Two to three APA double-spaced page essay in length (not including the title and reference pages)

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Learning Outcomes

After reading this chapter, you should be able to

De�ine I/O psychology.

Explain the history and evolution of I/O psychology.

Understand how positive psychology can in�luence I/O psychology practices.

Identify ways in which I/O psychology can lead to quanti�iable return on investment in human capital.

Describe the different roles I/O psychologists play in organizations.

Identify the major opportunities and challenges that I/O psychology can help organizations navigate.

1What Is Industrial/OrganizationalPsychology?

David Ridley/Getty Images

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1.1 De�ining I/O Psychology

According to the Society for Industrial and Organizational Psychology (SIOP), industrial/organizational (I/O) psychology can be de�ined as the scienti�ic study of working and the application of that science to workplace issues facing individuals, teams, and organizations. I/O psychology uses rigorous scienti�ic methods to investigate issues of critical relevance to individuals, businesses, and society, including talent management, coaching, assessment, selection, training, organizational development, performance, and work–life balance. In other words, I/O psychology is a branch of psychology that uses methods, facts, and principles of psychology to enhance employee productivity.

I/O psychology originates from two distinct but related areas of study: industrial and organizational psychology. Industrial psychology focuses on individual-level phenomena in the workplace. This includes assessing workers’ personalities, knowledge, skills, abilities, and other characteristics (KSAOs) in order to match them with the right jobs; measuring and managing employee attitudes and emotions; using the right working conditions and reward systems to motivate employees; training and developing employees for their current and future roles; and ensuring that workers have healthy, safe, and balanced jobs and lives. Organizational psychology focuses on group- and organizational-level phenomena, which may occur in both work and nonwork settings. Examples include communication, negotiation, con�lict resolution, and team processes. The purpose of organizational psychology is to facilitate the understanding of interactions and relationships among individuals and collectives in order to achieve common goals.

I/O psychology is also related to several other �ields, especially in the organizational sciences. For example, business scholars in the �ield of organizational behavior are interested in similar topics—especially at the individual and group levels—such as personality traits, motivation, and group dynamics. However, their approach tends to be more conceptual or theoretical. On the other hand, scholars and practitioners in the �ield of human resources (HR) are more interested in the practical applications of I/O psychologists’ and organizational behavior specialists’ methods and tools in organizational contexts. They apply these when making quality selection decisions; designing and administering effective compensation, bene�its, training, development, and succession programs; and complying with labor laws and regulations.

The Importance of People

What is an organization’s most important asset? As you can imagine, chief executive of�icers (CEOs) and organizational leaders are asked this question all the time. Many factors in�luence an organization’s overall performance, including �inancial resources, technology, customer service, creative organizational strategies, innovative products, and superior logistics. However, there is one factor that ultimately in�luences all others and is consistently identi�ied by organizational leaders as most important: people. For example, Mary Kay Ash, founder of Mary Kay Inc., once stated, “People are de�initely a company’s greatest asset. It doesn’t make any difference whether the product is cars or cosmetics. A company is only as good as the people it keeps.” Herb Kelleher, former CEO of Southwest Airlines, echoed this sentiment when he said:

If the employees come �irst, then they’re happy. . . . A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders. It’s not one of the enduring . . . mysteries of all time; it is just the way it works.

What these business leaders know is that without high-quality, highly motivated employees, companies have no one to execute strategies, satisfy customers, or develop new products—and without these imperatives, they fail. Considering how important people are to an organization, managers naturally want to make sure they hire the right person for each job. However, the costs associated with �inding, hiring, and retaining employees—called people costs—are consistently among the top operating costs for companies, and these expenses continue to rise. Examples of people costs include salaries, bonuses, health care costs, bene�its, and retirement expenses.

Creating a working environment that most effectively promotes employee performance and ef�iciency is another top priority. Managers must not only hire the right people; they must keep them. In order to attract and retain employees, a manager must address many elements, including employee health and safety, group dynamics,

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leadership effectiveness, organizational communication, decision-making processes, organizational structure, and corporate culture.

As people costs rise, organizations are looking for the most effective and cost-ef�icient way to identify, develop, and retain quality personnel. The �ield of I/O psychology is uniquely suited to help with these challenges and to optimize organizations’ most important asset—their people.

Concepts in Action: Corporate Focus on Employees

Ernst & Young, a large accounting and consulting �irm, starts a "People First" program. Accounts are staffed more ef�iciently, and more people are informed of the details of each deal.

The Nature of Work

As you will learn in this course, I/O psychologists are scientists who systematically study human behavior in the context of a work environment. It is, however, impossible to study this behavior without �irst understanding the nature of the work and the environment in which it is performed.

So, then, what is work? At its most basic level, work can be described as being made up of tasks. A task is a cognitive and/or physical operation that is performed actively and with purpose. For example, tasks performed by a bank teller include greeting customers, counting money, and answering customer questions. To perform tasks, employees must use their knowledge, acquired skills, and innate abilities. A bank teller needs to understand bank processes (knowledge), have strong communication skills (skill), and possess a friendly disposition (ability).

At a more advanced level, work can be organized into a job, which is a set of related tasks or activities that are performed by one or more people. People who work the same job perform tasks that are essentially the same. Our bank teller performs almost the same tasks and activities as most other tellers in a given bank, regardless of where in the country its branches are located.

Similar jobs can be grouped into a job family. At our hypothetical bank, a bank teller job family could be composed of three levels of tellers. The tellers at each level would all perform the same basic tasks, but at each level the tasks become more challenging and complex. The total work of an organization can be divided into a number of job families, with the number depending on the complexity of the organization.

Corporate Focus on Employees From Title: 9 to 5 No Longer (https://fod.infobase.com/PortalPlaylists.aspx?

wID=100753&xtid=40875)

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Dominique Deckmyn/CartoonStock

Some work-related terms are general and are not associated with one speci�ic organization. An occupation is a job that is, in essence, the same no matter where or for whom a person works; a person’s occupation does not depend on employment in a speci�ic organization. In fact, a person could be unemployed and still have an occupation. Examples of occupations include law, medicine, nursing, teaching, auto repair, psychology, and computer programming. The term career has a developmental connotation and refers to changes in job or organizational level over the course of a person’s work life. A person’s career, like his or her occupation, can develop at one or multiple organizations.

Tasks and jobs are not performed in a vacuum. They are embedded and develop within an organization, and many contextual factors can in�luence how work is performed. Some of these factors include culture, job design, and interpersonal relationships. People of different national cultures, for example, assign different value to individual and collective work. North American and western European cultures tend to place a higher value on individualistic goals, whereas Latin American, Asian, and African cultures tend to be more collectivist, placing a higher value on the needs, goals, and activities of the group (Hofstede, 1980; House, Hanges, Javidan, Dorfman, & Gupta, 2004; Triandis, 1989).

In addition to national culture, organizational culture can also affect tasks and jobs. Organizational culture has been de�ined as “a set of shared mental assumptions that guide interpretation and action in organizations by de�ining appropriate behavior for various situations” (Ravasi & Schultz, 2006, p. 437). Dimensions of organizational culture include shared norms, beliefs, and values. Organizational culture has a direct impact on the more transient dimensions of the organization’s climate. Organizational climate has been de�ined as “beliefs about the organization’s environment that are shared among members and to which members attach psychological meaning to help them make sense of their environment” (Dickson, Resick, & Hanges, 2006), or simply “how things are supposed to be done around here.” At the individual employee level, organizational climate in�luences psychological climate. Koys and DeCotiis (1991) de�ine psychological climate as “an experiential-based, multi-dimensional, and enduring perceptual phenomenon that is widely shared by the members of a given organizational unit. Its primary function is to cue and shape individual behavior toward modes of behavior dictated by

organizational demands” (p. 266). They identify eight speci�ic dimensions for psychological climate: autonomy, cohesion, trust, pressure, support, recognition, fairness, and innovation.

The way in which a job is designed can also have a notable impact on job performance. Typically, employees who work in jobs that are more autonomous, complex, and offer control over decision making will be more motivated to perform their best. Studying work, then, involves more than simply learning an employee’s set of tasks. It also requires understanding the ways in which contextual factors affect how work is done.

Work is not only �inancially essential; it also has social and psychological importance. Have you noticed how much time and effort we spend becoming quali�ied for work, searching for work, and, after �inding a job, working, thinking about, and talking about work—even when we don’t have to? A 2014 survey of time use by the U.S. Department of Labor (2015) found that the typical American aged 25 to 54 spent more than a third of his or her day at work.

Our work can in�luence life outside the workplace. You have probably been asked what you do. Perhaps you said you are a student pursuing a particular major or studying for a speci�ic occupation. Or, if you already have a job or an established line of work by which you identify yourself, you might have talked about that. Most of us have been asked this question, and we ask it of others—because our answers provide insight into our identity. What we learn

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about someone’s work helps us determine our potential relationship with that person and indicates how we think we should behave toward one another.

Consider This: Work Identity

Can you think of a time when you changed your perception of someone after learning what he or she does for a living?

Methods of I/O Psychology

I/O psychology is by its very nature a science. Scientists use a systematic process of examination. They are empirical, which means they rely on veri�iable observations, experimentation, and experience rather than on opinions, hunches, or private prejudices. A science is objective and therefore deals with facts that can be seen, heard, touched, measured, and recorded. The sections below elaborate on the scienti�ic method used in I/O psychology, as well as in the sciences in general.

Regarding its methods and procedures, I/O psychology attempts to be as scienti�ic as physics or chemistry. When I/O psychologists observe how people act at work, they do so in the best traditions of science: objectively, dispassionately, and systematically. Much of the subject matter of I/O psychology is observable, consisting of overt human behaviors such as movements, speech, writing, and other creative works. Observing and measuring these behaviors allows I/O psychologists to understand and draw conclusions about the people they are studying.

For example, an I/O psychologist might examine how a factory worker puts together a machine, how many keystrokes a computer clerk makes per minute, how effectively a team works together, or how a manager interacts with employees. These behaviors are overt and observable, and they can be objectively measured and recorded. The I/O psychologist might then associate these behaviors with other measurable or observable workplace characteristics such as lighting, noise levels, working hours, available tools and equipment, training and development opportunities, leadership styles, or reward systems. Based on correlations between workers’ behaviors and workplace characteristics, the I/O psychologist may conclude that factory workers’ performance is higher when they are given a particular tool set, led through a particular management style, or rewarded in a certain way. Similar conclusions can be drawn about what works best for other kinds of jobs.

Additionally, based on these kinds of observations and associations, I/O psychologists may experimentally manipulate various workplace characteristics and observe how various behaviors increase or decrease in frequency. For example, employees’ behavioral changes can be monitored as different working conditions, tools, equipment, training methods, or rewards are applied. Finally, based on conclusions from such experiments, interventions can be implemented to enhance the workplace characteristics that most strongly relate to the desired work behaviors.

Of course, not all of human existence is directly observable. Sometimes, I/O psychologists must study intangible qualities such as motives, emotions, needs, perceptions, thoughts, and feelings. Fortunately, I/O psychologists have rigorous methodology to scienti�ically design and implement objective tools, techniques, and methods to accurately measure such qualities. For example, I/O psychologists have developed many tools and assessments to measure intangible characteristics such as personality traits and job attitudes; mental processes such as perceptions, interpretations, and judgments; and emotions such as various moods.

Consider This: I/O Psychology as a Science

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1. What are some examples of mental processes needed in your job? 2. What are the behaviors that give evidence of these processes?

Find Out for Yourself: Psychological Assessment

Two of the most important job attitudes I/O psychologists measure are organizational commitment and employee engagement. To become familiar with the types of psychological assessments that I/O psychologists design to evaluate employees for these qualities, visit the following links.

Organizational Commitment Scale (http://journal-bmp.de/2013/12/validation-of-the-organizational- commitment-questionnaire-ocq-in-six-languages/?lang=en)

This article offers an example of the rigorous process typically used by I/O psychologists to design an objective measure of an intangible human quality. Although the details and methods are advanced and not required for this course, reading the abstract at the beginning of the article and skimming the rest of it should give you some appreciation for this elaborate scienti�ic process.

1. Scroll down to Table 1: Items of the Organizational Commitment Questionnaire at the end of this article and attempt the assessment. Respond to each item in the �irst column on a 5-point scale (1 = totally disagree, 5 = totally agree).

2. Items denoted by (-) are reverse scored, which means that after you respond to them, a score of 1 should be converted to 5, 2 should be converted to 4, 4 to 2, and 5 to 1.

3. Calculate your average score for the 15 items, then answer the following questions.

What Did You Learn?

1. As shown in Table 4, in this study the average level of organizational commitment in the United States and Canada was 3.4. Is your level of commitment to your organization higher, lower, or comparable to this score? Why do you think this is the case?

2. If you can speak one or more of the foreign languages in this study, to what extent do you consider the translation accurate? How would you have modi�ied the items to make them more re�lective of the characteristics being measured?

Gallup’s Q12 Employee Engagement Instrument (http://strengths.gallup.com/private/Resources/Q12Meta-Analysis_Flyer_GEN_08%2008_BP.pdf)

This report is a user-friendly version of a much more complex set of studies conducted by the Gallup Organization to design and re�ine this widely used instrument for measuring employee engagement. Again, the statistical details are beyond the scope of this course, so you only need to skim them to appreciate the scienti�ic process involved. Afterward, go to pages 10 and 11 of the report and attempt the assessment. Respond to each item on a 6-point scale (1 = extremely dissatis�ied, 5 = extremely satis�ied, 0 for items to which you do not know how to respond or that do not apply to you). Then answer the following questions.

What Did You Learn?

1. How important are each of the 12 items to you personally? Explain. 2. Which of the 12 items did you score highest and lowest on? 3. What have you learned about organizational commitment and employee engagement in general and

about your own levels of each?

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Stock Montage/Contributor/Getty Images

When Hugo Munsterberg published the �irst book on I/O psychology in 1913, he set the foundation for future research.

1.2 A Brief History of I/O Psychology

The �ield of I/O psychology formed out of circumstance and necessity. In the late 19th century, industrialism was on the rise. Businesses were facing challenges such as how to increase worker safety in factories, train workers on the new assembly lines, and optimize worker productivity. Additionally, as businesses grew larger, employers realized that they needed to �ind a way to identify and select quali�ied workers to �ill the expanding workforce. Some early psychologists saw an opportunity to apply psychological concepts to these sorts of business problems.

Key Founders of I/O Psychology

The initial foray of psychologists into industry was in advertising. American psychologist Walter Dill Scott (1869– 1955) studied how human psychology could increase the effectiveness of businesses’ advertising efforts. Scott’s two books, The Theory of Advertising (1903) and The Psychology of Advertising (1908), were the �irst to identify advertising characteristics that stimulate people’s purchasing behaviors. Interestingly, Scott found that the real problem in sales did not pertain to advertising materials, but rather to the characteristics of those employed as salespeople. Scott thus proposed that organizations needed more rigorous selection methods when hiring salespeople. This led him to start the �irst consulting practice in 1919, which provided personnel selection services to many large organizations.

Hugo Munsterberg (1863–1916), a German-born Harvard psychologist, is considered a founder of I/O psychology. He published the �irst book on industrial/organizational psychology, The Psychology of Industrial Ef�iciency, in 1913. This work set forth the major research topics of employee selection, training, vocational guidance, and the social in�luence of work during the early years of I/O psychology. As one of the �irst psychologists to conduct psychological research in business settings, Munsterberg used psychological tests both to measure employee skills and to match people to jobs. Additionally, Munsterberg was responsible for organizing the International Congress of Arts and Science at the 1904 St. Louis World’s Fair, where visitors had the opportunity to experience new mental and physical tests (Brown, 1992).

Much early I/O psychology focused on worker productivity and ef�iciency. Frederick Winslow Taylor (1856–1915) is considered the father of scienti�ic management, which is the use of scienti�ic methods to design work that optimizes worker productivity. In his book Scienti�ic Management, Taylor (1911) outlined ways to improve both machinery and individual worker performance after observing employees at work and then analyzing his data to determine optimal job performance. Despite the success of his methods, not everyone agreed with Taylor’s scienti�ic management philosophy. Some thought his approach, which reduced jobs to speci�ic tasks and the amount of time workers should spend on each, seemed to dehumanize the worker (Hoxie, 1916).

Early I/O psychology principles became mainstream in 1915 when the �irst university-based program on the topic was founded. Walter Van Dyke Bingham (1880–1952) established a center at Carnegie Institute of Technology to study the applications of psychology to business. Called the U.S. Bureau of Salesmanship Research, the program focused on conducting research for the life insurance industry on how to select and develop salespeople, clerks, and executive personnel.

In the 1940s German scholar Kurt Lewin, now considered the father of social psychology, established several streams of applied research. Lewin developed well-recognized and widely referenced models of organizational research. For example, Lewin’s approach, which he called action research, focuses on practical applications of scienti�ic theories and rigorous methods to solve everyday problems. Lewin also proposed that organizational change is a function of forces that both promote and hinder that change. According to Lewin, organizational change involves three stages: unfreezing, where the inertia of resisting change must be overcome and existing mind-sets challenged; actual change; and refreezing, where new mind-sets are established and the new status quo becomes the

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norm. Lewin also initiated the study of group dynamics, which emphasizes groups as unique entities that may exhibit characteristics that are distinct from and go beyond their individual members (in other words, the whole is greater than the sum of its parts). Although scholars and practitioners have built more elaborate models, Lewin’s models are foundational to many contemporary theories and areas of scienti�ic research today.

Find Out for Yourself: Scienti�ic Management at a Fast-Food Restaurant

Set aside about 30 minutes this week to visit your favorite fast-food restaurant. You may want to bring along a notebook and writing utensil or some other convenient way to record your observations.

1. While there, observe the processes that the workers engage in: taking and queuing orders; division of labor; cooking and preparing the food; wrapping and bagging each item; compiling each order; adding napkins, utensils, and condiments; and delivering the order to the customer.

2. Take note of the workers’ physical movements, eye–hand coordination, and speed.

What Did You Learn?

1. What are some ways this work might be performed more ef�iciently? 2. To what extent does working at a fast-food restaurant resemble working on a factory assembly line?

Contributions to the War Efforts

When the United States entered World War I in 1917, many psychologists were commissioned to identify ways to increase soldiers’ effectiveness. Their research goal was to understand soldier morale and enhance their overall motivation. For the �irst time, psychological tests such as the Army Alpha—a group-administered cognitive ability test—were designed to identify and place enlisted soldiers. Although the war ended before the Army Alpha test data could be implemented, after the war, researchers discovered a strong relationship between soldiers’ scores on the Army Alpha and their subsequent job performance. Additionally, tests such as the Personal Data Sheet (a precursor to the modern personality test) were used throughout the war to place of�icers and other specialized personnel. After the war ended, psychologists were able to use their experiences with the army to help businesses screen employees.

During World War II psychologists again worked closely with the military, developing more sophisticated assessments. For example, the Army General Classi�ication Test was designed to evaluate and place new draftees. Other screening tests included speci�ic skill and ability tests as well as leadership-potential tests. The Of�ice of Strategic Services, predecessor to the Central Intelligence Agency, commissioned psychologists to design screening tests that identi�ied candidates who were well suited for sensitive services (e.g., espionage). These assessments evaluated candidates as they completed multiple job-related exercises over the course of several days. Eventually, such screening tests evolved into the assessment centers used in the business world today.

The Hawthorne Studies: A Precursor to Human Relations

In 1924 Elton Mayo and researchers from Harvard University conducted a series of extensive studies at the Western Electric Company’s industrial plant in Hawthorne, Illinois. The Hawthorne studies, as they became known, began as straightforward studies based on scienti�ic management principles. Researchers were commissioned to study the optimal physical and social environment needed to produce maximum employee ef�iciency. For example, in one study, management was interested in optimizing the lighting levels for workers producing telephone equipment. Another study of a group of telephone-relay assemblers investigated the effects of allowing workers to choose their

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team members, varying break frequencies and lengths, providing food during breaks, varying the length of the workday, and having the workers discuss their preferences regarding these issues with their supervisors.

The results of the Hawthorne studies were unexpected, for both the researchers and the managers. The researchers found that productivity gains were unrelated to the changes researchers made to the physical environment. For example, in the illumination studies, even when lights were so dim that workers could barely see, productivity increased. In the relay-assembly experiments, every change resulted in an increase in productivity, even when the change was back to the original condition.

Researchers concluded that the physical work environment did not affect worker productivity as much as the extra attention they received during the research, which increased workers’ perception that management cared about them as individuals. Additionally, as evidenced by the relay-assembly experiments, human dimensions such as supervisory style and team dynamics were discovered to be more important than physical working conditions. Another plausible interpretation is that workers may have been concerned that management had intentions behind the experiments. For example, in another set of studies in a bank-wiring room, introducing �inancial incentives actually resulted in a decrease in productivity because workers were concerned that increasing their productivity might lead management to �ire some of them. Moreover, established group norms for productivity exerted a stronger in�luence on the workers’ behaviors than the newly introduced incentives. In all cases the physical environment was not the major in�luencing factor. Rather, the human dimensions and interpretations (positive or negative) were the key contributors to productivity changes. This notion is now often referred to as the Hawthorne effect.

The results of the Hawthorne studies changed how organizations would attempt to motivate workers. Prior to the studies, organizations designed jobs according to both scienti�ic principles and the will of management and then used incentives to get workers to comply. The Hawthorne studies made it clear that employees rejected management practices based on economic incentives. Instead, workers were motivated by feeling that they were accepted socially, held status within their work group, and would receive compassionate supervision. Out of the Hawthorne studies emerged the �ield of human relations, which studies the factors that produce motivated and satis�ied employees. I/O psychologists began to explore topics such as effective leadership, quality communication, group formation, employee attitudes, and other factors that improve worker ef�iciency and job satisfaction.

Consider This: The Hawthorne Effect

Can you think of a time when the Hawthorne effect occurred in your work setting?

Postwar, 20th-Century Approaches

Following World War II large organizations began to leverage I/O psychologists’ capabilities. I/O psychologists began to focus on different aspects of worker effectiveness, which resulted in a number of subspecialties, including personnel psychology, human factors psychology, and organizational psychology. During the 1960s and 1970s, organizations began using groups to accomplish work, and I/O psychologists were instrumental in developing tools and techniques needed to understand and deploy large, task-orientated groups. Additionally, I/O psychologists began to assess how an organization’s structure and operation affects its employees. These and related inquiries grew into the study of organizational development, a systematic approach to organizational-level change and improvement. At the time, it included such topics as participative management, self-managing teams, employee empowerment, and employee feedback, but has since evolved to include a variety of other areas as well.

A number of work-related laws have passed since the 1960s that have increased organizations’ need for I/O psychologists. With the passage of the Civil Rights Act of 1964 and other civil rights legislation, the courts have required employers to develop recruiting, selection, and promotion procedures that are job relevant and

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antidiscriminatory. Many employers have concluded that to comply with this and subsequent antidiscrimination legislation, and to successfully defend themselves against employment discrimination lawsuits, they need I/O psychologists to help them validate their hiring and promotional practices. Today I/O psychologists are often used as expert witnesses in trials about civil rights violations because of their ability to prove the validity of an organization’s selection practices.

Find Out for Yourself: The Civil Rights Act and Discrimination

The Our Documents website provides free access to historic American documents. Visit the website to access a transcript of the Civil Rights Act of 1964.

1964 Civil Rights Act (http://www.ourdocuments.gov/doc.php?doc=97&page=transcript)

What Did You Learn?

1. Against which protected classes does the act prohibit discrimination? 2. What are some of the implications of Title VII—which is speci�ic to employment—for organizations

in terms of recruitment, selection, training, promotion, and termination processes? 3. Why is it important for an I/O psychologist to understand Title VII?

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1.3 Emerging 21st-Century Perspectives

The changing business landscape continuously presents opportunities and challenges regarding an organization’s most important asset—its people. As discussed earlier, the science of I/O psychology can help managers and organizations formulate new theoretical frameworks and methods for effectively navigating these uncharted territories. Two emerging perspectives that are particularly pertinent for I/O psychologists are positive psychology and quantifying the return on investment (ROI) in human capital. These two topics are introduced in this section and will be revisited throughout the text.

Positive Psychology

One of the major challenges I/O psychologists face today is mainstream psychological training’s focus on curing mental illness and dealing with dysfunctional thoughts, emotions, and behaviors. Before World War II psychology was believed to have three missions: healing mental illness, helping healthy people become happier and more productive, and achieving full human potential. However, by the end of the war, healing mental illness had received the majority of resources and attention due to the tremendous amount of psychological damage caused by the war. In the meantime, psychology’s other two missions had been nearly forgotten. As a result, by the end of the 20th century, psychologists had made signi�icant strides in diagnosing and treating hundreds of mental problems but only limited progress in understanding and capitalizing on human strengths (Keyes & Haidt, 2003; Seligman & Csikszentmihalyi, 2000).

Problems With the Disease Model Although important for the good of society, healing mental illness follows what has been referred to as a “disease model.” There are two problems with this. The �irst is that the disease model is problem focused; it seeks to bring troubled individuals and low performers back to average. However, in the highly competitive business world, employers need employees who can deliver superior performance and execute the organization’s strategic initiatives with excellence. Freedom from pathological symptoms such as depression is not enough in itself to lead to this type of exceptional performance (Keyes & Haidt, 2003).

The second problem with the disease model is that even if psychology’s greatest contribution is in healing mental illness, most psychological theories and practices cannot be applied to the business context. Struggling organizations are not sick people. Organizations are made up of diverse individuals who have varying interests, motivations, strengths, and vulnerabilities. These organizational characteristics are to be appreciated and leveraged. They are not problems to be solved (Cooperrider & Whitney, 2005).

Via the popular press, thousands of positively oriented self-improvement and management best-sellers became available in the absence of a widely recognized method of positive organizational psychology. Some of that literature, such as Gallup’s strengths-based approach (Rath, 2007) and the Q12 measure of engagement (Wagner & Harter, 2006), is based on the scienti�ic methods discussed earlier. Both of these methods have shown success in predicting superior performance at work and in many other areas of life such as academics and relationships, as well as in increasing business-unit pro�itability (Harter, Schmidt, & Hayes, 2002). However, the majority of self-improvement and management literature is speculative, anecdotal, and based more on folk psychology than on rigorous scienti�ic research.

Business consultants have found that positive approaches appeal to their clients and constitute a great source of revenue for their consultancies, which has led to the popularity of many unfounded management fads by those who are less discerning or familiar with scienti�ic methods. In their seminal book Hard Facts, Dangerous Half-Truths and Total Nonsense (2006), Stanford professors Jeffrey Pfeffer and Robert Sutton uncover many of those lies that managers believe and act on, to the detriment of their organizations. Pfeffer and Sutton call for what is known as evidence-based management—practices that are based on rigorous scienti�ic research and consistently deliver real results. Evidence-based management has become an important way to bridge the gap between rigorous scienti�ic research and organizational practice (Latham, 2009a; Rousseau, 2012).

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Psychological capital increases a person’s con�idence, optimism, hope, and resiliency,

Seligman Calls for a Positive Approach Fortunately, around the turn of the 21st century, former president of the American Psychological Association Martin Seligman called for a “positive psychology” that brings back psychology’s two forgotten missions: helping healthy people become happier and more productive, and achieving full human potential. His call was well received, and positive psychological research and practice has grown exponentially over the past decade. Examples can be found in seminal references such as Handbook of Positive Psychology (Lopez & Snyder, 2016) and Character Strengths and Virtues: A Handbook and Classi�ication (Peterson & Seligman, 2004). This is not to say that psychology was a negative science prior to the positive psychology movement. However, negativity was widespread, and it was time for a more balanced perspective.

The positive psychology movement triggered a ripple effect across the business world. Organizational research and practice is generally positive, because organizations deal primarily with healthy and productive people. Extremely dysfunctional or disturbed individuals are unlikely to hold a job. Thus, positive psychology is appropriate for the target population of I/O psychology.

Two Approaches: POS and POB Speci�ically, two approaches have developed in organizational science over the past decade. The �irst is positive organizational scholarship (POS), which focuses on positive organizations as a whole. Cameron and Caza (2004) de�ine POS as a “movement in organizational science that focuses on the dynamics leading to exceptional individual and organizational performance such as developing human strength, producing resilience and restoration, and fostering vitality” (p. 731). POS is making signi�icant strides in the scienti�ic understanding of positive dynamics such as positive individual attributes, positive emotions, strengths and virtues, positive relationships, positive HR practices, positive organizational practices, and positive leadership and change (Cameron & Spreitzer, 2012).

The second approach is positive organizational behavior (POB), which focuses on the positivity of individual managers and employees. Luthans (2002b) de�ines POB as “the study and application of positively oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in today’s workplace” (p. 59). POB emphasizes the scienti�ic criteria of theory, application, measurement, and development. In other words, for a psychological capacity to be included in POB, it has to be positive, scienti�ically testable, applicable to the workplace, measurable, and developmental. Four speci�ic psychological capacities have been found to �it these criteria: con�idence, hope, optimism, and resilience. These capacities have been integrated into what has been termed “psychological capital.”

Psychological Capital Psychological capital (PsyCap) has been de�ined as:

an individual’s positive psychological state of development that is characterized by: (1) having con�idence (self-ef�icacy) to take on and put in the necessary effort to succeed at challenging tasks; (2) making a positive attribution (optimism) about succeeding now and in the future; (3) persevering toward goals and, when necessary, redirecting paths to goals (hope) in order to succeed; and (4) when beset by problems and adversity, sustaining and bouncing back and even beyond (resiliency) to attain success. (Luthans, Youssef-Morgan, & Avolio, 2015, p. 2)

Unlike many positive but unfounded management fads, PsyCap has been shown to relate to many of the outcomes that I/O psychologists wish to help their organizations realize: higher productivity, job satisfaction, organizational

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which can lead to increased performance at work.

commitment, and employee well-being; more frequent organizational citizenship behaviors; lower cynicism, stress, anxiety, and turnover intentions; and less frequent counterproductive work behaviors (Avey, Reichard, Luthans, & Mhatre, 2011). Positivity and positive interventions have been applied in many organizations around the world, including manufacturing, hospitality, franchise, banking, insurance, marketing, health care, telecommunications, aviation, aerospace, military, police, sports, oil and gas, education, government, nongovernmental organizations, and nonpro�its. A notable example is the Comprehensive Soldier and Family Fitness training program, established in 2008 by the U.S. Army to proactively build resilience in soldiers and their families as a preventative measure and a positive alternative to the prevailing reactive treatment programs (Seligman & Matthews, 2011). The U.S. military made large investments in developing and evaluating this program, and empirical studies provide evidence to support the ef�icacy of these initiatives in building positivity, buffering negativity, and promoting well-being among those serving in stressful and mission-critical roles (Krasikova, Lester, & Harms, 2015; Schaubroeck, Riolli, Peng, & Spain, 2011).

Figure 1.1: Psychological capital

Many people use a variety of social networking sites to stay connected with friends, family, former classmates, and colleagues.

Consider This: Positivity and Negativity

1. Describe an instance in which you received positive feedback. 2. Recall and describe your thoughts, feelings, attitudes, and behaviors after receiving the positive

feedback. What were some of the outcomes of positivity? 3. Describe an instance in which you received negative feedback. 4. Recall and describe your thoughts, feelings, attitudes, and behaviors after receiving the negative

feedback. What were some of the outcomes of negativity?

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It is important to acknowledge that positivity and negativity are not opposite sides of the same coin; they operate very differently. Cameron (2008) notes a paradox: On the one hand, humans are attracted to what is positive and pleasant. On the other hand, there is a prevalent bias toward negativity. Negativity tends to grasp more of our attention and physical, mental, and emotional resources. This is because negativity indicates an urgent de�iciency to be addressed and resolved. Positivity implies “business as usual,” which provides limited motivation for change. That is why balancing positivity and negativity requires intentional effort. In other words, both positivity and negativity are necessary, and while positivity is more appealing, negativity can be necessary for change.

Quantifying the ROI in Human Capital

Beyond positive psychology, there is an increasing emphasis in business practice on employee well-being, not only as a valuable and worthwhile pursuit in its own right but also as a strategic opportunity to earn signi�icant returns on investment in terms of reduced health care costs, increased engagement and commitment, and enhanced productivity (Cascio & Boudreau, 2011). In other words, human resources are increasingly being recognized as assets and a form of capital rather than just an expense.

However, quantifying the ROI in human capital is another area that I/O psychologists struggle with as they �ind themselves increasingly expected to link psychological measures to �inancial outcomes, especially in today’s tight economy. Strategic investments in human assets can yield quanti�iable returns on practices such as effective selection, training, and performance management. When I/O psychologists understand the methods of quantifying such returns, they are in a better position to effectively in�luence �inancial and HR allocations in their organizations.

As discussed earlier, both the popular psychology and business literatures include signi�icant amounts of unsubstantiated advice. I/O psychologists strive to correct many of these misconceptions and educate managers and organizational decision makers. Unfortunately, many managers believe that managing is more of an art than a science, which can lead them to make subjective decisions based on hunches, personal opinions, or politics and ignore the research that can lead to effective, evidence-based management (Latham, 2009a; Rousseau, 2012).

Furthermore, many managers believe that people are impossible to measure, quantify, predict, and explain. The problem with this notion is that no matter how important you believe people are, if you cannot quantify the ROI in them, they will be viewed as an expense. Resources and attention will then be allocated to more tangible assets that have quanti�iable returns on investment, and it may no longer be desirable to invest in people. When people are viewed as only an expense, they are often considered expendable, especially in tough economic conditions, as evidenced by the massive layoffs and high unemployment rates that characterized the Great Recession.

Jeffery Pfeffer and Robert Sutton (2000) refer to this thinking as the knowing–doing gap. Pfeffer’s (1998) earlier book, The Human Equation, built a convincing case for the quanti�iable ROI in human assets. He showed that about half of all organizations believe that people are their most important asset. Within this half, about half act on their belief. They implement systems and policies that show they value their people. Then within that quarter, about half stick to their beliefs and actions, even under business pressures to abandon their beliefs in order to cut costs or reallocate their investments. Interestingly, over the years, this one eighth has shown superior results on every measure of pro�itability, ef�iciency, and effectiveness when compared to the other seven eighths. The lesson: People do matter, and with the right measures, their value is quanti�iable. Latham (2009a) offers speci�ic areas for evidence- based management, such as using the right tools to hire high-performing employees, training and development to create high-performing teams, and motivating employees to be high performers. I/O psychology uses rigorous scienti�ic methods such as experimental designs and statistical analyses to help employers develop and use the right measures to quantify the ROI in people.

Find Out for Yourself: Human Assets and Human Costs

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Every year, Fortune magazine publishes a list of America’s largest corporations. Visit the website to �ind out which corporations are on the current Fortune 500 list.

Fortune 500 (http://beta.fortune.com/fortune500)

What Did You Learn?

1. According to Fortune’s methodology, what are the selection criteria and some indicators of these organizations’ performance?

2. Visit the websites of several Fortune 500 companies of your choosing. Read their mission, vision, and values statements. How many of them refer to people as one of their assets?

3. Take a look at the �inancial statements of those companies that are publicly traded. How much did they spend last year on people costs? Look for payroll, bene�its, training and development, and similar expenses.

4. How do these expenses compare to other expenses and investments for each company?

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1.4 The Role of I/O Psychologists

As previously discussed, I/O psychologists use psychological principles to improve employee performance. They do this by using a variety of methods that span various stages of an employee’s relationship with an organization, also referred to as the employee life cycle. These stages are introduced in this section and will be covered throughout the text.

Employee Selection Tools and Practices

Selecting employees requires tools that help identify the most quali�ied job candidates in a fair and unbiased manner. I/O psychologists study a job’s requirements and then develop job-speci�ic interviews and psychological tests that meet strict scienti�ic criteria. These topics are discussed in detail in Chapters 2 and 3.

Employee Performance Evaluations

Most organizations use some method to evaluate employee job performance, and they often base promotions, pay increases, transfers, and dismissals on these appraisals. Naturally, it is extremely important that performance evaluations be based on data that is as fair and objective as possible and not on a supervisor’s individual likes and dislikes. I/O psychologists design evaluations that avoid the potential pitfalls of subjectivity and personal preference. Designing and implementing high-quality performance evaluations are covered in detail in Chapter 4.

Find Out for Yourself: The Employee Life Cycle

Figure 1.2 provides an example of the employee life cycle. While each of these stages is discussed in detail in one or more chapters of this book, it will be helpful to familiarize yourself with them early on. Keep in mind that there are similarities and differences in employee life cycles across various jobs and industries. While the cycle is largely the same, the speci�ic processes have subtle but important differences.

Figure 1.2: The employee life cycle model

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Employee Training and Development

One of the constants in the working world is that things are constantly changing. Technology, products, strategies, services—so much about a job can change so rapidly that all employees must continue to learn, rookies and veterans alike. I/O psychologists research and develop the most effective ways to train employees and maximize transfer of knowledge to the learner. You will learn about these topics in Chapter 5.

Employee Motivation

Many aspects of the work environment affect employee motivation, such as pay, bene�its, recognition, job security, the quality of leadership, and the physical and psychological work climate. I/O psychologists work to identify and modify these conditions and others in order to provide motivating jobs and work environment. Chapter 6 addresses work motivation.

Organizational Processes

I/O psychologists are concerned with studying, understanding, facilitating, and increasing the effectiveness of organizational processes such as leadership, communication, decision making, problem solving, creativity, and group dynamics. Chapters 7, 8, and 9 focus on these critical organizational processes.

Employee Safety and Wellness

Managers are constantly searching for ways to increase worker productivity. Workers who feel safe, have an appropriate work–life balance, and are healthy tend to be the most productive. I/O psychologists help organizations create work environments that support employee health and wellness and reduce the damaging effects of physical hazards as well as the psychological risks of excessive stress and burnout. These topics are covered in Chapter 10.

Organizational Outcomes

The principles and methodology of I/O psychology can be an organization’s most important tool as it attempts to achieve the greatest return on its most important asset—its people. I/O psychologists recognize that pro�it and �inancial performance are valuable indicators of an organization’s success, even in not-for-pro�it enterprises. Even if �inancial success were an organization’s only reason for hiring an I/O psychologist, the organization’s managers would soon discover that they had made a good investment. The following section offers some ways in which I/O psychologists can contribute to an organization’s bottom line.

Reducing Employee Turnover Consider the costly problem of employee turnover. Whenever an employee quits, the company loses the investment it made in recruiting, selecting, and training that person. The company must then spend additional money to hire and train a replacement, during which time the company is short an employee. The ultimate cost of turnover can reach three times the original employee’s salary (Cascio, 2000). Programs devised and applied by I/O psychologists can improve retention and reduce turnover. For example, at Mutual of Omaha, a Fortune 500 company that provides insurance and �inancial services, a successful turnover reduction program reduced turnover by 15%, which in turn yielded $250,000 in savings for 3 consecutive years (Noon, 2004). Even in minimum wage jobs, replacing an employee has been found to cost as much as $5,000 (Mushrush, 2016).

Reducing Absenteeism

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Bradford Veley/CartoonStock

Another costly problem organizations face is absenteeism. Organizations lose a large amount of money when their employees don’t show up for work: projects stall, customers can’t be helped, and products can’t be made or sold. According to a study by the Society for Human Resource Management (SHRM) and Kronos Inc., U.S. companies spent over 20% of their payroll in 2013 on costs associated with absenteeism. European companies spent almost double that percentage (Lacapo, 2014). Examples of these expenses include the cost of hiring temporary workers or paying overtime to existing workers. Temporary workers cost about 15% more than permanent workers, and overtime can cost 30% to 40% more than the regular rate. Also keep in mind that replacement workers are only 70% to 80% as ef�icient as permanent workers and that absenteeism slows down the productivity of coworkers by about 20% (Bass & Fleury, 2011).

I/O psychologists can devise and apply techniques that reduce absenteeism, resulting in substantial savings for a business. For example, a nonpro�it hospital with 3,000 employees estimated that it saved $50,000 in 1 year simply by heeding a consulting psychologist’s advice to implement a positive incentive program to control absenteeism. In this program, employees were allowed to convert some of their unused paid sick leave into additional pay or paid vacation time (Schlotzhauer & Rose, 1985). The original use-it-or-lose-it policy may have triggered excessive sick leave and an entitlement mentality in which employees used their sick-leave days whether they were sick or not. In another study, contingent rewards such as public feedback and �inancial incentives were shown to successfully reduce unplanned absences among grocery store employees (Camden, Prince, & Ludwig, 2011).

In times of economic instability, however, many employees do not use their paid time off in order to cash it in, or even forfeit much-needed sick leave and vacation time for fear of losing their jobs, which can be detrimental to health and well-being. For example, much like how sleep

is necessary for optimal functioning, vacations have a similar positive impact on physical, mental, and psychological health (de Bloom, Radstaak, & Geurts, 2014). Thus, a balance is needed between strict attendance policies and �lexibility to allow workers to stay healthy, recover from illness, and attend to personal matters.

Improving Employee Attitudes Research also shows that positive employee attitudes such as job satisfaction, engagement, and organizational commitment can reduce grievances and other labor disputes as well as decrease absenteeism, turnover, work slowdowns, faulty products, and accidents. These are major �inancial concerns for businesses today. Research by the Gallup Organization, such as the Q12 employee engagement report you reviewed earlier, strongly supports that organizations with high employee-engagement scores have 3.9 times the earnings per share growth rate of organizations with lower employee engagement scores (Harter et al., 2002). Thus, corporate leaders call on I/O psychologists to improve employees’ attitudes toward both their jobs and their organization as a whole.

Consider This: Your Dream Job

Imagine that you have the opportunity to design your dream job. Make a list of all the characteristics this job would have: title, duties and responsibilities, salary, bene�its, incentives, working conditions, performance standards, promotion criteria, who you will report to, and how many employees you will manage (if any).

Questions to Consider

1. What KSAOs can you bring to this job? What should be the selection criteria for the right candidate for this job?

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2. What do you expect your attitudes to be toward your job and your organization? Will you be satis�ied? Engaged? Motivated? Happy? Committed?

3. What do you expect your behaviors to be if you get this job? Will you go above and beyond your direct responsibilities to give better service to your customers? Will you volunteer for additional projects that help your organization grow, even if you do not receive additional compensation for them? Will you consider leaving the organization for a better offer?

Maintaining Employee Rights and Dignity Creating jobs and work environments that maintain workers’ human rights and dignity is a critical mission within I/O psychology. I/O psychologists help organizations maintain their employees’ legal rights by complying with labor laws that pertain to various aspects of the workplace, such as hiring and �iring, compensation and bene�its, training and development, promotions and discipline, and others that you will learn about throughout this text.

However, legal compliance is not suf�icient to show workers respect and dignity. A person’s work life is critical for his or her self-identity and self-esteem (Gioia, Patvardhan, Hamilton, & Corley, 2013). Employees perceive themselves to be treated with dignity when their employers go beyond the letter of the law to provide jobs that offer additional dimensions such as meaningful work, personal accountability, and respectful treatment from those who supervise and lead them (Rucci, 2008).

What can I/O psychologists do to enhance employee dignity? One factor they can help improve is employees’ feeling that they have contributed to the organization’s success, which studies have shown in�luences job satisfaction. I/O psychologists can work with organizations to establish a closer �it between workers’ skills and key job requirements so that workers are able to use their skills and abilities to perform their jobs successfully. As discussed earlier, these factors have been shown to increase organizational commitment and employee engagement, with notable impact on the organization’s bottom line.

Employee dignity is also enhanced by employee-centered leaders. I/O psychologists have discovered that leaders who show an interest in their employees’ development, empower and challenge their employees, and encourage creative work can enhance employee dignity by creating a compelling, purposeful organizational environment. Employee-centered leaders not only elicit greater performance from their workers that translates into company pro�its (Colbert, Kristof-Brown, Bradley, & Barrick, 2008); they also have more productive, satis�ied, and committed employees, as well as high-performing teams and organizations (Banks, McCauley, Gardner, & Guler, 2016).

Consider This: Employee-Centered Leaders

1. Who is or was your favorite leader or mentor? What characteristics did you value in this person? 2. Think about the way this leader related to you or others. What made the strongest impact on you,

and why? 3. Who is or was the worst leader you have ever had? Why?

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1.5 I/O Psychology as a Profession

I/O psychology is a diverse �ield with a variety of professional opportunities. Many I/O psychologists work in business positions that deal with worker productivity, employee training and assessment, and HR. Others work in research or hold academic positions. For the experienced I/O psychologist, consulting is another option. But regardless of which position an I/O psychologist decides to pursue, the �irst step is to obtain the appropriate experience.

Educational, Licensing, and Certi�ication Requirements

I/O psychologists actively contribute to the workplace with both their research and applications. However, to be able to contribute effectively, they need to be appropriately educated and trained. Based on the results of the SIOP 2016 Income & Employment Survey (Poteet, Parker, Herman, DuVernet, & Conley, 2017), there is a strong emphasis in the �ield of I/O psychology on completing higher education. For example, most SIOP members have at least a master’s degree, and the majority have a doctorate. This trend is re�lective of the psychology profession in general. Most psychologists �ind it necessary to earn graduate degrees and professional certi�ications in order to advance their careers or further the scope of their practices. Therefore, education and experience are highly valued in this profession.

Although there is no speci�ic licensure for I/O professionals and the current licensure tests are weighted heavily in the clinical domain, I/O psychologists who are licensed in speci�ic �ields are in higher demand than nonlicensed ones, and they earn signi�icantly more (Poteet et al., 2017). Examples of licenses and certi�ications pursued by I/O psychologists include licenses in clinical, counseling, and school psychology; HR professional certi�ications granted through the SHRM or the Human Resource Certi�ication Institute; training and development certi�ications granted through the Association for Talent Development (ATD; formerly the American Society for Training and Development); and nonpsychology certi�ications such as Project Management and Lean Six Sigma (quality management and continuous improvement). Each of these licenses and certi�ications requires a preset number of examinations and professional development hours. Finally, many of the licenses are state governed and may vary from state to state.

Find Out for Yourself: State- and Domain-Speci�ic Licensures

The American Counseling Association website provides links to various state licensing boards. Visit the website to research licensure requirements in your own state or for any state you would consider working in.

American Counseling Association: Licensure & Certi�ication (http://www.counseling.org/knowledge- center/licensure-requirements/state-professional-counselor-licensure-boards)

Career Paths for I/O Psychologists

According to the SIOP 2016 Income & Employment Survey (Poteet et al., 2017), about 51% of I/O psychologists work in the private sector, with the majority of this group working for consulting �irms. Another 28.8% hold academic positions in educational institutions. Only 8.8% work for the public sector, and another 5.5% work for nonpro�its. The majority of I/O psychologists in�luence business organizations directly through their employment or consulting, or indirectly by teaching future generations of I/O psychologists or conducting research that can bene�it the practice of I/O psychology in organizations.

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Business Organizations Many private sector business organizations now hire I/O psychologists, including manufacturing, health care, pharmaceuticals, retail, transportation, banking, insurance, energy, and information technology (see Table 1.1). An I/O psychologist’s role depends on the job site. For example, in manufacturing and health care, roles may relate more to safety and wellness. In high-volume retail and mass transportation, emphasis may be placed on logistics and business process ef�iciencies, such as increasing productivity and quality and reducing waste. Banking and insurance may emphasize mainstream HR functions such as employee selection, training, and performance appraisal.

Table 1.1: I/O psychology job types and hiring organizations

Job types Hiring organizations

Management Consultant AppleOne

Organizational Development Consultant FedEx Of�ice and Print Services, Inc.

