptions about people at work: They are self‐engaged, committed, responsible, and creative. Consider the value of adopting a Theory Y approach toward people. One recent study demonstrated that employees and teams had higher performance when their managers displayed Theory Y behaviors. A second study uncovered higher levels of job satisfaction, organizational commitment, and organizational citizenship when managers engaged in Theory Y behaviors.12

Maslow’s Need Hierarchy Theory: Five Levels of Needs In 1943, psychologist Abraham Maslow published his now-famous need hierarchy theory of motivation. Although the theory was based on his clinical observation of a few neurotic individuals, it has subsequently been used to explain the entire spectrum of humanPage 165 behavior. The need hierarchy theory states that motivation is a function of five basic needs: physiological, safety, love, esteem, and self‐actualization. See Figure 5.2 for an explanation. FIGURE 5.2    Maslow’s need hierarchy

The Five Levels Maslow proposed that the five needs are met sequentially and relate to each other in a “prepotent” hierarchy (see Figure 5.2). Prepotent means the current most-pressing need will be met before the next need becomes the most powerful or potent. In other words, Maslow believed human needs generally emerge in a predictable stair-step fashion. Thus when physiological needs have been met, safety needs emerge, and so on up the need hierarchy, one step at a time. Once a need has been satisfied, it activates the next higher need in the hierarchy. This process continues until the need for self-actualization has been activated.13

Using Maslow’s Theory to Motivate Employees Although research does not clearly support its details, Maslow’s theory does offer practical lessons. It reminds us, for instance, that employees have needs beyond earning a paycheck. The hotel chain J.W. Marriott offers health care benefits, filling a physiological need, if hourly employees work 30 hours a week. The company also has companywide awards events, flexible scheduling, and steep travel discounts. The company’s headquarters includes a gym, dry cleaner, gift store, day care, and preferred parking for hybrid vehicles. Marriott also offers an array of wellness initiatives and an employee assistance line in multiple languages.14 This theory tells us that a “one style fits all” approach to motivation is unlikely to work. For example, studies show that different motivators are needed for employees working at small firms. George Athan, CEO of MindStorm Strategic Consulting, aptly noted, “People go to small companies to be part of something that will grow. They like the flexibility, too. The more they are involved in decision making, the more they feel it’s their mini-company.”15 A final lesson of Maslow’s theory is that satisfied needs lose their motivational potential. Therefore, managers are advised to motivate employees by devising programs or practices aimed at satisfying emerging or unmet needs.

Acquired Needs Theory: Achievement, Affiliation, and Power David McClelland, a well-known psychologist, began studying the relationship between needs and behavior in the late 1940s. He proposed the acquired needs theory, which states that three needs—for achievement, affiliation, and power—are the key drivers of employee behavior.16 McClelland used the term “acquired needs” because he believes we are not born with our needs; rather we learn or acquire them as we go about living our lives. Page 166

The Three Acquired Needs McClelland’s theory directs managers to drive employee motivation by appealing to three basic needs:  Need for achievement, the desire to excel, overcome obstacles, solve problems, and rival

and surpass others.  Need for affiliation, the desire to maintain social relationships, be liked, and join groups.  Need for power, the desire to influence, coach, teach, or encourage others to achieve. People vary in the extent to which they possess these needs, and often one need dominates the other two (see Figure 5.3). FIGURE 5.3    Mcclelland’s three needs

McClelland identified a positive and negative form of the power need. The positive side is called the need for institutional power. It manifests in the desire to organize people in the pursuit of organizational goals and help people obtain the feeling of competence. The negative face of

power is called the need for personal power. People with this need want to control others, and they often manipulate people for their own gratification. You can use this theory to motivate yourself, assuming you are aware of your need states. Can you guess which of the three needs is most dominant? Would you like to know which is helping or hindering the achievement of your personal goals? Check your perceptions by taking the acquired needs Self-Assessment.

SELF-ASSESSMENT 5.1 ASSESSING YOUR ACQUIRED NEEDS Please be prepared to answer these questions if your instructor has assigned Self- Assessment 5.1 in Connect.

1. Which of the three needs is dominant for you? Are you surprised by this result? 2. Which is/are helping you to achieve your goals? 3. Are any of the needs affecting your level of well-being? Should you make any changes in your need states?

Using Acquired Needs Theory to Motivate Others The following OB in Action box illustrates how Cameron Mitchell’s acquired needs affected the way he ran his successful restaurant business.

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OB IN ACTION CAMERON MITCHELL, FOUNDER AND CEO OF CAMERON MITCHELL RESTAURANTS, EXEMPLIFIES ACQUIRED NEEDS Cameron Mitchell has achieved his childhood dream of running a successful restaurant business. He currently runs 48 upscale restaurants such as Hudson 29 and Ocean Prime in 18 cities. His business earns about $250 million in annual revenue.

Cameron Mitchell  Courtesy of Cameron Mitchell Restaurants

Mitchell’s primary goal was “to create an extraordinary restaurant company known for great people delivering genuine hospitality.” He says, “In order to achieve this goal, I could not do it on my own! In fact, our past, present, and future success is directly attributed to our associates.”18 You might not have foreseen Mitchell’s success based on his difficult childhood. His parents divorced when he was 9, and he began drinking alcohol and trying drugs in middle school. When he started dealing drugs in high school, his mom threatened to call child protective services. Mitchell decided to run away.

He moved into a one-room apartment with other teens and sometimes went days without food. He decided to return home at 16 when he found himself thinking about suicide. He went back to high school and took a job as a dishwasher at a local steak house. He loved the job and concluded, “The restaurant business was where I wanted to be the rest of my life.”

When Mitchell’s application to the Culinary Institute of America was rejected due to his poor grades, he became more driven. He started working double shifts so he could pay for community college. He eventually graduated from culinary school and began working as a sous chef. Mitchell opened his first restaurant in 1993 in Columbus, Ohio. It was a success!19 The growth of Mitchell’s business was based on an underlying philosophy of “people first.” The company's website states that it “doesn’t just hire great people, it also treats them well. This inspires them to radiate a genuine hospitality that guests, vendors, and the community at large can feel and appreciate.”20 The company’s commitment to its employees shows in the wide array of benefits it offers, which exceed industry standards. It also rewards restaurant managers who support and develop their teams. Mitchell believes associates should have trusting, caring relationships with each other. He encourages managers’ autonomy by allowing them to provide input on menu and wine selection decisions. The company further reinforces the value of autonomy and effective decision making with leadership training programs. Managers are taught “how to think (rather than ‘how to do’). The goal is to encourage creative, appropriate problem-solving and idea generation," according to the company's website.”21 YOUR THOUGHTS?

1. Which of the three acquired needs is most pronounced in this example? 2. Would you like to work for someone like Cameron Mitchell? Why?

You can apply acquired needs theory by appealing to the preferences associated with each need when you (1) set goals, (2) provide feedback, (3) assign tasks, and (4) design the job.17 Let's consider how the theory applies to Cameron Mitchell.  Need for achievement. People motivated by the need for achievement, like Cameron

Mitchell, prefer working on challenging, but not impossible, tasks or projects. They like situations in which good performance relies on effort and ability rather than luck, and they like to be rewarded for their efforts. High achievers also want toPage 168 receive a fair and balanced amount of positive and negative feedback. This enables them to improve their performance.

 Need for affiliation. People motivated by the need for affiliation like to work in teams and in organizational climates characterized as cooperative and collegial. You clearly see this theme at work in Cameron Mitchell’s restaurants.

 Need for power. People with a high need for power like to be in charge. They enjoy coaching and helping others develop. Cameron Mitchell seems to exemplify this need.

Self‐Determination Theory: Competence, Autonomy, and Relatedness Self-determination theory was developed by psychologists Edward Deci and Richard Ryan. In contrast to McClelland’s belief that needs are learned over time, this theory identifies innate needs that must be satisfied for us to flourish. Self‐determination theory assumes that three innate needs influence our behavior and well‐being—the needs for competence, autonomy, and relatedness.22 Self-Determination Theory Focuses on Intrinsic Motivation Self-determination theory focuses on the needs that drive intrinsic motivation. Intrinsic motivation is longer lasting and has a more positive impact on task performance than extrinsic motivation.23 The theory proposes that our needs for competence, autonomy, and relatedness produce intrinsic motivation, which in turn enhances our task performance. Research supports this proposition.24 The Three Innate Needs An innate need is a need we are born with. The three innate needs are: 1. Competence—“I need to feel efficacious.” This is the desire to feel qualified, knowledgeable,

and capable to complete an act, task, or goal. 2. Autonomy—“I need to feel independent to influence my environment.” This is the desire

to have freedom and discretion in determining what you want to do and how you want to do it.

3. Relatedness—“I want to be connected with others.” This is the desire to feel part of a group, to belong, and to be connected with others.

Although the above needs are assumed to be innate, according to Deci and Ryan their relative value can change over our lives and vary across cultures.

Using Self-Determination Theory to Motivate Employees Managers can apply self-determination theory by trying to create work environments that support and encourage the opportunity to experience competence, autonomy, and relatedness. Here are some specific suggestions:  Competence. Managers can provide tangible resources, time, contacts, and coaching to

improve employee competence. They can make sure employees have the knowledge and information they need to perform their jobs. The J.W. Marriott hotel chain instills competence by providing employees developmental opportunities and training. Daniel Nadeau, general manager of the Marriott Marquis Washington, D.C., said, “The biggest perk is the opportunity.” He started at Marriott busing tables in high school and then worked his way up through sales, marketing, and operations. “A culture of mentorship is what pulled him along,” according to Nadeau.25

John Willard Marriott, Jr., is the executive chairman and chairman of the board of Marriott International. He joined the company in 1956 and was promoted to president in 1964 and CEO in 1972. His leadership philosophy is one of being a servant leader. This belief focuses on placing the needs of others above self-interests. We suspect this is one reason Marriott International has a progressive stance toward developing and improving the lives of its employees. He has been married for over 50 years.© Nikki Kahn/The Washington Post/Getty Images

 Autonomy. Managers can empower employees and delegate meaningful assignments and tasks to enhance feelings of autonomy. This in turn suggests they should Page 169 support decisions their employees make. A recent study confirmed this conclusion. Employees’ intrinsic motivation was higher when they perceived that their manager supported them.26 Unilever implemented the Agile Working program in support of autonomy. According to a writer for HR Magazine, the program allows “100,000 employees—everyone except factory production workers—to work anytime, anywhere, as long as they meet business needs. To support the effort, the company is investing in laptops, videoconferencing, soft-phones and smartphones, remote networks, webcams, and other technologies that help curtail travel.”27

 Relatedness. Many companies use fun and camaraderie to foster relatedness. Nugget Market, an upscale supermarket chain in Sacramento, builds relatedness by creating a family-type work environment. One employee described the climate in this way: “The company doesn’t see this as a workplace; they see it as a family. This is our home, where customers are treated as guests.”28 A positive and inspiring corporate vision also can create a feeling of commitment to a common purpose. For example, Lars Sørensen, CEO of Novo Nordisk, a global health care company specializing in diabetes treatments, believes his employees are intrinsically motivated by the thought of saving lives. “Without our medication,” he said, “24 million people would suffer. There is nothing more motivating for people than to go to work and save people’s lives.”29

Herzberg’s Motivator‐Hygiene Theory: Two Ways to Improve Satisfaction Frederick Herzberg’s theory is based on a landmark study in which he interviewed 203 accountants and engineers.30 These interviews, meant to determine the factors responsible for job satisfaction and dissatisfaction, uncovered separate and distinct clusters of factors associated with each. This pattern led to the motivator‐hygiene theory, which proposes that job satisfaction and dissatisfaction arise from two different sets ofPage 170 factors— satisfaction comes from motivating factors and dissatisfaction from hygiene factors.  Hygiene factors—What makes employees dissatisfied? Job dissatisfaction was associated

primarily with factors in the work context or environment. Herzberg hypothesized that such hygiene factors—including company policy and administration, technical supervision, salary, interpersonal relationships with supervisors, and working conditions—cause a person to move from a state of no dissatisfaction to dissatisfaction. He did not believe their removal created an immediate impact on satisfaction or motivation (for that, see motivating factors following). At best, Herzberg proposed that individuals will experience the absence of job dissatisfaction when they have no grievances about hygiene factors.

 Motivating factors—What makes employees satisfied? Job satisfaction was more frequently associated with factors in the work content of the task being performed. Herzberg labeled these motivating factors or motivators because each was associated with strong effort and good performance. He hypothesized that such motivating factors, or motivators— including achievement, recognition, characteristics of the work, responsibility, and advancement—cause a person to move from a state of no satisfaction to satisfaction. Therefore, Herzberg’s theory predicts managers can motivate individuals by incorporating motivators into an individual’s job.

For Herzberg, the groups of hygiene and motivating factors did not interact. “The opposite of job satisfaction is not job dissatisfaction, but rather no job satisfaction; and similarly, the opposite of job dissatisfaction is not job satisfaction, but no dissatisfaction.”31 Herzberg conceptualizes dissatisfaction and satisfaction as two parallel continuums. The starting point is a null state in which both dissatisfaction and satisfaction are absent. Theoretically an organization member could have good supervision, pay, and working conditions (no dissatisfaction) but a tedious and unchallenging task with little chance of advancement (no satisfaction), as illustrated in Figure 5.4. FIGURE 5.4    Role of job content and job context in job satisfaction and dissatisfaction

Managerial View of Job Satisfaction and Dissatisfaction Insights from Herzberg’s theory allow managers to consider the dimensions of both job content and job context so they can manage for greater overall job satisfaction. There is one aspect of this theory we think is wrong, however. We believe you can satisfy and motivate people by providing good hygiene factors. The Container Store, regularly rated as one of the top five companies to work for by Fortune, is a good example. The company pays retail hourly salespeople roughly double the industry average, approximately $50,000 a year in Page 171 2014.32 Its rate of employee turnover, about 5.7 percent, is significantly lower than the industry average of 74.9.33 Other companies seem to agree with our conclusion, because they have been offering a host of hygiene factors in an attempt to attract and retain Millennials. A recent survey of 463 human resource managers revealed that “some 21 percent of employers offer on-site fitness centers, 22 percent provide free snacks and drinks, and 48 percent offer community-volunteer programs.”34 Using Herzberg’s Theory to Motivate Employees Research does not support the two-factor aspect of Herzberg’s theory, nor the proposition that hygiene factors are unrelated to job satisfaction. However, three practical applications of the theory help explain why it remains important in OB. 1. Hygiene first. There are practical reasons to eliminate dissatisfaction before trying to use

motivators to increase motivation and performance. You will have a harder time motivating someone who is experiencing pay dissatisfaction or otherwise struggling with Herzberg’s hygiene factors.

2. Motivation next. Once you remove dissatisfaction, you can hardly go wrong by building motivators into someone’s job. This suggestion represents the core idea behind the technique of job design that is discussed in the final section of this chapter.

3. A few well‐chosen words. Finally, don’t underestimate the power of verbal recognition to reinforce good performance. Savvy managers supplement Herzberg’s motivators with communication. Positive recognition can fuel intrinsic motivation, particularly for people who are engaged in their work.

PROBLEM‐SOLVING APPLICATION What's Going on at the Arizona Department of Child Safety? The Arizona Department of Child Safety (DCS) is having motivational issues with its employees. The agency defines itself as “a human service organization dedicated to achieving safety, well-being and permanency for children, youth, and families through leadership and the provision of quality services in partnership with communities.”35 The overall turnover rate at the agency is 24.5 percent. It’s even higher for caseworkers (36 percent), the people who directly work with the children and families. Among those who stay, the number taking time off under the federal Family and Medical Leave Act recently increased 68 percent over the preceding year.

Current and former employees complain about “crushing workloads and fear-based management.” Former employees said they quit because of stress associated with growing caseloads and unrealistic expectations from management. As of December 2015 caseloads were 30 to 50 percent higher than the agency’s standard.

When Greg McKay was hired to head the agency in 2015, he fired almost all senior managers and brought in his own team, promoting some from within. McKay is

trying to make changes to reduce the caseload burden. The Arizona Republic reported that he is “seeking more support staff in the upcoming state budget to free caseworkers from some of the more clerical aspects of their jobs. He’s revamping the pay system to keep tenured staff on board, and has restored a training program in Tucson.” Pay raises might help retain staff. The entry-level salary for caseworkers is $33,000. Overall, the average agency salary is $41,360.36 A study by the Annie E. Casey Foundation ranked Arizona’s child welfare system 46th in the nation. The ranking was based on the number of children that are experiencing out-of-home care. According to a Phoenix New Times reporter, this rating is partly due to the fact that “few frontline employees lastPage 172 beyond three years, and there are never enough caseworkers to meet demand. There’s a lack of funding for preventative and poverty-assistance programs, and because of a perpetual shortage of foster homes, kids frequently end up sleeping in DCS offices for a night or two before being placed with families.”37 The Phoenix New Times investigative report on the DCS revealed that problems may have gotten worse under McKay’s leadership. According to the office of state senator Debbie McCune Davis, she has received “all sorts of phone calls from all sorts of people who have been pushed out of the agency or have left voluntarily and just can’t believe what’s going on. We hear a lot about people leaving the agency out of frustration, about firings or other changes at the top.” McCune Davis said employees “are afraid to make decisions based on professional judgment because they’re scared of becoming scapegoats.”38 New Times quoted current and former employees who said McKay was “retaliatory and vindictive.” The report also noted that “DCS has become a place where people are regularly fired for unexplained reasons and where those remaining tiptoe around, waiting and wondering when they’ll be let go.”39 New Times concluded that McKay has a passion for child welfare. But it questioned “whether he has the skills and personality to make DCS succeed.”40 APPLY THE 3‐STEP PROBLEM‐SOLVING APPROACH 1. Step 1:Define the problem in this case.  2. Step 2:Identify the key causes of this problem.   3. Step 3:Make your top two recommendations for fixing the problem at the DCS.   Figure 5.5 illustrates the overlap among the need and satisfaction theories discussed in this section. As you can see, the acquired needs and self-determination theories do not include lower-level needs. Remember, higher-level need satisfaction is more likely to foster well-being and flourishing. FIGURE 5.5    A comparison of need and satisfaction theories

TAKE‐AWAY APPLICATION Increasing My Higher‐Level Needs Consider the content theories of motivation.

1. Which ones include your highest needs? 2. Which needs are most important for your success in school? How about in terms of your current/last/most-desired job? 3. Given that flourishing is related to satisfying higher-order needs, what can you do to incr

PROCESS THEORIES OF MOTIVATION MAJOR QUESTION

How would I compare and contrast the process theories of motivation? THE BIGGER PICTURE Process theories examine the way personal factors and situation factors influence employee motivation. You’ll be considering three major process theories: equity/justice theory, expectancy theory, and goal‐setting theory. Each offers unique ideas for motivating yourself or employees. Process theories of motivation describe how various person factors and situation factors in the Organizing Framework affect motivation. They go beyond content theories by helping you understand why people with different needs and levels of satisfaction behave the way they do at work. In this section we discuss three process theories of motivation:

 Equity/justice theory  Expectancy theory  Goal-setting theory

Equity/Justice Theory: Am I Being Treated Fairly? Defined generally, equity theory is a model of motivation that explains how people strive for fairness and justice in social exchanges or give‐and‐take relationships. According to this theory, people are motivated to maintain consistency between their beliefs and their behavior. Perceived inconsistencies create cognitive dissonance (or psychological discomfort), which in turn motivates corrective action. When we feel victimized by unfair social exchanges, the resulting cognitive dissonance prompts us to correct the situation. This can result in a change of attitude or behavior. Consider what happened when Michelle Fields, a former reporter for Breitbart News, a conservative news and opinion website and radio program, was covering a press conference for Donald Trump during the 2016 presidential campaign.

On November 18, 2015, Michelle Fields, on the left of Donald Trump, approached Trump to ask a question. She  was allegedly grabbed by Trump's then campaign manager, Corey Lewandowski, shown behind and right of  Trump, following a press conference. The response from Breitbart, her employer, created such feelings of  inequity that Fields ultimately resigned. Feelings of inequity can stimulate high levels of motivation to resolve the  inequity.© Richard Graulich/Newscom

After the conference concluded, Fields approached Trump to ask him a question. She alleges that Trump campaign manager Corey Lewandowski “grabbed her by the arm and yanked her away as she attempted to ask her question.” Photos revealed bruises on the reporter’s arm. Ben Terris, a reporter from The Washington Post, witnessed the incident and confirmed that Lewandowski grabbed Fields. Page 174 A senior editor-at-large from Breitbart concluded the event could not have taken place the way Fields described it, despite the eyewitness account and Lewandowski’s admission that he had grabbed her. The editor then instructed Breitbart staffers “not to publicly defend their colleague,” according to The Washington Post. Fields felt betrayed. This created dissonance between her positive views of the organization and the lack of support she received from management. She told a Post reporter, “I don’t think they [management] took my side. They were protecting Trump more than me.”41 She resigned, as did her managing editor in support of Fields. Psychologist J. Stacy Adams pioneered the use of equity theory in the workplace. Let us begin by discussing his ideas and their current application. We then discuss the extension of equity theory into justice theory and conclude by discussing how to motivate employees with both these tools.

The Elements of Equity Theory: Comparing My Outputs and Inputs with Those of Others The key elements of equity theory are outputs, inputs, and a comparison of the ratio of outputs to inputs (see Figure 5.6). FIGURE 5.6    Elements of equity theory  Equity theory compares how well you are doing to how well others are doing in similar jobs. Instead of focusing  just on what you get out of the job (outputs) or what you put into the job (inputs), equity theory compares your  ratio of outputs to inputs to those of others.

Note: Does positive inequity result in satisfaction? Some of us may feel so. But J. Stacy Adams recognized that employees often feel  guilty about positive inequity, just as they might become angry about negative inequity. Your positive inequity is others’ negative  inequity. If your coworkers saw you as being favored unfairly in a major way, wouldn’t they be outraged? How effective could you  be in your job then?

 Outputs—“What do I perceive that I’m getting out of my job?” Organizations provide a variety of outcomes for our work, including pay/bonuses, medical benefits, challenging assignments, job security, promotions, status symbols, Page 175recognition, and participation

in important decisions. Outcomes vary widely, depending on the organization and our rank in it.

 Inputs—“What do I perceive that I’m putting into my job?” An employee’s inputs, for which he or she expects a just return, include education/training, skills, creativity, seniority, age, personality traits, effort expended, experience, and personal appearance.

 Comparison—“How does my ratio of outputs to inputs compare with those of relevant others?” Your feelings of equity come from your evaluation of whether you are receiving adequate rewards to compensate for your collective inputs. In practice people perform these evaluations by comparing the perceived fairness of their output-to-input ratio to that of relevant others (see Figure 5.6). They divide outputs by inputs, and the larger the ratio, the greater the expected benefit. This comparative process was found to generalize across personalities and countries.42

People tend to compare themselves to other individuals with whom they have close interpersonal ties, such as friends, and to whom they are similar, such as people performing the same job or individuals of the same gender or educational level, rather than to dissimilar others. For example, we work for universities, so we consider our pay relative to that of other business professors, not the head football coach.

The Outcomes of an Equity Comparison Figure 5.6 shows the three different equity relationships resulting from an equity comparison: equity, negative inequity, and positive inequity. Because equity is based on comparing ratios of outcomes to inputs, we will not necessarily perceive inequity just because someone else receives greater rewards. If the other person’s additional outcomes are due to his or her greater inputs, a sense of equity may still exist. However, if the comparison person enjoys greater outcomes for similar inputs, negative inequity will be perceived. On the other hand, a person will experience positive inequity when his or her outcome-to-input ratio is greater than that of a relevant comparison person. People tend to have misconceptions about how their pay compares to that of their colleagues. These misconceptions can create problems for employers. Consider the implications of results from a recent study of 71,000 employees. Thirty-five percent of those who were paid above the market—positive inequity—believed they were underpaid, while only 20 percent correctly perceived that they were overpaid. Similarly, 64 percent of the people paid at the market rate— equity—believed they were underpaid.43 In both these cases, significant numbers of equitably treated people perceived a state of inequity. If management fails to correct these perceptions, it should expect lower job satisfaction, commitment, and performance. The Elements of Justice Theory: Distributive, Procedural, and Interactional Justice Beginning in the later 1970s, researchers began to expand the role of equity theory in explaining employee attitudes and behavior. This led to a domain of research called organizational justice. Organizational justice reflects the extent to which people perceive they are treated fairly at work. This, in turn, led to the identification of three different components of organizational justice: distributive, procedural, and interactional.44  Distributive justice reflects the perceived fairness of the way resources and rewards are

distributed or allocated. Do you think fairness matters when it comes to the size of people’s offices? Robert W. Baird & Co., a financial services firm ranked as Fortune’s sixth-best place to work in 2016, did. The company decided to make everyone’s office the same size in its newly renovated headquarters.45

 Procedural justice is the perceived fairness of the process and procedures used to make allocation decisions.

 Interactional justice describes the “quality of the interpersonal treatment people receive when procedures are implemented.”46 Interactional justice does not pertain to the

outcomes or procedures associated with decision making. Instead it focuses on whether people believe they are treated fairly when decisions are being implemented.

Page 176 Tools exist to help us improve our ability to gauge the level of fairness or justice that exists in a current or past job. Try Self‐Assessment 5.2. It contains part of a survey developed to measure employees’ perceptions of fair interpersonal treatment. If you perceive your work organization as interpersonally unfair, you are probably dissatisfied and have contemplated quitting. In contrast, your organizational loyalty and attachment are likely greater if you believe you are treated fairly at work.

SELF-ASSESSMENT 5.2 MEASURING PERCEIVED INTERPERSONAL TREATMENT Please be prepared to answer these questions if your instructor has assigned Self- Assessment 5.2 in Connect.

1. Does the level of fairness you perceive correlate to your work attitudes such as job satisfaction and organizational commitment? 2. What is causing your lowest level of perceived fairness? Can you do anything to change these feelings? 3. What do these results suggest about the type of company you would like to work for after graduation?

The Outcomes Associated with Justice Doesn’t it make sense that your perceptions of justice are related to outcomes in the Organizing Framework? Of course! This realization has generated much research into organizational justice over the last 25 years. We created Figure 5.7 to summarize these research findings. The figure shows the strength of relationships between nine individual-level outcomes and the three components of organizational justice. By and large, distributive and procedural justice have consistently stronger relationships with outcomes. This suggests that managers would be better off paying attention to these two forms of justice. In contrast, interactional justice is not a leading indicator in any instance. FIGURE 5.7    Outcomes associated with justice components  The three components of organizational justice have varying effects on workplace outcomes, listed here in rough  order from strongest to weakest. Note that job satisfaction and organizational commitment lead the list and most  strongly align with justice components.

SOURCE: J. M. Robbins, M. T. Ford, and L. E. Tetrick, “Perceived Unfairness and Employee Health: A Meta‐Analytic  Integration,” Journal of Applied Psychology, March 2012, 235–272; N. E. Fassina, D. A. Jones, and K. L. Uggerslev, “Meta‐Analytic  Tests of Relationships between Organizational Justice and Citizenship Behavior: Testing Agent‐System and Shared‐Variance  Models,” Journal of Organizational Behavior, August 2008, 805–828; Y. Chen‐Charash and P. E. Spector, “The Role of Justice in  Organizations: A Meta‐Analysis,” Organizational Behavior and Human Decision Processes, November 2001, 278–321; and J. A.  Colquitt, D. E. Conlon, M. J. Wesson, C. O. L. H. Porter, and K. Y. Ng, “Justice at the Millennium: A Meta‐Analytic Review of 25 Years 

of Organizational Justice Research,” Journal of Applied Psychology, June 2001, 426.

You can also see that certain outcomes, such as job satisfaction and organizational commitment, have stronger relationships with justice. All told, however, the majority of relationships between justice and important OB outcomes are weak. This reinforces the conclusion that motivating people via justice works for some outcomes but not for others.

Using Equity and Justice Theories to Motivate Employees Figure 5.7 notwithstanding, managers can’t go wrong by paying attention to employees’ perceptions of equity and justice at work. Here are five practical lessons to help you apply equity and justice theories. 1. Employee perceptions count. No matter how fair management thinks the organization’s

policies, procedures, and reward system are, each employee’s perception of the equity of those factors is what counts. For example, females were found to be more sensitive to injustice when it came to procedural and distributive issues regarding rewards.47 Further, justice perceptions can change over time.48 This implies that it is important for managers to regularly assess employees’ justice beliefs. Companies tend to do this by using annual employee work attitude surveys.

2. Employees want a voice in decisions that affectthem. Employees’ perceptions of justice are enhanced when they have a voice in the decision-making process. Voice is the discretionary or formal expression of ideas, opinions, suggestions, or alternative approaches directed to a specific target inside or outside of the organization with the intent to change an objectionable state of affairs and to improve the current functioning of the organization.”49 Managers are encouraged to seek employee input on organizational issues that are important to employees, even though many employees are reluctant to use their “voice.” Mission Produce Inc., a large producer of avocados, took this recommendation to heart. According to HR chief Tracy Malmos, the companyPage 177 “implemented a pay structure in response to young employees' requests to 'take the mystery out of compensation.'”50 Managers can overcome these roadblocks to gaining employee input by creating a voice climate. A voice climate is one in which employees are encouraged to freely express their opinions and feelings.51

3. Employees should have an appeals process. Employees should be given the opportunity to appeal decisions that affect their welfare. This opportunity fosters perceptions of distributive and procedural justice.

4. Leader behavior matters. Employees’ perceptions of justice are strongly influenced by their managers’ leadership behavior and the justice-related implications of their decisions, actions, and public communications. For example, employees at Honeywell feltPage 178 better about being asked to take furloughs—in which they go on unpaid leave but remain employed—when they learned that David Cote, the company’s chair and CEO, did not take his $4 million bonus during the time employees were furloughed.52

5. A climate for justice makes a difference. Team performance was found to be higher in companies that possessed a climate for justice.53 Do you think it’s OK for customers to yell at retail or service employees or treat them rudely? We don’t! A climate for justice incorporates relationships between employees and customers. Employees are more likely to provide poor customer service when managers allow customers to treat employees rudely or disrespectfully.54

And as for you? You can work to improve equity ratios through your behavior or your perceptions. For example, you could work to resolve negative inequity by asking for a raise or a promotion (raising your outputs) or by working fewer hours or exerting less effort (reducing your inputs). You could also resolve the inequity cognitively, by adjusting your perceptions of the value of your salary or other benefits (outcomes) or the value of the actual work you and your coworkers do (inputs).

Expectancy Theory: Does My Effort Lead to Desired Outcomes?

Are you motivated to climb Mt. Everest? Expectancy theory suggests you would not be motivated to pursue this  task unless you believed you could do it and you believed the rewards were worth the effort and risks. Erik  Weihenmayer, shown climbing, was motivated to pursue his quest to become the first blind person to reach the  summit. He made it! It is truly amazing what one can achieve when motivation is coupled with ability.© AF archive/Alamy

Expectancy theory holds that people are motivated to behave in ways that produce desired combinations of expected outcomes. Generally, expectancy theory can predict behavior in any situation in which a choice between two or more alternatives must be made. For instance, it can predict whether we should quit or stay at a job, exert substantial or minimal effort at a task, and major in management, computer science, accounting, marketing, psychology, or communication. Page 179 The most widely used version of expectancy theory was proposed by Yale professor Victor Vroom. We now consider the theory’s key elements and recommendations for its application. The Elements of Vroom’s Expectancy Theory: Expectancy, Instrumentality, and Valence Motivation, according to Vroom, boils down to deciding how much effort to exert in a specific task situation. This choice is based on a two-stage sequence of expectations—moving from effort

to performance and then from performance to outcome. Figure 5.8 shows the major components of this theory. FIGURE 5.8    Major elements of expectancy theory

Let us consider the three key elements of Vroom’s theory. 1. Expectancy—“Can I achieve my desired level of performance? An expectancy represents

an individual’s belief that a particular degree of effort will be followed by a particular level of performance. Expectancies take the form of subjective probabilities. As you may recall from a course in statistics, probabilities range from zero to one. An expectancy of zero indicates that effort has no anticipated impact on performance, while an expectancy of one suggests performance is totally dependent on effort.

EXAMPLE Suppose you do not know how to use Excel. No matter how much effort you exert, your perceived probability of creating complex spreadsheets that compute correlations will be zero. If you decide to take an Excel training course and practice using the program a couple of hours a day for a few weeks (high effort), the probability that you will be able to create spreadsheets that compute correlations will rise close to one. Research reveals that employees’ expectancies are affected by a host of factors. Some of the more important ones include self-efficacy, time pressures, task difficulty, ability and knowledge, resources, support from peers, leader behavior, and organizational climate.55

2. Instrumentality—“What intrinsic and extrinsic rewards will I receive if I achieve my desired level of performance?” Instrumentality is the perceived relationship between performance and outcomes. It reflects a person’s belief that a particular outcome is contingent on accomplishing a specific level of performance. Passing exams, for instance, is instrumental in graduating from college, or put another way, graduation is contingent on passing exams. Twitter decided to make bonuses instrumental in employees’ staying around. That’s right! Because too many employees were leaving, some were offered bonuses ranging from $50,000 to $200,000 just for remaining at the company for six to 12 months.56 The Problem‐Solving Application Page 180box illustrates how various boards of directors are reducing the instrumentality between CEO pay and corporate performance. Do you think this is a good idea?

3. Valence—“How much do I value the rewards I receive?” Valence describes the positive or negative value people place on outcomes. Valence mirrors our personal preferences. For

example, most employees have a positive valence for receiving additional money or recognition. In contrast, being laid off or being ridiculed for making a suggestion would likely be negative valence for most individuals. In Vroom’s expectancy model, outcomes are consequences that are contingent on performance, such as pay, promotions, recognition, or celebratory events. For example, Aflac hosted a six-day appreciation week for employees that included theme park visits, movie screenings, and daily gifts.57 Would you value these rewards? Your answer will depend on your individual needs.

PROBLEM‐SOLVING APPLICATION Corporate Boards Decide to Lower the Instrumentalities between CEO Performance and Pay Alpha Natural Resources, a coal producer, gave CEO Kevin Crutchfield a $528,000 bonus after having the largest financial loss in the company’s history. The board said it wanted to reward him for his “tremendous efforts” in improving worker safety. This “safety bonus” was not tied to any corporate goals, and the company had never before paid a specific bonus just for safety.

The board at generic drugmaker Mylan made a similar decision, giving CEO Robert Coury a $900,000 bonus despite poor financial results. The board felt the results were due to factors like the European sovereign-debt crisis and natural disasters in Japan. Not to be outdone, the board at Nationwide Mutual Insurance doubled its CEO’s bonus, “declaring that claims from U.S. tornadoes shouldn’t count against his performance metrics.”

The New York Times reported that former Walmart US CEO Bill Simon also was rewarded for missing his goals. He was promised a bonus of $1.5 million if US net sales grew by 2 percent. Net sales ultimately grew by 1.8 percent, but the company still paid the bonus. The Times said this occurred because the company “corrected for a series of factors that it said were beyond Simon’s control.” Hourly wage bonuses for Walmart associates who perform below expectations are zero. Apparently, what’s good for the company’s CEO is not good for associates.58 Is It Good to Relax Instrumentalities between Performance and Pay? Companies relax instrumentalities between performance and pay because they want to protect executives from being accountable for things outside their control, like a tornado or rising costs in natural resources. While this may make sense, it leaves open the question of what to do when good luck occurs instead of bad. Companies do not typically constrain CEO pay when financial results are due to good luck. Blair Jones, an expert on executive compensation, noted that changing instrumentalities after the fact “only works if a board is willing to use it on the upside and the downside.… If it’s only used for the downside, it calls into question the process.”59 APPLY THE 3‐STEP PROBLEM‐SOLVING APPROACH

1. Step 1:Define the problem in this case. 2. Step 2:Identify the cause of the problem. Did the companies featured in this case use the principles of 

expectancy theory?  3. Step 3:Make a recommendation to the compensation committees at these companies. Should CEOs and hourly 

workers be held to similar rules regarding bonuses?    Page 181 According to expectancy theory, your motivation will be high when all three elements in the model are high. If any element is near zero, your motivation will be low. Whether you apply this

theory to yourself or managers apply it to their employees, the point is to simultaneously consider the status of all three elements. TAKE‐AWAY APPLICATION Applying Expectancy Theory This activity focuses on a past work- or school-related project that was unsuccessful or that you consider a failure. Identify one such project and answer the following questions.

1. What was your expectancy for successfully completing the failed project? Use a scale from 1 (very low) to 5 (very high). 2. What were the chances you would receive outcomes you valued had you successfully completed the project? Again use a scale from 1 (very low) to 5 (very high). 3. Considering the above two answers, what was your level of motivation? Was it high enough to achieve your performance goals? 4. What does expectancy theory suggest you could have done to improve your chances of successfully completing the project? Provide specific suggestions. 5. How might you use the above steps to motivate yourself in the future?

Using Expectancy Theory to Motivate Employees There is widespread agreement that attitudes and behavior are influenced when organizations link rewards to targeted behaviors. For example, a study of college students working on group projects showed that group members put more effort into their projects when instructors “clearly and forcefully” explained how high levels of effort lead to higher performance—an expectancy—and that higher performance results in positive outcomes like higher grades and better camaraderie—instrumentalities and valence outcomes.60 Expectancy theory has important practical implications for individual managers and organizations as a whole (see Table 5.1). Three additional recommendations are often Page 182 overlooked. First, establish the right goal. Our consulting experience reveals that people fail at this task more often than you might imagine. Second, remember that you can better keep behavior and performance on track by creating more opportunities to link performance and pay. Shutterfly Inc. makes it possible for employees to receive bonuses four times a year. App designer Solstice Mobile also uses quarterly (not annual) reviews to reward high performers with promotions and bonuses.61 Finally, monetary rewards must be large enough to generate motivation, and this may not be the case for annual merit raises in the U.S. The average merit raise was around 3 percent the last five years. To overcome this limitation, organizations are starting to eliminate merit raises and replace them with bonuses only for high performers.62 TABLE 5.1 MANAGERIAL AND ORGANIZATIONAL IMPLICATIONS OF EXPECTANCY THEORY

For Managers For Organizations 

 Determine the outcomes employees value.

 Reward people for desired performance, and do not keep pay decisions secret.

 Identify good performance so appropriate behaviors can be rewarded.  Design challenging jobs.

 Make sure employees can achieve targeted performance levels.

 Tie some rewards to group accomplishments to build teamwork and encourage cooperation.

 Link desired outcomes to targeted levels of performance.

 Reward managers for creating, monitoring, and maintaining expectancies, instrumentalities, and outcomes that lead to high effort and goal attainment.

 Make sure changes in outcomes are large enough to motivate high effort.

 Monitor employee motivation through interviews or anonymous questionnaires.

 Monitor the reward system for inequities.

 Accommodate individual differences by building flexibility into the motivation program.

The following Problem‐Solving Application illustrates expectancy theory in action at Westwood High School in Mesa, Arizona.

PROBLEM‐SOLVING APPLICATION A High School Principal Uses Principles of Expectancy Theory to Motivate Students Tim Richard, principal at Westwood High School, decided to use a motivational program he called “Celebration” to improve the grades of 1,200 students who were failing one or more courses. The school has a total of 3,000 students.

How Does the Program Work? “Students are allowed to go outside and have fun with their friends for 28 minutes on four mornings a week,” the principal explained to the local newspaper. “But those who have even one F must stay inside for ‘remediation’—28 minutes of extra study, help from peer tutors, or meetings with teachers.” Richard, who successfully implemented the program at a smaller high school, believes the key to motivating students is to link a highly valued reward— socializing with friends outside—with grades. Socializing includes playing organized games, dancing and listening to music, eating snacks, and just plain hanging out. Results suggest the program is working. Positive results were found within two to three months of the motivation program’s start. The number of students with failing grades dropped to 900. The principal’s goal is to achieve zero failing grades by the end of the year.

What Is the Student Reaction? Students like the program. Ivana Baltazar, a 17-year- old senior, said, “You really appreciate Celebration after you have been in remediation.” She raised an F in economics to a B after receiving help. Good academic students like Joseph Leung also like the program. Leung is a tutor to students with failing grades. He believes that “the tricky part is getting people out of the mind-set that they can’t succeed.… A lot of times they just haven’t done their homework. I try to help them understand that the difference between a person passing and failing is their work ethic.”63 APPLY THE 3‐STEP PROBLEM‐SOLVING APPROACH

1. Step 1:Define the problem Tim Richard is trying to address. 2. Step 2:Identify the causes. What OB concepts or theories are consistent with Richard’s motivational program?  3. Step 3:Make recommendations for fixing the problem. Do you agree with Richard’s approach to improving 

student performance? Why or why not?  Page 183

Goal‐Setting Theory: How Can I Harness the Power of Goal Setting? Regardless of the nature of their specific achievements, successful people tend to have one thing in common: Their lives are goal-oriented. This is as true for politicians seeking votes as it is for world-class athletes like Michael Phelps. Research also supports this conclusion. The results of more than 1,000 studies from a wide range of countries clearly show that goal setting helps individuals, teams, and organizations to achieve success.64

Michael Phelps, seen here at the FINA Swimming World Championships in Melbourne, Australia in 2007, set a  goal for the 2016 Rio Olympics that included winning more gold medals. His goal was achieved and he now has 28  medals, including 23 gold. Phelps is the most decorated Olympian in history. © Patrick B. Kraemer/EPA/Newscom

Next we review goal setting within a work context and then explain the mechanisms that make goal setting so effective. We will discuss the practical applications of goal setting in Chapter 6. Edwin Locke and Gary Latham’s Theory of Goal Setting After studying four decades of research on goal setting, two OB experts, Edwin Locke and Gary Latham, proposed a straightforward theory of goal setting. Here is how it works.65  Goals that are specific and difficult lead to higher performance than general goals like

“Do your best” or “Improve performance.” This is why it is essential to set specific, challenging goals. Goal specificity means whether a goal has been quantified. For example, a goal of increasing the score on your next OB test by 10 percent is more specific than the goal of trying to improve your grade on the next test.

 Certain conditions are necessary for goal setting to work. People must have the ability and resources needed to achieve the goal, and they need to be committed to the goal. If these conditions are not met, goal setting does not lead to higher performance. Be sure these conditions are in place as you pursue your goals.

 Performance feedback and participation in deciding how to achieve goals are necessary but not sufficient for goal setting to work. Feedback and participation enhance performance only when they lead employees to set and commit to a specific, difficult goal. Take Jim’s Formal Wear, a tuxedo wholesaler in Illinois. “Once a week, employees meet with their teams to discuss their efforts and what changes should be made the next week. Employees frequently suggest ways to improve efficiency or save money, such as reusing shipping boxes and hangers.”66 Goals lead to higher performance when you use feedback and participation to stay focused and committed to a specific goal.

