Summary one page

BEST OF HBR

1969

Pygnnalion n Management

byj. Sterling Livingston

Most parents are aware that teachers'expectations about individual children

become self-fulfilling prophecies: If a teacher believes a child is slow, the child

will come to believe that, too, and will indeed learn slowly The lucky child who

strikes a teacher as bright also picks up on that expectation and will rise to

fulfill it. This finding has been confirmed so many times, and in such varied

settings, that it's no longer even debated.

Self-fulfilling prophecies, it turns out, are justas prevalent in offices

as they are in elementary school classrooms. If a manager is convinced

that the people in her group are first-rate, they'll reliably outperform

a group whose manager believes the reverse-even if the innate talent

ofthe two groups is similar.

J. Sterling Livingston named this 1969 article after the mythical sculptor

whocarvesastatueof a womanthat is brought to life. His title also pays homage

to George Bernard Shaw, whose play Pygmalion explores the notion that the way

onepersontreatsanothercan,for better or worse, be transforming. In his article,

Livingston notes that creating positive expectations is remarkably difficult, and

he offers guidelines for managers; Focus special attention on an employee's first

year because that's when expectations are set, make sure new hires get matched

with outstanding supervisors, and set high expectations for yourself.

How can you

get the best

out of your

employees?

Expect the best

In George Bernard Sbaw's Pygmalion, Eliza Dooiittle explains:

"You see, really and truly, apart from the things anyone can pick up (the dressing and the proper way of speak- ing, and so on), the difference between a lady and a flower girl is not how she behaves but how she's treated. I shall always be a fiower girl to Professor Hig- gins because he always treats me as a flower girl and always will; but I know I can be a lady to you because you always treat me as a lady and always will."

Some managers always treat their subordinates in a way that leads to su- perior performance. But most manag- ers, like Professor Higgins, unintention- ally treat their subordinates in a way that leads to lower performance than they are capable of achieving. The way managers treat their subordinates is subtly influenced by what they expect of them. If managers' expectations are high, productivity is likely to be excel- lent. If their expectations are low, pro- ductivity is likely to be poor. It is as

MOTIVATING PEOPLE JANUARY 2003 97

BEST OF HBR

though there were a law that caused subordinates' performance to rise or fall to meet managers' expectations.

The powerful influence of one per- son's expectations on another's behavior has long been recognized by physicians and behavioral scientists and, more re- cently, by teachers. But heretofore the importance of managerial expectations for individual and group performance has not been widely understood. I have documented this phenomenon in a numberofcase studies prepared during the past decade for major industrial con- cerns. These cases and other evidence available from scientific research now reveal:

•What managers expect of subor- dinates and the way they treat them largely determine their performance and career progress.

• A unique characteristic of superior managers is the ability to create high performance expectations that subordi- nates fulfill.

- Less effective managers fail to de- velop similar expectations, and as a con- sequence, the productivity of their sub- ordinates suffers.

• Subordinates, more often than not, appear to do what they believe they are expected to do.

Impact on Productivity One of the most comprehensive illus- trations of the effect of managerial ex- pectations on productivity is recorded in studies of the organizational exper- iment undertaken in 1961 by Alfred Oberlander, manager ofthe Rockaway district office of the Metropolitan Life Insurance Company. He had observed that outstanding insurance agencies grew faster than average or poor agen- cies and that new insurance agents per- formed better in outstanding agencies than in average or poor agencies, re-

gardless of their sales aptitude. He de- cided, therefore, to group his superior agents in one unit to stimulate their per- formance and to provide a challenging environment in which to introduce new salespeople.

Accordingly, Oberlander assigned his six best agents to work with his best assistant manager, an equal number of average producers to work with an aver- age assistant manager, and the remain- ing low producers to work with the least able manager. He then asked the supe- rior group to produce two-thirds ofthe premium volume achieved by the en- tire agency during the previous year. He describes the results as follows:

"Shortly after this selection had been made, the people in the agency began referring to this select group as a 'super- staff because of their high esprit de corps in operating so well as a unit. Their production efforts over the first 12 weeks far surpassed our most optimistic expectations...proving that groups of people of sound ability can be moti- vated beyond their apparently normal productive capacities when the prob- lems created by the poor producers are eliminated from the operation.

"Thanks to this fine result, our overall agency performance improved by 40%, and it remained at this figure.