Compensation Analyst GM Financial

Project Manager Bio-Rad Laboratories

Leadership Selection and Assessment Specialist Cisco

Research Manager J.D. Power and Associates

Senior User Experience Researcher Macy’s

Human Resources Analyst Vertafore

Talent Acquisition Recruiter ACCO Brands

Executive Compensation Consultant Allstate

Operational Psychologist Booz Allen Hamilton Inc.

Manager, Talent Acquisition Comcast

Most Fortune 100 companies maintain in-house I/O psychologists. I/O psychologists may occupy positions in the HR department, such as vice president of HR, HR director, and HR manager; or they may specialize in selection, compensation, training, bene�its, performance appraisal, safety, or wellness. They can also hold consultative, research, or project-based positions such as organizational development specialist, personnel psychologist, compensation analyst, project manager, behavioral scientist, or senior researcher.

Consulting Firms I/O psychologists can be the sole owners of consulting �irms. They can also have partners with whom they jointly own the consulting practice. Some I/O psychologists may also be employed by consulting �irms without having any ownership interest in those �irms. They may occupy senior leadership, middle management, or entry-level positions in these �irms.

Typically, consulting �irms that employ I/O psychologists provide the same types of services discussed earlier (selection, training, performance management, and organizational change) for organizations that prefer to outsource these services to external consultants rather than hiring I/O psychologists to perform these services in-house. An organization that has full-time I/O psychologists and other HR professionals on its payroll may also seek the services of a consulting �irm for highly specialized or complex business needs. Furthermore, an external consulting �irm may be hired to back up and enhance the credibility of the initiatives pioneered in-house. Small companies that cannot afford to staff in-house I/O psychologists full time may hire consultants for speci�ic projects, such as to design a performance appraisal system or a training program.

Academic Institutions

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Similar to those in most positions within higher education, I/O psychologists typically have a doctorate degree, and most often progress through the academic titles of assistant professor, associate professor, full professor, emeritus professor, and department chair. Some academics also occupy the nonpermanent roles of lecturer or adjunct professor, often in conjunction with other employment or during career transitions. Others progress to administrative roles in academic institutions such as college dean, provost, vice president, or president.

Like many academics, I/O psychologists who work in academia have three primary roles: teaching, research, and service. Although teaching is the most visible role, academically oriented I/O psychologists spend a substantial portion of their time and energy conducting research to further knowledge in their �ields. They also serve in many capacities within and outside their employing organizations. For example, they can serve on expert panels in academic, professional, industry, community, and political settings and as editors and reviewers of academic and popular publications.

Government, Public, and Nonpro�it Organizations I/O psychologists are frequently hired in federal and local government organizations. The U.S. Of�ice of Personnel Management, which is responsible for placement, training, and conducting background checks for government jobs, develops and implements all selection tests for civil service jobs (e.g., Postal Service, air traf�ic control, Border Patrol). I/O psychologists also play an important role for state and municipal governments. Because these entities are held to a high standard when selecting state and local civil servants such as police and �ire�ighters, I/O psychologists are tasked with selecting personnel who meet state and local civil service requirements.

Similarly, the U.S. military uses I/O psychologists to execute its extensive testing program, and the U.S. Army Research Institute employs some of the top I/O psychology researchers. Their mission is to apply research related to leadership, motivation, personnel replacement, and human–machine interaction to create the most competent military in the world. The U.S. Army, U.S. Air Force, U.S. Navy, and other armed forces also employ I/O psychologists to design and assess training and to monitor important well-being indicators such as post-traumatic stress disorder. I/O psychologists who work or consult for the military often need to obtain and maintain security clearances and are given permission to access classi�ied information only after completing a thorough background check.

Find Out for Yourself: I/O Psychology as a Career

Review the following websites, then answer the questions that follow.

What Do I/O Psychologists Really Do? (http://www.siop.org/psychatwork.aspx)

Society for Industrial and Organizational Psychology JobNet (http://www.siop.org/jobnet/default.aspx)

Society for Human Resource Management Jobs (http://jobs.shrm.org/)

What Did You Learn?

1. Which industries are currently hiring I/O psychologists? 2. What are some common themes? What do you think it takes to land a job as an I/O psychologist? 3. If you were to choose I/O psychology as a career, what are some of the tasks you might perform? 4. How could you as an I/O psychologist help a past, current, or future employer achieve his or her

�inancial objectives? What speci�ic activities would you perform for this organization?

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Hemera/Thinkstock

The U.S. workforce is becoming increasingly diverse, with more women and minorities seeking employment. This offers organizations the opportunity to leverage the skills of a diverse workforce in ways that bene�it the company.

1.6 Organization Challenges and Opportunities for I/O Psychology

Today’s organizations face a greater rate of change than ever before, in terms of economic and demographic factors, technology, and leadership. These realities pose a number of challenges and opportunities.

Economic Factors

The collapse of the dot-com bubble in the late 1990s and early 2000s left many technology workers displaced or underemployed. The current economy has led to instability among organizations and their employees, and the 2008 economic crisis and slow recovery have forced many companies to rethink their business strategies. The ever- expanding global marketplace has not only challenged domestic companies to create innovative products faster and bring them to market sooner, it has also led U.S. jobs to be increasingly outsourced to countries where labor is less expensive. The oil and gas industry is facing unprecedented competitive challenges, leading to across-the-board layoffs and economic problems in states such as Texas. Massive federal student loans and limited employment prospects are anticipated to lead to another economic downturn as the default rate increases, expanding the already ballooning government debt.

I/O psychologists have an important role to play in such hard economic times. They can serve members of the workforce by facilitating their placement, onboarding, and continuous development. Examples of an I/O psychologist’s work in these areas include redesigning jobs to increase ef�iciency, effectiveness, productivity, and global competitiveness; retraining displaced employees; redesigning jobs to capitalize on existing skill sets; and rethinking training and development to emphasize transferable competencies rather than narrow skills.

Demographic Factors

Within the United States the demographic makeup of the workforce is rapidly changing. For example, in 2011, for the �irst time in American history, there were 1 million more female than male college graduates, meaning more women are expected to enter the workforce (Francese, 2011). Moreover, for the �irst time in history, the workplace includes �ive generations working side by side: the traditionalists, born before 1946; the baby boomers, born from 1946 to 1964; Generation X, born from 1965 to 1976; Generation Y, also referred to as millennials, born from 1977 to 1997; and now Generation Z, born after 1997 and just entering the workforce (Meister & Willyerd, 2010). Many traditionalists and baby boomers delayed their retirement due to increased life expectancy, better health, and depleted savings as a result of the 2008 economic recession. However, many are now retiring or will be retiring soon, and the millennial generation is replacing them at record pace. With 80 million millennials, 1 in every 2 employees in today’s workforce belongs to this group, which is predicted to constitute 75% of the global workforce by 2025 (Schawbel, 2013). In a few years, similar trends are anticipated for Generation Z.

These demographic changes are resulting in two trends. First, as the traditionalists and baby boomers leave the workforce, organizations experience a “brain drain.” Potential replacements must go through a steep learning curve to acquire the same levels of knowledge, skills, and experience needed to adequately replace baby boomer and traditionalist retirees. Second, millennials and Generation Z differ in their mind-sets, priorities, and work expectations, which will likely result in notable changes in jobs and organizational structures, cultures, and processes to �it these generations’ workstyle, attitudes, and motivations. For example, millennials are independent,

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creative, and technologically savvy. They do not trust or defer to authority as readily as previous generations did. They have higher expectations of their employers that go beyond pay and bene�its, including being socially responsible and making a difference in the world. They view work as a means to an end, with the end being personal ful�illment and a meaningful, balanced life. Generation Z is even more technologically savvy, but more calculating and �inancially minded. These changes are strongly aligned with I/O psychologists’ training in job and organizational design, workforce development, and performance management, which can facilitate the necessary adaptations of jobs and organizations to meet millennials’ needs and aspirations.

Find Out for Yourself: Millennials and Generation Z

Watch the following two videos for additional insights about millennials and Generation Z.

Millennials Now Biggest Part of Workforce (http://www.cbsnews.com/videos/millennials-now-biggest- part-of-workforce/)

Gen-Z Matters More Than Millennials (https://www.youtube.com/channel/UCyz6-taovlaOkPsPtK4KNEg? v=Y8mZx4o32vs)

What Did You Learn?

1. Are these videos re�lective of you or of members of these two generations that you know? 2. Do you �ind it easier/harder to work with one particular generation than the others? In what ways?

In addition to gender and age changes, workforce demographics are becoming more ethnically diverse. The 2010 census shows that persons of color, including African Americans, Hispanics, and Asian Americans, account for 35% of the population. By 2042 this number will climb even higher, with Caucasians predicted to constitute only 42% of the population. These demographic changes also in�luence the levels of education in the workforce, which, although increasing across the board, tend to be substantially lower among ethnic minorities (National Center for Education Statistics, 2016).

Although attainment of higher levels of education is on the rise, the quality and competitiveness of U.S. education is declining rapidly. When compared to the Organisation for Economic Co-operation and Development averages, U.S. high school students rank as average or below average in math, science, and reading, behind China, Korea, Singapore, Hong Kong, Japan, Canada, and a number of western and eastern European countries (Ryan, 2013). As attainment of higher education levels increases while quality decreases, wages and job-related educational requirements have to be adjusted accordingly, as do training needs to �ill knowledge gaps. I/O psychologists are well positioned to help equip future generations of employees with the competencies they need to be successful despite educational de�iciencies. Collaboration between employers and educational institutions is also growing in an attempt to improve the rigor and relevance of education, which opens doors for I/O psychologists to contribute to the quality and competitiveness of education.

Technology

With the help of portable technology and instant telecommunications, organizations are increasingly hiring employees who work off-site, whether across town or across the globe. These workers can telecommute from a home of�ice, e-mail and text message from a coffee shop, telephone from an airport while traveling, or teleconference

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from a hotel room. This dramatic shift in where and how people work is an outgrowth of the information age, and I/O psychologists must help organizations transition to a virtual work environment by creating effective tools for selecting people who will be successful in it. They must also train managers how to effectively coach, manage, and communicate with employees they may never meet face-to-face.

Moreover, social media has become a primary source of attracting, hiring, and retaining talent. For example, companies such as Google use social media to create “alumni networks” in order to stay in touch with former employees. Using social media to recruit, select, and retain employees is a prime area for I/O psychology research and application.

Leadership Challenges

Leaders in today’s organizations are faced with a number of challenges, many of which I/O psychologists can help overcome. For example, unethical behavior is on the rise and has become widespread at many levels in corporate America. I/O psychologists now face the challenge and opportunity of studying why some people, especially leaders, engage in unethical behaviors while others resist the temptation to do so. New selection tools and development programs are emerging from this research and becoming more commonly used to effectively develop and manage organizational ethics. Related areas receiving much emphasis and media attention include corporate social responsibility, sustainability, and environmental issues. As mentioned earlier, these are important concerns for the millennial generation. As millennials rise through the ranks and begin to dominate leadership positions, these areas are likely to be prioritized in terms of job and organizational design, hiring, motivation, and retention, all of which are within the scope of I/O psychologists’ roles within organizations.

Unfortunately, many of the scienti�ic and evidence-based tools and methods created by I/O psychologists may be overlooked by managers and decision makers who tend to favor intuition and instincts. For example, when making hiring decisions, some managers still say things like, “I know a great employee when I see one.” However, as you will learn in upcoming chapters, without accurate selection tools, a manager’s chances of making a successful hire may be no better than a coin �lip. Erroneous hires are not only detrimental to productivity, they may also expose the organization to substantial litigation costs and negative publicity. I/O psychologists can help develop assessments that identify which people will work best in a variety of positions across different job sectors. Although managers are gradually becoming more aware of the importance of evidence-based practices, there is a long way to go. I/O psychologists thus have a critical role to play in promoting application and bridging the gap between science and practice.

I/O psychologists can also play an important role in helping managers assess and improve employee engagement. The ongoing economic recession has taken a toll on workers. The stress of continued layoffs and, for those who still have jobs, burnout from increased workloads has often resulted in disengagement. In 2010 Aon Hewitt Associates consulting �irm found that since the start of the 2008 recession, employee engagement slipped dramatically. In fact, up to 60% of the employee population was thinking about changing jobs once the labor market improved. Although I/O psychologists cannot change the economic situation, they can help managers understand what makes employees feel engaged and help them maintain their engagement in spite of the economy. As this chapter has shown, employees want leaders who value employees. Managers can formally show their appreciation by introducing programs such as pro�it sharing and �lextime and by providing clear advancement opportunities. However, managers should also act in more informal, non-work-related ways to convey their appreciation for employees; this can be as simple as engaging an employee in a conversation that has nothing to do with his or her job. In the end, however, the thing that leads to true satisfaction for most employees is timely recognition for a job well done.

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Summary and Conclusion

There is signi�icant support for the notion that people are an organization’s most important asset. They are not just an expense or cost of doing business; rather, they are an investment that can realize quanti�iable returns and determine an organization’s success or failure. I/O psychology is a science that uses the methods, facts, and principles of psychology to enhance employee productivity, satisfaction, engagement, and well-being, and it has been shown to increase organizational ef�iciency, effectiveness, and competitive advantage.

Whether working in academia or for the private sector, the government, the military, a nonpro�it organization, or as a consultant, I/O psychologists help organizations make critical human capital decisions. Examples include designing motivating jobs, selecting the right candidates, training employees, accurately evaluating job performance, managing absenteeism and turnover, developing effective leaders, and avoiding discriminatory litigation.

The business world is rapidly changing, and I/O psychology can help address many issues that management fads cannot. This book introduces the interesting world of I/O psychology. It provides an overview of the established knowledge in the �ield as well as new and emerging approaches that will signi�icantly impact the way organizations do business. There are plenty of opportunities to apply I/O psychology principles to everyday thinking and activities. Even for those who do not intend to specialize in I/O psychology, the information in this course is foundational for becoming an effective contributor to any organization.

Chapter 1 Flashcards

Key Terms

action research

career

employee life cycle

Hawthorne effect

Choose a Study ModeView this study set

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human relations

industrial/organizational (I/O) psychology

industrial psychology

job

job family

occupation

organizational climate

organizational culture

organizational development

organizational psychology

people costs

positive organizational behavior (POB)

positive organizational scholarship (POS)

psychological capital (PsyCap)

psychological climate

scienti�ic management

task

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Learning Outcomes

After reading this chapter, you should be able to

Describe the critical stages of a job analysis.

Explain why recruiting practices are important to organizations.

Be familiar with initial screening tools for employee selection.

Create effective employee interviews.

Understand laws that impact employee selection practices.

Apply positive psychology to employee selection.

2Employee Selection

Stockbyte/Thinkstock

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2.1 The Importance of Employee Selection

Think about the following scenario: Your employer or favorite shopping place is experiencing signi�icant growth and needs to hire 20 new customer service representatives over the next 2 months. This can be an exciting time for the organization. The company is growing, and additional employees will ensure continued growth and increased revenue. Hiring these new employees, however, may pose some challenges. First, where will the company �ind quali�ied candidates for the new positions, and how will it encourage them to apply for the jobs? The company anticipates more than 200 people will apply for the 20 open positions. How will it screen the résumés and applications so as to identify the most quali�ied individuals? Additionally, who will conduct the interviews, and more importantly, how will the interviewers discern which applicants have the skills and abilities to best serve the company’s customers? Finally, how will the company ensure that each stage of the selection process is legal, ethical, and fair?

Most organizations encounter these challenges when they have to hire new employees. A common concern is the cost of hiring, which can be very expensive. There is the cost of advertising the job opening, which may include buying print ads, online ads, posting to a bulletin board, renting a booth at a job fair, or even paying a recruitment agency. Then there are the costs of processing the applications, screening the applicants, contacting prospective interviewees, and testing and interviewing applicants. These costs include not only the time of the organization’s HR employees and hiring managers, but also opportunity costs, or productivity sacri�iced because their time is not being spent on other productive activities. Once an employee is selected, there are costs associated with orientation and training to get that employee ready to perform. Because the new employee is now on the organization’s payroll, the costs of this orientation and training phase include both the manager’s and the employee’s time and opportunity costs.

Although hiring costs are high, hiring the wrong person can be even more costly. A Harvard University study estimated that 80% of turnover can be attributed to faulty hiring decisions (Yager, 2016). Turnover rate is the percentage of all the employees in an organization who leave in a given year. Turnover can be more expensive than hiring. When employees leave an organization, not only does the hiring process have to be repeated to �ill the vacancy, but there are also the costs of separating the departing employee, including time spent by HR employees and hiring managers, as well as any severance pay that may be due to the employee. The organization may never recover any returns on its investment in the departing employee’s training, or worse, this knowledge—as well as any intellectual property that the employee might have learned about—can go directly to a competitor who hires the separated employee.

Many of the problems that can lead to turnover—or to less extreme but still counterproductive and costly alternatives such as absenteeism, disengagement, job dissatisfaction, and lack of organizational commitment—can be avoided through better hiring, which should start with a careful process of proactive planning and analysis. I/O psychologists play an important role in helping organizations design and implement effective selection processes. In this chapter, we describe how I/O psychologists gather information about the work functions of an open job position, as well as what characteristics a worker needs to have for the job to be done successfully. Then we review the most effective ways to recruit candidates for a job, design initial screening methods, and establish fair selection processes.

Find Out for Yourself: Hiring Costs

1. Visit several recruitment websites such as Monster and Ladders. How much does it cost to advertise a job opening?

2. Research turnover rates at http://www.bls.gov/jlt (http://www.bls.gov/jlt) / in industries that are of interest to you. Are you surprised by the numbers you found?

3. Contact an organization to which you have access, such as your employer, the employer of a family member or friend, your bank, your grocery store, or your favorite fast-food restaurant or café. Ask

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how many applicants the organization usually gets per job opening. How much time does the manager spend processing each applicant? How long does it take to train a new employee?

4. How many employees work at that location, and how many left last year? Calculate the turnover rate.

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2.2 Job Analysis

Think about your current or past job. Begin by listing all the tasks and duties you must complete to perform the job. If you have trouble coming up with a complete list, start by thinking about a speci�ic day, like last Monday. What did you do to start your day? What happened after lunch? Before you left for the day? Now that you’ve identi�ied your regular job tasks, think about activities that you perform less frequently, perhaps on a monthly, quarterly, or annual basis. Be sure to add these to your list. Once you’ve identi�ied as many tasks as possible, indicate the level of importance for and amount of time spent on each one.

Now take a moment to think about the characteristics that would enable a person to perform these tasks successfully. For example, what technical knowledge might someone need to do your job? Would a worker need certain innate abilities, such as good judgment, critical-thinking ability, or strong communication skills? What other KSAOs are necessary for a person to perform this job?

Congratulations! By completing this exercise, you have created a basic job analysis, which is the systematic study of a speci�ic job based on information about its directly observable and veri�iable job tasks and worker behaviors (Morgeson & Dierdorff, 2011). Organizations use a similar process to collect information about jobs and the people who perform them. See the feature box Consider This: Job Analysis for a more sophisticated example.

Consider This: Job Analysis

Any job, even a simple one, can bene�it from job analysis. Read the sample from the Staf�ing-and-Recruiting- Essentials.com website to see a job analysis for a �inancial services salesperson.

Sample Job Analysis (http://www.staf�ing-and-recruiting-essentials.com/Sample-Job- Analysis.html#axzz4BNq2eiie)

Questions to Consider

1. Imagine you are applying for this type of job. What new information did you learn about it from reading this job analysis?

2. Now imagine you are the hiring manager for this position. What new insights did you gain from reading this job analysis?

3. If you were a competitor, which of the items listed on the job analysis would you include? Which ones would you eliminate? What would you add?

What Is Job Analysis?

The goal of a job analysis is to clearly understand what work is performed for a speci�ic job. Typically, a job analysis will include three pieces of information:

job tasks, worker requirements, and contextual factors.

The foundation for all job analyses is to clearly de�ine a speci�ic job’s tasks. Analyzing tasks provides a clear picture of what a worker does in the job. Tasks should be observable or veri�iable and recorded in the form of action statements. Here are examples of a few of the major tasks performed by a bank teller:

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iStockphoto/Thinkstock

The skills and abilities required for an of�ice job are different from those required for an assembly line job.

greeting customers who enter the bank, counting money back to a client, and answering customers’ questions about their account.

Greeting customers and counting money are observable behaviors. Whether the teller has adequately and correctly answered a customer’s question may not be as readily observable, but it can be veri�ied by assessing the customer’s satisfaction with the answer (e.g., by using a customer survey) or by comparing the answer the teller gave with an accurate source of information (e.g., a policy manual or a product brochure).

Sometimes, tasks will be combined into broader categories called responsibilities. Responsibilities are groups of related tasks that represent a generic behavior, which helps accomplish major goals (Cunningham, 1996). The three tasks listed for the bank teller, for example, could form a responsibility called “providing customer service.”

Second, a job analysis will include information about the speci�ic worker characteristics needed to perform a job’s tasks (Sackett & Laczo, 2003). These characteristics are unique to each job; they are composed of speci�ic knowledge, skills, abilities, and other characteristics (KSAOs). Knowledge is a set of related facts and information about a speci�ic �ield or work domain. For example, a bank teller probably needs to know bank policies and procedures, industry regulations, and bank product and service information. Skills are the minimum level of competency at which a worker must perform a task. Our bank teller may need to show competency in many different skills, such as typing, money counting, and data entry. Although workers can acquire skills, abilities are innate characteristics, such as cognitive, psychomotor, and physical capabilities. In short, they are a person’s enduring basic aptitude for performing a range of activities (Fleishman, Costanza, & Marshall-Mies, 1999). Other characteristics are all other relevant personal factors needed for a particular job, such as personality and motivational traits, experience, licensure, education, and certi�ication. For example, a bank teller might ideally have an extroverted personality, be motivated to serve customers, possess previous customer service experience and a high school diploma, and have a clean criminal background check.

Recently, there has been an increasing emphasis on competencies rather than on KSAOs. This is because a competency is a much broader cluster of KSAOs that is transferable and adaptable across jobs, which is necessary in today’s continuously changing business environment (Gangani, McLean, & Braden, 2006). For example, specifying the software programs an administrative assistant is required to use is not very useful, since many of these will become obsolete over time. However, the broader competency “technological literacy” can be used. Besides avoiding having to reanalyze a job every time new and relevant software programs become available, including this competency in job analysis implies that the job incumbent is expected to stay up-to-date on new programs in order to maintain a current skill set. This is becoming a more realistic job expectation than mastering a predetermined set of programs. Similarly, the broader and more encompassing competency of “effective communication” can replace speci�ic tasks such as answering phones, meeting and greeting clients, and responding to correspondence. This competency is more re�lective of the wide range of activities an administrative assistant must undertake in order to perform his or her job effectively, as well as the important capacity to adapt one’s communication modes and style to the situation at hand.

Find Out for Yourself: Competencies of a Trainer

Training and development are important areas through which an organization maintains its workforce’s KSAOs and competencies. U.S. organizations spend billions of dollars annually to train and develop their employees, and a large portion of these activities involve a professional trainer. Review the following page from the ATD’s website, which describes the competencies that a trainer needs to master in order to deliver effective training and development.

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The ATD Competency Model (https://www.td.org/Certi�ication/Competency-Model)

The �inal piece of a job analysis deals with the context in which a job is performed (Berry, 2003). Job context consists of the external factors that in�luence the way work is performed, and it can be examined according to a variety of aspects. For example, a job’s social context includes a worker’s interactions with team members, customers, and managers. Jobs that involve signi�icant interpersonal interaction require employees to have exceptional teamwork and social skills. The same job could also be examined according to its physical context, which includes all environmental factors, such as background noise, temperature, and lighting, as well as whether a person sits or stands while working and whether the job is performed inside or outdoors. Clearly, job context is important in determining what a worker needs to perform at his or her best.

The organizational data a company needs can often be generated by systematically studying its jobs—in other words, by performing job analyses. Job analysis is often used to create job descriptions and job speci�ications. A job description identi�ies what a worker is expected to do to perform a job. It can also be used to design job recruitment postings or compensation programs. A job speci�ication describes the quali�ications of the ideal candidate for the job, in terms of KSAOs, competencies, education, experience, and other tangible characteristics.

Additionally, organizations can use job-analysis data to classify jobs into job families, which is necessary for constructing effective multilevel systems of compensation as well as paths employees can follow as they change jobs within the company. Perhaps job-analysis data is most critically used to develop and prepare measures to select employees and appraise their performance. Table 2.1 summarizes some of the uses of job analysis.

Table 2.1: Uses of job-analysis information

Type of uses Types of job-analysis information

Job descriptions Tasks performed, worker requirements, contextual information

Recruiting Tasks performed, worker requirements, contextual information

Employee selection Tasks performed, worker requirements

Compensation evaluation Tasks performed

Training and development Tasks performed, worker requirements

Job classi�ication Tasks performed, contextual information

Placement Tasks performed, worker requirements

Find Out for Yourself: Jobs in Your Area

1. Search online for several job openings in one or two areas that interest you. 2. Read the details posted about each job. 3. Create a job analysis in which you identify the job tasks, worker requirements, and contextual factors

for each position. 4. Rank the positions according to how well they �it with your KSAOs, past experience, personal

characteristics and interests, and work context preferences.

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Consider This: Your Ideal Job

Take a few moments to think about your ideal job, then create a job analysis and describe the job context for that position.

Questions to Consider

1. What would the job duties and responsibilities be? 2. What speci�ic KSAOs do you have that would make you the best �it for this job? What are the general

competencies required? 3. How would you use your job analysis to determine the best compensation, career path, training and

development, and performance appraisal plan for this job?

Information Sources

Considering the importance of the job analysis, you may be asking yourself how I/O psychologists manage to gather all the information they need to construct this useful tool. Although they vary from job to job, information sources fall into several basic categories:

documentation, role incumbents, supervisors, and other sources of information.

Each of these provides a different perspective of a job; using all of them increases the accuracy and ef�icacy of the information collected.

Documentation Organizations may already have documents that describe certain aspects of a job. Examples include job descriptions, previous work analyses, training manuals, and operating guidelines. Generally, it’s good to start with such documents when beginning a job analysis because they are easily obtainable, contain a lot of good information, and provide a quick and ef�icient explanation of the job being analyzed. Even out-of-date documentation can provide useful comparative information as the job analysis progresses.

In addition to these internal sources, it is useful to review external documents. The U.S. government supplies job- relevant information for many types of jobs in the Dictionary of Occupational Titles, as well as online through the Occupational Information Network (O*NET) at http://www.onetonline.org (http://www.onetonline.org) /. Perusing job postings on national online job boards, such as Monster and CareerBuilder, can provide insight on how other organizations de�ine similar jobs. Finally, some professional associations for widely held jobs document the work of their members.

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Role Incumbents Because it is critical that a job analysis be accurate, it is crucial to talk to people who truly understand the job being analyzed. Role incumbents—that is, people who hold the job or have held it in the past—understand the intricate details of the job and how it is performed in the �ield. These �iner points are not often available from written sources. Communicating with role incumbents is also ethically and politically appropriate. When incumbents help de�ine their jobs, they provide insight into the job’s psychological and social contexts. They are also likely to be more committed to the outcomes of other HR processes based on the job analysis, such as performance appraisals, compensation, and promotions.

Despite the invaluable information incumbents can provide for a job analysis, keep in mind that this information is not infallible. Not all incumbents are equally able to share information about their jobs, perhaps because they lack communication skills or have poor memories. Some may intentionally provide incomplete or inaccurate information because they perceive the process as too time consuming or unimportant, or because they fear how the information will be used. It is therefore critical for the person performing the analysis to clearly explain the reasons for the study, as well as the way in which the information will be used.

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Supervisors An immediate supervisor also has a good understanding of what work is performed for a speci�ic job. Although supervisors are not typically as well acquainted with the day-to-day minutiae of a speci�ic job as job incumbents are, they can usually validate the incumbent’s information and provide additional insight into the job’s performance expectations. Additionally, unlike job incumbents, supervisors have little motivation to distort information. They also tend to have experience with multiple incumbents who have held the same job title, so they may be able to give more detailed descriptions of the job and insight into how different types of people have performed it.

Other Sources of Information Sometimes, other sources are needed to accurately describe a job. For example, if a job involves frequent interaction with customers, such as sales or customer service jobs, it can be useful to gather information from customers. Customers know how they want workers to perform their jobs. Keep in mind, though, that customer-provided information pertains to only a small portion of the job being performed.

Technical experts are another source of valuable, but limited, information. These experts can provide insights into a job’s technical or complex aspects. Examples of technical experts are engineers, lawyers, scientists, and machine technicians.

Conducting a Job Analysis

After determining what job information to measure and from whom or where to get it, the I/O psychologist must next determine how to gather it. Although there are many methods, there is really no one best way to gather information (Brannick, Levine, & Morgeson, 2007). The goal of a job analysis is to collect as much information as possible, and doing so requires more than one method (Gael, 1988). In this section, we will review the most common methods of gathering information and discuss different considerations for each one.

Observation One of the most common ways to collect job information is to simply observe people at work. With this method, an objective observer records speci�ic actions the worker performs and documents the importance of each task. Observation sessions may be as short as one 60-minute session or as long as several sessions over the course of many weeks. Typically, job analysts will observe a representative sample of job incumbents to get an accurate picture of the work. Observation yields such information as the tasks that are performed; the materials and equipment used; the work processes and procedures followed; and interactions with coworkers, subordinates, and supervisors.

As a method of gathering information, observation has mixed reviews. On the positive side, because this technique relies on direct observation, it overcomes the limitation of being dependent on the worker’s ability to recall all the relevant job details, which remains a challenge for all other collection methods. Additionally, observation enables the job analyst to learn �irsthand how and why work is performed, which in turn allows a job analyst to more accurately evaluate the quality of information provided from other methods. Despite these advantages, however, observation can be time consuming, and some jobs are not conducive to direct observation. Consider how dif�icult it would be to observe people such as doctors, engineers, scientists, or high-level managers with any sort of meaningful understanding! Finally, observation can be vulnerable to the Hawthorne effect, which was described in Chapter 1. In order to keep workers from acting abnormally while being observed, the job analyst must be as unobtrusive as possible.

Find Out for Yourself: Job Analysis Through Observation

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iStockphoto/Thinkstock

Interviews can be a great tool for gathering information for a job analysis, though interviewees’ responses may be biased.

1. Plan to observe three jobs this week. They can be at your favorite restaurant, doctor’s of�ice, bank, company cafeteria, gym, or anywhere else. Try to make your observation as unobtrusive as possible. For example, arrive early to appointments and observe as you wait.

2. Using your observations, attempt to create a job description for each position. 3. Describe the KSAOs that you would expect in the job incumbent. 4. Describe the job context. 5. Now search online for job openings that describe comparable positions. Compare your analysis to the

advertised positions to assess its accuracy.

Interviews Interviews are used to collect information from people who have direct contact with the job being analyzed, including job incumbents, supervisors, customers, and trainers for the position. The job analyst will create a structured interview that asks these people about various aspects of the job, such as tasks performed; materials and equipment used; work processes and procedures followed; and interactions with coworkers, subordinates, and supervisors. Interview questions are re�ined, and the process continues until workers begin to provide redundant information. In general, job analysts favor interviews as a way to gather information because they allow the analyst to ask clarifying questions. However, interviews can be time consuming. Another disadvantage is that interviewees may be biased in the information they share with job analysts. They may be able to deduce the purpose of the interview from the questions and shape their responses accordingly, which may not yield accurate information.

Subject Matter Expert Panels An even more ef�icient interview technique involves collecting information from a group of subject matter experts (SMEs) at the same time. Members of an SME panel could be job incumbents, supervisors, technical experts, or other people familiar with the work being analyzed. The analyst facilitates discussion among the panel members in order to create a list of the job’s major tasks and worker requirements.

The group dynamic allows the SMEs to establish consensus about information the analyst has already gathered; however, panels can sometimes become dysfunctional and produce inaccurate information. For example, when one participant dominates discussion, other knowledgeable participants may not feel comfortable sharing openly. Additionally, some participants may feel intimidated by supervisors and other higher status members of the panel, resulting in information that is skewed toward the input and opinions of the supervisor. To counteract these challenges, the job analyst must be a skilled facilitator. Limiting panel size to between 5 and 10 participants is also helpful, as is grouping SMEs into panels based on management level.

Questionnaires The information gathered from observations and interviews can be used to develop a job-analysis questionnaire. A large number of SMEs can then rate each item on the questionnaire according to criteria such as importance, frequency of task performance, dif�iculty, length of time to learn a task, and relationship of the item to the job as a whole.

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One advantage of the questionnaire is the large number of easily analyzed responses such tools can generate. With the advent of online survey tools, gathering data via questionnaires has become quicker and easier than ever before. However, long questionnaires (that contain hundreds of questions) can quickly fatigue participants, which often leads them to provide careless or incomplete responses. Naturally, such data will only increase the inaccuracy and unreliability of the resulting information.

A number of popular job-analysis questionnaires are available commercially. One widely used example is the Position Analysis Questionnaire (PAQ) developed by McCormick, Jeanneret, and Mecham (1972). The PAQ focuses on identifying worker characteristics or “elements” required by the job, rather than the speci�ic tasks performed. Managers and employees rate the PAQ’s 194 job elements on areas of importance, dif�iculty, and time required. The elements are organized into the following categories: information input, mental processes, work output, relationships with persons, job context, and other job activities and conditions. Although widely used, the PAQ seems to be better suited for blue-collar than for professional jobs.

Work Logs A work log is a detailed record of work being done. Typically, supervisors and job incumbents create work logs by pausing several times a day over the course of the job analyst’s observation period and recording all of their activities. Although used infrequently, the work log is valuable both for its low cost and the insights it provides. However, like other methods, work logs can be time consuming. They can also detract from performing a job, as workers stop working to complete the logs.

Critical Incidents Technique Originally designed to establish job requirements for military jobs, the critical incidents technique (Flanagan, 1954) is a specialized job-analysis technique. Unlike those discussed thus far, this technique does not endeavor to gather information about tasks or worker requirements. Instead, it attempts to identify behaviors that predict success and failure. Pinpointing these behaviors begins with job incumbents’ written or oral descriptions of behaviors that make the difference between success and failure in a job. These descriptions include information about the situation leading up to the success or failure; what exactly the individual did that made the action effective or ineffective; key contextual information, such as when and where the incident occurred; and the consequences of the action. Although this technique is time consuming, and infrequently used for that reason, it is a very effective way to design performance appraisals.

Job-Analysis Errors If two people perform the same job, it seems logical to assume they will describe the work in nearly the same way. As noted earlier, however, memory recall and communication skills can affect the quality of information they provide. Indeed, researchers have identi�ied a number of additional factors that in�luence job-analysis information:

Cognitive ability affects a worker’s capacity to explain the nuances of job functions (Hunter, 1986). Workers with higher conscientiousness tend to provide more detailed and accurate descriptions of their work. Contrary to what one might expect, workers with more job experience do not seem to provide greater information and insight about their jobs. A study by Richman and Quinones (1996) found that for new employees, each job experience is unique and can be easily recalled. Experienced workers, on the other hand, have performed their tasks so often that they seem to blend together. The way workers spend their time on the job can also in�luence the manner in which they describe their work. For example, high performers tend to spend more effort on important job tasks (Mullins & Kimbrough, 1988), so they may emphasize these tasks. Similarly, workers who receive more or less autonomy may change the amount of time they spend on various tasks, resulting in differences in perceived task importance.

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2.3 Employee Recruitment and Selection

Recruiting quality candidates involves much more than simply placing an ad in the paper or putting a Help Wanted sign on the front door. An organization must be able to set itself apart from others. Indeed, in 1997 Steven Hankin coined the phrase war for talent to describe the increasingly competitive world of recruiting and retaining talented employees (Chambers, Foulon, Hand�ield-Jones, Hankin, & Michaels, 1998). Today the term human capital is used to re�lect the strategic value of investing in people and the direct link between these investments and the organization’s long-term success. Hiring the best talent is big business and can ultimately mean the difference between a company’s success and failure.

A fundamental role of the I/O psychologist is to design selection processes that identify candidates who can successfully perform the functions of a speci�ic job. Doing so requires a number of key processes. First, the organization must attract the most quali�ied candidates to apply for the position. Next, the organization must use tools that help identify those applicants who possess the requisite skills to do the job. Finally, all selection processes must be fair and must not discriminate against segments of the population. It is important to note that recruitment and selection processes are related to more than just hiring, however. They also include promoting, demoting, and terminating. Although this chapter focuses on hiring new employees, most of the aspects discussed here also apply to internal movements of employees across jobs and positions. The critical aspects of each of these processes will be discussed for the remainder of this chapter.

Recruitment Sources

Organizations utilize a number of sources in their quest to identify and attract highly quali�ied job candidates. Some of the major types of recruitment sources are explained below.

Job Postings The most common job posting is the help wanted ad. Job postings tell applicants about a job’s major functions as well as information about the organization. If an organization wants to reach a wide audience, it can place postings in local or national newspapers; if, however, it is searching for an applicant with very speci�ic skills, it may post the job in a business or trade publication. However, it is expensive to advertise in print media, and such ads reach a limited number of high-quality applicants—only those who happen to be looking for a job when the job posting is published.

Internet Recruitment Almost every organization uses the Internet for recruitment—either through its corporate website, online publications, job posting sites such as CareerBuilder or Monster, or online social networks. Although Internet advertising can reach large numbers of applicants quickly, it also tends to attract many unquali�ied candidates, and sorting through all the applications can be time consuming and expensive.

Employment Agencies Employment agencies offer a full spectrum of recruitment services and will locate job candidates for a broad range of jobs. The United Way, U.S. Department of Labor, and local employment service agencies will post jobs on their websites, allowing organizations to reach a large number of people. Other agencies are more speci�ic and focus on certain types of jobs, such as sales, management, or information technology. Executive search �irms are agencies that specialize in identifying senior management candidates.

College Recruitment Colleges have long been a source of professional, technical, and management recruits. Companies are encouraged to post

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Richard Levine/age fotostock/Superstock

Companies sponsor career fairs in order to recruit the most quali�ied college graduates for jobs and internships.

jobs in career centers, on campus bulletin boards, and on college intranet sites. Additionally, college-sponsored career fairs allow company representatives to discuss job opportunities with a large number of students. During career fairs, representatives can conduct interviews with quali�ied candidates, discuss internship assignments, and even make job offers.

Employee Referrals One of a company’s best sources of recruitment is its own employees. Research has shown that applicants who have been referred by an active employee generally have lower turnover rates (Brown, Setren, & Topa, 2012). Because people who are referred can learn detailed information from the current employee about the organization, its jobs, and environment, these applicants are able to evaluate job �it

more accurately than other applicants. Interestingly, employees who refer others are also less likely to quit after making a referral (Burks, Cowgill, Hoffman, & Housman, 2013). Thus, employee referrals contribute to the retention of both referring and referred employees.

Often, organizations will notify their employees of a job opening. Employees are encouraged to refer someone who would be a good �it for the position, and they usually are compensated if their referral is hired. Typical referral bonuses are in the range of $500 to $1,000. However, organizations often compensate employees signi�icantly more for hard-to-recruit positions. For example, Piedmont Airlines, a subsidiary of American Airlines, announced a $5,000 referral bonus if a referred pilot is hired, completes training, and stays with the company for 6 months. The referred pilot also collects a $15,000 signing bonus (GlobeNewswire, 2016).

With so many options for job posting available, it may be hard to know which is best for attracting quali�ied candidates. Breaugh, Greising, Taggart, and Chen (2003) found that employee referrals (12.4%) and direct applicants (8.1%) were hired at higher rates than people recruited through job fairs (4.8%), newspapers (1.1%), or colleges (1.3%). Similarly, a meta-analysis that spans 50 years of recruitment research shows that internal sources such as employee referrals, in-house job postings, and rehiring former employees is more effective than external sources such as newspaper ads, school placement services, and employment agencies (Zottoli & Wanous, 2000). Contrary to what you might think, then, traditional job postings are often less effective than more informal, relationship-based recruitment techniques. In fact, 60% to 80% of jobs are found through networking and personal relationships, rather than formal channels (Driscoll, 2011).

Generating Applicant Pools

Once a job is posted, the �irst step in recruitment is to attract applicants whose KSAOs match the requirements of the job. In order to do so, an organization will attempt to show how it differs from other organizations, perhaps by advertising a low-stress work environment, family-friendly bene�its, great pay, or challenging and interesting work. The goal is for the organization to distinguish itself from others in a positive way, thus attracting the best job candidates.

According to much of the research, certain characteristics of a job or organization in�luence applicants’ perceptions of it. Applicants are attracted to organizations according to job types, organizational characteristics, recruiter characteristics, perceptions of the recruitment process, perceived job �it, and hiring expectations (Chapman, Uggerslev, Carroll, Piasentin, & Jones, 2005). For example, a study by Turban and Cable (2003) found that organizations with a positive reputation in their community attract more highly quali�ied job applicants than those deemed as less community-centric. Organizational characteristics such as �lexible work schedules and dependent- care assistance have also been shown to in�luence applicant attraction (Casper & Buffardi, 2004). Interestingly, job

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factors such as potential for career growth and challenging work have greater in�luence on organizational attraction than does either pay or bene�its (Lievens & Highhouse, 2003). It is important, then, that organizations consider enticements other than the traditional high pay and good bene�its when actively attracting job applicants.

Maintaining Viable Applicants

The recruitment process does not stop once an individual applies for a position. Both recruiter and applicant continue to gather information about each other to determine if there is a good �it, and their actions and interactions can in�luence each other (Higgins & Judge, 2004; Kristoff-Brown, 2000). Applicants use their early experiences with an organization to develop ideas and opinions about as-yet unknowable aspects of it (Rynes & Miller, 1983). Speci�ically, research has shown that recruiters’ interactions with job applicants in�luence applicants’ attraction to and intentions toward the organization. For example, Chapman and Webster (2006) found that recruiter friendliness is related both to applicant attraction and perceived fairness of the recruitment process. In a study of 361 on-campus interviews, Turban, Forret, and Hendrickson (1998) found that recruiters’ actions during the interview were instrumental to increasing applicants’ perceptions of both the job and the organization.

Other factors in�luence applicant perceptions. Timeliness of the selection process is particularly signi�icant (Rynes, Bretz, & Gerhart, 1991). Applicants lose patience with long, drawn-out selection processes and will be quick to exit the applicant pool if another company is faster at extending a job offer. Another important factor, especially for minority candidates, involves site visits. Studies show that if minority applicants perceive the organization to have a diverse climate, they will be more attracted to that organization (McKay & Avery, 2006). Ultimately, then, the goal is to keep applicants interested in the organization until a �inal job offer can be made to the right candidate.

Postoffer Closure

Very often, an organization’s most valued applicants are also the ones who receive multiple job offers. It is therefore critical for organizations to persuade top candidates to accept their job offers. Over the course of several recruitment phases, Boswell, Roehling, LePine, and Moynihan (2003) examined the way in which 14 job and organizational factors in�luenced whether applicants decided to accept or reject job offers. Results indicated that the factors with the greatest in�luence on acceptance decisions were nature of work (37.6%), location (37.6%), company culture (36.5%), and advancement opportunities (25.8%). Even when unemployment rates are high, applicants often turn down job offers if they receive a better counteroffer from another employer if the salary, title, or job duties do not meet their expectations or if they do not like the corporate culture (Marks, 2012). This research suggests that the recruiters must continue to work with applicants to emphasize the appeal of such factors until the applicant accepts the organization’s offer.

Realistic Job Previews

Realistic job previews attempt to give applicants a better idea of what a job is “really” like, in order to acquaint them with its positive and negative aspects. This information can be in the form of print materials such as brochures or job descriptions, interviews, videos, work samples, or even a trial period on the job. Although companies must create a positive recruitment experience to attract superior candidates, a realistic job preview, complete with the negatives, is also necessary to keep applicants from forming overly optimistic or unrealistic expectations about the job.

One large Fortune 500 company in the meat-processing industry experienced high turnover rates among its meat processors. When asked why they were leaving, many of these employees described the continuous sorting of meat parts as boring; others pointed out that it was exceedingly dif�icult to stand in the same place for 10 to 12 hours a day. Although recruiters had explained these and other challenges during the recruitment process, the exiting employees simply admitted that they “did not know it would be this hard.” To stem their departure, the company decided to take a bold step: It created a realistic 3-day job preview, during which applicants performed all functions of the job for 6 hours a day. During the preview period, the applicant could leave at any time, no questions asked. Almost immediately, turnover rates were cut in half. Even though more applicants chose to self-select out of the job

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offer during the preview period, the company was, in the end, able to �ind and hire more individuals who enjoyed doing the work.

In addition to reduced turnover, the use of realistic job previews correlates positively with job satisfaction, job performance, and organizational commitment (Ganzach, Pazy, Ohayun, & Brainin, 2002; Kammeyer-Mueller & Wanberg, 2003). There are a number of hypotheses as to why realistic job previews are so effective. One theory is that sharing a job’s negative aspects early in the recruitment process allows applicants to self-select out of jobs that are unappealing or otherwise inappropriate for them (Bretz & Judge, 1994). Additionally, evidence suggests that applicants perceive an organization that is willing to share both positive and negative information about a job as having a caring, honest, and trustworthy culture—an environment to which applicants aspire to belong (Meglino, DeNisi, Youngblood, & Williams, 1988).

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2.4 Selection Techniques

Because hiring the right employees is a vital part of creating an effective workforce, it is important to use a variety of selection techniques when choosing possible candidates. As discussed in more detail in Chapter 3, the most important characteristic of a selection technique is its power to predict future performance accurately, consistently, and without violating employment laws. Many managers believe that they know a good candidate when they see one. This notion relies on subjective and unsubstantiated judgments that can be dangerous, discriminatory, and ineffective in evaluating applicant quality. Instead, evidence-based selection tools should be used. Collecting personal history data, conducting thorough interviews, and checking references are three of the most commonly used techniques.

Personal History Data

Organizations commonly collect biographical information, or biodata, about applicants’ backgrounds. They do so based on the assumption that past experiences or job performance can be used to predict future work behavior or potential for success. Because many behaviors, values, and attitudes remain constant throughout a person’s life, this is not an unreasonable assumption. Below are some common methods of biodata collection.

Application Forms One of the most widely used selection tools is the application form. In any given year, large businesses may receive applications from millions of people. The application form is a quick and ef�icient way to begin screening applicants. The typical application form gathers two kinds of information. Some is used in the HR department for record- keeping purposes, such as the applicant’s name, address, phone number, Social Security number, and emergency contact information. Other information, such as education and work experience, is used to screen applicants against job requirements.

Although application forms can be used to quickly sample past or present behaviors, they also have many critical limitations. A study of 200 organizations found that even though most questions on application forms gathered information that was job-related and necessary for the employment decision, 95% of the applications contained one or more legally indefensible questions (Lowell & DeLoach, 1982). Although employers have since become more aware of the potential discriminatory impact of questions on application forms, problematic questions continue to persist.

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Another potential drawback of the application form is the accuracy of the information the applicant provides. Many people provide misleading or fraudulent information, especially about their previous job titles, responsibilities, pay, or education. For example, in 2001, George O’Leary resigned as Notre Dame University’s football coach after only 5 days on the job when it was discovered that he had not won three undergraduate football letters or received a master’s degree, as he had claimed in his job application material.

Biodata Inventory A biodata inventory differs from an application in that it is more systematized and makes use of the principle of behavioral consistency (i.e., the idea that past behavior predicts future behavior). A biodata inventory is a standardized questionnaire that asks about job-relevant background and experiences that are predictive of job performance. Applicants respond to multiple-choice items related to their hobbies, experiences, training, education, demographics, interests, beliefs, and values. Quality items are designed to elicit factual, observable, and veri�iable information, although items can also examine feelings, beliefs, and opinions, which provide insight into an applicant’s attitudes and personality. As you will learn in Chapter 3, I/O psychologists use scienti�ic procedures to develop and validate the quality of those items. Considerable research has found biodata inventories to be strongly predictive of job performance, though they must be designed correctly so as not to discriminate against minorities (Schmidt & Hunter, 1998).