 Goal achievement leads to job satisfaction, which in turn motivates employees to set and commit to even higher levels of performance. Goal setting puts in motion a positive cycle of upward performance.

In sum, it takes more than setting specific, difficult goals to motivate yourself or others. You also want to fight the urge to set impossible goals. They typically lead to poor performance or unethical behavior, as they did at Volkswagen. The company has admitted to installing software on over 11 million cars that manipulated emission test results.67 Its engineers claimed they tampered with emissions data because targets set by Martin Winterkorn, the former Volkswagen chief executive, were too difficult to achieve.68 Set challenging but attainable goals for yourself and others. Page 184

What Are the Mechanisms Behind the Power of Goal Setting? Edwin Locke and Gary Latham, the same OB scholars who developed the motivational theory of goal setting just discussed, also identified the underlying mechanisms that explain how goals affect performance. There are four. 1. Goals direct attention. Goals direct our attention and effort toward goal-relevant activities

and away from goal-irrelevant activities. If, for example, you have a term project due in a few days, your thoughts and actions tend to revolve around completing that project. In reality, however, we often work on multiple goals at once. Prioritize your goals so you can effectively allocate your efforts over time.69 For example, NuStar Energy, one of the largest asphalt refiners and operators of petroleum pipelines and product terminals in the United States, has decided to give safety greater priority than profits in its goals. This prioritization paid off when the company celebrated three years of zero time off due to injuries, and corporate profits are doing just fine.70

2. Goals regulate effort. Goals have an energizing function in that they motivate us to act. As you might expect, harder goals foster greater effort than easy ones. Deadlines also factor into the motivational equation. We expend greater effort on projects and tasks when time is running out. For example, an instructor’s deadline for turning in your term project would prompt you to complete it instead of going out with friends, watching television, or studying for another course.

3. Goals increase persistence. Within the context of goal setting, persistence represents the effort expended on a task over an extended period of time. It takes effort to run 100 meters; it takes persistence to run a 26-mile marathon. One of your textbook authors—Angelo Kinicki—knows this because he ran a marathon. What an experience! His goal was to finish in 3 hours 30 minutes. A difficult goal like this served as a reminder to keep training hard over a three-month period. Whenever he wanted to stop training or run slow sprints, his desire to achieve the goal motivated him. Although he missed his goal by 11 minutes, it still is one of his proudest accomplishments. This type of persistence happens when the goal is personally important.

4. Goals foster the development and application of task strategies and action plans. Goals prompt us to figure out how we can accomplish them. This begins a cognitive process in which we develop a plan outlining the steps, tasks, or activities we must undertake. For example, teams of employees at Tornier, a medical device manufacturer in Amsterdam, meet every 45, 60, or 90 days to create action plans for completing their goals. Implementation of the plans can take between six and 18 months depending on the complexity of the

goal.71 Setting and using action plans also reduces procrastination. If this is sometimes a problem for you, break your goals into smaller and more specific subgoals.72 That will get you going.

TAKE‐AWAY APPLICATION Increasing My Success via Goal Setting

1. Set a goal for performance on the next exam in this class by filling in the following statement. “I want to increase my score on my next exam by ___ percent over the score on my previous exam.” If you have not had an exam yet, pick a percentage grade you would like to achieve on your first exam. 2. Create a short action plan by listing four or five necessary tasks or activities to help you achieve your goal. Identify actions that go beyond just reading the text. 3. Identify how you will assess your progress in completing the tasks or activities in your action plan. 4. Now work the plan, and get ready for success.

MOTIVATING EMPLOYEES THROUGH JOB DESIGN MAJOR QUESTION

How are top‐down approaches, bottom‐up approaches, and “idiosyncratic deals” similar and different? THE BIGGER PICTURE Job design focuses on motivating employees by considering the situation factors within the Organizing Framework for Understanding and Applying OB. Objectively, the goal of job design is to structure jobs and the tasks needed to complete them in a way that creates intrinsic motivation. We’ll look at how potential motivation varies depending on who designs the job: management, you, or you in negotiation with management.

 “Ten hours [a day] is a long time just doing this.… I’ve had three years in here and I’m like, I’m going to get the hell out.… It’s just the most boring work you can do.”

—Ford autoworker

 “I love my job.… I’ve learned so much.… I can talk with biochemists, software engineers, all these interesting people.… I love being independent, relying on myself.

—Corporate headhunter

 “We see about a hundred injuries a year and I’m amazed there aren’t more. The main causes are inexperience and repetition.… People work the same job all the time and they stop thinking.”

—Slaughterhouse human resources director

These quotations reflect the different outcomes that can result from job design.73 Job design, also referred to as job redesign or work design, refers to any set of activities that alter jobs to improve the quality of employee experience and level of productivity. As you can see from this definition, job design focuses on motivating employees by considering the situation factors within the Organizing Framework. Figure 5.9 summarizes the approaches to job design that have developed over time.74

FIGURE 5.9      Historical models of job design

 Top‐down. Managers changed employees’ tasks with the intent of increasing motivation and productivity. In other words, job design was management led.

 Page 186Bottom‐up. In the last 10 years, the top-down perspective gave way to bottom-up processes, based on the idea that employees can change or redesign their own jobs and boost their own motivation and engagement. Job design is then driven by employees rather than managers.

 I‐deals. The latest approach to job design, idiosyncratic deals, attempts to merge the two historical perspectives. It envisions job design as a process in which employees and individual managers jointly negotiate the types of tasks employees complete at work.

This section provides an overview of these three conceptually different approaches to job design.75 We give more coverage to top-down techniques and models because they have been used for longer periods of time and more research is available to evaluate their effectiveness.

Top‐Down Approaches—Management Designs Your Job In top-down approaches, management creates efficient and meaningful combinations of work tasks for employees. If it is done correctly, in theory, employees will display higher performance, job satisfaction, and engagement, and lower absenteeism and turnover. The five principal top-down approaches are scientific management, job enlargement, job rotation, job enrichment, and the job characteristics model. Scientific Management Scientific management draws from research in industrial engineering and is most heavily influenced by the work of Frederick Taylor (1856–1915). Taylor, a mechanical engineer, developed the principles of scientific management based on research and experimentation to determine the most efficient way to perform jobs. Scientific management is “that kind of management which conducts a business or affairs by standards established by facts or truths gained through systematic observation, experiment, or reasoning.”76

This automotive assembly line, which is using robotics, is a great example of scientific management. The  principles of scientific management have aided auto manufacturers to produce cars more efficiently and with  higher quality.© Glow Images RF

Designing jobs according to the principles of scientific management has both positive and negative consequences. Positively, employee efficiency and productivity are increased. On the other hand, research reveals that simplified, repetitive jobs also lead to job dissatisfaction, poor mental health, higher levels of stress, and a low sense of Page 187accomplishment and personal growth.77 Recognition of these negative consequences paved the way for the next four top-down approaches. Job Enlargement Companies first used job enlargement in the late 1940s in response to complaints about tedious and overspecialized jobs created from the principles of scientific management. Job enlargement puts more variety into a worker’s job by combining specialized tasks of comparable difficulty. Some call this strategy horizontally loading the job. Researchers recommend using job enlargement as part of a broader approach that uses multiple motivational methods, because by itself job enlargement does not have a significant and lasting positive effect on job performance.78 Job Rotation Like job enlargement, job rotation gives employees greater variety in their work. Job rotation calls for moving employees from one specialized job to another. Rather than performing only one job, workers are trained and given the opportunity to perform two or more separate jobs on a rotating basis. Proposed benefits of job rotation include the following:79  Increased engagement and motivation because employees have a broader perspective on the

organization.  Increased worker flexibility and easier scheduling because employees are cross-trained to

perform different jobs.

 Increased employee knowledge and abilities, which improves employees’ promotability and builds a pipeline of internal talent.

More companies are now hiring new college graduates into “rotational programs,” which allow them to work in different functional areas for short periods and learn many different parts of the business along the way. Finally, the technique of job rotation has evolved into job swapping, more common among senior-level managers. (See the OB in Action box.)

OB IN ACTION JOB SWAPPING IS THE LATEST APPLICATION OF JOB ROTATION Job swapping can take place both externally, when people from different firms swap jobs, and internally, when employees within one company exchange jobs.

External Job Swapping Nadim Hossain, vice president of marketing at San Francisco- based PowerReviews, went to a recent meeting in which he met with a marketing team and provided input on a proposed ad. Interestingly, he did not do this for his employer. Fortune magazine reported on what he was up to: “He traded roles for the day with Jon Miller, VP of marketing and co-founder of San Mateo, California, software firm Marketo, hoping to gain some insight into his own role by experiencing someone else’s.” This experiment is an example of an external job swap. Both individuals felt they benefited from the experience. Hossain said he got many ideas about how to motivate his sales team, and Miller left with a better idea of the challenges faced by chief marketing officers.80 Another swap exchanged Rick Gill, a medical doctor, and Kevin Stephens, a farmer. The program was initiated by the Pike County, Alabama, Chamber of Page 188Commerce to help citizens appreciate the impact of different jobs on the county’s well-being. Dr. Gill spent a day on a farm, doing work that included picking cotton. Stephens’ time at the doctor’s office included removing staples from an incision and completing other small medical tasks. Both individuals raved about the experience and noted that it increased their appreciation for someone else’s job. This type of swap has taken place each year since 1986.81 Internal Job Swapping Terri Lodwick, president of All American Window and Door Co. in Germantown, Wisconsin, began the company’s job swap program in 2001. Her reason? “We wanted to give everybody a hands-on view of each others’ job duties, [so they could gain] a greater appreciation and understanding of each team member. We also wanted to strengthen our customer service and take [our company] to the next level of excellence,” she said. All Lodwick’s employees ultimately swap jobs for up to 40 hours per year. A typical swap lasts four hours, and employees are encouraged to swap with people across all company departments. The company attempts to make the process meaningful and practical by having employees complete a short questionnaire after each swap. Sample questions include: “What did you learn/observe today? What suggestions do you have for the process you observed?”

Lodwick noted that the program led to increased productivity, teamwork, and customer service. It also was a prime contributor to the company’s receipt of several business awards.82 YOUR THOUGHTS?

1. What are the pros and cons of job swaps? 2. What would be your ideal job swap? 3. If you managed a business, how would you feel about this option for your employees?

Job Enrichment Job enrichment is the practical application of Frederick Herzberg’s motivator-hygiene theory of job satisfaction, discussed earlier in this chapter. Specifically, job enrichment modifies a job such that an employee has the opportunity to experience achievement, recognition, stimulating work, responsibility, and advancement. These characteristics are incorporated into a job through vertical loading. Rather than giving employees additional tasks of similar difficulty (horizontal loading), vertical loading gives them more autonomy and responsibility. Intuit, for example, encourages employees “to spend 10 percent of their working time on projects and ideas of their own, even if they are not related to their assignments,” according to Fortune. The company finds that this practice has led to the creation of several successful new products.83 The Job Characteristics Model Two OB researchers, J. Richard Hackman and Greg Oldham, played a central role in developing the job characteristics approach. They proposed that intrinsic motivation was determined by three psychological states. In turn, these psychological states were fostered by the presence of five core job characteristics (see Figure 5.10). FIGURE 5.10   The job characteristics model

The goal of the job characteristics model is to promote high intrinsic motivation by designing jobs that possess the five core job characteristics. The five characteristics are as follows:  Skill variety. The extent to which the job requires an individual to perform a variety of tasks

that require him or her to use different skills and abilities.Page 189  Task identity. The extent to which the job requires an individual to perform a whole or

completely identifiable piece of work. Task identity is high when a person works on a product or project from beginning to end and sees a tangible result.

 Task significance. The extent to which the job affects the lives of other people within or outside the organization.

 Autonomy. The extent to which the job enables an individual to experience freedom, independence, and discretion in both scheduling and determining the procedures used in completing the job.

 Feedback. The extent to which an individual receives direct and clear information about how effectively he or she is performing the job.84

Moderators. A moderator is a variable that changes the relationship between two other variables. Hackman and Oldham proposed that there are moderators that affect the success of job design, and they are shown in the moderator box of Figure 5.10.  Knowledge and skill (representing whether or not the person has the knowledge and skills to

perform the enriched job).  Growth need strength (representing the desire to grow and develop as an individual).  Context satisfactions (representing the extent to which employees are satisfied with various

aspects of their job, such as pay, coworkers, and supervision). Page 190 The takeaway is that job design is more likely to work when people have the required knowledge and skills, when they want to develop, and when they are satisfied with their jobs. Job design is not for everyone.

In Practice. Research identifies three practical implications of applying the job characteristics model. 1. Managers can increase employee job satisfaction.85 2. Managers can enhance employees’ intrinsic motivation and performance, while reducing

absenteeism and stress.86 EXAMPLE Wegmans Food Markets, rated as the fourth best place to work by Fortune in 2016, increases autonomy by allowing employees “to write their own weekly schedule or take time off at the spur of the moment, no questions asked.” Medical device maker Stryker is interested in increasing the psychological state of meaningfulness. It does this by encouraging employees to observe how customers use its products. Employees observe surgeries and attend trade shows, which enables them to see the products being applied in the field.87 3. Managers can find noticeable increases in the quality of performance after a job redesign

program. Results from 21 experimental studies revealed that job redesign resulted in a median increase of 28 percent in the quality of performance.88

Bottom‐Up Approaches—You Design Your Own Job As its name suggests, bottom-up job design is driven by employees rather than managers; it is also referred to as job crafting. Job crafting represents employees’ attempts to proactively shape their work characteristics.89 The goal of job crafting is to help employees experience a sense of meaning in their jobs. This is more important than you might think. A recent survey of 20,000 employees revealed that only 36 percent felt they had meaningful work.90 Forms of Job Crafting Employees are viewed as “job crafters” according to the bottom-up model because they are expected to define and create their own job boundaries. Table 5.2 illustrates three forms of job crafting. The first changes the job’s task boundaries. You can do this by taking on more or fewer tasks or by altering their scope or nature. The second form changes the relational nature of the job. Specifically, you can alter the quantity or quality of interactions you have with others at

work, or you can establish new relationships. The third method is cognitive crafting. In this strategy you perceive or think differently about the existing tasks and relationships associated with your job. TABLE 5.2 FORMS OF JOB CRAFTING

Changes in Approach Example  Changes in Results 

Task boundaries: Number, scope,  and type of job tasks. 

Design engineers engage in  relational activities that move a  project to completion. 

Engineers are now guardians  or movers of projects; they  complete work in a more  timely fashion. 

Relational nature: Quality and/or  amount of interaction with others  encountered in a job. 

Hospital cleaners actively care for  patients and families and  integrate themselves into the  workflow of their floor units. 

Cleaners are now helpers of  the sick; they see the work of  the floor unit as a vital part  of an integrated whole. 

Cognitive crafting: Perception of  or thinking about tasks and  relationships in your job. 

Nurses take responsibility for all  information and “insignificant”  tasks so they can care more  appropriately for a patient. 

Nurses are now patient  advocates; they provide high‐ quality, technical care. 

SOURCE: Adapted from A. Wrzesniewski and J. E. Dutton, “Crafting a Job: Revisioning Employees as Active Crafters of Their  Work,” Academy of Management Review, April 2001, 185. 

Outcomes of Job Crafting

This employee of Swiss‐based computer device producer Logitech is working on a computer mouse. He looks very  focused on the task at hand. It may be that job crafting is partly behind his engagement. The company is using job  crafting to increase employee engagement and job satisfaction. As part of this effort the company created a 90‐ minute workshop to help employees learn how to align their strengths and interests with tasks contained in their  jobs.  

The right-hand column in Table 5.2 outlines the potential impact of job crafting on employee motivation and performance. You can see that job crafting is expected to change the way employeesPage 191 perceive their jobs. It should also result in more positive attitudes about the job, which is expected to increase employee motivation, engagement, and performance. Preliminary research supports this proposition.91 Computer accessories maker Logitech Inc. successfully implemented a job crafting pilot program. Jessica Amortegui, senior director of learning and development, said, “The company hopes helping employees find more intrinsic motivation in their work will be a powerful hiring draw. Logitech plans to begin using the [program] with all 3,000 of its workers.”92 Given that job crafting can lead to higher levels of engagement and satisfaction, you may be interested in understanding how you can apply the technique to a former, current, or future job. The Self‐Assessment 5.3 explores the extent to which you are applying job crafting to reduce job demands, seek resources, or seek challenges.

1. What are your strengths and weaknesses in terms of job crafting? 2. Were you happy in the job under consideration? 3. Do you think the average employee can affect all the suggestions measured in the survey? Explain.

Page 192 TAKE‐AWAY APPLICATION Increasing My Motivation with Job Crafting Use the results from Self‐Assessment 5.3 to complete the following:

1. Identify three job-crafting ideas you might use to increase your intrinsic motivation. 2. Using Table 5.2, identify two additional job-crafting ideas. 3. What are the roadblocks to implementing the ideas identified in the above two steps?

Idiosyncratic Deals (I‐Deals)—You Negotiate the Design of Your Job The last approach to job design, idiosyncratic deals, represents a middle ground between top- down and bottom-up methods and attempts to overcome their limitations. For example, top- down approaches are constrained by the fact that managers cannot always create changes in task characteristics that are optimal for everyone. Similarly, job crafting is limited by the amount of latitude people have to change their own jobs. Idiosyncratic deals (i‐ deals) represent “employment terms individuals negotiate for themselves, taking myriad forms from flexible schedules to career development.”93 Although “star performers” have long negotiated special employment contracts or deals, demographic trends and the changing nature of work have created increased opportunities for more employees to negotiate i-deals. I-deals tend to affect task and work responsibilities, schedule flexibility, location flexibility, and compensation.94 The goal of such deals is to increase employee intrinsic motivation and productivity by allowing employees the flexibility to negotiate employment relationships that meet their own specific needs and values. RSM promotes and encourages the creation of i-deals among its 8,000 employees. The focus of its program is to create innovative and flexible ways of working.95 This relatively new approach to job design has begun to generate much research. Results confirm that i-deals are associated with higher perceived organizational support, job satisfaction, and perceived voice. Employees also are less likely to quit when they negotiate i- deals.96 Future study is needed to determine the generalizability of these encouraging results. Consider how you might one day create an i-deal for yourself. Self‐Assessment 5.4 will help you think through the process.

What Did I Learn? You learned that motivation, a key individual‐level process, is influenced by inputs such as needs, perceptions of  justice, expectancies and instrumentalities, goals, and job design. You learned how various theories and models  of motivation can be applied by managers to improve multiple outcomes. Reinforce your learning with the Key  Points below. Consolidate your learning using the Organizing Framework. Then challenge your mastery of the  material by answering the Major Questions in your own words.

Key Points for Understanding Chapter 5 You learned the following key points.

5.1 THE WHAT AND WHY OF MOTIVATION  There are two types of motivation: intrinsic and extrinsic.  Extrinsic motivation results from the potential or actual receipt of external rewards.  Intrinsic motivation is driven by positive internal feelings generated by doing well. 5.2 CONTENT THEORIES OF MOTIVATION  Content theories are based on the idea that an employee’s needs influence motivation. There are five

key content theories.  Douglas McGregor proposed a theory of motivation based on two opposing views of employees.

Theory X people believe employees dislike work and are motivated by rewards and punishment. Theory Y people believe employees are self-engaged, committed, and responsible.

 Abraham Maslow proposed that motivation is a function of five basic needs—physiological, safety, love, esteem, and self-actualization—arranged in a prepotent hierarchy.

 David McClelland’s acquired needs theory is based on the idea that motivation is a function of three basic needs: achievement, affiliation, and power.

 Self-determination theory assumes that three innate needs influence motivation: competence, autonomy, and relatedness.

 Frederick Herzberg’s motivator-hygiene theory is based on the premise that job satisfaction comes from motivating factors and dissatisfaction from hygiene factors.

5.3 PROCESS THEORIES OF MOTIVATION  Process theories attempt to describe how various person factors and situation factors affect

motivation.  Equity theory explains how people strive for fairness and justice in social exchanges. Fairness or

equity is determined by comparing our outputs and inputs with those of others.  Three key types of justice are distributive, procedural, and interactive.  Expectancy theory assumes that motivation is determined by our perceived chances of achieving

valued outcomes. The three key elements of this theory are expectancies, instrumentalities, and valence of outcomes.

 Goal-setting theory proposes that goals affect performance because they (1) direct our attention, (2) regulate effort, (3) increase persistence, and (4) encourage the development of action plans.

5.4 MOTIVATING EMPLOYEES THROUGH JOB DESIGN  Job design theories are based on the idea that motivation is primarily influenced by the tasks people

perform and the characteristics of the immediate work environment.  Three broad approaches to job design are top-down, bottom-up, and emerging. Page 194

 The premise of top-down approaches is that management is responsible for creating efficient and meaningful combinations of work tasks for employees. Top-down approaches include scientific management, job enlargement, job rotation, job enrichment, and the job characteristics model.

 Bottom-up approaches, also referred to as job crafting, are driven by employees rather than managers. Employees create their own job boundaries.

 Emerging approaches include idiosyncratic deals (i-deals). This approach views job design as a process in which employees and managers jointly negotiate the types of tasks employees complete at work.

The Organizing Framework for Chapter 5 As shown in Figure 5.11, both person and situation factors influence the process of motivation. You can also see  that there are more situational than personal factors influencing motivation. This underscores the importance of  leadership and creating a work environment that reinforces voice and justice. Figure 5.11 further illustrates that  motivational processes affect outcomes across the individual, group/team, and organizational levels.   FIGURE 5.11  Integrative Framework for Understanding and Applying OB

Challenge: Major Questions for Chapter 5 You should now be able to answer the following questions. Unless you can, have you really processed and  internalized the lessons in the chapter? Review relevant portions of the text and your notes to answer the  following major questions. With Figure 5.11 as your guide, look for inputs, processes, and outputs specific to  each: 1. What is motivation and how does it affect my behavior? 2. How would I compare and contrast the content theories of motivation? 3. How would I compare and contrast the process theories of motivation? 4. How are top-down approaches, bottom-up approaches, and “idiosyncratic deals” similar and

different? Page 195 IMPLICATIONS FOR ME You can do five things to personally apply the material from this chapter. First, identify the needs that are important to you today, recognizing they may change over time. This can help you identify the type of work you would like to do before and after graduation. Second, if your current job is low on hygiene or motivating factors, reflect on what you can do to change this situation. You may be able to create change by talking to your boss, asking for new work assignments, or getting a different job. Third, because festering feelings of inequity are not good for you or those you interact with on a regular basis, make a plan to correct any feelings of

inequity that exist in your life. Fourth, set specific, measurable goals for things you want to accomplish in your life. Develop an action plan that outlines the path to success, then be sure to reward yourself for accomplishing the goals. Finally, if your current job is unfulfilling, try to find ways to incorporate job crafting or i-deals into your work. If this does not work, you might consider changing jobs. IMPLICATIONS FOR MANAGERS There are seven key implications for managers. First, recognize that intrinsic motivation can have longer-lasting effects than extrinsic motivation. Try to build Herzberg’s motivators into employees’ work experiences. Second, acknowledging that needs drive employee motivation, find a way to determine employee needs, such as employee surveys or one-on-one meetings. Third, because some needs are innate, consider people’s needs when they are first hired. Validated tests exist that will identify these. Fourth, uncover employees’ perceptions about equity and justice and then correct any deficiencies, such as by administering employee surveys or exit interviews. Fifth, incorporate the principles of expectancy theory by (1) ensuring that employees believe they can accomplish their goals and (2) linking performance to rewards that individual employees value. Sixth, participate with employees in setting challenging yet attainable goals and then establish action plans. Be sure employees have the resources needed to achieve the goals. Finally, consider different ways to design jobs so they foster intrinsic motivation and meaningfulness.

6 PERFORMANCE MANAGEME NT How Can I Use Goals, Feedback, Rewards, and Positive Reinforcement to Boost Effectiveness? MAJOR TOPICS I’LL LEARN AND QUESTIONS I SHOULD BE ABLE TO ANSWER

1. 6.1 PERFORMANCE MANAGEMENT PROCESSES 

MAJOR QUESTION: What are the elements of effective performance management, and how can this knowledge benefit me?

2. 6.2  STEP 1: DEFINE PERFORMANCE—EXPECTATIONS AND GOALS 

MAJOR QUESTION: How can improving my goal setting give me an advantage? 3. 6.3 

STEP 2: PERFORMANCE MONITORING AND EVALUATION 

MAJOR QUESTION: How can performance monitoring and evaluation improve my performance and my ability to manage the performance of others?

4. 6.4  STEP 3: PERFORMANCE REVIEW, FEEDBACK, AND COACHING 

MAJOR QUESTION: How can I use feedback and coaching to review and improve performance? 5. 6.5 

STEP 4: PROVIDING REWARDS AND OTHER CONSEQUENCES 

MAJOR QUESTION: How can I use consequences to generate desired outcomes? 6. 6.6 

REINFORCEMENT AND CONSEQUENCES 

MAJOR QUESTION: How can I use reinforcement and consequences to improve performance? igure 6.1 summarizes what you will learn in this chapter. The main focus is performance management, which we position as an individual process in the Organizing Framework for Understanding and Applying OB. It could easily be considered a group- or organizational-level process, but we put it at the individual level because it is the performance of individuals that determines the performance of groups, teams, and organizations. Performance management is an umbrella phrase that includes a number of important OB concepts, such as goal setting, performance measurement and appraisals, feedback, and rewards. Performance management therefore is an especially important topic in OB. A variety of person and situation factors influence performance management practices, and such practices impact performance management, which in turn affects numerous outcomes for individuals, groups/teams, and organizations.

It also is a key contributor to other processes across levels, such as your individual motivation, trust and conflicts with supervisors and coworkers, and the effectiveness of organizational change efforts.

The pervasive and important effects make performance management one of the most practical and valuable OB concepts.

FIGURE 6.1 Organizing Framework for Understanding and Applying OB

at Work How to Boost Your Personal Productivity Who doesn’t want to be more productive? You have your own tactics or techniques for getting things done, as does nearly everyone you know. But given that everybody has the same number of hours in a day, the only way for you to differentiate yourself is to spend your time more wisely. To help, we assembled the following collection of best practices to make you more productive.

1. Learn how you spend your time. Fill out a time log to measure how much time you spend on various activities. A useful time log requires genuine effort, since research shows that better than 80 percent of people are very poor at accurately estimating how they spend their time.1 Track your time and the way you spend it for two or three days to capture the things you commonly do. Ideally, you’ll pause every hour or two and tabulate how much time you’ve spent on particular tasks. If this isn’t feasible, then be sure you tabulate your time twice in the morning, twice in the afternoon, and once in the evening. (Note: You cannot accurately tabulate the entire day at the end. This doesn’t work so don’t even try.) When you have two or three days recorded, add up the time you spent on various tasks. Identify the three activities that consume the greatest amounts of your time. It is especially useful to determine how much time you spend e-mailing, texting, playing games, and surfing the web, and then determine how much of this effort is really related to school and/or work. You’ll likely be shocked. Use your time more wisely.

2. Never touch things twice. This means you should never put tasks in a holding pattern.2 If you open an e-mail, for instance, and then decide to respond later, you will have to look at it at least one more time. This advice also applies to phone calls and other items on your to-do list. You need to decide the first time you touch it—take action now, delegate it, or delete it. You may think, “Yeah, right, as if this is possible.” But being decisive is key to increasing productivity. You may have to do some less desirable or even undesirable tasks immediately instead of putting them off. Or you’ll have to figure out how to do certain things, like texting, only at certain times of the day.

3. Schedule e‐mail, text, and phone time. Turn off notifications—all of them. Then set specific times in the day when you’ll check and tend to distracting tasks. For instance, you are wise to always look at and respond to e‐mail in the same space of time, such as at 11:00 each morning and 4:00 each afternoon. When the phone rings, you don’t have to answer it. If it’s important the caller will leave a message, which you can listen to during the time you’ve allocated. Set times for particular tasks and stick to them.

4. Take regular breaks. Recharging with a walk, music, or a brief chat has been shown to improve your concentration and boost productivity during the time you’re on task. Some research suggests that 90-minute intervals of work are best. This means you should set a plan for what you’ll accomplish in 90 minutes, then take a break. A series of intense, focused, and energized intervals is more productive than long stretches of uninterrupted work.3

5. Trade social and gaming. Whatever amount of time you spend playing video games or connecting on social media, try reallocating some of it to clearing e-mails or tackling other items on your to-do list. For example, make rules—no Facebook before lunch and/or none after 7 p.m. This rule can be especially useful if you commute by bus or train or spend time waiting in lines. As long as you’re not driving, spend that time productively rather than gaming or posting.

What’s Ahead in This Chapter Performance management encompasses many of the topics and tools you’ve learned thus far. In many ways this chapter serves as a sort of summary. And in other ways it serves as a rationale for taking the course. If you want to know why OB is important, and why its theories, models, and tools matter, the answer comes down to improving performance at all three levels of OB—individual, team, and organizational. The discussion in this chapter focuses on several of the critical components of effective performance management: goal setting, feedback, rewards, and reinforcement. To effectively manage performance, managers and organizations need to identify and communicate clear expectations or goals, monitor and provide feedback regarding progress toward these goals, and then link and deliver appropriate consequences (rewards) for goal achievement. We also highlight how performance management serves as a powerful tool for motivating, developing, and retaining talent. We hope you will appreciate why effective performance management policies and practices often dramatically affect many aspects of your work lif

6.1 PERFORMANCE MANAGEMENT PROCESSES MAJOR QUESTION

What are the elements of effective performance management, and how can this knowledge benefit me? THE BIGGER PICTURE Performance management occurs in many arenas of your life, notably school and work. Because it is a process that generates grades at school and promotions and pay at work, it is important to understand how it works. You’ll learn why performance management is one of the most critical and far‐reaching processes in the Organizing Framework. You’ll also see why opinions about the usefulness and effectiveness of performance management practices are often negative. However, you’ll also learn how performance management practices can be beneficial, such as by helping signal and reinforce desired behaviors and outcomes across all levels of OB. This chapter focuses on improving individual job performance, notably yours, as well as on your ability to improve the performance of others. To do this, you need to draw on and apply many of

the concepts and tools you’ve learned thus far, such as hard and soft skills, personality, perceptions, and of course motivation. The integration and application of this knowledge for the purposes of improved outcomes is called performance management. Performance management (PM) is a set of processes and managerial behaviors that include defining, monitoring, measuring, evaluating, and providing consequences for performance expectations.4 Defined in this way, PM is far more than performance appraisal. Appraisals typically consist only of the actual performance review, an event. Effective PM, in contrast, is a continual process and a critically important individual-level process. Performance management typically operates through an organization’s managers and human resources policies and practices. You will learn how it affects outcomes across all levels in the Organizing Framework, such as individual (job satisfaction, OCBs, and turnover), team (cohesiveness, conflict, and performance), and organizational (reputation, performance, survival, innovation, and employer of choice).

Effective Performance Management As illustrated in Figure 6.2, effective PM has four steps:  Step 1: Defining performance.  Step 2: Monitoring and evaluating performance.  Step 3: Reviewing performance.  Step 4: Providing consequences. FIGURE 6.2   Effective performance management system

SOURCE: Adapted from A. J. Kinicki, K. J. L. Jacobson, S. J. Peterson, and G. E. Prussia, “Development and Validation of the 

Performance Management Behavior Questionnaire,” Personnel Psychology, 2013, 1–45.

Successfully managing performance is a powerful means for improving individual, group/team, and organizational effectiveness.5 Effective performance management influences important outcomes such as greater employee engagement and betterPage 204 organizational performance.6 Managers who practice effective performance management generate exceptional results compared to those who don’t:  48% higher profitability.  22% higher productivity.  30% higher employee engagement scores.  17% higher customer engagement scores.  19% lower turnover.7

Common Uses of Performance Management Most performance management processes have three primary functions. 1. Make employee‐related decisions. Your performance can be used to justify a pay raise, a

promotion, and new assignments. PM can also generate documentation to help justify termination and reduce the chances of a wrongful dismissal lawsuit.

2. Guide employee development. Effective performance management helps identify employees’ strengths, weaknesses, and development needs. One performance management expert said that PM “is one of the most powerful talent management practices we have as HR professionals.”8

3. Signal desired employee behavior. Performance management processes signal and otherwise communicate what is expected from employees, such as job performance and career advancement.

This final purpose also applies in school. Think about it: The components of your grade in this (or any) course signal what is important, what your professor expects you to do, and thus what is rewarded. Page 205

PROBLEM‐SOLVING APPLICATION How Much Would You Pay Fannie and Freddie? Fannie Mae and Freddie Mac are organizations at the heart of the US housing industry. They buy mortgages from lenders and either hold them or package and sell them to investors. They were central players in the financial crisis and were subsequently taken over (bailed out) by the government. It has been a long road back, and Mel Watt, the regulator who oversees Fannie and Freddie, recommended that their CEOs each get raises of $3.4 million, taking their salaries from $600,000 to $4 million each.

Watt argued that the increases were deserved and necessary. He said both CEOs have done a commendable job of turning their organizations around since the crisis. Some of these reasons were inspired by Timothy Mayopoulos, CEO of Fannie, when he expressed concerns about his present pay. Donald Layton, CEO of Freddie, is likely to retire in the near future, and Watt and other supporters claimed salaries of this level are necessary to attract qualified candidates to replace him. In fact, other senior Fannie and Freddie executives are paid more than the current CEOs.9 And earlier Fannie and Freddie CEOs earned $5.3 million and $3.8 million, respectively, as recently as 2011.10

The proposed raises met with strong opposition. President Obama and Congress blocked them, arguing that CEOs of organizations under government control should not be paid this much. Layton said in response, “I signed up for this job personally as a public service matter so compensation wasn’t the big attraction to me.” As to whether another qualified executive could be found at the lower pay level, Layton said, “I am of the belief there are other people like me who... would be willing to do a job as a public service matter.”11 APPLY THE 3‐STEP PROBLEM‐SOLVING APPROACH 1. Step 1:Define the problems confronting the regulator Mel Watt. 2. Step 2:Identify the potential causes of these problems.  3. Step 3:Make your recommendations. 

What Goes Wrong with Performance Management Volumes of research and employee surveys report that the majority of managers and organizations do a poor job of managing employee performance.

 Fewer than 40% of employees say their systems do not provide clear goals or generate honest feedback.12

 66% of employees say it actually interferes with their productivity.  65% say their company’s practices are irrelevant to what they actually do in their jobs.13  58% of 576 HR executives surveyed graded their company’s performance management

systems as a C or worse.14 These unfortunate perceptions raise the question: Why do companies often do so poorly with performance management?

Page 206

The meeting in this photo is typical of many performance reviews: Once a year a manager and a subordinate sit  on opposite sides of a table, the manager does most of the talking, both are uncomfortable, and each walks away  less than happy with the results. This chapter will help you understand how and why you and your managers can  do better.© Chris Ryan/agefotostock RF

First, performance management practices are often obsolete. Customer needs and job responsibilities change frequently and quickly, but PM practices often fail to keep pace. This can result in a disconnect between the elements in your review and what you actually do day-to-day in your job. This can reduce the whole process to “chores” that require little more than checking boxes. Second, PM is time consuming. Some surveys report that managers spend on average 210 hours per year on PM activities.That equals 5.25 weeks, or more than a month! It is even more difficult to justify the time when 77 percent of HR executives feel their reviews do not accurately capture employee contributions.15 Third, performance reviews are too narrow. This means managers administering them commonly focus on only a limited number of elements, which may not be the only or the most important ones. One reason for this narrow scope is that many companies include only what is measured instead of what should be measured. For example, law firms may say they want and need attorneys to focus on client service and community involvement, but the only thing they measure and link to rewards is billable hours with clients. This is largely what they get. Applying all the elements of performance management discussed in this chapter will help you overcome these negative perceptions at work and show you that performance management is an important, practical process that connects many inputs and outcomes in the Organizing Framework of OB.

The Importance of Management and Leadership Performance fluctuates widely and unnecessarily in most companies, in no small part from a lack of consistency in how people are managed. Research consistently shows that over half of the most important drivers of employee engagement and performance arePage 207 precisely the behaviors that define effective performance management: setting clear expectations, helping employees accomplish work, providing regular feedback, and finding new opportunities for employees to succeed and develop.16 This means that managing performance successfully requires that you have effective managers. PM policies and practices cannot substitute for poor management, yet effective managers can be undermined by poor PM policies and practices. Also critical is that leaders at all levels of the organization support and practice effective performance management. Ed Lawler, a world-renowned management expert, stated it very clearly: “Role modeling needs to begin at the top and it needs to be demonstrated by the appraisals being done on all members of the organization. It can’t be what the middle does to people at the bottom of the organization.”17 Who does your boss’s performance review? Who does that person’s review? On what elements is each of these people evaluated? Ask the same questions about the president or CEO of your employer. The answers can be very telling about how serious your organization is about performance management, and the extent to which leaders role-model PM and practice what they preach. The bottom line: Senior leaders need to develop and hire good managers, and they need to ensure that everybody practices effective PM.

Pervasive poor views of performance management practices have led many notable companies including Adobe, GE, Juniper, Accenture, and Cigna to scrap existing PM practices.18 One such company is Deloitte. The following OB in Action box illustrates how this accounting firm has tackled the challenges of performance management.

OB IN ACTION THE DELOITTE WAY: “SNAPSHOTS” AND “CHECK-INS” As part of a renewed commitment to developing its high-caliber workforce, Deloitte made a $100 million investment in The Leadership Center (called Deloitte University) in 2011. In the process it reviewed the role played by its performance management practices.

The internal review and research revealed two things. First, performance, retention, and client satisfaction were all better when employees felt they were playing to their strengths in their jobs.19 Second, current PM practices were interfering. The company then embarked on a dramatic transformation of its practices. Its new approach is as interesting for what it excludes as for what it includes. Gone are once-a-year performance reviews, 360-degree feedback tools, and cascading goals.20 Included are the four steps of effective performance management outlined above and described below. KEY ELEMENTS OF DELOITTE’S NEW APPROACH Step 1: Setting Goals and Objectives. Like its many clients, Deloitte has objectives, financial and otherwise, it must achieve. All are important and consequential for employees. However, instead of goals being set centrally by senior management and cascading down through the organization, goals are now set per client, per team, per employee. This means that goal setting and expectations are much more local and are handled by team leaders, rather than global and done by senior executives at headquarters.Page 208

Step 2: Monitoring and Measuring Performance. The company still tracks and measures performance, but now it does so in the form of Snapshots. These are questions each team leader answers for each team member, whether quarterly, monthly, at the end of a project, or at any other meaningful point. Instead of ranking the team member, leaders indicate to what extent they agree with statements like, “Given what I know of this person’s performance, I would always want him or her on my team,” “This person is at risk for low performance,” and “If it were my money, I would award this person the highest possible compensation increase in bonus.”21 Step 3: Reviewing Performance and Providing Feedback. Performance reviews and feedback happen not once or twice a year but at regular check-ins. Check-ins are one-on-one, real-time discussions between team leaders and their team members. Their purpose is to discuss progress, expectations, feedback, and any other relevant details related to current or near-term work. The rationale is that performance is driven through conversations, and check-ins give frequent opportunities for managers and employees to meet and talk. Check-ins are not mandated or tracked. Deloitte simply prompts all employees via periodic e-mails that ask, “Did you have a check-in conversation with your team leader this week? Yes or No.”22 Snapshot responses are aggregated every quarter, and HR reviews and discusses the results with business leaders. Along with other metrics, such as revenue per employee, Snapshots give leaders a more holistic and timely view of individual and unit performance. Step 4: Rewarding Performance. Snapshots provide regular and ongoing opportunities to recognize and correct performance, and the quarterly reviews provide yet another opportunity. All of this culminates in annual compensation decisions, which are now based on a wealth of information consistently captured throughout the year. Deloitte’s new system is viewed very positively and has been expanded to cover 2,000 employees, then 7,000, then 40,000, and now all business units are given the choice to participate.

YOUR THOUGHTS? 1. From an employee’s perspective, what do you think are some of the pros and cons of Deloitte’s new PM system? Explain. 2. Assuming you are a team leader at Deloitte, describe one benefit and one challenge of the PM system for you. 3. What do you think are the major challenges in implementing Deloitte’s new PM practices?

STEP 1: DEFINE PERFORMANCE— EXPECTATIONS AND GOALS MAJOR QUESTION

How can improving my goal setting give me an advantage? THE BIGGER PICTURE Not all goals are the same. You’re about to learn the difference between performance goals and learning goals. More importantly, you’ll pick up tips on how to manage the goal‐setting process. You’ll also benefit from practical guidance on what types of goals to use when.

Fisk 

Johnson, CEO of S. C. Johnson & Son, strongly believes in setting goals. S. C. Johnson is the world’s largest maker  of household products, including Shout, Windex, Drano, and Scrubbing Bubbles.© Jim Spellman/WireImage/Getty Images 

Here is what the CEO had to say when he accepted the Climate Leadership Award for Aggressive Goal Setting to reduce greenhouse gas emissions.23 As a family company, we’re committed to doing what’s right for people and the planet, and we believe that to make an impact, you have to set measurable goals. In addition to the 27 percent reduction we’ve achieved versus our 2005 U.S. baseline, we will continue to raise the bar and hold ourselves accountable. By 2016, we plan to further reduce our greenhouse gas emissions by an additional 7 percent absolute reduction, and we’re honored to be recognized for setting this goal.24 S. C. Johnson has since achieved its goal of a 7 percent reduction in greenhouse gases and earned yet another award, the very prestigious Excellence in Greenhouse Gas Management award given by the Environmental Protection Agency (EPA).25 Research supports the benefits of goal setting, as S. C. Johnson realizes. For instance, teams have been shown to innovate more effectively when their team leaders help clarify their goals.26 This shouldn’t be a surprise. It makes sense that improving goal setting is a way to boost both your own performance and your ability to manage the performance of others. But once again, common sense is not common practice. According to Gallup’s “State of the American Manager” report, only 12 percent of employees strongly agreed that their manager helps them set performance goals.27 To improve your own goal setting, let’s begin by differentiating two general types of goals—performance and learning. Page 210

Do You Want to Perform or Learn? One way to organize or differentiate your many goals is to categorize them as performance or learning. A performance goal targets a specific end result, and a learning goal promotes enhancing your knowledge or skill. Managers typically overemphasize the former and ignore the latter as they try to motivate greater effort and achieve results. If you lack necessary skills, experience, or direction from your manager, then performance goals can be more frustrating than motivating. When skills are lacking, it often is helpful to set learning goals first and then set performance goals once you’ve developed some level of proficiency. Let’s illustrate using a golf analogy. Here a performance goal can deflect attention from the discovery of task-relevant strategies (learning goals). For example, if a novice golfer focuses on achieving a score of 95 (a performance goal), this may prevent the player from concentrating on the fundamental elements of a sound golf swing and club selection (learning goals). Both learning goals are essential for attaining that score. In short, the novice golfer must learn how to play the game before becoming concerned about reaching a challenging performance outcome (a score of 95).28

Top professional golfers, like Jordan Spieth, undoubtedly focus on learning goals while practicing. But given their  level of proficiency and the expectations to win, many of their goals while on the course are performance goals. © Tom Pennington/Getty Images

In contrast, performance goals while playing are likely counterproductive for new golfers and those with high  handicaps. They just don't have the skill to perform. © John Cumming/Getty Images RF

This insight also applies in college (and later in life). Depending on socioeconomic status, between 55 and 80 percent of students who start college don’t graduate in six to eight years.29 One conclusion: Students’ goal-setting skills need more attention. A study of students who were struggling academically demonstrated the power of teaching people how to skillfully set and integrate both learning and performance goals. The students participated in an intensive online tutorial on how to write and achieve personal goals, which led to significant improvement in academic achievement four months later.30 The lesson? Learn about and apply goal setting to improve your grades now, if not also your performance at work.