"In the beginning of 1962 when, through expansion, we appointed an- other assistant manager and assigned him a staff, we again used this same con- cept, arranging the agents once more according to their productive capacity.

"The assistant managers were as- signed...according to their ability, with the most capable assistant manager re- ceiving the best group, thus playing strength to strength. Our agency overall production again improved by about 25% to 30%, and so this staff arrangement re- mained in place until the end ofthe year.

y. Sterling Livingston was on the faculty of Harvard Business School from 1941 to 1971. He founded the Sterling Institute, a management consultingßrm specializing in exec- utive training and development, in ¡967 and served as chairman ofthe Washington, DC-based institute until 1998. He is currently establishing the Sterling Center for Applied Managerial Leadership in Key Biscayne, Florida.

"Now in this year of 1963, we found upon analysis that there were so many agents.. .with a potential of half a mil- lion dollars or more that only one staff remained of those people in the agency who were not considered to have any chance of reaching the half-million- dollar mark."

Although the productivity of the super- staff improved dramatically, it should be pointed out that the productivity of those in the lowest unit,"who were not considered to have any chance of reach- ing the half-million-dollar mark," actu- ally declined, and that attrition among them increased. The performance ofthe superior agents rose to meet their man- agers' expectations, while that of the weaker ones declined as predicted.

Self-Fulfilling Prophecies. The"aver- age" unit, however, proved to be an anomaly. Although the district manager expected only average performance from this group, its productivity in- creased significantly. This was because the assistant manager in charge of the group refused to believe that she was less capable than the manager of the superstaff or that the agents in the top group had any greater ability than the agents in her group. She insisted in dis- cussions with her agents that every per- son in the middle group had greater potential than those in the superstaff, lacking only their years of experience in selling insurance. She stimulated her agents to accept the challenge of out- performing the superstaff. As a result, each year the middle group increased its productivity by a higher percentage than the superstaff did (although it did not attain the dollar volume ofthe top group).

It is of special interest that the self- image of the manager of the average unit did not permit her to accept others' treatment of her as an average manager, just as Eliza Doolittle's image of herself as a lady did not permit her to accept others'treatment of her as a fiower girl. The assistant manager transmitted her own feelings of efficacy to her agents, created mutual expectancy of high per-

98 HARVARD BUSINESS REVIEW

Pygmalion in Management

formance, and greatly stimulated pro- ductivity. Comparable results (Kcurred when a similar experiment was made at another office of the company.

Further confirmation comes from a study of the early managerial experi- ences of 49 college graduates who were management-level employees of an op- erating company of AT&T. David E. Berlew and Douglas T. Hall of the Mas- sachusetts Institute of Technology ex- amined the career progress of these managers over a period of five years and discovered that their relative success, as measured by salary increases and the company's estimate of each one's performance and potential, depended largely on the company's expectations.

The infiuence of one person's expec- tations on another's behavior is by no means a business discovery. More than half a century ago, Albert Moll con- cluded from his clinical experience that subjects behaved as they believed they were expected to. The phenomenon he observed, in which "the prophecy causes its own fulfillment," has recently become a subject of considerable scien- tific interest. For example:

• In a series of scientific experiments, Robert Rosenthal of Harvard University has demonstrated that a "teacher's ex- pectation for a pupil's intellectual com- petence can come to serve as an educa- tional self-fulfilling prophecy."

• An experiment in a summer Head- start program for 60 preschoolers com- pared the performance of pupils under (a) teachers who had been led to expect relatively slow learning by their chil- dren, and (b) teachers who had been led to believe that their children had ex- cellent intellectual ability and learning capacity. Pupils of the second group of teachers learned much faster.'

Moreover, the healing professions have long recognized that a physician's or psychiatrist's expectations can have a formidable influence on a patient's physical or mental health. What takes place in the minds of the patients and the healers, particularly when they have congruent expectations, may determine

MOTIVATING PEOPLE JANUARY 2003 99

BEST OF HBR

the outcome. For instance, the havoc of a doctor's pessimistic prognosis has often been observed. Again, it is well known that the efficacy of a new drug or a new treatment can be greatly influ- enced by the physician's expectations- a result referred to by the medical pro- fession as a placebo effect.