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The process of developing a biodata inventory begins with reviewing the job analysis to determine the most critical KSAOs required to perform the job. Then subject matter experts identify background experiences that may promote the development of these critical job-related characteristics (Berry, 2003). Theoretically, applicants who share those background experiences should possess a greater capacity to perform the critical job functions.

Biodata inventories can be quite long—up to 100 items—due to the need to establish a consistent trend of behaviors and experiences that can predict behavior in the new job. Examples of biodata items include: How many books have you read in the past 6 months? How often have you started a new assignment before completing the �irst assignment? From a list of responses, the applicant must choose the one that most closely represents his or her behavior in the given situation. In order to ensure the biodata items predict job success, the responses from a large group of applicants are correlated with their subsequent job performance.

One common limitation of the biodata measure is its susceptibility to false applicant information. Ultimately, applicants want to impress the hiring organization and will often respond to biodata items according to how they think the organization wants them to respond or in ways that suggest they have the skills, abilities, values, motivation, and experiences necessary to perform the job. One way to counteract this pitfall is to design items that are observable and factual and to tell applicants that their responses may be veri�ied for accuracy.

Social Networking and Online Information Many employers �ind it easy, convenient, and highly informative to get additional insight into applicants by accessing the information they post on social networking websites and through basic online searches using tools such as Google. Networking media include professional websites such as LinkedIn and social and recreational ones such as Facebook, although the line is blurring as many employers and individuals also use Facebook and other social websites for professional networking. A Harris Poll commissioned by CareerBuilder in 2014 found that 43% of employers use social networking websites to research applicants’ backgrounds, and 51% of these employers have turned down applicants based on information they found online. Examples of inappropriate content that caused an applicant to be rejected include provocative, offensive, or discriminatory photos or language; information related to excessive drinking, drug use, or illegal actions; con�idential or negative information about current or previous employers or coworkers; having an unprofessional screen name; and poor communication skills in general. This is a good reminder that anything posted on a public-facing website will likely be searched and evaluated by potential employers, so it is important to consider what personal photos and information you post, and where.

However, on the upside, the same survey showed that a quarter to a third of employers also found information online that directly led them to hire the candidate. Examples include personality and �it with company culture, additional quali�ications and accomplishments, large followership, and evidence of professionalism, communication skills, creativity, and well-roundedness (Grasz, 2014).

The problem with social networking and online information is that it also includes personal information that can be deemed discriminatory. For example, an employer may be able to �ind information about an applicant’s race, religion, age, sexual orientation, political af�iliation, or disability. Thus, the use of social networking and online information can lead to disparate treatment or impact. Moreover, evaluating social networking and online information has been criticized for being based on recruiters’ subjectivity. However, research shows that information gathered from social and online media tends to be accurate and job related, and that independent raters’ evaluations of candidates based on this information tend to be highly consistent (Kluemper & Rosen, 2009), which re�lects the credibility of using social networking and online information.

Employment Interviews

The most frequently used selection technique is the employment interview. The interview is used for two basic purposes: to promote the organization and recruit applicants and to evaluate applicants’ suitability for a job with the organization. Most businesses will not hire an applicant without �irst meeting him or her in person. Interviews help recruiters �ill information gaps in the application, and they are effective for examining an applicant’s personality and KSAOs related to job �it.

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Unstructured Interviews Job interviews may be designed and conducted in several ways, with varying results. The usual unstructured interview, which is what most businesses conduct, is the least effective option. Such interviews tend to be an indirect and nonstandardized conversation between recruiter and applicant. The interviewer has not previously decided on speci�ic questions to ask and will most likely ask different applicants different questions. Questions are often vague, such as, “What do you think is your biggest strength?” Many interviewers do not take notes on what the applicant says and, once the interview is over, often make a subjective judgment regarding the applicant’s suitability for employment. With no numerical grading or other objective evaluation of the applicant’s interview performance, the unstructured interview can be ineffective at identifying quality candidates (Conway, Jako, & Goodman, 1995) and can lead to biased and even discriminatory decisions. For example, unstructured interviews are more susceptible to applicants’ self-presentation tactics such as impression management, appearance, and verbal and nonverbal cues that are not necessarily related to their subsequent job performance (Barrick, Shaffer, & DeGrassi, 2009).

Concepts in Action: Asking the Right Questions

Interviews can be structured or unstructured and include a set of pre-planned questions; however, the researcher can ask additional questions to obtain more information. Researcher's must establish a rapport with the respondent and must avoid asking leading questions.

Structured Interviews Interview structure relates to the level of personal discretion an interviewer has in conducting the interview. During a structured interview, applicants are all asked the same questions. Follow-up questions are kept to a minimum, and the manner in which the interview is evaluated is consistent for all applicants. The theory behind the structured interview is that it produces results that are consistent across interviewers and interviewees. Compared to unstructured interviews, the structured interview is superior at predicting an applicant’s potential job performance (McDaniel, Whetzel, Schmidt, & Maurer, 1994). Developing a successful structured

Interviews: Asking the Right Questions From Title: Doing Sociological Research

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In a structured interview, the questions are prepared in advance, and all applicants are asked the same questions.

interview requires I/O psychologists to consider a number of factors, including interview preparation, question design, the interview process, the types of questions asked, and judgments made during and after the interview.

Interviewer Preparation Interviewers generally have some prior information about job candidates, such as recruiter evaluations, applications, or psychological tests. The nature of that information can predispose an interviewer to have a favorable or unfavorable impression of an applicant before he or she even arrives for the interview. For example, applicants who performed well in preliminary recruitment screenings are generally rated higher by interviewers than are those who did less well, regardless of the applicants’ actual interview performance. Prior information can also affect the focus of the interview. Interviewers will often attempt to discern or elicit information that con�irms what is in the applicant’s résumé, especially when they perceive the applicant as unsuitable for the job. Speci�ically, interviewers will try to frame questions that result in negative responses (Binning, Goldstein, Garcia, & Scatteregia, 1988) or will ask fewer positive and more dif�icult questions (Macan & Dipboye, 1988).

Ancillary information such as résumés and tests can often cause interviewers to inconsistently question and evaluate candidates, which in turn weakens the interview’s structure. Therefore, it may be better if interviewers do not review applicants’ ancillary information prior to the interview. Instead, they should prepare for the interview by reviewing the open position’s job analysis and receiving training to help them understand the job, the questions they need to ask applicants, and the interview rating criteria.

Question Design Information from the job-analysis process can be used to design job-relevant interview questions, which will ensure that the questions are relevant to the job and relate to worker characteristics that are essential to job performance. Indeed, research suggests that structured interviews developed with the aid of a job analysis are stronger predictors of job performance than those that are not (McDaniel et al., 1994). Basically, then, interviewers are better able to evaluate a candidate’s ability to perform a job when interview questions directly align with the job’s critical worker characteristics. The questions that are posed in the selection process are a key ingredient in selection effectiveness. Failure to address the proper questions and topics can lead to a poor selection, which can impact performance. Improperly designed questions can also be deemed discriminatory.

Interview Process How an interview is conducted signi�icantly in�luences its level of structure. Interviewers can follow some easy steps to maximize the interview’s quality.

First, all candidates must be asked the same questions in exactly the same order. This ensures that each candidate has an equal opportunity to present his or her capabilities and allows the organization to accurately compare candidates. Second, interviewers should limit prompts and follow-up questions. Some interviewers deem these unscripted interactions as critical to an effective interview, yet they typically interfere with the time needed for the candidate to answer all the scripted questions and can be a distraction. Additionally, an applicant who looks good on paper may not wish to risk answering any questions and can attempt to distract the interviewer by asking a lot of questions; in this case the interviewer should try to steer the interview back to

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the script. If prompts or follow-up questions are necessary, the interviewer should always wait until the end of the interview to present them. Third, using multiple interviewers, either as a panel or in turn, can increase accuracy by reducing the potential biases of a single interviewer. Each interviewer will also focus on different facets of a candidate’s experience, which will result in a broader range of information gathered. Finally, interviewers must use a consistent set of criteria to evaluate candidates’ interview performance.

Types of Questions The types of questions asked by an interviewer have a direct effect on the structure of the interview. Campion, Palmer, and Campion (1997) identi�ied four types of interview questions for structured interviews, samples of which can be found in Table 2.2.

The �irst type of question examines an applicant’s background in a domain important for job success (“What experience do you have working with mainframe computers?”). Typically, these background questions produce a wide variety of answers and are dif�icult to use when comparing candidates. Furthermore, they are less predictive of applicant success than the other three types of questions. Experience-based questions examine applicants’ experience with situations similar to those faced on the job (“Describe a time when you were forced to meet strict deadlines. What did you do to ensure they were met?” or “Think about a time when you had to help an angry customer. What was the situation, what actions did you take, and how did you resolve the situation?”). This type of question is effective because it applies the principle of behavioral consistency. Situational questions ask applicants to describe how they would handle a number of job-related scenarios (“You are leading a project team in which you hold no formal authority. One of the team members continues to submit work late, impacting the work of the other team members. What would you do in this situation?”). Finally, job-knowledge questions will look for speci�ic job-relevant knowledge that applicants must possess in order to succeed at the job (“What type of information might you use if you were developing a strategic plan for your organization?”).

As you can see, the last three types of question, if designed using a thorough job analysis, will elicit job-related responses.

Table 2.2: Structured interview questions

Type of questions

Example questions

Experience- based questions

Describe a time when you in�luenced someone to change his or her position on an issue. Tell me about a project that really tested your analytical abilities. How did you handle the challenge, and what were the results of the project? Provide an example of a time you had to work with a dif�icult customer. What did you do to produce a positive outcome?

Situational questions

If you were responsible for rolling out a new product for the company, what are the �irst actions you would take to manage the project? The company has just landed a new, very pro�itable client. What would you do to build a strong relationship with that client?

Job-knowledge questions

How would you create a strategic planning presentation that would be in�luential for a board of directors? Explain what procedures you would follow when putting together an expense report. What functions do you use in Excel to create macros?

Interview Judgments

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Several factors can bias an interviewer’s judgment about a job applicant. Often, these biases are subtle and not intentionally discriminatory. One type of judgment is the contrast effect, which manifests itself when interviewers base their evaluation of an applicant on the performance or characteristics of the applicants they previously interviewed. For example, after interviewing three undesirable candidates, the interviewer may rate the next candidate more favorably than that candidate’s quali�ications actually merit. Conversely, that same average candidate might be evaluated much less favorably if the previous three applicants were all highly quali�ied.

First impressions play a huge role in �inal hiring decisions, because they establish a bias that affects the interviewer’s interpretation of all other information gathered in the interview. One classic study found that 90% of the time, just one unfavorable impression of a candidate resulted in the candidate’s rejection. Positive information, on the other hand, was given little, if any, weight in the �inal decision (Bolster & Springbett, 1961).

Finally, personal prejudices, or interviewers’ personal beliefs and experiences, may affect their interviews and evaluations. Interviewers may hold beliefs about the type of person they feel can do the job, yet these beliefs may be unrelated to a candidate’s skills or abilities. For example, some interviewers may believe women are un�it for male- dominated job positions, such as truck drivers or law enforcement of�icers. Male applicants may suffer similarly when applying for traditionally female-dominated job positions, such as nurses, teachers, or day care providers. Often, the effect of personal prejudices can be very subtle, and most interviewers do not admit that they are in�luenced by them.

Despite their imperfections, almost all organizations will continue to use interviews. Fortunately, these �laws can be reduced, if not eliminated, if an organization creates highly structured interviews and trains their interviewers to recognize and avoid personal prejudices and biases.

Reference Checks

Until recently, employee-selection processes routinely included reference checks, in which information about an applicant was gathered from people who are familiar with the applicant’s background, skills, and work history (such as a former teacher, previous employer or coworker, or friend). The purpose was to learn other people’s impressions of the applicant and to verify the information reported in applications or interviews. As you can guess, the applicant’s references were often deliberately misleading. For example, a past employer might wish to be kind and say only favorable things about a valued former employee. Alternately, a former employer might skew his or her information positively out of fear of lawsuits for written (libelous) or oral (slanderous) defamation. Thousands of costly lawsuits have been �iled against U.S. corporations for defamation, and the mere possibility of legal action keeps many companies from cooperating in even the most basic reference checking (Korkki, 2007). There is, however, some legal precedent for punishing organizations that do not openly share information. Employers can be held negligent if they did not inform another employer that a former worker has a propensity for violence and that worker subsequently causes harm to an individual at the new organization (Ryan & Lasek, 1991).

Despite legal considerations, many companies still make at least a cursory attempt to check references. It is unadvisable, however, for the previous employer to reveal information beyond a person’s dates of employment, job title, and �inal salary. Should the company choose to go further, it should, for its own protection, keep written evidence in the form of an objective performance appraisal. Speci�ic historical examples of an employee’s past performance should be documented by date, time, and location. Additionally, managers and supervisors should always assume that a judge or jury might one day scrutinize anything they include in a letter of recommendation. Given the potential risks, it is easy to see why reference checks are used much less frequently today than in the past.

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Find Out for Yourself: Quality of Different Selection Methods

Go to the following website and read the section on predictive validity, which summarizes the quality of various selection methods in terms of how well they predict applicants’ subsequent performance. The concepts of validity and reliability will be discussed further in Chapter 3.

Predictive Validity (http://www.nicheconsulting.co.nz/validity_reliability.htm#PredV)

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2.5 Employment Law

By its very nature, employee selection methods attempt to differentiate between candidates who possess requisite job skills and those who do not. When selection methods treat applicants differently based on other factors such as race, age, or sex, they are said to be discriminatory. It is imperative for HR professionals to understand the rights and obligations of both the company and the job candidate in order to protect both parties’ legal rights and avoid the litigation costs and damage to the organization’s reputation that may result from discriminatory practices. This next section, although not exhaustive, highlights landmark discrimination legislation and how it has affected organizations’ selection processes.

Equal Employment Opportunity

The Civil Rights Act of 1964 (amended in 1979 and 1991) is divided into several sections, or titles, each of which deals with a different facet of discrimination, such as voting rights, public accommodations, and public education. For an employer, discrimination occurs when an employee is treated differently due to a legally protected characteristic such as gender, race, or religion. Title VII of the Civil Rights Act guarantees equal opportunity in employment and prompted the establishment of the U.S. Equal Employment Opportunity Commission (EEOC) to administer and enforce federal civil rights laws. Today the EEOC enforces laws that prohibit discrimination in employment based on gender, race, national origin, religion, disability, age, sexual orientation, gender identity, political af�iliation, status as a parent, and marital status. These laws apply not only to selection but also to other employment practices such as compensation, training, and apprenticeships.

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Age Discrimination

Age discrimination occurs when an employer treats an employee differently based on his or her age; it is legally de�ined in the Age Discrimination in Employment Act (ADEA) of 1967 (amended in 1978, 1986, and 1993). The ADEA is a federal law that protects all workers in the United States over age 40 from the moment they contact an employer about a job opening. Speci�ically, this law forbids employers from making any kind of employment decision based on a person’s age. For example, employers cannot terminate employment, deny a bonus or raise, or refuse to hire or promote someone simply because they think that person is too old. However, it is important to note that people under age 40 are not protected under the ADEA. Thus, it is possible for an organization to discriminate against an individual for being too young without legal repercussions.

Discrimination Based on Disability

People who are physically or mentally disabled are protected from discrimination in the workplace. Starting with the Vocational Rehabilitation Act of 1973, organizations were required to recruit and hire disabled workers. The

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The Americans With Disabilities Act makes it unlawful for an employer with 15 or more employees to discriminate against a quali�ied individual with a disability.

Americans With Disabilities Act (ADA) of 1990 makes it unlawful for an employer with 15 or more employees to discriminate against a quali�ied individual with a disability in hiring practices, testing, �iring, promotion, job training, or wages. The ADA requires employers to provide a reasonable accommodation if a person with a disability needs one to apply for or perform a job. However, the employer has the right to withhold accommodation that would impose an undue hardship on the organization.

Other Employment Laws

Several other laws are also relevant for employment in general and for employee selection in particular. For example, over 75 years ago, the National Labor Relations Act of 1935 legalized unionization and collective bargaining. Just before the Civil Rights Act of 1964, the Equal Pay Act of 1963 prohibited pay differentials for equal jobs across genders.

The Pregnancy Discrimination Act of 1978 prohibits dismissing an employee due to pregnancy and ensures job security during maternity leave.

More recently, the Immigration Reform and Control Act of 1986 prohibited hiring illegal immigrants. The Worker Adjustment and Retraining Noti�ication Act of 1988 requires a 60-day notice prior to shutting down or conducting massive layoffs. The Employee Polygraph Protection Act of 1988 limits the scope of lie detector use and prohibits it as the sole determinant in hiring and �iring decisions. The Family and Medical Leave Act of 1993 grants employees who have worked for 1 or more years for an organization that employs 50 or more workers up to 12 weeks of unpaid leave for family or medical reasons in any given 1-year period.

Finally, the Patient Protection and Affordable Care Act of 2010, commonly known as Obamacare or the Affordable Care Act, increases the responsibilities of employers, employees, and insurance companies to expand health care coverage’s accessibility and affordability, and progressively penalizes them for failing to do so. Although the act does not require any �irm to provide health care insurance to its employees, �irms that employ more than 50 full-time workers and do not offer health care coverage, or whose existing levels of health insurance do not meet the government’s guidelines for affordability, could be liable for annual penalties for each full-time employee who receives a tax credit or subsidy to obtain health care insurance through a government health care exchange. These penalties can increase each year. The act also prohibits excluding people from coverage based on any preexisting conditions. This act went into effect in 2014; however, to date, there continue to be many gaps and unknowns regarding the rules and regulations of the Affordable Care Act.

Interpretation and Enforcement of Employment Laws

Several concepts are critical for implementing and enforcing these and other employment laws. For example, illegal discriminatory practices can include disparate treatment or disparate impact. Just because a policy or selection procedure does not explicitly discriminate against members of a protected class (which would be a form of disparate treatment) does not make that procedure legal. If the procedure has a discriminatory effect (disparate impact), even if unintended, it can be illegal.

For example, setting height or weight requirements for a particular job may not be intended as a discriminatory practice. However, because such requirements exclude more women than men and members of racial groups that tend to be shorter or lighter, they can be found to be discriminatory, unless they can be justi�ied by a job’s speci�ic requirements. These requirements must be what is referred to as a business necessity.

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As a case in point, it has been found justi�iable to deny an individual in a wheelchair a job as a �ire�ighter. On the other hand, height and weight are no longer included in a �ire�ighter’s job requirements and have been replaced with job sample tests through which applicants are evaluated on their �itness level and ability to successfully carry out the physical requirements of the job.

Like discrimination, workplace harassment can assume two forms: quid pro quo or a hostile work environment. Quid pro quo (Latin for “this for that”) is a more explicit form of harassment in which the harassing employee requires the harassed employee to exchange favors against his or her will. However, the more subtle but equally illegal form of harassment, known as a hostile work environment, can be created by some employees. This is a workplace in which workers are offended to the point that they experience undue hardship and are hindered in their ability to adequately perform their job. Examples include sexual or racial remarks and displays of inappropriate forms of art (e.g., sexually explicit posters that would make some employees uncomfortable). Unfortunately, many employees who act in such ways do not realize that their employers can be held legally liable for their behavior. For example, employees who use company e-mail to forward jokes with sexual, racial, or religious connotations are exposing their employers to such risks.

It is also important to note that discrimination laws protect not only minorities but also members of majority groups. For example, in attempts to appear less discriminatory and more diverse, some organizations may consider hiring less quali�ied women and minorities. However, these attempts can be found discriminatory against more quali�ied White male applicants, who have traditionally constituted the majority of the working population. This “overcompensation” effect is referred to as reverse discrimination and is illegal.

It is important to note that it does not cost an employee to �ile a claim with the EEOC; this often results in large numbers of unsubstantiated claims. Moreover, most of the laws discussed here also have no-retaliation clauses that prohibit employers from retaliating against employees who report discriminatory practices. Once an employee provides basic evidence of the occurrence, the burden of proof shifts to the employer, which can be impossible if there is a lack of documentation and evidence. Discrimination lawsuits can cost the employer millions of dollars in punitive damages. Employment laws cover not only current employees but also job applicants and past employees, which makes these laws particularly relevant for selection as well as for all HR practices.

Find Out for Yourself: More on Employment Laws

Employment laws, statutes, and regulations are continuously evolving and changing. Furthermore, like other legal matters, their interpretation and implementation are in�luenced by case law, or court rulings in prior cases, also commonly referred to as precedent. Government regulatory agencies also routinely issue guidelines to help employers interpret and comply with the law. The following websites can help you expand your knowledge of employment laws.

Uniform Guidelines on Employee Selection Procedures (UGESP) (https://www.gpo.gov/fdsys/pkg/CFR-2011-title29-vol4/xml/CFR-2011-title29-vol4-part1607.xml)

This website provides a brief background of the 1978 UGESP from the U.S. Department of the Interior.

UGESP: A Free Resource for HR Professionals (http://uniformguidelines.com/uniformguidelines.html)

This website provides more detailed information on UGESP.

Employment Tests and Selection Procedures (https://www.eeoc.gov/policy/docs/factemployment_procedures.html)

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This website provides a summary of equal employment opportunity laws that govern employment tests and selection procedures, with recent examples of EEOC litigation and settlements.

Enforcement and Litigation Statistics (https://www.eeoc.gov/eeoc/statistics/enforcement/index.cfm)

This website provides statistical reports by the EEOC on how various employment laws are enforced. Be sure to click on the “De�inition of Terms” links under each table to better understand the information in them. Also, note the relative weight of different types of litigation and resolutions (many of which are out-of-court settlements), the large percentage of EEOC claims that are found to have “no reasonable cause,” and the substantial number of claims that are retaliation based.

Concepts in Action: Landmark Legislation Stimulates Equal Rights Progress

The Civil Rights Act of 1964 contained provisions to end racial discrimination in public education and public accommodations. Its most controversial aspect, Title 7, prohibited discrimination in employment on the basis of race, religion, national origin, and sex. Over the course of the 1970s and 1980s, such discriminations were attacked in court. On another front, Martin Luther King Jr. led a group of marchers from Selma to Montgomery protesting the fact that blacks could not register to vote. The Voting Rights Act �inally gave Southern states notice that such tactics were no longer acceptable.

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2.6 Recommendations for Applicants

Not everyone will be in a position to recruit, screen, interview, or select job candidates. However, almost everyone is likely to apply for a job, submit a résumé, �ill out an application form, or participate in a job interview on one or more occasions throughout his or her career. This section provides some helpful and evidence-based recommendations for doing so. It is organized in terms of what an applicant should consider doing before applying for a job, during the application process, and after receiving a job offer.

Before Applying

One of the most important but often neglected steps of �inding the right job is preapplication research. With the prevalence of online job search websites that feature an online application process, applicants have become accustomed to painless, one-click submissions, which essentially send the same generic, preloaded résumé to all prospective employers. However, these automated processes do not promote an in-depth knowledge of the employer or position. Nor is the application material adapted to �it them. An applicant who wishes to increase his or her chances of being selected for further consideration should invest more time and energy, as follows:

Read the job announcement carefully. Consider the job description and speci�ications carefully in relation to your quali�ications and experience. They do not have to match perfectly, but they need to be compatible. Remember that employers receive many more applications than they need, and they do not select applicants randomly. Likewise, you should not apply to jobs randomly. It should be a thoughtful and calculated process. It is better to apply to fewer positions more intentionally than to “throw an application” at every job you �ind. Research the organization to which you are applying. Visit the organization’s website. Google the organization and read any recent media coverage or reviews you can �ind. If the organization has a social media presence, visit the appropriate websites and read what others post about it. Remember that employers research applicants online, too. Clean up your social media pages. Remove controversial material, make it private, or limit its accessibility to your friends. Also consider your e-mail address and screen names; they should re�lect professionalism and dignity. Tailor your résumé to each position. Do not use a generic résumé, especially for positions that are high on your priority list. If you are applying for a lot of positions, at least consider creating a unique résumé for each type of job. Remember that a résumé is nothing more than a screening tool. The purpose of a résumé is not to get you the job, but to help you secure an interview. According to a study by Ladders, on average, recruiters spend 6 seconds looking at a candidate’s résumé. Within these 6 seconds, they need to be able to spot keywords that re�lect your suitability for the job or they move on to the next résumé (Adams, 2012). Furthermore, many employers now screen résumés electronically. Generic, cluttered, or unprofessional résumés have almost no chance of making the cut. If there is a separate application form, �ill it out thoughtfully and accurately. Résumés and applications are often used by different people for different purposes, so do not rely on your résumé in order to avoid completing a tedious application form. Network with current or former employees if you happen to know any. Widen your network if you don’t. Networking is the most important source of jobs. Use your contacts to �ind out more about an organization’s culture, what makes employees stay, and what makes them leave. Be truthful. Falsifying application material is unethical and illegal. It can provide grounds for dismissal after employment and can destroy your career years, even decades, after the fact, as was evident in the case of George O’Leary, discussed earlier.

During the Application Process

Once you hear back from an employer regarding your application, there is more work to be done:

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Dressing appropriately is crucial to having a successful interview.

Further research the organization. Study the organization’s website in more depth. Look at �inancial reports. Visit local branches and operations if accessible. Keep up with recent media coverage of the organization. Join social media sites af�iliated with the organization, if they are public. Network with contact persons within the organization in person or through social media. Further research the position. Find out more about the speci�ic duties and responsibilities. Research potential interviewers. If you are invited to interview, request the names of the interviewers ahead of time and �ind out more about them through social media and other online resources. Study their quali�ications and interests and prepare to show common ground during the interview. However, keep your efforts subtle. Do not overcommunicate, in order to avoid the impression that you are overbearing or desperate for a job. Also, do not get too personal in the interview or make the interviewers feel like you have been stalking them. Find out about the organization’s dress code and dress accordingly. Do not make assumptions. Being overdressed could poorly re�lect your �it for the organization’s culture. Similarly, dressing too casually can impart that you are not serious about the job or your career. Importantly, it is always in fashion to dress modestly and avoid �lashy or revealing clothes. Your goal is to draw attention to your professional quali�ications, not your outward appearance (unless outward appearance is the primary quali�ication for the position, such as in modeling). Prepare for potential interview questions. Be prepared to explain what quali�ies you for each item on the position’s description. Speak to your quali�ications accurately and clearly. Neither conceit nor bashfulness is desirable in a job interview. Also be prepared to address your weaknesses and limitations. For example, consider enrolling in a class that covers a particular area that appears to be important to your employer but that your skill set is lacking. Prepare a few thoughtful questions to ask the interviewer. Focus on the organization and the position. Do not ask about salary, bene�its, or vacations. It is more appropriate to ask these questions after you have been offered the position. During an interview or site visit, be on your best behavior. Act politely and courteously toward everyone, even those who appear to be uninvolved in the selection process. This includes receptionists, janitors, elevator operators, and cafeteria staff. If part of the visit includes a meal, be kind and courteous to servers and exhibit proper table manners. Also remember to mind your manners in the parking lot and surrounding areas before and after the visit. Poor road etiquette can limit or destroy your chances of getting the job if accidentally observed by a recruiter or potential coworker in the vicinity. Send a thank-you letter to the interviewers. The letter should be brief and have a pleasant and professional tone. It should express your continued interest in and �it for the position very concisely. It should not imply that you require a response.

After Receiving a Job Offer

A job offer is a wonderful outcome, but it is not the end of the process. If you have been successful in landing a job, make sure you consider the following:

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Carefully evaluate the offer in light of your expectations and research. Consider the full package, not just the pay. Consider the position, bene�its, working hours, working conditions, location, travel requirements, and prospects for promotion. Compare these aspects to other jobs to which you have applied. If this is not your top choice, consider waiting for another offer. If you have received multiple offers, compare them carefully and maintain a long-term perspective. A job with development opportunities and promotion prospects may be more favorable in the long term than a job with a higher starting salary. If you have any questions, it is legitimate to ask the employer at this point. Negotiate the terms of employment as needed. Except in rare situations, most terms of employment are negotiable. Do not assume that these terms are cast in stone, unless the employer explicitly says this. Be �lexible and courteous in all negotiations and do not give the employer an ultimatum. If you cannot reach an agreement on the terms of employment, decline the offer but maintain professional courtesy. You never know when you will cross paths with the same employer in the future. Follow all the requirements in the job offer. This includes responding by the deadline, undergoing medical examinations and background checks if requested, and completing any necessary paperwork. Once you accept a job offer, do not back out or consider other offers. If you are expecting or considering alternative offers, request a deadline extension, but once you commit, keep your word. Respectfully transition into your new position. As soon as you accept a job offer, update all your professional pro�iles to re�lect your new position and re�lect excitement about your new professional identity. Do not bad-mouth your former employer or coworkers. Maintain positive relationships throughout your career. Remember that you will always need references and people who can vouch for your quali�ications and character.

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2.7 Quantifying the ROI in Effective Selection

Although effective selection can be expensive, the costs of making mistakes can be even higher. One of the recognized scienti�ic approaches to quantifying the ROI in effective selection is utility analysis. Utility analysis uses statistical formulas to calculate these returns over time. Although the calculations for utility analysis are beyond the scope of this course, it may be helpful to gain a conceptual understanding and appreciation of what this technique has to offer.

Utility analysis takes into consideration several aspects of the selection process. For example, it accounts for the predictive capacity of one selection tool or process versus another or for the joint predictive capacities of multiple selection devices, such as a combination of structured interviews and aptitude tests. Furthermore, it also accounts for the importance of the job for the organization in terms of the �inancial impact of a particular job. Some jobs may exhibit higher variability in performance, warranting more accurate selection; others may not have as much variation across incumbents, which limits the ability to improve selection. Utility analysis also accounts for factors such as the supply and demand of labor, which may be out of the organization’s control. When the desired talent is in abundant supply, organizations can afford to be more selective; this can increase the ROI in more effective selection procedures. On the other hand, the cost may outweigh the bene�its when the organization intends to select the majority of applicants due to a talent shortage.

The primary difference between an investment and an expense is that ROIs accrue over more than 1 year. If effective selection is indeed an investment, its bene�its should accrue beyond the current year. Statistical methods such as utility analysis go beyond the costs of using various selection devices and even the opportunity costs of effective selection (e.g., managers’ time and energy being redirected away from other activities). They also consider time- sensitive factors such as employee �lows, which in turn are affected by the number of employees hired using one or more selection procedures, as well as these employees’ retention and turnover rates.

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Rawpixel Ltd/iStock/Thinkstock

Research shows that positivity may outweigh technical skills in selecting new hires.

2.8 Select for Positivity: Applying Positive Psychology to Selection

There is increasing evidence that just like KSAOs, positivity can predict productivity, as well as numerous other desirable outcomes in the workplace, such as job satisfaction and organizational commitment (Avey, Reichard, et al., 2011). Numerous studies over decades of research have also demonstrated that positivity functions as an effective predictor of performance. The logical question then becomes whether organizations should select more positive employees.

Based on studies conducted by Martin Seligman, the founder of positive psychology, the answer is a resounding yes. At the time Seligman conducted his studies on the sales force of Metropolitan Life Insurance, the company was basing selection decisions on the results of an industry-recognized test of applicants’ technical knowledge. However, selling insurance requires more than technical skills; being a successful salesperson requires a high level of positivity.

Seligman suggested to Metropolitan Life that positivity may be even more important than technical skills. To test this notion, Seligman convinced Metropolitan Life to hire a “special force” of applicants who had failed the industry’s technical test but who scored highly on a test that he had designed to measure optimism, a recognized dimension of positivity. The optimists who had failed the industry test went on to outperform pessimists who had passed it, indicating that hiring for positivity may be more important than hiring for skills!

Obviously, it is advantageous to hire candidates who possess every desirable quality that can predict job performance. However, such candidates are rare and can be expensive to locate, hire, and retain. Thus, selection should focus only on the job requirements that are dif�icult, expensive, or impractical to develop within a short time after an employee

is hired and thus are necessary for the employee to possess from the start. Other qualities that are open to development can be the emphasis of training (which is covered in Chapter 5). An organization should adopt a balanced perspective about selection versus development, comparable to make-versus-buy decisions in other business areas. Although technical skills are important, they can be easily acquired and developed through training. The question, then, is whether positivity can be taught.

Contrary to what you might expect, research shows that only about 10% of positivity depends on circumstances such as income, material belongings, physical attractiveness, marital status, or where one lives or works (Lyubomirsky, 2007). Fifty percent of positivity is a set point that is determined by genetics or hardwired into the brain at a very early age. About 40% of positivity is evidently malleable and thus open to development. Some approaches to developing positivity are discussed in Chapter 5. However, I/O psychologists must remember that whenever possible, positivity should be only one of the selection criteria, along with other factors such as technical, conceptual, and interpersonal skills and abilities.

Find Out for Yourself: How Positive Are You?

Both employers and employees can bene�it from positivity. The University of Pennsylvania’s Authentic Happiness website provides easy access to many assessments of various aspects of positivity. The site allows you to sign up for an account and save your results from each assessment, so take as many of these assessments as possible to determine your level of positivity.

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Authentic Happiness Questionnaire Center (https://www.authentichappiness.sas.upenn.edu/testcenter)

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Summary and Conclusion

Hiring the right employees is not just an added bene�it, a good use of resources, or an ethical concern. It is essential for organizational success and effectiveness. I/O psychologists will often �ind it necessary to educate managers on the bene�its of effective selection and the various tools available to better design and implement their organization’s selection processes. Furthermore, accurate selection is an elaborate process that should start with formal planning and a deep understanding of each job, followed by systematic and objective implementation of measurement and selection procedures.

Chapter 2 Flashcards

Key Terms

abilities

Age Discrimination in Employment Act (ADEA)

Americans With Disabilities Act (ADA)

disparate impact

disparate treatment

Employee Polygraph Protection Act

Equal Pay Act

Family and Medical Leave Act

hostile work environment

Immigration Reform and Control Act

Choose a Study ModeView this study set

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job analysis

job context

job description

job speci�ication

knowledge

National Labor Relations Act

Patient Protection and Affordable Care Act

Pregnancy Discrimination Act

quid pro quo

responsibilities

reverse discrimination

role incumbents

skills

Title VII of the Civil Rights Act

turnover rate

U.S. Equal Employment Opportunity Commission (EEOC)

utility analysis

Worker Adjustment and Retraining Noti�ication Act

work log

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Learning Outcomes

After reading this chapter, you should be able to

Identify the purpose and uses of psychological testing.

Describe the characteristics of a high-quality psychological assessment tool or selection method.

Explain the importance of reliability and validity.

Identify commonly used psychological test design formats.

Recognize the types of tests used to assess individual differences.

List the steps needed to develop and administer tests most effectively.

Discuss special issues in testing, including applicants’ reactions to testing and online administration.

Summarize the importance of testing for positivity.

3Foundations of Psychological Testing

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3.1 The Importance of Testing

When you hear the word test, what comes to mind? For many people, tests are not a pleasant activity. Most of us can remember wishing, as children, to grow up and �inish school so we would never have to take a test again. Of course, as adults, we discover that tests affect our lives long after we earn our diplomas. Tests determine whether we can drive a car, get into a graduate or job-training program, or earn a professional certi�ication. They in�luence our career choices and, quite often, our career advancement.

What profession do you plan to pursue? Do you want to be a doctor or a lawyer? How about a police of�icer or �ire�ighter? Perhaps you would like to earn your MBA and start your own business? Each of these examples, along with most professions, require many years of tests, demand high levels of knowledge and skills, and require continued education and recerti�ication testing.

Businesses use tests to help determine whether job applicants possess the skills and abilities needed to perform a job. After an applicant is hired, tests will help determine placement in an appropriate training and development program. Throughout an employee’s career, the organization may require testing for new job placements or promotions.

As you can see, tests can have a signi�icant in�luence on people’s lives; they can help identify talent and promote deserving candidates. But they can also be misused. Unfortunately, there are many poorly designed psychological tests on the market. They seduce organizations with promises of fantastic results but do little to identify quality employees. I/O psychologists possess the knowledge, skills, and education to design, implement, and score measures that meet the legal and ethical standards for an effective psychological test.

The goal of this chapter is not to teach you how to design quality psychological tests, but rather to acquaint you with the requirements, challenges, and advantages of doing so. Furthermore, understanding the test-making methods that I/O psychologists use will make you a more informed consumer of tests for your own personal and professional goals.

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Fuse/Thinkstock

Students take tests to demonstrate their knowledge of a particular subject. Similarly, employers administer exams to job applicants to measure employment and career-related quali�ications and characteristics.

3.2 What Are Tests?

In general, a test is an instrument or procedure that measures samples of behavior or performance. In an employment situation, tests measure an individual’s employment and career-related quali�ications and characteristics. The Uniform Guidelines on Employee Selection Procedures (1978) de�ines a test as any method used to make a decision about whether to hire, retain, promote, place, demote, or dismiss an employee or potential employee. By this de�inition, then, any procedure that eliminates an applicant from the selection process would be de�ined as a test. As discussed in Chapter 2, examples include application forms that evaluate education and experience; résumé screening processes; interviews; reference checks; performance in training programs; and psychological, physical ability, cognitive, or knowledge-based tests.

I/O psychologists are concerned with designing and implementing selection systems that identify quality job candidates. Clearly, organizations want to hire the best workers, but it is a real challenge to screen candidates who vary widely in their KSAOs, behaviors, traits, and attitudes—or what is known as their individual differences. This is especially true when hiring decisions are made with only basic tools such as application forms and short interviews. To help organizations better measure applicants’ personal characteristics, I/O psychologists have developed psychological measurements to identify how and to what extent people vary regarding individual differences (Berry, 2003).

What Is the Purpose of Psychological Testing and Selection Methods?

In employment, tests and other selection tools are used to predict job performance. Keep in mind that job performance can never be predicted with 100% accuracy. The only way employers could reach such a high level of accuracy would be to hire all the applicants for a particular job, have them perform the job, and then choose those with the highest performance. Of course, this approach is neither practical nor cost effective. Moreover, even if an organization could afford to hire a large number of applicants and retain only those who performed best, performance prediction is still not perfectly accurate. For example, many organizations have probationary periods in which the employer and the employee try each other out before a more permanent arrangement is established. Employees may be motivated to perform at a much higher level during the probationary period in order to secure permanent employment, but performance levels may drop once the probationary period is over. Moreover, job performance may be in�luenced over time by a myriad of factors that cannot be predicted or managed.

Although it is impossible to perfectly predict job performance, psychological testing and selection methods can provide reasonable levels of prediction if they accurately and consistently assess predictors that are related to speci�ic performance criteria. As brie�ly introduced in Chapter 2, accurately predicting performance criteria— usually referred to as validity—ensures that test results indicate performance outcomes, so that those who score favorably on the test are more likely to be high performers than those who do not. Simply put, validity re�lects the correlation between applicants’ scores on the test or selection tool and their actual performance. A high correlation indicates that test scores can accurately predict performance. A low correlation indicates that test scores are poorly related to performance.

In order to assess the validity of a selection tool, job performance must be quanti�iable, meaning that there is a set of numbers associated with applicants’ test scores so one can calculate a correlation. Performance scores are usually obtained from performance appraisal systems, which will be discussed in more detail in Chapter 4. Poorly designed

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performance appraisal systems can hinder an organization’s ability to assess the validity of its selection methods. For example, performance evaluations are sometimes highly subjective. Some managers tend to score all of their employees similarly regardless of performance in order to ensure they all receive a raise. Some do so to sidestep confrontation or to avoid having to justify the decision. This lack of variability in scores can bias the results of the statistical analysis’s underlying validity, preventing it from adequately calculating or comparing the validity of various selection methods.

Another important determining factor of tests and other selection tools is reliability. Also referred to as consistency, reliability is the extent to which test scores can be replicated over time and across situations. A reliable test will re�lect an applicant’s aptitude rather than the in�luence of other factors such as the interviewer, room temperature, or noise level. For example, many organizations use multiple interviews or panel interviews to evaluate applicants so that there are multiple raters scoring each applicant. Such processes have scorers assign both an absolute score, which measures how the applicant did in relation to the highest possible score, and a relative score, which measures how the applicant did in relation to the rest of the interviewees. When the scores assigned by these multiple raters are comparable in terms of absolute scores for each applicant, as well as relative scores and rankings across applicants, the interview process is considered reliable. On the other hand, if different raters score the same applicant very differently, and if the interview process yields different rankings across applicants and thus different hiring recommendations, then the process is unreliable. Similar to validity, no test or selection method has perfect reliability, but the more reliable and consistent a selection tool is, the more accurate it will be in determining quality candidates, and the more legally defensible it will be if the organization is sued for discriminatory hiring. An objective and systematic selection process that leads to consistent results across candidates and raters is an organization’s �irst line of defense against such accusations.

Ensuring that tests are both valid and reliable is an important part of the assessment process. Of course, the more accurate the testing process, the more likely the best candidates will be selected, promoted, or matched with the right job. However, that is not the only reason to do so: invalid or unreliable tests can be costly. Many tests need to be purchased or require a license of use to be obtained. Testing also takes time, both for the candidate and the organization. Tests need to be administered, be rated, and have the results reported, which requires managers’ and HR professionals’ time and effort. Tests that are not valid or reliable also have opportunity costs, such as the time spent using them as well as the lower productivity of those who were hired or promoted using the wrong test.

Finally, there are legal implications for ineffective testing. An invalid test may not be related to performance, but it may be discriminatory. It may favor certain protected classes over others. For example, if younger job applicants consistently score higher than older ones on a test, and these scores are not related to job performance, then that test may be found discriminatory. Similarly, if a particular test favors men over women or places minority applicants at a disadvantage, it can be considered discriminatory and thus illegal. For example, complaints were �iled against the pharmacy chain CVS Caremark for using a discriminatory personality test. The test included questions about the applicant’s propensity to get angry, trust others, and build friendships. These questions were found to be potentially discriminatory against applicants with mental disabilities or emotional disorders (Tahmincioglu, 2011). Although the organization may have had no intent to discriminate, using invalid discriminatory tests can result in what was referred to in Chapter 2 as “disparate impact,” which is also illegal.

Consider This: Tests and Testing

Make a list of as many tests as you can remember having taken during times when you were up for selection from a pool of potential candidates (e.g., jobs, volunteering opportunities, college admissions, scholarships, military service). Remember that a test can be any instrument or procedure that measures samples of behavior or performance. It does not have to be a written, proctored exam.

Questions to Consider

1. What do you think each of those tests was attempting to measure?

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2. What is your opinion of each of those tests? 3. Did the tests adequately measure what they were trying to measure? 4. What were some strengths and weaknesses of each test?

Find Out for Yourself: The Validity and Reliability of Commonly Used Selection Tools

Visit the following websites to read about the different types of validity and reliability, as well as how they are measured.

Validity & Reliability of Methods (http://www.nicheconsulting.co.nz/validity_reliability.htm)

Psychometric Assessment Validity (http://www.nicheconsulting.co.nz/validity.htm)

Psychometric Test Reliability (http://www.nicheconsulting.co.nz/reliability.htm)

What Did You Learn?

1. Compare the validity of various selection methods such as interviews, reference checks, and others. If you were a recruiter, which ones would you use? Why?

2. If you were to use an actual test, how long would you design the test to be? Why? 3. If you were to design an interview process, how many interviewers would you use for each

candidate? What are the bene�its of using more than one interviewer (rater)? 4. What are the key factors in increasing the validity of the selection process? 5. What are the key factors in increasing the reliability of the selection process?

Uses of Tests

Companies of all sizes are integrating tests into their employment practices. In 2001 a study by the American Management Association found that 68% of large U.S. companies used job-skill testing as part of their employment process; psychological (29%) and cognitive (20%) measurements were used less frequently. More recent studies, however, show that the testing trend is on the rise, with nearly 80% of Fortune 500 organizations using assessments of some sort (Dattner, 2008). Moreover, about a quarter of employers utilize online personality testing to weed out applicants early in the recruitment process, even before any other screening tool is used; this trend is expected to increase by about 20% annually. Examples include large, nationwide employers such as McDonald’s and CVS Caremark (Tahmincioglu, 2011). The growing popularity of testing within organizations has resulted in the use of tests not only for selection but also for a number of other HR functions.

One of the most important ways in which organizations use tests is to evaluate job applicant or employee �it. Organizations often administer tests to accurately evaluate an applicant’s job-related characteristics or determine an employee’s suitability for promotion or placement in a new position within the company. Because promotions and training are expensive, organizations place high importance on being able to determine which employees possess the higher level abilities and skills needed to assume advanced job positions. Similarly, during job reorganizations, companies must be able to place individuals into new jobs that align with their skills and abilities. Keep in mind that

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selection, promotion, and job-placement processes all involve employment decisions and thus must be well designed in order to meet the requisite legal and professional standards.

HR professionals make use of tests in areas outside the realm of employment selection. Training and development is one such example. Trainees are often tested on their job knowledge and skills to determine the level of training that will �it their pro�iciency. At the end of training, they may take tests to assess their mastery of the training materials or to identify areas where they need to be retrained. Other types of tests help individuals identify areas for self- improvement, and sometimes job teams take tests to help facilitate team-building activities. Finally, tests can help individuals make educational or vocational choices. People who work at jobs that utilize their skills and interests are more likely to be successful and satis�ied, so it is important that vocational and educational tests make accurate matches and predictions. Note that tests used solely for career exploration or counseling need not meet the same strict legal standards as tests used for employee selection.

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It is important that all applicants take the same test under the same conditions.

3.3 Requirements of Psychological Measurement

Tests designed by I/O psychologists possess a number of important characteristics that set them apart from other tests you may have taken. Scienti�ically designed tests differ from magazine quizzes or informal tests that you �ind online in that they are more than a set of questions related to a speci�ic topic. Instead, they must meet standards related to administration (the way in which the test is given), scoring methods, score interpretation, reliability, and validity. Unfortunately, many employers and consultants think they can simply put together a test or an interview protocol that they believe measures what they feel is necessary and start using the selection tool without any statistical analysis to assess its quality. In addition to the fact that this approach does not effectively distinguish applicants with higher performance potential, which makes it a waste of time and resources, it can also yield inconsistent and discriminatory results, which makes it illegal.

Standardized Administration

To administer a selection test properly, the conditions under which applicants complete the test must be standard— that is, they must be the same every time the test is given. These conditions include the test materials, instructions, testing facilities, time allowed for testing, and allowed resources and materials. To ensure standardization, organizations put instructions into written form or administer the test to large groups so that all applicants hear the same instructions. Additionally, applicants will all complete the test in the same location using well-functioning equipment and comfortable seating. Test administrators are also careful to keep the testing environment comfortable in terms of temperature and humidity as well as free from extraneous noise or other distractions. Variations in testing conditions can signi�icantly interfere with results, making it impossible to create accurate comparisons between different applicants based on the conditions in which they were tested.

Consider how changing even one aspect of testing conditions can affect test performance. What would happen if, on a cold day in the middle of winter, the heat stopped working partway through a series of applicant evaluations? Applicants might not perform well on a typing test because their hands were cold and stiff, or they might not complete a written test because they were shivering and could not concentrate. Now think about how differently two groups of test takers would perform if one group accidentally received incomplete instructions from an inexperienced administrator, while a second group received the proper instructions from an experienced administrator. You can easily see how unfair it would be to try to compare test results of applicants who were not all tested under equal conditions!