Managing the Goal‐Setting Process There are four general steps to follow when implementing a goal-setting program (for yourself or others). Deficiencies in one step cannot be made up for with strength in the others. You need to diligently execute all four steps. We label these Step A, Step B, and so on to avoid confusion with the numbered steps of the effective performance management system (compare Figure 6.2).  Step A: Set goals.  Step B: Promote goal commitment.  Step C: Provide support and feedback.  Step D: Create action plans. Page 211

Step A: Set Goals Whether your manager sets your goals or you set them together, the goals should be “SMART.” SMART applied to goals is an acronym for specific, measurable, attainable, results oriented, and time bound. Table 6.1 lists practical guidelines for writing SMART goals. TABLE 6.1 GUIDELINES FOR WRITING SMART GOALS

Specific

State goals in precise rather than vague terms. For example, I will participate in 20 hours  of training this quarter, versus I will do more training this year. Quantify your goals  whenever possible. 

Measurable 

You need to track progress and verify whether a goal is achieved or not. To do this  requires some form of measurement or verification—quantity, quality, completed (yes or  no), and other relevant details. If, for instance, the goal is to assess the characteristics of  your company’s top‐performing sales teams, then you likely will need to include both  quantitative (sales) and qualitative (methods for building customer relationships)  measures. To emphasize, goals should not be set without considering the interplay  between quantity and quality of output. 

Attainable 

Goals should be realistic, challenging, and attainable. Impossible goals reduce motivation  because people do not like to fail. And remember, people have different levels of ability  and skill. What is easy and “old hat” for one person, may be very difficult for another. 

Results oriented 

Corporate goals should focus on desired end results that support the organization’s  vision. In turn, an individual’s goals should directly support the accomplishment of  corporate goals. Activities that support the achievement of goals are outlined in action 

plans. To focus goals on desired end results, goals should start with the word to, followed  by verbs such as complete, acquire, produce, increase, and decrease. 

Time bound  Specify target dates for goal completion. Recall the example of S. C. Johnson at the  beginning of this section. Assign a date, even if you have to change it later.  

SOURCE: Excerpted from J. Schroeder and A. Fishbach, “How to Motivate Yourself and Others? Intended and Unintended  Consequences,” Research in Organizational Behavior, 2015, 123–141.

TAKE‐AWAY APPLICATION Applying SMART Goals

1. Select an important goal at school. 2. Make it “SMART” by being sure that it is specific, measurable, attainable, results oriented, and time bound. 3. Refine it further by ensuring that it begins with “To ______,” and pay particular attention to how it will be measured. 4. Do the same for a goal outside school.

Step B: Promote Goal Commitment Goal commitment is important because employees are more motivated to pursue goals they view as personally relevant, obtainable, and fair. Table 6.2 provides practical advice to increase your goal commitment, while at the same time improving the quality of your goals and boosting your likelihood of success. Page 212 TABLE 6.2 TIPS FOR INCREASING GOAL COMMITMENT AND SUCCESS

Write Your Goals Down

You’ve heard it before, but writing your goals down makes a real  difference. In addition to helping make them SMART, it provides a  record that you can go back to and revise as you make progress toward  your goal. It also is more efficient—you don’t have to keep the goals  and details in your head. 

Identify Key Obstacles and Sources of Support 

Be proactive and try to identify who or what might get in your way.  Conversely, think of who or what might be able to help you reach your  goal. 

Ask What’s in It for YOU?  List the benefits of achieving the goal. Keeping your eyes on the prize  will help you stay motivated over time. 

Break It Down 

Some goals are big and/or take considerable time to achieve. It is helpful to break them down into smaller, sub- or intermediate goals.

Visualize 

If you haven’t tried this, do it—it works! Imagine not only how you will benefit by achieving your goal, but also how you will feel. Adding the positive emotional component can boost your motivation.

Organize  Preparation is key. It gives you clarity, makes you more efficient, and  helps you avoid wasting energy and time. 

Reward Yourself 

Reward yourself both for making progress while pursuing your goal and  for attaining the ultimate outcome. It is important to reinforce your  efforts. Building in small wins and rewards along the way can help  motivate you and keep you on track.31 

TAKE‐AWAY APPLICATION Building Commitment to My Goals

1. Using a SMART goal you created from the previous Take-Away Application box, apply the recommendations from Table 6.2 to increase your commitment to that goal. 2. Set a grade goal for the next exam in one of your courses. Apply the Table 6.2 recommendations to enhance your commitment and increase your chances of success.

Step C: Provide Support and Feedback This step is about helping employees achieve their goals. (More detail related to feedback is provided later in this chapter.) Practical suggestions include:  Make sure each employee has the necessary skills and information to reach his or her goals.

Provide training if necessary, because it can boost people’s expectancy (Chapter 5).  Similarly, pay attention to employees’ expectations about their perceived relationship

between effort and performance (recall expectancy theory from Chapter 5), their perceived self-efficacy, and their reward preferences, and adjust accordingly.

 Give employees timely and task-specific feedback (knowledge of results) about what they are doing right and wrong.

 Provide monetary and nonmonetary incentives, and be sure to reward meaningful progress and not just goal accomplishment.32

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Step D: Create Action Plans What use is a goal without a plan for realizing it? For instance, planning the amount of time you intend to devote to training, rather than simply attending a session or doing it when you can, greatly improves the effectiveness of your learning. The same applies to studying—plan your study time and what you will study during that time, and research says you are more likely to stick with it and increase your learning.33 The first three steps all help tremendously in formulating your actions plans. Table 6.2 also offers useful tips. Besides these, we encourage you to look to your experience—what’s worked in the past when pursuing a similar goal? If you can’t rely on your own experience, then learn what others have done and follow their plan. No need to reinvent the wheel. Next, visualize what achieving the goal looks like and work backward. This is another instance when the characteristics of SMART goals are extremely valuable. Being specific, results oriented, and time bound are fundamental characteristics of solid action plans. Finally, if you run into difficulties, we’ve already provided you with an excellent tool—the 3-Step Problem- Solving Approach. This can help you identify and remedy roadblocks in your goal setting and action plans. Applying a contingency approach to goal setting is another way to be more effective and boost performance. Let’s explore this next.

Contingency Approach to Defining Performance and Setting Goals Recall the discussion in Chapter 1 about how effective employees and managers (you!) should use a contingency approach. Do what the situation requires rather than applying a one-size-fits- all approach, relying on personal preferences, or doing something “the way it’s always been done.” Fit the behavior, policy, or practice to the situation. You can apply this same wisdom to goal setting.

Learning and performance goals have their place, and setting SMART goals can give you a significant advantage over your competitors. However, another way to define goals is in terms of behavioral, objective, and task/project (see Table 6.3). Defining goals in this manner helps you assure your goals match the situation. For instance, not all performance can or should be defined and measured in dollars and cents. TABLE 6.3 CONTINGENCY APPROACH TO DEFINING PERFORMANCE

BEHAVIORAL GOALS OBJECTIVE GOALS  TASK OR PROJECT GOALS 

 Can be used in most jobs.

Best for jobs with clear and readily measured outcomes.

Best for jobs that are dynamic, but in which nearer-term activities and milestones can be defined.

 Most relevant for knowledge work.

Measure what matters, not just what can be measured. Similar to SMART goals.

 Example: Treat others with professionalism and respect; communicate clearly.

Examples: sales quotas, production rates, error rates.

Example: Complete your portion of the team project by Tuesday.

STEP 2: PERFORMANCE MONITORING AND EVALUATION MAJOR QUESTION

How can performance monitoring and evaluation improve my performance and my ability to manage the performance of others? THE BIGGER PICTURE To ensure success, you'll need to accurately measure and evaluate both your progress and the ultimate completion of the goals you set in Step 1. In this section you’ll learn numerous practical tips to help with monitoring and evaluating performance. Specifically, you’ll learn how your perceptual errors can influence your evaluation of performance, and why 360‐degree feedback is commonly used to help overcome shortcomings in the measurement and evaluation of performance. Once you have defined and communicated performance expectations (goals), you are ready to monitor and evaluate your and others’ progress and ultimate performance. We emphasize the need to monitor and evaluate both progress toward the final goal and the ultimate level of goal achievement. Doing both instead of simply focusing on the final outcome boosts both motivation and performance. For instance, at school you prefer to learn how you’re performing sometime before your final grade report, such as a midterm exam and/or homework assignments. If the only score you receive and the only time you learn this is on the final, then you have no opportunity to take corrective action and improve the outcome. Moreover, your final exam may not appropriately capture all that you’ve done (performance) throughout the course. Despite this common-sense argument, many, many organizations and entire industries focus only on one final outcome, such as sales target (pharmaceuticals), wins (sports), and rankings (business schools).

This is why accurately and appropriately monitoring and evaluating both progress and outcomes are critical components of effective performance management and your personal effectiveness.

Grades are the ever famous means for monitoring and evaluating performance at school. Midterm and  homework grades are a means for montioring your performance toward your overall or final grade in your  courses.© Robert Payne/Getty Images RF

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Monitoring Performance—Measure Goals Appropriately and Accurately Monitoring performance means measuring, tracking, or otherwise verifying progress and ultimate outcomes. You use the information gathered through monitoring to identify problems (and successes) and to find opportunities to enhance performance during the pursuit of a goal. To be effective, you need to use or even create accurate and appropriate measures. Table 6.3 showed that many goals can be categorized as behavioral, objective, or task-oriented. The way you measure these goals should match their character. Your measurement and monitoring can improve further still if you consider the following (you’ll notice some overlap with Table 6.3):

1. Timeliness. Was the work completed on time? Many customer service roles require representatives to answer calls within a certain number of rings, or to respond to customer requests in a certain number of hours or days.

2. Quality. How well was the work done? A behavioral goal that could fit here is greeting customers warmly, personally, and with a smile. Measurement consists of observing and/or reporting that these actually occurred.

3. Quantity. How much? Sales goals are common examples here, such as dollars or number of units sold.

4. Financial metrics. What are the profits, returns, or other relevant accounting/financial outcomes? For instance, some law firms measure the performance of attorneys and the larger firm by calculating profits in dollars per partner.34

It’s safe to assume that monitoring will only increase in the future, and the vast majority is well intended. But as in all things related to performance management, some practices are better than others. The following OB in Action box highlights some of the inherent benefits and costs to consider.

OB IN ACTION THE CHALLENGES GROW AS EMPLOYEE MONITORING BECOMES MORE SOPHISTICATED AND PERVASIVE There was a time when some employers used tape measures to plot the distance and paths nurses followed on their patient rounds in hospitals.35 Today, such monitoring is done with hardware and software that provides real-time location and activity logs for employee activity. Patty Jo Toor, the chief nursing office at Florida Hospital Celebration Health, uses electronic badges to monitor how often nurses and other care providers visit patient rooms.36 One result was that the hospital found it could increase time with patients by stocking more medication on the floors during the night shift, cutting the time nurses had to spend ordering it. In a similar way, United Parcel Service (UPS) has used GPS to make drivers’ routes more efficient, saving time, gas, emissions, and money (millions of dollars every year).37 BENEFITS TO THE EMPLOYER Monitoring data can help employers restructure work spaces, identify employees’ most productive work periods, simplify timekeeping, pinpoint training needs, evaluate performance, document poor behavior, and identify high-performing teams.38 Employers also use technology to protect themselves and employees against theft, violence, and liability. Some companies equipPage 216 their vehicles with video cameras in case of theft or accidents. Shuttle Express Inc., for example, used dashboard camera video to show that its driver was not at fault in an accident. It saved the company an estimated $100,000.39 Most employees would not fault employer monitoring that guards against improper sharing of trade secrets or other proprietary information. But as monitoring becomes more capable and more pervasive, we might ask: Just because employers can monitor, should they? COSTS AND CAUTIONS FOR EMPLOYERS Some employers have gone to extremes, such as counting keystrokes or measuring how long employees’ keyboards have been idle. Others check web searches, e- mails, and texts for keywords to identify inappropriate or proprietary content. Employers also are tracking the time lost to non-work activities, such as March Madness, Cyber Monday, and online gaming.40 Individual opinions will vary about each of these, but such constant monitoring also has the potential to cause stress, undermine employee morale and trust, and even be the grounds for lawsuits. Intermix Wire Transfer was sued by an employee after she learned that the app she was required to download onto her phone enabled the company to track her location and driving speed, both during and after work hours. She “likened it to

wearing a house arrest bracelet.” When she protested and uninstalled the app, she was fired.41 YOUR THOUGHTS?

1. Assuming you own your company, make the case for monitoring your employees. 2. If you are working (or have worked), does your employer monitor employees? If yes, describe the costs and benefits to that employer. 3. If your employer does not monitor employees, what type of monitoring might be beneficial from the employer’s perspective? 4. Whether you are working or not, describe a type of monitoring that would be useful for your school.

Companies have considerable legal discretion to monitor employees. Nevertheless, monitoring has its pitfalls. Here are helpful tips to consider when utilizing monitoring at work.

APPLYING OB

Monitor with Purpose and without Pain Legally, companies have considerable discretion (rights) to monitor employees. That said, the following tips can help realize the benefits of employee monitoring and avoid the pitfalls.

1. Establish clear motives for monitoring. Employers need first to ask themselves, Why are we monitoring employees? What do we hope to gain? Is the purpose performance improvement, safety, theft avoidance? 2. Identify the boundaries. The answer to No. 1 above will help establish what is appropriate to measure, such as only time on premises or also time away from the office, or all web usage or just usage during work hours or on company-owned devices. Page 217 3. Avoid monitoring non‐work areas. Common sense says not to monitor company bathrooms, locker rooms, or cafeterias and other areas in which work is not expected to be conducted. 4. Communicate what, where, how, and why. Tell employees what is monitored, where, how, and especially why. Justify! The primary motive should be performance improvement. But if guarding against theft is also a goal, say so. Employees may raise potential pitfalls you didn’t consider. Addressing them will help avoid lawsuits. 5. Focus on improvement, not punishment. Of course, if employees are stealing or engaging in other undesirable or unethical conduct, monitoring can identify them so they can be punished. However, monitoring works best when it’s used to help employees boost their performance. Avoid inducing fear and instead foster better performance.42 6. Be consistent! If you’re going to monitor some employees, monitor all. Don’t make the mistake of monitoring employees’ Internet or smartphone use and not doing the same for managers and executives.

After you’ve defined your performance goals and monitored them using accurate and appropriate measures, it is time to evaluate the level or quality of performance.

Evaluating Performance Your measures of performance should be both relevant and accurate. There is nothing more discouraging than being measured on criteria that don’t matter or not being measured on those that do. Evaluating performance is the process of comparing performance at some point in time to a previously established expectation or goal. Your midterm grade, for instance, helps you monitor your performance so far. But it isn’t the end of the story. You then evaluate it—did you perform as you expected? Why or why not? How

will your midterm performance affect your grade for the course? The answers to these questions are important and are often influenced by your perceptual processes.

Perceptual Errors in Evaluating Performance As you learned in Chapter 4, your attributions and perceptions can greatly influence the way you evaluate the information you gathered via monitoring. Table 6.4 lists common perceptual errors in monitoring employee performance and recommended solutions. TABLE 6.4 COMMON PERCEPTUAL ERRORS RELATED TO PERFORMANCE EVALUATION

PERCEPTUAL ERROR TENDENCY  EXAMPLE 

RECOMMENDED SOLUTION: KEEP PERFORMANCE NOTES 

Halo effect 

To form an overall  impression about a  person or object and  then use that  impression to bias  ratings about same. 

Rating an employee  positively across all  dimensions of  performance because  the employee is so  likable.  

Record examples of positive and  negative employee performance  throughout the year. Remember  employee behavior tends to vary  across different dimensions of  performance. 

Leniency 

To consistently  evaluate other people  or objects in an  extremely positive  fashion. 

Rating an employee  high on all dimensions  of performance  regardless of actual  performance. 

Provide specific examples of both  good and poor behavior so you  can help the employee improve.  Remember it does not help  employees when they are given  positive but inaccurate feedback.  Be fair and realistic in evaluations. 

Central tendency 

To avoid all extreme  judgments and rate  people and objects as  average or neutral. 

Rating an employee as  average on all  dimensions regardless  of actual performance. 

Define an accurate profile, with  high and low points, so you can  help the employee improve.  Remember it is normal to provide  feedback that contains both  positive and negative information. 

Recency effect 

To over‐rely on the  most recent  information. If it is  negative, the person  or object is evaluated  negatively. 

Rating an employee  based only on the last  portion of the review  period. 

Accumulate examples of  performance over the entire rating  period. Remember to look for  trends but accept some variance  as normal. 

Contrast effect 

To evaluate people or  objects by comparing  them with  characteristics of  recently observed  people or objects. 

Rating an employee as  average, from a  comparison of the  employee’s  performance with the  exceptional 

Evaluate employees against a  standard, rather than against the  performance of your highest‐ performing employees. Remember  that each employee deserves the 

performance of a few  top performers. 

objectivity in evaluation that a  standard can provide. 

The best-laid goals from Step 1 can be completely undermined if performance toward them is not measured appropriately, or if performance is evaluated with bias. Many organizations and their managers have tried to overcome such problems using 360-degree feedback.

In 360‐degree feedback individuals compare perceptions of their own performance with behaviorally specific (and usually anonymous) performance information from their manager, subordinates, and peers. Such multi‐rater feedback can also come from outsiders, such as customers or suppliers. HCL Technologies, one of India’s three largest IT services companies, implements a 360- degree feedback program for the CEO and 3,800 managers. The CEO’s reviews are transparent, posted on the company’s internal website for all 50,000 employees to see. The managers’ results are posted too. Vineet Nayar, the former CEO who created the system, described the system as “reverse accountability,” wherein managers are accountable to employees, the opposite of the business norm.43 Collecting performance information from multiple sources helps the person being evaluated get a broad view of his or her performance, and it also highlights any biases and perceptual errors that might be occurring. Finally, using multiple raters also makes it Page 218 much more difficult for managers to unfairly favor or punish particular employees (recall our discussion of equity and fairness in Chapter 5). A study of 360-degree feedback for 69,000 managers and 750,000 employees revealed fascinating results. Managers dramatically overrate their own capabilities—perhaps this is not a surprise. But those who underrated their prowess were viewed by employees as the most effective leaders. The underraters also had the most engaged employees (an important individual-level outcome).44 Research on 360-degree feedback, combined with our consulting experience, leads us to favor anonymity and also to discourage use of 360-degree feedback for pay and promotion decisions. When it is used for pay and promotions, managers often resist and/or try to manipulate the process. However, multi-source feedback can be extremely helpful for training and development purposes. Now that you have a sense of the importance of monitoring and evaluating performance, as well as tips for doing this accurately, let’s move on to the next step and review performance. The next section also provides additional insights about feedback.

STEP 3: PERFORMANCE REVIEW, FEEDBACK, AND COACHING MAJOR QUESTION

How can I use feedback and coaching to review and improve performance? THE BIGGER PICTURE You’re about to learn how different forms of feedback influence performance and how to deliver feedback more effectively. You’ll also see how combining feedback with coaching is a powerful means for managing and improving your performance and that of others. Most people agree that feedback—both giving and receiving it—has the potential to boost performance. However, most people also admit that they neither receive nor provide feedback as often or as well as they would like. We’ll help you understand some reasons this happens and

what you can do about it. It is safe to say your feedback skills are some of the most valuable tools you can develop and use throughout your career. Now let’s convince you that this bold statement is true.

What Effective Feedback Is … and Is Not Students and employees alike appreciate feedback (at least those who are top performers do). Both want to know how they’re doing and how their performance compares to that of their peers. Feedback is an important, but not always present, cousin of goal setting. It enables you to learn how your performance compares to the goal, which you can then use to modify your behaviors and efforts. We therefore define feedback as information about individual or collective performance shared with those in a position to improve the situation. Effective feedback is only information—it is not an evaluation. Subjective assessments such as “You’re lazy” or “You have a bad attitude” do not qualify as effective feedback. They are simply opinions and often have little value. But hard data such as units sold, days absent, dollars saved, projects completed, customers satisfied, and quality rejects are all candidates for effective feedback. Christopher Lee, author of Performance Conversations: An Alternative to Appraisals, clarifies the concept of feedback by contrasting it with performance appraisals: Feedback is the exchange of information about the status and quality of work products. It provides a road map to success. It is used to motivate, support, direct, correct, and regulate work efforts and outcomes. Feedback ensures that the manager and employees are in sync and agree on the standards and expectations of the work to be performed. Traditional appraisals, on the other hand, discourage two-way communication and treat employee involvement as a bad thing. Employees are discouraged from participating in a performance review, and when they do, their responses are often considered “rebuttals.”45 Page 220

The Value of Feedback Mike Duke, former president and CEO of Walmart, is a strong advocate of linking goal setting and feedback.

Leadership is about … listening and getting feedback from a broad array of constituents.… It’s about setting aggressive goals and not being afraid to go after very aggressive goals and targets. I think it’s even better for a leader to set an aggressive goal and come up a little short than it would be to set a soft goal and to exceed it.… Hard feedback is in some environments viewed in a very threatening way, and people don’t want to hear feedback. In our environment, I think there is a desire to hear candid feedback. When we leave a meeting, before we’ll even drive away, I’ll ask, “Well, give me feedback.” I think a leader asking for feedback sets a good tone.46 Despite the clear and important role Mike Duke describes for feedback, it is dramatically underutilized in most every area of our lives. A Watson Wyatt Worldwide survey, for instance, revealed that 43 percent of employees “feel they don’t get enough guidance to improve their performance.” Sixty-seven percent felt they received too little positive feedback in general, and 51 percent too little constructive criticism from their bosses. Those who said they did not receive enough feedback were 43 percent less likely to recommend their employer to others.47 Clearly, feedback can affect outcomes across levels of the Organizing Framework.

If Feedback Is So Helpful, Why Don’t We Get and Give More? This obvious question is worth answering. After surveying thousands of students and employees, researchers offer the most common responses:

1. Potential strain on relationships. It is easy for most people to deliver good news: “Susan, great job on the project. The customer was very pleased, and you made the team look good.” However, very few people like to deliver negative feedback (or bad news in general): “Susan, you were ill-prepared and really hurt our chances with that customer.” We worry about

making the person feel bad and wonder how that person will act in the future because of it. After all, we often make friends at work, we genuinely like many of our coworkers, and we don’t want to make them feel bad, make ourselves and others uncomfortable, or harm our relationships.

2. Too little time. We’re all busy. Even true believers in the value of feedback often let it slide: “This week I plan to talk to Mark about how impressed I am with his fast start at the company.” But the week passes and you still haven’t done it. Next week. But then that passes too, and so on, and so on.

3. Lack of confidence. Very few people are trained to give effective feedback and so lack confidence in their abilities. This problem is compounded if the feedback is going to include negative content and/or will be tied to a performance evaluation. After reading this chapter and book, you won’t have such an excuse. You’ll be equipped with both knowledge and tools to boost your confidence.

4. No consequences. As you’ll learn or may already be aware, the trend is toward giving more frequent and considerably different forms of feedback than in the past. However, if managers are not evaluated on whether they provide feedback—effective or not—they are less likely to give it.

With these common obstacles in mind, let’s learn how to overcome them and do better, beginning with the two primary functions of feedback—to instruct and to motivate.

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Two Functions of Feedback Experts say feedback serves two functions for those who receive it: one is instructional and the other motivational. Feedback instructs when it clarifies roles or teaches new behavior. For example, an assistant accountant might be advised to handle a certain entry as a capital item rather than as an expense item. Feedback motivates when it serves as a reward or promises a reward (remember the discussion in Chapter 5). Hearing the boss say, “You’ve completed the project ahead of schedule; take the rest of the day off,” is a pleasant reward for hard work. More generally, however, many employees appreciate the attention and interest expressed by the very act of providing feedback, regardless of content.

Assume you're one of the students learning CPR in the photo. Which type of feedback do you think would be  more helpful and you would appreciate more—instructional or motivational? Regardless of your preference, you  certainly would agree that both forms would be more effective than the instructor simply saying you did it wrong  and that she is unhappy with your performance. Keep this in mind when you provide feedback to others. Keep it  instructional or motivational and you'll keep it appreciated and effective!© Hero Images/Getty Images RF

Important Sources of Feedback—Including Those Often Overlooked The three common sources of feedback are 1. Others 2. Task 3. Self It almost goes without saying that you receive feedback from others (peers, supervisors, lower- level employees, and customers). Perhaps less obvious is the fact that the task itself is a common source of objective feedback. For instance, many tasks—writing code, landing a plane, or driving a golf ball—provide a steady stream of feedback about how well or poorly you are doing. A third source of feedback is you, but self-serving bias and other perceptual problems can contaminate this source (recall Chapter 4). Page 222 Those high in self-confidence tend to rely on personal feedback more than those with low self- confidence. This effect becomes more common as we move up the organizational hierarchy, because the higher someone’s rank, the more difficult it is to get useful feedback from others. These challenges aside, feedback can be made even more useful when it is supported by senior managers or is collected from departing employees and from customers. We discuss each of these next.

The Role of Senior Managers and Leaders Nobody likes to give the boss negative feedback. And frankly, many bosses never ask for feedback because they don’t want it. For example, one of the authors has worked at multiple universities and companies in various industries, and none of his bosses have solicited feedback—not deans, not department chairs, not executives, not managers—no one. Another problem is that task feedback is less feasible for senior managers because their day-to-day activities are more abstract than those of frontline employees (for instance, formulating strategy versus closing a sale). The predicament for companies is consequential, as noted by Jim Boomer, a CPA and professional service firm consultant: [I]f you don’t have a system for holding individuals accountable for their goals, all the work, time, and effort that goes into developing these plans is diminished and you’ve your wasted effort.… Leadership tends to hold junior employees accountable but shies away from a formalized system to measure performance at the [senior manager/leader] level.… If [senior managers/leaders] are not willing to hold themselves accountable, employees will simply go through the motions and won’t buy into a firm-wide performance system.48 The value of feedback from subordinates is highlighted by recent research. It showed that when subordinates provided candid feedback, with details and facts, about reward allocations they felt were unfair, their managers tended to make future decisions that were less self-interested and more fair to employees. However, when employees simply complained, managers’ subsequent decisions became even more self-interested and more unfair.49 So what can executives or high-level managers do to improve their response to feedback? 1. They can seek feedback from others by creating an environment in which employees feel

they can be honest and open. 2. Separating feedback from the performance review process also helps, especially for

executives who typically are reviewed informally if at all. 3. They can create a mechanism to collect feedback anonymously. This is useful if the source of

the feedback is not particularly important. For example, a CEO based at headquarters in Phoenix is curious about how she is perceived by the design team in Shanghai. In this instance, she doesn’t need to know the views of any specific employee, just the views of employees from that location.

NO SURPRISES! Whoever conducts a performance review should ensure there are no surprises—good or bad! As a general rule, if you are surprised by something shared during your review, your manager is doing a poor job of managing your performance. It also is a sure sign that he or she is not giving you the appropriate quantity and quality of feedback. Most often such surprises occur in performance management systems structured around an annual review. This means that regardless of how frequently performance information is collected, it is communicated and discussed only once a year.

To avoid surprises in your own reviews, check in with your manager periodically and informally ask, “Is there anything I should be aware of? I know we’ll have my review later this year, and I want to be sure there are no surprises ... even positive ones.” If you conclude with a smile it is likely your manager will clearly understand your intent.

The following OB in Action box describes the unique approach to employee feedback at Zappos.

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OB IN ACTION HOW DO YOU SPELL FEEDBACK AND SELF-IMPROVEMENT? Z-A-P-P-O-S!

Zappos employees are not only allowed but encouraged to personalize their workspaces. This aligns with the  company's values—create fun and a little weirdness—and is believed to foster excellent customer service. © Ronda  Churchill/Bloomberg/Getty Images

One of the key elements that enables Zappos to have rock star status with its customers and more than 1,400 employees is the company’s approach to performance management. The company puts an extremely high premium on feedback, which it sees as fundamental to continuous improvement.50 Form of Feedback Managers are explicitly instructed to provide only instructional feedback (such as the amount of time spent on calls with customers), not evaluative feedback. It is presented as, for instance, the number of times the manager witnessed a particular desirable behavior. The managers must give specific examples of the behavior. Linked to Values These behaviors, and thus the feedback, are directly linked to the company’s 10 core values—deliver WOW through service, embrace and drive change, create fun and a little weirdness, be creative and open-minded, pursue growth and learning, build open and honest relationships with communication, build a positive team and family spirit, do more with less, be passionate and determined, be humble. The company’s performance management and associated feedback are all driven by and based on these values. Use and Frequency of Feedback The company no longer does once-a-year reviews. Instead managers are expected to provide feedback and recognize employees continually, as they exhibit particular behaviors. This means managers decide how frequently to offer input. Moreover, “these assessments are not used for

promotion, pay, or disciplinary purposes. Rather, their purpose is simply to provide feedback on how employees are perceived by others.”51 Not Meeting Expectations? If someone’s performance is not up to standards, the company provides a number of free, on-site courses aimed at skill building and improvement. YOUR THOUGHTS?

1. What are the advantages to the Zappos approach to feedback? 2. What disadvantages are possible? 3. Explain why you would or would not want to be an employee with such a PM system. 4. Assume you are a manager at Zappos. What are the pros and cons of this system for you?

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Exit and Stay Interviews Employees quit jobs for many reasons, such as better job opportunities, dual-career issues, money, lack of fairness, bullying, and the most common—a horrible boss. Whatever the reason, exit interviews can provide the feedback that uncovers the true reasons.

Exit interviews are an excellent means for obtaining feedback regarding reasons employees leave. More recently, some companies also are conducting stay interviews. The reasoning is simple—find out why people stay and do things to keep them. It is far more effective and cheaper to keep good employees than to replace them.© Gustavo Frazao/Shutterstock RF

When done well, exit interviews can:52 1. Build employee engagement. Collecting, sharing, and acting on the information gained

signals to remaining employees that their views and experiences matter. This in turn can foster engagement.

2. Highlight needed action. Because poor management is a common cause of turnover, exit interviews can help pinpoint development needs for managers, such as help for those who tend to micromanage.

3. Help benchmark. Exiting employees often can reveal pay and benefits packages of competitors, as well as other factors that make them attractive to key talent.

4. Make former employees into recruiters. Providing exiting employees an opportunity to share opinions and experiences can build goodwill in their eyes. Favorable opinions may lead departed employees to recommend their former employer to friends and associates as a good place to work or do business.

5. Make former employees into customers or partners. Depending on the nature of the business, former employees may become or remain customers of their past employer’s products or services. They may also partner and actually work together. In both cases the former employer wins. For instance, many attorneys leave law firms and go “in house” to work for clients. They then hire the law firm for legal services.

Savvy managers also want to know why employees stay. It is better to ask than to rely on common sense or assume you know. Former Twitter CEO Dick Costolo told an interviewer he thinks exit interviews are overrated—“Everybody quits their manager.” He thinks it is more valuable to find out what the company is doing right in the eyes of its most valuable employees.53 Many HR professionals share Costolo’s view. The argument is that exit interview information, even if actionable, arrives too late. The employee is already gone. In contrast, stay interviews “build engagement by allowing your employees’ opinions to be heard, acted on and cared about ... while they’re still your employees,” according to Curtis Odom, principal and managing partner and Prescient Strategists.54 Ideally, employers will do both. Exit and stay interviews have different purposes and provide different types of useful information. Stay interviews, in particular, can create an environment in which managers and employees have more open and frequent communication about what is working and what is not.

Who Seeks Feedback, Who Doesn’t, and Does It Matter? Because both academics and managers agree about its value, feedback has been studied extensively. This work enables us to identify attributes that predict who is more and less likely to seek feedback. The left-hand column of Table 6.5 lists characteristics of employees who are less likely to seek feedback and the right-hand column those who are more likely. Page 225 TABLE 6.5 WHO SEEKS FEEDBACK AND WHO DOESN’T

PREDICTORS OF SEEKING LESS FEEDBACK PREDICTORS OF SEEKING MORE FEEDBACK 

Tenure with the organization High learning and performance goal orientation

Tenure in current job High self-esteem

Age High-quality relationships SOURCE: Excerpted from F. Anseel, A. Beatty, W. Shen, F. Lievens, and P. Sackett, “How Are We Doing After 30 Years? A Meta-Analytic Review of the Antecedents and Outcomes of Feedback-Seeking Behavior,” Journal of Management, January 2015, 318–348.

The above results are interesting and helpful. But does simply seeking feedback improve outcomes? Yes. Seeking feedback is linked with improved

 Job satisfaction  Proactive work behavior  Relationship building  Networking55

If any of these outcomes are meaningful to you, then you are well served to ask for feedback. Now let’s explore how your perceptions and feedback are linked.

Your Perceptions Matter Another reason people don’t give or get more feedback is that they don’t want it. What are your attitudes toward feedback? Do you seek it out? Do you want to hear it only if it is positive? To answer these questions and better understand your desire for feedback, complete Self‐ Assessment 6.1.

SELF-ASSESSMENT 6.1 WHAT IS MY DESIRE FOR PERFORMANCE FEEDBACK? Please be prepared to answer these questions if your instructor has assigned Self‐Assessment 6.1 in Connect.

1. Think of a recent instance when you were given feedback. 2. How does your score help explain your reaction to that feedback? 3. Describe a specific way your desire for feedback (your score) helps or hurts you in college and at work. 4. Given your score, think of ways you can improve your receptiveness for feedback.

Many other factors can affect your perceptions of feedback. For instance, whether the source is credible, the feedback system is fair, and the feedback is negative can all influence your perceptions.

Factors that Affect Your Perceptions of Feedback Many factors influence the way we perceive feedback. For instance, all managers and employees are susceptible to the fundamental attribution bias (your manager attributes your poor performance entirely to you and things you control) and the self-serving bias (you are likely to take credit for positive performance outcomes and attribute poor performance to extrinsic factors). The following also can influence your perceptions of feedback: 1. Accuracy. A common criticism of PM systems is that they measure the wrong things or

measure the right things the wrong way. Either way, the feedback is inaccurate.Page 226 2. Credibility of the sources. If a member of your project team points out shortcomings in your

work, you are likely to put more weight on the feedback if he or she is an “A” student or top performer. Trust is also critical here. If you don’t trust the person delivering the feedback, you will likely be suspicious of his or her intentions and discount its value.

3. Fairness of the system. If you perceive the process or outcomes—recall equity theory from Chapter 5—as unfair, you are likely not only to discount the feedback but also to be outraged, withdraw, commit counterproductive work behaviors, and/or quit. Performance appraisals are one of the aspects of organizational life that most commonly reveal issues of fairness.

4. Performance‐reward expectancies. Effective performance management, particularly ongoing and open feedback between you and your supervisors, is an important means of managing such expectancies.

5. Reasonableness of the goals or standards. When it comes to goals, challenging is good, unattainable bad. If your manager says, “You can earn a bonus of up to 50 percent of your salary,” ask whether anybody has actually ever earned that much. If not, you may be the first, but more likely the goal is unreasonable.

Any feedback that fails to clear one or more of these cognitive hurdles will be rejected or discounted. Personal experience largely dictates how you weigh these factors. For example, a

review of research on disciplinary practices found that people have different perceptions of a disciplinary act based on the gender of the person delivering the discipline, the cultural characteristics of the people involved, and the supervisor’s use of apologies and explanations.56 Given these differences in perception, we recommend that supervisors utilize two-way communication, follow up with the employee to make sure the discipline was understood, use empathy (or apologies if appropriate) to lessen the employee’s negative reactions, and focus on helping the employee in the long run. Negative Feedback Remember, feedback itself is simply information. It becomes positive or negative only when you compare it to a goal or expectation. Such comparisons are the basis for improvement. (Note: Negative feedback is not negative reinforcement. You’ll learn the important difference later in this chapter.) Generally, people tend to perceive and recall positive feedback more accurately than they do negative feedback. But negative feedback (such as being told your performance is below average) can have a positive motivational effect. One study showed that those who were told they were below average on a creativity test subsequently outperformed those who were led to believe their results were above average. The subjects apparently took the negative feedback as a challenge and set and pursued higher goals. Those receiving positive feedback were less motivated to do better.57

Negative feedback of course has its place at work—sometimes it is necessary. But be very careful when using it to  avoid doing more harm than good.© Photographee.eu/Shutterstock RF

Nonetheless, feedback with a negative message or threatening content needs to be administered carefully to avoid creating insecurity and defensiveness. Put another way, perception matters. Both negative and positive feedback need to provide clear guidance to improve performance. Feedback is most likely to be perceived accurately, and thus more likely to be acted on, when it is instructional and helps achieve an important or valued outcome. Table 6.6 provides guidance for using negative versus positive feedback. TABLE 6.6 WHEN TO USE POSITIVE AND NEGATIVE FEEDBACK

POSITIVE FEEDBACK BEST WHEN RECEIVER IS

NEGATIVE FEEDBACK BEST WHEN RECEIVER IS 

Near beginning of pursuing a goal Near end of pursuing a goal

A novice An expert

A distant relationship A close relationship SOURCE: © Dr. Alan J. Rowe, Distinguished Emeritus Professor. Revised December 18, 1998.

Page 227 Self-efficacy also can be damaged by negative feedback, as discovered in a pair of experiments with business students. The researchers concluded, “To facilitate the development of strong efficacy beliefs, managers should be careful about the provision of negative feedback. Destructive criticism by managers which attributes the cause of poor performance to internal factors reduces both the beliefs of self-efficacy and the self-set goals of recipients.”58 Managers therefore need to be careful when delivering feedback, due to the effect of feedback on goals.

Feedback Do’s and Don’ts According to Anne Stevens and Greg Gostanian, principal consultants at ClearRock, an outplacement and executive coaching firm, “Giving feedback to employees—and receiving feedback yourself—is one of the most misunderstood and poorly executed human resource processes.”59 Table 6.7 lists important and fundamental do’s and don’ts for giving feedback. TABLE 6.7 FEEDBACK DO’S AND DON’TS

DON’T60 DO61 

Don’t use feedback to punish, embarrass, or put  somebody down.  Keep feedback relevant by relating it to existing goals. 

Don’t provide feedback that is irrelevant to the  person’s work. 

Deliver feedback as close as possible to the time the  behavior was performed. 

Don’t provide feedback too late to do any good.  Provide specific and descriptive feedback. 

Don’t provide feedback about something beyond  the individual’s control  Focus the feedback on things employees can control. 

Don’t provide feedback that is overly complex or  difficult to understand.  Be honest, developmental, and constructive. 

Today’s Trends in Feedback Since 2012 there has been a three-fold increase in the number of companies that have abandoned or dramatically altered Page 228 the historical annual or biannual review. GE, Adobe, Accenture, and The Gap, among others, are now implementing ongoing and real-time performance conversations. Such continual feedback is often facilitated by technology that enables employees to leave real-time messages about each other’s performance.62 And these conversations are not only between boss and subordinate. Every employee is able to exchange feedback with all the others. This new development holds the promise of being truly more

developmental and effective. If done well, it will capitalize on the pros and help limit the cons that were so common in the past (and still are today).

Donna Morris, senior vice president of customer and employee experience at Adobe Systems, has spearheaded a dramatic transformation in the way her company manages performance. Regular “check‐ins” and “snapshots” are mini and continual opportunities to provide and receive feedback. © Michael Nagle/Bloomberg/Getty Images

Coaching—Turning Feedback into Change Coaching is a customized process between two or more people with the intent of enhancing learning and motivating change. Coaching can occur at any step in the PM process, but it most often follows the review and consequences of performance.

Anne Hawley Stevens, founder of ClearRock, is recognized as one of Boston’s top executive coaches.© ClearRock, Inc

One way to look at coaching is that it is an individualized and customized form of performance management. It is different from training, which typically consists only of skill building with the same content delivered to a group of people. It also differs from mentoring, which typically has a career rather than a performance focus and flows exclusively from more senior to more junior employees. All these processes differ from counseling, which usually aims to overcome a problem, conflict, or dysfunctional behavior.63 Effective coaching is developmental, has specific performance goals, and typically includes considerable self-reflection, self-assessment, and feedback. In fact, “research from Gallup, McKinsey, and Harvard recommends that giving feedback should be the most used tool in a coach’s toolbox.”64 The Self-Assessments throughout this book can serve as important elements for your own coaching.65 When approached in this way, coaching is not only an important aspect of effective performance management, but it is also consistent with positive organizational behavior. Consider this: If coaching is done in the way described, who wouldn’t appreciate it or benefit from it?

STEP 4: PROVIDING REWARDS AND OTHER CONSEQUENCES MAJOR QUESTION

How can I use consequences to generate desired outcomes? THE BIGGER PICTURE Of course you like being rewarded, but some rewards are more effective than others. In this section you’ll learn common types of rewards and the potential outcomes of specific reward systems. You’ll see how organizations use various criteria, such as results and behaviors, to distribute rewards, as well as why rewards can fail to motivate as intended. Rewards are a critical component of performance management. And just as particular motivational approaches affect people differently, so do rewards. Some employees see their job as the source of a paycheck and little else. Others derive great pleasure from their job and association with coworkers. Even volunteers who donate their time to charitable organizations, such as Habitat for Humanity, walk away with rewards in the form of social recognition and the pride of having given unselfishly of their time. People often also see such work as highly meaningful (recall the Chapter 3 discussion). Hence, the subject of organizational rewards includes but goes far beyond monetary compensation. This section examines key factors of organizational reward systems.

U.S. Air Force photo by Staff Sgt. Jamal D. Sutter/Released

Key Factors in Organizational Rewards Despite the fact that reward systems vary widely, they do share some common components. The model in Figure 6.3 diagrams the relationship of three components: 1. Types of rewards 2. Distribution criteria 3. Desired outcomes

FIGURE 6.3   Key factors in organizational reward systems

Let us examine these components and then discuss pay for performance.