Pattern of Failure. When salespersons are treated by their managers as super- people, as the superstaff was at the Met- ropolitan Rockaway district office, they try to live up to that image and do what they know supersalespersons are ex- pected to do. But when the agents with poor productivity records are treated by their managers as not having any chance of success, as the low producers at Rockaway were, this negative expec- tation also becomes a managerial self- fulfilling prophecy.

Unsuccessful salespersons have great difficulty maintaining their self-image and self esteem. In response to low man- agerial expectations, they typically at- tempt to prevent additional damage to their egos by avoiding situations that might lead to greater failure. They either reduce the number of sales calls they make or avoid trying to close sales when that might result in further painful re- jection, or both. Low expectations and damaged egos lead them to behave in a manner that increases the probability of failure, thereby fulfilling their man- agers' expectations. Let me illustrate:

Not long ago I studied the effective- ness of branch bank managers at a West Coast bank with over 500 branches. The managers who had had their lending authority reduced because of high rates of loss became progressively less effec- tive. To prevent further loss of authority, they turned to making only "safe" loans. This action resulted in losses of business to competing banks and a relative de- cline in both deposits and profits at their branches. Then, to reverse that decline in deposits and earnings, they often "reached" for loans and became almost irrational in their acceptance of ques- tionable credit risks. Their actions were not so much a matter of poor judgment

What managers believe about themselves subtly

influences what they believe about their subordinates,

what they expect of them, and how they treat them.

as an expression oftheir willingness to take desperate risks in the hope of being able to avoid further damage to their egos and to their careers.

Thus, in response to the low expecta- tions of their supervisors who had re- duced their lending authority, they be- haved in a manner that led to larger credit losses. They appeared to do what they believed they were expected to do, and their supervisors' expectations be- came self-fulfilling prophecies.

Power of Expectations Managers cannot avoid tbe depressing cycle of events that flow from low ex- pectations merely by hiding their feel- ings from subordinates. If managers be- lieve subordinates will perform poorly, it is virtually impossible for them to mask their expectations because the message usually is communicated unin- tentionally, without conscious action on their part.

Indeed, managers often communicate most when they believe they are com- municating least. For instance, when they say nothing-become cold and un- communicative-it usually is a sign that they are displeased by a subordinate or believe that he or she is hopeless. The silent treatment communicates nega- tive feelings even more effectively, at times, than a tongue-lashing does. What seems to be critical in the communi- cation of expectations is not what the boss says so much as the way he or she behaves. Indifferent and noncommittal treatment, more often than not, is the kind of treatment that communicates low expectations and leads to poor performance.

Common Illusions. Managers are more effective in communicating low expectations to their subordinates than in communicating high expectations to them, even though most managers be-

lieve exactly the opposite. It usually is astonishingly difficult for them to rec- ognize the clarity with which they trans- mit negative feelings. To illustrate again:

• The Rockaway district manager vig- orously denied that he had communi- cated low expectations to the agents in the poorest group who, he believed, did not have any chance of becoming high producers. Yet the message was clearly received by those agents. A typical case was that of an agent who resigned from the low unit. When the district manager told the agent that he was sorry she was leaving, the agent replied, "No you're not; you're glad." Although the district manager previously had said nothing to her, he had unintentionally communi- cated his low expectations to his agents through his indifferent manner. Subse- quently, the agents who were assigned to the lowest unit interpreted the as- signment as equivalent to a request for their resignation.

• One of the company's agency man- agers established superior, average, and low units, even though he was con- vinced that he had no superior or out- standing subordinates. "All my assistant managers and agents are either average or incompetent," he explained to the Rockaway district manager. Although he tried to duplicate the Rockaway re- sults, his low opinions of his agents were communicated-notsosubtly-tothem. As a result, the experiment failed.

Positive feelings, on the other hand, often are not communicated clearly enough. Another insurance agency man- ager copied the organizational changes made at the Rockaway district office, grouping the salespeople she rated highly with the best manager, the average salespeople with an average manager, and so on. Improvement, however, did not result from the move.The Rockaway district manager therefore investigated

100 HARVARD BUSINESS REVILW

the situation. He discovered that the as- sistant manager in charge of the high- performance unit was unaware that his manager considered him to be the best. In fact, he and the other agents doubted that the agency manager really believed there was any difference in their abili- ties. This agency manager was a stolid, phlegmatic, unemotional woman who treated her agents in a rather pedestrian way. Since high expectations had not been communicated to them, they did not understand the reason for the new organization and could not see any point in it. Clearly, the way managers treat sub- ordinates, not the way they organize them, is the key to high expectations and high productivity.