Of course, it is sometimes not only appropriate but also necessary to alter the testing conditions. Applicants with disabilities may need speci�ic accommodations, such as a sign language interpreter for a person with a hearing impairment or a reader or Braille version of a written test for a person with a visual impairment. For applicants with disabilities, then, not allowing for changes in the testing conditions would make it dif�icult, if not impossible, for them to perform their best.

A real-life example of this occurred when an on-campus recruiter for a highly coveted internship program noticed that, despite performing as well as other students when interviewed on campus, minority students from very low- income areas fared poorly when invited to an on-site interview. The recruiter suspected that the organization’s luxurious of�ice building and extravagant furnishings may have intimidated those students and caused their poor performance. To further investigate his point, he changed the location of the interview to a local community youth center—everything else about the interview process was kept identical. Under these conditions, the students’ performance improved signi�icantly and was no different from the overall applicant pool. In other words, the change was necessary to neutralize the distracting effects of an otherwise unrelated testing condition.

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Objective Scoring

Just as performance on a test can be affected by testing conditions, results can be affected by the way in which the test is scored. To eliminate the possibility of bias, test scores must be standardized, which means that a test must be scored in the same way for everyone who takes it. Establishing a scoring key or a clear scoring criterion before administering a test will reduce an evaluator’s subjective judgments and produce the same or similar test scores no matter who evaluates the test.

Organizations can utilize both objective tests and subjective tests. Objective tests, such as achievement tests and some cognitive ability tests, have one clearly correct answer—multiple-choice tests are an example. As long as a scoring key is available, scoring an objective test should be free from bias. In contrast, subjective tests, such as résumé evaluations, interviews, some personality tests, and work simulations, have no de�initive right or wrong answers; their scores rely on the interpretation and judgment of the evaluator. To minimize the in�luence of personal biases and increase scoring accuracy, the evaluator uses a predetermined scoring guide or template, also sometimes referred to as a rubric, which establishes a very speci�ic set of scoring criteria, usually with examples of what to look for in order to assign a particular score. For example, if a rater is scoring an applicant on professionalism using a scale of 1 to 5, with 3 being “average” or “meeting expectations,” this score can also be accompanied by a description of what is considered “meeting expectations” so the assessment is not subject to the rater’s interpretation of what is expected. Although subjective tests are commonly used to make employment decisions, objective tests are preferred for making fair, accurate evaluations of and comparisons between job candidates. In the majority of situations, not everything can be objectively measured, so both subjective and objective tests are used to combine the speci�icity of objective tests and the richness of subjective tests.

Score Interpretation

After a test has been scored, the score needs to be interpreted. Once again, this process must be standardized. Additionally, to be interpreted properly, a person’s score on a test must be compared to other people’s scores on the same test. I/O psychologists use a standardization sample, which is a large group of people who have taken the test against whose scores an individual’s score can be compared. The comparison scores provided by the standardization sample are called test norms. The demographics of the standardization sample can be used to establish test norms for various racial and ethnic groups, men and women, and groups of different ages and various education levels.

Let’s look at an example of how test-score interpretation works. As part of a selection process, an applicant might answer 30 out of 40 questions correctly on a multiple-choice cognitive ability test. By itself, this score provides little information about the applicant’s level of cognitive ability. However, if we can compare it to how others performed on the same test—speci�ically, the test norms established by a standardization sample—we will be able to ascribe some meaning to the score.

Often, raw scores, the number of points a person scores on a test, are transformed into percentile scores, which tell the evaluator the percentage of people in the standardized sample who scored below an individual’s raw score. Continuing the example above, if the score of 30 falls in the 90th percentile, 90% of the people in the standardized sample scored lower than our �ictional applicant.

Test Reliability

As introduced earlier, test reliability refers to the dependability and consistency of a test’s measurements. If a person takes a test several times and scores similarly on it each time, that test is said to measure consistently. If a test measures inconsistently, then outside factors must be in�luencing the results. For example, if an applicant takes a mechanical ability test one week and correctly answers 90 out of 100 items, but then takes another form of the test the following week and gets only 50 out of 100 items correct, the test evaluator must ask whether the tests are actually doing what they’re supposed to be doing—measuring mechanical ability—or if something else is in�luencing the scores. Examples of common but often unreliable interview questions include “tell me about

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yourself” and “discuss your strengths and weaknesses.” Such questions are unreliable because the answer may vary widely depending on the applicant’s mood or recollection of recent events. Moreover, interpretation of the answers is subjective and depends on whether the interviewer likes or dislikes what the applicant says. There is also a very limited scope for comparing answers across applicants to determine which answers are higher or lower quality. On the other hand, more targeted and job-related questions—such as “tell me about a situation where you had to . . .” or “what would you do if you were faced with this situation”—are more likely to yield consistent and comparable responses. Thus, before trusting scores from any test that measures inconsistently, I/O psychologists must discover what is in�luencing the scores.

The test taker’s emotional and physical state can in�luence his or her score. A person’s mood, state of anxiety, and level of fatigue may change from one test-taking time to another, and these factors can have a profound effect on test performance. Illness can also impact performance. If a person is healthy the �irst time she takes a test, but then has a cold when she takes the test again, her score will likely be lower the second time around.

Changing environmental factors can also make a test measure inconsistently. Differences from one testing environment to another, such as room lighting, noise level, temperature, humidity, and equipment, will affect a person’s performance, as will the relative completeness or incompleteness of instructions and manner in which they are given.

Differences between versions of the same test also in�luence reliability. Many tests have more than one version or form (the written portion of a driver’s license test is an example). Although the test versions aim to measure the same knowledge, the test items or questions vary. If the questions in one version are more dif�icult than those in another, the test taker may perform better on one version of the test.

Finally, some inconsistency in test scores stems from real changes in the test taker’s KSAOs. These changes often appear if a signi�icant period of time passes between tests. High school students taking the SAT, for example, may show vast increases in scores from their junior year to their senior year because they have improved their cognitive ability, subject knowledge, and/or test-taking skills.

Measures of Reliability

Typically, reliability is measured by gathering scores from two sets of tests and then determining their association. The reliability coef�icient states the correlation—or relationship—between the two score sets, and ranges from 0 to +1.00. Although we won’t go into mathematical details of calculating correlations here, it is important to understand that the closer the score sets approach a perfect +1.00 correlation, the more reliable the test. For employment tests, reliability coef�icients above +.90 are considered excellent, and those above +.70 are considered adequate. Tests with reliability estimates lower than +.70 may possess suf�icient errors to make them unusable in employment situations. I/O psychologists measure test reliability with the internal consistency, test–retest, interrater, alternate-form (or parallel-form), and split-halves methods described below.

Internal Consistency Reliability Internal consistency reliability assesses the extent to which different test items or questions are correlated and thus consistently measure the same trait or characteristic. For example, if a 20-question test is used to measure extroversion, then scores on these 20 items should be highly correlated. If they are not, then some of the items may be measuring a different concept. The most common measure of internal consistency reliability is Cronbach’s alpha, which is an overall statistical measure of all the intercorrelations across items in a particular test. It can also pinpoint which items are poorly performing and which should be removed to improve the test’s internal consistency.

Test–Retest Reliability Test–retest reliability involves administering the same test to the same group of people at two different times and then correlating the two sets of scores. To the extent that the scores are consistent over time, the reliability coef�icient shows the test’s stability (see Figure 3.1). This method has a few limitations. First, it can be

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uneconomical, because it requires considerable time for employees to complete the tests on two or more occasions. Second, it can be dif�icult to determine the optimal length of time that should pass between one test-taking session and the next. If the interval is short, say, a few hours, test takers may remember all the questions and simply answer everything the same way on the retest, which could arti�icially in�late the reliability coef�icient. Conversely, waiting too long between tests, say, 6 months to 1 year, could cause retesting scores to be affected by changes that result from outside learning. This can arti�icially reduce the test’s reliability. The best time interval is therefore relatively short, such as a few weeks or up to a few months.

Figure 3.1: Test-retest reliability

One way to determine a test’s reliability is to conduct a test–retest. The more consistent test scores are over time, the more reliable the test is thought to be.

From Levy, P.E. (2016). Industrial/organizational psychology: Understanding the workplace. (5 ed). p. 26, Fig. 2.3. Copyright 2017 by Worth Publishers. All rights reserved. Reprinted by permission of Worth Publishers.

Interrater Reliability As the name implies, and as introduced in earlier examples, interrater reliability involves allowing more than one evaluator (rater) to assess each candidate’s performance, and then correlating the scores of the raters across candidates. To the extent that the scores are consistent across raters, the test is considered more reliable. This method is particularly relevant for subjective tests that are prone to personal interpretation. Even with well-

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designed rubrics and valid questions, these methods introduce some variability in assessment across candidates and raters. Interrater reliability ensures that such variability is under control and insuf�icient to bias the results of the process or alter hiring decisions. Various advanced statistical methods are available to take into account both the consistency of the absolute scores of the candidates across raters and their relative scores and rankings compared to each other. Both types of consistency are important. For example, absolute scores can affect selection decisions in situations where there is a cutoff score, such as in the case of college admissions and certi�ications. Relative scores and rankings can affect promotion decisions or come into play when only a predetermined number of candidates (e.g., top �ive) can be selected.

Alternate-Form Reliability Alternate- (or parallel-) form reliability has to do with how consistent test scores are likely to be if a person takes two similar, but not identical, forms of a test. As with test–retest reliability, this measure requires two sets of scores from a group of people who have taken two variations of a test. If the score sets yield a high parallel-form reliability coef�icient, then the tests are not materially different. If the reverse happens, the tests are probably not equivalent and therefore cannot be used interchangeably.

The major limitations of parallel-form reliability are that it is time consuming and costly. Furthermore, it requires the test developer to design two versions of a test that both cover the same subject matter and are equivalent in dif�iculty and reading level.

Split-Halves Reliability Split-halves reliability tests are more cost effective than either test–retest or parallel-form reliability because they can be assessed with scores from one test administered just one time. After the test has been given, it is split in half, and scores from the two halves of the test are correlated. A high reliability coef�icient indicates that each section of the test is consistently measuring similar content, whereas the reverse is true with a low reliability coef�icient.

The tricky part of split-halves reliability is determining how best to split the test. For example, if test items increase in dif�iculty as the test progresses, or if the �irst half of the test contains fewer dif�icult questions than the second, it won’t work to simply split the test down the middle and compare the scores from each half. To solve this dilemma, tests are often split by odd- and even-numbered questions.

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Test Validity

Validity is the most important aspect of an employment test. Although a test is reliable if it is able to make consistent measurements, a test is valid if it truly measures the characteristics it is supposed to measure. An employment test may yield reliable scores, but if it doesn’t measure the skills that are needed to perform a job successfully, it is not very useful. I/O psychologists use three methods to establish test validity: criterion-related validity, content validity, and construct validity.

Concepts in Action: Reliability and Validity—Core Concepts in Psychology

In this video, the concepts of reliability and validity are demonstrated through a simple exercise. Students learn about the importance of consistency and interpreting data in a relevant manner when conducting experiments.

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Criterion-Related Validity The purpose of criterion-related validity is to establish a predictive, empirical (number-based) link between test scores and actual job performance (see Figure 3.2). To do this, I/O psychologists compare applicants’ employment test scores with their subsequent job performance. This correlation is called the validity coef�icient, and it ranges from 0 to ±1.00. Tests that yield validity coef�icients ranging from +.35 to +.45 are considered useful for making employment decisions, whereas those with validity coef�icients of less than +.10 probably have little relationship to job performance.

I/O psychologists use two different methods to establish criterion-related validity: predictive validity and concurrent validity. Predictive validity involves administering a new test to all job applicants but not using the test scores to try to predict the applicants’ job readiness. Instead, the scores are �iled away to be analyzed later. After a time, managers will have accumulated performance ratings or other information that indicates how new hires are performing on the job. At that point, the new hires’ preemployment test scores will be correlated with their performance, and the organization can look at how successfully the test predicted performance. If the test proves to be a valid predictor of performance, it can be used in future hiring decisions. Although this approach is considered the gold standard of test validation, many organizations are unwilling to use the predictive validity method because �iling away employment test scores lets some unquali�ied applicants slip through the preemployment screening process. However, scienti�ically developed tests regularly use this method to validate them prior to their use.

The concurrent validation approach is more popular because, instead of job applicants, on-the-job employees are used to establish the test’s validity. With this method, both the current employees’ test scores and their job performance ratings are gathered at the same time, and test validity is established by correlating these measures. Organizations appreciate the cost-effectiveness offered by concurrent validation. Tests that are found to be of high concurrent validity based on the results from current employees are then used to assess job applicants.

Other forms of concurrent validation include convergent and divergent validity. Convergent validity refers to the correlation between test scores and scores on other related tests. For example, SAT and ACT tests are expected to correlate, so the validation of new SAT questions may involve examining their correlation with ACT questions. Divergent validity refers to the correlation between test scores and scores on other tests or factors that should not be related. For example, test scores should not be related to gender, race, religion, or other protected classes. To ensure that a test is not discriminatory, the correlation between its scores and each of these factors can be examined. Divergent validity is supported when these correlations are low or statistically insigni�icant. Taken together, convergent and divergent validity examine the extent to which a test relates to what it should be related to and does not relate to what it should not be related to, respectively.

Figure 3.2: Criterion-related validity

Reliability and Validity—Core Concepts in Psycholog...

  0:00 / 4:07 1x © Infobase. All Rights Reserved. Length: 04:07

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In order to establish a connection between test scores and actual job performance, I/O psychologists use criterion-related validity. Tests with high correlations between scores and job performance are considered to be high-validity tests and can be useful for making employment decisions. Tests with low correlations between scores and job performance are considered low- validity tests and would not be ideal for assessing job performance.

From Levy, P.E. (2016). Industrial/organizational psychology: Understanding the workplace. (5 ed). p. 29, Fig. 2.4. Copyright 2017 by Worth Publishers. All rights reserved. Reprinted by permission of Worth Publishers.

Despite the time- and cost-saving advantages, concurrent validation does have a number of drawbacks. First, the group of employees who validate a test could be very different from the group of applicants who actually make use of the test. The former would likely skew the validation because lower performing employees (and their low scores) would have already been removed from their positions and thus not be part of a test-validating process. This can cause the validity of the test to appear higher than it really is. On the other hand, employees may also skew the validation by not trying as hard as job applicants. Employees who already have jobs might not be as motivated to do their best as applicants eager for a job would be. This can cause the test’s validity to appear lower than it really is.

Content-Related Validity Content-related validity is the rational link between the test content and the critical job-related behaviors. In other words, test items should be directly related to the important requirements and quali�ications for the job. The rationale behind content-related validation is that if a test samples actual job behaviors, then individuals who perform well on it will also perform well on the job. Remember that the goal of testing is to predict performance.

As you can probably guess, content-related validation studies rely heavily on information gathered from a job analysis. If test questions are directly related to the speci�ic skills needed to perform a job, the test will have high

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content-related validity. For example, a test for administrative professionals might ask questions related to effective �iling methods, schedule management, and typing techniques. Because these skills are important for the administrative professional position, this test would have high content-related validity. Content validity cannot be evaluated numerically or statistically as readily as criterion validity. It is often qualitatively evaluated by subject matter experts. However, qualitative evaluations can be quanti�ied using well-designed rubrics and assessed for reliability and consistency.

Construct Validity Construct validity is the extent to which a test accurately assesses the abstract personal attributes, or constructs, that it intends to measure. Although there are valid measures of many personality traits, numerous invalid measures of the same traits can be found in less scienti�ic sources such as magazines or the Internet. Because constructs are intangible, it can be challenging to design tests that measure them.

How do we know if tests of personality, reasoning, or motivation actually measure these intangible, unobservable characteristics? One way to establish construct validity is to correlate a new test with an established test that is known to measure the construct in question. If the new test correlates highly with the established test, the new test is likely measuring the construct it is intended to measure.

Validity Generalization Initially, I/O psychologists thought that validity evidence was situation speci�ic; that is, a test that was validated and used for applicants for one job could not be used for applicants for a different job unless an additional job-speci�ic validation study was performed. Further, I/O psychologists believed that tests that had been validated for a position at one company could not be used for the same position at a different company—again, unless it was validated for the second company, which is a tedious and costly process.

However, research over the past few decades has shown that validity speci�icity is unfounded (Lubinski & Dawis, 1992). I/O psychologists now believe that validity evidence transfers across situations, a notion that is referred to as validity generalization. Researchers discovered that the studies that supported validity speci�icity were �lawed (Schmidt & Hunter, 1981).

Validity generalization has been a huge breakthrough for organizations. Establishing validity evidence for every employment test in every situation was, for most organizations, both cost and time prohibitive. Because of its cost- and time-saving bene�its, the advent of validity generalization has meant that organizations are more willing to integrate quality tests into their employment practices.

Face Validity Face validity is not a form of validity in a technical sense; rather, it is the subjective impression of how job relevant an applicant perceives a test to be. For example, a bank teller would �ind nothing strange about taking an employment test that dealt with numerical ability or money-counting skills, because these skills are obviously related to job performance. On the other hand, the applicant may not see the relevance of a personality test that asks questions about personal relationships. This test would thus have low face validity for this job.

Organizations need to pay close attention to their applicants’ perceptions of a test’s face validity, because low face validity can cause an applicant to feel negatively about the organization (Chan, Schmitt, DeShon, Clause, & Delbridge, 1997; Smither, Reilly, Millsap, Pearlman, & Stoffey, 1993). If organizations have the opportunity to pick between two tests that are otherwise equally valid, they should use the test with the greater level of face validity.

Find Out for Yourself: Your Personality Type

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Visit the 16 Personalities website and take the personality-type assessment provided. Read your results, then visit the Encyclopedia Britannica entry on personality assessment and read about the reliability and validity of assessment methods.

16 Personalities (https://www.16personalities.com/free-personality-test)

Reliability and Validity of Assessment Methods (https://www.britannica.com/science/personality- assessment/Reliability-and-validity-of-assessment-methods)

What Did You Learn?

1. What have you learned about yourself through this assessment? 2. Is this assessment accurate? Which types of validity and reliability apply to it? 3. Based on this assessment, what are some examples of jobs that would �it your type?

Qualitative Methods

Most of the methods discussed in this chapter are quantitative in nature. However, employers often �ind it necessary to take into consideration other factors that are not necessarily quanti�iable but can be very important in employee selection. Qualitative selection methods may include observation, unstructured interview questions, consultation with references, or solicitation of opinions from past or future managers and coworkers. Qualitative methods can yield a much richer and broader array of information about an applicant that may be impossible to capture using quantitative methods.

Unfortunately, however, qualitative methods are much harder to assess in terms of validity and reliability, and thus they may lead to erroneous decisions. Their subjectivity can also lead to discriminatory decisions. Qualitative methods can be particularly problematic in ranking applicants. Without a predetermined set of evaluation criteria and a rating scale, interrater reliability can be very low. That is why psychologists attempt to quantify even what would be considered qualitative criteria—such as person–organization �it and person–job �it—by creating survey measures of these factors. With the help of I/O psychologists, employers can also create quantitative scoring themes for qualitative data to increase the integrity and legality of these methods.

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3.4 Test Formats

Thousands of employment tests are on the market today. Naturally, no two tests are the same and may differ in their construction or administration. Tests vary in their quality depending on the rigor of their validation processes. They also vary in cost depending on their extensiveness and popularity. However, it is important to note that quality and cost do not always go hand in hand. Some of the most valid and reliable tests are available in the scienti�ic literature free of charge, but they are not very popular among practitioners, who are often unfamiliar with the scholarly literature. On the other hand, some of the popular and expensive tests marketed by well-known consulting companies have questionable validity and reliability. In some cases these tests are only taken at face validity and are never statistically analyzed. In other cases the test developers make sure their tests are valid and reliable but are reluctant to publicly share their analyses for proprietary reasons. In all cases prudent employers should demand evidence of validity and reliability in order to ensure that they are (a) investing their time and resources in the right selection tools that will yield the most quali�ied workforce and (b) using legally defensible and nondiscriminatory methods. Commonly used test-design formats include assessment centers, computer-adaptive tests, speed and power tests, situational judgment tests, and work-sample tests.

Assessment Centers

An assessment center is one of the most comprehensive tests available and is often used to select management and sales personnel because of its ability to assess interpersonal, communication, and managerial skills. A typical assessment center includes personality inventories, cognitive assessments, and interviews, as well as simulated activities that mimic the types of activities performed on the job. Common types of simulated activities include in- basket tasks, leaderless group discussions, and role-play exercises.

Although assessment centers can predict the level of success both in training and on the job, they have a number of limitations. First, assessment centers are expensive to design and administer, because administrators must be speci�ically trained to evaluate discussions and perform role plays. Assessment centers for senior management positions can cost more than $10,000, a price tag that is prohibitive for many organizations. Second, because scoring an assessment center relies on the judgment of its assessors, it can be dif�icult to standardize scores across time and location. This issue can be mitigated by training assessors to evaluate behaviors against an established set of scoring criteria.

Computer-Adaptive Tests

Typical tests include items that sample all levels of a candidate’s ability. In other words, they contain some questions that are easy and will be answered correctly by almost all test takers, some that are dif�icult and will be answered correctly by only a few, and some that are in-between. A computer-adaptive test, however, tailors the test to each test taker’s individual ability.

In this type of test, the candidate begins by answering a question that has an average level of dif�iculty. If he or she answers correctly, the next question will be more dif�icult; if he or she answers incorrectly, the next question will be easier. This process continues until the candidate’s pro�iciency level is determined. The fact that candidates do not waste time answering questions of inappropriate dif�iculty is a clear advantage of the computer-adaptive test. Additionally, because each test is tailored to the individual, test security (i.e., cheating) is less of a concern.

Speed and Power Tests

Tests can be designed to assess either an individual’s depth of knowledge or rate of response. The �irst type of test is called a power test. Power tests are designed to be dif�icult, and very few individuals are able to answer all of the items correctly. Test takers receive either a generous time limit or no time limit at all. The overall purpose of the power test is to evaluate depth of knowledge in a particular domain. Therefore, response accuracy is the focus, instead of response speed.

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Situational judgment tests present applicants with job-related scenarios in order to assess their decision-making skills.

Speed tests contain a homogenous content set, and test takers receive a limited amount of time to complete the test. These tests are well suited to jobs in which tasks must be performed both quickly and accurately, such as bookkeeping or word processing. For these jobs, a data-entry test would be an appropriate speed test for measuring an applicant’s potential for success.

Situational Judgment Tests

A situational judgment test is a type of job simulation that is composed of a number of job-related situations designed to assess the applicant’s judgment. Each situation includes multiple options for how to respond. The applicant must select the options that will produce the most and least effective outcomes. Statistically, situational judgment tests have validities comparable to structured interviews, biographical data, and assessment centers (Schmidt & Hunter, 1998).

Situational judgment tests are frequently administered to candidates for management positions, although research shows them to be predictive of performance for a wide variety of jobs. Studies have found validity evidence for situational judgment tests’ ability to predict supervisory performance (Motowidlo, Hanson, & Craft, 1997) and to predict job performance for sales professionals (Phillips, 1992), insurance agents (Dalessio, 1994), and retail store employees (Weekley & Jones, 1997).

Work-Sample Tests

Work-sample tests evaluate an applicant’s level of performance when demonstrating a small sample set of a job’s speci�ic tasks. The two general areas for work-sample tests are motor skills and verbal abilities. A test that requires a machinist applicant to properly operate a drill press is an example of a motor skills work-sample test; a test that asks a training applicant to present a portion of the organization’s training program is a verbal ability work-sample test.

One advantage of work-sample tests is that they generally show a high degree of job relatedness, so applicants perceive that they have a high degree of face validity. Additionally, these tests provide applicants with a realistic job preview. The disadvantage is that they can be expensive to develop and administer.

Consider This: The Costs of Testing

1. For most of the tests discussed in this section, expense is a major drawback. Why do you think an organization would go to the trouble of developing and using employment tests?

2. How might the expense of a test be justi�ied, offset, or overcome?

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3.5 Testing for Individual Differences

People differ in psychological and physical characteristics, and identifying and categorizing people in respect to these differences is important for successfully predicting both job performance and job satisfaction. The most commonly tested categories of individual differences are cognitive ability, physical ability, personality, integrity, and vocational interests. Each of these categories has an important theoretical foundation as well as its own set of advantages and disadvantages.

Cognitive Abilities

The past hundred years of study have produced two distinct concepts of cognitive ability. Beginning with Spearman’s seminal research in 1904 on general intelligence, one concept is based on the belief that cognitive ability is a single, unitary construct (called the g, or general, factor) along with multiple subfactors (called s factors). According to this two-factor, or hierarchical, theory of cognitive ability, the g factor is important to all cognitive performance, whereas s factors in�luence speci�ic intelligence domains. For example, your performance on a math test will be in�luenced by both your general, overall intelligence (the g factor) and your knowledge of the speci�ic math topic being tested (an s factor). From test to test, your scores will be strongly correlated, because all performance is in�luenced by the g factor; however, the in�luence of s factors will keep the correlation from being perfect. So, although a high g factor of overall intelligence might mean that you would score higher than most on both a math test and a verbal reasoning test, your math test scores could be lower than your verbal reasoning scores simply because you never took a class that covered the speci�ic topics on the math test (an s factor).

Led by Thurstone’s research, begun in 1938, scientists challenged Spearman’s theories by proposing that cognitive ability was a combination of multiple distinct factors, with no overarching factor. Using a statistical technique called factor analysis, Thurstone and his colleagues identi�ied seven primary mental abilities: spatial visualization, number facility, verbal comprehension, word �luency, associative memory, perceptual speed, and reasoning (Thurstone, 1947). This theory suggests that employment tests should evaluate the primary mental abilities that are most closely linked to a speci�ic job. For example, a test for engineering applicants would focus on spatial and numerical abilities.

Although there is no consensus, research has supported Spearman’s hierarchical model of cognitive ability (Carroll, 1993; Schmid & Leiman, 1957). Consequently, employers tend to use tests to measure both general intelligence and speci�ic mental domains. Those that focus on the g factor are called general cognitive ability tests. They measure one or more broad mental abilities, such as verbal, mathematical, or reasoning skills. General cognitive ability tests can be used to evaluate candidates for almost any job, especially those in which cognitive abilities such as reading, computing, analyzing, or communicating are involved. Speci�ic cognitive ability tests measure the s factors and focus on discrete mental abilities such as reaction time, written comprehension, and mathematical reasoning. These tests must be closely linked to the job’s speci�ic functions.

Cognitive ability tests are among the most widely used tests because they are highly effective at predicting job and training success across many occupations. In their landmark study, Schmidt and Hunter (1998) examined validity evidence for 19 different selection processes from thousands of studies over an 85-year period. After compiling a meta-analysis (which is a combination of the results of several studies that address a set of related research hypotheses), Schmidt and Hunter found that cognitive ability test scores correlated with job performance at .51 and training success at .53, which were the highest validity coef�icients among all the types of tests they examined. Other researchers found similar validities using data from European countries (Bertua, Anderson, & Salgado, 2005; Salgado, Anderson, Moscoso, Bertua, & Fruyt, 2003). Interestingly, additional research has found that a job’s complexity positively affects the validity of cognitive ability tests. In other words, the more complex the job, the better the test is at predicting future job performance. For jobs with low complexity, on the other hand, high cognitive ability test scores are less important for predicting successful job performance (Hunter, 1980; Schmidt & Hunter, 2004).

The most popular general cognitive ability test is the Wonderlic Cognitive Ability Test. Developed by Eldon F. Wonderlic in the 1930s, this test contains 50 items, has a 12-minute time limit, and is used by both private businesses and government agencies. Test norms have been set by more than 450,000 working adults and are

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available for over 140 different jobs. Test content covers numerical reasoning, verbal comprehension, and spatial ability. The test begins with very easy questions and progresses to very dif�icult ones; due to this range and the short time limit, few people are able to answer all 50 questions correctly. The test is offered in a variety of versions, including computer- and paper-based formats, and is now available in nine languages, including French, Spanish, British English, and American English. In all, more than 130 million job applicants have taken the Wonderlic.

The Wechsler Adult Intelligence Scale-Revised (WAIS-R), developed by David Wechsler in 1955 and currently in its fourth edition, is another commonly used general cognitive ability test. It differs from the Wonderlic in both length and scope and is composed of 11 different tests (6 verbal and 5 performance), requiring 75 minutes to complete. The 6 verbal tests are comprehension, information, digit span, vocabulary, arithmetic, and similarities. The performance tests are picture completion, picture arrangement, object assembly, digital symbol, and block design. Naturally, this complex psychological assessment requires well-trained administrators to ensure accurate scoring and score interpretation. The WAIS-R is typically used when selecting for senior management or other positions that require complex cognitive thinking.

Outside the world of work, a person’s cognitive ability also predicts his or her academic success. Using meta-analytic research, psychologists examined the relationship between the Miller Analogies cognitive ability test (a test commonly used to select both graduate students and professional-level employees) and student and professional success. Interestingly, results showed that there was no signi�icant difference between the cognitive abilities required for

academic and business success (Kuncel, Hezlett, & Ones, 2004).

Although they are valid performance predictors for many jobs, cognitive ability tests can produce different selection rates for individuals in select classes. Whites typically score higher than African Americans, and there is much concern that these differences are due to bias within the test. If a test is biased to favor one ethnic group or population over others, then any employment selection or promotion program that utilizes it will be inherently �lawed. Discovering bias within a test can be extremely dif�icult, but I/O psychologists have been able to reduce the impact of potentially biased cognitive ability tests by adding noncognitive tests, such as personality tests, to selection processes (Olson-Buchanan et al., 1998).

Physical Abilities

Many jobs require a signi�icant amount of physical effort. Fire�ighters and police of�icers, for example, may need physical strength, and mechanics may need �inger dexterity. Other examples of hazardous or physically demanding work environments include factories, power plants, and hospitals. Organizations must be careful to use information from a job analysis to understand the speci�ic physical requirements of a job before purchasing or developing any work-sample tests to use in the selection process. Fleishman (1967) identi�ies nine physical ability characteristics present in many jobs (see Table 3.1). Measures of each physical ability are not strongly correlated, however, which suggests that there is no overall measure of general physical ability.

Table 3.1: Fleishman’s physical ability dimensions

Physical ability Description

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Physical ability Description

Static strength Maximum muscle force exerted by muscle groups (e.g., legs, arms, hands) over a continuous period of time

Explosive strength Explosive bursts of muscle energy over a very short duration to move the individual or an object

Dynamic strength Repeated use of a single muscle over an extended period of time

Trunk strength Ability of back and core muscles to support the body over repeated lifting movements

Extent �lexibility Depth of �lexibility of arms, legs, and body

Dynamic �lexibility Speed of �lexibility of arms, legs, and body

Gross body coordination

Ability to coordinate arms, legs, and body to perform activities requiring whole-body movements

Gross body equilibrium

Ability to coordinate arms, legs, and body to maintain balance and remain upright in unstable positions

Stamina Ability to exert oneself physically over a long duration

Research consistently demonstrates that physical ability tests predict job performance for physically demanding jobs (Hogan, 1991). Identifying individuals who cannot perform the essential physical functions of a job—especially in hazardous positions such as police of�icer, �ire�ighter, and military personnel—can minimize the risk of physical harm to the job candidate, other employees, and civilians. Another positive feature of physical ability tests is that they are not strongly correlated with cognitive ability tests, which as mentioned earlier tend to be biased. Thus, using physical ability tests in conjunction with cognitive ability tests can help decrease potential bias and make job performance predictions more accurate (Carroll, 1993).

I/O psychologists must be careful to design and measure physical ability tests so they do not discriminate against minority groups. Unfortunately, although a job may legitimately need candidates who possess speci�ic physical skills, the standards and measures of those skills are often arbitrarily or inaccurately made. For example, height and weight are often used as a proxy for physical strength. Even though these measurements are quick and easy to make, they are not always the most accurate, and they have resulted in the underselection of women for physically demanding jobs (Meadows v. Ford Motor Co., 1975). Companies that fail to implement accurate, careful measurements of an applicant’s ability to perform a job’s necessary, speci�ic physical requirements run the risk of discriminating against protected classes—something that will likely land them in court, where judges and juries consistently rule in favor of the plaintiff and award large settlements.

One example of a valid, commercially available physical ability test is the Crawford Small Parts Dexterity Test. This test is used to assess the �ine motor skills and manual dexterity required for industrial jobs. It examines applicants’ ability to place small objects into small holes on a board. For their �irst task, test takers use a pair of tweezers to place 36 pins into holes and position a collar around each pin. In their second task, test takers use a screwdriver to insert 36 screws into threaded holes. The test is scored in two ways: by measuring the amount of time taken to complete both parts of the test and by measuring the number of items completed during a set time limit (3 minutes for part 1 and 5 minutes for part 2).

Personality

I/O psychologists have studied how personality affects the prediction of job performance since the early 20th century. After examining 113 studies published from 1913 to 1953, Ghiselli and Barthol (1953) found positive but small correlations between personality and the prediction of job performance. The researchers were surprised that the correlation was not stronger and suggested the companies had used personality tests with weak validity evidence. Developing and using tests with stronger validity evidence, they concluded, would facilitate better predictions of applicants’ future job performance.

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Guion and Gottier (1965) disagreed with this notion, suggesting instead that personality measures were unrelated to job performance—even though the two noted that their data came from studies that used poorly designed or theoretically unfounded personality measures. In fact, most researchers at the time developed their own concepts of personality and created tests to match them, which naturally led to considerable inconsistency in the ways they measured personality constructs. Thus, although organizations continued to use personality tests to select candidates for management and sales positions, academic research in this area waned for the next 20 years.

In the early 1990s Barrick and Mount’s (1991) landmark meta-analysis established the �ive-factor model of personality, now commonly referred to as the Big Five personality factors—extraversion, agreeableness, conscientiousness, neuroticism, and openness to experience—which are described in detail in Table 3.2. This model is broader than earlier theories and therefore lends itself more readily to a useful classi�ication for the interpretation of personality constructs (Digman, 1990).

Table 3.2: Big Five personality factors

Factor Also referred to as Description

Neuroticism Adjustment Insecure, untrusting, worried, guilty

Extraversion Sociability Sociable, gregarious, fun, people person

Openness to experience Inquisitiveness Risk taking, creative, independent

Agreeableness Interpersonal sensitivity Empathetic, approachable, courteous

Conscientiousness Mindfulness Dependable, organized, hardworking

The most important advantage of the �ive-factor model is the functional structure it provides for predicting the relationships between personality and job performance. Barrick and Mount (1991) reviewed 117 criterion-related validation studies published between 1952 and 1988 that measured at least one of the �ive personality factors. Results showed that conscientiousness (a measure of dependability, planfulness, and persistence) was predictive of job performance for all types of jobs. Further, extraversion (a measure of energy, enthusiasm, and gregariousness) predicted performance in sales and management jobs. The other three factors were found to be valid but were weaker predictors of some dimensions of performance in some occupations. That same year, Tett, Jackson, and Rothstein (1991) found strong positive predictive evidence not only for conscientiousness and extraversion but also for agreeableness and openness to experience. On the other hand, they found neuroticism to be negatively related to job performance. These researchers also discovered that validity was higher among studies that referenced job analysis information to create tests that linked speci�ic personality traits with job requirements. In summary, then, measures of the Big Five personality factors can signi�icantly predict job performance, but to do so, they must be carefully aligned with critical job functions.

In addition to strong criterion-related validity, measures of the Big Five factors also generally show very little bias. Across a number of personality factors, score differences across racial groups and/or genders are minor and would be unlikely to adversely impact employment decisions; two areas that fall outside this generalization are agreeableness, in which women score higher than men, and dominance (an element of extraversion), in which men score higher (Feingold, 1994; Foldes, Duehr, & Ones, 2008). Because they produce almost no adverse impact, personality tests can be used in conjunction with cognitive ability tests during selection processes to increase validity while reducing the threat of potential bias (Hough, Oswald, & Ployhart, 2001).

The �irst test to examine the Big Five personality factors was the NEO Personality Inventory, named for the �irst three factors of neuroticism, extraversion, and openness to experience. Composed of 240 items, the test can be completed in 30 to 40 minutes and is available in a number of languages, including Spanish, German, and British English. However, research now supports much shorter versions, as short as 10 items (Gosling, Rentfrow, & Swann, 2003), which are ideal for use in work settings, either separately or in combination with other tests and survey measures.

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Concepts in Action: Personality Traits - The Big Five

Today’s personality researchers are mainly interested in investigating the basic dimensions of personality and its connection to behavior. They start with a few characteristics that are stable over time and can be captured by a few dimensions. The most popular inventory is known as the Big Five.

Types of Personality Tests There are two basic types of personality tests: projective tests and self-report inventories. The former presents test takers with an ambiguous image, such as an inkblot, and asks them to describe what they see. Trained psychologists then interpret the descriptions. The rationale for this type of test is that test takers will project their unconscious personalities into their descriptions of the image. Two examples of projective tests are the Rorschach (inkblot) test and the Thematic Apperception Test.

Projective tests are most often used by clinical psychologists and are rarely used in employee selection processes because they are expensive, are time consuming, and require professional interpretation. Instead, employers make use of self-report personality inventories, which ask individuals to identify how a situation, behavior, activity, or feeling is related to them. The rationale for this type of test is that test takers know themselves well enough to make an accurate report of their own personality. Some advantages of the self-report inventories over projective tests are cost-effectiveness, standardization of administration practices, and ease in scoring and interpreting results. For example, the website below can help you assess your Big Five personality traits.

Find Out for Yourself: Your Big Five Personality Traits

Visit the following website to �ind extensive information and research about the Big Five personality traits, take the Big Five personality test, and get instant feedback.

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The Big Five Project Personality Test (http://www.outofservice.com/big�ive/)

Unfortunately, self-report inventories have drawbacks. A major one is the tendency of test takers to distort or fake their responses. Because test items usually have no right or wrong answers, test takers can easily choose to provide socially acceptable responses instead of true answers in order to make themselves look better to the hiring organization. Indeed, in one controlled study, researchers instructed test takers to try to respond to a personality inventory in a way they felt would create the best impression, which resulted in more positive scores (Hough, Eaton, Dunnette, Kamp, & McCloy, 1990). Furthermore, a signi�icant number of actual applicants who took personality inventories as part of a selection process were found to have distorted their responses to appear more attractive, even without having been told to do so (Stark, Chernyshenko, Chan, Lee, & Drasgow, 2001).

The real question for I/O psychologists is whether response distortion signi�icantly affects the validity of personality inventories. Ones, Viswesvaran, and Reiss (1996) conducted a meta-analysis that examined the effects of social desirability on the relationship between measures of Big Five factors and both job performance and counterproductive behaviors. They found that test takers’ attempts to provide socially acceptable—not necessarily truthful—answers did affect their scores in the areas of emotional stability and conscientiousness but did not seriously in�luence test validity. However, faking answers can in�luence hiring decisions by changing the rank ordering of job candidates (Christiansen, Gof�in, Johnston, & Rothstein, 1994).

One interesting and paradoxical �inding of personality test research is that people who are able to recognize the socially acceptable answers, whether they accurately represent the truth of that person, tend to perform better on the job than people who are unable do so (Ones et al., 1996). How can this be? One explanation is that people in the former group are better at reading a situation’s subtle social cues and are therefore more able to extrapolate what they need to do to ful�ill coworkers’ and managers’ expectations.

To balance the advantages and disadvantages of projective and self-report tests, a new type of tests, called implicit measures, has emerged. Implicit measures are self-report tests in which the questions are intentionally designed to make the purpose of the test less obvious and thus less amenable to faking and social desirability biases. For example, the test taker may be given a few seemingly neutral situations and a list of thoughts, feelings, and actions and be directed to select the ones that most closely represent him or her in each situation. This intentional vagueness allows implicit measures to assess a construct more accurately and comprehensively (Bing, LeBreton, Davison, Migetz, & James, 2007; LeBel, & Paunonen, 2011).

Honesty and Integrity

Organizations need to be able to identify individuals who are likely to engage in dishonest behaviors. Employee misconduct is more serious than distortion of answers on a personality test and can have a signi�icant impact on both coworkers and the organization as a whole. Employee theft, embezzlement, and other forms of dishonesty may cost American businesses billions of dollars annually. According to the National White Collar Crime Center, embezzlement alone is estimated to cost companies as much as $90 billion each year (Bressler, 2009). In the past, organizations used polygraph tests, but polygraph test results are not always accurate, and applicants may �ind them to be an invasion of privacy. When the Employee Polygraph Protection Act was passed in 1988, most private employers became unable to use these tests, thus requiring them to �ind another way to identify this trait.

A more valid way to measure employee dishonesty is with an integrity test. Integrity tests fall into two categories: overt integrity tests and personality-based integrity tests. The �irst type assesses an individual’s direct attitudes and actions toward theft and employment dishonesty. Test items typically ask individuals to consider their opinions about theft behaviors or to think of their own dishonest behaviors. Sample questions include “Is it OK to take money from someone who is rich?” and “Have you taken illegal drugs in the past year?”

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Personality-based integrity tests typically contain disguised-purpose, or covert, questions that measure various personality factors—such as responsibility, virtue, rule following, excitement seeking, anger, hostility, and social conformity—that are related to both productive and counterproductive employee behaviors. Although overt integrity tests can predict theft and other glaring forms of dishonesty, personality-based integrity tests are able to predict behaviors that are more subtly or secretly dishonest, such as absenteeism, insubordination, and substance abuse.

Vocational Interests

Unlike most of the tests we have discussed so far, vocational interest inventories are designed for career counseling and should not be used for employee selection. In these inventories, test takers respond to a series of statements pertaining to various interests and preferences. In theory, people who share the preferences and interests of successful workers in a given occupation should experience a high level of job satisfaction if they pursue that line of work. Vocational interest scores predict future occupational choices reasonably well, with between 50% and 60% of test takers subsequently working in jobs consistent with their vocational interests (Hansen & Dik, 2005). However, even though people are likely to get a job doing something in which they are interested, research does not support the notion that vocational interest will always lead to high job performance or satisfaction. In fact, interest congruence is only weakly related to job satisfaction and does not effectively predict either job or training performance (Tranberg, Slane, & Ekeberg, 1993; Schmidt & Hunter, 1998). Keep in mind that just because someone is interested in a certain job does not mean he or she will be able to perform it well.

One frequently used measure of vocational interest is the Strong Interest Inventory (SII), previously known as the Strong Vocational Interest Blank. The SII is a self-report inventory composed of 291 items divided into six themes: artistic, conventional, social, realistic, enterprising, and investigative. The test requires 25 minutes to complete and is administered and scored by computer. The results help test takers identify occupations, leisure activities, and work preferences that match their interests. It possesses norms for 211 different occupations. Because interests tend to remain stable throughout a person’s life, it makes sense for high school and college students to take an interest inventory like the SII as they begin the process of developing their professional careers.

Another example is the Armed Services Vocational Aptitude Battery (ASVAB). This test assesses a wide range of abilities that predict future success in the military. More than 1 million military applicants, high school students, and postsecondary students take this test every year. Test subcategories include reading comprehension, world knowledge, science, math, electronics, and mechanics.

Find Out for Yourself: Occupational Interests and Personal Abilities

Complete the Interest Pro�iler available on the O*NET website.

O*NET Interest Pro�iler (http://www.mynextmove.org/explore/ip)

What Did You Learn?

1. What did you �ind out about your occupational interests and personal abilities? 2. Are you currently working in a job that aligns with your occupational interests? Why or why not?

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3.6 Developing a Testing Program

Although creating, identifying, and using valid tests are essential for any quality testing program, organizations also face a number of administrative decisions that can affect the program’s overall success.

Deciding When Not to Test

Most important, an organization must decide whether to use testing in the selection process. Time and cost are extremely important considerations, and they include test development and design, necessary equipment, facility usage, and administrator/evaluator training and pay. Naturally, organizations will need to ensure that the bene�its of their testing program outweigh the costs.

Sometimes, the level of employee productivity that a test is able to identify is not high enough to warrant the expense of a testing program. In these cases other measures, such as improving employee training and development, can help advance new hires’ performance. Alternately, conducting a more careful review of applicants’ educational backgrounds or asking more in-depth interview questions can provide greater insight into the job-related skills and abilities of potential employees, without having to add tests to the preemployment process. In summary, then, it is important for an organization both to establish its employment needs and to determine the potential bene�its and expected costs of testing programs before implementing these useful selection tools.

Finding Quality Tests

Over the past few decades, the volume and variety of selection tests have increased dramatically. Unfortunately, the test publishers and consulting companies that design them use varying levels of rigor and expertise. How, then, is an organization to know which tests have met acceptable standards of validity, reliability, and test norming? Two periodicals, the Mental Measures Yearbook and Tests in Print, are excellent reference sources that provide descriptions and expert reviews of a large number of tests, including those used for selection. As you learned in Chapter 1, you can also consult the original scienti�ic research that was conducted to develop and validate various tests in order to assess their quality and rigor.

Find Out for Yourself: Quality of Selection Methods

Research various selection methods with which you are familiar or that you have undergone in the past. Examples may include job applications, interviews, reference checks, medical exams, and referrals. Try to �ind validity and reliability scores for each method. Which ones are more valid? Which ones are more reliable? Why do you think that is the case?

Test Administrators

A test’s usefulness depends in part on its proper administration, scoring, and interpretation. Organizations must not only train their testing administrators on these key functions but also establish quality controls and retrain administrators when necessary. The requirements for administrator quali�ications and abilities vary from test to test, so it is important for organizations to be aware of the requirements outlined in each test’s manual when selecting and administering tests.

Addressing Ethical and Privacy Issues

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Test security is a major concern for I/O psychologists and organizations in order to maintain high ethical testing practices. Tests and scores must remain con�idential. Questions should never be published or distributed to the public, and tests should only be administered to quali�ied individuals.

Some applicants may view tests as an invasion of privacy, particularly ones that assess personality and integrity or screen for drugs. As we have noted, fear or mistrust in the selection process can have adverse consequences. Organizations can alleviate some of these concerns by communicating to applicants the reasons for the test, how test results will be used, and how con�identiality will be maintained.

Testing People With Cultural and Language Differences

Differences in cultural backgrounds can shape how test takers interpret and respond to test questions. As the American workforce becomes more racially and ethnically diverse, it is critical that organizations emphasize the use of culturally unbiased tests. Moreover, English is no longer the primary language for a growing number of applicants. Naturally, applicants who cannot �luently read or speak the language used in a test will likely return arti�icially low scores, not because they lack skills or knowledge but simply because they cannot comprehend the instructions or understand the test questions. To overcome language barriers, a test can be translated into a variety of languages. However, a common problem with this approach is that expressions and phrases used in the test items may be lost in translation, which decreases the test’s validity generalization. Thus, additional validation is necessary to assess validity generalization whenever a test will be used for a different racial or ethnic group or translated into a different language, and the test may need to be adapted accordingly.

Testing People With Disabilities

The ADA protects quali�ied individuals with disabilities from discrimination in all areas of employment, including employment testing. It can be challenging for organizations to accommodate individuals with disabilities; they must aim to be sensitive to the needs of the individual while also maintain the integrity of the testing process and avoid incurring undue hardship. Test administrators require training to understand and properly respond to accommodation requests. Examples of reasonable accommodations include modifying test equipment or seating, ensuring accessibility to the testing facility, and providing a Braille or large-print version of a test to visually impaired candidates.

Establishing Appeals and Retest Processes

Every applicant should have the opportunity to perform at his or her best on a test. Despite every intention to create this opportunity, sometimes it is simply not possible. Equipment can malfunction, the testing environment could be poor (noise, temperature, bad odors, or even disasters such as �ire or �lood), and candidates can be affected by outside stressors (illness or hospitalization of a family member, among others). With each of these situations, candidates could perform signi�icantly better if given the opportunity to retake the test under conditions in which the negative in�luences are not present.