Types of Rewards Financial, material, and social rewards qualify as extrinsic rewards because they come from the environment. Psychic rewards, however, are intrinsic rewards because they are self‐ granted. If you work primarily to obtain rewards such as money or status, you are extrinsically motivated. If you derive your primary reward from the task itself, or the feeling that your work is meaningfulPage 230 and gives you a sense of responsibility, then you are motivated by intrinsic rewards (recall extrinsic and intrinsic motivation from Chapter 5). The relative importance of extrinsic and intrinsic rewards is a matter of culture and personal preferences, so it is critically important to know what types of rewards you and others value most. This knowledge can make the difference in your getting what you want personally, as well as in your ability to effectively manage others. It can also assist you in identifying employers with whom you fit.66 For example, if you’re hard-charging, a high income is very important to you, and you like to be rewarded based on your own efforts, then it would be advisable to look for companies whose reward system aligns with your preferences. You also can use your self-knowledge to “manage up.” One of the authors of this book routinely told his managers shortly after he was hired which of the rewards available for that particular job he valued most. This helped his managers choose and provide rewards that would have the most positive impact.

Self‐Assessment 6.2 will help you identify the rewards you value most and also show you what a survey of employees revealed they valued most. Use your results to complete the Take-Away Application that follows.

SELF-ASSESSMENT 6.2 WHAT REWARDS DO I VALUE MOST? Please be prepared to answer these questions if your instructor has assigned Self- Assessment 6.2 in Connect.

1. Were your perceptions accurate? Why or why not? 2. What would Vroom’s expectancy theory (covered in Chapter 5) suggest you should do? 3. Would you generalize the actual survey results to all nonmanagerial employees? Why or why not?

Page 231 TAKE‐AWAY‐APPLICATION Applying Knowledge of My Preferred Rewards Using the results of Self‐Assessment 6.2, answer the following:

1. Which rewards in the list are extrinsic? Intrinsic? 2. Do your personal top five most-valued items contain more intrinsic or extrinsic rewards? 3. What are your three most valued rewards from the list? 4. Assume you are job hunting. How can you find out whether a given company provides the three rewards you value most?

Distribution Criteria Organizations use three general criteria for distributing rewards:  Results. Tangible results include quantity produced, quality, and individual, group, or

organizational performance. These are often accounting-type measures—sales, profit, or error rate. Employers increasingly include customer satisfaction.

 Behavior and actions. Examples are teamwork, cooperation, risk taking, and creativity.  Nonperformance considerations. Examples are abundant, such as rewards linked to seniority

or job title. Associate attorneys’ salaries are often linked to the number of years out of law school—first-year associates get paid a set salary, which differs from second-year associates, and so on. Night or weekend shifts often pay differently. Perks, like use of a company plane or membership to a golf club, often received by executives are nonperformance rewards. They get them just because they hold the job not because of what they do.67

Industries, companies, and jobs all differ, and so too should their performance and reward- distribution criteria. Many Internet-based companies, for example, track number of page views, registered users, and app downloads as performance criteria. These may or may not be relevant to individual employee, team, or organizational performance.

Netscape founder, and now legendary tech investor, Marc Andreessen is leading a charge to do away with what he calls “vanity” or “bull#$!% metrics.” He argues that many common metrics are meaningless and don’t capture performance. “Download counts can easily be inflated if an app developer is willing to pay.”68 Analytics company Mixpanel is attempting to help with this very problem. Suhail Doshi, one of Mixpanel’s founders, said: “Every business has a natural goal that correlates with its success. For instance, Yelp benefits most when it has more reviews, and Instagram when it has more photos uploaded. Measuring that ‘one key metric’ can lead to insights that are particular to that

business, and optimizing for it can give the company an edge versus competitors that are not so fine-tuned.”69 An excellent example is Facebook. The company has well over 1 billion members, but more meaningful is the number of monthly active users. At the end of 2015 that stood at 1.49 billion, more than for WhatsApp, Twitter, and Instagram combined.70 This measure is one way of comparing Facebook’s performance to competitors’. It also is an excellent measure of customer engagement, which is what many companies—not just social media companies—want. In sum, effective PM includes measures, rewards, and distribution criteria that are aligned.71

Desired Outcomes of the Reward System As Figure 6.3 showed, a good reward system should not only attract and motivate talented people, but it should also foster development and keep talented people from leaving. A Page 232 prime example is Tulsa-based QuikTrip, a gas station and convenience store chain. Good employee wages and benefits, training, and a friendly and supportive culture result in an annual turnover rate of just 13 percent. The industry average is 59 percent! An employee was quoted as saying, “We actually have to open new markets to create movement to give our employees an opportunity to advance because no one leaves.” No wonder QuikTrip made Fortune’s list of Best Companies to Work For (especially for Millennials).72 The Applying OB box below addresses the important topic of rewards and teams.

APPLYING OB

Put the “I” in Team with Appropriate Incentives Many companies and leaders trumpet the importance of teamwork—we win or lose together. Yet most of these same companies reward individuals and not teams. Such inconsistencies undermine teamwork and the effectiveness of PM. If teamwork is truly important, then the following recommendations can ensure that PM practices send consistent signals.

1. Split 50‐50. Awards, bonuses, and recognition should be split evenly. If there is an employee of the year, then be sure to have a team of the year. If money is allocated too, be sure teams and individuals get the same. 2. Acknowledge assistance. Don’t take team members’ help for granted. The supporting cast needs to be explicitly recognized. 3. Allocate credit. Acknowledging others is not enough. Also give them appropriate credit. If a plaque, check, or trip is given to a top-performing individual, then give the same to an entire team. 4. Show enthusiasm and fanfare. Be sure energy and attention for team incentives matches that for individuals. 5. Measure both! If teams are indeed valuable, create and utilize effective means for measuring team performance, just as you do for individuals.

Be Sure You Get the Outcomes You Desire Rewards are exchanges—you are given this for doing that. Professors sometimes give extra credit for doing well in an assignment or course. At work, you may be paid a cash bonus or your commission rate may increase for performing above and beyond your sales quota. Employees of design consulting firm Kimley-Horn and Associates are able to nominate coworkers for spot rewards of $50. Does it work? Last year 4,468 such rewards were given, totaling $245,000 in bonuses.73 And as we’ll explore, rewards come in many forms—financial and nonfinancial. But whatever the case, whoever provides the reward should get what is desired or intended in exchange. There are three potential outcomes from rewards:

1. Desired outcome. You get more of what you intended and for which you are rewarding people. 2. Nothing. The reward can have no effect. 3. Undesired side effects. Rewards reinforce or motivate the wrong behaviors. For example, doctors and hospitals in the US health care system have historically been compensated for the services they provide. This means providers make more money when they run more tests and provide more treatments. Thus postoperative infections and procedure- related strokes are on average twice as profitable as cases that go smoothly. Page 233 A study by Harvard Medical School, Bain Consulting Group, and Texas Health Systems found: Private-insurance and Medicare payments soared when surgeries went awry, outpacing extra treatment costs. In one example, a complication during an intestinal surgery … could lead to an intensive care stay, boosting payments five- fold.… On average, procedures with complications netted $15,700 versus $7,600 for procedures that went well.74 People should get paid for their expertise and work. But performance management is part of both the cause and the solution to this enormous challenge. This example also illustrates how the distribution of rewards can be both an input and a process in the Organizing Framework.

The take-away: Be sure your performance management system produces the desired outcomes and be mindful of undesirable side effects.

Total and Alternative Rewards Including the usual paycheck, the variety and magnitude of organizational rewards have evolved into a mind-boggling array—from child adoption and partner benefits to college tuition reimbursement and stock grants and options. All these are extrinsic rewards, and it is common for nonwage benefits to be 50 percent or more of total compensation.

A report by the Society for Human Resource Management describes the current and broader perspective that is “total rewards.” Total rewards encompass not only compensation and benefits, but also personal and professional growth opportunities and a motivating work environment that includes recognition, job design, and work–life balance. Table 6.8 lists and describes the key components of a total rewards perspective. TABLE 6.8 Components of a Total Rewards Perspective75

Component Description 

Compensation  Base pay, merit pay, incentives, promotions, and pay increases 

Benefits  Health and wellness care, savings and retirement planning, and paid time off 

Work–life effectiveness  Policies and practices to help employees thrive at work and home 

Recognition  Formal and informal programs that acknowledge employee efforts and behaviors  that support the organization’s strategies and objectives 

Talent development 

Training, career development, and other support necessary to improve  performance and advance careers 

This broader view of rewards has grown partly in reaction to stiffer competition and challenging economic conditions, which have made it difficult for cost-conscious organizations to offer higher wages and more benefits each year. Employers have had to find alternative forms of rewards that cost less but still motivate employees to excel.

Alternatives to Money and Promotions McKinsey Consulting found that three noncash rewards were at least as effective as monetary rewards such as cash bonuses, increased pay, and stock options. Those rewards are: 1. Praise from immediate managers (e-mail or handwritten notes, recognition in meetings). 2. Attention from leadership (one-on-one conversations with top leaders, lunch). 3. Opportunities to lead projects or task forces (such as for new products, new practices, or

market research).76 Page 234

OB IN ACTION FOOSBALL? NO THANKS. STOCK THAT MATTERS? SIGN ME UP! Free food, beverages, foosball, and a wide assortment of additional perks are now common at many tech companies. Just as Microsoft, Google, and Facebook pioneered these benefits, today’s start-ups are now leading the way on the employee benefit frontier. The motive for the new practices they’re introducing is to attract, retain, refresh, and boost performance.

Stock that Pays Kik is a social-sharing technology start-up valued at $1 billion. Its approach to rewarding employees with company stock is novel. Historically, when employees left start-ups, they had 90 days to cash out their options or lose them. This often meant they had to borrow funds to buy the stock. Making matters worse, if they then sold the stock, taxes were due on the gains. That enormous expense is a major reason only about 5 percent of employee stock options are ever exercised. Kik founder and CEO Ted Livingston didn’t think this was fair or productive. Now Kik employees don’t have such time constraints for cashing out. Pinterest followed suit, giving its employees seven years. The leaders of both firms are convinced ending the time limit makes it easier to attract and retain talent.

Vacation You Must Take Kik, like other companies in the recent past, adopted an unlimited vacation policy. Take as much as you want, so long as your work is done. But employees took less rather than more, defeating the intention of giving them time to recharge. The solution? A must-take vacation policy that requires every employee to take at least one week every four months.

In an attempt to solve a similar problem, the app developer Evernote gives its employees $1,000 to spend if they take at least a week off. And the CEO of FullContact implemented a “paid paid vacation” policy. The company will “fund any trip an employee wanted to take to the tune of $7,500 as long as they actually went somewhere and didn’t check their work e-mail the entire time.”77 YOUR THOUGHTS?

1. Describe three benefits of the stock reward practices at these companies. Explain not only the benefit but how or why it works. 2. Why do you think the companies noted had such difficulties getting employees to take time off, even with unlimited vacation-time policies in place? 3. Assume you are a founder and CEO of a company. What are your concerns about implementing such policies?

Why Rewards Often Fail and How to Boost Their Effectiveness Here are some of the reasons rewards often fail to motivate.

1. Too much emphasis on monetary rewards. 2. Sense in recipient that extensive benefits are entitlements. 3. Fostering of counterproductive behavior (as discussed in Chapter 2). 4. Long delay between performance and reward. 5. One-size-fits-all rewards. 6. Use of one-shot rewards with short-lived motivational impact. 7. Continued use of demotivating practices such as layoffs, across-the-board raises and cuts,

and excessive executive compensation.78 Page 235 One way to use these findings is as a checklist. The Take-Away Application box provides you an opportunity to apply your new knowledge and help ensure that managers and employers get more for their reward bucks!

TAKE‐AWAY APPLICATION Understanding Why Some Rewards Fail to Motivate Evaluate the rewards you receive at school, at work, and in other areas of life against the seven reasons listed above for why rewards fail to motivate. For school, try to think of a reward other than grades.

1. Decide whether any rewards you receive suffer one or more of these shortcomings.

2. If you were to improve the motivational effects of this award, what would you change? (Use the list as a guide, but feel free to include other suggestions.) How to Boost the Effectiveness of Rewards One step that can improve the effectiveness of almost any reward system is involving employees in devising the system. Recall the discussion of motivation and procedural justice in Chapter 5. Including them in the design, selection, and assessment of rewards programs increases the chance that employees will perceive the rewards as fair and valuable. (Valuable rewards are valence outcomes in expectancy theory from Chapter 5.) Involvement also fosters employee engagement—discussed in Chapter 2—because it makes them feel valued. Despite these benefits, only 11 percent of respondents in one study said their companies included employees in the design of reward programs,79 which means 89 percent of companies do not. This may present you and your current or future employers with an opportunity: Including employees is one way to get ahead of the competition.

PROBLEM‐SOLVING APPLICATION Garbage... Not Just the Work but the Outcomes Too City officials in Albuquerque, New Mexico, needed to cut costs. Among the targets they identified was overtime pay of trash collectors. The officials decided to pay trash collection crews for eight hours of work no matter how long it actually took them to finish their routes. The hope was that the crews would work more efficiently and quickly, given that they could then go home early and still get paid for eight hours of work.

This PM practice seemed like a success, and overtime costs dropped significantly. However, unintended consequences emerged. Crews overloaded their trucks to reduce the time they spent going to the dump, but strict weight limits resulted in fines when they arrived. So they drove faster, which resulted in more tickets and accidents. Sometimes they skipped trash pickups and truck maintenance, which generated customer complaints and more frequent vehicle breakdowns.80 APPLY THE 3‐STEP PROBLEM‐SOLVING APPROACH

1. Step 1:Define the problem city officials wanted to fix. 2. Step 2:Identify the potential causes of this problem. (Consider also the common reasons rewards fail to 

motivate.)  3. Step 3:Make your recommendations. 

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Pay for Performance Pay for performance is the popular term for monetary incentives that link at least some portion of pay directly to results or accomplishments. Pay for performance is compensation above and beyond basic wages and salary, and its use is consistent with recommendations derived from the expectancy theory of motivation.81 Many people refer to it simply as incentive or variable pay, which has consistently grown as a percentage of total compensation for decades. This means that over the course of your career, an increasing portion of your pay will be variable. The general idea behind pay-for-performance schemes—including but not limited to merit pay, bonuses, and profit sharing—is to give employees an incentive for working harder and/or smarter. Supporters of incentive compensation say something extra is needed because hourly wages and fixed salaries do little more than motivate people to show up and put in the required hours. We look next at the types of pay for performance. Piece-Rate Pay The most basic form of pay for performance is the traditional piece-rate plan, in which the employee is paid a specified amount of money for each unit of work. Many contractors use such plans, such as by paying a set amount for replacing a roof, number of homes connected to the Internet, or boxes of cookies sold.

Commissions Sales commissions, whereby a salesperson receives a specified amount of money for each unit sold, are another long-standing example of pay for performance. This approach is utilized very successfully by ride-sharing companies Uber and Lyft, as well as many other companies in the “gig economy.” In these arrangements companies contract with people to do work for a set fee or commission. The company benefits by not having to officially hire employees or pay the associated costs (such as taxes and benefits), while the workers get to control their hours, location, and amount of work they perform.

Selling Girl Scout cookies is a famous form of piece‐rate work. Each year Girl Scouts sell approximately 200 million  boxes and take in $776 million.82© Allen J. Schaben/Los Angeles Times/Getty Images

Uber has over 300,000 active drivers in the United States, who earn 70 to 80 percent of each fare they collect.83© Andrew Harrer/Bloomberg/Getty Images

Aligning Organizational Objective and Rewards Nutrisystem, the weight-loss program, meets many of its organizational objectives by using pay for performance. The company aims to increase sales, staff particular working hours, and expand its customer base. Its call-center sales associates are paid the greater of either an hourly rate ($10 an hour for the first 40 hours per week and $15 an hour for any additional hours) or a flat-rate Page 237 payment based on sales. Unlike conventional commissions, the flat rate is not tied to the sales price of the product. Instead, the payments vary depending on the shift during which the sale occurs and whether the sale resulted from an incoming or outgoing call. Higher payments are made for outgoing calls and for sales during off-peak times. Thus Nutrisystem incentivizes employees to work less-desirable hours and to make outgoing calls. The company also avoids overtime payments while at the same time rewarding desired employee behaviors.84 This example underscores the increasingly common practice of using performance criteria in reward systems.

Making Pay for Performance Work As in all other OB topics, we can use research and practice as a guide. Monetary rewards can work if they help people meet their basic needs, confer status, or allow people to provide for their families. However, monetary rewards do not increase knowledge, skills, and abilities, nor do they enrich jobs or enhance intrinsic motivation.85 Research shows mixed outcomes for pay for performance—sometimes increased performance results and sometimes decreased performance. A comprehensive review of the literature found only a modest positive relationship between financial incentives and performance quantity, and no impact on

performance quality.86 The results are especially unimpressive for executive performance. Only a weak link was found between large executive bonuses paid out in good years and improvement in corporate profitability in subsequent years.87 Bernie Marcus, cofounder and former board member of Home Depot, was an early advocate of pay for performance and supported clawing back bonuses from executives who didn’t meet performance expectations. In fact, during his time as a leader at the company he often refused bonuses.

John Thain is a three‐time Wall Street CEO; he led the New York Stock Exchange, Merrill Lynch, and most recently  CIT. Many people outside Wall Street know him best for being fired from Merrill Lynch after it was merged with  Bank of America during the Wall Street meltdown of 2009. Not only was Thain accused of not disclosing Merrill  Lynch’s true mortgage liabilities, but he also spent $1 million renovating his own office during the same  period.88© Scott Eells/Bloomberg/Getty Images

John Thain, former CEO of CIT Group, had his bonus cut 30 percent because he did not effectively integrate One-West, a company CIT Group acquired. The rationale was that he had “plenty of time to get his ducks in a row... Closing a deal is only the beginning. CIT’s approach, tying incentives to the actual achievement of the promised benefit of a merger, is the right one... Even when a merger is sensible, making it work is a crucial part of the job for a company’s leaders.”89

However, companies with the best pay-for-performance results

 Paid top performers substantially more than their other employees.

 Reduced “gaming” of the system by increasing transparency.  Utilized multiple measures of performance.  Calibrated performance measures to ensure accuracy and consistency. A company’s culture should reinforce such practices, and leadership support is the most important contributor to such a culture. Even with limited compensation dollars to spend, “the best pay for performance organizations often carve out funds for extra rewards to high performers and tend to see fewer employees whose perfor

REINFORCEMENT AND CONSEQUENCES MAJOR QUESTION

How can I use reinforcement and consequences to improve performance? THE BIGGER PICTURE In this section, you’ll learn about three especially effective and practical means for influencing your behavior and that of others: (1) the law of effect and the way it relates to respondent and operant conditioning; (2) common types of reinforcement; and (3) the way managers can increase the effectiveness of reinforcement using a variety of reinforcement schedules. Providing consequences is the last stage of the performance management process. Do managers always get it right? Consider these scenarios:

 You stop making suggestions on how to improve your department because your boss never acts on your ideas.

 Your colleague, the ultimate political animal in your office, gets a great promotion, while her more skilled coworkers (like you) scratch their heads and gossip about the injustice.

In the first instance, a productive behavior faded away for lack of encouragement. In the second. unproductive behavior was unwittingly rewarded. The way rewards, and consequences more generally, are administered can make or break performance management efforts. Effective use of these OB tools is particularly important given that pay raises and promotions are often powerful career outcomes in the Organizing Framework. They often influence subsequent perceptions of fairness, intentions of quitting, emotions, and a range of behaviors at work.

The pioneering work of Edward L. Thorndike, B. F. Skinner, and many others since have outlined behavior modification and reinforcement techniques. These techniques help managers achieve the desired effect when providing feedback and granting rewards.

The Law of Effect—Linking Consequences and Behaviors During the early 1900s, psychologist Edward L. Thorndike observed in his lab that a cat would behave randomly when placed in a small box with a secret trip lever that opened a door. However, once the cat had accidentally tripped the lever and escaped, it would go straight to the lever when placed back in the box. Hence, Thorndike formulated his famous law of effect, which says behavior with favorable consequences tends to be repeated, while behavior with unfavorable consequences tends to disappear.91 This was a dramatic departure from previous notions that behavior was the product of instincts.

Using Reinforcement to Condition Behavior B. F. Skinner refined Thorndike’s conclusion that behavior is controlled by its consequences. Skinner’s field of work became known as behaviorism because he dealt strictly with observable behavior. He believed it was pointless to explain behavior in terms of unobservable inner states,

such as needs, drives, attitudes, or thought processes.92 He Page 239 instead drew an important distinction between two types of behavior: respondent and operant behavior.93 Skinner labeled unlearned reflexes or stimulus–response (S–R) connections respondent behavior. This category of behavior describes a very small proportion of adult human behavior, like shedding tears while peeling onions and reflexively withdrawing your hand from a hot stove.94 Skinner attached the label operant behavior to behavior learned when we “operate on” the environment to produce desired consequences. Some call this view the response–stimulus (R–S) model. Years of controlled experiments with pigeons in “Skinner boxes” led to the development of a sophisticated technology of behavior control, or operant conditioning. For example, Skinner taught pigeons how to pace figure eights and how to bowl by reinforcing the underweight (and thus hungry) birds with food whenever they more closely approximated target behaviors. Skinner’s work has significant implications for OB because the vast majority of organizational behavior falls into the operant category.95

Contingent Consequences According to Skinner’s operant theory, contingent consequences control behavior in one of four ways: 1. Positive reinforcement 2. Negative reinforcement 3. Punishment 4. Extinction The term contingent here means there is a purposeful if-then link between the target behavior and the consequence. So you should first think of the target behavior and whether you want to increase or decrease it, and then choose the appropriate consequence (see Figure 6.4). We next look more closely at the four behavioral controls. FIGURE 6.4   Contingent consequences in operant conditioning

Increase Desired Behaviors Positive reinforcement is the process of strengthening a behavior by contingently presenting something pleasing. A behavior is strengthened when it increases in frequency and weakened when it decreases in frequency. For instance, in the wake of the BP oil spill in 2010, newly

appointed CEO Bob Dudley based 100 percent of employees’ variable pay (bonuses) on safety for the fourth quarter of 2010.96 This was a reward or reinforcer for safe behaviors. Page 240 Negative reinforcement also strengthens a desired behavior by contingently withdrawing something displeasing. For example, many probationary periods for new hires are applications of negative reinforcement. During probation periods (often your first 30, 60, or 90 days on a new job) you need to have weekly meetings with your boss or have somebody sign off on your work. Once you’ve demonstrated your skill, these requirements are removed. It’s easy to confuse negative reinforcement with negative feedback, which is a form of punishment. Negative reinforcement, as the word reinforcement indicates, strengthens a behavior because it provides relief from something undesirable (paperwork, meetings, or yelling). Decrease Undesired Behaviors Punishment is the process of weakening behavior through either the contingent presentation of something displeasing or the contingent withdrawal of something positive. The U.S. Department of Transportation now fines airlines up to $27,500 per passenger for planes left on the tarmac for more than three hours. This policy reduced reported cases from 535 to 12 in the first year it was implemented.97 And while approximately 69 percent of companies have employee health and wellness programs, and 75 percent of these use incentives,98 some companies are now punishing employees for unhealthy behaviors. CVS Caremark, for instance, now requires its employees to participate in health screenings or pay an extra $600 for their health care premiums.99 This practice is supported by research at the University of Pennsylvania. The administrators offered different cash incentives for employee participation in “step programs,” with a goal that every employee should walk 7,000 steps per day. The incentives did not affect goal achievement any better than having no incentives. However, participants who would have been penalized for not walking 7,000 steps reached the goal 55 percent of the time. A related study produced similar results. Participants who were at risk of losing their $550 health insurance premium incentive for noncompliance with healthy behaviors were more successful than those that were rewarded for doing so.100 Weakening a behavior by ignoring it or making sure it is not reinforced is referred to as extinction. Discouraging a former boyfriend or girlfriend by blocking phone calls or texts or unfriending the person on Facebook is an extinction strategy. A good analogy for extinction is the fate of your houseplants if you stopped watering them. Like a plant without water, a behavior without occasional reinforcement eventually dies. Although they are very different processes, both punishment and extinction have the same weakening effect on behavior.

The bottom line: Knowing the difference between these various forms of contingent consequences provides you with a number of powerful tools with which to manage yourself and others. Put another way, you just learned four tools for influencing behavior. Most people think of and use only two—positive reinforcement and punishment (negative feedback). Apply your knowledge and get ahead!

Positive Reinforcement Schedules You can supercharge or at least enhance the effectiveness of positive reinforcement (rewards) by managing the timing or schedule of reinforcement. Continuous and intermittent reinforcement schedules are two common means for timing the administration of reinforcers. Continuous Reinforcement If every instance of a target behavior is reinforced, then a continuous reinforcement (CRF) schedule is in effect. For instance, if you get paid every time you make a sale, this is a CRF

schedule. The sale is the desired behavior and payment is the reinforcement. CRF is especially useful for making early links between desired behaviors and outcomes, but they are susceptible to perceptions of entitlement and rapid extinction if the link is broken. Page 241 Just as you train your dog to do a new trick by providing a reward each time he or she does it successfully, CRF schedules are especially useful when employees learn a new task or skill. For example, assume you are asked to conduct an analysis of the individual purchasing patterns of your employer’s largest customers. Your manager could help you develop this skill by giving you feedback as you complete the analysis for each customer. This feedback and recognition reinforce your performance on this new task. However, you can see that while this reinforcement is especially helpful and appreciated for the first few customer analyses, it likely loses its effect after the 10th, 20th, and 30th customer. Enough already!

Like dogs, humans respond to reinforcement. To make this work for you, identify a behavior you want somebody  to perform, and when they do be sure to shower them with praise, recognition, or some other form of reward  they value and tell them it is because of what they did. The behavior will likely happen again.  © Huntstock/Getty Images RF

One way to help guard against the fading benefit of reinforcers is to use intermittent schedules.

Intermittent Reinforcement Unlike CRF schedules, intermittent reinforcement consists of reinforcement of some but not all instances of a target behavior. There are four subcategories of intermittent schedules. Table 6.9 shows them along with examples. TABLE 6.9 REINFORCEMENT SCHEDULES, EXAMPLES, ADVANTAGES, AND DISADVANTAGES

REINFORCEMENT SCHEDULE EXAMPLES  ADVANTAGES  DISADVANTAGES 

Fixed ratio 

Piece‐rate pay;  bonuses tied to the  sale of a fixed number  of units 

Clear and predictable  link between the  behavior and the  reinforcer 

Costly to monitor  performance and  administer reinforcers (like  money); reinforcers lose  effect over time 

Variable ratio 

Slot machines that pay  after a variable number  of pulls; lotteries that  pay after a variable  number of tickets sold 

Strong motivation to  continue until reinforcer  is received; less costly  than fixed ratio 

Some desired behaviors  will not be rewarded;  potentially long periods  between reinforcers (such  as payouts) 

Fixed interval 

Paychecks (every two  weeks or once a  month); annual  bonuses; probationary  periods 

Clear and predictable  link between the  behavior and reinforcer;  less costly than fixed  ratio 

Inconsistent effort and  performance over the  interval (majority of  effort/performance occurs  near reinforcer) 

Variable interval 

Random supervisor  “pats on the back”;  spot rewards; random  audits (financial);  random drug tests of  athletes and  employees; pop  quizzes 

Consistent and strong  motivation to perform  over time; least costly  schedule due to  relatively little  monitoring and  administration 

Some desired behaviors  will not be reinforced;  potentially long periods  between reinforcers  (payouts) 

Page 242

Work Organizations Typically Rely on the Weakest Schedule Generally, variable ratio and variable interval schedules of reinforcement produce the strongest behaviors that are most resistant to extinction. As gamblers will attest, variable schedules hold the promise of reinforcement after the next roll of the dice, spin of the wheel, or pull of the lever. In contrast, continuous and fixed schedules are the least likely to elicit the desired response over time. Nevertheless, the majority of work organizations rely on fixed intervals of reinforcement, such as hourly wages and annual reviews and raises. Reinforcement Schedules and Performance Figure 6.5 illustrates the relative effect of the schedules on performance over time. Consider three professors who teach different sections of the same OB course. Assume their students are essentially equal in age, experience, and GPAs across the three sections. This is the scenario:  Professor Blue bases student grades solely on short quizzes given at the beginning of every class

(continuous reinforcement).  Professor Black bases grades on a midterm and final exams of equal weight (fixed interval).  Professor Red uses a number of unannounced or pop quizzes (variable interval).

We expect the level of preparation for each class and overall academic performance (preparation and learning) to follow the patterns in Figure 6.5. Professor Blue’s students will start fast and prepare diligently for each class. However, they will then settle into a routine and a common level of preparation. Over time they will figure out what is required and do less. Some may even quit preparing once they have a clear sense of what their overall grade will be. FIGURE 6.5   Reinforcement schedules and performance

SOURCE: © 2014 Mel Fugate.

The pattern for Professor Black’s students is all too common. They start slowly, knowing there is plenty of time before the midterm. When it grows near, the intensity of their preparation increases and some begin cramming. Once the midterm passes, they disconnect for a while until they ramp up again for the final.

In contrast, Professor Red’s students will likely maintain a higher average level of preparation throughout the course, because there is a chance they will have a pop quiz and be graded in every session.

Page 243 The bottom line: Students generally don’t like unannounced or pop quizzes. However, if the professor’s goal is increased student preparation and learning, then variable-interval grading is one means for generating a higher average level of performance. These same patterns and results apply in business settings too. For instance, many sales and professional service jobs such as accounting and law have monthly numbers to meet, like sales or billable hours. This often means employees get far more work done in the last few days of the month than in the beginning (see Figure 6.5). Practical Implications for Using the Strongest Schedule In general, any type of consequence—whether reward or punishment—is more effective when administered in proximity to the behavior. Effectiveness wears off as time passes.101 You are unlikely to change your professor’s grading format or the timing of your employer’s pay and bonus schedules. However, there are many ways you can put your knowledge of positive reinforcement schedules to use within the confines of existing practices. Spot Rewards. At work, spot rewards are highly effective. If your coworker has worked hard to make your project a success, recognize her efforts via an e-mail to the entire team including your manager. Your manager, in turn, may decide to give Friday off to those who complete their current work satisfactorily and ahead of schedule. Variable Rewards/Bonuses. Entrepreneurs can especially benefit from applying knowledge of reinforcement schedules. Assume you started your own business and, like many new businesses owners, you are short on cash. You would like to provide regular bonuses and pay raises, but you can afford monetary rewards only when your company secures a new customer or a big

order. The variable nature of these rewards not only recognizes employees’ efforts and success, but it also motivates them to work hard in the future because they know that such efforts are recognized and reinforced. Celebrations. When it comes to school, we advocate celebrating and thus reinforcing “victories,” such as completing a paper, achieving a good score on an exam, and ending a semester in which you worked hard and performed well. Scattering these reinforcers throughout the semester can help motivate and reenergize you to work hard in the future, especially if you make these rewards contingent on good behavior. All three of these examples apply variable schedules. Think of your own examples and consider their effectiveness. Reinforcement schedules, like the larger process of performance management, are often limited only by your creativity and willingness to apply your knowledge. Use the knowledge of PM you gained in this chapter to better underst

What Did I Learn? In our coverage of performance management, you learned how you can use goals, feedback, rewards, and  reinforcement to boost effectiveness. Reinforce your learning with the Key Points below. Consolidate it using the  Organizing Framework. Then challenge your mastery of the material by answering the Major Questions in your  own words.

Key Points for Understanding Chapter 6 You learned the following key points.

6.1 PERFORMANCE MANAGEMENT PROCESSES  Effective performance management (PM) is a process of defining, monitoring, reviewing, and

providing consequences.  PM is often used for employee-related decisions and development. It also is a powerful means for

signaling what is wanted or not.  Employee perceptions of the value and effectiveness of PM are often very low.  Managers and leaders are critical to the perceived and actual success of PM. 6.2 STEP 1: DEFINE PERFORMANCE—EXPECTATIONS AND GOALS  Goal setting is critical to effective PM.  Both learning and performance goals can be used.  SMART goals are more likely to be achieved.  Goal commitment, support and feedback, and action plans foster goal achievement.  PM can be improved using behavioral, objective, and task/project goals. 6.3 STEP 2: PERFORMANCE MONITORING AND EVALUATION  Monitoring performance requires making effective measurements of progress and/or outcomes, such

as of the timeliness, quality, or quantity.  Evaluation requires comparing performance measures to expectations or goals.  Performance evaluation is often hampered by perceptual errors.  Multi-rater or 360-degree feedback can make performance evaluation more accurate. 6.4 STEP 3: PERFORMANCE REVIEW, FEEDBACK, AND COACHING  Two basic functions of feedback are to instruct and motivate.

 Sources of feedback include others, the task, and yourself.  Leaders and managers often don’t receive useful feedback, yet both are critical in ensuring that others

do receive it.  The effectiveness of positive and negative feedback is greatly influenced by the receiver’s

perceptions.  Coaching helps translate feedback into desired change. 6.5 STEP 4: PROVIDING REWARDS AND OTHER CONSEQUENCES  Rewards can be extrinsic or intrinsic.  Results, behavior, and nonperformance considerations are common criteria by which rewards are

distributed.  Rewards are tools to help achieve desired outcomes, such as to attract, motivate, retain, develop, and

engage employees.  Alternate rewards practices increasingly common today are total rewards, noncash, and pay for

performance. 6.6 REINFORCEMENT AND CONSEQUENCES  According to the law of effect, behaviors are either repeated or diminished depending on the

desirability of the consequences to which they are linked.  Providing contingent consequences is fundamental to effective reinforcement.  Page 245 Both positive and negative reinforcement increase desired behaviors.  Punishment and extinction both decrease undesirable behaviors.  The schedule on which reinforcers are administered can increase their effectiveness. The Organizing Framework for Chapter 6 As shown in Figure 6.6, performance management practices are associated with nearly every outcome across  the three levels of OB. At the individual level these outcomes are task performance, work attitudes, well‐ being/flourishing, citizenship and counterproductive behaviors, turnover, career outcomes, and creativity. Group  and team‐level performance, along with group satisfaction, cohesion, and conflict, are similarly related. As for the  organizational level, performance management practices link to accounting/financial performance, customer  satisfaction, reputation, and even an organization’s overall survival.

FIGURE 6.6   Organizing Framework for Understanding and Applying OB

© 2014 Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without permission of the authors.  

Challenge: Major Questions for Chapter 6 You should now be able to answer the following questions. Unless you can, have you really processed and  internalized the lessons in the chapter? Refer to the Key Points, Figure 6.6, the chapter itself, and your notes to  revisit and answer the following major questions: 1. What are the elements of effective performance management, and how can this knowledge benefit

me? 2. How can improving my goal setting give me an advantage? 3. How can performance monitoring and evaluation improve my performance and my ability to manage

the performance of others? 4. How can I use feedback and coaching to review and improve performance? 5. How can I use consequences to generate desired outcomes? 6. How can I use reinforcement and consequences to improve performance? Page 246 IMPLICATIONS FOR ME We offer six notable applications. First, look for companies and managers with PM practices that align with your personal values, preferences, and aspirations. If you like continual feedback and large differentials between top and low performers, find opportunities that match. Second, compare what managers and organizations say they value and what they reward. Many will say they value and reward performance, but they give everybody the same 3 percent raise or promote people based on tenure rather than performance. Third, use Table 6.2 to build your own goal commitment; this alone can set you apart from the competition. Fourth, if you’re not given regular feedback, ask for it. This step will help you avoid surprises during your reviews and boost your performance in between. Fifth, using Self‐ Assessment 6.2, identify the rewards you value most, then tell your managers which

available rewards you value most. Be sure to think broadly about rewards, and don’t think only about the money. If you value time (vacation), autonomy (flexibility to work from home), or development (tuition benefits), making these part of your total rewards can enhance the value of your compensation. IMPLICATIONS FOR MANAGERS The following seven take-aways may prove especially useful. First, you can immediately increase your management effectiveness by ensuring that you set clear expectations and provide regular and effective feedback for those you manage. Second, make explicit and clear links between what you reward and the behaviors and/or outcomes rewards are intended to signal. Third, practice the recommendations in Table 6.2 to boost goal commitment. This, along with ensuring your people set SMART goals, will help set them up to win. Fourth, guard against common perceptual errors when evaluating performance. Be sure you effectively measure the appropriate elements of performance (both quantitative and qualitative) for a particular job and individual. Fifth, provide more feedback! Apply what you learned here to make it more effective (see Table 6.6), and try to focus on development more than evaluation. Feedback is a skill. Practice it and you’ll get better. Sixth, be certain your rewards are delivering the intended outcomes. Clearly linking them to expectations helps. Finally, if teamwork is important and truly valued, then be certain your PM practices send such signals.

Problem‐Solving Application Case Why Are Some Companies Yanking Forced Ranking? Money is an important tool for both attracting and motivating talent. If you owned a company or were its CEO,  you would likely agree and choose performance management practices to deliver such outcomes. You would  probably also favor rewarding high performers and having an effective means for removing low performers. For  decades, forced‐ranking appraisal practices have helped organizations and their managers differentiate employee  performance and achieve both objectives—rewarding top performers and providing grounds for terminating the  low performers.

Broad Appeal These qualities made forced ranking (also known as forced distribution or “rank and yank”) a popular  performance management tool for many marquee companies, such as Ford Motor Company, 3M, and Intel. GE,  for instance, made the approach famous using its “vitality curve” to rate employees into three categories—top 20  percent, middle 70 percent, and bottom 10 percent. The top often received raises two to three times greater  than the next group, while the bottom group was often put on probation or fired.102 Microsoft also used forced  distribution to ensure it was always raising the bar on talent and performance. It replaced its lowest‐performing  employees with the best in the market and ensured there was always more exciting work than it had people to  do it.103 One argument in support of forced ranking is increased accountability. It requires managers to do the difficult  work of differentiating performance. While nobody likes to be the bearer of bad news, not confronting  performance issues is an underlying cause of score inflation (grade inflation in school) and mediocrity. The  implication is that not everybody can be a top performer, and it is management’s job to know and acknowledge  the differences. Forced ranking also can be used to remove “dead wood.” Employees who aren’t as driven,  capable, or competitive are driven out and replaced with those who are.104  Another central supportive argument is that resources are constrained, notably people and money. Culling the  workforce based on performance is a way to be sure your best employees are able to work on the company’s  most important and valuable projects, products, and services. And it allows companies not only to allocate more 

to their best employees, but also to create clear and often substantial differences between different levels of  performance and associated rewards. 

This All Makes Sense, But Why Are Many Company’s Yanking the Practice? Performance management practices have compounded the challenges faced by Yahoo and Amazon. According to  a spokesperson at Yahoo, the company's program—quarterly performance review (QPR) recommended by  McKinsey Consulting—is intended to “allow for high performers to engage in increasingly larger opportunities at  our company, as well as for low performers to be transitioned out.”105 However, problems arose when managers  and employees accused the company of using it to fire employees “for performance” instead of laying them off.  The scale of this issue is substantial, given that nearly one‐third of the company’s workforce left or was  terminated in 2015–2016, though the law requires at least 30 days’ notice for mass layoffs.106 Similar practices  also were linked to discriminatory dismissals at Ford, Goodyear, and Capital One and caused them to change their  practices.107 Amazon has embraced forced ranking to foster internal competition and drive employees to always improve. Its  organizational‐level review (OLR) process requires managers to select which employees to support and which to  “sacrifice” (not all employees can pass). Even after an incredibly rigorous hiring process intended to select the  best of the best, employees are distributed into high, average, and low performers—20, 60, and 20 percent,  respectively. This means 80 percent of the company’s employees have stopped being stars by the time of their  first performance review. The process is challenging for managers too, who must continually select talented  subordinates to fire at every performance review.108  Rank and Yank at Adobe Another company that championed forced ranking was Adobe. It had a rigorous, complex, technology‐driven  process for ranking its employees each year. Performance expectations were set and performance  Page 248was  measured, documented, reviewed, and rewarded. The goals were to help the company improve employee  performance and ensure it had the best talent. However, what the company actually achieved was quite  different. Adobe calculated that its process of reviewing its 13,000 employees required approximately 80,000 hours from  its 2,000 managers each January and February. This massive time commitment actually reduced employee  performance, because this time wasn’t being spent on productive work like developing products or cultivating  and serving customers. And while the system was meant to ensure manager accountability, it actually allowed  many to avoid confronting low performers until the annual review. This meant low performers were terminated  only once a year. 

Donna Morris, Adobe’s global senior vice president of people and places, described the PM flaws this way:  “Especially troublesome was that the company’s ‘rank and yank’ system, which forced managers to identify and  fire their least productive team members, caused so much infighting and resentment that, each year, it was  making some of the software maker’s best people flee to competitors.”109  Moreover, the performance  management practices did not align with the goals of employee growth and team work, both fundamental to  Adobe’s success. It instead focused on past performance and compared employees to each other.  The shortcomings of the process were underscored by internal “employee surveys that revealed employees felt  less inspired and motivated afterwards—and turnover increased.”110 This last point compounded problems by  causing the wrong employees—the high‐performing ones—to quit.  Assume you are Donna Morris, Adobe’s global senior vice president of people and places. How does the  information in the case inform your recommendations about PM practices at Adobe? 

Apply the 3-Step Problem-Solving Approach to OB Use the Organizing Framework in Figure 6.6 and the 3‐Step Problem‐Solving Approach to help identify inputs,  processes, and outcomes relative to this case.

1. Step 1: Define the problem. A. Look first to the Outcome box of the Organizing Framework to help identify the important

problem(s) in this case. Remember that a problem is a gap between a desired and current state. State your problem as a gap, and be sure to consider problems at all three levels. If more than one desired outcome is not being accomplished, decide which one is most important and focus on it for steps 2 and 3.

B. Cases have protagonists (key players), and problems are generally viewed from a particular protagonist’s perspective. In this case you’re asked to assume the role of Donna Morris, senior VP of people and places.

C. Use details in the case to determine the key problem. Don’t assume, infer, or create problems that are not included in the case.

D. To refine your choice, ask yourself, Why is this a problem? Focus on topics in the current chapter, because we generally select cases that illustrate concepts in the current chapter.

Step 2: Identify causes of the problem by using material from this chapter, which has been summarized in the Organizing Framework for Chapter 6 and is shown in Figure 6.6. Causes will tend to show up in either the Inputs box or the Processes box. E. Start by looking at the Organizing Framework (Figure 6.6) and determine which person

factors, if any, are most likely causes to the defined problem. For each cause, explain why this is a cause of the problem. Asking why multiple times is more likely to lead you to root causes of the problem. For example, do particular skills, values, or personality profiles help explain the problem you defined in Step 1? This might lead to the conclusion that Adobe’s PM practices suit particular employees well and others not.