Impossible Dreams. Managers'high expectations must pass the test of re- ality before they can be translated into performance. To become self-fulfilling prophecies, expectations must be made of sterner stuff than the power of posi- tive thinking or generalized confidence in one's subordinates - helpful as these concepts may be for some other pur- poses. Subordinates will not be moti- vated to reach high levels of productiv- ity unless they consider the boss's high expectations realistic and achievable. If they are encouraged to strive for unat- tainable goals, they eventually give up trying and settle for results that are lower than they are capable of achiev- ing. The experience of a large electrical manufacturing company demonstrates this; the company discovered that pro- duction actually declined if production quotas were set too high, because the workers simply stopped trying to meet them. In other words, the practice of "dangling the carrot just beyond the donkey's reach," endorsed by many man- agers, is not a good motivational device.

Research by David C. McClelland of Harvard University and John W. Atkin- son of the University of Michigan has demonstrated that the relationship of motivation to expectancy varies in the form of a bell-shaped curve.^

The degree of motivation and effort rises until the expectancy of success

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reaches 50%, then begins to fall even though the expectancy of success con- tinues to increase. No motivation or re- sponse is aroused when the goal is per- ceived as being either virtually certain or virtually impossible to attain.

Moreover, as Berlew and Hall have pointed out, if subordinates fail to meet performance expectations that are close to their own level of aspirations, they will lower personal performance goals and standards, performance will tend to drop off, and negative attitudes will de- velop toward the activity or job.̂ It is therefore not surprising that failure of subordinates to meet the un realistically high expectations of their managers leads to high rates of attrition, either voluntary or involuntary.

Secret of Superiority. Something takes place in the minds of superior man- agers that does not occur in the minds of those who are less effective. While superior managers are consistently able to create high performance expectations that their subordinates fulfill, weaker managers are not successful in obtain- ing a similar response. What accounts for the difference?

The answer, in part, seems to be that superior managers have greater confi- dence than other managers in their own

A young person's first

manager is likely to be

the most influential in

that person's career.

ability to develop the talents of their subordinates. Contrary to what might be assumed, the high expectations of superior managers are based primarily on what they think about themselves- about their own ability to select, train, and motivate their subordinates. What managers believe about themselves sub- tly influences what they believe about their subordinates, what they expect of them, and how they treat them. If they have confidence in their ability to

develop and stimulate subordinates to high levels ofperformance,they will ex- pect much of them and will treat them with confidence that their expectations will be met. But if they have doubts about their ability to stimulate subordi- nates, they will expect less of them and will treat them with less confidence.

Stated in another way, the superior managers' record of success and confi- dence in their own ability give their high expectations credibility. As a con- sequence, their subordinates accept these expectations as realistic and try hard to achieve them.

The importance of what a manager believes about his or her training and motivational ability is illustrated by "Sweeney's Miracle," a managerial and educational self-fulfilling prophecy.

James Sweeney taught industrial man- agement and psychiatry at Tulane Uni- versity, and he also was responsible for the operation of the Biomédical Com- puter Center there. Sweeney believed that he could teach even a poorly edu- cated man to be a capable computer operator. George Johnson, a former hos- pital porter, became janitor at the com- puter center; he was chosen by Sweeney to prove his conviction. In the mornings, Johnson performed his janitorial duties, and in the afternoons Sweeney taught him about computers.

Johnson was learning a great deal about computers when someone at the university concluded that to be a com- puter operator one had to have a cer- tain lQ score. Johnson was tested, and his IQ indicated that he would not be able to learn to type, much less operate a computer.

But Sweeney was not convinced. He threatened to quit unless Johnson was permitted to learn to program and op- erate the computer. Sweeney prevailed, and he is still running the computer center. Johnson is now in charge ofthe main computer room and is responsi- ble for training new employees to p r o gram and operate the computer."*

Sweeney's expectations were based on what he believed about his own

teaching ability, not on Johnson's learn- ing credentials. What managers believe about their ability to train and motivate subordinates clearly is the foundation on which realistically high managerial expectations are built.

The Critical Early Years Managerial expectations have their most magical influence on young peo- ple. As subordinates mature and gain experience, their self-image gradually hardens, and they begin to see them- selves as their career records imply. Their own aspirations and the expecta- tions of their superiors become increas- ingly controlled by the "reality" of their past performance. It becomes more and more difficult for them and for their managers to generate mutually high ex- pectations unless they have outstanding records.