Test administrators should be trained to identify situations that produce invalid results and then implement a speci�ic process to retest the candidate based on information and guidance provided by the test publisher. The organization should also establish policies for handling complaints regarding testing in order to resolve concerns fairly and consistently.

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3.7 Psychological Testing: Special Issues

Over the past decade, I/O psychologists have become interested in a number of questions related to employment testing. How do applicants feel about being tested? Do these feelings affect their perceptions of the company? Do online tests show the same validity as paper-and-pencil tests, and how can organizations keep applicants from cheating on them? Recent research �indings shed some light on these interesting questions.

Applicants’ Reactions to Tests

Most research about testing has focused on technical aspects—content, type, statistical measures, scoring, and interpretation—and not on social aspects. The fact is, no matter how useful and important tests are, applicants generally do not like taking them. According to a study by Schmit and Ryan (1997), 1 out of 3 Americans have a negative perception of employment testing. Another study found that students, after completing a number of different selection measures as part of a simulated application process, preferred hiring processes that excluded testing (Rosse, Ringer, & Miller, 1996). Additional research has shown that applicants’ negative perceptions about tests signi�icantly affect their opinions about the organization giving the test. It is important for I/O psychologists to understand how and why this occurs so they can adopt testing procedures that are more agreeable to test takers and that re�lect a more positive organizational image.

Typically, negative reactions to tests lower applicants’ perceptions of several organizational outcome variables, including organizational attraction (how much they like a company), job acceptance intentions (whether they will accept a job offer), recommendation intentions (whether they will tell others to patronize or apply for a job at the company), and purchasing intentions (whether they will shop at or do business with the company). A study conducted in 2006 found that “[e]mployment tests provide organizations with a serious dilemma [: . . .] how can [they] administer assessments in order to take advantage of their predictive capabilities without offending the applicants they are trying to attract?” (Noon, 2006, p. 2). With the increasing war for top-quality talent, organizations must develop recruitment and selection tools that attract, rather than drive away, highly quali�ied personnel.

What Can Be Done? I/O psychologists have addressed this dilemma by identifying several ways to improve testing perceptions. One is to increase the test’s face validity. For example, applicants typically view cognitive ability tests negatively, but their reactions change if the test items are rewritten to re�lect a business-situation perspective. Similarly, organizations can use test formats that already tend to be viewed positively, such as assessment centers and work samples, because they are easily relatable to the job (Smither et al., 1993).

Providing applicants with information about the test is another, less costly way to improve perceptions. Applicants can be told what a test is intended to measure, why it is necessary, who will see the results, and how these will be used (Ployhart & Hayes, 2003). Doing so should lead applicants to view both the organization and its treatment of them during the selection process more favorably (Gilliland, 1993). Noon’s 2006 study investigated applicants’ reactions to completing cognitive ability and personality tests as part of the selection process for a data-processing position. Half of the applicants received detailed information explaining the testing process, while the other half received the standard information normally provided by the company. Applicants who received the detailed information found the company more attractive and were more likely to recommend it to others, even if they did not receive a job offer. Although this tactic is not always used during testing process, providing detailed information about a test is a quick, cost-effective, and practical way for organizations to improve applicant test perceptions (Lounsbury, Bobrow, & Jensen, 1989).

Online Administration

Over the past decade, online testing has increased dramatically. Also referred to as unproctored Internet testing,

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Minerva Studio/iStock/Thinkstock

Online testing is becoming more prevalent and has many bene�its, such as increasing the applicant pool and lowering costs.

the online test has replaced many traditional paper-and- pencil alternatives, and almost every type of test is now available through online administration. Online tests have a number of advantages over paper-and-pencil tests. They can be taken by anyone from nearly anywhere in the world, increasing the pool of applicants for a job. Brick-and-mortar testing facilities and proctors no longer need to be a part of the testing program, because applicants can complete the test from home or a public library. The amount of administrative support also decreases, further lowering costs. Hiring decisions are made faster using online administration, because the testing software provides immediate scoring and feedback on test performance. Finally, online tests often take advantage of new interactive technology, such as video clips, simulations, and gaming platforms, and thus test takers �ind them more engaging.

Despite the ease and mass marketability of Internet tests, however, I/O psychologists struggle to reach a consensus on their ef�icacy and ethicality as well as the validity of the test scores they yield. Online tests present a number of challenges, including applicant cheating, potential for subgroup differences, and the inability to identify the test taker (Tippins et al., 2006). Current research suggests that unproctored Internet tests are not compromised by cheating (Nye, Do, Drasgow, & Fine, 2008), although undoubtedly there will be occasions when an applicant will feel the stakes are high enough to rationalize cheating. One solution to this potential problem is to require candidates to complete a portion of the test under proctored conditions at the organization prior to receiving a job offer.

Regardless of the challenges, online tests are here to stay. The advantages far outweigh the disadvantages, leaving I/O psychologists with the “delicate task of balancing best ‘academic’ practice with often con�licting practical and organizational needs to implement valid and reliable online assessments” (Kaminski & Hemingway, 2009, p. 26).

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Psychological testing can be an effective way to assess applicants’ positivity levels.

3.8 Testing for Positivity

Selecting for KSAOs is important, but so is selecting for positivity. Psychological testing can be an effective way to assess applicants’ positivity levels. Although valid and reliable tests are available to assess many physical, cognitive, social, and psychological traits and abilities, tests are just starting to emerge that adequately assess positivity in general as well as speci�ic positive psychological qualities in an applicant or an employee.

This is not to say that established psychological assessments are predominantly negative. To the contrary, many of the most recognized psychological tests are positive in nature. For example, the Big Five personality traits include four clearly positive traits—conscientiousness, extroversion, agreeableness, and openness to experience—and only one negative trait, neuroticism. However, many of the existing psychological tests are primarily based on problem-oriented models and processes, which mainly focus on detecting what an applicant may be lacking rather than on assessing what makes an applicant �lourish and thrive in the workplace.

Inherently, an applicant’s positivity and negativity are often considered to be opposite sides of the same coin. For example, an employer might assume that an employee who tests high on optimism will be low on pessimism, or that an employee who is high on positive affect should also be low on negative affect. These assumptions have gone unchallenged for years, and many organizations and consultants have readily made extrapolations from positive to negative and negative to positive psychological characteristics, as if they are two ends of the same

continuum. However, recent studies show that these assumptions may not always hold true. For example, Schaufeli and Bakker’s (2004) study showed strong evidence that experiencing burnout and engagement at work are two distinct psychological constructs rather than polar opposites of the same continuum, and each is affected by different job characteristics. Another example is work behavior. Positive and negative work behaviors have been shown to be distinct and to yield different, not just opposite, performance outcomes (Dunlop & Lee, 2004; Sackett, Berry, Wiemann, & Laczo, 2006).

Several resources are available for those employers searching for valid and reliable tests of positivity. The reference Positive Psychological Assessment: A Handbook of Models and Measures (Lopez & Snyder, 2003), published by the American Psychological Association, evaluates the validity and reliability of numerous tests of positive psychological constructs such as optimism, hope, con�idence, creativity, and courage. Of course, for each psychological construct, there are several alternative tests. Some offer higher validity or reliability than others, so employers should carefully select not only which constructs they should test and evaluate but also which speci�ic tests to use.

Three speci�ic positivity tests have been found particularly relevant and predictive of work performance and other desirable outcomes such as job satisfaction, organizational commitment, and overall well-being. The �irst of these is Gallup’s Strength�inder (Rath, 2007), which assesses test takers on 34 different “talents” and is widely used in the United States and around the world to select, place, and �it job candidates in the right jobs, usually based on the test taker’s top �ive talents.

The second is the Psychological Capital Questionnaire (PCQ-24), which has been recently developed and validated by Fred Luthans and colleagues (Luthans, Avolio, Avey, & Norman, 2007; Luthans, Youssef-Morgan, & Avolio, 2015) at the University of Nebraska. It is a 24-item measure that assesses the test taker’s levels of hope, con�idence, resilience, and optimism and combines these four psychological resources into one higher order positive construct. There is also a short, 12-item version of this test (PCQ-12; Avey, Avolio, & Luthans, 2011; Luthans, Youssef,

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Sweetman, & Harms, 2013) that has been translated into a number of languages and tested in numerous cultures (Wernsing, 2014), as well as an implicit version that uses adaptable positive, negative, and neutral situations to assess test takers’ reactions (Harms & Luthans, 2012).

The third is Barbara Fredrickson’s (2009) positivity ratio assessment, which measures positivity and negativity as two independent constructs and then calculates the ratio of positive-to-negative responses. See the feature box Find Out for Yourself: How Positive Are You? to learn more about this assessment.

Find Out for Yourself: How Positive Are You?

Visit the Positivity website to complete Barbara Fredrickson’s positivity ratio assessment and instantly obtain your own positivity ratio. Keep in mind that this assessment is somewhat volatile and will change depending on the situations you encountered the day before. To get a more accurate assessment, it is recommended that you complete this test multiple times over several days and take an average of your scores. Also keep in mind that some of the statistical analysis behind positivity ratios has been criticized, so be sure to review the 2013 update posted by Fredrickson on the same website.

Positivity Ratio Assessment (http://www.positivityratio.com/single.php)

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Summary and Conclusion

Selecting the right candidates from the available pool of job applicants is critical for employee and organizational success. When the right employee is selected and placed in the right job, performance is higher, which can translate into higher productivity and �inancial returns for the organization. For example, well-placed employees tend to go above and beyond the immediate job requirements, which can positively in�luence coworkers and promote a positive organizational culture. Properly selected employees are also likely to stay with the organization longer and be absent less often, which can translate into enormous cost savings. Equally important, well-placed employees will likely experience more satisfaction with their jobs and the organization, have higher work engagement levels, and perceive their jobs as more meaningful, all of which contribute to higher employee well-being.

Because effective employee selection relies on predicting subsequent performance on the job, it is bene�icial for managers to use the most accurate and consistent predictors available. Psychological testing affords managers the opportunity to use valid and reliable tests that can ful�ill this important role. However, many managers continue to use highly subjective approaches to selection, which often ends up wasting their time and their organization’s resources on selecting, training, and managing the wrong job applicants, or worse, exposing their organization to discrimination-based lawsuits that can be time consuming and costly and can compromise its reputation.

The role an I/O psychologist plays in the test-selection process is threefold. First, I/O psychologists can educate managers and organizational decision makers on the importance of �inding evidence for a test’s validity and reliability before attempting to use it. Second, they can use available evidence to help organizations discern among multiple tests, a process that managers often perceive as intimidating or dif�icult to understand. Third, I/O psychologists contribute to the development of more valid and reliable tests and selection tools in areas where none currently exist, helping create the most appropriate and ef�icient methods for selecting the right candidates in an ever-changing workplace.

Chapter 3 Flashcards

Key Terms

constructs

Choose a Study ModeView this study set

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Cronbach’s alpha

meta-analysis

objective tests

percentile scores

raw scores

reliability

standardization sample

subjective tests

test

test norms

validity

validity generalization

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Learning Outcomes

After reading this chapter, you should be able to

Recognize the importance of performance measurement for organizational success.

Identify and critique common approaches to measuring employee performance in organizations.

Explain the differences between objective and subjective performance appraisals.

Describe the different performance appraisal formats.

Apply the concepts of validity and reliability to performance appraisal tools and processes.

Assess the effects of rating errors on performance appraisal accuracy.

Implement an effective performance management system.

Apply positive psychology to performance appraisal processes.

4Performance Appraisal

iStockphoto/Thinkstock

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Link employee performance and performance appraisal results to �inancial outcomes.

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4.1 The Importance of Performance Appraisals

Throughout your life, people will evaluate your performance in ways that shape who you become and where you will go. From elementary school through college, on the athletic �ield and in your community, from your �irst part-time job to your adult career, others will test and evaluate and compare your performance, the results of which will determine whether you advance to the next phase of life.

Within organizations, assessing employees’ performance tends to be perceived as a necessary evil that neither managers nor staff particularly enjoy. Many employees fear that even one low performance rating could affect their pay or damage their career. Even more concerning is the prospect of receiving low ratings from a manager who doesn’t ever directly observe or work with you but uses secondhand information or personal biases to make his or her evaluations. Sadly, this is frequently the case.

Consider This: How Do You Feel About Being Evaluated?

Think about one or more occasions in which you were being evaluated. It could be at work, at school, while playing a sport, or elsewhere.

Questions to Consider

1. Describe your feelings and thoughts before you received these evaluations. Were you anxious? Were you looking forward to the evaluation?

2. Describe your feelings and thoughts while receiving these evaluations. Were you surprised? Upbeat? Interested in receiving feedback? Actively involved? Did you passively receive the information? Feel under attack?

3. Describe your feelings and thoughts immediately after these evaluations. Were you excited? Flattered? Humiliated? Angry? Defensive?

4. What effects did these evaluations have on your personal, social, or professional life? Did they make you a better person in any way? Explain your answer.

Managers also experience anxiety when completing performance appraisals. Most often, they worry that criticisms, no matter how small, might provoke negative reactions, ranging from disappointment and frustration to anger and hostility. These emotions can strain the manager–employee relationship or cause the employee to become less motivated or even to quit. As a result, managers tend to shy away from providing negative performance feedback, which of course negates accuracy.

Consider This: How Do You Feel About Evaluating Others?

Think about one or more occasions in which you had to evaluate or give feedback to someone. Again, it can be at work, at school, or in the context of a sport. Personal and social settings can also be used for this exercise.

Questions to Consider

1. Describe your feelings and thoughts before you gave your evaluation or feedback. Were you anxious? Hesitant? Excited?

2. What were your primary concerns? The fairness of your evaluations? The reactions of the people you were evaluating? The repercussions of your evaluation for yourself and/or the person you were

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evaluating? 3. Describe the settings in which you had to communicate your evaluations. Was it face-to-face? On the

phone? Via e-mail? In a written report? 4. Describe the content of your feedback. Was it positive, neutral, or negative? 5. How did the person you were evaluating react? Was your feedback appreciated? Tolerated? Rejected? 6. How did you manage or leverage the reaction of the person you were evaluating? Did you involve him

or her? Did you ask for his or her input? 7. Describe your feelings and thoughts after giving your evaluation. Were you stressed? Drained?

Relieved? Did you feel more or less con�ident about your feedback communication skills and your ability to accurately assess others’ performance?

8. What effects did your evaluation have on others’ personal, social, or professional lives? Did it make them better? Did it help them advance their careers? How did it affect your relationships with the individual you evaluated? Explain.

If everyone dislikes performance appraisals, why keep doing them? For one thing, unmanaged performance is chaotic and random. Employees’ work needs to be aligned with the organization’s overall goals, and clear performance feedback helps everyone know if this is indeed happening. In fact, a well-designed performance appraisal system should not only provide employees with rich feedback but should also communicate clear performance expectations and include information that will help them perform at their highest level possible (Pulakos & O’Leary, 2011). Appraisals that meet each of these concerns will enable the organization to further its mission to succeed. The question, then, is not whether to keep doing performance appraisals but how to make them most effective.

Using Performance Appraisals

A performance appraisal is the formal process through which employee performance is assessed. It involves providing feedback to the employee and designing corrective action plans if necessary. Organizations conduct performance appraisals for the following reasons:

1. To evaluate performance objectively. Organizations need some sort of system to measure the value of each employee’s performance. These measures must be objective and allow managers to consistently compare the performance of people who have the same job function.

2. To increase worker motivation. Appraisals provide employees with speci�ic feedback regarding their strengths and weaknesses. When workers know what they should be doing, how they actually are doing, and how they can improve, they are often motivated to perform better.

3. To make administrative decisions. Managers rely heavily on data from performance appraisals when making decisions about employee raises and bonuses, promotions, demotions, or even terminations. Employees must perceive these decisions as fair and free from bias; a good performance appraisal will facilitate those favorable perceptions.

4. To improve organizational performance. Performance appraisals are essential to improving organizational performance (DeNisi & Sonesh, 2010). They pinpoint skill de�iciencies in speci�ic parts of the organization, helping managers focus their training and selection efforts. Appraisals also enhance an organization’s opportunities for success by identifying poor performers. This not only helps weed out subpar personnel but also motivates top performers to keep their performance levels high. It is important to note that the link between performance appraisals and organizational performance is not always direct. As discussed throughout this chapter, performance appraisal needs to be an integrated part of an effective set of human resource practices in order to have a positive impact on organizational performance (DeNisi & Smith, 2014).

5. To establish training requirements. Appraisal data provides insight into workers’ knowledge, skill, and de�iciency levels. This information helps managers establish speci�ic training objectives, update or redesign training programs, and provide appropriate retraining for speci�ic employees.

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6. To enhance selection and testing processes and outcomes. An important use of performance appraisal data is to establish the criterion-related validity of selection tests. Recall from Chapter 3 that criterion-related validity establishes a predictive, empirical (number-based) link between test scores and actual job performance by correlating applicants’ employment test scores with their subsequent performance on the job. How can the predictive capacity of a test be determined if the organization does not design and implement objective performance measures and procedures? It would have no accurate data with which to correlate test scores, which would hinder its ability to design and use accurate tests and implement effective selection processes.

7. To provide a level playing �ield. Performance appraisals help clarify expectations. This is especially important in large organizations that feature many managers who oversee similar positions. Both managers and employees should ensure that they are pursuing a uni�ied set of goals and expectations and that there are no discrepancies. A formal performance appraisal process can help with that standardization and calibration process. Without performance appraisals, employees may be evaluated unfairly because some managers may be intentionally or unintentionally more lenient than others. You will learn about some of these common biases in this chapter.

Concepts in Action: Maintenance and Renewal of Employees

Training and development are ongoing processes and may include external and internal training. Reward systems are often linked to motivational theories.

Maintenance & Renewal of Employees From Title: Human Resources Function

(https://fod.infobase.com/PortalPlaylists.aspx?wID=100753&xtid=40230)

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michaeljung/iStock/Thinkstock

Recording how many cars this man sold over the past year is one way to objectively measure his performance, although it does not address other aspects of his performance, such as customer service.

4.2 Approaches to Measuring Performance

I/O psychologists have identi�ied a number of techniques for measuring employee performance. These measures can be either objective or subjective. Generally, what is measured and how it is done depends on the type of work an employee performs. Some jobs, such as sales and assembly-line work, have objective outcome measures (sales revenue, number of pieces assembled), whereas others are more subjective (wait staff performance, art design work).

Objective Performance Measures

Objective performance measures are quantitative measures of performance that can be found in unbiased organizational records. They are generally easy to gather and include two types of data: production measures (such as sales volume, number of units made, number of error occurrences) and personnel measures (such as absenteeism, tardiness, theft, and safety behaviors). Both measures are also usually evaluated according to the quality of performance.

However, objective measures can be deceivingly simple. Consider the performance of two sales professionals in an insurance company. Over the course of a year, Salesperson A sold 500 policies and Salesperson B sold 1,000. According to this data, Salesperson B appears to be the better salesperson—twice as good, in fact. However, if we examine the quality of each worker’s performance, we might learn that Salesperson B sold unpro�itable policies, resulting in a $1 million loss for the company. Salesperson A, on the other hand, sold very pro�itable policies, resulting in a $1 million pro�it.

Alternatively, Salesperson B may have focused on selling more policies while cutting corners on after-sale service and follow-up, which could have resulted in dissatis�ied customers. On the other hand, Salesperson A may have invested more time per sold policy on such interactions. Although the organization may not directly measure or reward after-sale service and follow-up, these customer interactions can help build its reputation and are known to result in more satis�ied customers returning for additional products and referring others. Repeat business from and referrals by satis�ied customers are signi�icantly less costly for an organization to generate than is building new clientele. However, these additional sales may not be easily attributable to Salesperson A if the returning or referred customers are assigned to another salesperson. As you can see, evaluating worker performance by quantity alone is not a wise course of action.

Unfortunately, even after accounting for performance quality, objective data may not provide an accurate or complete picture of an employee’s performance. Many factors beyond workers’ control can limit their ability to perform their best. Looking more closely at our two insurance salespeople, we might discover that the difference in sales volume could be attributable to the location of each employee’s branch of�ice. Salesperson A could work in a small town, while Salesperson B works in a large metropolitan region. Thus, Salesperson A could have captured a larger market share of his designated region than Salesperson B, even though he sold fewer policies. Alternatively, perhaps Salesperson B was assigned an easy-to-sell policy because she was a new employee, while Salesperson A, as a veteran employee, was assigned a hard-to-sell but very lucrative policy. As you can see, accurate performance evaluations require more than a cursory look at sales and production numbers, although adding manager interpretation into the mix does make objective performance measures more subjective.

Personnel data, another objective measure, includes components such as theft, tardiness, absenteeism, safety behaviors, and rate of advancement. Though not typically related to a worker’s ability to do the job, these elements

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do indicate job success or failure. Many jobs, such as teachers, customer service representatives, and bank tellers, require consistent and timely daily attendance. Thus, absenteeism and tardiness are often used to evaluate these workers’ performance. Other jobs, such as machine operators, assembly-line workers, and truck drivers, have serious safety risks. With jobs such as these, it makes sense to keep count of employees’ accidents and safety incidents and use them as objective measures of performance.

As with any type of objective data, however, taken on its own, personnel data can be misleading. Once again, circumstances outside a worker’s control could affect performance. Sick children, a death in the family, or transportation troubles may affect an otherwise superior employee’s ability to come to work. Similarly, a workplace accident could have been caused by faulty company equipment, not worker error. Because you now understand the limits of objective data, let’s turn to subjective performance measures, their limitations, and ways to keep this data fair and free from bias.

Subjective Performance Measures

The allure of objective performance measures has to do with their ability to provide bias-free information on all workers across a speci�ic job. Of course, we now know that objective data can still be misleading. Further, most jobs require much more than simply looking at sales or production numbers, because most jobs are composed of a complex web of tasks, not all of which can be measured objectively. For example, a teacher’s performance must be made up of more than his or her students’ test scores, just as a police of�icer cannot be evaluated solely on the number of arrests he or she makes each month. While it is in most respects easier to measure things objectively, this can exclude important aspects of a situation that may not be objectively quanti�iable but should still be taken into consideration. Examples in the context of performance appraisal include “friendliness” of a salesperson, “helpfulness” of a customer service representative, or “leadership potential” of a frontline employee. To account for these hard-to-quantify characteristics, I/O psychologists created subjective performance measures, which rely on human judgment for evaluation and are thus exposed to some degree of subjectivity and personal judgment. Of course, with personal judgment comes some personal bias. To reduce such bias, evaluators must base their ratings on observations of worker behaviors that are critical for successful job performance. Furthermore, these behaviors must be identi�ied by conducting an accurate job analysis.

Interestingly, research shows only a small correlation between objective and subjective performance measures, which suggests that they measure different aspects of worker performance (Bommer, Johnson, Rich, Podsakoff, & McKenzie, 1995). Thus, the two sets of measures are complementary and should be used in conjunction whenever possible.

Organizations use many types of subjective performance measures, ranging from manager-composed performance narratives to numerically oriented rating scales. Each method differs in complexity as well as the amount of time required to create and implement it. The next section provides a brief review of some common subjective performance measures.

Written Narratives With the written narrative, one of the easiest performance measures to develop, the manager writes a paragraph or two summarizing an employee’s performance over a certain length of time. An example of a written narrative is a reference letter written by a supervisor for an intern at the end of an internship. When used to measure performance, managers often share speci�ic examples of the worker’s strengths and weaknesses, which the worker can then use to help improve his or her performance during the next appraisal cycle.

Although written narratives are quick and easy, they have a number of drawbacks. First, every manager will set different evaluation standards, making it impossible to compare workers with different managers. As a result, the written narrative should not be used to make decisions about compensation, promotions, or layoffs. Second, managers vary in their quality of written communication skills. Some may use ambiguous, incomplete, or misleading language, which can lead the employee to misinterpret or not understand the feedback. Finally, managers are often

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reluctant to address poor performance in a straightforward manner and sometimes deliberately write the narrative to cast negative behavior in a positive light.

The drawbacks of the written narrative have prompted I/O psychologists to develop a number of techniques to both improve the objectivity of subjective performance measures and reduce managerial biases.

Rank Ordering Rank ordering requires no forms or instruments and is the easiest way to evaluate workers. Managers simply rank their employees from best to worst. Some managers have the tendency to evaluate employees similarly. Rank ordering provides much-needed differentiation, even though the small differences between median employees still make it a challenge for managers to rank employees. Rankings also do not provide workers with performance feedback, which means they are not useful for self-improvement or training guidance. Because of their limitations, rankings should be used only during periods of promotion, downsizing, reorganization, or any other situation in which it would be valuable to understand a worker’s standing relative to other workers.

Paired Comparison As with rank ordering, the paired comparison technique requires the manager to evaluate a worker’s performance compared to the other workers on the team. In a systematic fashion, the manager compares one pair of workers at a time and then judges which of the two demonstrates superior performance. After comparing all the workers in all possible pairings, the manager then creates a rank ordering based on the number of times each worker is the better performer of a pair. For example, using the formula N(N - 1)/2)]N to determine the number of discrete pairings in a group, a manager with 10 employees would need to make 45 paired comparisons. A manager with a team of 20 employees would need to make 190 comparisons. As you can see, the number of pairs goes up quite quickly as the size of the team increases. For this reason, paired comparisons are only advantageous for smaller groups.

Like general rank orderings, paired comparisons do not provide performance feedback. However, they are generally simpler to use because managers need only compare one employee pair at a time, instead of the entire work team. Organizational leaders should keep in mind that rankings are not standard across the entire workplace. The lowest ranked member of a high-performing team might, for example, actually perform better than the highest ranked member of a poorly performing team.

Forced Distribution When an organization needs to evaluate a large number of employees, forced distribution is a viable option. With this technique, managers place employees into categories based on preestablished proportions. A typical performance distribution uses the following performance categories and proportions:

Superior 10%

Above average 20%

Average 40%

Below average 20%

Poor 10%

Using this distribution for a team of 100 workers, a manager would identify the top 10 employees (10%) and the bottom 10 employees (10%) and place them in the superior and poor categories, respectively. From the remaining 80 workers, the manager would then select the next 20 highest performers (20%) for the above-average category and the next 20 lowest performers (20%) for the below-average category. The �inal 40 workers (40% of the original 100) would fall into the average category. The lowest performance group would then be assigned to additional training, reprimanded, put on probation, or terminated. This approach is most commonly associated with Jack

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Welch, former CEO of General Electric. The company eliminated the lowest 10% of performers every year using this method.

Obviously, one of the major drawbacks of forced distribution is that it assumes that worker performance follows a normal distribution (some high performers, some low, most somewhere in the middle). This method makes no concessions for teams that are �illed with superior performers or, conversely, teams fraught with poor performers. Furthermore, it makes no distinctions among workers in a category; all average workers, for example, are simply considered average. Finally, as with rank ordering and paired comparisons, forced distribution can add arti�icial luster to “superior” members of poor-performing teams or unfairly tarnish “poor” members of a high-performing team. However, many organizations �ind forced distribution methods necessary to maintain a high-quality workforce in a competitive market. In order for forced distribution to realize its bene�its, an organization should consider factors such as how low performers are treated and how high performers are differentiated from low performers in terms of rewards (Blume, Baldwin, & Rubin, 2009)

Consider This: Leadership

In this video, former General Electric CEO Jack Welch discusses his leadership strategies, including the value of the forced distribution approach.

Jack Welch on Leadership (https://www.youtube.com/watch?v=l5GryYk5hV8)

Graphic Rating Scale Graphic rating scales are the most commonly used method for rating worker performance. Managers observe speci�ic employee behaviors or job duties along a number of predetermined performance dimensions such as quality of work, teamwork, initiative, leadership ability, and judgment. Then the manager rates the quality of performance for each dimension on a scale ranging from high to low performance. Looking at Figure 4.1, you can see that this employee received a below-average rating on teamwork.

Figure 4.1: General graphic rating scale

Each point on a graphic rating scale, called an anchor, is de�ined along the continuum. Anchors can vary in number, description, and depth of detail and can be stated in numbers, words, longer phrases, or a combination of these forms. Typically, the manager rates workers’ performance for each anchor using the 5-point rating scale, although 7- or even 9-point scales are not uncommon.

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Graphic rating scales are versatile, inexpensive, and quickly made. However, in order for the manager to make clear, accurate distinctions in worker performance across different dimensions, care must be taken to create speci�ic and unambiguous anchor descriptions. For example, in Figure 4.2, Scale A uses only qualitative anchors and requires the rater to place a check mark at the point that represents the worker’s current performance level. This is a poorly designed rating scale because the rating anchors are left unde�ined. Similarly, Scales B, C, and D include both verbal and numerical anchors, but ratings rely solely on manager judgment. Of course, this can be problematic, because one manager might judge his or her employees more or less stringently than another. Standard measures allow for clear comparisons across workers, even if they have different managers.

Figure 4.2: Examples of different graphic rating scales

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Some organizations ask managers to provide written examples that support their ratings of employees for each performance dimension and/or for the employee’s overall performance level. By combining both their rating scores and written feedback, employees learn how their performance compares to the company’s expectations and what their current strengths and weaknesses are. This allows the company to set goals or devise training strategies accordingly, and it allows the employee to seek out self-improvement or educational resources.

Behaviorally Anchored Rating Scale First proposed by Smith and Kendall in 1963, the behaviorally anchored rating scale (BARS) attempts to evaluate workers’ performance of very speci�ic behaviors critical for job success. These behaviors are established using the critical incidents job analysis technique discussed in Chapter 2.

Developing a BARS can be a long and dif�icult process. To begin, a group of supervisors familiar with the job both identi�ies the performance dimensions (quality of work, teamwork, initiative, etc.) that should be measured and observes critical incidents that exemplify both effective and ineffective job performance. Another group of subject matter experts transforms the list of critical incidents into behavioral statements that describe different levels of performance. A �inal group evaluates the behavioral statements and assigns a numerical value scale to each. See Figure 4.3 for an example.

Figure 4.3: Example of a BARS

One positive feature of the BARS approach is that the behaviorally de�ined anchors are very explicit as to what performance criteria are being measured. This makes it much easier for managers to distinguish between high and low performers. Additionally, because the rating scale is standardized, managers can compare BARS performance ratings across individuals and teams. Furthermore, workers perceive BARS to have high face validity, which reduces negative reactions to low ratings.

Despite the advantages, the signi�icant time investment needed to develop BARS means that most organizations do not employ this technique. Additionally, this method’s overall rating quality still depends on each manager’s observational skills (or lack thereof). Finally, research shows that the BARS is no more valid or reliable than any other rating method, nor is it more successful at decreasing rater error (Landy & Farr, 1980).

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Behavioral Observation Scale The behavioral observation scale (BOS) is similar to BARS in that both use critical incidents to identify worker behaviors observed on the job. The biggest difference between BOS and BARS is the rating format. Instead of quality, BOS rates the frequency with which a worker is observed to perform a critical job behavior (see Figure 4.4 for an example). Frequency is typically measured on a 5-point rating scale, comprising numerical (0%–20% of the time, 21%–40% of the time, etc.) or verbal assignments (sometimes, always, never, etc.) or a combination. The ratings are aggregated across all behavioral statements to establish a total score. Some researchers have tried to determine which method—BARS or BOS—is superior, but the research has been mixed and inconclusive.

Figure 4.4: Example of a BOS for a bank teller

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4.3 Sources of Performance Appraisal

The goal of performance appraisal is to accurately measure employees’ performance. To do so, raters must directly observe an employee’s actions and behaviors. In many cases managers do not get to directly observe their employees. A police chief, for example, cannot accompany all of his or her of�icers as they perform their daily patrols, nor can a school principal sit in classrooms all day long. Who, then, should evaluate such workers? For many jobs, input from a variety of sources helps create a more accurate, well-rounded performance appraisal—for a police of�icer, these sources might include his or her partner or members of the community; for a professor, they might include students or fellow faculty members. The following section describes the most common sources of input.

Supervisor Evaluation

Supervisors are the most common source of input for a performance appraisal, and rightly so. After all, managers are in the best position to evaluate employees’ performance as it relates to the organization’s objectives. Furthermore, because managers are responsible for recommending rewards and punishments, they must be able to tie their evaluations to employees’ performance. Without this link between performance and rewards, employees can become less motivated, resulting in poorer performance. Indeed, research shows that supervisors’ performance ratings are more strongly correlated to employees’ actual performance than any other rating source (Becker & Klimoski, 1989).

Peer Evaluations

Peer evaluations, or those made by one worker about a coworker, are common in jobs that require employees to work as a team. Peer feedback can be especially insightful. Coworkers often understand the job in greater depth than managers and can analyze how team members’ behaviors affect each other and contribute to the team’s success. Similarly, peer ratings on the dimension of leadership effectiveness provide a valuable perspective into a worker’s leadership skills and abilities.

How do employees respond to peer evaluations? Generally, reactions are mixed. In some situations, workers are appreciative because their peers are the only ones who ever directly observe their performance and are therefore the only ones who can accurately evaluate them. Furthermore, because peer ratings are nearly as accurate as supervisory ratings, they are excellent guides for self-improvement (Harris & Schaubroeck, 1988). On the other hand, workers may question the validity of a negative peer review, which can detrimentally affect their future performance. DeNisi, Randolph, and Blencoe (1983) found that workers who received negative peer-rating feedback went on to hold more negative perceptions of group performance, group cohesion, and overall satisfaction during the subsequent team task. Conversely, positive peer feedback did not signi�icantly affect any of these variables on the next task. Peer ratings, therefore, should serve as a supplemental—not sole—source of a worker’s performance evaluation.

Subordinate Evaluations

Subordinates are uniquely capable of assessing their manager’s actions and effectiveness across a broad range of dimensions, including delegation, coaching, communication, leadership, and goal setting. The process of subordinate evaluation, also called upward feedback, involves allowing subordinates to evaluate their superior’s performance.

Some research supports the notion that upward feedback can improve management’s performance. In one study, subordinates rated their managers on a number of different dimensions (quality, fairness, support, and communication). Superiors who received low to moderate ratings showed signi�icantly more rating improvements 6 months later than those who received high ratings (Smither et al., 1995). Further research shows that managers can improve their ratings even more by discussing upward feedback with their subordinates (Walker & Smither, 1999).

Con�identiality is critical to ensure that subordinate evaluations are accurate. Many employees fear there will be potential repercussions to giving managers negative feedback and will arti�icially in�late their evaluations if they

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Although self-ratings show more leniency and greater bias than those provided by supervisors or peers, employees who complete self- evaluations feel more engaged in the appraisal process, which can decrease their feelings of defensiveness regarding the �inal ratings.

know the manager will be able to identify them (Antonioni, 1994).

Self-Evaluation

Employees who complete self-evaluations, or evaluations of their own performance, feel as though they have a voice in the appraisal process, which in turn increases their acceptance of and decreases their potential defensiveness about the �inal ratings. Although typically used as supplemental evaluative data, self-ratings are especially useful with workers who work alone or independently.

Generally, self-ratings show more leniency, less variability, greater bias, and less agreement with those provided by supervisors, peers, or subordinates (Harris & Schaubroeck, 1988). These differences could stem from the worker’s use of a different evaluative standard (Schrader & Steiner, 1996), but research has identi�ied several ways to make self-ratings more accurate. First, workers can be told that their self- ratings will be compared against objective performance criteria. Second, the organization can make it clear that the self-evaluation will be used only for self-developmental purposes (Meyer, 1991). Third, educating both superiors and subordinates on the rating criteria and appraisal process leads to greater agreement between supervisor ratings and self-ratings (Williams & Levy, 1992).

360° Appraisals

360° appraisal is a multisource evaluative process; it utilizes performance input from many different viewpoints. In this process, a manager might, for example, receive feedback from his or her supervisor, peers, subordinates, and internal or external customers, as well as conduct a self-evaluation. Normally, each source uses a rating scale to evaluate the manager’s current pro�iciency level for a predetermined set of job duties and/or leadership dimensions (coaching, delegating, communicating, etc.). After all ratings are complete, they are compiled in a report and shared with the manager.

Over the past 30 years, 360° appraisals have become signi�icantly more popular. In the mid-1980s fewer than 10% of companies used this method to evaluate managers (Bernardin, 1986). Today, even though there is no exact percentage, it is likely that every Fortune 1000 company has some experience with conducting 360° appraisals. Interestingly, there is no consensus on how exactly to use these evaluations. Some believe it is appropriate to use them to make administrative decisions (Church & Bracken, 1997), but most disagree, suggesting they be used only for management development purposes (Antonioni, 1996; Coates, 1996). Some of this debate stems from concerns that employees may feel uncomfortable with rating their superiors and may fear the repercussions of providing an unfavorable evaluation. On the other hand, managers may feel that their peers or employees are unquali�ied to rate their performance because they may not have the full picture. However, despite differing opinions on how 360° appraisals should be used, research shows that consulting various sources provides unique and distinct perspectives about an employee’s competencies, performance, and effectiveness (Semeijn, Van Der Heijden, & Van Der Lee, 2014).

I/O psychologists recommend a number of practices to increase the effectiveness of 360° appraisals. First, both raters and the manager should receive instructions on how to interpret the different performance dimensions and the rating scale. Second, all participants must be explicitly told that feedback will only be used for the purpose of manager development. Furthermore, maintaining rater anonymity tends to prompt subordinates to view 360° appraisals more positively, although, interestingly, managers tend to prefer that employees be held accountable for their ratings (Antonioni, 1994). Finally, to ensure the highest quality, a 360° appraisal program must include skilled coaches to help managers interpret and use their feedback to create goals and courses of developmental action

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(Coates, 1996; Crystal, 1994). Absence of such coaching can compromise the desired behavioral changes and performance improvements and can lead to disengagement (Nowack & Mashihi, 2012).

Consider This: Seeking Feedback

1. Most of us often seek feedback on our performance in various life domains, whether at work, at school, at home, in sports, or at church. In which domains of your life do you normally seek or get feedback on your performance?

2. What are the advantages and disadvantages of each source of feedback?

Find Out for Yourself: Performance Measures and Sources

Review the following templates from the HR of�ices at University of California–Berkeley and University of California–Davis for examples of performance measures that utilize feedback from different sources as well as performance evaluations that use these measures.

UC Berkeley Annual Performance Planning and Review (http://hr.berkeley.edu/sites/default/�iles/attachments/FY16_Perf_Mgt_Form- Director_of_Finance_and_Strategic_Planning_RP.docx)

UC Davis Employee Performance Appraisal Report (http://www.ucdmc.ucdavis.edu/hr/hrdepts/forms/MSP_EPAR.doc)

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4.4 Sources of Rating Error and Bias in Performance Evaluation

Performance appraisal relies on the assumption that human judgment is capable of some degree of accuracy. However, humans are not objective observers. We can never be completely certain that our judgments are free from error or personal biases. Often, of course, errors are unintentional. In the workplace, rating errors can occur if managers do not observe workers’ performance or if they do not use the rating scale correctly. More insidious, managers can also harbor unacknowledged biases against certain types of workers. At other times, rating errors are intentional. Managers can deliberately in�late a poorly performing employee’s ratings because they don’t want to jeopardize their relationship with the employee or because they don’t want to cause negative reactions. I/O psychologists have worked hard to identify, understand, and correct sources of rating error.

Types of Rating Error

In order to improve accuracy, one must �irst identify and understand error. With performance appraisals, rater errors typically fall into three major categories: observational errors, distributional errors, and rating-scale errors. In this section, we review the speci�ic rating errors associated with each category and discuss how these errors reduce performance appraisal accuracy.

Observational Errors As stressed throughout this chapter, appraisals must be based on thorough observation of an employee’s performance in order to be accurate. Without direct observation, managers may rate employees based on unreliable sources of information such as general impressions, observations from past ratings, or hearsay.

Even if managers are able to observe workers’ performance, they are often unable to remember more than an employee’s most memorable performance accomplishments (or failures). An average appraisal cycle lasts up to 12 months, and as you might expect, a manager will remember and thus more strongly emphasize recent performance, an effect called recency error. Of course, when a recency error occurs, a worker’s ratings do not accurately represent his or her overall performance throughout the entire appraisal cycle.

The best way to overcome recency error is simple: Reduce the amount of performance information the manager needs to remember. One practical way for managers to do this is to shorten the appraisal cycle by conducting more frequent appraisals throughout the year instead of once annually. Additionally, managers can improve recall by keeping a detailed performance log for each employee, especially at the beginning of the rating cycle. Regular feedback is important for motivation and development. Thus, performance appraisal should not be viewed as a once- a-year event but as an ongoing process. The timing and frequency of performance feedback should be determined by employee needs, situations that necessitate such feedback, and logical milestones in the employee’s performance goals.

Distributional Errors Within an organization, evaluation standards tend to differ from manager to manager. Signi�icant error occurs if managers inaccurately distribute rating scores along the rating scale. For example, some managers may clump everyone together with average scores. Others may be overly positive or afraid to give anyone negative scores. A third group of managers may be too stringent and thus give most of their employees low scores. These faulty judgments are called distributional errors.

First, one of the most common forms of rating error in general is leniency error. In this situation, managers have a low performance standard and rate their employees higher than their performance deserves. A graphic representation of a lenient manager’s rating scores will show that they tend to cluster on the positive end of the distribution. Even though the high scores could be a re�lection of a truly high-performing team, research tells us that such a result is unlikely. Normal worker performance distribution tends to follow a bell-curve pattern, with some workers falling at the high and low ends but most clustering somewhere in the middle. Leniency error is very obvious when it occurs. For example, one study found that out of 12,000 federal employees, 85% received ratings at

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the superior level on their performance appraisals, whereas only 1% received ratings below the fully successful level (Marrelli & Tsugawa, 2009). It is extremely unlikely that this distribution is accurate.

Research shows that rater personality characteristics such as agreeableness and conscientiousness could be linked to leniency error. In an experimental lab study, people with low conscientiousness and high agreeableness rated their peers more positively, regardless of actual performance (Bernardin, Cooke, & Villanova, 2000). As previously discussed, a manager’s reluctance to give negative feedback is another common impetus for rating leniency. Most managers want to develop and maintain positive relationships with their subordinates, and offering positive feedback during a performance discussion is certainly more enjoyable than the alternative. Unfortunately, being lenient not only fails to challenge and improve workers’ future performance, it also makes it legally dif�icult to terminate a poor performer.

The second form of distributional error is central tendency. Central tendency error occurs when a manager is reluctant to rate employees as either superior or inferior. As a result, ratings scores cluster around the middle of the performance scale. Third is severity error, in which a manager holds excessively high standards and rates employee performance as lower than it actually is. A severe manager’s ratings scores will cluster around the low end of the performance scale. Although these two distribution errors are less common than leniency error, they are just as problematic. Because they fail to address the real differences among employees’ performance, scores tainted by severity and central tendency error are worthless for making employee decisions.

Find Out for Yourself: Distributional Errors and Biases

The next time you participate in a group activity or team project, rate each of the group members (excluding yourself) on his or her performance and contribution to the project on a scale of 1–10. Then ask each team member to evaluate each of the other members (excluding himself or herself).

What Did You Learn?

1. Are your evaluations consistently more lenient than, more stringent than, or comparable to your team members’ evaluations?

Rating-Scale Error Sometimes performance appraisal errors occur because the rater does not know how to use the rating scale correctly. In other cases a manager’s general opinion about a speci�ic employee can color his or her ratings of all performance dimensions for that employee (Lance, LaPointe, & Stewart, 1994). This tendency, called the halo effect, is the most common form of rating-scale error and can either arti�icially in�late or de�late ratings. For example, if a manager believes one of his or her subordinates is extremely smart, he or she might transfer that positive opinion to evaluations of other performance areas, such as collaboration, ethics, and loyalty. Basically, then, managers who rate workers high (or low) on one signi�icant dimension will go on to score them high (or low) on all other dimensions on the appraisal, especially if the other dimensions are not well de�ined or directly observed.

One way to counteract the halo effect is for managers to rate all employees on the same dimension before moving on to the next one. This helps managers keep employee performance in perspective. Another option is to use more than one source to rate employees.

Although most researchers believe that the halo effect is present in almost all ratings and settings, some studies suggest that it is less prevalent—and less of a concern—than previously thought. In a review of past research, Murphy, Jako, and Anhalt (1993) concluded that, in the studies they examined, halo was not nearly as common as traditionally believed and, even when it did occur, did not negatively affect rating accuracy. Surprisingly, when

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Performance ratings are often based on the evaluator’s personal bias regarding gender, age, and race. For instance, older workers typically receive lower performance ratings than their younger coworkers.

organizations consciously try to control halo, they end up with less accurate ratings (Murphy & Reynolds, 1988). Organizations must therefore not become overzealous in their attempts to eliminate halo. Indeed, some employees really are very strong (or very weak) across all performance dimensions, and their consistent ratings re�lect an accurate evaluation of their performance.

Rater Biases Ratings can also be in�luenced by a worker’s personal relationship with the evaluator. Similar-to-me error, for example, occurs when evaluators give higher ratings to workers whom they perceive to be like them (Wexley, Alexander, Greenawalt, & Couch, 1980). A study of 104 air force of�icers showed that familiarity between the of�icers and the aviators they debriefed, if it existed, positively affected the aviators’ ratings of the of�icers (Scotter, Moustafa, Burnett, & Michael, 2007). Other research has examined personal characteristics such as attractiveness and demographic characteristics, each of which in�luences performance ratings.

Another source of rater bias is implicit person theory. People tend to hold implicit theories about the extent to which a person can change. Those who adopt an incremental implicit theory believe in people’s malleability and ability to change, while those who adopt an entity implicit theory believe that people’s characteristics are inherently �ixed and dif�icult to change. Research shows that managers who adopt an incremental theory are more likely to observe changes in employee behaviors from one performance appraisal to the next and are less likely to be bogged down by prior impressions in judging current performance than their entity theory counterparts. Thus, these managers are more likely to provide more accurate and objective performance evaluations. Managers can be trained to use an incremental theory when evaluating their employees and thus become more effective performance evaluators (Heslin, Latham, & VandeWalle, 2005). In other words, when managers believe in their employees’ ability to change and develop, they are more likely to observe changes in their behaviors over time and to evaluate them more accurately and objectively. Thus, effective performance management systems should emphasize supervisor training in order for raters to have an appropriate mind-set for yielding accurate and bene�icial results.

Three demographic characteristics require particular attention: race, gender, and age. As you recall from Chapter 2, any tool organizations use to make decisions about employees (hiring, promotion, placement, compensation, termination, etc.) must not discriminate against protected classes. In most organizations, performance appraisals provide important data used to make those decisions. You can easily understand, then, that any personal biases based on race, gender, and age are especially problematic for an organization if they signi�icantly in�luence performance appraisal ratings.

Research on race, gender, and age biases has produced mixed results. In the category of race, research shows that overall, Black employees receive slightly lower ratings than White employees (McKay & McDaniel, 2006). However, because closer examination shows that all managers tend to give higher ratings for individuals of their own race, the overall results seem to be due to a combination of similar-to-me error and the higher proportion of Whites in managerial roles.

Likewise, gender bias occurs in some situations, but it tends to be limited to situations of gender role incongruence. Speci�ically, male employees’ performance tends to be rated higher than female employees’ performance in traditionally masculine roles but lower in traditionally feminine roles, and vice versa for women (Pulakos, White, Oppler, & Borman, 1989). A more recent study of 448 upper level managers examined the equity of promotions for

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men and women and found that women needed to show signi�icantly higher performance appraisal ratings than men in order to be considered for promotion (Lyness & Heilman, 2006).

Finally, research shows that managers may favor younger workers. In general, older workers receive lower ratings than their younger coworkers, and the bias increases when older employees work for younger managers (Shore, Cleveland, & Goldberg, 2003).