F. Follow the same process for the situation factors. For each ask yourself, Why is this a cause? For example, the quality of relationships between managers and subordinates might have some effect on the problem you defined. Other HR practices, aside from performance management, might contribute to the problem. If you agree, which specific practices and why? By following the process of asking why multiple times you are likely to arrive at a more complete and accurate list of causes. Again, look to the Organizing Framework for this chapter for guidance.

G. Now consider the Processes box in the Organizing Framework. Performance management processes are clearly part of the story, but are any other processes at the individual, group/team, or organizational level potential causes of your defined problem? For any process you consider, ask yourself, Why is this a cause? Again, do this for several iterations to arrive at the root causes.

H. Page 249 To check the accuracy or appropriateness of the causes, be sure to map them onto the defined problem.

Step 3: Make your recommendations for solving the problem. Consider whether you want to resolve it, solve it, or dissolve it (see Section 1.5). Which recommendation is desirable and feasible? I. Given the causes identified in Step 2, what are your best recommendations? Use the material in

the current chapter that best suits the cause. Remember to consider the OB in Action and Applying OB boxes, because these contain insights into what others have done. These insights might be especially useful for this case.

J. Be sure to consider the Organizing Framework—both person and situation factors, as well as processes at different levels.

K. Create an action plan for implementing your recommendations.

8 GROUPS AND TEAMS

How Can Working with Others Increase Everybody’s Performance? MAJOR TOPICS I’LL LEARN AND QUESTIONS I SHOULD BE ABLE TO ANSWER

1. 8.1 GROUP CHARACTERISTICS 

MAJOR QUESTION: How can knowledge of groups and their key characteristics make me more successful?

2. 8.2  THE GROUP DEVELOPMENT PROCESS 

MAJOR QUESTION: How can understanding the group development process make me more effective at school and work?

3. 8.3  TEAMS AND THE POWER OF COMMON PURPOSE 

MAJOR QUESTION: What are the characteristics of effective team players, team types, and interdependence, and how can these improve my performance in teams?

4. 8.4  TRUST BUILDING AND REPAIR—ESSENTIAL TOOLS FOR SUCCESS 

MAJOR QUESTION: How can I build and repair trust in ways that make me more effective at school, work, and home?

5. 8.5  KEYS TO TEAM EFFECTIVENESS 

MAJOR QUESTION: What are the keys to effective teams, and how can I apply this knowledge to give me an advantage? Figure 8.1 summarizes what you will learn in this chapter. The main focus is on groups and teams and associated processes within the Organizing Framework. You’ll see that group and team dynamics affect outcomes across all levels of OB. For instance, groups and teams powerfully affect the individual-level outcomes of their members such as task performance, work attitudes, turnover, flourishing, and creativity. Groups and teams similarly affect their own collective outcomes, such as group/team performance, group satisfaction, and group cohesion and conflict. Finally, because many organizations consist of teams, they also affect organization-level outcomes like financial performance, organizational performance, customer satisfaction, and innovation. Page 295

FIGURE 8.1 Organizing Framework for Understanding and Applying OB

© 2014 Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without permission of the authors.

In addition to being responsible for important outcomes, such as rescuing the injured or even saving their lives,  military medical teams illustrate many team concepts covered in this chapter. These medical teams, for instance,  serve both organizational and individual functions. They complete complex tasks that individuals alone simply  cannot, and they also confirm individual team member’s self‐esteem and sense of identity. The members of  military medical teams fulfill various task and maintenance roles essential to effective team dynamics and  functioning, such as information seeker and encourager, respectively. Fundamental to all of this are the 

teamwork competencies of the team members, such as possessing and applying their relevant knowledge and  skills in constructive ways for the benefit of the soldiers they save and the overall team.SOURCE: Sgt. Daniel

Schroeder/U.S. A

Winning at Work Using Team Charters to Boost Effectiveness When working in teams, most students and employees hurry into the task at hand. While this works sometimes, social scientists and OB professionals have identified a better approach. They recommend that individuals in the team create team charters that detail members’ mutual expectations about how the team will operate, allocate resources, resolve conflict, and meet its commitments.1 This process may include identifying member strengths, setting goals, agreeing on processes for communication and decision making, and deciding how to measure and use contributions from members. In OB concept the situation always matters. The same is true for teams. The implication is that every team is comprised of unique individuals and operates within a particular context. This means that each team will be confronted with its own opportunities and challenges. It is during the team charter process that team members are encouraged to anticipate the opportunities, needs, and challenges of the team. For instance, the team charter process provide the chance to determine and agree upon expectations for the team and its members. Creating charters also is a way to anticipate and then avoid and overcome potential and consequential conflicts. 1. Mission statement: Like organization mission statements, team charter mission statements

describe why a team exists—its overarching purpose. Be careful not to describe this in terms of a goal, such as get a good grade. Missions focus on and articulate a higher purpose. For example, the American Humane Society's is: “Celebrating animals, confronting cruelty.”

2. Team vision: Vision statements are forward-looking and describe what the team looks like when functioning at its best. A vision has more detail than a mission statement and describes how its actions and deliverables (products and services) affect specific outcomes and stakeholders, such as other team members, customers, professors, other students and coworkers, and suppliers.

3. Team identity: It helps to create a team name and perhaps a logo or to help signify membership. These can serve as important ways for team members to connect to the team and to distinguish the team and its members from other individuals and teams. Think of the names and mascots of sports teams and the functions they serve. It can be helpful to use the same elements in your own teams at school and work. Team rosters including each member’s name, email address, phone number, and schedule can make communicating and planning teamwork much more efficient. This task becomes even more useful if each member’s team-related strengths and responsibilities are included.

4. Boundaries: Boundaries identify the values, such as timely and quality work, to which team members will commit. Many effective teams also describe the legitimate activities of the team, which are details about what the team will and will not do and what members will and will not do in the name of the team. It also is important to agree to and describe the key stakeholders affected by the team's activities. This clarifies who the team does and does not serve.

5. Operating guidelines: Describe the team structure and processes, including how leadership and other roles will function, how decisions will be made, how work will be allocated, and how members will communicate with each other and with those outside the team. It also can be very helpful to describe how conflict will be managed, both processes and consequences.

6. Performance norms and consequences: Team researchers have shown that effective teams often outline the performance expectations, including: how team and member performance will be assessed; how members are expected to interact with each other; how dysfunctional behaviors will be managed; how team members will be disciplined for not adhering to team norms; the process for terminating a member from the team; expectations for team meetings; expectations for member contributions to team projects; consequences for work that is late or of poor quality; how great for team projects will be allocated to individual team members.2

7. Charter endorsement: Every team member should sign an endorsement signifying commitment to the elements of the charter.

What’s Ahead in This Chapter We begin Part Two of this book with a discussion of groups and teams. Your performance at work and school improves when you understand the differences between formal and informal groups, because the two have different functions, roles, norms, and dynamics. Next we describe the group and team development process, and then we differentiate groups from teams and explore important team concepts, such as different types of teams and the nature of their interdependence. A number of key team characteristics also are explored, including team competencies and teamwork. The value of trust is covered next, because trust is a critical element for group and team functioning. We close by exploring facilitators for team effectiveness—common purpose, composition, collaboration, and rewards.

GROUP CHARACTERISTICS MAJOR QUESTION

How can knowledge of groups and their key characteristics make me more successful? THE BIGGER PICTURE Groups can be formal or informal, and they serve multiple functions. As a group member you can play many different roles. Group roles and norms are the means by which expectations are communicated to groups and their members. They are powerful forms of social control that influence group and member behavior. They also influence a number of important outcomes across the levels in the Organizing Framework. Drawing from the field of sociology, we define a group as (1) two or more freely interacting individuals who (2) share norms and (3) goals and (4) have a common identity. These criteria are illustrated in Figure 8.2. Think of the various groups to which you belong. Does each group satisfy the four criteria in our definition? FIGURE 8.2     Four criteria of a group

A group is different from a crowd or organization. Here is how organizational psychologist E. H. Schein helps make the distinctions clear: The size of a group is … limited by the possibilities of mutual interaction and mutual awareness. Mere aggregates of people do not fit this definition [of a group] because they do not interact and do not perceive themselves to be a group

even if they are aware of each other as, for instance, a crowd on a street corner watching some event. A total department, a union, or a whole organization would not be a group in spite of thinking of themselves as “we,” because they generally do not all interact and are not all aware of each other. However, work teams, committees, subparts of departments, cliques, and various other informal associations among organizational members would fit this definition of a group.3 The size of a group is thus limited by the potential for mutual interaction and mutual awareness.4 People form groups for many reasons. Most fundamental is that groups usually accomplish more than individuals. It seems, for instance, that simply interacting with others improves both individual and team accuracy. The performance benefits increase further still if the team receives feedback that describes which member’s approach is most effective. The rationale is that the team becomes more efficient, focuses on the best approach, and then applies and improves it, which raises performance even more.5 How do we differentiate between formal and informal groups?

Page 298

Formal and Informal Groups Individuals join or are assigned to groups for various purposes. A formal group is assigned by an organization or its managers to accomplish specific goals. Such groups often have labels: work group, team, committee, or task force. An informal group exists when the members’ overriding purpose in getting together is friendship or a common interest.6 Formal and informal groups often overlap, such as when a team of analysts plays tennis after work. New Types and Functions of Informal Groups In an era of job hopping, reorganizations, and mass layoffs, friendships forged at work often outlast a particular job or employer. For example, numerous successful companies—McKinsey & Co., Ernst & Young, and SAP—have developed and maintained corporate alumni groups. Instead of parting forever with former employees, organizations are increasingly using them as sources of new business, referrals for new job candidates, and even boomerang talent (former employees who eventually return to the firm).7 Functions of Formal Groups Formal groups fulfill two basic functions: organizational and individual (see Table 8.1). Complex combinations of these functions can be found in formal groups at any given time. TABLE 8.1 FORMAL GROUPS FULFILL ORGANIZATIONAL AND INDIVIDUAL FUNCTIONS

Organizational Functions Individual Functions 

1. Accomplish complex, interdependent tasks that are  beyond the capabilities of individuals. 

1. Satisfy the individual’s need for  affiliation. 

2. Generate new or creative ideas and solutions. 

2. Develop, enhance, and confirm the  individual’s self‐esteem and sense of  identity. 

3. Coordinate interdepartmental efforts. 

3. Give individuals an opportunity to test  and share their perceptions of social  reality. 

4. Provide a problem‐solving mechanism for complex  problems requiring varied information and  assessments. 

4. Reduce the individual’s anxieties and  feelings of insecurity and powerlessness. 

5. Implement complex decisions.  5. Provide a problem‐solving mechanism for 

personal and interpersonal problems. 

6. Socialize and train newcomers.  7.   SOURCE: Adapted from E. H. Schein, Organizational Psychology, 3rd ed. (Englewood Cliffs, NJ: Prentice-Hall, 1980), 149–151. TAKE‐AWAY APPLICATION Understanding Individual and Organizational Functions of Groups

1. Think of a formal group in which you’re a member. 2. Describe how being a member of that group fulfills at least three of the five individual functions listed in Table 8.1. Be specific and use concrete examples. 3. Now describe in detail how the team fulfills at least two of the organizational functions.

Page 299 The pro bono efforts of law firm Baker Donelson, detailed in the OB in Action box, illustrate the individual and organizational functions of formal groups.

OB IN ACTION BAKER DONELSON GIVES IT AWAY TO MAKE A DIFFERENCE Law firm Baker Donelson highly values community service and has doubled its number of pro bono hours each year since 2008. The firm’s attorneys provided 20,000 hours of free legal assistance (worth over $22.5 million) in 2014 alone.8 To formalize their commitment to such work, they appointed a pro bono shareholder and created a pro bono committee.9 Not only does this committee show the firm’s alignment of cultural values and norms, but it also illustrates both the organizational and individual functions of formal groups. Specifically, the committee helps coordinate pro bono work across the many offices and practice areas of the firm (an organizational function). And free services support Baker Donelson’s organizational values and goals of being a good citizen in the communities and increasing attorney satisfaction (also organizational functions).

In addition, realizing opportunities to provide legal assistance to people, organizations, and causes that attorneys personally value can fulfill individual functions, such as confirming an attorney’s sense of identity as a caring individual, building strong work relationships, and living according to his or her values.

YOUR THOUGHTS? 1. What do you think are the three greatest benefits to the firm of its pro bono work? Try to rank them in value. 2. Its pro bono work costs the firm tens of millions of dollars each year. How could this work lead to more paid business? 3. Most law firms do some amount of pro bono work. Why do you think Baker Donelson chooses to do so much? What difference does it make in terms of the firm’s competitiveness?

Next, let’s learn about roles and norms, two of the most powerful influences on individual behavior in groups.

Roles and Norms: The Social Building Blocks of Group and Organizational Behavior Groups transform individuals into functioning organizational members through subtle yet powerful social forces. These social forces, in effect, turn “I” into “we” and “me” into “us.” Group influence weaves individuals into the organization’s social fabric by communicating and enforcing both role expectations and norms. That is, group members positively reinforce those who adhere to roles and norms with friendship and acceptance. However, nonconformists experience criticism and even ostracism or rejection by group members. Anyone who has experienced the “silent treatment” from a group of friends knows what a potent social weapon ostracism can be. Let’s look at how roles and norms develop and why they are enforced. Page 300 What Are Roles and Why Do They Matter? A role is a set of expected behaviors for a particular position, and a group role is a set of expected behaviors for members of the group as a whole.10 Each role you play is defined in part by the expectations of that role. As a student, you are expected to be motivated to learn, conscientious, participative, and attentive. Professors are expected to be knowledgeable, prepared, and genuinely interested in student learning. Sociologists view roles and their associated expectations as a fundamental basis of human interaction and experience. Two types of roles are particularly important—task and maintenance. Effective groups ensure that both are being fulfilled (see Table 8.2). Task roles enable the work group to define, clarify, and pursue a common purpose, and maintenance roles foster supportive and constructive interpersonal relationships. Task roles keep the Page 301group on track, while maintenance roles keep the group together. Members can play more than one role at a time, or over time. TABLE 8.2 TASK AND MAINTENANCE ROLES

Task Roles Description 

Initiator  Suggests new goals or ideas 

Information  seeker/giver  Clarifies key issues 

Opinion seeker/giver  Clarifies pertinent values 

Elaborator  Promotes greater understanding through examples or exploration of  implications 

Coordinator  Pulls together ideas and suggestions 

Orienter  Keeps group headed toward its stated goal(s) 

Evaluator  Tests group’s accomplishments with various criteria such as logic and  practicality 

Energizer  Prods group to move along or to accomplish more 

Procedural technician  Performs routine duties (handing out materials or rearranging seats) 

Recorder  Performs a “group memory” function by documenting discussion and  outcomes 

Maintenance Roles Description

Encourager  Fosters group solidarity by accepting and praising various points of view 

Harmonizer  Mediates conflict through reconciliation or humor 

Compromiser  Helps resolve conflict by meeting others halfway 

Gatekeeper  Encourages all group members to participate 

Standard setter  Evaluates the quality of group processes 

Commentator  Records and comments on group processes/dynamics 

Follower  Serves as a passive audience 

SOURCE: Adapted from discussion in K. D. Benne and P. Sheats, “Functional Roles of Group Members,” Journal of Social Issues, Spring 1948, 41–49. A project team member is performing a task function when he or she says at a meeting, “What is the real issue here? We don’t we seem to be getting anywhere.” Another individual who says, “Let’s hear from those who oppose this plan,” is performing a maintenance function. The group’s leader or any of its members can play any of the task and maintenance roles in combination or in sequence.

TAKE‐AWAY APPLICATION APPLYING MY KNOWLEDGE OF TASK AND MAINTENANCE ROLES

1. Think of a formal or informal group of which you’re a member. 2. Describe the way at least three task roles are fulfilled, using examples of specific people and behaviors. 3. Do the same for at least three maintenance roles.

(Note: If necessary use more than one group to which you belong, but be sure to describe at least three task and three maintenance roles.) The task and maintenance roles listed in Table 8.2 can serve as a handy checklist for managers and group leaders who wish to ensure group development (discussed in the next section of this chapter) and effectiveness (the last section of this chapter).

Sallie 

Krawcheck is one of the most influential women in business. She made her name on Wall Street but is now on her  fourth career, starting a digital investment platform for women called Ellevest.11© Brad Barket/Getty Images

Leaders can further ensure that roles are being fulfilled by clarifying specifically what is expected of employees in the group. In 2009 Sallie Krawcheck, whom Fortune magazine had named one of the most powerful women on Wall Street and in business, took over as president of the Global Wealth and Investment Management group at Bank of America (BoA) and was quick to fulfill both task and maintenance roles. At the then-embattled bank, Krawcheck quickly tended to task roles by appointing eight executives to oversee various operations within the group, such as heading the US brokerage force and private wealth management. New goals were set, and she also worked diligently on the maintenance role of integrating the culture of Merrill Lynch, which BoA had just acquired at the height of the financial crisis.12 Learn about your own group role preferences by completing Self‐Assessment 8.1. This knowledge can help you understand why you might have been more or less satisfied with a particular group or team of which you’ve been a member. Playing roles that don’t match your preferences is likely to be less satisfying. Furthermore, understanding your own preferences can enable you to set yourself up to be happy and productive in future groups, because you can volunteer for or position yourself to play the roles you prefer. Page 302

SELF-ASSESSMENT 8.1 GROUP AND TEAM ROLE PREFERENCE SCALE Please be prepared to answer these questions if your instructor has assigned Self- Assessment 8.1 in Connect.

1. Does your preferred role (the one with the highest score) match your perceptions? Justify your answer using examples of your behavior. 2. Given your preferred role, how can you be most effective in group assignments? What challenges might playing your preferred role cause for you? For your group? 3. Describe how playing your least preferred role (the one with the lowest score) has been problematic for you and one of your teams. Explain two ways you could improve your performance and that of your team by working on this deficiency.

What Are Norms and Why Do They Matter? “A norm is an attitude, opinion, feeling, or action—shared by two or more people—that guides behavior.”13 Norms help create order and allow groups to function more efficiently because they save groups from having to figure out how to do the same things each time they meet. Norms also help groups move through the development process. Can you imagine having to establish guidelines over and over again? Norms are more encompassing than roles, which tend to be at the individual level in the Organizing Framework and pertain to a specific job or situation. Norms, in contrast, are shared and apply to the group, team, or organization. Although norms are typically unwritten and are seldom discussed openly, they have a powerful influence on group and organizational behavior. Like organizational culture, individual and group behavior are guided in part by shared expectations and norms. For example, the 3M Co. has a norm whereby employees devote 15 percent of their time to thinking big, pursuing new ideas, or further developing something spawned from their other work. The “15 percent time” program, as it is called, was started in 1948 and supports the culture of innovation 3M is known for. Google, as well as other tech companies, has implemented a similar program allowing

employees to allocate 20 percent of their time to ideas and projects beyond their own jobs. It is rumored, but not confirmed, that among the projects employees developed during this time were Gmail and Google Earth.14 Norms serve many purposes and are thus reinforced by the group. Some of these reasons are listed in Table 8.3. TABLE 8.3 WHY NORMS ARE REINFORCED

Norm Reason  Example of reinforcement 

“Make our department  look good in top  management’s eyes.” 

Group/organization  survival 

A staff specialist vigorously defends the vital role  of her department at a divisional meeting and is  later complimented by her boss. 

“Work hard and don’t  make waves.” 

Clarification of  behavioral expectations 

A senior manager takes a young associate aside  and cautions him to be a bit more patient with  coworkers who see things differently. 

“Be a team player, not a  star.” 

Avoidance of  embarrassment 

A project team member is ridiculed by her peers  for dominating the discussion during a progress  report to top management. 

“Make customer service  our top priority.” 

Clarification of central  values 

Two sales representatives are given a surprise  Friday afternoon party for winning best‐in‐the‐ industry customer service awards from an  industry association. 

Page 303 Norms can emerge on their own over time. For instance, think of the group of friends you hung out with on Friday night. What were some of the unspoken norms of behavior? Were these norms the result of discussion and explicit agreement, or did they just happen?

In contrast, norms can also be purposefully created, which is what we advocate. Why leave things to chance, especially at work, when you can directly influence them for the better? The World Health Organization (WHO) sets norms, as described in the Applying OB box. While these recommendations are written, they are not formally required, which would make them actual rules.

APPLYING OB

Health Norms—The Safe Surgery Checklist The mission of the World Health Organization (WHO) is to improve health for people around the world. This includes improving surgical outcomes. So WHO created the Safe Surgery Checklist, identifying three stages of surgery and the important tasks associated with each. The aim is to “minimize the most common and avoidable risks endangering the lives and well-being of surgical patients.”15 The checklist recommends that a surgery coordinator (a specific task role) be assigned to ensure that each task is complete before the surgical team moves to the next stage.16 Stage 1—(Sign In) Before Administering Anesthesia: Confirm patient identity, site, procedure, and consent;  mark the site of the surgery; perform anesthesia safety check; turn pulse oximeter on. 

Stage 2—(Time Out) Before Incision: Confirm all team members have introduced themselves by name and  role; surgeon, anesthesiologist, and nurse confirm patient, procedure, and site; surgeon reviews critical steps and  potential challenges; anesthesiologist checks for potential problems; nursing team reviews that all equipment  and personnel are in place. Confirm appropriate medications have been administered.  Stage 3—(Sign Out) Before Patient Leaves Operating Room: Nurse verbally confirms with the team—name  of procedure has been recorded; instrument, sponge, and needle counts are correct; specimen is labeled and  includes patient’s name; surgeon, anesthesiologist, and nurse review post‐op concerns, medications, and pain  management. 

 Finally, another way to think about roles and norms is as peer pressure. Peer pressure is about expectations, and we all know how effective or problematic expectations can be. But at its root, peer pressure is simply the influence of the group on the individual, and the expectations of associated roles and norms are the means of this influence.

THE GROUP DEVELOPMENT PROCESS MAJOR QUESTION

How can understanding the group development process make me more effective at school and work? THE BIGGER PICTURE You’ll find working in groups and teams much easier when you recognize that they often follow a development process. One such process has five stages, and the other is called punctuated equilibrium. We explore both and help you understand the problems and benefits common to groups and teams as they evolve. Your application of this knowledge will enable you to more effectively manage individual‐ and group‐level outcomes in the Organizing Framework and perform more successfully in work and school groups. At work and school, groups and teams go through a development process. Sometimes this development is like the life cycle of products in marketing or like human development in biology. That is, it consists of stages of a specific number, sequence, length, and nature.17 Other kinds of groups form, progress in a stable manner for a while, but then respond to an event by radically changing their approach. We’ll discuss models of both development processes in this chapter, beginning with the most popular— Tuckman’s five-stage model (see Figure 8.3).18

Tuckman’s Five‐Stage Model of Group Development Tuckman’s five-stage model of group development—forming, storming, norming, performing, adjourning—has great practical appeal because it is easy to remember and apply. Notice in the top part of Figure 8.3 how individuals give up an increasing amount of their independence as a group develops. The lower box of the figure also describes some of the issues faced by individual members and the larger group as it develops.

FIGURE 8.3     Tuckman’s five‐stage model of group development

TAKE‐AWAY APPLICATION Applying My Knowledge of Group Development Use the information in Figure 8.3 to understand and explain your experiences of group development. 1. Think of a group to which you belong, such as a work group, athletic team, fraternity/sorority, or class project 

team. 2. Identify the stage of development that group is in today.  3. Compare the individual and group issues described in Figure 8.3 to what you and the group you identified in 

No. 1 are actually experiencing.  4. Repeat this application for a group that no longer exists—a disbanded project team from work or a project 

team from last term are good choices. Then try to trace any issues back to the various stages of development  in the model. 

The five stages are not necessarily of the same duration or intensity. For instance, the storming stage may be practically nonexistent or painfully long, depending on the goal clarity, commitment, and maturity of the members.

Page 305 Stage 1: Forming During the ice-breaking forming stage, group members tend to be uncertain and anxious about such unknowns as their roles, the people in charge, and the group’s goals. Mutual trust is low, and there is a good deal of holding back to see who takes charge and how. Some research shows that conflict among group members is actually beneficial during this stage. For instance, early conflict in product development teams can boost creativity.19 However, the results can also be quite different. For example, in the life-and-death situations sometimes faced by surgical teams and airline cockpit crews, the uncertainty inherent in the early stages of development (forming and storming) can be dangerous. Stage 2: Storming The storming stage is a time of testing. Individuals test the leader’s policies and assumptions as they try to decide how they fit into the power structure. Subgroups may form and resist the current direction of a leader or another subgroup. In fact, some management experts say the reason many new CEOs don’t survive is that they never get beyond the storming stage. For instance, Ron Johnson joined JCPenney after leaving Apple, and he never convinced employees and top managers to accept his radical rebranding of the aging retailer. As CEO he fired thousands of employees, and much of the old guard, but many of those who remained resisted his plan, as did the board of directors.20 Marissa Mayer has had a similar experience at Yahoo. She took the helm of a struggling company, changed strategies, fired thousands, and never really gained support from important stakeholders, such as investors, industry partners, and the remaining employees.21 Many groups stall in Stage 2 because of the way the use of power and politics can erupt into open rebellion. Stage 3: Norming Groups that make it through Stage 2 generally do so because a respected member, other than the leader, challenges the group to resolve its power struggles so work can be accomplished. Questions about authority and power are best resolved through unemotional, matter-of-fact group discussion. A feeling of team spirit is Page 306sometimes experienced during this stage because members believe they have found their proper roles. Group cohesiveness, defined as the “we feeling” that binds members of a group together, is the principal by‐product of Stage 3.22 Stage 4: Performing Activity during this vital stage is focused on solving task problems, as contributors get their work done without hampering others. This stage is often characterized by a climate of open communication, strong cooperation, and lots of helping behavior. Conflicts and job boundary disputes are handled constructively and efficiently. Cohesiveness and personal commitment to group goals help the group achieve more than could any one individual acting alone. Stage 5: Adjourning The group’s work is done; it is time to move on to other things. The return to independence can be eased by rituals such as parties and award ceremonies celebrating the end and new beginnings. During the adjourning stage, leaders need to emphasize valuable lessons learned.

Target CEO Brian Cornell made dramatic changes to the executive suite when he took the helm. In the midst of  struggling performance he removed the chief stores officer and head merchant. He then hired a new chief  information officer and made the former CFO the chief operations officer. These staffing moves were intended  not only to provide new leadership, but also to align the senior leadership team and boost its performance.  Another way to look at this is that perhaps the previous team had “normed” but just wasn’t performing. So  Cornell started over with a largely new group.© Andrew Burton/Getty Images 

Punctuated Equilibrium In contrast to the discrete stages of Tuckman’s model, some groups follow a form of development called punctuated equilibrium. Groups establish periods of stable functioning until an event causes a dramatic change in norms, roles, and/or objectives. The group then establishes and maintains new norms of functioning, returning to equilibrium (see Figure 8.4). Extreme examples of punctuated equilibrium often occur because of disruptive technologies, such as Apple’s introduction of iTunes. This innovation caused all players in the music industry to radically change their approaches from digital to streaming and from purchasing entire albums to buying individual songs and subscriptions. Walmart’s low-price approach to big-box retailing also revolutionized an industry. In such scenarios companies and teams that can adapt will realize tremendous new opportunities, but those that don’t often find themselves obsolete and go out of business. This phenomenon plays out at all levels of OB. Many individual’s careers have been ignited due to punctuated equilibrium. This means that punctuated equilibrium at the organizational level drives significant change, development, and opportunity at the group and individual levels too. Apply your new knowledge of OB to be sure your career is one of them.

FIGURE 8.4 Punctuated equilibrium

8.3

TEAMS AND THE POWER OF COMMON PURPOSE MAJOR QUESTION

What are the characteristics of effective team players, team types, and interdependence, and how can these improve my performance in teams? THE BIGGER PICTURE When you better understand the difference between groups and teams, you’ll be well equipped to perform better in both. You’ll find practical tips in our discussion of critical teamwork competencies, along with a description of various types of teams. This section concludes with a discussion of team interdependence, a characteristic that is fundamental to the functioning of teams. A team is a small number of people who are committed to a common purpose, performance goals, and approach for which they hold themselves collectively accountable. Besides being a central component of the Organizing Framework, teams are a cornerstone of work life. General Electric CEO Jeffrey Immelt offers this blunt overview: You lead today by building teams and placing others first. It’s not about you.23 This means practically all employees need to develop their skills related to being good team players and building effective teams. It also means that in today’s team-focused work environment, organizations need leaders who are adept at teamwork themselves and can cultivate the level of trust necessary to foster constructive teamwork. Employees reported that the three traits of their most admired bosses were trust in employees, honesty/authenticity, and great team-building skills.24 To help you be more effective in the team context, let’s begin by differentiating groups and teams.

A Team Is More than Just a Group Management consultants at McKinsey & Co. say it is a mistake to use the terms group and team interchangeably. After studying many different kinds of teams—from athletic to corporate to military—they concluded that successful teams tend to take on a life of their own. A group becomes a team when it meets the criteria in Table 8.4. TABLE 8.4 CHARACTERISTICS OF TEAMS

A GROUP BECOMES A TEAM WHEN …

Leadership becomes a shared activity. 

Accountability shifts from strictly individual to both individual and collective.

The group develops its own purpose or mission.

Problem solving becomes a way of life, not a part‐time activity. 

Effectiveness is measured by the group’s collective outcomes and products. 

SOURCE: R. Rico, M. Sánchez-Manzanares, F. Gil, and C. Gibson, “Team Implicit Coordination Processes: A Team Knowledge-Based Approach,” Academy of Management Review, January 2008, 163–184.

Bob Lane, the former CEO of Deere & Co., emphasized the purpose and effectiveness of teams when he talked about his company being a team, not a family. A reporter Page 308 summarized his words this way: “While family members who don’t pull their weight may not be welcome at the Thanksgiving dinner table, they remain members of the family. But if you’re not pulling your weight here, I’m sorry, you’re not part of the team.”25 Lane clearly has strong views on the difference between groups and teams. Despite the differences, both groups and teams can perform at a high level. Think of your experiences. As you know, well-functioning groups or teams can be incredibly effective in achieving goals and quite fulfilling for members. You may also know that when not working well they can be a tremendous waste of time. Some experts describe team effectiveness in terms of maturity.

Mature groups are more effective. Completing Self‐Assessment 8.2 will help you better understand the maturity level of a current or past team of which you’re a member.

SELF-ASSESSMENT 8.2 IS THIS A MATURE WORK GROUP OR A TEAM? Please be prepared to answer these questions if your instructor has assigned Self- Assessment 8.2 in Connect.

1. Does your evaluation help explain why the group or team was successful or not? Explain. 2. Was (or is) there anything you could have done (or can do) to increase the maturity of this group? Explain. 3. How will this evaluation help you be a more effective group member or leader in the future?

The following OB in Action box describes how important building an effective team is to leading Internet entrepreneur Kevin Ryan. Ryan clearly acknowledges that teams take time to develop. But he also is clear that he expects managers to control the process.

OB IN ACTION TEAM BUILDING IS AN IMPORTANT PART OF TALENT MANAGEMENT26

© 

Michael Nagle/Getty Images

Kevin Ryan knows a bit about building successful teams. He’s done it at a number of companies, such as DoubleClick, Gilt Groupe, Business Insider, Zola, and most recently Kontor. His leadership style emphasizes talent management, which he sees as the No. 1 responsibility of CEOs, and rigorous performance management. Both converge in his expectations of managers’ ability to build effective teams. These views are illustrated in his description of a conversation with a new manager.

Clear Expectations “Five months from now, you need to have a great team. Earlier would be better, but five months is the goal. To do that, you’ll need to spend the next month evaluating the people you have right now. I hope they’re good. But if they’re not, we’ll make changes to replace them. If Page 309you need to promote people internally, we’ll do that. If you need to go outside, we’ll do that. You also need to make sure you retain your best people. I’m going to be really disturbed if I see that people we wanted to keep have started leaving your area.” Consequences Sadly, the manager in this case didn’t build a strong team. At four months, two key positions were still open and two key individuals had left. Ryan then asked, “Tell us what we can do to help. . . . If you need us to double your recruiting resources, we’ll do that.” At six months the situation had not improved. Ryan then said, “We’re done.” YOUR THOUGHTS?

1. What are the benefits to Kevin Ryan’s approach to team building? 2. What are the potential shortcomings? 3. Explain why you would or would not want to be a manager for Kevin Ryan.

Being a Team Player Instead of a Free Rider Teams collaborate and perform most effectively when companies develop and encourage teamwork competencies. Fair enough, but if these competencies are important, how can you measure them? Researchers have distilled five common teamwork competencies outlined in Table 8.5. The examples listed for each suggest ways they can be measured. TABLE 8.5 COMMON TEAMWORK COMPETENCIES

Competency Examples of Member Behaviors 

1. Contributes to the team’s work 

 Completed work in a timely manner   Came to meetings prepared   Did complete and accurate work 

2. Constructively interacts with team members 

 Communicated effectively   Listened to teammates   Accepted feedback 

3. Keeps team on track 

 Helped team plan and organize work   Stayed aware of team members’ progress   Provided constructive feedback 

4. Expects high‐quality work 

 Expected team to succeed   Cared that the team produced high‐quality 

work 

5. Possesses relevant knowledge, skills, and abilities  (KSAs) for team’s responsibilities 

 Possessed necessary KSAs to contribute  meaningfully to the team 

 Applied knowledge and skill to fill in as  needed for other members’ roles 

Notice that all these competencies are action-oriented. This means being a team player is more than a state of mind: It’s about action!

Evaluating Teamwork Competencies There are at least two ways to use Table 8.5 and your knowledge of teamwork competencies. The first is as tools to enhance your self-awareness. The second is as a means to measure your performance and that of other members of your team. Self‐Assessment 8.3 can be useful for both. Page 310 Many of your business courses require team assignments and some require peer evaluations. Complete Self‐Assessment 8.3 to learn about your own teamwork competencies and/or to evaluate the performance of the members of one of your teams at school (for a class, sport, club, or fraternity/sorority). Knowledge of your teamwork competencies can help you determine which competencies are your strongest and those that are opportunities for improvement. You can then choose to play to your strengths and/or develop your deficiencies.

SELF-ASSESSMENT 8.3 EVALUATE YOUR TEAM MEMBER EFFECTIVENESS Please be prepared to answer these questions if your instructor has assigned Self- Assessment 8.3 in Connect.

1. Which competencies are your strongest (have the highest average scores)? 2. Do these scores match your own impressions of your teamwork competencies? 3. Which competency is your lowest? Describe two things you can do to further develop and display this competency. 4. Which competency do you feel low performers most often lack in the teams of which you’re a member? 5. Describe the pros and cons of using this tool to do peer evaluations for team assignments in school.

Adapted from M. W. Ohland, M. L. Loughry, D. J. Woehr, L. G. Bullard, R. M. Felder, C. J. Finelli, R. A. Layton, H. R. Pomeranz, and D.  G. Schmucker, “The Comprehensive Assessment of Team Member Effectiveness: Development of a Behaviorally Anchored Rating  Scale for Self‐ and Peer Evaluation,” Academy of Management Learning & Education, 2012, 609–30. Reprinted with permission of  Academy of Management. 

What Does It Mean to Be a Team Player? Understanding and exhibiting the competencies noted in Table 8.5 is an excellent start on becoming a team player. And while everybody has her or his own ideas of the characteristics that are most important, most people likely include the three Cs of team players:  Committed  Collaborative  Competent27 Think of it this way: The three Cs are the “cover charge” or the bare minimum to be considered a team player. Effective team players don’t just feel the three Cs—they display them. Think of

somebody on one of your teams who clearly displays the three Cs and somebody who does not. How do the differences affect you? The team? While there are many potential reasons some people are not team players, a particularly common and problematic one is social loafing. Let’s see what that means. What Is Social Loafing? Social loafing is the tendency for individual effort to decline as group size increases. To illustrate the point, consider a group or team of which you’re a member and ask yourself: “Is group performance less than, equal to, or greater than the sum of its parts?” Can three people working together, for example, accomplish less than, the same as, or more than they would working separately? A study conducted more than a half-century ago found the answer to be less than. In a tug-of-war exercise, three people pulling together achieved only two-and-a-half times the average individual rate. Eight pullers achieved less than four times the individual rate.28 Social loafing is problematic because it typically consists of more than simply slacking off. Free riders (loafers) not only produce low-quality work, which causes others to work harder to compensate, but they often also distract or disrupt the work of other team Page 311 members. And they often expect the same rewards as those who do their work. You undoubtedly have many examples from your own experiences. Given social loafing is so common and problematic, let’s look at how to guard against it. 1. Limit group size. 2. Ensure equity of effort to reduce the possibility that a member can say, “Everyone else is

goofing off, so why shouldn’t I?” 3. Hold people accountable. Don’t allow members to feel they are lost in the crowd and can

think, “Who cares?” TAKE‐AWAY APPLICATION Guarding against Social Loafing

1. Think of a group or team situation in which one of the members was loafing. 2. Given what you just learned, what do you think was the cause of the free riding or loafing? 3. Describe in detail two things you could have done to prevent loafing from happening. 4. Describe what you can do in a future group assignment in school to avoid or reduce social loafing. Be specific.

Now let’s discuss various types of teams. Understanding the differences can make you a more effective team member and leader.

Types of Teams As the world of work becomes more complex, so too do the types of teams. We can differentiate some common ones by particular characteristics, such as:

1. Purpose of the team. 2. Duration of the team’s existence. 3. Level of member commitment.

Work Teams Work teams have a well-defined and common purpose, are more or less permanent, and require complete commitment of their members. Professional sports teams’ top priority is to win games, which they hope will also lead to higher ticket sales and more television viewers. The same teams exist from season to season, and membership is a full-time, all-consuming job for each player. An audit team at work is the same: It is full of auditors who work full time auditing.

Project Teams Project teams are assembled to tackle a particular problem, task, or project. Depending on their purpose, their duration can vary immensely, from one meeting to many years. For instance, your employer may assemble a team to brainstorm ideas for generating more business with a certain customer. This project team may be limited to only one meeting, whether virtual or face- to-face. Or a project team may be responsible not only for creating ideas for more business with that customer, but also for executing the ideas over the course of one or more years.

Members of project teams most often divide their time between the team and their primary jobs and responsibilities. They may be from the same department, product, customer, or service area in an organization, or they may be from different functional disciplines such as finance, operations, or marketing. And as you may have already experienced, any given employee may be a member of multiple project teams at one time.

Page 312 Cross‐Functional Teams Cross‐functional teams are created with members from different disciplines within an organization, such as finance, operations, and R&D. Cross-functional teams can be used for any purpose, they can be work or project teams, and they may have a short or indefinite duration. New-product development is an area in which many organizations utilize cross- functional teams. Brian Walker, CEO of furniture maker Herman Miller, described how the company uses cross-functional teams to leverage the talents of employees in product development and boost company performance: We’re big believers in putting teams together … we’re very willing to move folks around between departments. In our design process, for example, we deliberately create tension by putting together a cross-functional team that includes people from manufacturing, finance, research, ergonomics, marketing and sales. The manufacturing guys want something they know they can make easily and fits their processes. The salespeople want what their customers have been asking for. The tension comes from finding the right balance, being willing to follow those creative leaps to the new place, and convincing the organization it’s worth the risk.29 Self-Managed Teams Self‐managed teams are groups of workers who have administrative oversight over their work domains. Administrative oversight consists of activities such as planning, scheduling, monitoring, and staffing. These are normally performed by managers, but in self-managed teams employees act as their own supervisors. Self-managed teams have a defined purpose and their duration can vary, along with the level of member commitment. Cross-functional, work, and project teams can all be self-managed. Leadership responsibilities often are shared and shift as the demands on and members of self- managed teams change.30 Outside managers and leaders maintain indirect accountability. This contrasts with the hierarchical or centralized types of management historically found in teams. The vast majority of major US companies use self-managed teams.31 The OB in Action box describes some potential benefits of self-managed teams.

OB IN ACTION THE ART OF THE SELF-MANAGING TEAM32 Many argue, and some convincingly, that great teams don’t last. Many disassemble because their members move on to other opportunities. One implication of this fact is that organizations and their leaders obsess too much over choosing the best members—chances are they will leave. However, companies W.L. Gore, Worthington Industries, Semco, and Morning Star provide insights into how to overcome this common hurdle and continually create top-performing self-managed teams.

The Opposite of Chaos Some managers fear teams that are not under direct managerial control. But effective self-managed teams are not free-wheeling, undisciplined, or chaotic. They instead are focused and more effective than many conventional teams over time. Company founder Bill Gore says, “At Gore we don’t manage people. . . . We expect people to manage themselves.”33 Self-managed teams at these companies share three characteristics:

1. Competence Rules the Day. Most employees and team members do not have job titles. However, that does not mean a lack of leadership. Everybody knows who the leaders are, and they typically are those who have “served their colleagues best, have offered the most useful ideas, and have worked the Page 313 hardest and most effectively for the team’s success. At W.L. Gore, they say you find out if you’re a leader by calling a meeting and seeing if anyone comes.” Even assigned or explicit leaders are “transparently competence-based.”34 A strict hierarchy is followed by most emergency room teams—attending physicians, fellows, and finally residents. 2. Clear Goals and Expectations. Most organizations do goal setting poorly, and even those that do it well can do it better. That said, each employee at Morning Star, a tomato processor, creates a “letter of understanding” with colleagues who are most affected by his or her work. This letter explains in great detail what each person can expect of the other. It not only clarifies goals and expectations, but it also boosts goal commitment. 3. Shared Values. Effective self-managed teams are clear about what they value. Surgical teams are keenly focused on patient safety and good medical outcomes. This focus is shared by everyone on the team despite the fact that members routinely come and go.

YOUR THOUGHTS? 1. These organizations make self-managed teams look simple and effective. If this is true, why do you think more organizations don’t use them? 2. Assume you’re a founder and CEO of a company. Argue both for and against using self-managed teams in your organization.

Self‐managed does not mean workers are simply turned loose to do their own thing. Indeed, an organization embracing self-managed teams should be prepared to undergo revolutionary changes in its management philosophy, structure, staffing and training practices, and reward systems. Managers sometimes resist self-managed teams, due to the perceived threat to their authority and job security. Now that you’ve learned about some common team types and their characteristics, we turn our attention to virtual teams. Virtual teams are a common and critically important type of team with unique characteristics.