Incidentally, the same pattern occurs in school. Rosenthal's experiments with educational self-fulfilling prophecies consistently demonstrate that teachers' expectations are more effective in influ- encing intellectual growth in younger children than in older children. In the lower grade levels, particularly in the first and second grades, the effects of teach- ers' expectations are dramatic. In the upper grade levels, teachers'prophecies seem to have little effect on children's intellectual growth, although they do affect their motivation and attitude to- ward school. While the declining in- fiuence of teachers'expectations cannot be completely explained, it is reason- able to conclude that younger children are more malleable, have fewer fixed notions about their abilities, and have less well established reputations in the schools. As they grow, particularly if they are assigned to"tracks"on the basis of their records, as is now often done in public schools, their beliefs about their intellectual ability and their teachers' expectations of them begin to harden and become more resistant to influence by others.

Key to Future Performance. The early years in a business organization.

102 HARVARD BUSINESS REVIEW

Pygmalion in Management

when young people can be strongly in- fluenced by managerial expectations, are critical in determining future per- formance and career progress.

In their study at AT&T, Berlew and Hall concluded that the correlation be- tween how much a company expects of an employee in the first year and how much that employee contributes during the next five years was "too compelling to be ignored."^

Subsequently, the two men studied the career records of 18 college gradu- ates who were hired as management trainees in another of AT&T's operat- ing companies. Again they found that both expectations and performance in the first year correlated consistently with later performance and success.

"Something important is happening in the first year...," Berlew and Hall con- cluded. "Meeting high company ex- pectations in the critical first year leads to the internalization of positive job attitudes and high standards; these at- titudes and standards, in turn, would first lead to and be reinforced by strong performance and success in later years. It should also follow that a new man- ager who meets the challenge of one highly demanding job will be given subsequently a more demanding job, and his level of contribution will rise as he responds to the company's growing expectations of him. The key...is the concept of the first year as a critical period for learning, a time when the trainee is uniquely ready to develop or change in the direction of the com- pany's expectations."^

Most Influential Boss. A young per- son's first manager is likely to be the most infiuential in that person's career. If managers are unable or unwilling to develop the skills young employees need to perform effectively, the latter will set lower personal standards than they are capable of achieving, their self-images will be impaired, and they will develop negative attitudes toward jobs, employers, and - in all probabil- ity-their own careers in business. Since the chances of building successful ca-

MOTIVATING PEOPLE JANUARY 2003

reers with these first employers will de- cline rapidly, the employees will leave, if they have high aspirations, in hope of finding better opportunities. If, on the other hand, early managers help em- ployees achieve maximum potential, they will build the foundations for suc- cessful careers.

With few exceptions, the most effec- tive branch managers at the West Coast bank were mature people in their for- ties and fifties. The bank's executives explained that it totik considerable time for a person to gain the knowledge, ex- perience, and judgment required to han- dle properly credit risks, customer rela- tions, and employee relations.

One branch manager, however, ranked in the top 10% ofthe managers in terms of effectiveness (which included branch profit growth, deposit growth, scores on administrative audits, and subjective rankings by superiors), was only 27 years old. This young person had been made

a branch manager at 25, and in two years had improved not only the performance of the branch substantially but also de- veloped a younger assistant manager who, in turn, was made a branch man- ager at 25.

The assistant had had only average grades in college, but in just four years at the bank had been assigned to work with two branch managers who were remarkably effective teachers. The first boss, who was recognized throughout the bank for unusual skill in developing young people, did not believe that it ttx)k years to gain the knowledge and skill needed to become an effective banker. After two years, the young person was made assistant manager at a branch headed by another executive, who also was an effective developer of subordi- nates. Thus it was that the young person, when promoted to head a branch, confi- dently followed the mode! of two previ- ous superiors in operating the branch.

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quickly established a record of out- standing performance, and trained an assistant to assume responsibility early.