Improving Rater Accuracy

Clearly, performance appraisals are susceptible to numerous types of rating errors, which affect the appraisals’ usefulness in employee decision making and self-improvement. To thwart the negative effects of error, I/O psychologists have identi�ied several ways to increase rating accuracy. Let’s take a moment to review some of these techniques.

Rating-Error Training One way to deal with rating errors is to train raters not to make them. Rating-error training involves teaching raters about the different types of rating errors along with practical strategies for avoiding them. When dealing with leniency error, for example, raters will �irst learn about the type of error (in this case, in�lated ratings with little variability), then its possible causes (e.g., raters wish to maintain a positive relationship with the employee), and �inally strategies to overcome it (e.g., rank order employees before rating each one). This process assumes that educating raters about potential errors and possible solutions can help them overcome their biases.

Unfortunately, the perceptual biases that lead to rating errors (such as stereotypes, the need to please, and high expectations) are ingrained in our cognitive processes and are dif�icult to change. Rating-error training thus requires signi�icant time and effort, with sessions typically lasting from 6 to 8 hours (Latham, Wexley, & Pursell, 1975). Yet even with extensive training, improved rating accuracy is short lived (Fay & Latham, 1982).

Rating-Accuracy Training Like rating-error training, frame-of-reference (FOR) training aims to help raters improve their accuracy. With this method, raters learn about the type of employee performance their organization wishes to see. They are given a frame of reference, or model, against which to compare their employees. If raters know the organization’s performance standard for a speci�ic job position, they will be less likely to use their own idiosyncratic standards to judge a worker in that position.

Designing FOR training involves a number of important steps. First, the raters receive a clear and concrete de�inition of the various performance dimensions and rating scale included on the appraisal they will be using. Next, the trainer discusses work behavior that illustrates appropriate performance at each rating-scale level. After the raters have a basic understanding of the different performance expectations, they practice using the rating scale, usually by watching video scenarios of people working at various levels of performance and then attempting to appropriately rate them. Finally, the trainer goes over each scenario, discussing at which performance level each sample employee should have been rated.

Research has found that FOR training does indeed lead to more accurate performance appraisal ratings (Woehr & Huffcutt, 1994). As an added bonus, research by Davis and Mount (1984) found that managers who received FOR training became more effective at creating development plans for their direct reports because they more clearly understood what the company expected of its employees.

Rater Accountability

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In calibration meetings, managers must discuss the ratings of employees in similar jobs. As such, calibration meetings increase accountability, as they require managers to justify their ratings of each employee to their peers.

Raters need to be motivated to make accurate ratings, but organizations often do not provide much incentive to do so. If your boss never underwent formal performance appraisal training, or if he or she was never really held accountable for the quality of his or her performance ratings, how motivated would he or she be to take performance appraisal seriously? In turn, how likely will you be to take it seriously when it is time for you to evaluate your own staff? Unfortunately, the poor behavior modeled by some executives often provokes similarly cavalier attitudes among the company’s entire management team. If, however, managers are held accountable, they will take the appraisal process seriously, and their ratings will be more accurate (Harris, Ipsas, & Schmidt, 2008; Mero & Motowidlo, 1995). One way to increase accountability is for organizations to hold calibration meetings, at which managers discuss the performance and ratings of workers in similar jobs. As you might surmise, because they force managers to justify their ratings to their peers, these meetings increase rating

consistency across employees (McIntyre, Smith, & Hassett, 1984).

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4.5 Performance Management Systems

So far in this chapter, we have focused on the need for and strategies used to improve the accuracy of performance appraisals. However, even the most accurate appraisal can fuel negative manager and employee reactions if it does not include quality feedback. This knowledge has prompted some I/O psychologists to suggest that worker self- improvement, rather than rating accuracy, should be the focus of a performance appraisal (Ilgen, 1993). In order to build a successful self-improvement plan, an employee needs to have the following information: (a) clear performance expectations, (b) an understanding of his or her own current performance, and (c) suggestions from his or her manager on how to improve.

Performance appraisal, then, is really part of a larger performance management system, which includes not only the appraisal but also the setting of performance expectations and continuous feedback. Recent research has presented serious criticism of conducting performance appraisals without integrating them into an effective performance management system. Common examples include annual performance ratings that are not connected to daily operations, retro�itted ratings to justify pay increases that are not necessarily related to performance, and appraisals that result in limited or no pay differentials between high and low performers (Pulakos, Mueller Hanson, Arad, & Moye, 2015). In fact, Pulakos et al. (2015) presented an interesting and unique case study of Cargill, a very large organization in the food-service industry that has 149,000 employees in 70 countries. Cargill has abandoned performance ratings altogether, with minimal impact on the organization’s operations and effectiveness. When performance appraisals are integrated into a performance management system, however, they offer important bene�its that should not be overlooked. Thus, it is critical that organizations do not consider performance ratings in isolation, but in terms of their links to strategic decision making (Adler et al., 2016; Gorman, Cunningham, Bergman, & Meriac, 2016; Smither, 2015).

Of course, if an employee truly wishes to improve his or her performance, the employee must be willing to listen to and act upon constructive performance feedback, something that will not happen unless the manager and employee are able to establish a strong, high-quality relationship with a signi�icant amount of trust. In this section, we will review the three major components of the performance management system: building relationships and trust, providing continuous feedback, and setting expectations. We will also discuss the effects of cross-cultural similarities and differences on performance management systems and practices.

Building Relationships and Trust

Think about the last time you worked with a peer or for a manager you did not trust. How did you feel? Chances are, at one time or another, you experienced frustration, confusion, apathy, or even anger toward that person. Now imagine that the person took some time to offer you constructive performance feedback. How would you respond? Most of us would question this untrustworthy person’s intentions, withdraw from the situation, or even become hostile, ignoring the feedback or interpreting it in a negative way. Furthermore, most people would stay quiet and not question the feedback if they feared they might be punished for disagreeing. Actual negative feedback is even more detrimental, especially when little trust exists between the manager and the employee. Employees can become unmotivated and lose con�idence (Kluger & DeNisi, 1996). When trust exists, however, workers are more likely to accept criticism openly, believing their manager has their best interests in mind.

As you can see, a positive manager–employee relationship is necessary to have a positive performance appraisal experience, and trust is a prerequisite for executing an effective performance management system (Peterson & Hicks, 1996). In fact, research shows that the quality of the relationship between manager and employee has a stronger in�luence on reactions to performance appraisals than the favorability of the ratings or whether the employee participates in the appraisal process (Pichler, 2012). Relationship quality and perceived organizational justice are key factors in employees’ satisfaction and buy-in (Dusterhoff, Cunningham, & MacGregor, 2014). Therefore, it is important for organizations to train managers how to build relationships and trust with their staff by keeping their commitments, displaying integrity, providing timely feedback, and showing an interest in their subordinates.

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When managers provide continuous feedback, employees feel less threatened and can immediately adjust their performance to solve existing problems and account for current demands.

Providing Continuous Feedback

During a typical annual postappraisal meeting, a manager will hold a one-sided conversation with an employee, reviewing the employee’s successes and failures from the most recent performance review cycle. As you may have determined from the opening exercises of this chapter, the meeting can quickly become tense, even hostile, if the feedback includes criticism. Employees tend to instinctively de�lect criticism, blaming it on forces outside their control. Just think for a moment, though: If this meeting were a once-a-year occurrence, how desirable or useful would criticism be if it referred to something that happened 10 months ago? Could the employee even do anything now to �ix the situation? Probably not. How might an employee react differently if, instead of annually, she or he received informal feedback on a more regular basis?

Both scienti�ic researchers and in-the-�ield practitioners advocate the habit of providing continuous informal feedback to employees (Corporate Executive Board, 2011; Gregory, Levy, & Jeffers, 2008). More speci�ically, continuous feedback should be given in addition to, not at the exclusion of, the annual performance appraisal, and it must be provided immediately after any instance of effective or ineffective employee performance. Once-a-year feedback has never been very effective and is especially unhelpful for today’s users of instant-communication systems such as Facebook and Twitter. Increasing its frequency makes feedback not only less threatening but also more helpful, because employees can actually use the information to solve existing problems or adjust performance to meet current demands.

In addition to increasing frequency, I/O psychologists have identi�ied a number of other conditions under which employees will be more likely to adopt managers’ feedback suggestions:

1. Feedback must address speci�ic employee behaviors or actions, not personal characteristics. It is best to use facts, data, statistics, or direct observations to support positive or negative feedback.

2. Feedback should involve two-way communication between managers and employees. If employees feel they can express their views, they are more likely to be satis�ied with the feedback process (Dipboye & de Pontbriand, 1981).

3. Managers should provide constructive feedback only on behaviors the employee can control. 4. If feedback is negative, it should be constructive. Furthermore, managers should provide support for the

employees’ self-improvement.

Setting Expectations

Most of us truly wish to do our best at our jobs, but it is hard to do so if we do not understand what is expected of us. Managers can facilitate effective goal-setting sessions by following these guidelines (Latham, 2009b):

1. Encourage employee participation. Managers should not simply assign performance goals. Rather, they should collaborate with employees to create mutually agreed-upon expectations. Participating in the goal- setting process increases an employee’s goal-aspiration motivation (his or her desire to meet the goal) and leads to the creation of more challenging goals.

2. Set clear, realistic goals. Goals that are speci�ic and challenging yet achievable more successfully motivate workers to perform their best.

3. Determine speci�ic achievement deadlines. Workers perceive open-ended goals as less urgent than those with deadlines and are therefore less likely to achieve them.

4. Link performance to rewards. Employees tend to follow the adage “What gets rewarded gets done.” Employees should always understand how achieving (or not achieving) goals will impact them and how

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accomplishments will be rewarded. 5. Facilitate priority setting. Not all goals hold the same importance. Managers should help employees

prioritize and order goals according to their importance.

Cross-Cultural Perspectives

Cross-cultural differences have substantial effects on business practices. Many organizational practices do not transfer readily across cultures and thus require adaptation (Hofstede, 1980; House et al., 1999; House et al., 2004). Performance management is particularly prone to such differences and necessary adaptations. The United States is largely an individualistic culture, which leads to an emphasis on individual success and accomplishment. By contrast, collectivistic cultures, often found in Eastern and Middle Eastern countries, place a high value on saving face and maintaining harmony. Thus, negative feedback can be perceived as too confrontational and may have far more damaging effects on relationships. Even positive feedback in the form of public recognition can be uncomfortable to high-performing employees in collectivistic cultures; they may prefer to be recognized privately in order to avoid alienating their colleagues (Sumelius, Björkman, Ehrnrooth, Mäkelä, & Smale, 2014). That is why in collectivistic cultures, it is usually recommended that recognition occurs in a private, one-on-one setting.

Another distinct difference can be seen in how cultures view power distance. In the United States there is a strong emphasis on equality and fairness. It is acceptable for employees to express their opinions freely, even when they disagree with their managers. Power and status are earned based on achievements. However, in some cultures, power and status differences are readily accepted and rarely challenged. Examples include most Asian and South American countries. In such cultures, employees will likely conform to the process and accept its results, but they will be less likely to actively participate in setting their ratings or disagree with their managers. Similarly, in high power distance cultures, ratings by peers or subordinates are unlikely to be authentic and may not be accepted as legitimate or taken seriously because they are not assigned by a superior (Sumelius et al., 2014). In such cultures, traditional top-down performance evaluations are usually more effective.

Because in many countries pay, promotions, and status continue to be highly based on seniority, performance appraisals may be perceived as an imposed Western practice, and thus not taken seriously or adopted wholeheartedly. This can at best make the process a waste of time, and at worst a counterproductive practice that can damage relationships and cause divisiveness. This notion is particularly relevant to multinational corporations when they attempt to implement uniform practices across their global operations. It is thus necessary and valuable to adapt various features of performance management systems to cross-cultural differences (Sumelius et al., 2014).

Finally, it is important to note that cultural diversity can exist even within one country or geographic location, and cultures can differ substantially from one area of a country to another. For example, in the United States cultural differences exist between the West Coast, East Coast, Midwest, and South, as well as from rural to urban to suburban locations. Organizations often �ind it necessary to adapt business practices across operations, even within the same country. Managers should also understand these differences when dealing with employees from different backgrounds, whether these involve local, regional, national, or international differences.

Consider This: Delivering Compliments Across Cultures

Even simple gestures can mean different things across cultures. Consider how you would interpret the gestures in Figure 4.5.

Figure 4.5: Cross-cultural interpretations of the same gestures

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In some cultures, these gestures would be considered positive and complimentary. In others, they could be impolite or even offensive. Managers should be sensitive to their employees’ cultural backgrounds. They should not assume that anything they say or do in their own culture would be readily accepted in other cultures. Similarly, organizations should keep cross-cultural differences front and center when making strategic decisions.

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4.6 The R in ROI: Linking Performance Evaluations to Financial Results—Friend or Foe?

Performance measurement is extremely important, for the numerous reasons discussed earlier. However, performance appraisals can also become a laborious exercise that I/O psychologists or HR departments push on the rest of the organization to serve other, less important goals. For example, managing the performance appraisal system can become a goal in itself for those whose job is to ensure that the system is functional and well maintained. It justi�ies the jobs they are holding and the salaries they are paid. When that is the case, the managers who perform the evaluations start to view the performance appraisal system as a formality and do not take it very seriously. They may �ill in the necessary forms, but the accuracy of their ratings will likely be questionable.

Another common but often less effective approach to performance appraisals is to limit their outcomes to only determine annual salary increases. Especially in a tight economy, when overall payroll allocations are frozen, relatively stable, or even decreased, linking performance appraisals solely to annual raises is unlikely to be conducive to performance outcomes. For example, when the best performers get a raise of only 4% and the worst performers get a raise of 2%, you can see why the difference is unlikely to translate into any constructive performance feedback for either employee. In cases where there is a limited pool of resources to distribute, high performers often feel guilty about getting a raise at the expense of their colleagues, rather than feeling appreciated or rewarded. Conducting performance appraisals only to determine annual raises also ignores their purpose of providing continuous constructive performance feedback. As discussed earlier, employees need to receive feedback on their performance more often. This feedback should be provided to help them better align their performance with the organization’s goals. When appraisals are always linked to pay, appraisal sessions become mostly about money, rather than about performance improvement.

Performance appraisals are also often used in conjunction with layoff decisions. Even though this is a legitimate use, if they are only used to justify these decisions, they become perceived as a way for the organization to provide a legally defensible paper trail. This diminishes the appraisals’ value, and the process becomes resented and distrusted by managers and employees alike. Again, although the above uses of performance appraisals are important and legitimate, their primary use should be as a tool with which to objectively measure performance and facilitate its improvement.

So how do organizations, managers, I/O psychologists, and HR departments design truly effective performance appraisals systems? It is critical to choose the correct measures. As discussed earlier, the correct measures should be readily linked to the organization’s goals and its success. This chapter offers numerous ways to enhance the quality of performance measures. However, in the words of sociologist William Bruce Cameron (1963) in his book Informal Sociology: A Casual Introduction to Sociological Thinking: “Not everything that can be counted counts, and not everything that counts can be counted” (p. 13). The Pareto ef�iciency principle, also known as the 80–20 rule, posits that in most situations, 80% of outcomes are caused by 20% of the inputs. In performance appraisal, this means that it would be most effective for managers to focus on their employees’ most critical behaviors, which constitute about 20% of everything the employees do on a daily basis, because these critical behaviors cause 80% of the outcomes that truly impact the organization’s success and effectiveness.

Although not the only approach, performance measures that are directly linked to �inancial results tend to be perceived as objective and fair because they re�lect an employee’s true value to an organization. They are also critical for making resource allocation decisions, because they put HR decisions on a par with other investments. For example, the �inancial value of an employee’s performance can justify the costs of hiring or retaining that employee over outsourcing the position or investing in a piece of equipment that would allow the job to be automated.

Should an appraisal system, then, attempt to capture the �inancial value of every aspect of an employee’s performance? Absolutely not! The concept of opportunity cost, introduced in earlier chapters, implies that appraisals should only capture those performance dimensions where the bene�its of measurement exceed the costs. For example, even though it is easy to quantify stationery consumption, the cost of policing employees to be less wasteful in their use of inexpensive stationery items can be higher than the cost savings that may accrue from these initiatives (such as saving paper). Similarly, many organizations install expensive equipment or have their managers

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waste numerous hours managing their employees’ attendance even when the costs of such monitoring far exceed the costs of an employee coming in late or leaving early.

What, then, should an appraisal system track? The Pareto ef�iciency principle implies that it should focus on performance dimensions that would be of high enough �inancial value to justify the cost. The key is not always the absolute cost or bene�it of a performance dimension but rather the variation of that cost or bene�it. To use our previous example, the difference between the most and least conservative use of stationery is not substantial. In measuring the performance dimensions that would have the most substantial effects on �inancial outcomes, emphasis should be on the dimensions with the highest variability and the ones that are “pivotal” to performance (Cascio & Boudreau, 2011). For example, at an upscale restaurant, the most pivotal performance dimension for cooks is their cooking skills. On the other hand, the most pivotal skills of the wait staff are their social skills. Although cooks need to have some social skills to effectively deal with the wait staff and restaurant management, social skills are not pivotal for cooks. They can still be subjectively evaluated (e.g., using a narrative or a rating scale), but attempting to place a �inancial value on those skills is both impractical and unnecessary.

Consider This: Appraising Performance Dimensions That Really Matter

Choose a job that would be of interest to you. It can be your current job, a job you held in the past, a job you hope to have in the future, or just a job that you have come across in a job-opening announcement or advertisement. Describe the job in detail. For more information, you may search for job descriptions of similar jobs.

Questions to Consider

1. How would you measure the performance of the incumbent of this job? What are the most important dimensions to measure, according to the Pareto ef�iciency principle?

2. What are the performance dimensions that will likely exhibit the most variability (the most pivotal dimensions)?

3. Which dimensions will be most readily linked to �inancial results? Explain. 4. Which dimensions should be subjectively evaluated? 5. Which dimensions should be ignored and not evaluated? Note that this is an important decision

because it can signi�icantly affect the ef�iciency and effectiveness of a performance appraisal system. It is also a decision that is often neglected or inadequately addressed.

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4.7 Toward More Positive Appraisal Sessions

As humans, we have a tendency to overemphasize and amplify the magnitude of negativity in our lives (Baumeister, Bratslavsky, Finkenauer, & Vohs 2001). Negative stimuli tend to receive more of our attention and energy. For example, threatening personal relationships have been shown to receive more of our thought time than supportive ones, and blocked goals tend to receive more thought time than those with open and available options (Klinger, Barta, & Maxeiner, 1980). Performance appraisal is no exception. It is much easier to dwell on our own or others’ faults than to acknowledge talents, strengths, and positive performance attributes. Doing the latter requires intention.

So why do humans in general tend to focus on negativity? The tendency to overemphasize negativity has been attributed to primitive survival mechanisms in reaction to perceived physical danger. In civilized societies, overemphasis on negativity has been attributed to four psychological factors that are comparable to these survival mechanisms: intensity, urgency, novelty, and singularity (Cameron, 2008). The �irst factor is the intensity of negative stimuli. Because negative events are perceived as threatening, they are experienced more intensely. Second is the sense of urgency that negative stimuli place on our perceptions and action tendencies, because something is wrong and needs to be �ixed. Positive stimuli do not pose the same sense of urgency, because ignoring positive stimuli does not pose as much risk as ignoring negative stimuli. Third is the perceived novelty of negative events. Believe it or not, a lot of what is going on in most people’s lives is positive. That’s why it tends to go

unnoticed. Negativity is the exception. That’s why it gets more attention.

Fourth, one of the unique characteristics of negativity is what is referred to as singularity. Imagine a system with one defective component, a body with one ailing organ, a team with one counterproductive employee, or a family with one dysfunctional member. A single negative component is capable of tainting the performance of the collective, which causes that single negative component to really stand out and alert the rest to the need to somehow remedy the problem. On the other hand, positivity tends to be more general and global. One positive component alone does not necessarily make a system better. One good employee alone usually cannot make an organization successful. One healthy organ alone cannot make the whole body healthy. This singularity makes the effect of negativity more pronounced and far reaching.

Paradoxically, humans also have a natural tendency, referred to as the heliotropic tendency, to gravitate toward what is pleasurable (i.e., positive) and away from painful or uncomfortable stimuli. However, this tendency tends to be overwhelmed by the intensity, urgency, novelty, and singularity of negativity and needs to be encouraged through intentional decisions and actions. That is why although most managers recognize their tendency to overemphasize their employees’ weaknesses, faults, and mistakes and wish they could be more positive, they cannot. For example, they may get overwhelmed by the urgent need to address the dysfunctional behaviors of their worst employees and end up with no time to interact with and praise their better ones for their consistent positive behaviors. Moreover, those consistent positive behaviors may no longer stand out; they may be taken for granted. A manager may even forget to recognize them when appraising these employees’ performances.

So how can managers overcome their negative tendencies and conduct more positive performance appraisal sessions? First, a manager needs to recognize the importance of positivity, which was introduced in Chapter 3. Although extreme positivity is unnecessary and can even be dysfunctional, research supports the idea that humans thrive and �lourish in a positive environment (Keyes, 2002). So managers need to intentionally create positive interactions with their employees, especially when they need to counterbalance a negative interaction, such as when it is necessary to give negative feedback. In performance appraisal sessions, managers should put in the effort to �ind

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and comment on positive aspects of their employees’ performance. This requires the art of catching employees doing something right instead of the common practice of focusing on problems and mistakes. You might think that this hand-holding is more necessary for new or inexperienced employees and that more mature employees or more established relationships can tolerate less positivity. However, research shows that even more positivity is needed in more complex settings such as top management teams and marital relationships (Fredrickson, 2013; Gottman, 1994).

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Summary and Conclusion

Organizations that excel in their ability to measure their employees’ performance are at a signi�icant competitive advantage. They place themselves in a favorable position to select the best employees, capitalize on their talents and skills, promote them into their areas of excellence, adequately reward them, and retain them for enough time to reap signi�icant returns on their investment in them. They also have an edge in accurately and promptly identifying performance de�iciencies and pursuing corrective measures. Accurate performance appraisals can be a source of information for the organization, a communication vehicle for managers, and a much needed feedback process for employees.

However, in many instances, performance appraisal systems can be plagued with so much subjectivity that they not only defeat their purpose but become counterproductive. They can be perceived as inequitable, which can damage morale and performance. They can also be discriminatory, which may result in legal costs and damage to the organization’s reputation. Thus, a poorly designed performance appraisal system may be worse than not having one at all!

Organizations should view the process of designing and maintaining a well-functioning performance appraisal system as a worthwhile investment, rather than just an expense, a formality, or a necessary evil. Accurate measures should be designed to assess the most pivotal dimensions of performance. They should be integrated with other HR systems, such as recruitment, selection, training, and compensation, as well as with overall organizational goals and strategies in order to ensure full utilization and impact on the organization’s bottom line.

Chapter 4 Flashcards

Key Terms

behaviorally anchored rating scale (BARS)

behavioral observation scale (BOS)

forced distribution

Choose a Study ModeView this study set

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graphic rating scale

objective performance measures

paired comparison

performance appraisal

rank ordering

subjective performance measures

360° appraisal

written narrative

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Learning Outcomes

After reading this chapter, you should be able to

Explain how organizations establish training needs.

Describe the major methods and techniques of training.

Utilize techniques that enhance the application of learned information to the job.

Evaluate the effectiveness of various training methods.

Understand how to develop positivity in workers and why doing so is important.

Appreciate the importance of quantifying the ROI in training and development in general, and in developing positive attitudes and behaviors in particular.

5Training and Development

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Training bene�its both employees and the organization because it increases motivation and performance.

5.1 The Importance of Employee Training

Think about all the changes that have affected organizations over the past few decades: increased globalization, advancing technology, outsourcing, new products and services, and so much more. Amid this backdrop of constant change, businesses must evolve quickly in order to stay competitive. Similarly, workers have had to discard old notions of what it means to be successful in a career, exchanging the paradigm of lifelong employment and a pension for one of lifelong learning and a shifting career path. They must also stay informed about and adjust to emerging technologies, learn new business practices, and improve their interpersonal skills. Because the educationally stagnant worker severely inhibits not only his or her own success but the organization’s as well, employee training and development is more important than ever.

Learning is a “relatively permanent change in knowledge or skill produced by experience” (Weiss, 1991, p. 172). Ultimately, learning helps the worker perform an assigned job at a higher level. The two methods used to produce learning are training and development. Training is the formal process of helping workers learn job-relevant knowledge and skills that enable them to perform their current job- related duties (Goldstein & Ford, 2002). In contrast, development involves activities that help workers learn the knowledge and skills required in their profession (Noe, 2010). Development tends to focus on knowledge and skills that will be needed in the future and is often more discretionary than training. Although this chapter will mostly refer to training, the techniques and methods discussed are also relevant to development.

Find Out for Yourself: Association for Talent Development

The ATD is an organization of experts in training and development. It is one of the most widely recognized organizations of this kind. ATD attracts members from around the world and from all types of organizations, all of whom share a common professional interest in training and development processes and human resource management (HRM). Browse the ATD’s website to access numerous valuable readings and resources and to learn more about the ATD and training and development in the United States and around the world.

Association for Talent Development (https://www.td.org)

Training is an essential organizational function; it provides a number of bene�its for both workers and the organization. On the most basic level, training helps workers and organizations perform better. In a meta-analysis that compared the performance of workers who did and did not receive training, researchers found that the former group’s behavioral, learning, and job performance outcomes were signi�icantly higher than those of the latter (Arthur, Bennett, Edens, & Bell, 2003). Training has also been found to improve objective measures of an organization’s performance, such as �inancial results, customer satisfaction, and employee retention (Tharenou, Saks, & Moore, 2007). The bene�its of training and development have been recognized and documented for individuals, teams, organizations, and society, making it an organizational priority (Aguinis & Kraiger, 2009).

On a more complex level, participating in training activities can affect a worker’s overall motivation, job satisfaction, and commitment to the organization. Social exchange theory suggests that workers will reciprocate the investment

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the company makes in them by showing greater work effort and/or organizational loyalty (Balkin & Richebe, 2007). Other studies found that extensive training opportunities improved not only organizational performance but also worker commitment (Birdi et al., 2008) and made employees more willing to volunteer for overtime (Lambooij, Flache, Sanders, & Siegers, 2007).

Moreover, because of its time and �inancial commitment, training is often the clearest indicator of an organization’s values to its employees, customers, and shareholders. What message would a bank be sending if it required new employees to complete 40 hours of customer service training before they were allowed to interact with customers? What would be the message if the training instead taught employees how to sell bank products? By communicating the organization’s values through training, the organization promotes the culture it seeks to establish.

Finally, training can have a positive effect on an organization’s rate of employee retention. Workers are on the lookout for employers that offer and promote training and development. In fact, a recent study of millennials showed that they value training and career development more highly than any other workplace bene�it, including higher wages, �lexible hours, health care, retirement funding, and paid leave (McCarthy, 2015). Therefore, training plays a critical role in attracting and retaining talent.

Find Out for Yourself: Career Development and Change

Research the topic of career development using a variety of sources (articles and websites as well as conversations with people you know who are at various stages of their careers). The following are some websites to get you started.

Bureau of Labor Statistics Employee Tenure Summary (https://www.bls.gov/news.release/tenure.nr0.htm)

“Job Hopping Is the ‘New Normal’ for Millennials” (http://www.forbes.com/sites/jeannemeister/2012/08/14/job-hopping-is-the-new-normal-for-millennials-three- ways-to-prevent-a-human-resource-nightmare/#39087c6f5508)

What Did You Learn?

1. On average, how many years do employees currently tend to stay in the same job? With the same organization? Within the same career?

2. How many times did adults change employers on average if they started their career in the 1950s– 1970s? What about in the 1980s–1990s?

3. How do these numbers and trends compare with the current workforce? Does the current workforce change employers and/or careers more or less often? What could be some reasons?

4. What are some of the training and development challenges associated with these trends?

Costs of Training

Training requires both signi�icant �inancial resources and large investments of workers’ time, both of which are valuable commodities. According to the ATD, in 2011 U.S. organizations spent $156 billion on employee learning and development (Miller, 2012). In 2013 the average cost of training per employee was about $1,200 (Miller, 2014).

Some common expenses incurred by a typical corporate training program include trainer compensation; meeting facility and equipment rental (or depreciation and maintenance, if owned); airfare and sleeping accommodations (if

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travel is required); meals and coffee breaks; and training materials. There is also the cost of hiring temporary help to �ill in while permanent employees are training, which includes recruiting, selecting, orienting, training, and compensating those contingent workers.

In addition to these substantial costs, it is also important to account for the opportunity costs of training, or the alternative uses of organizational resources and employee and trainer time and effort that went into training. Consider the following examples:

1. Participants’ salaries and bene�its, which continue to be paid even though the participants are away from their jobs during training. The average worker spends nearly 32 hours per year participating in formal training (Miller, 2014).

2. Lost business due to the lower productivity of temporary workers during training. 3. Managers’ time (salaries and bene�its) spent reassigning participants’ work to others or dealing with any

errors and inef�iciencies made by their temporary replacements. 4. Return on alternative investments had the organization allocated its training costs to other uses, such as

acquiring additional machinery, equipment, buildings, a competitor, stocks, bonds, money market funds, or other tangible and intangible assets.

Obviously, organizations wish to see a positive return on their training investment that exceeds not only the large direct costs of training but also the expected returns on alternative investments. The commonly held belief is that these substantial expenditures and time investments will lead to human capital growth, with returns in the form of higher employee productivity, talent retention, and the creation of a sustainable human-based competitive advantage. However, surprisingly, only about a third of organizations evaluate the business impact of their training programs. In addition, only about a quarter use objective business metrics, and only 15% measure the ROI of their programs (Ho, 2016; Kelly, 2009). Without data to show the value of such programs, learning and development departments quickly lose credibility with management. Indeed, a survey of Fortune 500 CEOs found that more than 50% questioned the value of their organization’s learning and development functions (Phillips & Phillips, 2009). A function that cannot demonstrate its value is often the �irst to be cut during dif�icult �inancial times. This is not to say that training and development do not add value but that organizations often fail to quantify that value, causing them to be perceived as unnecessary expenses.

Legal Issues and Training

As discussed in previous chapters, any process used to hire, promote, place, compensate, or terminate an employee cannot discriminate based on race, gender, age, or disability. Because participating in training and development programs can in�luence employees’ career development and success, organizations must determine whether such programs create adverse impact. For example, if being promoted to a certain job within an organization requires an employee to complete a leadership development program, and women are nominated to participate in the program less frequently than their equally quali�ied male counterparts, then that training could be responsible for adverse impact. Organizations must therefore continually review their training programs to ensure they are not discriminatory.

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5.2 Training-Needs Assessment

A training-needs assessment is the analysis of organizational priorities and worker needs in order to determine when and where to allocate training resources. Simply put, the needs assessment analyzes the organization’s overall goals and what workers need to learn in order to meet them. It then determines how to make the two components mesh.

For many organizations, training is the �irst resort when a problem is detected. However, training cannot resolve every organizational problem; it tends to be most effective for resolving knowledge or skill de�iciencies. For example, compare the following three scenarios:

An employee prefers to work on her own rather than be part of a team. An employee asks his supervisor and coworkers too many questions and seems to always need help and assurance that he is on the right track. An employee wastes his time and his coworkers’ time, hopping between cubicles to chat and gossip.

Many organizations would approach these three situations indiscriminately, treating them all as training needs. However, only the second scenario clearly signals a need for training. The employee who asks too many questions may lack technical knowledge or the con�idence to apply his current knowledge, both of which can be enhanced through training. The �irst employee’s preference for individual work may be due to her personality, which cannot be changed through training. In the third scenario, training is also unlikely to ameliorate the gossiping employee’s counterproductive behavior. Excessive chatting is rarely the result of a knowledge or skill de�iciency. Poor job satisfaction, low work engagement, or a lack of commitment to the organization are more likely sources of this behavior; training is unlikely to resolve these underlying problems. Motivational techniques, such as those covered in Chapter 6, would be necessary instead.

Although needs assessments are important to develop a successful training program, many organizations skip this important step. In fact, a meta-analysis of 397 studies of training programs found that only 6% of organizations performed a needs assessment prior to designing their training programs (Arthur et al., 2003). Needs assessments are expensive and time consuming, which of course makes them �inancially unattractive. However, a needs assessment can help organizations determine how to best allocate their training resources and keep them from running ineffective or unnecessary programs. Each of the three components of the needs analysis—organization, task, and person analysis—plays an important role in helping organizations make better decisions about their particular training programs.

Concepts in Action: Training Needs Analysis

Correct training, mentoring, and coaching are good investments for a company. Training needs analysis can help companies best determine how to apply their resources to develop employees.

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Organizational Analysis

As you can imagine, business strategies differ from one organization to the next, and because organizations have different goals, they must design speci�ic training programs to meet their unique needs. The purpose of an organizational analysis is to determine the broad direction for the organization’s training programs, as well as where and when they are needed.

Organizational analysis is accomplished by identifying the organization’s training needs based on its mission, business strategy, and performance objectives. For example, after performing an organizational analysis, a heavily regulated business may discover that it needs to design training that teaches employees how to follow state and federal regulations to increase compliance and reduce the risk of litigation. A globally expanding organization, on the other hand, may �ind that it needs to implement cross-cultural and diversity training in order to prepare employees to work successfully in foreign markets.

Performing organizational analyses helps I/O psychologists and HR professionals understand their organizations’ business strategies. Doing so enables them to design appropriate training, enhance worker performance, and ultimately improve business results.

Task Analysis

Although organizational analysis is essential to understanding an organization’s broader training needs, a task analysis is needed to create speci�ic training program requirements. A task analysis identi�ies the tasks performed on the job along with the speci�ic KSAOs needed to perform each task. The four key elements of the task analysis are as follows (Goldstein & Ford, 2002):

1. Task statements. Subject matter experts write these to explain what a worker does on the job. An example for a bank teller could be, “Greets all new customers within 5 seconds of entering the branch of�ice.” Task statements are speci�ic, and there might be as many as 100 of them per job.

2. Task clusters. Subject matter experts sort task statements by similarity into groups called task clusters. For example, the bank teller task statement might be grouped with other customer service task statements into one large task cluster.

3. KSAOs. Subject matter experts then determine the KSAOs that a worker must have to perform the job tasks successfully.

4. Training. After identifying which KSAOs are required to perform the critical job tasks, HR professionals or I/O psychologists can create effective training designed to enhance the KSAOs. For example, if money counting is a skill that is essential to succeed as a bank teller, training could be designed to teach tellers basic math (addition and subtraction) or how to properly count back money.

Training Needs Analysis From Title: Training and Development (https://fod.infobase.com/PortalPlaylists.aspx?

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In summary, the task analysis establishes the precise content of the training program.

Consider This: Training-Needs Assessment for Various Positions

Select a position in which you are interested, such as of�ice manager, insurance salesperson, medical assistant, dental hygienist, telemarketer, customer service representative, server, software developer, or production engineer. Conduct a training-needs assessment for that position. Include the following:

1. Task statements. Write speci�ic statements that describe what the incumbent does on the job. 2. Task clusters. Sort task statements by similarity into groups. 3. KSAOs. Determine the KSAOs necessary to perform the job tasks successfully. 4. Training. After identifying which KSAOs are required, make a list of training topics the incumbent will

likely need and ways in which these topics might be covered at the necessary level. For example, does that topic require formal education? Or can it be developed on the job by observing or shadowing more experienced coworkers?

Person Analysis

It is not always necessary to institute a blanket training program in which everyone in the organization receives the same training. Person analysis attempts to discover not only who needs to be trained but also what training each individual actually needs. Without an adequate person analysis, organizations can waste a lot of time and money training the wrong employees, training them improperly, or training them when they are not ready (Noe, 2008). Employees usually need training when they �irst start with a company or change jobs within the company, when new technology is introduced, or when a new product or service is launched. In each situation, some employees might only need a portion of the training, and some might not even require training at all. For example, a new employee whose previous job was in the same industry might not need as much training on the company’s products and services. Person analysis is thus useful for determining each employee’s training needs.

As previously stated, training can be time consuming and expensive, both to design and implement. Therefore, organizations should implement training only when it can truly improve performance. Sometimes, poor performance can be explained by other factors, such as environmental constraints or overall lack of motivation, neither of which can be �ixed through training. To avoid making a wasteful investment, then, organizations must be able to identify their employees’ training needs and readiness.

Organizations can perform a person analysis in a few different ways. They can examine employees’ selection materials—such as their résumés, psychological test outcomes, and notes from their interviews—to identify what training they may need. Performance appraisals also highlight areas in which a worker might be challenged and for which training is warranted. Managers can also simply ask employees to identify what training they think they need, although data collected in this fashion must be judged carefully, because poor performers typically overestimate their performance relative to others on self-assessments (Dunning, Johnson, Ehrlinger, & Kruger, 2003).

One often-overlooked component of person analysis is whether workers are ready to be trained. In a survey of 217 large American companies, nearly 34% of new employees with only a high school education were found to lack the basic skills needed to complete new hire training and perform their job (Casner-Lotto, Rosenblum, & Wright, 2009). If organizations wish to ensure the success of their job-training program (and ultimately of their employees), they must prepare unready employees by providing remedial skills training �irst.

Even though it may take extra time, money, and effort to conduct a thorough needs analysis, doing so is a good investment. Needs analyses keep the organization from implementing training that does not meet its goals, is not

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aligned with the job, or is unnecessary.

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5.3 Training Methods and Techniques

Once an organization has identi�ied its training needs and learning objectives, it is time to design an appropriate training program. This is no easy task. There are many training methods from which to choose, and no one method is best. Organizations must review each method and then decide which best meets its objectives while remaining cost effective.

Information-Based Training Methods

Information-based training methods are one-way instruction methods that can ef�iciently deliver a large amount of information to trainees. These methods—which include lectures, demonstrations, and programmed instruction—can be administered internally or by external consultants.

Lectures Lectures can quickly and ef�iciently convey a large amount of information to a lot of learners and are the most common way to train employees in procedures. With the advent of technology, lectures can be much more dynamic than a speech given by someone standing at the front of a hall. Today audio, video, and computer conferencing allow lecturers to present to students all over the world, as well as to be recorded and shown multiple times. A main drawback of the lecture method is that audience members are often passive participants, which reduces the transfer of knowledge. This method is therefore most effective when coupled with other more active training methods.

Demonstrations Similar to a how-to video on YouTube, a demonstration shows trainees how to perform a work procedure. Typically, demonstrations include a systematic review of procedures. They are introduced with a short explanation of the procedure’s purpose and how it affects the job. For example, bank tellers might see a demonstration on how to use the computer to open a new checking account. Or a manager could watch a video demonstration of the proper techniques for coaching a poorly performing employee. This method is best used when teaching procedural knowledge, and it is advantageous because of the minimal costs involved.

Programmed Instruction With programmed instruction, trainees receive a set of training materials to study and learn at their own pace. They then take tests of mastery when they feel ready. The self-set pace prompts the trainee to actively participate in the learning process. The exponential growth in online training has promoted the use of programmed instruction. Organizations frequently buy preprogrammed training programs or hire consultants to develop their own online programs. These materials are then loaded onto a learning platform, and employees are given access to the training. Despite up-front costs, online programmed instruction is relatively inexpensive to administer compared to face-to- face training. Furthermore, in addition to self-pacing and scheduling �lexibility, online programs can be self-tracking, which leads to accurate records of attendance, participation, and performance scores. However, although programmed instruction is useful for conveying work information, it is less effective for teaching complex skills or work processes that require hands-on experience or direct interaction with trainers and colleagues.

Interactive Training Methods

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Unlike information-based training methods, interactive training is a two-way street between trainers and trainees, as well as among trainees. Interactive training methods include discussion groups, role playing, behavior modeling, case studies, simulations, and computer-assisted instruction.

Discussion Groups This is an active training method that involves a trainer who moderates discussion among a small group of people. Trainees are encouraged to raise questions, debate topics, and discuss real-world experiences. If designed correctly, the resulting discussion and re�lection can alter the way trainees think, improve their motivation, and increase their con�idence (Burke, Scheuer, & Meredith, 2007). Discussion groups can also help build working relationships and promote a positive, communal climate. The main advantage of this training method is that it costs very little and can easily be used with other methods (such as a lecture) to reinforce learning concepts and course content. However, discussion groups can be time consuming to conduct, and if they are inappropriately facilitated or designed around controversial or sensitive topics, they may result in con�licts or violations of privacy. Moreover, if the participants are not at least somewhat knowledgeable about the discussion topic, such groups can be a waste of time and can instill or reinforce faulty information or assumptions.

Find Out for Yourself: Discussion Groups

News channels often use discussion groups, particularly to explore debatable political topics. Recent examples of discussion group topics include health care, gun control, immigration reform, taxation, and counterterrorism, among many others. This week, watch and evaluate a few of these debates on various news channels such as CNN, MSNBC, and Fox News.

What Did You Learn?

1. What is the debate topic? 2. Who are the opposing parties, and what are their views? 3. What does each party have to win or lose? 4. Did members of each party appear knowledgeable about the topic? 5. Was the discussion civil and organized? Did some participants become agitated and hostile? Why? 6. Did one party appear to win or lose the argument? Which one? What contributed to the outcome? 7. What was the role of the moderator? Was he or she effective?

Role Playing The role-play technique is generally used to enhance interpersonal, supervisory, or sales skills. In a role-playing situation, participants receive a real-life or hypothetical interpersonal scenario that deals with topics such as coaching, delegation, negotiation, con�lict management, or teamwork. Half the group observes as the other half participates in the scenario. Afterward, the observing group provides feedback, and the trainer concludes by facilitating a whole-group discussion about what went well and what did not.

Behavior Modeling Behavior modeling is one of the most effective training methods (Burke & Day, 1986), especially when teaching interpersonal and supervisory skills (Taylor, Russ-Eft, & Chan, 2005). To employ this method, trainees observe demonstrators (such as the trainer or actors) as they properly model a skill in front of the class. Sometimes demonstrators model ineffective or incorrect behaviors that trainees must identify and correct. The trainer will highlight especially effective behaviors before breaking the class into small groups to practice the skills they have

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Case studies encourage learners to examine real issues and identify possible solutions.

observed. As trainees practice, the trainer provides corrective feedback. Behavior modeling not only allows participants to develop skills through active performance and practice, but also challenges them to develop observation and communication skills—all of which are valuable when transferred to a real job setting.

Case Studies Case studies take a problem-based learning approach that involves challenging learners to examine a real work problem (from their organization or another), called a case study, and then identify possible solutions. This method teaches learners to think critically about business issues and make sound judgments, which they can then apply to new or similar situations that may exist or arise within their organization. Harvard University uses the case study method extensively with its MBA students, and organizations often choose this method to help develop leaders. A limitation to case studies is that the solution may not be relevant to the organization’s problems. Therefore, the action taken to solve the case may not positively transfer to the job.

Simulations A simulation places the learner in a similar-to-real-life situation, providing him or her with safe, realistic practice as well as feedback to promote transfer of learning to the actual

job environment. Simulations develop both technical and interpersonal skills. Simulated business games have been developed to train managers in interpersonal development, �inancial acumen, strategy, and allocation decision making. Sophisticated simulations are often used with workers whose jobs can impact personal and/or public safety, such as police of�icers, �ire�ighters, pilots, and medical workers. Simulations are also useful for training workers in hazardous procedures while minimizing the risks and costs associated with injuries.

Although simulation is clearly an important training method, it does have a number of drawbacks. One is cost. In a business setting, the customized design and implementation of job simulations can pose signi�icant �inancial challenges. Further, simulations must reproduce the same mental and/or physical processes required to perform the actual job. If they fail to do so, the skills workers learn during the simulation will not transfer appropriately or will create confusion on the job (Cannon-Bowers & Bowers, 2010).

Computer-Assisted Instruction Millions of workers around the world use computers every day, which has given rise to the development of computer-assisted instruction (CAI), also referred to as computer-based training. As with programmed instruction, CAI challenges trainees to actively participate in their learning and allows them to work at their own pace. CAI goes one step further, however, in that it also provides performance feedback—the computer continually monitors and assesses the trainee’s performance to identify learning challenges and provide remedial assistance if needed. The self-paced nature of CAI means that motivation plays a signi�icant role in trainees’ success or failure. A study by Brown (2001) found that workers who completed fewer than 70% of the practice sessions for an online problem- solving course also had the lowest scores on the �inal assessment.

CAI can be very effective and ef�icient. Research has found it to be 19% more effective at teaching declarative knowledge (such as facts, methods, and procedures) than instructor-led training (Sitzmann, Kraiger, Stewart, & Wisher, 2006). Additionally, because the learning is self-monitored, trainees can elect to skip the training exercises associated with material they already know, making it more time ef�icient than lecture-based training programs. Finally, because CAI can be used with any number of trainees, organizations do not need to wait for a certain quota

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to �ill a class or struggle to accommodate a large group. However, CAI does have high up-front costs due to the need to design programs and buy necessary equipment.

Applied Training Methods

Both information-based and interactive training methods require participants to take time away from their jobs. In that sense they are often called “off-the-job” training methods. Applied training methods, on the other hand, engage participants in training while they do their jobs. These methods include on-the-job training, vestibule training, apprenticeship/internship, and job rotation.

On-the-Job Training On-the-job training is an informal process in which the trainee slowly learns the job by doing it. Typically, the process begins with trainees watching as the departmental supervisor or a highly experienced coworker performs speci�ic job tasks. As trainees become familiar with the tasks, they start to perform some of the easier ones. After they master the simpler jobs, trainees add more complex tasks to their duties until they have mastered all job functions. Throughout the process, the trainer answers questions and provides performance feedback.

Because of its many advantages, on-the-job training is one of the most common training methods. Because managers or coworkers conduct the training, organizations can avoid the cost of hiring a separate trainer or facilitator. Furthermore, all of the training is very closely related to the actual job employees will perform. Finally, because on- the-job training features constant observation and feedback, the organization is assured that trainees will be able to do their jobs at the expected level of performance.

Of course, there are some drawbacks associated with on-the-job training. First, it requires managers and workers to spend large amounts of time training instead of doing their actual jobs. Although the training is important, trainers can be torn between spending time and effort on properly training new hires and performing their regular job functions. As a result, trainees may not receive the level of attention they need. In addition, whereas the trainer— who is often the highest performing member of the team—may be able to perform his or her job extremely well, he or she may lack the ability to communicate clearly, the willingness to provide coaching, or the courage to give constructive feedback. Finally, the informal, unstructured nature of on-the-job training means it can also be time consuming and ineffective (Goldstein & Ford, 2002).

Vestibule Training To deal with the challenges of on-the-job training, some organizations have introduced vestibule training, in which on-the-job training is conducted in a mock work space in a separate training facility. Using the same equipment, technology, and processes as those used on the job, a highly skilled trainer shows how to perform the major job functions correctly.

Vestibule training is commonly used to teach production and mechanical work. Similar to simulations, it allows workers to practice tasks without the pressure of making errors, damaging equipment, or slowing the assembly line while they learn. A major limitation of this type of training is its cost; organizations must equip a training facility and hire experienced trainers.

Apprenticeship/Internship Apprenticeships are among the oldest training methods, and they are most commonly used in skilled trades such as plumbing, electrical contracting, masonry, and carpentry. Modern-day apprentices generally begin by acquiring the basic knowledge and skills of their profession through formal education. They then practice what they’ve learned under the tutelage of an experienced worker who has been in the �ield

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Apprenticeships help people who want to pursue a career in a particular trade gain experience by working under the guidance of a skilled expert.

for many years. At the end of the apprenticeship, the apprentice is promoted to journeyman status. Generally, apprenticeships are intense and require many years to complete.