Virtual Teams

Technology not only allows people to communicate where, when, and with whom they wish, but it also allows  many people and organizations to work without offices. What are the advantages and disadvantages for you  personally of telecommuting and virtual work?© Image Source/Getty Images RF

Virtual teams work together over time and distance via electronic media to combine effort and achieve common goals.35 Traditional team meetings are location-specific. You and other team members are either physically present or absent. Members of virtual teams, in contrast, report in from different locations, different organizations, and often different time zones and countries. Advocates say virtual teams are very flexible and efficient because they are driven by information and skills, not by time and location. People with needed information and/or skills can be team members, regardless of where or when they actually do their work.36 Nevertheless, virtual teams have pros and cons like every other type of team. Page 314

Best Uses of Virtual Teams Virtual teams and distributed workers present many potential benefits: reduced real estate costs (limited or no office space); ability to leverage diverse knowledge, skills, and experience across geography and time (you don’t have to have an SAP expert in every office); ability to share knowledge of diverse markets; and reduced commuting and travel expenses. The flexibility often afforded by virtual teams also can reduce work–life conflicts for employees, which some employers contend makes it easier for them to attract and retain talent.37 Obstacles for Virtual Teams Virtual teams have challenges, too. It is more difficult for them than for face-to-face teams to establish team cohesion, work satisfaction, trust, cooperative behavior, and commitment to team goals.38 Many of these are important elements in the Organizing Framework. So virtual

teams should be used with caution. It should be no surprise that building team relationships is more difficult when members are geographically distributed. This hurdle and time zone differences are challenges reported by nearly 50 percent of companies using virtual teams. Members of virtual teams also reported being unable to observe the nonverbal cues of other members and a lack of collegiality.39 These challenges apply to virtual teams more generally, as does the difficulty of leading such teams.40 When virtual teams cross country borders, cultural differences, holidays, and local laws and customs also can cause problems. Effective Virtual Team Participation and Management We put together a collection of best practices to help focus your efforts and accelerate your success as a member or leader of a virtual team:41 1. Adapt your communications. Learn how the various remote workers function, including

their preferences for e-mail, texts, and phone calls. It often is advisable to have regularly scheduled calls (via Skype). Be strategic and talk to the right people at the right times about the right topics. Don’t just blanket everybody via e-mail—focus your message. Accommodate the different time zones in a fair and consistent manner.

2. Share the love. Use your company’s intranet or other technology to keep distributed workers in the loop. Acknowledging birthdays and recognizing accomplishments are especially important for those who are not regularly in the office. Newsletters also can help and serve as a touch point and vehicle for communicating best practices and success stories.

3. Develop productive relationships with key people on the team. This may require extra attention, communication, and travel, but do what it takes. Key people are the ones you can lean on and the ones who will make or break the team assignment.

4. Be a good partner. Often members of virtual teams are not direct employees of your employer but are independent contractors. Nevertheless, your success and that of your team depend on them. Treat them like true partners and not hired help. You need them and presumably they need you.

5. Be available. Managers and remote workers all need to know when people can be reached, where, and how. Let people know and make yourself available.

6. Document the work. Because of different time zones, some projects can receive attention around the clock, as they are handed off from one zone to the next. Doing this effectively requires that both senders and receivers clearly specify what they have completed and what they need in each transfer.

7. Provide updates. Even if you are not the boss, or your boss doesn’t ask for them, be sure to provide regular updates on your progress to the necessary team members.42

8. Select the right people. Effective virtual workers generally prefer and do well in interdependent work relationships. They also tend to be self starters and willing to Page 315take initiative. Such independent thought contrasts starkly with people who prefer to wait for instructions before taking action.43

9. Use your communication skills. Because so much communication is written, virtual team members must have excellent communication skills and write well in easy-to-understand and to-the-point language.

Face Time Researchers and consultants agree about one aspect of virtual teams—there is no substitute for face‐to‐face contact. Meeting in person is especially beneficial early in virtual team development, and team leaders are encouraged to meet even more frequently with key members.44 Face-to- face interactions can be as simple as lunch, water-cooler conversations, social events, or periodic meetings. Whatever the case, such interactions enable people to get familiar with each other and build credibility, trust, and understanding. This reduces misunderstandings and makes subsequent virtual interactions more efficient and effective, and it also increases job performance and reduces conflict and intentions to quit.45 Face-to-face interactions enable people to get real-time feedback, forge meaningful and real connections, and get a better sense of what others actually think and feel.46 Moreover, virtual

teams cannot succeed without additional and old-fashioned factors, such as effective decision making, good communication, training, a clear mission and specific objectives, effective leadership, schedules, and deadlines.47 Underlying many of these is one of the truly essential elements to effective teams of all types—trust. You’ll learn more about this in the next section. But first let’s explore interdependence.

Team Interdependence One of the most important aspects of teams is interdependence, or the extent to which members are dependent on each other to accomplish their work.48 We discuss two common forms of interdependence—task and outcome. Task interdependence is the degree to which team members depend on each other for information, materials, and other resources to complete their job tasks. The degree of task interdependence is determined by the degree of interaction between members and the amount of coordination required among them. There are four basic types of task interdependence, ranked by how much team member interaction and coordination are required. The types are illustrated in Figure 8.5.

FIGURE 8.5    Types of team interdependence

1. Pooled. Many pharmaceutical and other sales teams illustrate pooled interdependence. Each member sells a chosen drug to his or her customers, which requires little or no interaction or coordination with other representatives. At the end of the month all reps’ sales are added together to arrive at a team sales total.

2. Sequential. Manufacturing or assembly processes are typically sequential. PCs manufacturing teams, for example, require that motherboards and hard drives be installed before the box can be closed and fastened.

3. Reciprocal. Hiring processes sometimes use reciprocal interdependence. Candidates are interviewed by members of HR and then separately interviewed by the hiring manager or members of that department, and the two communicate and decide to whom to make the offer.

4. Comprehensive. Product development teams often utilize comprehensive interdependence. Online games, for instance, require significant back and forth between those who create the idea, write the code, test, and market the game. It isn’t just a linear or sequential process.

Outcome interdependence is “the degree to which the outcomes of task work are measured, rewarded, and communicated at the group level so as to emphasize collective outputs rather than individual contributions.”49 Outcome Page 316 interdependence is determined by the extent to which team members’ objectives and rewards are aligned. Task interdependence provides opportunities for interaction, sharing, and coordination.50 The form of interdependence should match what the team requires to achieve its goals. A common mission or purpose helps a team and its members see how their own efforts and outcomes contribute to the larger department or organization.51 And rewarding teamwork is likely to further enhance actual teamwork and team performance.

TRUST BUILDING AND REPAIR—ESSENTIAL TOOLS FOR SUCCESS MAJOR QUESTION

How can I build and repair trust in ways that make me more effective at school, work, and home? THE BIGGER PICTURE Trust sometimes seems like a rare commodity in today’s turbulent workplace. But you’re about to see why it’s so important at all levels of the Organizing Framework. Moreover, in the context of teams, trust is essential because it facilitates all interactions within and between teams. With this understanding you’ll be empowered to apply your knowledge to build trust and to repair it when it has been damaged or diminished. Trust is the willingness to be vulnerable to another person, and the belief that the other person will consider the impact of how his or her intentions and behaviors will affect you.52 We can hardly overstate the value of trust in organizational life. Only respectful treatment was rated higher as a predictor of employee job satisfaction,53 and many would see trust and respect as highly correlated. Trust is the lubricant of interpersonal relationships within and between all organizational levels in the Organizing Framework, and thus it also drives performance across levels (see Figure 8.6). Lack of trust, for example, is a key factor in employee turnover. One study found that 59 percent of employees quit their jobs due to trust issues, which were linked to a lack of leader communication and honesty.54 Trust within groups of hospitality employees was also associated with increased motivation and performance.55

FIGURE 8.6      Percent of people who engage in each behavior based on trust

SOURCE: 2016 Edelman Trust Barometer Global Report, Edelman.com, January 17,

2016, http://www.edelman.com/news/2016‐edelman‐trust‐barometer‐release/.

Arthur Gensler, founder of a leading global architecture and design firm, said this about trust:

Trust in business enjoys two main benefits. The first is with your clients. If they know you are honest and direct with them, they usually are willing to work through challenges with you, and they won’t hesitate to be a referral source when things go well. The second benefit is that authentic collaboration will take root within your firm. Your people can trust each other to act honorably and to fulfill their defined roles on a project assignment or company initiative according to shared company values.56 Yet these have not been good times for trust in the business world. As Richard Edelman, whose company produces the famous Trust Barometer each year, said, the sad state of trust “is directly linked to the failure of key institutions to provide answers or leadership in response to events such as the refugee crisis, data breaches, China’s stock market downturn, Ebola in west Africa, the invasion of Ukraine, the FIFA bribery Page 318 scandal, VW’s manipulation of emissions data, massive corruption at Petrobras, and exchange-rate manipulation by the world’s largest banks.”57 Given this grim commentary, and because trust is so important, we will explore ways in which to build trust and to repair it when it has been damaged. But let’s first learn about different forms of trust.

Three Forms of Trust For our purposes in OB, we discuss three particular forms of trust:

1. Contractual trust. Trust of character. Do people do what they say they are going to do? Do managers and employees make clear what they expect of one another?

2. Communication trust. Trust of disclosure. How well do people share information and tell the truth?

3. Competence trust. Trust of capability. How effectively do people meet or perform their responsibilities and acknowledge other people’s skills and abilities?58

Answering these questions provides both a good assessment of trustworthiness and a guide for building trust.

Page 319 TAKE‐AWAY APPLICATION Applying My Knowledge of Trust

1. Describe a person with whom you have a high level of contractual trust, then a person with whom you have a low level. What are the implications for your relationship with each? 2. Think of an instance when you demonstrated communication trust by making an admission that was difficult, perhaps even costly for you, but you did it anyway. Now think of a time when somebody violated this type of trust with you. What were your reactions in each case? 3. Describe an instance when competence trust was violated, by you or somebody else. What was the result? (Hint: Group assignments in school often provide examples.)

Building Trust You may already believe that to get trust you must give trust. The practical application of this view, and of new knowledge we’ve gained about trust, is to act in ways that demonstrate each of the three types of trust. Doing so builds trust. You can also benefit by practicing the following behaviors for building and maintaining trust:

 Communication. Keep team members and employees informed by explaining policies and decisions and providing accurate feedback. Be candid about your own problems and limitations. Tell the truth.59

 Support. Be available and approachable. Provide help, advice, coaching, and support for team members’ ideas.

 Respect. Delegation, in the form of real decision-making authority, is the most important expression of managerial respect. Delegating meaningful responsibilities to somebody shows trust in him or her. Actively listening to the ideas of others is a close second.

 Fairness. Be quick to give credit and recognition to those who deserve it. Make sure all performance appraisals and evaluations are objective and impartial.

 Predictability. Be consistent and predictable in your daily affairs. Keep both expressed and implied promises.

 Competence. Enhance your credibility by demonstrating good business sense, technical ability, and professionalism.60

If trust is a matter of give and take, it will be helpful to know how trusting you are of others. Self‐Assessment 8.4 can help you learn about different aspects of your interpersonal trust. Besides improving your self-awareness, knowledge of your interpersonal trust can also provide guidance for how you can more effectively build trust with others—friends, classmates, coworkers, and bosses.

SELF-ASSESSMENT 8.4 HOW MUCH DO YOU TRUST ANOTHER? Please be prepared to answer these questions if your instructor has assigned Self- Assessment 8.4 in Connect.

1. Which particular items in this questionnaire are most central to your idea of trust? Why? 2. Does your score accurately depict the degree to which you trust (or distrust) the target person? 3. Why do you trust (or distrust) this individual? 4. If you trust this person to a high degree, how hard was it to build that trust? Explain. 5. Given your inclination to trust others (your score on the assessment), describe three implications for your work in group assignments and project teams at school.

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Repairing Trust Just as trust can be built, so can it be eroded. The violation of trust, or even the perception of it, can diminish trust and lead to distrust. As you probably know from personal experience, trust is violated in many ways—sometimes deliberately and sometimes unwittingly. In any case, it is important to repair trust when it has been damaged. Regardless of who is responsible for eroding or damaging trust, both parties need to be active in the repair of trust. Dennis and Michelle Reina studied thousands of instances of broken trust in business and developed seven steps for regaining it. Figure 8.7 illustrates their recommendations as an upward staircase, to show how individuals must work their way back from distrust, one step at a time, to finally regain what they have lost. This seven-step process can help whether you are the perpetrator or the victim. FIGURE 8.7     Reina seven‐step model for rebuilding trust

SOURCE: Adapted from D. Reina and M. Reina, Rebuilding Trust in the Workplace: Seven Steps to Renew Confidence, Commitment, and Energy (San Francisco, CA: Berrett‐Koehler, 2010), 13. 

We conclude this section with an observation about trust from Lars Dalgaard, a general partner at the venture capital firm Andreesen Horowitz and the founder and former CEO of SuccessFactors, a human capital consulting firm:

The funny thing is that you’re actually a stronger leader and more trustworthy if you’re able to be vulnerable and you’re able to show your real personality. It’s a trust multiplier, and people really will want to work for you and be on a mission together with you

KEYS TO TEAM EFFECTIVENESS

MAJOR QUESTION

What are the keys to effective teams, and how can I apply this knowledge to give me an advantage? THE BIGGER PICTURE You will thrive in team settings when you better understand the characteristics of high‐performing teams. You can use these characteristics as facilitators to function more successfully in group and team settings. You will also benefit from the practical suggestions, supported by research and practice, with which we conclude the chapter, such as how to foster and reward collaboration and teamwork.

Characteristics of High‐Performing Teams Current research and practice have identified the following eight attributes of high-performance teams: 1. Shared leadership—interdependence created by empowering, freeing up, and serving others. 2. Strong sense of accountability—an environment in which all team members feel as

responsible as the manager for the performance of the work unit. 3. Alignment on purpose—a sense of common purpose about why the team exists and the

function it serves. 4. Open communication—a climate of open and honest communication. 5. High trust—belief that member actions and intentions focus on what’s best for the team and

its members. 6. Clear role and operational expectations—defined individual member responsibilities and team

processes. 7. Early conflict resolution—resolution of conflicts as they arise, rather than avoidance or delay. 8. Collaboration—cooperative effort to achieve team goals.62

The 3 Cs of Effective Teams With the above characteristics in mind, you might ask: How do you build a high-performing team? The short answer is to use the three Cs. (Note: These three Cs are at the team level, in contrast to the three Cs of effective team players discussed earlier that focus on the individual or team member level.) The three Cs are:  Charters and strategies  Composition  Capacity Charters and Strategies Both researchers and practitioners urge groups and teams to plan before tackling their tasks, early in the group development process (the Page 322storming stage). These plans should include team charters that describe how the team will operate, such as through processes for sharing information and decision making (teamwork).63 Team charters were discussed in the Winning at Work feature at the beginning of this chapter. Teams should also create and implement team performance strategies, deliberate plans that outline what exactly the team is to do, such as goal setting and defining particular member roles, tasks, and responsibilities.64 Composition Team composition describes the collection of jobs, personalities, knowledge, skills, abilities, and experience levels of team members. When we think of it this way, it is no surprise that team composition can and does affect team performance. Team member characteristics should fit the responsibilities of the team if the team is to be effective. Fit facilitates effectiveness and misfit impedes it—you need the right people on your team.

Recent research on Tour de France cycling teams revealed that teams with greater diversity in tenure—with  some new riders, some longtime riders, and some in between—had better team performance, measured as the  number of riders finishing in Paris. What makes this finding intriguing is that diversity in terms of members’ skills,  previous Tour stage wins, age, and experience had no effect on team performance!68  © Jean Catuffe/Getty Images

Research shows that in the early stages of team development (forming and storming), teams perform better when members have a high tolerance for uncertainty (a personality trait). This same finding applies to self-managed and virtual teams, due to their relative lack of imposed direction and face-to-face communication.65 Team research also shows that teams with members who possess high levels of openness or emotional stability deal with task conflict better than those without these composition characteristics.66 Finally, in the university context, top management teams (presidents, vice presidents, and chancellors) who were more diverse in terms of educational and disciplinary backgrounds generated more funding for research and improved school reputations.67 The bottom line: Create teams with the composition to match the desired objectives. Knowledge of OB and the Organizing Framework, in particular, can be very helpful in this regard.

Page 323 Capacity Team adaptive capacity (adaptability) is the ability to make needed changes in response to demands put on the team. It is fostered by team members who are both willing and able to adapt to achieve the team’s objectives. Described in this way, team adaptive capacity is a matter of team composition—the characteristics of individual team members. And it is an input in the Organizing Framework that influences team-level outcomes.69

Collaboration and Team Rewards Collaboration is the act of sharing information and coordinating efforts to achieve a collective outcome. It’s safe to assume that teams whose members collaborate are more effective than those whose members don’t.70 Collaboration is what enables teams to produce more than the sum of their parts.71 Many factors can influence collaboration, including how teams are rewarded. In this final section we’ll explore how to foster collaboration and the role rewards can play. Collaboration—The Lifeblood of Teamwork As interdependence increases, so too does the need for and value of collaboration. Today’s business landscape, characterized by globalization, outsourcing, strategic partnering, and virtual teams, makes collaboration ever more important.72 That said, many things can interfere with collaboration. To help foster collaboration, we recommend the following as a starting point: 1. Communicate expectations. Clarifying roles and responsibilities for each team member is

essential. Identify and communicate both individual and team accountability. 2. Set team goals. SMART goals for teams are a good place to start, but also review goals regularly as a

team (weekly, monthly, or quarterly). Be sure individual roles and responsibilities align with team goals.

3. Encourage creativity. Create a safe environment where employees can take risks without fear of humiliation or career damage. Nurture a “can do” attitude within the team, and foster it by asking why or why not instead of saying yes or no.

4. Build work flow rhythm. Technology can be of great assistance. Project management software as well as other scheduling tools can help team members know exactly what they need to do and when. This can greatly assist in their coordination efforts and help assure that interdependent needs of team members are met.

5. Leverage team member strengths. Set individuals up to win by identifying and utilizing their strengths. The key to realizing the benefits of the team is to appropriately utilize the strengths of its individual members.73

Reward Collaboration and Teamwork Rewards matter, and dissatisfaction with rewards is a common cause for suboptimal team performance. Despite the need to work collaboratively, many if not most professional service firms (law, accounting, and consulting practices) measure and reward individual contributions, such as billable hours, up-or-out promotion systems (either qualify for partner or find another job), and competition between team members.74 In contrast, Whole Foods Market uses teams extensively throughout the organization, and most incentives are team-based, not individual. If a team’s department or store reduces costs and/or boosts revenues, then the team earns a share of the financial benefits.75 Organizations that foster the greatest collaboration and assemble the most effective teams typically use hybrid reward systems that recognize both individual and team performance. Table 8.6 provides guidance on how to reward performance in teams, based on the desired outcome (speed or accuracy) and the degree of interdependence (low, moderate, high). These guidelines can give you a tremendous head start in determining how best to reward and motivate team performance.76 Page 324 TABLE 8.6  RECOMMENDATIONS FOR IMPROVING THE COORDINATION AND MOTIVATION OF TEAMS AND  TEAM MEMBERS

LOW INTERDEPENDENCE 

MODERATE INTERDEPENDENCE  HIGH INTERDEPENDENCE 

Speed Relay Teams Road Cycling Teams Crew Teams

  What to measure: Individual performance

What to measure: Individual performance

What to measure: Team performance

  How to measure: Managerial assessment

How to measure: Managerial assessment

How to measure: Managerial and peer assessment

  How to reward: Competitive rewards  

How to reward: Competitive rewards  

How to reward: Cooperative rewards  

Accuracy Gymnastics Teams Basketball Teams Synchronized Swimming Teams

  What to measure: Individual performance

What to measure: Team performance

What to measure: Team performance

  How to measure: Managerial assessment

How to measure: Managerial and peer assessment

How to measure: Managerial and peer assessment

  How to reward: Competitive rewards

How to reward: Cooperative rewards

How to reward: Cooperative rewards

SOURCE: R. K. Gottfredson, “How to Get Your Teams to Work,” Industrial Management, July/August 2015, 25‐30. 

Appropriate rewards for collaboration and teamwork motivate at both the individual and team levels, and they also positively influence many important outcomes across all levels in the Organizing Framework. The following Problem‐Solving Application illustrates how collaboration, teamwork, and performance management were applied in hospitals and nursing homes to improve patient and financial outcomes.

PROBLEM‐SOLVING APPLICATION Together, Hospitals Combat a Common Foe77 The Foe Clostridium difficile, or C. difficile for short, is an antibiotic-resistant bacteria. The vast majority of people infected are patients in hospitals and nursing homes. Some enter the facility with the infection, but it also is common for people admitted for other reasons to acquire it once there. Another common source of infection is patients who are transferred from one facility to another and bring the bacteria with them, introducing it to a new patient population. How It Does Its Damage Overuse and inappropriate use of antibiotics is largely responsible for this resistant bacteria. It is extremely difficult to kill and can live on bed rails, call buttons, and doorknobs for up to five months if they are not cleaned effectively.

Patients must ingest C. difficile to become infected. Typically they must also be on antibiotics that wipe out the good bacteria in their gut, allowing C. difficile to thrive there. This means prevention is Page 325partly a matter of hygiene among care providers and in nursing home and hospital environments, and partly a matter of prescribing practices. Costs and Responsibilities The C. difficile problem occurs across the United States, but a number of hospitals and nursing homes in the Rochester, New York, area had a particular problem. For

instance, a group of hospitals was spending an additional $4 million to $5 million a year to deal with C. difficile‐related problems. Moreover, Medicare is increasingly rewarding or punishing hospitals based on performance outcomes, such as infection rates and readmissions. The organizations therefore had both moral and financial incentives to act. Potential solutions were made more difficult because these same hospitals and nursing homes in the area compete on a daily basis for patients, doctors, and dollars. APPLY THE 3‐STEP PROBLEM‐SOLVING APPROACH 1. Step 1:Define the problem(s) confronting the hospitals and nursing homes. 2. Step 2:Identify the major causes of the problem(s).  3. Step 3:Make your recommendations.  We conclude the chapter with perhaps the most incredible and challenging application of teamwork—the International Space Station. Teamwork in this context is literally out of this world!

OB IN ACTION EXEMPLARY TEAMWORK AT NASA

Crew members of Expedition 30 pose for an in‐flight crew portrait in the European Space Agency’s Automated  Transfer Vehicle Edoardo Amaldi (ATV‐3) while docked with the International Space Station.© Rex Features/AP Photo

The US National Aeronautics and Space Administration (NASA) epitomizes teamwork. NASA epitomizes the effective structure and implementation of multi- team teams. They have to be experts, as controlling space craft is obviously incredibly complex and difficult. Today, the organization’s challenges related to the International Space Station (ISS) are substantially greater. This is due to the fact that NASA is one of five space agencies around the globe that jointly control the

International Space Station. These agencies have rotated responsibilities 24 hours a day, 365 days a year, since 2000! The space station itself was built and is maintained by the five space agencies, which represent 23 countries. Yet effective coordination and collaboration occur almost seamlessly, even as team members come and go and responsibilities repeatedly cross international borders. As part of the space station’s crew, NASA overcomes common challenges faced by many teams today.

Page 326 Dynamic Composition The members of the various teams continually change. Astronauts from several countries routinely come and go, for example, because their time on board the ISS is limited for their safety. Imagine the time and resources required to continually prepare new members to live on the space station. Technical, physical, and cultural training requirements are immense, not least because all team members must effectively execute their responsibilities when on board. Technology and Distance Communication is critical and an ever-present challenge. Ground control must communicate with both the ISS and its various locations on the ground. It’s not as simple as making a cell phone call or Skyping. Distance is an obvious obstacle. NASA, and its partners, must overcome the “us” versus “them” dynamic between the flight crew and mission control. In addition to language differences at both mission control and the ISS, isolation is a problem. Astronauts can be on board the station for up to a year at a time. The confined spaces and lack of communication with family and friends are incredibly stressful. Thankfully, new technology enables the flight crew to communicate more frequently and privately with others on the ground. The Ultimate Telecommuters An interesting way to think of astronauts and cosmonauts, is to think of them as the most extreme telecommuters! Most if not all the challenges discussed in this chapter are experienced by those involved in the ISS—both on the ground and in space.78 YOUR THOUGHTS? Imagine you’re a leader of the ISS flight crew.

1. What team challenges do you think would be most enjoyable for you? 2. What team challenges do you think would be most problematic for you? 3. What would you do to ensure the team works effectively and safely?

Your work life, and life more generally, is awash in teams. Apply the OB knowledge and tools gained in this chapter to be more successful and fulfilled when you work with others.

What Did I Learn? You learned that working with others can increase everybody’s performance because groups and teams can, and  often do, accomplish more than individuals. You learned that roles and norms are the building blocks of group  and team behavior. We explored group development processes, along with ways to differentiate groups and  teams and the characteristics of effective team players. We saw the different types of teams and the value of  interdependence. You learned how to boost your personal effectiveness further still by understanding trust and  knowing how to repair it. Finally, we addressed the elements that foster team effectiveness and collaboration.  Reinforce your learning with the Key Points below and consolidate it using the Organizing Framework. Challenge  your mastery of the material by answering the Major Questions in your own words.

Key Points for Understanding Chapter 8 You learned the following key points:

8.1 GROUP CHARACTERISTICS  Groups consist of two or more individuals who share norms, goals, and identity.  Both formal and informal groups are useful.   Roles are expected behaviors for a particular job or position, and group roles set expectations for members of 

a group.   Norms are shared attitudes, opinions, feelings, or actions that help govern the behaviors of groups and their 

members.  8.2 THE GROUP DEVELOPMENT PROCESS  Groups often evolve or develop along five defined steps: forming, storming, norming, performing, and 

adjourning.  Punctuated equilibrium is another form of group development, in which normal functioning is disrupted by 

an event that causes the group to change the way it operates. It then settles into this new mode of operation  or equilibrium. 

 Knowledge of group development can help you understand group dynamics and be more effective in groups  and teams. 

8.3 TEAMS AND THE POWER OF COMMON PURPOSE  Teams differ from groups in terms of shared leadership, collective accountability, collective purpose, and a 

focus on problem solving and collective effectiveness.  Team players are committed, collaborative, and competent.   Common forms of teams are work, project, cross‐functional, self‐managed, and virtual.   Team interdependence describes the degree to which members depend on each other for information, 

materials, and other resources to complete their job tasks.  8.4 TRUST BUILDING AND REPAIR—ESSENTIAL TOOLS FOR SUCCESS  Trust is a belief that another person will consider the way his or her intentions and behaviors will affect you.  Three common forms of trust are contractual, communication, and competence.   Trust is critical to your short‐ and long‐term success and, if damaged, can be repaired using a seven‐step 

process.  8.5 KEYS TO TEAM EFFECTIVENESS  High‐performing teams have several characteristics, such as participative leadership, aligned purpose, future 

focused, and creativity.  Charters and strategies, composition, and capacity are the three Cs of effective teams.   Page 328Reward and collaboration are important means of fostering team effectiveness. 

The Organizing Framework for Chapter 8 As shown in Figure 8.8, the process of group/team dynamics leads to a large number of outcomes at all three  levels in the Organizing Framework.

FIGURE 8.8      Organizing Framework for Understanding and Applying OB

© 2014 Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without permission of the authors.  

Challenge: Major Questions for Chapter 8 You should now be able to answer the following questions. Unless you can, have you really processed and  internalized the lessons in the chapter? Refer to the Key Points, Figure 8.8, the chapter itself, and your notes to  revisit and answer the following major questions: 1. How can knowledge of groups and teams and their key characteristics make me more successful?  2. How can understanding the group development process make me more effective at school and work?  3. What are the characteristics of effective team players, team types, and interdependence, and how can these 

improve my performance in teams?  4. How can I build and repair trust in ways that make me more effective at school, work, and home?  5. What are the keys to effective teams, and how can I apply this knowledge to give me an advantage?  Page 329 IMPLICATIONS FOR ME There are five practical ways you can apply the material in this chapter. First, learn which individual functions of groups are most important to you. This knowledge can help you understand why you are more satisfied in some groups than others. Knowledge of organizational functions can help you diagnose conflict and/or underperformance in some of the groups in which you are a member. Second, apply your knowledge of task and maintenance roles to identify ways you can make meaningful contributions to your groups and teams. If a role is missing and important, use your knowledge to fulfill it. Third, develop your teamwork competencies. Table 8.5 provides examples of how to do it. These competencies will serve you in any group or team and increase your value throughout your career. Fourth, apply your knowledge to combat social loafing. Don’t let free riders add to or undermine your hard work. Fifth, your trustworthiness will make or break you. Pay attention to communication, support, respect, fairness, predictability, and your competence to boost your own trustworthiness. And when trust is diminished or violated, use Figure 8.7 to repair it.

IMPLICATIONS FOR MANAGERS There are six practical implications that will benefit you as a manager. First, identify the important task and maintenance roles in the various teams you manage or belong to. Be sure these important roles are fulfilled effectively (not always by you). Second, you can reduce frustrations when working in teams by understanding the group development process. Identify the particular stage of development the group is in, and then apply your knowledge to advance it to the next. Third, evaluate those you manage in terms of the three Cs of a team player— committed, collaborative, competent. These can help you explain both top performers and underperformers. Fourth, always be mindful of trust, both how trusting you are of your people and how trusting they are of you. Managing people is infinitely more difficult when trust is an issue—never underestimate its importance. Apply the knowledge you gained in this chapter to both build and repair trust (see Figure 8.7). Fifth, Use team charters to set up your various teams to win. Doing this work early can pay great dividends and avoid conflict throughout the team’s existence. Last but not least, be sure the tangible and intangible rewards you offer support collaboration and teamwork.

Problem‐Solving Application Case Optimizing Team Performance at Google79 Google is well on its way to ruling the universe. Whether this is its actual goal or not, the company’s short‐ and  long‐term success depend on the performance of its work teams. Realizing this, Google applied its immense  human, technological, and financial resources to finding out what makes top‐performing teams so effective.  Despite its legendary achievements, the company knew that teams vary considerably in terms of their  performance, member satisfaction, and level of cohesion and conflict. To understand why, it did what it does  best—collect and analyze data. It created Project Aristotle and spent millions of dollars to gather mountains of  data from 180 teams across the company. The only thing more surprising than what it found was what it didn’t  find.

What Did Google Expect to Find? Google sliced and diced the team data looking for patterns that would distinguish the most successful from the  less successful teams. It expected that some combination of team member characteristics would reveal the  optimal team profile. Such a profile or pattern never emerged. Google examined seemingly everything, such as  team composition (team member personality, experience, age, gender, and education), how frequently  teammates ate lunch together and with whom, their social networks within the company, how often they  socialized outside the office, whether they shared hobbies, and team managers’ leadership styles.

It also tested the belief that the best teams were made up of the best individual contributors, or that they paired  introverts with introverts and friends with friends. To the researchers’ amazement, these assumptions were  simply popular wisdom. In sum, “the ‘who’ part of the equation didn’t seem to matter.” Even more puzzling was  that “two teams might have nearly identical makeups, with overlapping memberships, but radically different  levels of effectiveness,”80 said Abeer Dubey, a manager in Google’s People Analytics division.  What Did the Company Actually Find? It turned out it wasn’t so much who was in the group but the way the group functioned or operated that made  the performance difference. Group norms—expected behaviors for individuals and the larger team—helped  explain why two groups with similar membership function very differently. But this finding was only the  beginning. Now Google needed to identify the operative norms.

Members of the Project Aristotle team began looking for team member data referring to factors such as  unwritten rules, treatment of fellow team members, ways they communicated in meetings, and ways they  expressed value and concern for one another. Dozens of potential norms emerged, but unfortunately the norms  of one successful team often conflicted with those of another. 

To help explain this finding, the Project Aristotle team reviewed existing research on teams and learned that work  teams that showed success on one task often succeed at most. Those that performed poorly on one task typically  performed poorly on others. This helped confirm their conclusion that norms were the key. However, they still  couldn’t identify the particular norms that boosted performance or explain the seemingly conflicting norms of  similarly successful teams.  

Then came a breakthrough. After intense analysis, two behaviors emerged. First, all high‐functioning teams  allowed members to speak in roughly the same proportion. Granted, they did this in many different ways, from  taking turns to having a moderator orchestrate discussions, but the end result was the same—everybody got a  turn. Second, the members of successful teams seemed to be good at sensing other team members’ emotions,  through either their tone of voice, their expressions, or other nonverbal cues. 

Having identified these two key norms, the Project Aristotle team was able to conclude that many other team  inputs and processes were far less important or didn’t matter at all. Put another way, teams could be very  different in a host of ways, but so long as everybody got and took a turn when communicating, and members  were sensitive to each other, then each had a chance of being a top‐performing team. With this knowledge in  hand, now came the hard part. How to instill these norms in work teams at Google? 

How could Google instill the appropriate communication practices, as well as build empathy into their teams’  dynamics? 

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Apply the 3‐Step Problem‐Solving Approach to OB Use the Organizing Framework in Figure 8.8 and the 3‐Step Problem‐Solving Approach to help identify inputs,  processes, and outcomes relative to this case.

1. Step 1: Define the problem.    

A. Look first to the Outcomes box of the Organizing Framework to help identify the important problem(s) in this case. Remember that a problem is a gap between a desired and current state. State your problem as a gap, and be sure to consider problems at all three levels. If more than one desired outcome is not being accomplished, decide which one is most important and focus on it for steps 2 and 3.

B. Cases have protagonists (key players), and problems are generally viewed from a particular protagonist’s perspective. You therefore need to determine from whose perspective— employee, manager, team, or the organization—you’re defining the problem. As in other cases, whether you choose the individual or organizational level in this case can make a difference.

C. Use details in the case to determine the key problem. Don’t assume, infer, or create problems that are not included in the case.

D. To refine your choice, ask yourself, Why is this a problem? Focus on topics in the current chapter, because we generally select cases that illustrate concepts in the current chapter. (Reminder: Chapter 8 is the first chapter in the Groups/Teams section of the book. Perhaps particular attention at this level is warranted.)

Step 2: Identify causes of the problem by using material from this chapter, which has been summarized in the Organizing Framework for Chapter 8 and is shown in Figure 8.8. Causes will tend to show up in either the Inputs box or the Processes box.    

E. Start by looking at the Organizing Framework (Figure 8.8) and determine which person factors, if any, are most likely causes to the defined problem. For each cause, explain why this is a cause of the problem. Asking why multiple times is more likely to lead you to root causes of the problem. For example, do particular team member characteristics help explain the problem you defined in Step 1?

F. Follow the same process for the situation factors. For each ask yourself, Why is this a cause? By asking why multiple times you are likely to arrive at a more complete and accurate list of causes. Again, look to the Organizing Framework for this chapter for guidance.

G. Now consider the Processes box in the Organizing Framework. Are any processes at the individual, group/team, or organizational level potential causes of your defined problem? For any process you consider, ask yourself, Why is this a cause? Again, do this for several iterations to arrive at the root causes.

H. To check the accuracy or appropriateness of the causes, map them onto the defined problem. Step 3: Make your recommendations for solving the problem. Consider whether you want to resolve it, solve it, or dissolve it (see Section 1.5). Which recommendation is desirable and feasible? I. Given the causes identified in Step 2, what are your best recommendations? Use the material in

the current chapter that best suits the cause. Remember to consider the OB in Action and Applying OB boxes, because these contain insights into what others have done. These insights might be especially useful for this case.

J. Be sure to consider the Organizing Framework—both person and situation factors, as well as processes at different levels.

K. Create an action plan for implementing your recommendations.

10 MANAGING CONFLICT AND NEGOTIATIONS

How Can These Skills Give Me an Advantage? MAJOR TOPICS I’LL LEARN AND QUESTIONS I SHOULD BE ABLE TO ANSWER

1. 10.1 A CONTEMPORARY VIEW OF CONFLICT 

MAJOR QUESTION: How can a contemporary perspective on conflict make me more effective at school, work, and home?

2. 10.2  CONVENTIONAL FORMS OF CONFLICT 

MAJOR QUESTION: What are some types of conflict and how can I manage them to my benefit?

3. 10.3  FORMS OF CONFLICT INTENSIFIED BY TECHNOLOGY 

MAJOR QUESTION: What can I do to manage work–family conflict and incivility to make me more effective at school, work, and home?

4. 10.4  EFFECTIVELY MANAGING CONFLICT 

MAJOR QUESTION: What can I do to prevent, reduce, or even overcome conflict? 5. 10.5 

NEGOTIATION 

MAJOR QUESTION: What are some best practices for effective negotiation? Page 377 The Organizing Framework in Figure 10.1 summarizes the key concepts you’ll learn in this chapter. You’ll notice a large number of person factors, such as your personality, experience, conflict-handling styles, mindfulness, and civility influence the type, frequency, and intensity of conflict you have in all arenas of your life. Many of these same factors influence how you negotiate. You’ve also undoubtedly expect relationship quality, leadership, organizational climate, as well as a number of norms and practices to shape conflict and negotiations at work. The importance of these factors notwithstanding, our primary focus in this chapter is understanding conflict and negotiation processes themselves, and how they in turn impact nearly every outcome in the Organizing Framework. This complexity and broad impact of conflict, in particular, highlights the critical importance of managing conflict for your own satisfaction and performance at work. FIGURE 10. Organizing Framework for Understanding and Applying OBSOURCE: © 2014 Angelo Kinicki and  Mel Fugate. All rights reserved. Reproduction prohibited without permission of the authors. 

Winning at Work Negotiating Salaries and Raises Experts offer this advice for getting the best compensation you can.

Negotiating Your Salary for a New Job  Know the market rate. Research what companies are paying other employees with similar

jobs in the same area. Glassdoor.com often can help.  Know your own value. Can you justify asking for more than the market rate? If yes, then be

prepared to justify this premium with compelling examples of your performance and accomplishments. Whether asking for premium or not, it is always a good idea to focus on how you benefited your past or present employers.

 What’s in it for them? Of course, like everybody else you pursue particular jobs because of how they will benefit you. However, during interviews and negotiations for a new job you are best served by focusing on the ways you can benefit your new employer, help the hiring manager reach her goals, and what a positive impact you’ll have in work teams.

 Be honest. Don’t exaggerate your current or past pay, your actual value, or accomplishments.

 Don’t go first. Try to wait for the other person to name a number. If you feel you must say something first, then you might say you want to be paid the rate of a top performer with your qualifications. If you have to give an answer, give a range, not a specific dollar figure.

 Consider benefits, too. Some of the most valuable parts of your compensation package may be insurance, retirement savings, vacation time, or the ability to work from home a certain percentage of time. Retirement may seem like eons away, but an employer matching your 5

percent contribution to your 401(k) plan is like giving you an extra 5 percent of pay—without an immediate tax bite.

 Look at the long term. If you can’t get a big pay package, consider whether you can ask for something else that will help your long-term career, for example, a chance to work on an important assignment.1

Negotiating a Pay Raise Preparation is critical. You need information, and the following are some valuable sources and techniques for acquiring it.

 Ask current colleagues. Peers are the best but also the toughest source. The best strategy is to be honest and say: “I’m not sure my salary reflects market value, so I’m checking with colleagues to find out what the current salary range is in our field. Would you be willing to talk about compensation?” Assure them you’ll keep it confidential, and then, if they’re willing, start by giving them a range where your salary falls and asking them how it compares with theirs.

 Query former colleagues. Ask former coworkers what they think is an appropriate range for your job in a company of your employer’s size and industry. It may help to keep the discussion in the third person: “What do you think is a competitive or appropriate salary for a solid performer doing X type of work in a company like mine (or a company like yours)?”

 Give to get. Another effective approach is to offer your salary and then ask: “Does that sound competitive with what you’re making or what your company offers?”

 Ask recruiters. One of the very best sources is recruiters who place people in jobs and companies like yours. Salary is almost always part of their discussions. So, if you’re going to build out your network, adding a recruiter or two who will share such info can be extremely valuable. But you need the relationship first. It’s no use cold calling a recruiter and expecting him or her to answer your questions—that expertise is part of what recruiters get paid for!2

What’s Ahead in This Chapter We continue our discussion of the group and team level in the Organizing Framework and address conflict and negotiation in this chapter. Conflict is an inevitable part of organizational life. We describe both positive and negative forms of conflict—yes, there are both. We also explore common forms of conflict at work, such as personality and intergroup. Significant attention is given to work–life conflict and cyberbullying, problems created and intensified by Internet technology and social media. We then provide practical guidance on how to manage various forms of conflict, followed by an explanation of negotiation, including types of negotiations and ethical pitfalls.

A CONTEMPORARY VIEW OF CONFLICT MAJOR QUESTION

How can a contemporary perspective on conflict make me more effective at school, work, and home? THE BIGGER PICTURE Conflict is an ever‐present part of your life and an important group‐level process in the Organizing Framework. To help you better understand and manage conflict, we explore several common causes of conflict at school and work. Then you’ll learn about what it means to have too little, too much, and just enough conflict (the conflict continuum). We explain why not all conflict is bad or dysfunctional; some forms are functional or desirable. Next, we describe some desired outcomes of functional conflict.

Because conflicts occur between people, a good place to begin is for you to learn about your own tendencies for conflicts with others. You likely believe you have relatively few and are easy to get along with, which may be true. However, even the most problematic bosses think so of themselves. Test your impressions of yourself by completing Self‐Assessment 10.1.

SELF-ASSESSMENT 10.1 INTERPERSONAL CONFLICT TENDENCIES Please be prepared to answer these questions if your instructor has assigned Self- Assessment 10.1 in Connect.

1. Does your score match your perception of yourself? 2. The assessment measures how well you get along with others and how they treat you; both are sources of conflict. If you were to improve the measure, what other factors do you think should be included?

Conflict Is Everywhere and It Matters Conflict is a pervasive part of the human experience. Some surveys report that employees spend two or more hours per week, or one day per month, dealing with some type of conflict at work. Not only is conflict time consuming, but employees also report many other undesirable consequences, such as  25 percent call in sick.  24 percent avoid work-related events.  18 percent quit.  16 percent say they’ve been fired.  9 percent attribute project failures to conflict.3 Whether these statistics move you or not, you can safely assume that all forms of conflict at work are underreported. Due to these consequences, and the fact that conflict occurs both within and between levels in the Organizing Framework for OB, managing it effectively is essential for individual, departmental, and organizational effectiveness. Page 380 However, it is important to realize conflict has both positive and negative consequences. The goal of this chapter is to help you understand how to avoid the negatives while also gaining from conflict’s positive outcomes. Let’s begin by defining conflict, describing the conflict continuum, and then explaining the difference between functional and dysfunctional conflict.

A Modern View of Conflict Conflict occurs when one “party perceives that its interests are being opposed or negatively affected by another party.”4 The word perceives reminds us that sources of conflict and issues can be real or imagined, just like perceptions of fairness. A lack of fairness, perceived or real, is a major source of conflict at work.