For confirming evidence of the crucial role played by a person's first bosses, let us turn to selling, since performance in this area is more easily measured than in most managerial areas. Consider the following investigations:

• In a study of the careers of loo in- surance salespeople who began worii with either highly competent or less- than-competent agency managers, the Life Insurance Agency Management Association found that those with av- erage sales-aptitude test scores were nearly five times as likely to succeed under managers with good perfor- mance records as under managers with poor records, and those with superior sales-aptitude scores were found to be twice as likely to succeed under high- performing managers as they were un- der low-performing managers.^

•The Metropolitan Life Insurance Company determined in i960 that dif- ferences in the productivity of new in- surance agents who had equai sales ap- titudes could be accounted for only by

ciency in sales training and direction" of the local managers.*^

• A study I conducted of the perfor- mance of automobile salespeople in Ford dealerships in New Engiand re- vealed that superior saiespersons were concentrated in a few outstanding deal- erships. For instance, ten of the top 15 salespeopie in New England were in three (outof approximately 200) of the deaierships in this region, and five of the top 15 people were in one highiy successful dealership. Yet four of these people previousiy had worked for other dealers without achieving outstanding sales records.There was little doubt that the training and motivational skills of managers in the outstanding dealer- ships were critical.

Astute Selection. Whiie success in business sometimes appears to depend on the luck of the draw, more than luck is involved when a young perst>n is se- lected by a superior manager. Success- ful managers do not pick their subordi- nates at random or by the toss of a coin. They are carefui to select only those who they "know" wili succeed. As Met- ropoiitan's Rockaway district manager,

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differences in the ability of managers in the offices to which they were assigned. Agents whose productivity was high in relation to their aptitude test scores in- variably were employed in offices that had production records among the top third in the company. Conversely, those whose productivity was low in reiation to their test scares typically were in the least successful offices. After analyzing all the factors that might have ac- counted for these variations, the com- pany concluded that differences in the performance of new agents were due primarily to differences in the "profi-

Alfred Oberlander, insisted: "Every man or woman who starts with us is going to be a top-notch life insurance agent, or he or she would not have been asked to join the team."

When pressed to explain how they "know" whether a person will be suc- cessful, superior managers usually end up by saying something like/'The qual- ities are intangible, but I know them when 1 see them." They have difficulty being explicit because their selection process is intuitive and is based on inter- personal intelligence that is difficult to describe. The key seems to be that they

HAKVAKD BUSINESS REViEW

are able to identify subordinates with whom they can probably work effec- tively - people with whom they are compatible and whose body chemistry agrees with their own. They make mis- takes, of course. But they give up on a subordinate slowly because that means giving up on themselves-on their judg- ment and ability in selecting, training, and motivating people. Less effective managers select subordinates more quickly and give up on them more eas- ily, believing that the inadequacy is that of the subordinate, not of themselves.

Developing Young People Observing that his company's research indicates that "initial corporate expec- tations for performance (with real re- sponsibility) mold subsequent expecta- tions and behavior," R.W. Walters, Jr., director of college employment at AT&T, contends that "initial bosses of new college hires must be the best in the organization."^ Unfortunately, how- ever, most companies practice exactly the opposite.

Rarely do new graduates work closely with experienced middle managers or upper-level executives. Normally they are bossed by first-line managers who tend to be the least experienced and least effective in the organization. While there are exceptions, first-line managers generally are either"old pros" who have been judged as lacking competence for higher levels of responsibility, or they are younger people who are making the transition from "doing" to "manag- ing." Often these managers lack the knowledge and skill required to develop the productive capabilities oftheir sub- ordinates. As a consequence, many col- lege graduates begin their careers in business under the worst possible cir- cumstances. Since they know their abil- ities are not being developed or used, they quite naturally soon become nega- tive toward their jobs, employers, and business careers.

Although most top executives have not yet diagnosed the problem, industry's greatest challenge by far is to rectify the

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underdevelopment, underutilization, and ineffective management and use of its most valuable resource - its young managerial and professional talent.

Disillusion and Turnover. The prob- lem posed to corporate management is underscored by the sharply rising rates of attrition among young mana- gerial and professional personnel. Turn- over among managers one to five years out of college is almost twice as high now as it was a decade ago, and five times as high as two decades ago. Three out of five companies surveyed by Fortune in the fall of 1968 reported that turnover among young managers and professionals is higher than five years ago."^ While the high level of economic activity and the shortage of skilled per- sonnel have made job-hopping easier, the underlying causes of high attrition, I am convinced, are underdevelopment and underutiiization of a workforce that has high career aspirations.