Internships are similar to apprenticeships in that they involve inexperienced workers practicing in a job setting what they have learned in school. Interns are usually college students or recent graduates who wish to apply what they learned in school or gain work experience in their �ield of study. Some students must complete an internship as a requirement for graduation. Unlike apprenticeships, however, internships tend to be less intense and more informal, and interns do not always work under the tutelage of a highly experienced worker.

Job Rotations Job rotations are a method of training in which a trainee rotates through a variety of jobs. Each position in the rotation can last anywhere from a few weeks to a year, depending on the complexity of the job. The goal is for the trainee to become familiar with numerous tasks in each job before rotating to the next. Organizations often use job rotations to enhance an employee’s career development. Workers who participate in job rotations become more versatile and gain a broader understanding of the organization, making them better able to advance as positions open throughout the company.

Mentoring

Mentoring involves pairing an experienced or higher ranking worker with a junior-level one to provide guidance and support. Mentors provide both career-related support, which involves helping the protégé understand how the organization works, and psychosocial support, which involves building the protégé’s self-ef�icacy, self-worth, and professional identity (Eby, 2010). Research has shown that mentored individuals experience more career success, higher advancement, better job performance, higher satisfaction and commitment, and greater earnings (Chun, Sosik, & Yun, 2012; Dreher & Cox, 1996; Eby, Allen, Evans, Ng, & DuBois, 2008; Eby et al., 2013; Hegstad & Wentling, 2004; Ragins & Kram, 2007). This could explain why mentoring has become more popular for both leadership and career development. Indeed, approximately 71% of Fortune 500 companies have one or more formal mentoring programs (Bridgeford, 2007).

Mentoring may be either a formal or an informal process. Informal mentoring relationships develop spontaneously based on mutual interests and may be initiated by the mentor, the protégé, or both. The two participants set their own agenda, expectations, and intended outcomes, and the relationship is not part of any program sanctioned or created by the organization. Formal mentoring relationships, on the other hand, occur as part of an organizationally driven program in which the company’s HR department matches mentors to protégés (Eby, Rhodes, & Allen, 2007). In formal programs, a mentoring contract speci�ies meeting dates, expected goals, the length of the relationship, and intended outcomes. Somewhat surprisingly, informal mentoring has been shown to generate greater bene�its than formal mentoring (Ragins & Cotton, 1999). This could be due to the spontaneity, mutual attraction, and motivation involved in informal mentoring. Formal mentoring, on the other hand, can sometimes be perceived as forced and unnatural, since paired mentors and protégés do not always click in terms of personalities, interests, goals, and aspirations—or even schedules.

Mentoring bene�its not only the protégé but also the mentor and the organization as a whole. Protégés earn signi�icantly higher salaries and faster promotions, achieve better performance, and experience reduced stress and higher motivation (Eby et al., 2008). Mentors can experience greater feelings of self-worth, with heightened perceptions of career success (Allen, Lentz, & Day, 2006) and increased feelings of personal satisfaction (Allen,

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Poteet, & Burroughs, 1997). Finally, preliminary data suggests that mentoring may affect company performance. One recent study found that companies with more employees in mentoring relationships displayed higher overall company performance (Allen, Smith, Mael, O’Shea, & Eby, 2009).

Despite research that indicates the value of mentoring, there are some challenges associated with this type of training. The mentor–protégé relationship can have problems that stem from mismatched personalities, values, or beliefs. Protégé neglect can also become a problem if the mentor does not have suf�icient time to devote to the relationship, while some mentors lack the interpersonal skills needed to support and guide the protégé. Conversely, some protégés may not be motivated to learn or may sabotage the relationship by exhibiting behaviors associated with con�lict, jealousy, mistrust, relationship exploitation, or lack of interpersonal skills. When such relationship challenges begin to arise, it is best to end the mentorship (Scandura & Ragins, 1993).

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5.4 Training Environment

The work environment can often in�luence whether training is effective. Organizational and departmental structure, culture, processes, and communication can shape employees’ perceptions of what they might gain from training. Employees’ abilities and motivation can also affect whether they are open to acquiring new knowledge. After the training program, these factors can also in�luence the potential for employees to apply what they have learned to their jobs.

Pretraining Environment

Training goals and objectives should be clearly de�ined before training starts so employees know what to expect and what they should focus on. In addition, training goals should be linked to organizational objectives so employees know how they are expected to contribute to organizational success after they complete the training. Furthermore, ongoing training is more likely to communicate that the organization is serious about developing its employees. “Shot-in-the-arm” or one-time training may not communicate the same level of commitment.

Before undergoing training, workers pick up on environmental clues about how their manager and the organization perceive various aspects of training, including course content, organizational policies, allocation of resources, or training itself. Depending on whether these perceptions are positive or negative, workers will deduce whether the organization values the training.

Given this, managers can take a number of steps to create a positive training environment. Research has shown that trainees who have managers who support training also believe that training is important to their own success (Cohen, 1990). The opposite is true too. For example, if your manager told you that the company’s orientation lecture was a waste of time, how much effort would you put into paying attention during class? On the other hand, what if your manager told you the lecture was vitally important? It is easy to see how the pretraining environment can in�luence motivation and performance. In one study, safety training for waste workers was more effective for those who came from a training-supportive environment (Smith-Crowe, Burke, & Landis, 2003). Thus, managers should set clear training expectations by explaining the importance of the training, its application to the job, and its relation to career growth. Because not all managers will create supportive pretraining environments, training programs should include strategies to overcome barriers (e.g., managerial disapproval or indifference) to applying learning to the job (Burke & Hutchins, 2007).

In addition to the external work environment, certain psychological factors can in�luence trainees’ drive and capacity to succeed. These include their knowledge, ability, self-ef�icacy, and motivation.

Cognitive Abilities As discussed in Chapter 3, general cognitive ability, as measured through tests, is a strong predictor of training success. High cognitive ability enables a person to comprehend complex cognitive processes and to learn information quickly, and it is especially important for unstructured (as opposed to structured) learning (Snow, 1986).

Self-Ef�icacy Self-ef�icacy, or con�idence, has been de�ined as “one’s belief about his or her ability to mobilize the motivation, cognitive resources, and courses of action necessary to execute a speci�ic action within a given context” (Stajkovic & Luthans, 1998b, p. 66; see also Bandura, 2012; Kanter, 2006). Typically, workers with higher self-ef�icacy outperform those with lower self-ef�icacy in training (Bouffard-Bouchard, 1990). Simply put, people who go into a training program believing that they are capable of mastering the content are more likely to succeed. Numerous studies also show a positive relationship between self-ef�icacy and individual work performance (Stajkovic & Luthans, 1998a) and teams (Gully, Incalcaterra, Joshi, & Beaubien, 2002; Stajkovic, Lee, & Nyberg, 2009).

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Regardless of ability, trainees will not learn unless they have the desire to do so. Therefore, motivation is essential to whether workers succeed in their training.

Motivation Being motivated to learn is essential to a worker’s success in a training program. Regardless of ability, trainees will not learn unless they want to do so. You can probably think of many people who have reached the pinnacle of success not because they possessed immense talent but because they possessed a limitless desire to learn. In fact, a meta-analysis by Colquitt, LePine, and Noe (2000) found that learning motivation signi�icantly affects one’s ability to acquire skills and knowledge, regardless of cognitive ability. Other studies have shown that trainees with higher pretraining motivation demonstrate a higher rate of training completion and are more able to apply the training to their job (Salas & Cannon- Bowers, 2001). As previously discussed, managers can increase trainees’ motivation by establishing a supportive pretraining environment. Furthermore, they can offer support during training, allow employees to offer input during needs assessments, and let employees choose their own training.

Posttraining Environment

I/O psychologists have devoted considerable effort to understanding how the knowledge and skills taught during training are applied to the job. Some trainees are able to take what they learn and apply it, but others are not. One of the key ways to measure a training program’s success is through the transfer of training. Similar to the retraining environment, factors such as organizational and departmental structure, culture, and practices, along with trainee con�idence, abilities, and motivation, can in�luence how well training is transferred. Moreover, the methods and techniques utilized and the extent to which they are compatible with training needs and content can signi�icantly affect the quality and effectiveness of training.

Transfer of Training Transfer of training is the extent to which trainees effectively apply what they learned in training to their jobs. Positive transfer of training is the ultimate goal of training: Without it, organizations are wasting their investment. Unfortunately, some research suggests that trainees transfer as little as 10% of what they learned back to their jobs (Baldwin & Ford, 1988; Coates, 2010). Factors that prevent transfer include trainee characteristics (such as cognitive ability, personality, and motivation); environmental factors (such as support); and job and training characteristics (Blume, Ford, Baldwin, & Huang, 2010). While stable trainee characteristics (such as cognitive ability and personality) are very dif�icult to change, motivation and environmental factors can be improved to facilitate training transfer, as discussed in this chapter and in Chapter 6.

One element of transfer is training generalization, which is the extent to which the trainee is able to apply trained skills and behaviors to �it appropriate, though not necessarily the same, situations on the job. Transfer is heightened when training conditions closely mimic working conditions (Goldstein & Ford, 2002). However, learners must also be able to generalize what they have learned and apply it to other situations.

In addition to ensuring the immediate transfer of newly trained skills, organizations must also consider the long- term maintenance of those skills. Research by Baldwin and Ford (1988) found that even with immediate transfer, knowledge and skills tend to decline over time due to lack of use. Other factors include shallow learning during training, low motivation to use the new skill, and poor management support.

There are a few ways organizations can ensure the long-lasting transfer of knowledge. One is to provide refresher training in order to reteach forgotten skills. Another is to challenge workers to set transfer goals at the beginning of

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training. Trainees who commit to the goal of applying the new skills on the job have been found to be less likely to forget the skills compared to those who did not (Richman-Hirsch, 2001). Yet another option is to allow trainees to immediately apply what they have learned upon returning to their jobs. Research shows that retrieving information for practice facilitates long-term retention more than repeatedly studying material (Roediger & Butler, 2010)— hence the old adage “Practice makes perfect.”

Consider This: Your Ability and Motivation for Learning Transfer

Take stock of the many learning opportunities you have encountered in your life. They can be in the form of formal education, personal or work experiences, and professional development, as well as mentoring by parents, teachers, or trusted role models. Create a list of the most important lessons each of these opportunities taught you (focus on what you can remember). Then complete the following tasks.

1. Assess your ability to effectively apply each of the lessons learned to your current situation (job, education, family).

2. Assess your motivation to effectively apply each of the lessons learned to your current situation (job, education, family).

3. What are the most important characteristics of learning opportunities that you are most and least able and motivated to apply?

Practice Simple exposure to training is not enough for transfer to occur; the learner must also actively practice. Generally, practice involves some form of physical or mental repetition. For example, a soccer player may spend countless hours kicking the ball through the goal (physical practice) to be ready for a game. A college student might spend several nights reviewing the major battles of the Civil War (mental practice) for a U.S. history �inal. Each form of practice requires active preparation to transfer training to the on-the-job environment. If workers are to successfully transfer training and also retain and generalize it, they need suf�icient time to practice.

One of the major considerations of training design is how to structure the practice sessions. Some tasks are better learned in one relatively long practice session (massed practice), whereas others are better learned through many shorter practice sessions spaced over time (distributed or spaced practice). Often, distributed practice sessions are alternated with other training activities, such as lectures. In general, research shows that distributed practice is more successful than mass practice (Benjamin & Tullis, 2010; Donovan & Radosevich, 1999).

Trainers must also consider how to present the course content. In whole learning, the learner receives all task information at once and practices the task in its entirety. In part learning, the learner receives task information in segments and practices each segment separately before performing the complete task with all the steps in order. Again, the nature of the task determines which learning method is most appropriate. Whole learning works better for simple tasks, and part learning makes sense for complex, multistep tasks.

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5.5 Training Evaluation

So far we have discussed ways to identify training needs, different training techniques, and how to maximize training transfer. However, none of these things matter if, in the end, a training program does not produce positive results. Ineffective training programs are a �inancial burden that most companies cannot afford. Thus, organizations must perform evaluative research in order to determine the value of and defend the �inancial investment in their training programs. Evaluation has the added bene�it of providing trainers with data they can use not only to improve and market the training program but also to determine future training programs (Kraiger, 2002). The four levels of criteria, identi�ied by Kirkpatrick (1976), that are used to evaluate most training programs are reaction criteria, learning criteria, behavioral criteria, and results criteria.

Reaction Criteria

At the reaction criteria level, trainees report their reactions to and general satisfaction with the training on a questionnaire. The questionnaire typically includes questions such as “Do you believe the training was useful?” or “Do you believe you can use the skills taught in training on the job?” These measures are quite useful for helping trainers understand how to change and improve course structure and content, but they provide very little understanding of the training’s actual effectiveness. Unfortunately, most organizations rely solely on this basic level of measurement to determine the effectiveness of their training programs.

Learning Criteria

The next evaluative level is learning criteria. At this level, trainers measure how much trainees learned during the course of the program. Written tests are good for assessing knowledge acquisition; a �inal exam in a college class is an example. Performance tests, on the other hand, such as work samples or simulations, are effective for measuring skill development.

Behavioral Criteria

Behavioral criteria, or actual changes in job performance that occur as a result of training, are the next level. Objectively measured examples include changes in levels of production or numbers of accidents. Subjective measures, such as performance appraisals or 360° feedback, are more commonly used to evaluate training outcomes.

Results Criteria

The highest level of training evaluation includes results criteria, which indicate the training program’s economic value to the organization. The goal is to determine whether the training has helped the organization achieve its goals. However, it can be dif�icult to establish the link between workers’ training-related behavior changes and subsequent organizational outcomes, such as pro�itability, market share, and customer loyalty. For this reason, very few organizations measure training effectiveness at this level.

Despite the need for training evaluation, many organizations do not do it. Certainly, training evaluation can be very time consuming, labor intensive, and expensive, causing some researchers to question whether it is worth the effort. Furthermore, even the best intentioned training leader may forego evaluation because he or she does not feel quali�ied to conduct the research. Finally, training departments may not wish to evaluate their programs for fear of the results; a negatively or indifferently evaluated training program could re�lect poorly on the department or even endanger its existence. However, without proper evaluation, employee training programs cannot be effectively measured for success or failure, which in turn may result in wasted or redundant training investments or valuable training opportunities left unpursued.

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5.6 Special Types of Training and Development

Technical training that emphasizes KSAOs that are directly applicable to a job is important. However, other types of training have also been found useful for employees’ and organizations’ long-term success. For example, special training may be necessary to get employees on board when they �irst start with the organization, to prepare them for future challenges such as leadership positions or international assignments, or to increase their sensitivity to issues of diversity and safety.

Orientation

Orientation, also sometimes called “onboarding,” is designed to familiarize new employees with the work environment by introducing them to their job, managers, coworkers, and the organization’s structure, culture, and processes. Orientation can also help new employees reach desired performance levels sooner by accelerating their development and moving them faster along the learning curve. An effective orientation can also help the organization build a positive image among new employees. Research shows that organizational-level orientation programs help introduce new employees to organizational goals, values, history, and people in the organization, which promotes commitment (Klein & Weaver, 2000). HR professionals, together with operating managers and supervisors, are often the ones who carry out this type of initial training, although many organizations now have formal orientation programs delivered by training staff or programs that are available online.

Concepts in Action: Special Types of Training

HR expert Peter Wallbridge reccomends making sure company systems and technology are immediately available to the new hire and there is a plan for their �irst day, which includes an overview of what is expected.

Leadership Development and Management Training

Leadership development has been de�ined as “expanding the collective capacities of organizational members to engage effectively in leadership roles and processes” (Day, 2000, p. 582; see also Day, Fleenor, Atwater, Sturm, & McKee, 2014, for a comprehensive review). The need for leadership development has grown with the increase in globalization and competition. However, 50 years of leadership development research shows that managerial training programs continue to have modest impacts on leadership effectiveness and are most adept at producing more learning outcomes than targeted behavioral change or performance results (Powell & Yalcin, 2010). It is therefore crucial to �ind more effective ways to develop the knowledge and skills of those who are in managerial positions so as to be able to contribute to future organizational performance.

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The leadership development process is also integral to succession planning and career planning. Organizations can effectively prepare a cadre of future leaders by assessing the need to �ill future management positions, evaluating potential candidates’ current performance, and then proactively imparting the required knowledge and developing the needed skills (Kristick, 2009). The overall purpose of a leadership development program should be to help the organization achieve its goals and objectives. Therefore, the design, development, delivery, and evaluation of the program must be based on organizational strategy and goals.

Leadership development can be offered through a combination of the methods and approaches discussed earlier. It can also be achieved through a special form of job rotation that is often referred to as management training. This is a structured program in which a high-potential trainee is groomed for a management position through a carefully designed sequence of short-term job transfers and rotations. During this time, he or she gains experience with various parts of the business and usually has increasing levels of challenge and responsibility. When the trainee graduates from the program, he or she is usually ready to assume a leadership position. For example, Unilever has a well-recognized management training program to develop capable local leaders within their global operations. The program is designed for young, recent college graduates who show high leadership potential. They are promised an accelerated career path to a senior management position within 8 to 10 years of successfully completing the program.

Find Out for Yourself: Unilever’s Future Leaders Program

Browse the Unilever website to �ind out more about its future leaders program.

Unilever Future Leaders Programme (https://www.unilever.com/careers/graduates/u�lp/)

What Did You Learn?

1. What are the bene�its of joining this program? 2. What are the bene�its to Unilever of offering this program? 3. Would you be interested in a program of this nature? Why or why not?

International Assignments

Employees typically need intensive and costly training before being assigned to an international position. This training helps them and their families adapt to the challenges they will face in their new host country and reduces the culture shock they may experience. International assignments are also considered a form of training and development. They give employees the opportunity to learn to deal with different cultures and new economic, social, and political systems and to develop their managerial and leadership skills. International assignments also give employees opportunities to move up in the organization when they return. Such assignments are also recognized as one of the most effective ways to prepare future global leaders (Linacre, 2016; Pope, 2009). Turning down an international assignment may limit an employee’s future prospects and the organization’s investment in that employee (Bolino, Klotz, & Turnley, 2016).

Diversity Training

Given the increased diversity in today’s workplace, the importance of diversity management cannot be stressed enough. The purpose of diversity training is to create awareness among employees so they can avoid discriminatory or harassing behaviors that intimidate others, allowing them to work together in a more peaceful and harmonious way (King, Dawson, Kravitz, & Gulick, 2012). Accordingly, diversity training should help create an environment that

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promotes mutual respect and acceptance. Such an environment can enable employees to be more productive, reduce lawsuits, and most importantly, allow the organization to capitalize on the contributions and creativity of a diverse workforce. Research shows that diversity training has a strong positive effect in terms of changing employees’ feelings, thoughts, and skills in dealing with diversity (Kalinoski et al., 2013).

Safety Training

In 2014 nearly 5,000 American workers died in work-related accidents (Bureau of Labor Statistics, 2016a), and more than 3.5 million nonfatal workplace injuries or illnesses were reported in 2015 (Bureau of Labor Statistics, 2016b). Although these numbers are less than half what they were 50 years ago, they are still relatively high. Consider that more than a dozen American workers will not go home today because they will die in a work-related accident (U.S. Department of Labor, n.d.). Obviously, some accidents are inevitable, but even the loss of one life or limb is unacceptable if it can be prevented.

Established in 1970 to deal with workplace safety, the Occupational Safety and Health Administration (OSHA) requires safety and health training programs in many industries across the United States. The purpose of such programs is to inform employees about workplace safety standards and ensure everyone’s safety. These programs may include topics such as accident prevention and safety promotion, accident and

emergency response, chemical and hazardous material safety, and general safety practices.

Effective safety training makes employees aware of the signi�icance of workplace safety and promotes a safe culture within an organization. Furthermore, it can save an organization money and time by reducing the number of injuries and deaths. This is in addition to many other bene�its, including reduced incidences of illness, property damage, and worker compensation claims. Studies show that although most forms of safety training have a positive impact, more engaging training—such as that which involves interaction, hands-on practice, or behavioral modeling—tends to most effectively reduce accidents, illnesses, and injuries (Burke et al., 2007).

Consider This: Your Training Experiences

Think back on your past or current job and any training experiences you may have had there.

Questions to Consider

1. What training programs did you go through? 2. How effective were they in increasing your job pro�iciency? 3. How effective were they in increasing your job satisfaction? 4. How effective were they in increasing your personal satisfaction?

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5.7 Quantifying the ROI in Training and Development

According to the generally accepted accounting principles (GAAP) that govern �inancial accounting and reporting, in order for a resource expenditure to be considered an asset or an investment, it needs to be usable and provide a return for more than one accounting period (usually 1 year). For example, when an organization purchases a building or a piece of equipment, the returns from using this asset materialize over more than 1 year. Thus, only a portion of the cost of that asset is considered an expense each year over the usable life of the asset. This cost or expense is referred as depreciation.

On the other hand, expenditures that are used up during the same accounting period in which they are made are considered expenses or operating costs and are deducted from revenues to calculate net pro�it. For example, raw materials and parts used to manufacture a product are expenses that are not depreciated over more than 1 year, because these items are consumed within the same year their bene�its are realized (via the sale of the products that contain them).

Given this, should training costs be considered an expense or an investment? Most organizations treat training costs as expenses, and GAAP does not have provisions for treating them as investments. However, if training is truly designed to add value, it is likely that the bene�its of having well-trained employees will accrue over more than 1 year. Thus, training should be treated as an investment rather than as an expense. If an organization is doing a good job in retaining the employees it trains, then these employees’ performance improvements will likely bene�it the organization beyond the year in which they received the training. That is why the American National Standards Institute is now in the process of developing HR standards that are comparable to the standards for more tangible assets and processes.

The goal is for HR standards to in�luence accounting standards so that organizations’ �inancial statements re�lect the value of training, development, and other investments in human assets. There is abundant evidence that supports the validity and legitimacy of accounting for human assets. For example, the stock prices of publicly traded organizations that invested twice as much as the industry average in training and development have been shown to outperform the Standard & Poor’s 500 in subsequent years (Bassi & McMurrer, 2004), and recent follow-up studies show that the bene�its of training and development were sustainable even during the recent economic recession (Bassi & McMurrer, 2009).

As another example, the ROI in developing psychological capital (a multidimensional psychological resource that constitutes self-ef�icacy, hope, optimism, and resilience) has been quanti�ied at 270%! This return was realized through brief workplace training interventions that consisted of just a couple of hours of face-to-face or online training (Luthans et al., 2015).

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While 50% of positivity is hardwired in the brain, about 40% can be trained and developed.

5.8 Can Positivity Be Developed?

You might recall from Chapter 2 that research by Sonja Lyubomirsky (2007) and her colleagues shows that 50% of positivity is a set point that is determined by genetics or hardwired in the brain at a very early age. On the other hand, about 40% of positivity is malleable and thus open to development. The question, then, is which speci�ic positive qualities can an organization effectively develop in its employees, and how? Numerous studies investigating these questions have identi�ied some successful scienti�ic approaches to developing important positive psychological resources such as hope, ef�icacy, resilience, and optimism, which are together referred to as “psychological capital” or the “HERO” within.

Hope

Hope has been de�ined as “a positive motivational state that is based on an interactively derived sense of successful (1) agency (goal-directed energy) and (2) pathways (planning to meet goals)” (Snyder, Irving, & Anderson, 1991, p. 287). Agency, or “willpower,” is the investment of determination and energy to set and achieve realistic but challenging goals. Pathways, or “waypower,” is the ability to generate alternative ways to reach goals, even when the original paths become blocked. Hope has been demonstrated to be positively related to performance, job satisfaction, work happiness, and organizational commitment (Youssef & Luthans, 2007), making it a particularly relevant positive psychological resource for organizations.

Although hope has a dispositional, trait-like, or hardwired baseline, it has also been found to be a state that can be developed and managed (Snyder et al., 1996). Approaches to developing hope include goal-setting methods such as “stretch goals,” which challenge the employee but are within reach; “stepping,” which involves breaking down goals into smaller subgoals and milestones; and “contingency planning,” which allows one to redirect goals and pathways when necessary (Luthans et al., 2015).

Ef�icacy

Ef�icacy is “the individual’s conviction or con�idence about his or her abilities to mobilize the motivation, cognitive resources or courses of action needed to successfully execute a speci�ic task within a given context” (Stajkovic & Luthans, 1998b, p. 66). Findings from numerous studies that used meta-analytical statistical procedures strongly support a positive correlation between ef�icacy and work-related performance (Stajkovic & Luthans, 1998a). Thus, developing employee ef�icacy is critical not only for successful training, as discussed earlier, but also on the job. This is because ef�icacious employees are highly self-motivated, tend to set high goals for themselves, self-select into dif�icult tasks, welcome and thrive on challenge, invest the necessary effort to accomplish their goals, and persevere when faced with obstacles (Bandura, 2012; Luthans et al., 2015).

Bandura (1997) and others have shown that ef�icacy can be developed through four speci�ic approaches: (a) opportunities to experience mastery and success, (b) vicarious learning from modeling, (c) social persuasion and positive feedback, and (d) psychological and physiological stimulation and well-being.

Mastery Experiences The most effective approach to developing ef�icacy is the use of mastery experiences, or giving someone repeated opportunities to experience success. For example, when a trainer or mentor breaks down a complex task into subcomponents and teaches the employee each of the subskills, the employee can experience small successes more frequently, which can help gradually develop his or her ef�icacy. Another approach to providing mastery experiences is to intentionally place employees in situations where they have a good chance of experiencing success—that is, setting them up for success. This can be accomplished through effective selection, orientation, placement, and career

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planning. Speci�ic to training and development, simulations, case studies, what-if analyses, and other experiential techniques can provide opportunities for mastery experiences that are intended to enhance ef�icacy.

Vicarious Learning From Modeling There are situations, however, in which opportunities for mastery and success are unavailable or unfeasible due to the risks and costs involved. For example, it would be irresponsible to allow pilots to �ly real airplanes while training or for surgery residents to conduct surgeries on real patients in order to develop mastery experiences. Instead, employees can learn vicariously by observing and mimicking those with more experience as they model desired behaviors. In order for vicarious learning from modeling to effectively develop self-ef�icacy, there must be both model and situational similarity. The more similar the role model is to the trainee and the more similar the situation being observed is to the real task, the more vicarious learning from modeling will enhance ef�icacy.

Social Persuasion and Positive Feedback The third approach to developing ef�icacy is through social persuasion and positive feedback. The more you have others cheering you on, the more you become convinced that you can do it. The bene�its of positive feedback, recognition, and supervisory support were discussed in detail in Chapter 4.

Psychological and Physiological Stimulation Finally, ef�icacy can be enhanced through psychological and physiological stimulation, which can be accomplished by emphasizing physical, mental, and psychological well-being. Feeling good, being happy, staying in shape, eating healthfully, and getting suf�icient sleep are known to enhance ef�icacy. On the other hand, feeling down, being stressed, feeling ill, or lacking sleep can be detrimental both to one’s health and to one’s ef�icacy, which in turn can impact job performance.

Resilience

Resilience is “the capacity to rebound or bounce back from adversity, con�lict, failure, or even positive events, progress, and increased responsibility” (Luthans, 2002a, p. 702). This ability to bounce back helps employees not only overcome dif�iculties and setbacks but also learn and grow as a result of challenges. In this way challenges become springboards for new levels of positivity. Resilience—like hope, ef�icacy, and optimism—has been shown to contribute to many desirable work outcomes (Youssef & Luthans, 2007).

Research shows that resilience is not a magical or mystical capacity (Masten, 2001); nor is it a super material (Sutcliffe & Vogus, 2003) or a hardwired, �ixed trait. Rather, it is open to development. Masten, Cutuli, Herbers, and Reed (2009) describe three resilience development strategies: (a) asset-focused strategies (that enhance one’s assets and resources, such as KSAOs that can increase one’s chances of success and reduce one’s chances of failure); (b) risk-focused strategies (those in which someone learns skills to cope with uncontrollable setbacks and to avoid controllable risky behaviors that can decrease one’s chances of success or increase one’s chances of failure); and (c) process-focused strategies (those that strategically allocate assets in order to mitigate risk factors).

Optimism

Optimism describes general positive future expectancies (Carver, Scheier, Miller, & Fulford, 2009). It is an explanatory style that attributes positive events to personal, permanent, and pervasive causes and negative events to external, temporary, and situation-speci�ic factors (Seligman, 1998). Such an explanatory style maximizes the positive impact of success and minimizes the detrimental impact of failure on an individual’s future expectancies and outlook. A pessimistic explanatory style does the opposite. It attributes positive events to external, temporary, and situation-speci�ic attributes, thus minimizing their perceived probability of recurring in the future. Such a style hinders pessimists from giving themselves credit for their success. Moreover, pessimism attributes negative events

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to personal, permanent, and pervasive causes, thus intensifying their perceived negative future impact and inducing self-blame (Seligman, 1998).

Although extreme optimism can be delusional and irresponsible, balanced, realistic, and �lexible optimism is possible and open to development (Peterson, 2000; Schneider, 2001). Approaches to developing this type of optimism revolve around training managers and employees to develop the skills for positive self-talk, in which they express (a) leniency for the past (positively reframing setbacks, giving oneself the bene�it of the doubt, and repositioning uncontrollable dimensions of the situation in the best possible light); (b) appreciation for the present (�inding the good, even in bad situations, and attributing it to internal, permanent, and pervasive causes); and (c) opportunity seeking for the future (learning from dif�iculties and moving on based on a better understanding of one’s strengths and weaknesses).

Integrated psychological capital development training programs have been successfully implemented in various work and educational settings, both nationally and internationally, and both face-to-face and online (Dello Russo & Stoykova, 2015; Demerouti, Van Eeuwijk, Snelder, & Wild, 2011; Ertosun, Erdil, Deniz, & Lut�ihak, 2015; Luthans, Avey, Avolio, Norman, & Combs, 2006; Luthans, Avey, Avolio, & Peterson, 2010; Luthans, Avey, & Patera, 2008; Luthans, Luthans, & Avey, 2014). Hope, ef�icacy, resilience, and optimism are just a few of the positive psychological resources that employees can be taught to develop. Interventions that develop these and other psychological resources have shown success, both in work and nonwork settings (Seligman, Steen, Park, & Peterson, 2005; Sin & Lyubomirsky, 2009; Youssef-Morgan & Dahms, 2016; Youssef-Morgan & Stratman, 2016; Youssef-Morgan & Sundermann, 2014). It is important to remember, however, that about 10% of positivity depends on one’s circumstances, most of which an employee has limited control over, at least in the short term. On the other hand, organizations may be in a good position to impact some of those situational determinants of positivity. For example, they might adopt initiatives that target work–life balance, wellness, and employee assistance programs, as these can promote employees’ emotional, psychological, and physiological well-being.

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Summary and Conclusion

Training and development are not just additional bene�its organizations use to attract talent or keep pace with competitors. They also play a critical role in maintaining an organization’s vitality by developing and recon�iguring talent and human capital. Even though training will not solve all of an organization’s problems, it is important for an organization to address its talent needs using an integrated approach that combines careful and strategic selection and placement with systematic development. Doing so allows an organization to maintain its competitive edge.

It is also important to recognize that training may not effectively address de�iciencies in personality traits, general mental ability, or poor person–organization or person–job �it. However, even the most effective selection approaches that address these individual differences are unable to always account for today’s dynamic business environment, which requires continuous learning; nor can they satisfy the growing needs of today’s workforce for learning, growth, and self-actualization. Investments in effective training and development can truly prepare the organization and its employees for the challenges of today’s and tomorrow’s marketplace.

Chapter 5 Flashcards

Key Terms

agency

behavioral criteria

development

ef�icacy

hope

leadership development

learning

Choose a Study ModeView this study set

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learning criteria

mastery experiences

mentoring

opportunity costs of training

optimism

organizational analysis

pathways

person analysis

reaction criteria

resilience

results criteria

task analysis

training

training generalization

training-needs assessment

transfer of training

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Learning Outcomes

After reading this chapter, you should be able to

De�ine motivation and discuss its basic properties.

Explain content theories of motivation.

Distinguish between intrinsic and extrinsic motivation.

Explain process theories of motivation.

Design jobs to increase motivation.

Demonstrate how pay programs can increase motivation.

Explain the effect of motivation on individual performance and organizational outcomes.

6Creating Work That Is Motivating

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6.1 The Importance of Worker Motivation

Motivation is one of the most basic and important drivers of human behavior, especially when we work. Traditionally, motivation has been viewed as a de�icit-based process that starts with an unful�illed need or a de�iciency. People have an inherent drive to act or behave in certain ways in order to meet a need or alleviate a de�iciency. However, more recent research shows that motivation can be self-generated and based on personal goals and aspirations. In other words, people intentionally set challenging goals and invest the effort and motivation to reach their dreams, regardless of the existence of a pressing need or de�iciency (Bandura, 2012; Bandura & Locke, 2003).

The three basic elements of motivation are intensity, persistence, and direction. Each of these elements is required in order for a person to perform a job well. People most commonly think of intensity, or the amount of effort an individual puts into achieving a goal, when they think about motivation. However, the direction of the effort also matters: Workers must direct their efforts toward behaviors that lead to positive outcomes for the organization. Finally, workers must demonstrate persistence—that is, they must be able to continue working until they achieve the desired outcome. A motivated worker, then, will apply effort (intensity) as long as it takes (persistence) in such a way (direction) as to achieve the desired goal.

But what motivates people at work? I/O psychologists have been trying to answer this elusive question for the past century. Think about how you might answer it. Do coworkers motivate you? Rewards? Perhaps the fear of punishment? No matter how you respond, chances are your reasons for doing your job differ from those of your friends, family, and coworkers. Because everyone has different needs, values, emotions, and personality traits, each person will likewise possess a different set of factors that drive his or her motivation. The indeterminate number of variables that in�luence motivation are what makes it dif�icult to study this topic.

Despite the challenges, over time researchers have gained considerable insight into how to improve worker motivation. This chapter is divided into two sections: The �irst deals with content and process theories of motivation, and the second focuses on ways in which organizations can improve worker motivation.

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Creatas Images/Creatas/Thinkstock

According to Maslow’s hierarchy of needs, humans need to feel like they belong. This could be ful�illed in the workplace by celebrating employees’ birthdays or anniversaries.

6.2 Content Theories of Work Motivation

In general, the various theories and writings on motivation can be described as focusing on either content or process. Content theories of motivation try to comprehensively identify what motivates people, whereas process theories of motivation attempt to discover how motivators trigger the drives that can lead to behavior. Both types of theories are important and informative for people interested in motivating themselves and others, and both involve managing the antecedents and conditions that can facilitate desirable behaviors. To begin, let’s look at four content theories: Maslow’s hierarchy of needs, Herzberg’s two-factor theory, Alderfer’s existence-relatedness- growth theory, and McClelland’s needs theory.

Maslow’s Hierarchy of Needs

Some content theories of motivation deal with needs, or the physiological and psychological wants or desires people attempt to satisfy by achieving particular goals. These theories aim to identify not only the different needs people have, but also the conditions under which they will be motivated to satisfy these needs in a way that contributes to performance. American psychologist Abraham Maslow’s hierarchy of needs, developed in 1943, is the most in�luential of the needs-based theories of motivation.

According to Maslow, needs can be organized hierarchically, from the most basic to the most advanced. Maslow de�ined �ive levels of needs, beginning with (1) physiological needs, such as the need for food, water, and shelter. After satisfying the primary needs, human motivation progresses sequentially through higher levels of needs, including (2) safety, or the need for physical and emotional security; (3) belonging, or the need for love, affection, and af�iliation; (4) esteem, or the need for admiration and respect from others; and (5) self-actualization, or striving to achieve one’s full potential.

Maslow emphasized that it is important to ful�ill each need level sequentially. According to his theory, a given level of needs will not motivate a person’s behavior until the needs from preceding levels have been met. For example, people will not be motivated to meet their needs to belong (level 3) until they have met their basic physiological and safety needs (levels 1 and 2, respectively). Moreover, Maslow argued that once a need has been satis�ied, it ceases to be motivating. Further motivation requires moving to the next level in the hierarchy. Finally, to achieve self-actualization, a person must have opportunities for growth and responsibility. Striving toward personal growth and self-actualization is what creates long-term worker motivation.

Because it is intuitively logical and easy to use, Maslow’s theory has been highly in�luential in the workplace. However, research indicates that the hierarchy of needs is limited, and some of its precepts can be refuted (Rauschenberger, Schmitt, & Hunter, 1980). For example, many people pursue higher level needs such as esteem and self-actualization even when they seem not to have met their most basic needs. Additionally, a person’s need for self- actualization does not ever seem to reach satiation. In fact, highly accomplished individuals seem to have a stronger need for self-actualization than other people. Despite some limitations, however, Maslow’s theory offered a signi�icant contribution to the thinking and practice in the �ields of psychology and organizational sciences, because it clearly demonstrated that workers are motivated by a wide range of needs, not simply the traditional rewards (such as wages and �inancial incentives) and punishments (such as job termination).

Concepts in Action: Maslow's Hierarchy of Needs

Author and management expert Kenneth H. Blanchard talks about Abraham Maslow's "hierarchy of needs" concept and how it applies to management. Blanchard

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argues that when workers are well paid, have job security, and enjoy good working conditions, the organization can then focus on what he calls social esteem needs.

Consider This: Your Needs and Motivation

1. Which level of Maslow’s needs applies the most to you right now? 2. In relation to Maslow’s hierarchy, have your lower level needs been satis�ied? 3. Do you agree with the sequence of needs in Maslow’s hierarchy? Why or why not? How would you

change the sequence based on your own needs and experiences?

Find Out for Yourself: More on Maslow

Visit the following website, which lists publications by and about Maslow, to expand your knowledge about Abraham Maslow’s seminal work.

Abraham H. Maslow Publications (http://www.maslow.com/)

Herzberg’s Two-Factor Theory

In the 1960s another American psychologist, Frederick Herzberg, developed a different model: Herzberg’s two- factor theory of motivation, also known as motivation–hygiene theory. The basis for the two-factor theory stemmed from studies in which Herzberg asked professionals to report incidents at work that exceptionally motivated them as well as those that exceptionally discouraged them. The professionals’ responses showed consistent themes. The factors related to positive feelings about work, which Herzberg called motivators, tended to be associated with the

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job itself, such as job content, responsibilities, and achievements. On the other hand, the factors related to negative feelings, which Herzberg called hygiene factors, tended to be associated with the job context, such as pay, working conditions, and the manager’s style. Although hygiene factors can, according to Herzberg’s theory, prevent job dissatisfaction, only motivators can lead to motivation and job satisfaction. Examples of motivators and hygiene factors are displayed in Table 6.1.

Table 6.1: Examples of Herzberg’s motivation and hygiene factors

Motivator factors Hygiene factors

Achievement Salary and bene�its

Recognition Work conditions

Job characteristics Quality of supervision

Advancement opportunities Coworker relationships

Growth opportunities Job security

Responsibility Company policies

The most signi�icant contribution of the two-factor theory is the notion that job content is a powerful motivator, necessary to develop and retain the right talent within an organization. At the time of the theory’s inception, the primary emphasis of management was on hygiene factors such as pay, bene�its, and working conditions. Although these peripheral factors are important in attracting new employees, Herzberg found that they are unlikely to create motivating and satisfying jobs unless complemented with interesting and challenging work.

More recently, researchers have studied the differences between intrinsic and extrinsic motivation. As with the two- factor theory, these studies differentiate between motivation generated by workers’ interest in the job for its own sake, called intrinsic motivation, and motivation triggered by tangible, externally generated rewards and/or punishments, or extrinsic motivation. Much debate surrounds the relationship between intrinsic and extrinsic motivation. One side views the two as additive, overlapping, and complementary. For example, a promotion might be both intrinsically and extrinsically motivating: the former because the employee desires interesting new work that makes better use of his or her skills; the latter because the employee needs a larger income. Conversely, some studies suggest that extrinsic motivation can adversely affect intrinsic motivation. A hobby, for example, might be interesting and engaging as long as a person does it for fun (intrinsically motivating), but should it become a paying job (motivated by external factors such as money), it can become yet another chore to complete and thus lose much of its motivational power (Wiersma, 1992).

According to a recent comprehensive study, intrinsic motivation is a stronger predictor of performance. When both types of motivation are present, they do not simply add up to higher motivation. Instead, they have a “crowding out” effect, especially when extrinsic motivation is directly tied to performance. Also, intrinsic and extrinsic motivation in�luence different aspects of performance. Intrinsic motivation in�luences performance quality, whereas extrinsic motivation tends to in�luence performance quantity (Cerasoli, Nicklin, & Ford, 2014). In addition, intrinsic motivation can be more sustainable over time than extrinsic motivation. The concepts of intrinsic and extrinsic motivation are key components of many organizational theories and practices, such as those involved in work design, reward systems, and performance management. They are also important psychological concepts that have been applied to many �ields such as education, sports, and health.

Consider This: Your Intrinsic and Extrinsic Motivation

1. What are your most intrinsically motivating activities? List three to �ive activities that you really enjoy spending time on. These are the types of activities you get fully absorbed in, those that make you lose track of time and feel really good afterward.

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2. What are some shared characteristics of those activities? 3. How are those activities a re�lection of your current needs? 4. How would you feel about those activities if you could �ind a job that would pay you to do them on a

regular basis? 5. Do you believe that extrinsic and intrinsic motivation are complementary or contradictory? Explain.

Existence Relatedness Growth Theory

Clayton Alderfer’s existence, relatedness, and growth (ERG) theory, �irst published in 1969, continued to build on the work of Maslow and Herzberg. ERG theory recognizes various types of needs, falling between Maslow’s hierarchy and Herzberg’s two-factor theory with three basic categories: existence, which includes basic survival needs; relatedness, or the desire for support, relationships, and recognition; and growth, which deals with self- actualization and esteem needs. Although the categories are hierarchical (existence needs have priority over relatedness, for example), Alderfer did not necessarily agree with Maslow’s notion that each level must be attained in sequence before moving on to the next. Rather, ERG theory holds that individuals may work on meeting different categories of needs simultaneously. Furthermore, Alderfer recognized a potential regression mechanism, the frustration-regression principle, in which existence and/or relatedness needs resurface when growth needs are frustrated. In practice, managers can use this knowledge both to help frustrated employees by meeting their existence and/or relatedness needs until they are ready to move forward and to try to avoid regression in the �irst place by providing employees with growth opportunities. Because ERG theory states that needs �luctuate and evolve, it can help explain some of the exceptions that arise in older motivational models, such as needs that do not ever seem to reach satiation or the pursuit of higher level needs when lower level needs have not been met.

McClelland’s Needs Theory

Building on Henry Murray’s (1938) seminal theories of psychological needs, David McClelland began his investigation into the realm of motivational needs theory in the late 1950s. Unlike Maslow, Alderfer, and Herzberg, McClelland developed a nonhierarchical model. His theory identi�ied three needs that are developed by individual experiences and shared in varying degrees by all people. These needs motivate speci�ic behaviors:

Need for achievement: the drive to excel and achieve results; the desire to gain satisfaction from personal attainment Need for af�iliation: the desire to form close personal relationships and be liked by others Need for power: the drive to in�luence or control others; the desire to be responsible for others

McClelland predicted that people would be motivated to seek out and perform well in jobs that matched their needs. For example, high achievers will be motivated by tasks or jobs that require moderate levels of risk taking and high levels of responsibility and feedback, because such work bestows not only a certain level of autonomy and challenge but also a good chance of success. Consequently, high achievers should perform well in entrepreneurial activities. On the other hand, high achievers often make poor managers, since they tend to care more about personal success and less about directing other people’s efforts (Miner, Smith, & Bracker, 1994). Individuals with a high need for af�iliation or power have been shown to be more successful managers (Miner, 1965). Team settings may be more appealing to those with a high need for af�iliation than to those with a high need for achievement or power.

Figure 6.1: Overview of need theories

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From Industrial/Organizational Psychology: Understanding the Workplace (5th ed.), by P. E. Levy, 2016, New York, NY: Worth Publishers, p. 233, Fig. 9.2. Copyright 2017 by Worth Publishers. All rights reserved. Reprinted by permission of Worth Publishers.

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6.3 Process Theories of Work Motivation

As you have learned from the content theories of motivation, people are driven to meet a variety of needs within their lives. Some needs are more basic and trigger the need to survive. Others are intrinsic and drive people to achieve a sense of personal ful�illment or self-actualization. Content theories address what motivates people, but this is not enough to fully explain motivation. Managers cannot simply peruse a list of needs (content) and then somehow extrapolate how to motivate their employees (process). This is where process theories of motivation come in. These theories aim to describe the actual process of motivation; that is, how a person becomes interested in moving from a state of complacency or satisfaction to a state of motivation and change. We will discuss three major process theories in this section: goal-setting theory, equity and justice theories, and expectancy theory.

Goal-Setting Theory

We have goals in every facet of our lives. People set goals related to personal health, relationships, and �inancial status. Similarly, organizations set goals concerning work productivity, ef�iciency, and quality. We live in a goal- oriented society. With all of this goal setting going on, have you ever wondered if goals actually improve performance? The research is clear: Goals do positively in�luence performance—as long as they are designed properly.

Since the 1960s, Edwin Locke and his associates have been examining how to design goals that will motivate workers. Goal-setting theory states that speci�ic, challenging goals lead to greater performance than vague goals, such as encouraging a person to do her best (Locke & Latham, 1990, 2002). These �indings have been supported in both laboratory and �ield studies and have been shown to affect the performance of individuals, teams, and organizations. Many organizational and personal development initiatives emphasize the importance of SMART goals; that is, goals that are speci�ic, measurable, attainable, relevant, and time bound.

Why might speci�ic goals be better than vague ones? In addition to focusing an individual’s attention on precise objectives, speci�ic goals reduce ambiguity about expected levels of performance. To enhance a goal’s speci�icity, managers should include a measurable outcome and set a clear completion date. As an example, let’s examine a familiar goal: the New Year’s weight loss resolution. People who vow simply to lose weight will lack the focus needed to make a plan and achieve their goal. On the other hand, people who set a speci�ic goal with due dates (e.g., lose 20 pounds by June 1) will give themselves a clear objective they can work to achieve.

Now let’s look at the second �inding of goal theory, which states that dif�icult goals lead to greater performance than easy ones. As when they are speci�ic, goals that are dif�icult focus an individual’s attention on goal-relevant activities and away from distractions. They also motivate people to work harder to achieve the goal. Think about your own work habits. Do you exert the same amount of effort on an easy assignment as you do on a challenging one? Probably not. Finally, hard goals encourage greater persistence. Researchers found that when people are allowed to control the amount of time they spend on a task, they will work longer when the goal is dif�icult (LaPorte & Nath, 1976). Keep in mind that in order to be effective, a goal must be challenging but not so dif�icult that it is unattainable. People must believe they can attain a goal, or they will become frustrated and demoralized to the extent that the goal will serve to reduce their effort or inspire them to give up altogether.

A speci�ic, dif�icult goal is most bene�icial when accompanied by ongoing feedback. Feedback allows people to compare their current performance with that set by the goal, identify discrepancies, and then make modi�ications to get back on track. Different types of feedback vary in terms of impact. Feedback that comes through completing the job, as is typical of production jobs, has been shown to be a more powerful motivator than feedback received from an external source such as the manager (Ivancevich & McMahon, 1982).

No matter how speci�ically worded, appropriately dif�icult, and feedback supported they are, in the end goals are not really goals unless people want to achieve them. Therefore, determination to reach a goal, or goal commitment, is another important facet of effective goal setting. A meta-analysis of 83 studies found that goal commitment is a critical link in the connection between goals and successful performance, especially when goals are dif�icult (Klein, Wesson, Hollenbeck, & Alge, 1999). I/O psychologists have proposed two ways to increase goal commitments:

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increase the perceived importance and relevance of the goal and foster the goal setter’s self-ef�icacy (Locke & Latham, 2002).