A Conflict Continuum Ideas about managing conflict underwent an interesting evolution during the 20th century. Initially, management experts believed all conflict ultimately threatened management’s authority, reduced productivity, and thus had to be avoided or quickly resolved. They later recognized the inevitability of conflict and advised managers to learn to live with it. Emphasis, nevertheless, remained on resolving conflict whenever possible. Beginning in the 1970s, OB specialists realized conflict had both positive and negative outcomes. This perspective introduced the revolutionary idea that organizations can suffer from either too much conflict or too little. Neither is desirable.

Appropriate types and levels of conflict energize people to move in constructive directions.5 The relationship between conflict intensity and outcomes is illustrated in Figure 10.2. The differences between types and levels of conflict lead to the distinction between functional and dysfunctional conflict discussed next. FIGURE 10.2    Relationship between conflict intensity and outcomes

SOURCE: C. G. Donald, J. D. Ralston, and S. F. Webb, “Arbitral Views of Fighting: An Analysis of Arbitration Cases, 1989–

2003,” Journal of Academic and Business Ethics, July 2009, 1–19.

Functional vs. Dysfunctional Conflict The distinction between functional conflict and dysfunctional conflict pivots on whether the organization’s interests are being served. Functional conflict, commonly referred to as constructive or cooperative conflict, is characterized by consultative interactions, a focus on the issues, mutual respect, and useful give‐and‐take. In such situations people often feel comfortable disagreeing and presenting opposing views. Positive outcomes frequently result. Page 381 Each of these factors is lacking in cases of dysfunctional conflict, disagreements that threaten or diminish an organization’s interests.6 This danger highlights the valuable role of management, and your own actions, in determining whether conflict is positive. To effectively deal with any kind of conflict, we need to understand some of the common causes.

Common Causes of Conflict Certain situations produce more conflict than others. Knowing the causes can help you and managers anticipate conflict and take steps to resolve it if it becomes dysfunctional. Table 10.1 lists many of the situations that tend to produce either functional or dysfunctional conflict. Which have happened to you? TABLE 10.1 SITUATIONS THAT COMMONLY PRODUCE CONFLICT

Incompatible personalities or value systems  

Inadequate communication 

Overlapping or unclear job boundaries   

Interdepartment/intergroup competition 

Competition for limited resources   

Unreasonable deadlines or extreme time  pressure 

Unreasonable or unclear policies, standards, or rules   

Decision making by consensus (dissenters  may feel coerced) 

Organizational complexity (conflict tends to increase as  the number of hierarchical layers and specialized tasks  increases) 

Collective decision making (the greater the  number of people participating in a decision,  the greater the potential for conflict) 

Interdependent tasks (one person cannot complete his  or her assignment until others have completed their  work) 

Unmet expectations (employees who have  unrealistic expectations about job  assignments, pay, or promotions are more  prone to conflict) 

SOURCE: Adapted in part from discussion in A. C. Filley, Interpersonal Conflict Resolution (Glenview, IL: Scott, Foresman, 1975), 9–12; and B. Fortado, “The Accumulation of Grievance Conflict,” Journal of Management Inquiry, December 1992, 288–303. See also D. Tjosvold and M. Poon, “Dealing with Scarce Resources: Open-Minded Interaction for Resolving Budget Conflicts,” Group & Organization Management, September 1998, 237–255. Proactive managers look for these early warnings and take appropriate action. For example, we can sometimes reduce conflict by making decisions on the basis of majority approval rather than striving for a consensus. However, if conflict is unnoticed or allowed to continue, it can and does escalate.

Escalation of Conflict When conflict escalates, the intensity increases and often leads to cycles of provocation and counter-provocation. The conflicting parties then often replace meaningful exchange and debate with increasingly destructive and negative attacks, which are often more about undermining or hurting the other party than advancing one’s own interests.7 People then take positions that are increasingly extreme and hard to justify. Conflict escalation often exhibits these five characteristics: 1. Tactics change. Parties often move from “light tactics,” such as persuasive arguments, promises, and

efforts to please the other side, to “heavy tactics” that include threats, power plays, and even violence.

2. Number of issues grows. More issues that bother each party are raised and included in the conflict. 3. Issues move from specific to general. Small and specific concerns often become more vague or

general and can evolve into a general dislike of or intolerance for the other party. 4. Number of parties grows. More people and groups are drawn into the conflict. 5. Goals change. Parties change their focus from “doing well” or resolving conflict to winning and even

hurting the other party.8 Which of the five characteristics are present in the following OB in Action box?

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OB IN ACTION FIRST A QUESTION, THEN A MAJOR ALTERCATION9

Heightened airline security since 9/11 has increased frustrations and conflicts for passengers and employees.© Jim West/Alamy

Since 9/11, heightened airline security has increased frustrations for both airline employees and passengers. Passengers have to abide by ever more rules that employees must enforce. For instance, on a flight from Europe to the United States, a simple passenger request escalated quickly. “Bill Pollock asked a flight attendant about a sign telling passengers not to venture beyond the curtain separating economy class from the rest of the plane,” The New York Times reported. “He wanted to stretch his legs and visit his wife seated on the opposite aisle, using the passageway behind the galley in the plane’s midsection. But when he questioned a flight attendant on the policy and began recording their conversation using his cell phone, the situation quickly escalated: The flight attendant grabbed his phone and nearby federal air marshals intervened.” The marshals held him against the wall with his hands behind his back. Pollock said, “I wasn’t violent, I didn’t use four-letter words. All I did was ask this guy about the sign on the curtain and they flipped out.” Afterward Pollock wondered about his rights and the rules, such as being restricted to particular cabins and not just bathrooms, as well as the right to video/audio record flight crew. A spokesperson for the Federal Aviation Administration responded that there is no rule limiting passenger movement on planes, but “no person may assault, threaten, intimidate, or interfere with a crew member in the performance of the crew member’s duties.”

YOUR THOUGHTS? 1. What is your reaction? 2. Why do you think the situation escalated? 3. What could the flight attendant have done differently to prevent escalation? 4. What could the passenger have done differently to avoid escalation?

Why People Avoid Conflict Are you uncomfortable with conflict? Do you go out of your way to avoid it? If so, you’re not alone. Many of us avoid conflict for a variety of reasons both good and bad. Some of the most common are the following:  Fear of harm to ourselves.  Fear of rejection.  Fear of damage to or loss of relationships.  Anger.  Desire not to be seen as selfish.  Desire to avoid saying the wrong thing.  Fear of failure.  Page 383Fear of hurting someone else.  Fear of getting what you want.10 This list is self-explanatory, except for the last item. It refers to people who, for personal reasons, feel undeserving or fear the consequences of success and thus tend to sabotage themselves. Of course, avoiding conflict doesn’t make it go away. It may continue or even escalate. Moreover, avoiding conflict can cost you a promotion. Many otherwise qualified employees are passed over for management and executive positions because they avoid making tough decisions, confronting poor performance, or challenging weak or faulty ideas. This suggests that conflict-handling, not conflict-avoiding, skills are in high demand.11 Southwest Airlines took this to heart. Leaders wanted to shake up what they viewed as a culture of “artificial harmony” among staffers. The company now promotes middle managers to executive positions partly based on their ability to spark conflict among staffers, says Elizabeth Bryant, vice president of training. During a five-week training program, these high-potential managers learn to foster vigorous but respectful internal debates.12 This view is reinforced by noted management consultant Patrick Lencioni, who said: “The only thing worse than engaging in conflict is not to do so.”13 What is the alternative? The Applying OB box below provides useful suggestions. For our purposes, it is enough to become aware of our fears and practice overcoming them, as the rest of this chapter will show.

APPLYING OB

Avoiding Conflict Makes It Grow14 When you’re tempted to avoid conflict, you may be wise to do the following instead.

1. Stop ignoring a conflict. Ignoring or working around a conflict won’t make it go away and may cause further escalation. Instead, bring both sides together to address the issues.

2. Act decisively to improve the outcome. Delay only causes the problem, real or perceived, to fester. Addressing a conflict in short order can help unveil misunderstandings or simple oversights before they grow into something more or spread.

3. Make the path to resolution open and honest. Involve all relevant parties, collect information, and determine a desired outcome. Doing so helps resolve misunderstandings and focuses everybody on the end state instead of wallowing in the (alleged) offenses.

4. Use descriptive language instead of evaluative. Beware of accusations and judgmental language. Both put people on the defensive and impede progress. Instead, focus on the problem (behaviors, feelings, implications) and solution rather than the perpetrator.

5. Make the process a team‐building opportunity. If the problem affects the team, then it may be beneficial to approach the conflict and its solution as a team. Such resolutions may improve relationships in such a way that the team functions even better than it did before the conflict.

6. Keep the upside in mind. Effective conflict resolution creates “success momentum.” In other words, conflicts are signs along the road to the final and desired destination. Don’t get bogged down and lose sight of the ultimate goal or bigger picture.

Page 384 TAKE‐AWAY APPLICATION Practicing Functional Conflict

1. Think of a conflict or a strained situation that you either haven’t addressed or have purposefully avoided. 2. Describe how you could apply suggestions 2, 3, and 4 from the Applying OB box above. 3. If the situation involves a team or a group of people, describe how you might use this as an opportunity for team building (suggestion 5). 4. Identify and focus on the upside (suggestion 6), because it will help motivate you to follow the other suggestions and prevent you from getting discouraged.

Let’s remind ourselves what we get for our conflict-solving efforts. After all, embracing conflict or taking a more functional and constructive view can be difficult if not counterintuitive. What are the outcomes we seek?

Desired Outcomes of Conflict Management Conflict management is more than simply a quest for agreement, nor should it be a quest for victory. If progress is to be made and dysfunctional conflict minimized, we need a broader goal. An influential model of cooperative conflict outlines these three desired outcomes: 1. Agreement. Equitable and fair agreements are best. An agreement that leaves one party feeling

exploited or defeated will tend to breed resentment and subsequent conflict. 2. Stronger relationships. Good agreements enable conflicting parties to build bridges of goodwill and

trust for future use. Moreover, conflicting parties who trust each other are more likely to keep their end of the bargain they have made.

3. Learning. Functional conflict can promote greater self-awareness and creative problem solving. Like the practice of management itself, successful conflict handling is learned primarily by doing. Knowledge of the concepts and techniques in this chapter is a necessary first step, but there is no substitute for hands-on practice. There are plenty of opportunities to practice conflict management in today’s world.15

We therefore encourage you, when possible, to look at conflict not as a war or a battle, but instead as an opportunity or a journey. Keep the following observation in mind for the balance of this chapter: Conflict gives you an opportunity to deepen your capacity for empathy and intimacy with your opponent. Your anger transforms the “other” into a stereotyped demon or villain. Similarly, defensiveness will prevent you from communicating openly with your opponents, or listening carefully to what they are saying. On the other hand, once you engage in dialogue with that person, you will resurrect the human side of his/her personality—and express your own as well.16

CONVENTIONAL FORMS OF CONFLICT MAJOR QUESTION

What are some types of conflict and how can I manage them to my benefit? THE BIGGER PICTURE You can probably think of many types of conflicts from your own life, and you likely have a good idea what caused most of them. But in this section we focus on two of the most common and consequential types of conflict in organizations—personality and intergroup. The first

occurs at the individual level and the other at the group level. Understanding both types will make you more effective at managing an extremely valuable group‐level process in the Organizing Framework. As we discussed in the first section, opposition isn’t necessarily a problem. It can be a constructive way of challenging the status quo and improving behaviors, processes, and outcomes. New ideas by definition contrast with old ideas or ways of doing things. However, opposition becomes an issue if it turns into dysfunctional conflict and impedes progress and performance. Personality conflict and intergroup conflict can both cause a number of undesirable outcomes across levels of the Organizing Framework for OB.

Personality Conflicts Given the many possible combinations of personality traits, it is clear why personality conflicts are inevitable. How many times have you said or heard, “I just don’t like him [or her]. We don’t get along.” One of the many reasons for these feelings and statements is personality conflicts. We define a personality conflict as interpersonal opposition based on personal dislike or disagreement. Like other conflicts, personality conflicts often escalate if not addressed. Think of personality conflicts you’ve had at work or school. What were the consequences for you? The other person? Members of your team, department, or class? Did they escalate? If the source of a conflict really is personalities, it is particularly troublesome since personality traits are by definition stable and resistant to change. Research shows that conflicts over work tasks can turn into personal conflicts and escalate into bullying.17 But they have other undesirable outcomes too, such as negative emotions related to particular coworkers and to work in general. If these feelings persist beyond work, employees can ruminate and fail to recover appropriately. The result can harm their health and non-work relationships.18

Bill Gross is the billionaire investor long known as the bond king. Beginning in the early 1970s he worked at  PIMCO and built a $2 trillion empire. His stern, domineering, “my way or the highway” approach caused many  conflicts. But in recent years these conflicts with noted individuals within the firm, including then‐CEO 

Mohammed El‐Erian, became intolerable. El‐Erian and others left, and Gross tried to fire more. Eventually the  board fired Gross. The troubles didn’t stop there. Investors have pulled nearly $400 billion since Gross’s  departure, and he is suing PIMCO for $200 million more. He now works just down the street at a competitor— Janus.20© Patrick T. Fallon/Bloomberg/Getty Images

A particularly troublesome form of conflict that is too often attributed to personalities is sexual harassment and other forms of discrimination. Such conflicts have nothing to do with personalities and are unethical if not also illegal.19 But the accused often attribute the target’s resistance and complaints to personality: “She’s too sensitive,” or “He can’t take a joke.” It is critically important to identify and remedy such conflicts. Page 386

How to Deal with Personality Conflicts OB IN ACTION

THE CEO WHO PLANNED A “FOOD FIGHT” Kevin Reddy, the chair and CEO of Noodles & Co. Restaurants and former COO of Chipotle Mexican Grill, hired Dan Fogarty as chief marketing officer knowing Fogarty’s personality clashed with that of the company’s president, Keith Kinsey. (Fogarty and Kinsey had previously worked together at Chipotle.)

Reddy knew that Kinsey was analytical and pragmatic, while Fogarty was unstructured and creative. The CEO counted on and took advantage of their different personalities and heated debates. Reddy believed executives who challenge one another—rather than validating each others’ ideas—produced the best thinking. He said, “I don’t mind if it gets a little bloody as long as it’s merely a flesh wound.”21 How successful his strategy proved is hard to say. But it is worth noting that in 2015 Fogarty left in March, citing “personal reasons,”22 and Kinsey left in June to become CEO of Portillo’s Hot Dogs.23 Page 387 Table 10.2 presents practical tips for both you and managers who are involved in or affected by personality conflicts. Best practices vary depending on the party. Steps 2 through 4 in the table show how to escalate your concern if the conflict is not resolved. TABLE 10.2 HOW TO RESPOND WHEN AN EMPLOYEE EXPERIENCES A PERSONALITY CONFLICT

FOR THE EMPLOYEE FOR THIRD‐PARTY OBSERVERS 

FOR THE EMPLOYEE’S MANAGER 

1. Be familiar with and follow company policies on diversity, discrimination, and sexual harassment.

2. Communicate directly with the other person to resolve the perceived conflict (emphasize problem solving and common objectives, not personalities).

Do not take sides in  someone else’s  personality conflict. 

Investigate and document the  conflict; if appropriate, take  corrective action (feedback or  behavior modification). 

3. Avoid dragging coworkers into the conflict.

Suggest the parties work  things out for  themselves in a 

If necessary, attempt informal  dispute resolution. 

constructive and positive  way. 

4. If dysfunctional conflict persists, seek help from direct supervisors or human resource specialists.

If dysfunctional conflict  persists, refer the  problem to the parties’  direct supervisors. 

Refer difficult conflicts to  human resource specialists or  hired counselors for formal  resolution efforts and other  interventions. 

PROBLEM‐SOLVING APPLICATION Butt Your Heads Together and Fix the Problem24 At Black Butte Coal in Wyoming, a warehouse supervisor and maintenance manager’s conflict escalated to the point that their manager was going to fire both of them. Not only did they disagree and argue, but they also yelled at each other in front of other employees. It seemed that their goals for their respective departments, and the determination of each to meet those goals at the other’s cost, caused them to lose sight of the bigger picture and the way their efforts contributed to the outcome for the larger company.

Amanda DeBernardi, the HR manager, stepped in to help. She put the two employees in a room with a blank piece of paper in front of each. She then gave each the opportunity to explain his position and issues, without interruption, while the other took notes.

APPLY THE 3‐STEP PROBLEM‐SOLVING APPROACH 1. Step 1:Define the problem in this case. 2. Step 2:Identify the potential causes.  3. Step 3:Make your recommendations. DeBernardi got you started on a potential solution, but what else 

would you do? You can build on her actions or take a different course. Explain.  Page 388

Intergroup Conflict Conflict among work groups, teams, and departments is a common threat to individual and organizational effectiveness, as illustrated in the Organizing Framework. The application of hydraulic fracturing (fracking) to extract oil, for instance, has caused intense conflicts between local residents, local and state legislatures, energy companies, and environmental groups. In Florida, environmentalists are against fracking, local governments and citizens are concerned about damage being done in their communities, oil companies are eager to drill, and all these concerns roll up to the state legislature, which must ultimately decide what to do. In early 2016 the state considered legislation that would regulate fracking. The other parties then argued that the measures the state is considering miss important elements and potential consequences.26

  The exponential growth of Uber and other ride‐sharing companies has caused tremendous conflicts between taxi drivers, as well as between ride‐sharing companies and the local and federal officials who regulate transportation around the world. For instance, violent protests in Paris and other French cities by drivers opposed to ride sharing brought traffic to a standstill.25 The way Uber and other such companies deal with and resolve these conflicts will be critical to their future success. Some cities and countries have outlawed their services and others have restricted them. The road to this industry’s future expansion is not so smooth.© Marcio Fernandes/AP Photo

Because so many parties can be involved, and because intergroup conflicts can each be so different, we differentiate them in terms of states and processes.

Conflict States and Processes  Conflict states are shared perceptions among team members about the target and intensity of the

conflict. Targets can be either tasks (goals or ideas) or relationships.  Conflict processes are the means by which team members work through task and relationship

disagreements.27  Recent research strongly supports what you likely suspect, that conflict processes, or the ways teams manage differences, matter. Much like the case in ensuring distributive and procedural justice, process always matters!28 So much so that a leading expert and her colleagues concluded this about conflict processes: “How teams interact regarding their differences are at least as important as conflict states, that is, the source and intensity of their perceived incompatibilities.”29 The importance of conflict states and processes is commonly highlighted in mergers, such as those in the telecom industry where consumers, regulators, content providers, and telecom companies themselves often have opposing interests and views. When Comcast offered to buy Time Warner, for instance, consumers and regulators argued that this merger would result in less competition, fewer choices, and higher prices. Content providers, companies that make TV shows and movies, were concerned that fewer providers would enable those that do remain to charge higher fees to distribute their content.30 The opposition won; the merger didn’t happen. We address conflict states (targets) in more detail in the next two sections of this chapter.

In‐Group Thinking—“Us vs. Them” Cohesiveness—a “we feeling” that binds group members together—can be a good thing or a bad thing. A certain amount of Page 389 cohesiveness can turn a group of individuals into a smooth- running team. Too much cohesiveness, however, can breed groupthink, because a desire to get along pushes aside critical thinking and challenges to existing or inferior ideas. The study of in- groups has revealed an array of challenges associated with increased group cohesiveness and in- group thinking. Specifically,  Members of in-groups view themselves as a collection of unique individuals, while they

stereotype members of other groups as being “all alike.”  In-group members see themselves positively and as morally correct, while they view

members of other groups negatively and as immoral.  In-groups view outsiders as a threat.  In-group members exaggerate the differences between their group and other groups, which typically

leads them to a distorted perception of reality.31 Managers cannot eliminate in-group thinking, but they certainly should not ignore it when handling intergroup conflicts. Let’s explore some options for managers—and you.

How to Handle Intergroup Conflict How have you attempted to solve conflicts between a group of which you are a member and another group? While many techniques are successful in particular situations, research and practice support three specific approaches:  Contact hypothesis.  Conflict reduction.  The creation of psychologically safe climates.

Making an effort to understand and appreciate differing company, industry, or cultural customs is an effective  way to avoid conflicts and make all parties more comfortable.© Blend Images/Alamy RF

Page 390 Contact Hypothesis The contact hypothesis suggests that the more members of different groups interact, the less intergroup conflict they will experience. Those interested in improving race, international, and union–management relations typically encourage cross-group interaction. The hope is that any type of interaction, short of actual conflict, will reduce stereotyping and combat in- group thinking. But research has shown this approach to be naive and limited. For example, a study of ethnic majority (in-group) and ethnic minority (out-group) students from Germany, Belgium, and England revealed that contact did reduce prejudice. Specifically, contact over time resulted in a lower desire for social distance and fewer negative emotions related to the out-group. The quality of contacts mattered too, especially regarding equal status, cooperation, and closeness. It wasn’t enough simply to encounter members of the out-group (to just be introduced, for example). However, prejudice also reduced contact. Those in the out-group were more reluctant to engage with or contact the in-group. Contact had no effect on reducing prejudice of the minority out- group toward the majority in-group.32 One interpretation of these results is that contact matters, high-quality contact matters more, but both matter the most from the in-group’s perspective. Nevertheless, intergroup friendships are still desirable, as many studies document.33 But they are readily overpowered by negative intergroup interactions. Thus the top priority for managers faced with intergroup conflict is to identify and root out specific negative linkages between or among groups. More specifically, focusing on the perceived security and quality of the interactions matters. If you and/or your managers can make the out-group feel there is nothing at stake (they are not being evaluated), they are more likely to feel secure and satisfied with the interaction. This reassurance can also reduce both groups’ prejudices about the other. We can achieve such benefits by sharing social interests or social events where the focus is not on work, particularly the out-group’s work.34 Conflict Reduction Considering this evidence, managers are wise to note negative interactions between members and groups and consider options for reducing conflict. Several actions are recommended:  Eliminate specific negative interactions (obvious enough).  Conduct team building to reduce intra-group conflict and prepare for cross-functional

teamwork.  Encourage and facilitate friendships via social events (happy hours, sports leagues, and book

clubs).  Foster positive attitudes (empathy and compassion).  Avoid or neutralize negative gossip.  Practice the above—be a role model.35 TAKE‐AWAY APPLICATION Handling Intergroup Conflict

1. Think of an intergroup conflict in your own life. Your example should include a description of a group, team, or department of which you are or were a member, as well as the nature of the conflict state (task or relationship). 2. Then describe how the conflict was handled. Was it resolved? 3. Regardless of your answer to question 2, explain how one or more of the above recommendations could have been applied to reduce, eliminate, or even prevent the conflict described in question 1.

Page 391 Creating a Psychologically Safe Climate As we’ve discussed, conflict occurs at all levels in the Organizing Framework. This means the causes and remedies can also occur at individual, group, and organizational levels. One such

organizational-level cause and remedy is a climate of psychological safety. A psychological safety climate represents a shared belief among team members that it is safe to engage in risky behaviors, such as questioning current practices without retribution or negative consequences.36 When employees feel psychologically safe, they are more likely to speak up and present their ideas and less likely to take disagreements personally. This interaction results in increased team creativity,37 less conflict within and between teams, and higher individual and team performance.38 Psychological safety climates also help improve employee turnover, safe work behaviors, and job satisfaction.39 How can you and your employers create or foster a climate for psychological safety? Here are three fundamental and widely applicable practices:

1. Ensure leaders are inclusive and accessible. 2. Hire and develop employees who are comfortable expressing their own ideas, and receptive

and constructive to those expressed by others. 3. Celebrate and even reinforce the value of differences between group members and their

ideas.40 Find out the level of psychological safety in one of your groups, teams, or organizations by completing Self‐Assessment 10.2. It’s a quick, accurate, and valuable way to get a sense of this important environmental characteristic. Knowing the level of psychological safety can help you understand why some conflicts occur and how effectively you can handle them. SELF-ASSESSMENT 10.2 PSYCHOLOGICAL SAFETY CLIMATE Please be prepared to answer these questions if your instructor has assigned Self- Assessment 10.2 in Connect.

1. Identify a group at school or work of which you are a member. It helps if the one you choose has to deal with opposing views and make decisions. Complete Self‐Assessment 10.2 focusing on this group. 2. Which items help you understand why the group deals with conflicts as it does? 3. Explain three things you and your group members can do to increase psychological safety and reduce conflict.

SOURCE: Excerpted from A. Edmondson, “Psychological Safety and Learning Behavior in Work Teams,” Administrative Science Quarterly 44 (1999), 350–383. Copyright © 1999. Reproduced with permission of Sage Publications, Inc. via Copyright Clearance  Center. 

FORMS OF CONFLICT INTENSIFIED BY TECHNOLOGY MAJOR QUESTION

What can I do to manage work–family conflict and incivility to make me more effective at school, work, and home? THE BIGGER PICTURE We focus our discussion on two particular forms of conflict: work–family conflict and incivility. You face demands at school and other arenas of your life—work, social life, and perhaps a family—and these demands can compete with each other and cause conflicts for you. Such conflicts, along with uncivil behavior or mistreatment, can have dramatic and undesirable effects on your personal health, well‐being, opportunities, and other outcomes in the Organizing Framework.

Students, employees, and people everywhere have always experienced conflicts between the various arenas of their lives, notably between work, school, and home. But historically, various activities and their demands were confined to the physical locations in which they occurred— work happened largely at the office. Not anymore. Technology has blurred the old boundaries— and also extended mistreatment to every place and every arena. The Internet and social media are new and devastating tools for bullies and other bad actors. For these reasons we give special attention to these forms of conflict.

Work–Family Conflict Work–family conflict occurs when the demands or pressures from work and family domains are mutually incompatible.41 Work–family conflict can take two distinct forms: work interference with family and family interference with work.42 For example, suppose two managers in the same department have daughters playing on the same soccer team. One manager misses the big soccer game to attend a last-minute department meeting (work interferes with family), while the other manager skips the meeting to attend the game (family interferes with work). Both kinds of conflicts matter, because they can negatively affect many important outcomes in the Organizing Framework and your larger life domain (see Table 10.3). As research accumulates, it is also becoming clear that work interfering with family is the far more frequent and consequential problem.43 TABLE 10.3 NEGATIVE CONSEQUENCES OF CONFLICTS BETWEEN WORK, FAMILY, AND OTHER LIFE DOMAINS

WORK INTERFERES WITH FAMILY FAMILY INTERFERES  

OUTCOMES LINKED TO LIFE MORE GENERALLY 

Job satisfaction  Marital satisfaction  Life satisfaction 

Intentions to quit  Family satisfaction  Health problems 

Absenteeism  Family‐related strain  Depression 

Performance  Family‐related  performance  Substance use/abuse 

SOURCE: Adapted from F. T. Amstad, L. L. Meier, U. Fasel, A. Elfering, and N. K. Semmer, “A Meta‐Analysis of Work‐Family Conflict  and Various Outcomes with a Special Emphasis on Cross‐Domain versus Matching Domain Relations,” Journal of Occupational Health Psychology, 2011, 151–169.

What about you? What level of conflict do you think you experience between school and other domains of your life? Self‐Assessment 10.3 will help you see such conflicts from the point of view of others, not just your own perceptions. It can also help you identify which conflicts are the most and least serious, and this knowledge can assist you in deciding what to do about them. Page 393

SELF-ASSESSMENT 10.3 SCHOOL–NON-SCHOOL CONFLICT Please be prepared to answer these questions if your instructor has assigned Self- Assessment 10.3 in Connect.

1. What is your reaction? 2. Do any of your responses and sources of conflict surprise you? 3. Which do you think is greater, the social dimension (questions 1–6) or the cognitive dimension (questions 7–9)? 4. What can you do to prevent or reduce the conflicts you identified?

SOURCE: Adapted from S. R. Ezzedeen and P. M. Swiercz, “Development and Initial Validation of a Cognitive‐Based Work‐Nonwork  Conflict Scale,” Psychological Reports, 2007, 979–99. Reprinted with permission of Ammons Scientific Ltd. 

Making many conflicts worse is the spillover effect. This means, for instance, that hostilities in one life domain can manifest in other domains.44 Because these and other consequences can be numerous and troublesome, researchers and managers alike have devoted extensive attention and effort to understanding and reducing conflicts and their spillover effects. From a practical perspective, it is helpful to think of balance. Balance Is the Key to Reducing Conflict A survey asked employees to list the biggest factors that damage work–life balance:

The leading answer by a mile was “bad bosses”—defined as “demanding, overbearing, and mean.” Tied for second, constantly working beyond standard business hours and inflexibility in scheduling work hours and off time. A not-so- distant third were incompetent colleagues and long commutes.45 It is therefore no surprise that 46 percent of employees in another survey said work–life balance was the thing they valued most when looking for a new job (second only to salary, cited by 57 percent).46 Ideally, you will be able to avoid or remove conflicts completely. But more often than not you will have to balance demands coming from the different domains of your life. Here are some ideas to consider.  Work–family balance begins at home. Case studies of successful executives reveal that family and

spousal support is critical for reaching senior-level positions.47 This suggests that both men and women need help with domestic responsibilities if there is any chance of achieving work–family balance.

 Page 394An employer’s family‐supportive philosophy is more important than specific programs. Organizational culture must support the use of family-friendly programs in order for employees to benefit from them. For instance, it’s not enough to simply provide child care; employees must also feel supported and comfortable using it. The same goes for leaving work early to attend a child’s sporting event or recital.

 The importance of work–family balance varies across generations. A study of the work values of 16,000 adults of all ages suggests that organizations should consider implementing work policies targeted toward different generational groups.49 For example, flextime and compressed work programs can attract and retain both Gen Ys and Gen Xers, while job enrichment may be a more effective way to motivate baby boomers.

Sheryl Sandberg, chief operating officer of Facebook, moved the issue of work–life balance to the front pages  with her celebrity and her book Lean In. She championed the belief that women can have it all, including rising to 

the C‐suite in corporate America. But having it all, according to Sandberg, requires a husband or partner who can  help balance the load. In her own book, Unfinished Business, Anne‐Marie Slaughter, former Princeton dean and  State Department official, agrees with Sandberg that women can indeed climb to the top rungs of corporate  ladders. However, she claims that women can’t have it all unless they are superhuman, rich, or self‐employed.  The system needs to change—men need to have the same responsibilities as women and vice versa—in order for  there to be balance and for the career trajectories of women to be similar to those of men.48(Left): © Spencer Platt/Getty Images; (right): © Paul Morigi/Getty Images 

OB IN ACTION AT UNITED SHORE FINANCIAL—GIVE ME ONLY 40 OR YOU’RE FIRED!50 A number of companies have taken work–life balance to another level. For instance, United Shore Financial Services in Troy, Michigan, requires that employees work only 40 hours per week. Sure, plenty of companies talk about such limits, but it’s a reality at this mortgage wholesaler. Mat Ishbia, the CEO, claims the “firm 40” policy makes employees more efficient and focused when at work, knowing they must be completely unplugged when they leave. There is no after- hours e-mailing or coming in on weekends.

Ishbia also claims that since word about the policy has gotten out, the firm has attracted more talented employees than in the past. He describes the policy this way: “5:55 p.m. on a Friday is no different from 10:55 a.m. on a Tuesday— taking Page 395no breaks for Facebook or online shopping. But once the day is done, employees are off duty until the next morning.” Laura Lawson, the company’s chief people officer, says this: “You give us 40. Everything else is yours.”51 The premise, supported by research, is that everybody needs time to recover. More hours do not necessarily translate into more productivity. Some studies in fact show that any more than 48 hours of work per week results in a dramatic decrease in productivity per hour. United Shore’s practices are quite different from those of many companies trying to better integrate work and life and in the process often further blurring the lines between these two arenas and increasing conflict. YOUR THOUGHTS?

1. What do you think are the benefits of United Shore’s “firm 40” practice for the firm? 2. What do you think are some of the likely challenges for the firm or its employees? 3. What would you most appreciate about a “firm 40” policy?

Flex Space vs. Flextime and Your Supervisor Balance requires flexibility, which is a key aspect of many efforts to eliminate or reduce conflicts. That said, not all flexibility is the same.

 Flex space, such as telecommuting, occurs when policies enable employees to do their work from different locations besides the office (coffee shops, home, or the beach).

 Flextime is flexible scheduling, covering either the time when work must be completed (deadlines) or the limits of the workday (9–5, 10‐4, or any time today).

Understanding the differences can help you better balance your own demands between not only work and family, but school and the rest of your life too. At first you might think more is better—more flex space and more flextime will make you happier if not also more productive. Research shows that this is not true. There can be benefits to greater flexibility, but flex space in particular can end up further blurring the boundaries between work and other arenas of your life and consequently adding to conflicts.52 Flex, but beware.

One final caution: The value of most flexible work arrangements can be undermined if your immediate supervisor isn’t supportive. Put another way, supportive policies matter, but what good is a policy if you aren’t allowed to use it?53 Fully half of companies surveyed offer some sort of flexible work arrangements, yet the same companies report that only a third of employees utilize them.54 Now let’s turn our attention to a different category of conflict—incivility.

Incivility—Treating Others Poorly Has Real Costs Incivility is any form of socially harmful behavior, such as aggression, interpersonal deviance, social undermining, interactional injustice, harassment, abusive supervision, and bullying.55 Like other OB concepts, incivility is perceptual—it is in the eyes of the beholder.56 If you feel you’ve been treated poorly, then you’ve been treated poorly, and this feeling is what affects numerous outcomes across levels of the Organizing Framework. Recent research reports that 98 percent of employees reported experiencing some form of incivility, and 50 percent said they had been treated rudely at least once a week!57 Page 396Table 10.4 describes common employee responses to incivility and their frequencies. Besides the obvious—that no one likes to be mistreated—experts on the topic describe the costs of incivility this way: The costs chip away at the bottom line. Nearly everybody who experiences workplace incivility responds in a negative way, in some cases overtly retaliating. Employees are less creative when they feel disrespected, and many get fed up and leave.58 TABLE 10.4 EMPLOYEES’ RESPONSES TO AND THE COSTS OF INCIVILITY AT WORK 

48% intentionally decreased their work effort 

47% intentionally decreased the time spent at work 

38% intentionally decreased the quality of their work 

63% lost work time avoiding the offender 

66% said performance declined 

25% admitted to taking frustration out on customers 

12% said they left their job because of it 

SOURCE: C. Porath and C. Pearson, “The Price of Incivility—Lack of Respect Hurts Morale and the Bottom Line,” Harvard Business Review, January–February 2013. 

Even more shocking is the prevalence and impact of incivility in health care. For instance, hospital workers whose supervisors mistreated them were less likely to share knowledge and information, which diminished their team’s performance.59 Another study found that almost 25 percent of physicians said incivility led to patient harm, and nearly 75 percent of those physicians said bad behavior in their team caused medical errors, even contributing to patient deaths.60 Finally, one estimate is that 13 percent of executives’ time at Fortune 1000 companies is spent dealing with incivility. This equates to seven weeks per year!61 Now that you’re clear on the magnitude of the problem, let’s explore some causes and solutions.

Causes of Incivility It’s no surprise that both individuals and their employers can be the root cause of mistreatment at work. Figure 10.3 illustrates common causes of various forms of incivility. FIGURE 10.3    Causes, forms, and outcomes of incivility at work

SOURCE: Inspired by and adapted from R. Singleton, L. A. Toombs, S. Taneja, C. Larkin, and M. G. Pryor, “Workplace Conflict: A 

Strategic Leadership Imperative,” International Journal of Business and Public Administration 8 (2011), 149–156.

Note that the causes, just like the outcomes, can occur at all three levels in the Organizing Framework. Also note that incivility is contagious, like emotions, and if unchecked it can escalate. If your boss is rude to you, then you are more likely to look for rude behavior in your interactions with others and respond accordingly (negatively). This may help explain why incivility has been shown to be catastrophic to teamwork, because it undermines collaboration and individual member performance.62 This means bad behavior is truly an organizational problem, even if it starts with a single individual. Bullying Bullying occurs at multiple levels in OB. Recall our discussion of counterproductive work behaviors and bullying in Chapter 2, where the Winning at Work section and a Problem-Solving Application box addressed bullying from the target’s or individual’s perspective. We build on these here and explore the implications of bullying at the group and organization levels. Bullying is different from other forms of mistreatment or incivility in at least three ways.63 1. Bullying is usually evident to others. Bullies at work don’t have to push you down or take your lunch

money, like they do in elementary school. But even when the bullying is less obvious and nonviolent,

coworkers are commonly aware through either Page 397gossip or other forms of communication (meetings, e-mail, and social media) that someone is being bullied.

2. Bullying affects even those who are NOT bullied. Research shows that employees who are simply aware of bullying of colleagues but are not themselves a target are more likely to quit their jobs. This means bullying has costs that extend well beyond the harm to the person being bullied.64 Simply witnessing or being aware that one of your colleagues is mistreated has negative effects on you.

3. Bullying has group‐level implications. Because even those who are not targeted by bullies can be affected, bullying often negatively affects group dynamics and group satisfaction and performance,65 important processes and outcomes in the Organizing Framework.

Given the costs of bullying, what can you and employers do? Table 10.5 provides a collection of best practices from business and research. TABLE 10.5 ANTI‐BULLYING STRATEGIES FOR GROUPS AND ORGANIZATIONS

Develop a workplace bullying policy.

Encourage open and respectful communication. 

Develop a clear procedure for handling complaints about bullying. 

Identify and model appropriate ways for people to interact with colleagues. 

Develop and communicate a system for reporting bullying. 

Identify and resolve conflicts quickly and fairly to avoid escalation. 

Identify the situations, policies, and behaviors likely to cause bullying or allow it to occur. 

Train employees to manage conflict. 

Establish and enforce clear consequences for those who engage in bullying. 

Monitor and review employee relationships, with particular attention to fairness. 

SOURCE: Adapted from H. Cooper‐Thomas, D. Gardner, M. O’Driscoll, B. Cately, T. Bentley, and L. Trenberth, “Neutralizing  Workplace Bullying: The Buffering Effects of Contextual Factors,” Journal of Managerial Psychology 28 (2013), 384–407.

Cyber Bullying and Harassment

Brianna Wu is well known for her independent game development studio, Giant Spacekat, which has produced  mobile games such as Revolution 60. But Wu also is known as the target of the now infamous online group  Gamergate. As one reporter described it, “She came under attack by a vicious posse of cyber trolls intent on  ruining her career, invading her privacy, destroying her reputation, and, as indicated by numerous threats, killing  her.” The threats have been so severe and persistent that Wu needs a security detail and avoids putting her name  on the programs of different events she is invited to attend. She has received no fewer than 108 death  threats.68 Part of what makes her a target is that she is determined to develop and market “action‐packed video  games made for women, by women, starring kick‐a$$ female characters,” in what has been and still is an industry  dominated by male developers.69© Joanne Rathe/The Boston Globe/Getty Images

Advances in technology have changed the nature of conflict at school and work.66 The Internet and particularly social media have created new avenues and weapons for bullies at school, at work, and in our social lives. Many researchers now report that virtual bullying is more common than face-to-face bullying, although the two often co-occur.67 Worse still, both face-to- face and cyber bullying affect their victims in two ways. Not only do the uncivil acts directly harm the targeted person, but also the fear of future mistreatment amplifies this effect. Given this, what can you and managers do to avoid bullying and other forms of incivility? The practices described in Table 10.5 are a good start. But it is useful for you and your employer to take specific actions to prevent and address virtual incivility (harassment and bullying) in e-mails and social media. Here are some ideas. Page 399 Policies  Create and enforce policies covering acceptable technology usage.

 Ensure that company technology (computers and smartphones) cannot be used anonymously.

 Communicate expectations for e-mail and social media communications outside work that affect the organization and its members.

Practices  Enforce your policies!  In communications, be wary of:

 The use of bold or UPPER CASE lettering (denoting shouting) and underlining and punctuation.

 Messages that are mean-spirited.  Demeaning phrases.  Personal insults.

 Avoid sending copies of e-mails related to conflicts to people who don’t need to be involved—so as not to embarrass the recipient or escalate the conflict.

 Think before you hit the send button (it’s a good idea to wait until the next day).  Take appropriate action when you become aware of “conflict-producing” e-mail.70 Victim, Witness, or Perpetrator? You’ve learned about various forms of conflict, as well as potential causes and solutions. Let’s conclude this section by having you assess not just your experience but also your actions. Completing Self‐Assessment 10.4 can help you improve your own effectiveness. SELF-ASSESSMENT 10.4 BULLYING SCALE—TARGET AND PERPETRATOR Please be prepared to answer these questions if your instructor has assigned Self- Assessment 10.4 in Connect.

1. Which three example items do you most commonly experience? 2. What do you think are the causes of these examples? Try to identify causes across individual, group, and organizational levels using your OB knowledge. 3. To what extent do your most common experiences of being bullied match those you most commonly engage in? 4. Describe some things that could be done to prevent or reduce these acts of bullying.

SOURCE: From T. Glomb, “Predicting Workplace Aggression: Reciprocal Aggression, Organizational, and Individual  Responses,” International Journal of Organization Theory and Behavior 13 (2010), 249–291. Reprinted with permission.  

Another way to be more effective and helpful when witnessing bullying is to take the perspective of the target. Consciously think about what it is like to be him or her, walk in his or her shoes, and experience the effects of being bullied. In a practical sense, perspective-taking can serve as a low-cost and highly effective intervention to help reduce many of the prejudices and bad behaviors often observed in work and school settings. You can also use it when mediating conflicts, because in the heat of the conflict most parties are so focused on themselves that they never think to consider the other’s view.

Remember that mistreatment has more victims than the actual target. Don’t be a silent bystander, but do your part to prevent and remedy various forms of incivility at school, work, and home.

EFFECTIVELY MANAGING CONFLICT

MAJOR QUESTION

What can I do to prevent, reduce, or even overcome conflict? THE BIGGER PICTURE We extend your knowledge in this section by introducing a number of practical means for dealing with a variety of conflicts. Specifically, we explore ways to program or create functional conflict. You also will learn about various conflict‐handling styles and when to use them. We then explore how to implement alternative forms of dispute resolution (ADR). The practical knowledge in this section will enable you to better manage conflicts and in turn yield many important outcomes in the Organizing Framework.

Programming Functional Conflict Have you ever been on a team or committee that got so bogged down in details and procedures it accomplished nothing? Most of us have. Such experiences are both a waste of time and frustrating. To break out of such ruts, you essentially have two options:

1. Fan the fire and get more of the same. Managers can urge coworkers to hunker down and slog through—simply persist. While this approach may work, it can be unreliable (conflict can escalate) and slow.

2. Program conflict. Managers can resort to programmed conflict. Experts in the field define programmed conflict as “conflict that raises different opinions regardless of the personal feelings of the managers.”71 The challenge is to get contributors to either defend or criticize ideas based on relevant facts rather than on the basis of personal preference or political interests. This positive result requires disciplined role-playing and effective leadership.