The problem can be seen in its ex- treme form in the excessive attrition rates of college and university graduates who begin their careers in sales posi- tions. Whereas the average company loses about 50% of its new college and university graduates within three to five years, attrition rates as high as 40% in the^^rsi year are common among college graduates who accept sales positions in the average company. This attrition stems primarily, in my opinion, from the fail- ure of first-line managers to teach new college recruits what they need to know to be effective sales representatives.

As we have seen, young people who begin their careers working for less- than-competent sales managers are likely to have records of low productiv- ity. When rebuffed by their customers and considered by their managers to have little potential for success, the young people naturally have great diffi- culty in maintaining their self-esteem. Soon they find little personal satisfac- tion in their jobs and, to avoid further loss of self-respect, leave their employers for jobs that look more promising. Moreover, as reports about the high

turnover and disillusionment of those who embarked on sales careers filter back to college campuses, new gradu- ates become increasingly reluctant to take jobs in sales.

Thus ineffective first-line sales man- agement sets off a sequence of events that ends with college and university graduates avoiding careers in selling. To a lesser extent, the same pattern is du- plicated in other functions of business, as evidenced by the growing trend of college graduates to pursue careers in "more meaningful "occupations, such as teaching and government service.

A serious "generation gap" between bosses and subordinates is another sig- nificant cause of breakdown. Many managers resent the abstract, academic language and narrow rationalization characteristically used by recent gradu- ates. As one manager expressed it to me, "For God's sake,you need a lexicon even to talk with these kids." Nondegreed managers offen are particularly resent- ful, perhaps because they fee! threat- ened by the bright young people with book-learned knowledge that they do not understand.

For whatever reason, the generation gap in many companies is eroding man- agerial expectations of new college grad- uates. For instance, I know of a survey of management attitudes in one ofthe na- tion's largest companies that revealed that 54% of its first-line and second-line managers believed that new college re- cruits were "not as good as they were five years ago." Since what managers expect of subordinates influences the way they treat them, it is understand- able that new graduates offen develop negative attitudes toward their jobs and their employers. Clearly, low manage- rial expectations and hostile affitudes are not the basis for effective manage- ment of new people entering business.

Industry has not developed effective first-line managers fast enough to meet its needs. As a consequence, many com- panies are underdeveloping their most valuable resource-talented young men

and women. They are incurring heavy attrition costs and contributing to the negative attitudes young people offen have about careers in business.

For top executives in industry who are concerned with organizational pro- ductivity and the careers of young em- ployees, the challenge is clear: to speed the development of managers who will treat subordinates in ways that lead to high performance and career satisfac- tion. Managers not only shape the expec- tations and productivity of subordinates but also influence their attitudes toward their jobs and themselves. If managers are unskilled, they leave scars on the careers of young people, cut deeply into their self-esteem, and distort their image of themselves as human beings. But if they are skillful and have high expecta- tions, subordinates' self confidence will grow, their capabilities will develop, and their productivity will be high. More offen than one realizes, the manager is Pygmalion. ^

i.The Rosenthal and Headstart studies are cited in Robert Rosenthal and Lenore)acobson,Py^J7iû/i'['/i in the Classroom (Holt, Rinehart, and Winston, 1968), p.n.

2. See John W. Atkinson, "Motivational Determi- nants of Risk-Taking Behavior!'Psychohgical Review, vol. 64, no. (1,1957, P- 365.

3. David E. Berlew and Douglas T. Hall, "The Socialization of Managers: Effects of Expectations on Perf<)rniance,'Míí''i/>7í.'jfraííVe Science Quarterly, Septcmher 1966, p. 208.

4. Rosenthal aiiid Jacobson, p. 3.

5. Berlew and Hall, p. 221.

6. David E. Berlew and Douglas T. Hall,"Some De- terminants of Eariy Managerial Success," Alfred P. Sloan School of Management Organization Re- search Program #81-64 (M1T,1964), p. 13.

7. Robert T. Davis,"Sales Management in the Field," HBR January-February 1958, p. 91.

8. Alfred A.Oberlander,"The Collective Conscience in Recruiting," address to Life Insurance Agency Management Association annual meet ing, Chicago, Illinois,i963, p. 5.

9."HowtoKeeptheGo-Getters,"/Viii(iiii'i Business, June 1966, p. 74.

10. Robert C. Albrook, "Why It's Harder to Keep Good Executives," Rirtum; November 1968, p. 137.

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