Two programmed conflict techniques with proven track records are devil’s advocacy and the dialectic method. Let’s explore each. Devil’s Advocacy Devil's advocacy gets its name from a traditional practice within the Roman Catholic Church. When someone’s name comes before the College of Cardinals for elevation to sainthood, it is absolutely essential to ensure that the person had a spotless record. Consequently, one individual is assigned the role of devil’s advocate to uncover and air all possible objections to the person’s canonization. In today’s organizations devil’s advocacy assigns someone the role of critic. Figure 10.4 shows the steps in this approach. Note how devil’s advocacy alters the usual decision-making process in steps 2 and 3 on the left-hand side of the figure. FIGURE 10.4   Techniques for stimulating functional conflict: devil’s advocacy and the dialectic method

  SOURCE: From R. A. Casler and R. C. Schwenk, “Agreement and Thinking Alike: Ingredients for Poor Decisions,” Academy of Management Executive, February 1990, 72–73. Reproduced with permission of The Academy of Management, via Copyright 

Clearance Center.

The Dialectic Method Like devil’s advocacy, the dialectic method is a time-honored practice, going all the way back to ancient Greece. Plato and his followers attempted to identify truths, called thesis, by exploring opposite positions, called antithesis. Court systems in the United States and elsewhere today rely on hearing directly opposing points of view to establish guilt or innocence. Accordingly, the dialectic method calls for Page 401managers to foster a structured dialogue or debate of opposing viewpoints prior to making a decision.72 Steps 3 and 4 in the right-hand side of Figure 10.4 set the dialectic approach apart from common decision-making processes. Pros, Cons, and Practical Advice on Programmed Conflict It is a good idea to rotate the job of devil’s advocate so no one person or group develops an undeserved negative reputation. Moreover, periodically playing the devil’s advocacy role is good training for developing analytical and communication skills and emotional intelligence. As for the dialectic method, it is intended to generate critical thinking and reality testing. A major drawback is that the goal of “winning the debate” might overshadow the issue at hand. The dialectic method also requires more skilled training than does devil’s advocacy. Research on the relative effectiveness of the two methods ended in a tie, although both methods were more effective than consensus decision making.73 Page 402However, another study showed that devil’s advocacy produced more potential solutions and made better recommendations for a case problem than did the dialectic method.74 In light of this mixed evidence, you have some latitude in choosing a method for pumping creative life back into stalled deliberations. Personal preference and the role-players’ experience may well be the deciding factors in your decision. The important thing is to actively stimulate functional conflict when necessary, such as when the risk of blind conformity or groupthink is high.

Conflict‐Handling Styles People tend to handle (negative) conflict in similar ways, referred to as styles. Figure 10.5 shows that five of the most common styles are distinguished by the combatants’ relative concern for others (x-axis) and for self (y-axis). The combinations of these two characteristics produce the conflict-handling styles called integrating, obliging, dominating, avoiding, and compromising.75 FIGURE 10.5    Five common conflict‐handling styles

SOURCE: From M. A. Rahim, “A Strategy for Managing Conflict in Complex Organizations,” Human Relations, 1985, 84. Reproduced 

with permission of Sage Publications Ltd. via Copyright Clearance Center.

 Integrating (also called problem solving): When using an integrating style, interested parties confront the issue and cooperatively identify it, generate and weigh alternatives, and select a solution.

 Obliging (also called smoothing): If you have an obliging style, you tend to show low concern for yourself and a great concern for others. Such people tend to minimize differences and highlight similarities to please the other party.

 Dominating: Those with a dominating style have a high concern for self and low concern for others, often characterized by “I win, you lose” tactics. The other party’s needs are largely ignored. This style is often called forcing because it relies on formal authority to force compliance.

 Avoiding: With an avoiding style, passive withdrawal from the problem and active suppression of the issue are common. We addressed the pitfalls of avoiding conflict earlier.

 Compromising: The compromising style is a give‐and‐take approach with a moderate concern for both self and others. Compromise is appropriate when parties have opposite goals or possess equal power.

Before you learn about the characteristics of these styles and the best situations in which to use each one, take Self‐Assessment 10.5 to learn your own style. Then you’ll be able to see whether what you learn matches your style. Better still, you’ll know the situations in which your preferred style helps you and when it hurts you in handling conflict. For instance, wouldn’t you like to know when an avoiding style is most effective? Page 403

SELF-ASSESSMENT 10.5 PREFERRED CONFLICT-HANDLING STYLE Please be prepared to answer these questions if your instructor has assigned Self- Assessment 10.5 in Connect.

1. What is your style? On the surface, before reading below, does this make sense to you? Why or why not? 2. Describe a conflict you’ve experienced in which your conflict-handling style helped you. 3. Describe a conflict in which your style didn’t serve you well. Explain why. 4. Which style do you think would have been best for that particular conflict?

SOURCE: The complete instrument may be found in M. A. Rahim, “A Measure of Styles of Handling Interpersonal Conflict,” Academy of Management Journal, June 1983, 368–376. Copyright © 1983. Reproduced with permission of Academy of management via  Copyright Clearance Center. 

When to Apply the Various Conflict‐Handling Styles Consistent with the contingency approach described throughout this book, conflict resolution has no “one style fits all” approach. Research and practice thankfully provide some guidance indicating which styles seem to work best in particular situations (see Table 10.6). TABLE 10.6 STYLES FOR HANDLING INTERPERSONAL CONFLICT AND THE SITUATIONS WHERE THEY ARE APPROPRIATE AND INAPPROPRIATE

STYLE APPROPRIATE  INAPPROPRIATE 

Integrating  1. Issues are complex.  1. Task or problem is simple. 

2. Synthesis of ideas is needed to come up  with better solutions. 

3. Commitment is needed from other parties  for successful implementation. 

4. Time is available for problem solving.  5. One party alone cannot solve the problem.  6. Resources possessed by different parties 

are needed to solve their common problem. 

2. Immediate decision is  required. 

3. Other parties are unconcerned  about outcome. 

4. Other parties do not have  problem‐solving skills. 

Obliging 

1. You believe that you may be wrong.  2. Issue is more important to the other party.  3. You are willing to give up something in 

exchange for something from the other  party in the future. 

4. You are dealing from a position of  weakness. 

5. Preserving relationship is important. 

1. Issue is important to you.  2. You believe that you are right.  3. The other party is wrong or 

unethical. 

Dominating 

1. Issue is trivial.  2. Speedy decision is needed.  3. Unpopular course of action is implemented.  4. Necessary to overcome assertive 

subordinates.  5. Unfavorable decision by the other party 

may be costly to you.  6. Subordinates lack expertise to make 

technical decisions.  7. Issue is important to you. 

1. Issue is complex.  2. Issue is not important to you.  3. Both parties are equally 

powerful.  4. Decision does not have to be 

made quickly.  5. Subordinates possess high 

degree of competence. 

Avoiding 

1. Issue is trivial.  2. Potential dysfunctional effect of 

confronting the other party outweighs  benefits of resolution. 

3. Cooling‐off period is needed. 

1. Issue is important to you.  2. It is your responsibility to make 

decision.  3. Parties are unwilling to defer.  4. Prompt attention is needed. 

Compromising 

1. Goals of parties are mutually exclusive.  2. Parties are equally powerful.  3. Consensus cannot be reached.  4. Integrating or dominating style is not 

successful.  5. Temporary solution to a complex problem is 

needed. 

1. One party is more powerful.  2. Problem is complex enough to 

need problem‐solving  approach. 

SOURCE: M. A. Rahim, “Toward a Theory of Managing Organizational Conflict,” The International Journal of Conflict Management 13 (2002), 206–235.

TAKE‐AWAY APPLICATION Reflecting on My Conflict‐Handling Styles

1. Think of a conflict in your own life. 2. Which style best describes the way you handled the conflict? Was it the appropriate style?

3. Explain which style would have been most appropriate and why. When to Avoid Pamela Valencia, an organizational development consultant and trainer to Fortune 500 companies, recommends avoiding when:

You decide that the conflict has no value, and that you’re better off saving your time and energy for other matters. Additionally, this can be a good temporary solution if you need more time to gather facts, refocus, take a break, or simply change the setting of the conflict. However, be sure not to avoid people in your attempt to avoid conflict—don’t be evasive.76 Why Styles Matter Because conflict is so pervasive, it is no surprise that researchers and managers have both devoted considerable attention to the topic. Key points about conflict-handling styles follow: 1. Culture. Conflict-handling styles are not just an individual-level phenomenon. Departments and

entire organizations can develop the same styles—integrating, dominating, and avoiding. And leaders’ own styles have the greatest influence in determining which style gets embedded in the group or organization.

2. Results. Cooperative styles (integrating and obliging) improved new-product development performance between buyers and suppliers across several industries in Hong Kong. In contrast, uncooperative styles (dominating and avoiding) increased numerous types of conflicts and hampered new-product development. Compromising had Page 405no effect on performance in these same situations.77 New-product development relationships are increasingly important in the global economy. Give careful consideration to the styles you use when working with such partners.

3. Reduced turnover. Research with nurses showed that those with high levels of emotional intelligence were more inclined to use collaborative styles and less likely to use accommodating conflict-handling styles.78 Given the intense shortage of nurses in many parts of the world, turnover is a critical and top-of-the-mind issue for nursing managers and health care administrators alike. Therefore, reducing conflict (bullying) is an important and effective means for reducing turnover.

4. Contingency approach. No one style is best for every situation. Employees and managers are both well served to apply a contingency approach to conflict-handling styles.

Third‐Party Interventions: Alternative Dispute Resolution Disputes between employees, between employees and their managers or employers, and between companies too often end up in lengthy and costly court battles. US businesses spend hundreds of billions of dollars per year on direct legal costs. But this number is puny when compared to indirect legal costs, such as opportunities not pursued due to litigation concerns, disclaimers, and extra testing. All such costs are ultimately passed on to consumers in the form of higher prices.79 A more constructive, less expensive approach called alternative dispute resolution has grown rapidly in recent years. The benefit of alternative dispute resolution (ADR) is that it “uses faster, more user‐friendly methods of dispute resolution, instead of traditional, adversarial approaches, such as unilateral decision making or litigation.”80 The Many Forms and Progression of ADR You may not realize it, but you already know of many forms of ADR, such as peer review, arbitration, and mediation. We will discuss these and more in a moment. These techniques represent a progression of steps third parties can take to resolve organizational conflicts.81 ADRs have four general benefits over litigation: 1. Speed. Mediation, for example, often takes only a few hours and has a 70 to 80 percent

success rate. This track record is in stark contrast to the months or even years litigation often requires, not to mention the numerous other costs.

2. Low cost. Research shows that ADRs generally cost 90 percent less than litigation. 3. Confidentiality. Because of the discovery process and other legal requirements,

confidentiality is limited in legal proceedings. However, ADRs often provide near-complete control over what’s disclosed and what’s not. Moreover, decisions of ADRs are rarely

formalized like the outcomes of lawsuits, which means there is no record to be made public or to use as precedent in future conflicts.

4. Winning solutions. Courts rule based on the law, and their decisions are almost always win or lose, with one party writing a check to the other. ADRs, in contrast, can often reach win– win solutions arranged by the parties themselves.82

The benefits of alternative dispute resolution are clearly acknowledged in the business world; 97 percent of Fortune 1000 companies use mediation (a form of ADR) for some purpose.83 Now that you know the benefits of ADRs, let’s learn about the various forms. Table 10.7 ranks them from easiest and least expensive to most difficult and costly. Page 406

TABLE 10.7 DIFFERENT FORMS OF ALTERNATIVE DISPUTE RESOLUTION (ADR)

FORM OF ADR DESCRIPTION 

Facilitation  A third party, usually a manager, informally urges disputing parties to deal directly with  each other in a positive and constructive manner. 

Conciliation 

A neutral third party informally acts as a communication conduit between disputing  parties. This is appropriate when conflicting parties refuse to meet face‐to‐face. The  immediate goal is to establish direct communication, with the broader aim of finding  common ground and a constructive solution. 

Peer Review 

A panel of trustworthy coworkers, selected for their ability to remain objective, hears  both sides of a dispute in an informal and confidential meeting. A decision by the review  panel may or may not be binding, depending on the company’s ADR policy. Membership  on the peer review panel often is rotated among employees.84 

Ombudsman 

Someone who works for the organization, and is widely respected and trusted by his or  her coworkers, hears grievances on a confidential basis and attempts to arrange a  solution. This approach, more common in Europe than in North America, permits  someone to get help from above without relying on the formal chain of hierarchy. 

Mediation 

A neutral and trained third party guides the others to find innovative solutions to the  conflict. To ensure neutrality, most organizations hired ADR qualified outsiders.85 Unlike  an arbitrator, a mediator does not render a decision. It is up to the disputants to reach a  mutually acceptable decision. The Equal Employment Opportunity Commission (EEOC)  implemented mediation in the 1990s and cut the average time to resolution by 80  percent!86 

Arbitration 

Disputing parties agree ahead of time to accept the decision of a neutral arbitrator in a  formal courtlike setting, often complete with evidence and witnesses. Statements are  confidential, and decisions are based on the legal merits of the case. Trained arbitrators,  typically from outside agencies such as the American Arbitration Association, are versed  in relevant laws and case precedents. In many instances, employee arbitration is  mandatory for resolving disputes. Heated debate has occurred over the past several  years, however, regarding mandatory versus voluntary arbitration. On the one hand,  many employers have not reaped the time and cost savings promised by arbitration and 

now prefer to litigate. On the other, many employees feel arbitration unfairly benefits  employers, who hire skilled arbitrators whose job it is to handle such disputes.87 

We close this section with a reminder. The time to consider the various forms of ADR is when a conflict first comes to light. Regardless of the issue, you are wise to evaluate likely costs and opportunities associated with conflict before it escalates, causing legal action, fees, and anger to foreclose more functional or constructive outcomes.

NEGOTIATION MAJOR QUESTION

What are some best practices for effective negotiation? THE BIGGER PICTURE Life is an endless series of negotiations. It therefore is valuable to better understand negotiation and related strategies. We discuss different forms and tactics of negotiation in this section because they are both the cause and remedy of many conflicts. And they can influence outcomes across all three levels of the Organizing Framework. Negotiation is a give‐and‐take decision‐making process between two or more parties with different preferences. A common example is labor–management negotiations over wages, hours, and working conditions. Negotiation is even more important today given the increasingly complex and competitive workplace. More personally, you’ll negotiate many job salaries and promotions and other factors related to your own jobs and career. And you’ll be expected to accomplish more things, in more places, with more people, which increases the value of your negotiation skills.

Two Basic Types of Negotiation Negotiation experts often distinguish between two fundamental types of negotiation—position- based or distributive, and interest-based or integrative. Understanding the difference has great practical value. Position‐Based vs. Interest‐Based A distributive negotiation usually concerns a single issue—a “fixed pie”—in which one person gains at the expense of another.88 This win–lose approach is arguably the most common type of negotiation and is characterized by dividing up the pieces of a pie. There is only so much pie to go around, and two (or more) parties negotiate over who gets how much or which parts. Haggling over the price of a car is a position-based or distributive negotiation. You have a particular price you want, and you get it only if the seller compromises on the price he or she desires. However, many conflicts bring together a variety of interests (not just the price of a car), and each party in the negotiation values those interests differently. The outcome is no longer a fixed pie distributed among all parties. Instead, a host of interests are integrated into a mutually satisfying solution. Such scenarios call for integrative negotiation, in which a host of interests are considered, resulting in an agreement that is satisfactory for both parties.89 This kind of interest-based negotiation is a more collaborative, problem-solving approach. As one group of researchers puts it, instead of dividing a pie, as in position-based negotiation, interest-based negotiations often generate win–win outcomes—one party gets the crusts and the other the fruit (the part each prefers). Interest-based negotiations may even lead to creative solutions. The parties may decide to build a pie factory together instead of negotiating over individual pies.90 Table 10.8 describes some key differences between conventional position-based negotiation and the more collaborative interest-based process. Page 408

TABLE 10.8 KEY CHARACTERISTICS OF THE TWO FUNDAMENTAL FORMS OF NEGOTIATION

POSITION‐BASED NEGOTIATION INTEREST‐BASED NEGOTIATION 

Adversarial Partner

Focus on winning Focus on challenge to be met

Acquire the most value  Create value for all parties 

Personal goal focused  Solution focused 

Impose or sell your own position  Find mutual interests and satisfaction 

Use salesmanship and manipulation Make honest disclosure of respective interests

Choose between relationship and achieving goals  Emphasize relationship and substance 

Yield reluctantly to other positions/interests  Be open and willing to yield 

Outcomes are win–lose or compromise  Win–win collaborative outcomes are possible 

SOURCE: Adapted from K. Campbell and R. O’Leary, “Big Ideas for Big Problems: Lessons from Conflict Resolution for Public Administration,” Conflict Resolution Quarterly, Winter 2015, http://onlinelibrary.wiley.com/doi/10.1002/crq.21146/abstract. Applying a Collaborative Interest-Based Approach The collaborative, interest-based approach is explicitly based on problem solving, and it can be applied between two or more individuals, between an individual and a group, or between two or more groups. The following protocol is followed by renowned negotiator Christina Merchant.91 1. Define and frame the issue in terms of parties’ interests. 2. Explain the respective interests (listen, learn, and share). 3. Explore expanding the pie (create value rather than claiming it). 4. Create options. 5. Evaluate options in light of the interest described in step 1. 6. Choose the option that best meets the interest described. 7. Develop and agree on a plan of implementation.

Factors to Consider in All Negotiations

Many people say we are negotiating all the time and throughout our lives. Buying a car is one such instance.  These transactions are excellent opportunities to apply your OB knowledge and improve your outcomes—more  car for less money.© OJO Images Ltd/Alamy RF

Regardless of your negotiation approach, finding areas of common ground can be difficult. Successful negotiators are able to weigh multiple issues and gather information about which are most important to the other parties and why. Research and practice provide some helpful hints:  Know who you are. Personality matters. Research shows that people with high levels of

agreeableness are best suited for integrative negotiations, whereas those low in this personality characteristic are better at distributive negotiations.92 Why do you think this is?

 Manage outcome expectations. In most negotiations, each party has an expected outcome and compares it to the actual outcome.93 Skilled negotiators manage expectations in advance of actual negotiations. For example, if two people paid $35,000 for a car, then the one who expected to pay $33,000 was disappointed and the one who expected to pay $37,000 was delighted. Similarly, managers will often Page 409send out a message saying, “It’s been a tough year” in advance of annual reviews and salary discussions.

 Consider the other person’s outcome.94 Of course you negotiate for your own benefit. But it also matters how the other party fares—is he or she satisfied?

 Adhere to standards of justice.95 Not only do the outcomes need to be perceived as fair (distributive justice), but so too do the processes by which they were attained. For instance, nobody likes to be taken advantage of, such as by having incomplete information. Again, think of buying a new car. The dealer knows all the numbers, and despite the best information the web has to offer, you are still never as well informed.

 Remember your reputation.96 You may “win” today, only to foreclose opportunities in the future. Put another way, winning at all costs often has significant costs!

Considering these factors can help you decide whether you should pursue a particular position (you win, they lose), or whether you’re better off reaching a collaborative, interest-based agreement that leaves both parties satisfied.

Emotions and Negotiations Many people believe good negotiators show no emotion, like Roger Federer on the tennis court. But as you’ve learned, emotions are an integral part of the human experience and of almost everything we do. Negotiation experts and researchers acknowledge this and provide guidance on how to use emotions to your advantage. Remember that emotions are contagious. If you want the other party to be calm, creative, or energetic, consider showing these emotions yourself.

OB IN ACTION TAKE IT FROM AN FBI INTERNATIONAL HOSTAGE NEGOTIATOR97 Negotiating a pay raise or the price of a new car is stressful. But if you had Christopher Voss’s former job, you would be negotiating on behalf of the FBI for the safe return of hostages in many of the most unstable, war-torn parts of the world. That is an entirely different type of stress. Voss is therefore eminently qualified to teach us all something special about effective negotiations. He offers the following advice:

 Be likable! People are six times more likely to make a deal with someone they like.  Confirm your understanding. Ask questions of the other side to be sure your perceptions of their position are accurate.  Let the other side go first. Regardless of how important the outcome is to you, you’ll benefit from learning the other parties’ interests. What is their position? What do they want? What challenges do they see? You’ll never have all the facts, but do what you can to learn what you can early in the process.  Don’t make too much of body language. Look for all nonverbal cues, such as tone and volume of voice and facial expressions; sometimes they are quite telling. But don’t rush to conclude that folded arms or crossed legs mean resistance.  Mind your emotions. Anger most often generates resistance and defensiveness, which never help your cause. Anger can be used strategically, but beware of it and of other unintended and unproductive emotions.  Be ready to say, “That doesn’t work for me.” It is important to be willing to say no and walk away. Just be sure to do it gracefully; you don’t want to burn bridges unnecessarily. Says Voss, “If you’re not willing to say no, you’ve taken yourself hostage.”

YOUR THOUGHTS? 1. Which of Voss’s recommendations do you most often follow? 2. Which do you never use? Why? 3. What are two specific things you can do to be more likable during a negotiation? 4. Think of two questions you can use to confirm your accurate understanding of the other’s position.

Preparation is critical to effective negotiations. The following tips can help you prepare emotionally for an upcoming negotiation. 1. Identify your ideal emotions. How do you want to feel going into the negotiation? Why? Many

people answer this question quickly and say, “Calm but assertive,” but Page 410when probed further they reveal other, if not competing, emotions. The challenge is to realize which emotions will best suit your objectives, and be mindful of them while negotiating.

2. Manage your emotions. What can you do in advance to put yourself in the ideal emotional state? Promote positive emotions. Choose appropriately—meditation to calm you down or perhaps music that pumps you up. If you are ambushed or put on the spot, such as by an unexpected phone call or somebody stopping by your office, buy some time and say to your negotiating partner, “I just need to wrap up what I’m doing, and I’ll call you back in 10 minutes.” This will give you time to regain the appropriate emotional state.

3. Page 411Know your hot buttons. What can throw you off balance? Some people seem eternally patient, while others get frustrated easily. And some negotiators try to push your hot buttons as a deliberate tactic. Know your own tendencies and be sure to manage them appropriately.

4. Keep your balance. Everyone loses balance once in a while. How will you regain it if lost? Taking a break is a good idea. Stepping out, going to the restroom, or simply calling a “time-out” can provide a break in the action and enable you to regroup. These same tactics can redirect a negotiation that has gone in the wrong direction. You also may want to redirect to higher-level issues, especially if you are getting bogged down in details.

5. Identify your take‐away emotions. How do you want to feel when you’re finished? Many people say, “Relieved,” which signifies the stress many of us feel while negotiating. Others say, “Satisfied,” which speaks more to performance. Whatever the case for you, set goals for emotions just as you do for other outcomes in negotiations (and in the Organizing Framework).98

TAKE‐AWAY APPLICATION Planning My Negotiations Identify an upcoming negotiation or an existing conflict that you need to address.

1. Make a plan using the guidelines above. 2. What do you anticipate the benefits of the guidelines will be for the situation you chose? 3. After implementing your plan, reflect on the outcome. Which of the above tips were most helpful?

Do emotions affect position-based and interest-based negotiations differently? The answer appears to be yes. Recent research showed that expressing emotional ambivalence—not clearly positive or clearly negative—can be detrimental in position-based negotiations. The rationale is that it invites the other side to be assertive and take advantage of you. However, in interest- based negotiations, emotional ambivalence was shown to increase value creation. Being ambivalent, rather than clearly positive or negative emotionally, tends to facilitate cooperation and allow you the opportunity to integrate the negotiators’ interests.99 Nonverbal communications also help convey your emotions during negotiations. You can smile, laugh, or flinch in reaction to a first offer, for example. This signals to your counterpart that his or her proposal is outside your zone of possible agreement or ZOPA—the range of possible outcomes you are willing to accept.100 Be clear about your ZOPA regardless of the form of negotiation you choose. Now let’s close this section and chapter with a discussion of ethics and negotiations.

Ethics and Negotiations The success of negotiations is often influenced to a large extent by the quality of information exchanged. Telling lies, hiding key facts, and engaging in other potentially unethical tactics erodes trust and goodwill, both of which are vital in successful negotiations. Awareness of these dirty tricks can keep good-faith bargainers from being unfairly exploited. See Table 10.9 for a list and description of unethical negotiating tactics. These behaviors also need to be factored into organizational codes of ethics, and every employee from the top to the bottom of the organization must adhere to them. Page 412 TABLE 10.9 QUESTIONABLE AND UNETHICAL TACTICS IN NEGOTIATIONS

TACTIC DESCRIPTION/CLARIFICATION/RANGE 

Lies 

Subject matter for lies can include limits, alternatives, the negotiator’s intent,  authority to bargain, other commitments, acceptability of the opponent’s offers,  time pressures, and available resources. 

Puffery 

Among the items that can be puffed up are the value of one’s payoffs to the  opponent, the negotiator’s own alternatives, the costs of what one is giving up or is  prepared to yield, importance of issues, and attributes of the products or services. 

Deception  Acts and statements may include promises or threats, excessive initial demands,  careless misstatements of facts, or asking for concessions not wanted. 

Weakening the  opponent 

The negotiator here may cut off or eliminate some of the opponent’s alternatives,  blame the opponent for his own actions, use personally abrasive statements to or  about the opponent, or undermine the opponent’s alliances. 

Strengthening  one’s own  position 

This tactic includes building one’s own resources, including expertise, finances, and  alliances. It also includes presentations of persuasive rationales to the opponent or  third parties (e.g., the public, the media) or getting mandates for one’s position. 

Nondisclosure 

Includes partial disclosure of facts, failure to disclose a hidden fact, failure to correct  the opponents’ misperceptions or ignorance, and concealment of the negotiator’s  own position or circumstances. 

Information  exploitation 

Information provided by the opponent can be used to exploit his weaknesses, close  off his alternatives, generate demands against him, or weaken his alliances. 

Maximization 

Includes demanding the opponent make concessions that result in the negotiator’s  gain and the opponent’s equal or greater loss. Also entails converting a win–win  situation into win–lose. 

SOURCE: From H. J. Reitz, J. A. Wall Jr., and M. S. Love, “Ethics in Negotiation: Oil and Water or Good Lubrication?” Business Horizons, May–June 1998.

As we’ve noted, conflict and negotiations are affected by and in turn influence many elements in the Organizing Framework. They can determine your personal satisfaction and performance throughout your professional life. Apply your knowledge of conflict and negotiation to realize its true value.

What Did I Learn? In this chapter you learned that by managing conflict and applying sound principles in negotiation, you gain an  advantage in working for better outcomes at work, school, and home, and across all levels of organizations.  Reinforce what you learned with the Key Points below. Then consolidate your learning using the Organizing  Framework. Finally, challenge your mastery of this chapter by answering the Major Questions in your own words.

Key Points for Understanding Chapter 10 You learned the following key points.

10.1 A CONTEMPORARY VIEW OF CONFLICT  Conflict occurs when one party perceives that its interests are opposed or negatively affected by another.  Conflict can be either functional or dysfunctional.   People avoid conflict for many reasons, but doing so can cause it to escalate.   Positive outcomes of conflict often fit into three categories: agreement, stronger relationships, and learning.  10.2 CONVENTIONAL FORMS OF CONFLICT  Common forms of conflict are personality and intergroup.  We can avoid or overcome personality conflicts by communicating directly with the other party(ies), avoiding 

needlessly involving others, and, if necessary, pursuing help from superiors or human resource specialists.   Intergroup conflicts can be avoided or overcome if we distinguish between conflict states and processes, 

apply the contact hypothesis, and create a psychologically safe climate.  10.3 FORMS OF CONFLICT INTENSIFIED BY TECHNOLOGY  Work–family conflict occurs when the demands or pressures from work and family domains are mutually 

incompatible.  Work–family conflict can be addressed in many ways, such as by balancing demands between the different 

domains and implementing supportive employee policies and managerial practices, including flex space and  flextime. 

 Incivility (bullying and harassment) has negative consequences not only for targeted employees but also for  coworkers who witness it. 

 Cyber bullying is a particularly problematic form of incivility that must be monitored and addressed by  organizational policies and practices. 

10.4 EFFECTIVELY MANAGING CONFLICT  Functional conflict can be fostered using several approaches, such as programmed conflict, devil’s advocacy, 

and the dialectic method.  Five common conflict‐handling styles are integrating, obliging, dominating, avoiding, and compromising.   Forms of alternative dispute resolution (ADR) include facilitation, conciliation, peer‐review, ombudsman, 

mediation, and arbitration.  10.5 NEGOTIATION  Negotiation is a give‐and‐take decision‐making process involving two or more parties with different 

preferences.  Position‐based negotiation usually focuses on a single issue—dividing a “fixed pie”—in which one person 

gains at the expense of another.   Interest‐based negotiation seeks agreements that are better for both parties than they would have reached 

through position‐based negotiation.   Emotions and ethics affect any and all negotiations.  Page 414

The Organizing Framework for Chapter 10 As shown in Figure 10.6, you learned that conflict is an inevitable part of organizational life and serves as an  especially important group/team‐level process in the Organizing Framework. The way you manage conflict can  influence outcomes across all levels of OB. You also learned that the process of negotiation is a valuable tool for  preventing and managing conflict, as well as achieving goals.

FIGURE 10.6   Organizing Framework for Understanding and Applying OB

SOURCE: © 2014 Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without permission of the authors.

Challenge: Major Questions for Chapter 10 You should now be able to answer the following questions. Unless you can, have you really processed and  internalized the lessons in the chapter? Refer to the Key Points, Figure 10.6, the chapter itself, and your notes  to revisit and answer the following major questions: 1. How can a contemporary perspective on conflict make me more effective at school, work, and home?  2. What are some types of conflict and how can I manage them to my benefit?  3. What can I do to manage work–family conflict and incivility to make me more effective at school, work, and 

home?  4. What can I do to prevent, reduce, or even overcome conflict?  5. What are some best practices for effective negotiation?  Page 415 IMPLICATIONS FOR ME We highlight eight practical nuggets for you. First, realize that not all conflict is bad or should be avoided. Some amount of functional conflict is desirable and can help you develop as an individual. Be especially mindful of this if you run your own business or wish to do so someday. Conflict can lead to growth. Second, be sure to tend to dysfunctional conflict and don’t allow it to escalate, costing you jobs and relationships. Third, personality conflicts are almost certain to happen. Table 10.2 can be very helpful in dealing with them. Fourth, be mindful of work–school– family conflicts. The way you manage them can dramatically affect your personal fulfillment and flourishing in life. Do what you can to balance demands from the

various arenas of your life, and look for companies that are also mindful of this and have family-friendly policies and leaders. Fifth, beware of the many forms of incivility at work. Don’t underestimate their causes and effects. Beyond what your employer requires through policies and practices, civility, like ethical conduct, starts with the behavior of individuals. Table 10.5 can help clarify what to do. Sixth, use your knowledge of conflict-handling styles and your own preferences to be more effective when dealing with groups and teams. Table 10.6 is an excellent guide to which style to use given the situation. Seventh, continue to expand your knowledge and skill using interest-based negotiations. Doing so can help you avoid and overcome the resistance common in position-based negotiations. You’re often better off to approach the other parties as partners than adversaries. Finally, the knowledge and tools in this chapter are essential if you hope to manage people effectively. Apply your knowledge and build your skills! IMPLICATIONS FOR MANAGERS We provide seven practical steps for you as a manager. First, distinguish between conflict states and conflict processes. Doing so will make you more effective at avoiding and remedying conflict as a manager. Second, managing intergroup conflict can make or break your own opportunities and successes. Perhaps the single best way to avoid such conflicts, as well as to deal with them, is to create a psychologically safe climate. Third, beware of the many forms of incivility at work. As a manager you are responsible for knowing what is happening and intervening and following up. Do not underestimate how destructive incivility is to individuals, your team, and your larger organization. Not only the targets suffer. Your own actions are the single most powerful tool you have. Don’t tolerate bad behavior. Use Table 10.5 as a guide. Fourth, utilize devil’s advocacy and the dialectic method to arrive at better decisions and be more inclusive. Fifth, use your knowledge of conflict-handling styles and of your own preferences to become more effective when dealing with groups and teams. Table 10.6 is an excellent guide for which style to use in a given situation. Sixth, become familiar with the alternative dispute resolution choices and use the appropriate remedy (Table 10.7). Seventh, taking an interest-based approach to negotiating with those you manage, and more generally with those with whom you work, can improve their level of trust in you and thus boost your effectiveness.

PROBLEM‐SOLVING APPLICATION CASE What About McDonald’s Other Customers? Background and Scale

Sixty‐nine million. That is the number of customers McDonald’s serves per day around the world! The company  does a staggering volume of business. But it might surprise you that despite the brand’s global reach and  incredible staying power, it is in the midst of a serious conflict with its other important customers—its  franchisees. McDonald’s has 5,000 franchisees around the world who run 82 percent of the chain’s 36,000  restaurants, accounting for just under $30 billion or a third of the company’s total revenue and employing 90  percent of its employees. This means the average franchisee operates six to seven restaurants, and the company  lives or dies by their performance.101

Trouble under the Golden Arches

The relationship between the company and its franchisees is very complicated and increasingly strained. While  franchisees own their respective businesses, McDonald’s owns the land and buildings they use. That means the  company is the landlord and has ultimate say over whether particular restaurants open or close. The company  also largely dictates menu items, required equipment, and most other details, including pricing in many  instances. (One franchisee said he controls the price of fewer than 20 of 100 menu items.)102  Franchisees must follow directions from the company and pay an assortment of expenses and fees, such as rent  of 15 percent of revenues, a royalty of 5 percent of revenues, and 5 percent of revenues for advertising.103 On top  of this, various additions to the menu require new equipment. The McCafe coffee and espresso equipment can  cost up to $20,000 per machine, expanding grill space to accommodate all‐day breakfast takes another $5,000,  and installing a second drive‐thru window can cost $100,000.104 A milkshake machine costs $20,000, and a new  grill $15,000.105 While the corporation focuses on the restaurants’ top line, operators worry about what’s left  after paying rent, payroll, royalties, and other expenses.106  Last but not least, if the movement to boost minimum wages to $15 across the country succeeds, the burden will  fall on the franchisees. McDonald’s decided to raise wages in all its corporate‐owned restaurants to $1 above the  minimum wage. The move was presumably intended to help keep up with similar wage hikes by Walmart and  Target,107 with whom the company often competes for employees. The problem? Corporate stores compete with  franchisees too and don’t bear the costs outlined above. A wage hike will likely have a much smaller impact on  the corporate‐owned stores versus the franchisees. 

Impact and Potential Causes

The franchise model has worked very well for McDonald’s and the majority of its franchisees. Revenues have  exceeded expenses and many franchisees have become quite wealthy, which explains why many own multiple  restaurants. However, franchisee satisfaction and performance have steadily declined. In 2015, for the first time  McDonald’s closed more stores than it opened, and the level of same‐store sales (a key performance measure)  also declined. Franchisees and Wall Street analysts attribute much of the lackluster performance and conflict to  poor corporate leadership and policies. Corporate leaders dictate menu items, pricing, and strategy to  franchisees. The addition of McWraps, salads, yogurt parfait, and specialty coffees, for instance, were meant to  compete with the likes of Chipotle, Burger King, Shake Shack, and Wendy’s, as well as to keep up with evolving  customer tastes.108 Boosted sales is certainly a good outcome for the corporate arm of the company, given it takes a cut of all  revenues, but franchisees argue that enough money isn’t left over for them. Some initiatives, like the dollar  menu, are actually money losers for some franchisees, yet it is difficult not to offer them because of national  advertising that promotes them, not to mention pressure from regional and corporate representatives. Another  franchisee provided an example. “One time our coffee price was a nickel over  Page 417what the advertising  price was and the head of the McDonald’s region came in and he said: ‘You are over. You can’t do this.’ That was  the first time he told us to sell our business.”109  Beyond the financial implications, many franchisees also feel various initiatives have eroded the McDonald’s  brand, which makes “the promise of serving good‐tasting food fast.” The company requires that any order be  filled in 90 seconds or less, which many franchisees say is unrealistic for many (new) menu items. These  standards will be put to the test yet again with the “Create Your Taste” initiative, which allows customers to  personalize their burgers. One longtime but now former franchisee, Al Jarvis, said in an interview that he “loves  the taste, but the complexities of making it came to epitomize his disillusionment with McD’s. ‘The service times  went up because of the expansion of the menu … I think they went a little overboard. When I would … see cars  backed up at the drive‐thru my stomach would just knot up. The people were different, the company was  different. It became very frustrating … I wanted to get the hell out.’” And he did.110   There is evidence to support Jarvis’s concerns. The American Customer Care Satisfaction Index Restaurant Report  for 2015 ranked McDonald’s dead last among all fast‐food restaurants. This index measures staff courtesy, speed 

of checkout or delivery, food quality, and order accuracy.111 The frustration Jarvis expressed is increasingly  common and has generated an “us vs. them” dynamic between franchisees and McDonald’s corporate staff.  Franchisees also perceive that McDonald’s is using them as a shield, for instance, in deflecting the question of  wages by saying it is up to franchisees to do as they see fit. Doing one thing at corporate‐owned stores, which  account for only 10 percent of employees, and doing something else at franchise stores has the potential of  creating more intense conflicts. Steve Easterbrook, relatively new as CEO, is aware of the performance challenges  and determined to make significant changes. It will be up to McDonald’s employees and franchisees at all  locations to effectively implement them.112  If you were CEO, what would you do to help overcome the challenges raised by franchisees while meeting  McDonald’s goals? 

Apply the 3-Step Problem-Solving Approach to OB 

Use the Organizing Framework in Figure 10.6 and the 3‐Step Problem‐Solving Approach to help identify inputs,  processes, and outcomes relative to this case. 

1. Step 1: Define the problem.    

A. Look first at the Outcomes box of the Organizing Framework to help identify the important problem(s) in this case. Remember that a problem is a gap between a desired and current state. State your problem as a gap, and be sure to consider problems at all three levels. If more than one desired outcome is not being accomplished, decide which one is most important and focus on it for steps 2 and 3.

B. Cases have protagonists (key players), and problems are generally viewed from a particular protagonist’s perspective. In this case you’re asked to assume the role of CEO.

C. Use details in the case to determine the key problem. Don’t assume, infer, or create problems that are not included in the case.

D. To refine your choice, ask yourself, Why is this a problem? Focus on topics in the current chapter, because we generally select cases that illustrate concepts in the current chapter.

Step 2: Identify causes of the problem by using material from this chapter, which has been summarized in the Organizing Framework for Chapter 10 and is shown in Figure 10.6. Causes will tend to show up in either the Inputs box or the Processes box.    

E. Start by looking at the Organizing Framework (Figure 10.6) and decide which person factors, if any, are most likely causes of the defined problem. For each cause, explain why this is a cause of the problem. Asking why multiple times is more likely to lead you to root causes of the problem. For example, do employee characteristics help explain the problem you defined in Step 1?

F. Follow the same process for the situation factors. For each ask yourself, Why is this a cause? By asking why multiple times, you are likely to arrive at a more complete and accurate list of causes. Again, look to the Organizing Framework for this chapter for guidance.

G. Now consider the Processes box in the Organizing Framework. Are any processes at the individual, group/team, or organizational level potential causes of your defined Page 418problem? For any process you consider, ask yourself, Why is this a cause? Again, do this for several iterations to arrive at the root causes.

H. To check the accuracy or appropriateness of the causes, map them onto the defined problem.

Step 3: Make your recommendations for solving the problem. Consider whether you want to resolve it, solve it, or dissolve it (see Section 1.5). Which recommendation is desirable and feasible?    

I. Given the causes you identified in Step 2, what are your best recommendations? Use the material in the current chapter that best suits the cause. Consider the OB in Action and Applying OB boxes, because these contain insights into what others have done that might be especially useful for this case.

J. Be sure to consider the Organizing Framework—both person and situation factors—as well as processes at different levels.

K. Create an action plan for implementing your recommendations. LEGAL/ETHICAL CHALLENGE Arbitration and a Snowball’s Chance113 As you likely knew before you read this chapter, arbitration is an alternative form of dispute resolution. In theory  and in practice it often is intended to save time and money and achieve better outcomes than going to court. If  you haven’t actually been involved in arbitration, you might be surprised to know you have likely agreed to it  many times without knowing it. Most cell phone, cable, Internet, online shopping, and credit card agreements  now contain arbitration clauses. In the fine print of their service agreements are buried the words, “The company  may elect to resolve any claim by individual arbitration.” This means the company reserves the right to settle any  dispute you raise as an individual, or as a group via class‐action, using arbitration. You essentially forfeit your  constitutional rights to sue and agree to be bound by the decision of a third party, often hired by the company  against which you have a complaint. 

A 2015 investigation by The New York Times revealed that such clauses are increasingly inserted in consumer  and employment contracts as a way to work around the courts, limiting consumers’ recourse both as individuals  and collectively in class‐action suits. Proponents of the bans say arbitration clauses work just as intended: They  save time and money by protecting companies from frivolous lawsuits, while at the same time providing a less  costly, faster, and less resource‐intensive route to potential satisfaction for customers.  Opponents also have much to say. They often refer to such clauses as “get out of jail free cards” for large  corporations. Moreover, many critics claim that rules of arbitration favor companies, which have skill and  experience in arbitrating, as well as financial resources, that the vast majority of consumers lack. The deck seems  stacked in the big companies’ favor. 

The purpose of class‐action suits is to allow individuals with relatively small claims to band together and achieve  some sort of recourse against an offending company. But courts have thrown out numerous class‐action claims  because of arbitration clauses, including a complaint against a travel‐booking website for conspiring to fix hotel  prices, another against Goldman Sachs claiming sex discrimination, and still another against Taco Bell for  discriminating against African American employees. William Young, a federal judge in Boston, said of arbitration  clauses, “Ominously, business has a good chance of opting out of the legal system altogether and misbehaving  without reproach.”114    There is no official tracking system for arbitration that tallies the number of cases, success rates, or  Page   419amount of money awarded. But the Times investigation revealed that between 2010 and 2014 a total of  1,179 class‐action suits were filed against companies. Eighty percent were pushed to arbitration by judges. In a  single year, 2014, judges ruled against 134 of 162 class‐action filings, moving them to arbitration or causing the 

plaintiffs to drop the cases. The story of individual consumer plaintiffs is even more telling. Between 2010 and  2014, Verizon faced only 65 consumer arbitrations, despite having 125 million subscribers. Time Warner Cable  had only seven from among its 15 million customers. It thus seems that while arbitration is a contractual  possibility, relatively few individual consumers utilize it, and groups of consumers have no choice but to do so. 

What Should Be Done? 1. Nothing. Allow companies to include arbitration clauses in consumer agreements and contracts as

they choose. Explain your reasoning. 2. Modify the clauses to better protect consumers. Explain your recommended modifications. 3. Do away with arbitration clauses. Justify. 4. Create and explain other alternatives.