One way to convince people of a goal’s importance is to have them make a public commitment to the goal, because going against such a visible promise would presumably make goal setters feel hypocritical (Cialdini, 2001). For example, sharing the goal with others and asking them to hold you accountable are a way to make a public commitment to a goal. Goals can also gain importance if leaders communicate them as inspiring visions of the future around which followers can rally. An inspirational vision also serves to enhance excitement about the goal and generates the energy needed to persevere until the goal is accomplished. Finally, monetary incentives can improve a goal’s prestige and workers’ commitment to it. With this last approach, however, managers must be extremely careful. Financial rewards can discourage risk taking and creativity, splinter relationships, and create limited short- term thinking (Kohn, 2003).

The second way to improve goal commitment is to increase the goal setter’s self-ef�icacy. In other words, if a person believes he or she can accomplish a goal, he or she will be more committed to it (Wofford, Goodwin, & Premack, 1992). Leaders can raise self-ef�icacy by providing training and experiences that improve workers’ KSAOs in goal- related areas, role modeling successful performance, and conveying con�idence that workers can achieve the goal (Bandura, 1986; White & Locke, 2000).

In conclusion, setting goals is one of the most practical tools available to help leaders motivate workers. Intentions, in the form of speci�ic and dif�icult goals, are a very powerful motivating force and have been found to increase worker output signi�icantly. The broad range of effects of goal setting can be generalized across a wide variety of organizations, jobs, and tasks.

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Find Out for Yourself: Practical Approaches to Goal Setting in Organizations

The following articles introduce you to two commonly used approaches to goal setting in organizations. Read both articles, then think about how you could apply these approaches to achieve more effective goal setting in your current organization. If you are not currently employed, consider how these approaches could be applied in your academic pursuit or in another important area of your life.

“Management by Objectives” (http://www.economist.com/node/14299761)

What Is the Balanced Scorecard? (http://balancedscorecard.org/Resources/About-the-Balanced- Scorecard)

“What is the Balanced Scorecard” link used with permission from Balanced Scorecard Institute, a Strategy Management Group company. Copyright 1998-2017.

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Equity and Justice Theories

Equity theory states that motivation is in�luenced by our perception of how equitably or fairly we are treated at work (Adams, 1965). The creator of this theory, John Stacey Adams, concluded that employees compare the ratio of inputs (effort, experience, education, and competence) they invest in a job and the outcomes (pay, bene�its, recognition, and promotions) they receive with another person’s or group’s ratio of inputs and outcomes in the same or a similar job. If the person’s ratio of inputs and outcomes is unequal to that of the other person or group (called the referent), he or she perceives the situation as unfair (see Figure 6.2). In other words, people seek a fair balance between what they put into their job and what they get back in return. Tension arises when there is a perception of imbalance: If people feel under-rewarded, they can experience frustration or anger; if they feel over-rewarded, guilt.

Figure 6.2: Equity theory ratios

According to equity theory, people are highly motivated to maintain equitable exchange relationships and will therefore devote considerable energy toward making their situations fair. Carrell and Dittrich (1978) proposed a number of ways people reduce their feelings of unfairness. First, they can actually change their inputs (reducing effort or taking classes, for example) and/or outcomes (asking for a raise or applying for a higher level job). Second, they can distort their own perceptions of inputs and/or outcomes so as to make things seem more equitable in their own minds (called cognitive distortion). Finally, they can simply quit and �lee the situation.

Research on equity theory supports the notion that people evaluate the fairness of their inputs and outputs, especially when inequity is due to undercompensation. Underpaid hourly employees, for example, tend to lower their inputs by producing less work, and underpaid piece-rate workers tend to produce a high volume of low-quality work. In reducing their inputs, then, underpaid employees are attempting to adjust their performance to a level they feel matches their compensation. Interestingly, when the opposite occurs—imbalance due to overcompensation— research shows that employees tend not to be motivated to balance the input–output ratio. Theoretically, the guilt employees experience when overpaid should motivate attempts to reestablish equity, perhaps by working more or improving the quality of their work, but again, research just does not seem to support this conclusion (Mowday, 1996).

Equity theory examines one form of fairness, that which deals with the way workers judge the fairness of outcomes (also called distributive justice). People, however, evaluate much more than work-reward ratios. They assess almost everything connected to the organization, including decision-making procedures, interpersonal interactions, and information (Colquitt, Conlon, Wesson, Porter, & Ng, 2001). Many factors shape their assessments of various

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exchanges, including their perceptions, thoughts, and feelings regarding mutual trust, commitment, support, and relationship quality with their leaders (Colquitt et al., 2013). I/O psychologists refer to this broader, multidimensional view of fairness, of which distributive justice is but one part, as organizational justice (see Figure 6.3). The following sections will include an overview of the other three parts of organizational justice: procedural justice, informational justice, and interpersonal justice.

Figure 6.3: Model of organizational justice

Procedural Justice As we all know, organizations have limited resources (promotions, pay, job opportunities, and so on) to give employees. In addition to judging the fairness of the outcomes of resource allocation (distributive justice), employees also evaluate the fairness of how management decides to give out its resources, especially if the process seems unfair. If your manager gives one member of your team a bonus, you would probably want to know how the manager made his or her decision and why you were left out, right? Depending on the answers, you may or may not decide the decision was fair. This is called procedural justice.

How can managers improve procedural justice? One way is to give employees a chance to have their opinions heard during the decision-making process. Employees who participate in making decisions are more likely to be committed to those decisions, even if the decisions are disadvantageous. To further improve procedural justice, managers must also demonstrate consistency (across time and people), act

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By giving employees a chance to voice their opinions, businesses can improve their procedural justice.

ethically and without bias, gather input from affected parties, use accurate information, and remain open to appeals (Leventhal, 1980).

Fair procedures are especially important if a decision results in a negative outcome. This makes logical sense. If a coworker gets the promotion for which both you and he applied, the coworker probably isn’t too concerned about how the decision was made, beyond the notion that he feels he deserved it. You, on the other hand, most likely want to know exactly why you were passed over, especially if you feel that you possess the same educational and skill level and work just as hard as your coworker. If you come to the conclusion that the process of determining the recipient of the promotion was fair, you will view your negative outcome more positively. This is known as the fair-process effect, and it illustrates the importance of the relationship between procedures and their outcomes. Keep in mind that examining processes and outcomes separately will never yield a complete understanding of fairness. Managers must always consider how procedures interact with outcomes and how the former will in�luence employees’ ultimate perceptions of the fairness of the latter.

Informational Justice The fair-process effect is also exhibited using two additional forms of organizational justice: informational justice and interpersonal (or interactional) justice. The work of Bies and Moag (1986) on informational justice has shown that one way to improve people’s perceptions of fairness is to provide them with information about the procedures used and outcomes given before, during, and/or after rewards are allocated. Signi�icant research supports the notion that employees will be even more apt to perceive explanations as having high informational justice if they perceive them to be adequate (Bies, 1987).

Interpersonal (Interactional) Justice Interpersonal justice (or interactional justice) deals with the way in which outcomes are presented and procedures are explained on an interpersonal level (Greenberg, 1993). Let’s go back to our earlier example in which your coworker received a promotion for which you also applied. Perhaps, as part of your fairness assessment, you ask your manager to explain the decision. If your manager gives what is technically a fair and adequate explanation yet communicates it in an insensitive manner, you will probably still experience feelings of injustice. A study by Mikula, Petri, and Tanzer (1990) asked respondents to describe a recent unjust event in their lives. Many of the reported injustices were related to interpersonally unfair treatment, such as inconsiderate, impolite, or aggressive behavior; treatment that violated personal dignity; or actions that indicated a lack of loyalty from another person. The implication is that, in their daily lives, people are aware of interpersonal treatment and perceive poor interpersonal treatment as unfair.

In the previous few sections, we’ve discussed the ways in which people perceive and judge processes, outcomes, and interpersonal communication. Why are people’s perceptions of justice important? Organizationally speaking, employees who feel that they are treated unjustly show lower performance, decreased satisfaction, and greater turnover. Therefore, especially when dealing with negative outcomes, managers should follow consistent and unbiased processes, be transparent about how the decision was made, and treat workers with dignity and respect.

Consider This: Perceptions of Equity and Justice

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Think about a recent unjust event that you personally experienced or witnessed. Try to remember as many of the details of the event as possible, then describe the event in terms of distributive, procedural, informational, and interpersonal justice. If possible, ask someone else who was involved in the event to also describe the event. Interpret the other person’s description in terms of distributive, procedural, informational, and interpersonal justice.

Question to Consider

1. In what ways were your perceptions similar to the other person’s? In what ways were they different?

Expectancy Theory

One of the most widely evaluated process theories of motivation is Victor Vroom’s expectancy theory, developed in 1964, which states that motivation is determined by the outcomes that people expect as a result of their actions on the job. Ultimately, Vroom’s theory deals with the mental processes of choosing; people will be motivated to choose work activities they both �ind attractive and believe they can do. This process can be broken into three dimensions: expectancy, instrumentality, and valence (Vroom, 1964), and the theory focuses on the relationship among them:

Effort–performance relationship (expectancy): The probability perceived by the individual that expending effort on an activity will lead to high performance. The worker asks herself, “Can I perform this activity well?” If the worker perceives the probability of high performance to be low, she will not be motivated to apply the effort. Performance–outcome relationship (instrumentality): The degree to which the worker believes that successful performance will lead to the desired outcome. The individual asks, “If I perform well, will this lead to a reward (pay, promotion, recognition, etc.)?” Rewards–personal goals relationship (valence): The degree to which an activity’s outcomes have suf�icient personal value (based on needs, goals, interests) to motivate the individual to behave in a certain way. The worker asks, “Is the reward for performance personally attractive?”

Expectancy theory includes a method of calculating a task’s motivational force (multiplying the expectancy dimension by a composite of the combined valence and instrumentality dimensions). If any one of the factors is 0, the employee will take no action (Donovan, 2001).

Even though people rarely consciously perform these calculations, they are motivated and guided by the interactions of expectancy, instrumentality, and valence. For example, imagine you are a highly successful salesperson at a large company. You have always dreamed of being a manager for the company and have just learned that there will be a job posting for a sales leader 6 months from now. The thought of getting the promotion is very exciting for you (valence). Additionally, you feel you can perform your current job exceptionally well and earn an excellent performance appraisal if you continue to generate high sales numbers and act as a good team player, �inish your degree, and complete some management courses (expectancy). Finally, you believe your excellent evaluation will lead your managers to give you the promotion (instrumentality). Taking this information into consideration, you have a high likelihood of being motivated to try for the promotion. The dimensions of expectancy theory have also been applied to entrepreneurship and linked to the levels of effort entrepreneurs intend to invest and their progress toward an operating venture (Renko, Kroeck, & Bullough, 2012).

Interestingly, although expectancy theory makes a lot of sense intuitively, evaluative research on this topic has generated mixed results. As you might expect, people will generally expend greater effort toward reaching a goal as their expectations of receiving a reward increase, assuming they perceive the reward to be valuable (Van Eerde & Thierry, 1996). Other research shows some caveats. Expectancy theory assumes that individuals are looking only for the outcome that is the most personally bene�icial. If this is true, organizations would be able to motivate workers as long as they make outcomes suf�iciently enticing. However, this is not always the case. For example, even though an individual might �ind a promotion personally attractive (with the potential for travel to exotic locations, high pay,

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increased prestige and respect, exciting job duties, a move to a fantastic city with a great climate, and so on), he might not be motivated to attain it (moving would mean leaving behind friends and family, longer hours and travel would preclude spending time with family or participation in a treasured hobby). Choices, then, often yield outcomes that can be perceived as both positive and negative, and they are not solely motivated by personal considerations.

Self-Determination Theory

Self-determination theory (SDT) is a contemporary theory of motivation that proposes that motivation is determined by both content and process. In terms of content, SDT suggests humans are motivated by three types of needs: autonomy, or the perception of being in control of one’s own behavior; competence, or perceived ability and effectiveness; and relatedness, or feeling understood and cared for by others. Ful�illment of these needs is essential for psychological growth and well-being (Deci & Ryan, 2000).

Importantly, SDT focuses less on the quantity of motivation a person has and more on the nature or source of that motivation. Beyond the distinction between intrinsic and extrinsic motivation discussed earlier, the emphasis of SDT is on the level of internalization of motivators. Motivators are autonomous when their source is an innate desire to achieve personally meaningful and interesting goals and challenges. On the other hand, controlled motivation results from pressure, which can be external or internal. Examples of external pressures include rewards and punishments. Examples of internal pressures include guilt, shame, or even pride (Deci & Ryan, 2000, 2012; Ryan & Deci, 2000). For example, if you truly want to read this chapter because the topic interests you, you are more likely to be motivated to �inish the reading and master the content than if you are completing the task to do well on a test or to get good grades in order to make your family proud of you. As you might expect, controlled motivation is much less motivating than autonomous motivation.

The environment also plays an important role in SDT. Environmental factors and actors (e.g., family, friends, teachers, leaders, coworkers, organizational culture) offer need supportiveness, which is the extent to which these factors facilitate or hinder the achievement of autonomy, competence, and relatedness, as well as the internalization of the motivation processes for need ful�illment (Silva, Marques, & Teixeira, 2014). For example, managers can facilitate autonomy through giving their employees choices and a voice in the decision-making process, respecting their goals and aspirations, and avoiding unnecessarily controlling and micromanaging them. They can facilitate competence through clarifying expectations, giving feedback, and offering training and development opportunities. And they can facilitate relatedness through building high-quality relationships with their employees, taking interest in their unique qualities and characteristics, treating them with empathy, showing appreciation for what they do, and being there for them when they need help or support. Table 6.2 summarizes the dimensions of SDT.

Table 6.2: The self-determination continuum

Nonself-determined Self-determined

Motivation Amotivation Extrinsic motivation Intrinsic motivation

Regulatory styles

Nonregulation External regulation

Introjected regulation

Identi�ied regulation

Integrated regulation

Intrinsic regulation

What is the source of motivation?

Impersonal External Somewhat external

Somewhat internal

Internal Internal

What regulates motivation?

Nonintentional, nonvaluing, incompetence, loss of control

Compliance, external rewards and punishments

Self-control, ego involvement, internal rewards and punishments

Personal, importance, conscious valuing

Congruence, awareness, synthesis with self

Interest, enjoyment, inherent satisfaction

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Source: Based on “Self-Determination Theory and the Facilitation of Intrinsic Motivation, Social Development, and Well-Being,” by R. M. Ryan and E. L. Deci, 2000, American Psychologist, 55, p. 72.

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6.4 Making Work Motivating

Every day, millions of people go to work. For most of us, it’s not a choice: Without a paycheck, we couldn’t pay bills, buy food, or shelter our families, let alone indulge in luxuries. It’s unfortunate, then, that the majority of us spend so much time and effort earning our income at jobs we �ind unsatisfying. In 2009 the Conference Board, a market information company, found that only 45% of American workers were satis�ied with their jobs. In 22 years of conducting the survey, this percentage is the lowest the survey has ever measured (as cited in Pepitone, 2010). This percentage has gone up to about 50%, which is the highest it has been since 2005 (Conference Board, 2016). This is a problematic statistic because it means that half of all workers are simply going through the motions at work without deriving any sense of satisfaction or motivation from the single life activity that consumes more time and energy than any other life domain. The research cited a number of reasons for the low levels of job satisfaction, including uninteresting work and low pay. As we have already illustrated, each of these elements—job characteristics and rewards—affect workers’ motivation and are thus very important in determining an employee’s overall success at his or her job. Because organizations control these factors, can managers strategically adjust them to make work more motivating? If so, how?

The Job Characteristics Model

Despite the sobering statistics, there are many people who are satis�ied with their jobs and actually enjoy going to work. Often, the positive feelings stem from the inherent characteristics of the job itself. In 1976 Hackman and Oldham’s job characteristics model attempted to identify the speci�ic job characteristics that impact workers’ attitudes and motivation:

Skill variety: The extent to which a job provides the opportunity to use a variety of different skills and talents on the job. Managing an of�ice is one example of a job with high skill variety. An of�ice manager is responsible for ordering supplies, coordinating a budget, managing support staff, facilitating team meetings, and interacting with others. On the other hand, a person who works on an assembly line has a job with low skill variety; an automobile assembly-line worker will do a single task, such as attaching front bumpers to assembled cars, 8 hours a day. Task identity: The degree to which a job requires the completion of a whole or identi�iable piece of work, from beginning to end. One example of high task identity is a sales professional who is responsible for the entire sales process, from identifying customers to conducting sales meetings to closing the deal. A job with low task identity is that of a cabinetmaker whose sole responsibility is to sand cabinet doors. Task signi�icance: The degree to which the job has an impact on the lives and well-being of other people (i.e., customers and coworkers). An example of a job with high task signi�icance is a medical doctor whose actions impact the lives and physical well-being of patients in his or her care. On the other hand, an of�ice worker responsible for scanning records into an online �iling system has a job with low task signi�icance. Autonomy:The degree to which the job provides signi�icant freedom and discretion to schedule and organize one’s own work activities. An example of a job with high autonomy is that of a bank lender who has the latitude to schedule his or her work day and make decisions as to the most effective sales strategies. A job with low autonomy is that of a bank lender who is given a schedule of meetings and is required to follow a strict set of processes and procedures when making loans. Feedback: The amount and type of information received about the effectiveness of one’s work performance. An example of a job with high feedback is that of a gun manufacturer who �ires each completed gun to

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ensure proper functioning. A job with low feedback is that of an information technology (IT) manager who receives feedback from his or her manager just twice a year, during formal performance appraisals.

The job characteristics model proposes that the motivating potential for any job can be calculated. Using the Job Diagnostic Survey, a worker reads descriptions of various job characteristics and, on a scale from 1 (very nondescriptive) to 5 (very descriptive), determines the degree to which each statement describes his or her job. Next, the employee’s responses are calculated (as shown in Figure 6.4) to determine a score for each of the �ive dimensions of job characteristics (skill variety, task identity, task signi�icance, autonomy, and feedback), and scores for each dimension are entered into an equation to determine the overall motivating potential score (MPS) for the job.

Figure 6.4: Calculating motivation potential from the job characteristics model

According to Hackman and Oldham’s model (see Figure 6.5), the higher these �ive job characteristics are in a particular job, the more motivating and satisfying the job will be because it will create and nurture three desired psychological states. In particular, the �irst three job characteristics in Hackman and Oldham’s model (variety, identity, and signi�icance) additively in�luence the psychological state of work meaningfulness. This allows these three dimensions to substitute for one another. For example, a highly specialized job can still be motivating and satisfying if it is high on identity and signi�icance. Note that in the equation, the subdimensions of skill variety, task identity, and task signi�icance are combined. The higher people rate their job in any or all of the three subdimensions, the more likely they are to perceive their work as important, interesting, and meaningful.

Figure 6.5: The job characteristics model

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From “Motivation Through the Design of Work,” by J. R. Hackman and G. R. Oldham, 1976, Organizational Behavior and Human Performance, 16, p. 256. Reprinted by permission of Elsevier.

On the other hand, the fourth characteristic, autonomy, affects a different psychological state: responsibility of outcomes. Jobs that score high in autonomy increase workers’ feelings of responsibility for their work. Finally, the �ifth characteristic (feedback) in�luences a third psychological state: knowledge of results. Jobs that provide considerable feedback ensure that the worker has a clear understanding of his or her performance.

Furthermore, as you can see in the equation, the effect of the three psychological states is multiplicative: De�iciencies in one state can be detrimental for the motivational potential of the whole job, because these states cannot substitute for one another. For example, a highly meaningful job is not motivating if it provides no feedback to allow for knowledge of results or if it provides no autonomy to facilitate perceptions of responsibility for outcomes.

Interestingly, there are some situations in which jobs will not be motivating, no matter how high their MPSs are. This often happens when workers become dissatis�ied with outside factors, such as pay, policies, supervision, or the work environment. Additionally, workers must possess the skills and abilities needed to perform a job, or they will end up frustrated and angry. Finally, if workers have a high need for growth and development (called growth need strength), they will experience more psychological satisfaction from working in a meaningful job; but if workers do not have high growth need strength, they will not be motivated in the job, even if it should be—according to a job diagnostic survey—highly motivating. Simply put, even if you have the best job in the world, it’s hard to be motivated if you can’t do the job, dislike your manager, or have no desire to meet the demands of highly meaningful, challenging jobs.

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The job characteristics model has stood the test of time, and elements of it have been incorporated in more contemporary motivation theories such as SDT. Studies have shown that people who perceive that their jobs contain meaning, responsibility, and feedback typically feel intrinsically motivated (Gagné & Deci, 2005). Additionally, jobs with high motivating potential positively impact employee motivation, work satisfaction, organizational commitment, and job performance. Even with the changing nature of work, which has led to higher skill variety, autonomy, and interdependence, the �ive factors in the job characteristics model continue to predict job satisfaction with about the same strength as they did four decades ago when the model was �irst proposed (Wegman, Hoffman, Carter, Twenge, & Guenole, 2016).

However, recent developments of the job characteristics model take into consideration important changes in the workplace. For example, jobs are becoming harder to de�ine; they evolve over time and as the need arises. In addition, it is increasingly common that managers are no longer in a position to control what their employees do to get the job done. Thus, it is becoming impossible to design the speci�ic properties of a job and to keep them �ixed. Instead, there is now much more emphasis on job crafting, or the notion of giving employees and teams the freedom to design and change their own jobs as they see �it. Furthermore, most jobs now include a substantial amount of social interaction with colleagues, clients, and other stakeholders, regardless of organizational level. These social dimensions should also be incorporated in the core dimensions of job design, especially in today’s highly networked world (Oldham & Hackman, 2010).

Redesigning Jobs

Consider the following scenario: Zach S., an e-business development specialist, sits slumped at his desk. “I can’t wait to quit this job,” he thinks to himself. “I’m so bored. Every day is the same: review some reports, �ind some information, enter it into the computer. Any monkey could do this job. I don’t care how much they pay me, I need some challenges! And my boss needs to stop micromanaging me; I’m sick of having to ask for his approval every time I need to make a change to my data entries.” Zach sighs, frustrated. Then he sits up straight in his chair, a smile playing about his lips. “That’s it . . . I’m going to make my idea for a lawn care business a reality! Sure, it’ll be tough, especially at �irst, plus I know I won’t make as much money . . . but the work will be challenging and will change every day—and, best of all, I’ll be my own boss.” His mind made up, Zach stands, sets his shoulders, and strides purposefully out of his cubicle to speak with his manager about his decision to quit his job.

As we can see from this example, Zach’s job as an e-business specialist involved unchallenging, repetitive tasks for which he perceived little meaning. To make matters worse, he had very little autonomy to make his own decisions, even in minor situations. As the head of his own lawn care business, however, Zach would not only be constantly challenged with a variety of meaningful tasks, he would also have the autonomy to meet each challenge with actions that directly affect the business. Zach’s actions illustrate the basic tenet of the job characteristics model: Work needs to contain the right combination of meaning, autonomy, and performance feedback in order to be motivating. Let’s look now at how organizations can use the job characteristics model to maximize a job’s motivating power.

Job Rotation Job rotation involves workers periodically moving from one job or task to another. The goal of job rotation is twofold: �irst, to keep workers challenged and stimulated when the original job has become routine, and second, to help workers learn new KSAOs they can use later in their career. For example, large companies like General Electric and PepsiCo adopt rotation programs in which high-performing leaders rotate through the major functions of the business as a way to increase their business knowledge and leadership skills. Factories may train employees on all segments of the assembly line so they can be moved as needed. Giving workers the opportunity to perform a larger number and variety of tasks improves job interest while reducing boredom and stagnation. Job rotation also helps workers better understand how their job contributes to the organization as a whole, which improves perceptions of the job’s signi�icance.

Job Enlargement

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Participative management is a form of job involvement in which the employee and supervisor work jointly to make decisions and share the decision-making power equally, thus boosting employee enthusiasm and work commitment.

Job enlargement involves increasing a job’s diversity by expanding the number and variety of tasks workers perform within that job. For example, a customer service position might require a representative to address incoming customer questions. However, the job could be enlarged if representatives were also instructed to cross- sell products during calls. The differences between job rotation and job enlargement are subtle but important. Unlike job enlargement, job rotation does not involve redesign, because the worker simply moves from one established job to another. Although job enlargement often leads to enhanced work motivation and satisfaction, the additional activities can be viewed negatively if they result in stress and burnout.

Job Involvement Although not a job-redesign mechanism per se, increasing job involvement—or the degree to which workers are involved in decisions that affect their work—does have a positive impact on workers’ motivation. One form of job involvement studied extensively in organizations is participative management, in which the employee and supervisor work jointly to make decisions and thus share the decision-making power equally. Participative management has garnered considerable support in organizations due to the belief that it boosts employees’ enthusiasm and work commitment. The job characteristics model also supports the idea of job involvement, because greater involvement in one’s job should increase a worker’s feelings of responsibility (autonomy) and job meaningfulness, which should then go on to improve the worker’s satisfaction and motivation. For example, a loan of�icer who was required to obtain manager approval for all new loans entering the bank would feel less involved with her job than she would if she were part of a committee that worked together to make �inal loan decisions.

Although job involvement seems to be an important part of stimulating worker motivation, research on the subject is mixed. Miller and Monge (1986) have shown that job involvement has a moderate relationship with motivation, satisfaction, and productivity. Pereira and Osburn (2007) found employee participation to have a stronger relationship with performance than with employee attitudes. It is possible that the impact of participation on employee attitudes may depend on the amount of responsibility workers want to have. For example, people who are uncomfortable making decisions yet good at following directions may be better suited to work in positions that require little job involvement.

However, it is important to note that individual employee characteristics and needs should not be overlooked. Recall the example at the beginning of this section. Zach may only be motivated by the autonomy of running his own business. If that’s the case, no amount of job redesign will be able to make his current job motivating. Furthermore, not all jobs have suf�icient latitude for job redesign or job crafting. In many cases at least some dimensions of the job cannot be changed. Thus, proper job design should follow effective selection procedures to identify the right candidates that can enjoy and be motivated to perform each job. Trying to keep the wrong person in a job by “tweaking” the job design is an ineffective approach that focuses on symptoms, rather than root causes of low motivation—namely, ineffective selection and placement.

Money as a Motivator

At the beginning of this chapter, you were asked to think about what motivated you at work. Did money make the list? If not, you’re not alone. As an extrinsic motivator, pay is not usually the driving factor in job satisfaction. However, compensation does have an important role in how organizations attract and retain top performers. As you learned earlier in Herzberg’s model, although pay may not be a motivator that promotes job satisfaction, adequate

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pay can be considered a hygiene factor that prevents job dissatisfaction. A survey asked high performers in many large companies to consider what would cause them to leave their jobs, and 71% of respondents indicated that compensation would play a role (White, 2006). As you can see, pay can be very important to workers. If designed properly, compensation systems can be a strategic tool used to motivate employees.

A closer look at recent studies can help clarify the common discrepancies in people’s reactions to �inancial incentives. One of the main advantages of money is that it is universally valued and can be converted into other items of value. In other words, each employee can covert money into whatever he or she deems valuable. Thus, money is an ef�icient and effective way to reward most people. On the other hand, �inancial rewards can reach a satiation point. Obviously, rarely would anyone turn down extra pay. However, beyond a certain level, additional money can cease to be motivating. It may not promote an increase in performance or satisfaction. A large-scale study by Daniel Kahneman, winner of a Nobel Prize in Economics, shows that money is related to happiness up to an annual income of about $75,000 (in 2008/2009 dollars). Beyond that compensation level, the relationship between money and happiness disappears. In other words, while lack of money can make you unhappy, too much money does not necessarily make you happier. Other motivators discussed in this chapter become more important (Kahneman & Deaton, 2010).

Also equally important to the presence of �inancial incentives is the way in which they are administered. Some pay systems can be more motivating than others. The motivational potential of �inancial incentives depends on how well pay is linked to performance goals.

Concepts in Action: Motivational Strategies

Although material rewards can motivate people, such rewards don't usually represent the strongest motivational force. Many companies have redesigned jobs to challenge their employees. A number of companies have also tapped new sources of employee motivation by revising old notions of managerial control. Employees who feel in control and creatively involved in their work often feel they have a stake in the company, which can motivate the highest level of job performance.

Pay for Performance

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As the name implies, pay-for-performance systems link compensation to performance. Although these systems are gaining popularity in many sectors and jobs, their use continues to be limited. Only 25% of American workers reported that any part of their pay is linked to their performance (Miller, 2010). Unfortunately, compensation systems that are not linked to performance are not effectively designed to motivate workers. Take the example of schoolteachers. Very often, their compensation is based strictly on seniority and not on teaching style or effectiveness. These teachers may be tempted to think that putting in extra effort is needless, because they will be paid the same regardless.

Two traditional types of pay-for-performance programs are piece-rate pay and merit-based pay. Piece-rate pay is the most effective method of linking pay to performance on production jobs. Under a piece-rate system, workers do not typically get a base salary. Instead, they receive a set amount of money for each unit they complete. A data processor could be paid this way, perhaps receiving $1 for each page he entered into the system. The faster he works, the more pages he would complete and the more money he would receive, resulting in a strong link between job performance and compensation. Commission-based pay for sales jobs is another example.

Piece-rate pay systems have a number of limitations. First, they can sometimes increase productivity at the expense of quality. When production is the sole measure of performance, workers are likely to focus their attention exclusively on producing as many pieces as possible in order to maximize their reward. Organizations can counter this either by implementing appropriate control mechanisms to monitor quality or by including a quality metric as part of the payment criteria. Our data processor, then, might be paid only for each page that contained zero errors. Another limitation of piece-rate systems is that they reward individual productivity, which can decrease cooperation among workers. Finally, these systems are simply not feasible for many professional-level workers, such as managers, customer service representatives, and marketing professionals. Although piece-rate pay is motivating for and relevant to some jobs, it is not the only way to pay workers based on their performance.

Compared with production jobs, white-collar jobs have fewer objective performance criteria, making them more dif�icult to compensate according to a pay-for-performance system. Attempts to link pay with performance in white- collar jobs are called merit-based pay plans. In these systems, also called variable-pay plans, managers are required to periodically evaluate their employees’ performance on preestablished dimensions. Based on these evaluations, managers then recommend whether employees should be rewarded some amount of merit pay over and above their base salaries.

In addition to a positive relationship with job performance, merit-based pay plans have the support of managers, who readily appreciate the value of rewarding high performers and recognize that merit pay is one way to keep their most valuable workers from being recruited and hired away by a competitor. Variable-pay programs allow top employees to be recognized and compensated for their hard work and effort, which increases their overall pay satisfaction (Williams, McDaniel, & Nguyen, 2006). Additionally, with these systems, higher pay is no longer simply a form of entitlement.

Although many companies now use some form of variable pay, the plans are usually poorly executed. Unfortunately, a merit system is only as good as the performance evaluation upon which it is based, and as you recall from Chapter 5, managers tend to have a dif�icult time accurately describing and measuring superior performance. As a result, managers might be unable or unwilling to discriminate between excellent, average, and poor performers, resulting in unfair distribution of merit pay. Additionally, depending on the company’s �inancial situation, the size of the incentive pool might be quite small, which would not serve as an effective motivator. That is why compensation specialists currently advocate a much smaller base pay with a higher level of variation in order to create more differentiation and effectively reward high performers (Miller, 2016).

Find Out for Yourself: What Really Motivates Us?

Watch the following video to learn some surprising results from an MIT study on what motivates people to excel in the workplace.

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“Drive: The Surprising Truth About What Motivates Us” (https://www.youtube.com/watch? v=u6XAPnuFjJc)

Executive Compensation Compensation for top executives has received quite a bit of attention from both researchers and the media, possibly because of the perceived inequity between executives’ pay and that of the average worker. In 2014 CEOs of publicly traded companies earned an average of $13.5 million, 373 times more than the average worker (Trottman, 2015). With all the scandals, bailouts, and turmoil in which companies are currently involved, many people are asking whether large salaries and lavish perks are truly justi�ied.

It may come as a surprise that research has found the statistical link between CEOs’ pay and their organizations’ performance, for the most part, to be signi�icant. For example, a study examined the relationship between CEO pay and company performance for 280 companies from 2006 to 2009. CEO pay was positively related to company performance, as measured by return on equity (Sigler, 2011). However, work by Wallsten (2000) indicates that this relationship may be more complex than it appears. Wallsten found that when companies do well, the top executives receive large salary increases in proportion to the high performance. On the other hand, when companies perform poorly, there is very little change in executives’ pay, upward or downward. This suggests that executive pay is insulated from the negative impact of poor organizational performance, making it less effective as a motivational tool. For executive pay to be truly motivational, boards of directors may need to be willing to adjust compensation downward when the company’s performance is low. The U.S. Securities and Exchange Commission recently issued regulations requiring publicly traded companies to report on the link between their executive pay and the company’s performance. The relationship must be documented for 3 to 5 years, depending on company size, in order to ensure a long-term emphasis on creating value to shareholders. Executive pay must also be shown to be comparable across companies of the same size and type (Gordon, 2015).

Alternative Work Arrangements

Beyond job redesign and pay, organizations are using alternative work arrangements to satisfy and motivate workers. According to the Organisation for Economic Co-operation and Development (2015), the average American and Canadian employee worked about 1,800 hours in 2015, which is over 300 hours more than French and German workers, who tend to have shorter workdays and more vacation time. This places tremendous time pressure and work–life imbalance on North American workers. With the advent of an increasingly diverse workforce and constantly advancing technology, however, companies are experimenting with ways to modify the traditional work schedule in order to accommodate workers’ needs. Common forms of alternative scheduling include �lextime, the compressed workweek, and telecommuting.

Flextime Flextime, short for �lexible work time, is an alternative work schedule in which the worker has the discretion to determine his or her arrival and quitting times. Typically, employees on �lextime are expected to work 8 hours a day and to be in attendance during core hours (usually 9:00 a.m. to 3:00 p.m., with a lunch break at midday), but they are free to structure their remaining hours any way they wish. For example, if an of�ice is open from 6:00 a.m. to 6:00 p.m., a worker on �lextime could choose to work from 6:00 a.m. to 3:00 p.m. with an hour for lunch.

These �lexible work schedules have become popular with both organizations and employees. A survey by the Society for Human Resource Management (SHRM) in 2016 found that 56% of American employers offer �lexible work arrangements. Organizations appreciate the value of �lextime because it helps attract new workers, such as stay-at- home parents and retired workers, who require greater �lexibility and would not otherwise be willing or able to work. It also helps retain valuable employees who tend to exit the workforce at a higher rate, such as new parents

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The option to work from home improves work– life balance, which can make a job more attractive to candidates and more engaging to employees.

(Bernard, 2014). For the worker, �lextime allows for easier, more effective management of work and personal schedules and has a positive effect on productivity, job satisfaction, satisfaction with work schedules, and lower employee absenteeism (Baltes, Briggs, Huff, Wright, & Neuman, 1999). A major drawback is that �lextime is not feasible for every job, which can sometimes reduce morale for workers who believe they are missing out on a bene�it that others are receiving, leading to perceptions of inequity. For example, jobs that require availability to and personal contact with customers do not lend themselves to �lextime.

Compressed Workweek Another work schedule option is the compressed workweek, in which an employee works the same number of hours as a typical workweek (usually 40 hours) but in fewer days. Most commonly, employees do this by working 10 hours a day, 4 days a week. Organizations or departments following compressed work schedules may then choose either to operate just 4 days a week or to institute a system of rotation to cover more days of the week. As with �lextime, compressed workweeks provide employees with greater scheduling �lexibility, and despite the longer days, employees appreciate the added free day and use it to pursue personal activities, accomplish errands and tasks, and spend more time with friends and family. This arrangement can also save commuting time, which allows for more work and personal time. Research supports a positive relationship between compressed schedules and productivity and job satisfaction (Baltes et al., 1999). However, compressed work schedules can also increase fatigue and error rates, reducing productivity, especially when employees work more than 12 hours in 1 day (Monk & Folkard, 1992; Rogers, Hwang, Scott, Aiken, & Dinges, 2004; Scott, Hwang, & Rogers, 2006).

Telecommuting Have you ever thought about what it would be like to work from home? There would be no dreary commute, you could work in your pajamas, and you wouldn’t have to worry about many of the usual work distractions (coworkers’ voices, machine noise, unscheduled interruptions, and so on). This option, also referred to as telecommuting, lets employees work at home while staying in touch with their of�ice.

The 2016 survey by SHRM found that 60% of American employers offer telecommuting, up from just 20% in 1996. For example, the U.S. Department of Homeland Security has recently allowed telecommuting, and preliminary studies show a positive relationship with employee well-being, as well as hours invested in work, family, and personal activities. Of course one of the primary factors in this study was the amount of time that telecommuting employees can save by avoiding Washington, D.C., traf�ic (Powers, 2014).

Organizations that utilize telecommuting experience a number of advantages and disadvantages. On the positive side, offering a telecommuting option makes organizations more attractive to job candidates, which serves to increase the labor pool. It also lowers organizational expenditures, because it reduces turnover as well as the need for as much of�ice space and equipment. On the other hand, managers often struggle with the telecommuting option because they are unable to supervise workers directly. Additionally, telecommuting can interfere with managers’ attempts to foster teamwork within a highly collaborative and team-oriented work environment. That is why Yahoo! CEO Marissa Mayer changed the company’s highly coveted extensive telecommuting policies, requiring all employees to physically report to work every day. Of course, this change led to many disgruntled employees who may have originally joined the company for that �lexibility, but her reasoning was the need for communication and collaboration (Gourdeau, 2013).

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For employees, as with other forms of alternative scheduling, telecommuting is bene�icial in that it offers greater �lexibility and work–life balance. For some people, however, going into work addresses an important social need. Excessive telecommuting interferes with the ful�illment of this need because it can be isolating, which can reduce job satisfaction (Gajendran & Harrison, 2007). Additionally, although traditional work distractions are minimized at home, new distractions can arise. Children, daily chores, television, and Internet sur�ing can easily compromise a telecommuter’s overall productivity. Telecommuting, then, is not an optimal option for all workers.

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6.5 Special Issues in Motivation

As you may have noticed, motivation is not a new topic to I/O psychology. In fact, interest in human motivation can be traced to centuries of writing and research in a wide range of �ields such as philosophy, psychology, sociology, anthropology, political science, education, and more recently, management and organizational sciences. However, new perspectives have emerged on how organizations can build on those traditional approaches to increase the motivation of their managers and employees, leading to higher productivity and yielding desirable �inancial outcomes at the organizational level. In this section, we introduce three of these new perspectives, namely, motivation across cultures, behavioral management, and positivity.

Motivation Across Cultures

With globalization, organizations often must motivate managers and employees from different cultural backgrounds. In the previous chapter, you were introduced to some recognized cross-cultural differences. These differences may affect not only performance management but also motivation across cultures. For example, Citigroup managers from different cultures were found to vary in their perceptions of whether their employees were intrinsically and/or extrinsically motivated, which affected their appraisals of their employees’ performance (DeVoe & Iyengar, 2004).

As a result of cross-cultural differences, motivation theories designed primarily for Western cultures may not always lend themselves to application in other cultures. This is because, although many motives such as need for achievement seem to be universal, the factors that drive these motives are not generalizable across cultures. These factors include goals and aspirations, feedback mechanisms, reward systems, job and organizational characteristics, and job satisfaction (Gelfand, Erez, & Aycan, 2007). Let’s consider goal setting as an example. Not all cultures value the public nature of committing to a goal. It can be highly productive and motivating in certain contexts, but too confrontational, embarrassing, or detrimental in others. Another example is public recognition. As mentioned in other chapters, collectivistic cultures that value harmony and saving face do not appreciate public recognition and “standing out.” Thus, motivation theories should be �itted with and adapted to the cultural context in which they are applied in order to successfully leverage employee motivation.

Behavioral Management: Which Rewards Will Produce the Desired Performance Outcomes?

Have you ever tried to train a pet to behave in a certain way? What did you do? You probably rewarded the desired behavior to reinforce it and punished the undesirable behavior until it disappeared. The same behavioral management foundations have been applied to motivation in the workplace. Unlike the process theories of motivation you studied earlier, behavioral management is not too concerned with why people are motivated by certain rewards or the mental processes that explain their motivation. Behavioral management emphasizes observable behavior and how it can be predicted using speci�ic environmental cues and tangible or measurable reward systems.

The foundations of behavioral management date back to Pavlov’s 19th-century experiments, in which he conditioned dogs to salivate at the sound of a bell that was associated with the presence of food, and Skinner’s early 20th-century operant conditioning experiments, in which he manipulated the behavior of lab rats and pigeons by varying the consequences he administered for various types of behavior. Thorndike’s law of effect, published in 1905, captured the essence of behavioral management, which is that behaviors followed by positive consequences tend to increase in frequency, whereas those followed by negative consequences tend to decrease in frequency.

Interest then shifted to conditioning human behavior. The question became, Can we shape people’s behavior by managing the consequences of that behavior? Studies support that indeed this is possible and can yield many desirable outcomes in many settings, including the workplace. In fact, behavioral management principles are the foundation for many reward systems today; the entire process has become known as organizational behavior modi�ication. In the workplace, behavioral modi�ication can be achieved in �ive steps: (a) identifying critical performance-related behaviors, (b) measuring the current frequency of those behaviors, (c) analyzing the

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antecedents and consequences of the behaviors, (d) intervening with positive reinforcers contingent on the desired behaviors, and (e) evaluating the results (Luthans & Kreitner, 1975).

Three decades of extensive research studies consistently support this approach (Stajkovic & Luthans, 1997, 2003). Speci�ically, three types of reinforcers have consistently emerged as effective in the workplace: money, feedback, and recognition (Luthans & Stajkovic, 1999). Interestingly, although feedback and recognition can be used at no cost to the organization or the manager, they have been found to result in similar (and sometimes higher) performance outcomes than money. However, the key to the motivational potential of those rewards is that they have to be administered contingently on the desired behaviors rather than just being given randomly (e.g., a manager who praises or berates employees depending on whether he or she is having a good day or a bad day), being spread equally (e.g., companywide bonuses or layoffs), or becoming an entitlement (e.g., a �ixed paycheck or seniority-based promotion instead of merit-based pay).

Meta-analytical research �indings show that behavioral modi�ication and management interventions in the workplace, comparable to the �ive-step process described above, can increase performance by about 17% on average and have a success rate of about 63% (Stajkovic & Luthans, 1997, 2003). Although people have different needs and different motivators, the motivational potential of money, feedback, and recognition, when administered contingently, tends to generalize across most worker populations not only in the United States but in other cultures as well (Welsh, Luthans, & Sommer, 1993).

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6.6 The Heart of Motivation: Applying Positive Psychology

An interesting recent development in the positive psychology movement is the application of Mihaly Csikszentmihalyi’s concept of �low to work motivation. Earlier in this chapter, you considered the motivational effect of activities that you really enjoy; certain activities are so fully absorbing that we tend to lose track of time when we engage in them. At the end of these activities, we feel good. These thoughts and feelings describe the state of �low. When we are in �low, activities are so intrinsically motivating and rewarding that time may seem as though it is standing still (Nakamura & Csikszentmihalyi, 2009). Now think for a moment. Wouldn’t it be wonderful if employees could experience �low on the job? What would it take for people to experience �low in the workplace on a regular basis?

The key is to understand when and how �low takes place. Flow occurs when one’s experienced level of challenge in a given situation is perfectly balanced with one’s perceived ability to meet the demands of that situation. When challenges are perceived to be higher than one’s skill level, this can lead to stress and anxiety. When challenges are perceived to be lower than one’s skill level, this can lead to boredom and apathy. Even when challenges and skills are matched but are both at a low level (unchallenging task that one has skills to accomplish), this is not conducive to �low. Flow is most likely to take place when challenges and skills are balanced at a high level, because it immerses the person in an exciting state of pursuing something that is dif�icult and worthwhile enough to warrant attention and energy (Csikszentmihalyi, 1997).

Applications of �low to the workplace are emerging (Csikszentmihalyi, 2003), including job design, goal setting, training and development, and organizational design. Jobs that are designed to have variety, identity, signi�icance, autonomy, and feedback are more likely to provide the requisite challenges for experiencing �low, as do goals that gradually stretch the employees’ abilities without being too challenging for their skills and abilities. Effective training and development can enhance employee capabilities to rise to new challenges and balance new work demands, leading to higher levels of �low. Organizational design that facilitates the allocation of appropriate resources—such as managerial support, adequate information, the right tools for the job, an environment that is conducive to productivity, as well as �inancial resources—is also critical. It can help alleviate the tension and discouragement that employees may experience if they feel inadequately equipped for the challenges ahead, which can hinder those valuable experiences of �low moments at work.

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Summary and Conclusion

Motivating employees to work harder is a daily challenge that managers face. Managers need a clear understanding of what motivates their employees (the content of motivation) and how their employees are motivated (the process of motivation). Motivation can come from extrinsic factors such as the proper administration of pay, bene�its, and working conditions. However, it is more important that the content of a job be intrinsically motivating. Effective job design to incorporate variety, identity, signi�icance, autonomy, and feedback; goal setting that allows for challenging goals and stretches employees toward their full potential; and an equitable workplace where employees perceive distributive, procedural, informational, and interpersonal justice are some of the ways that can help create motivating jobs and work environments.

Chapter 6 Flashcards

Key Terms

autonomy

competence

compressed workweek

content theories of motivation

distributive justice

equity theory

existence, relatedness, and growth (ERG) theory

expectancy

expectancy theory

Choose a Study ModeView this study set

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extrinsic motivation

�lextime

�low

frustration-regression principle

goal-setting theory

hierarchy of needs

hygiene factors

informational justice

instrumentality

interpersonal justice

intrinsic motivation

job characteristics model

job enlargement

job involvement

job rotation

merit-based pay

motivators

need for achievement

need for af�iliation

need for power

organizational justice

participative management

piece-rate pay

procedural justice

process theories of motivation

relatedness

self-determination theory (SDT)

telecommuting

two-factor theory of motivation

valence

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Learning Outcomes

After reading this chapter, you should be able to

De�ine leadership and contrast leadership with management.

Compare and contrast the different leadership theories.

Identify the most effective ways to select and develop leaders.

Describe the characteristics of positive leadership.

Describe the communication process in organizations.

Identify common barriers to effective communication.

7Leadership and Communication

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7.1 The Meaning of Leadership

Researchers and practitioners have studied organizational leadership for more than a century. Although research approaches differ, the same basic question guides all leadership research: What constitutes leadership and how does it emerge? To �ind answers, researchers and practitioners break the topic into three main lines of inquiry:

What is the difference between management and leadership? Are all good leaders also good managers? Why or why not? How does leadership emergence differ from assigned leadership? What are the advantages and disadvantages of each? Are leaders born or made? What speci�ic characteristics of leaders are innate? What speci�ic abilities are learned?

The following sections address each of these questions in turn.

Consider This: What Is Leadership?

Think about each of the questions above and try to answer them using examples and evidence from your own personal, social, and/or professional experience.

Management Versus Leadership

John Kotter, a Harvard University professor, explained the difference between managers and leaders by determining where they focus their time and energy. He argues that managers act to reduce organizational complexity by creating plans, setting goals, monitoring work, and allocating resources. Leaders, on the other hand, focus on coping with change by establishing a vision of the future, aligning others to this vision, and inspiring them to achieve great things (Kotter International, 2014). Similarly, an interesting series of studies in the 1980s differentiated between successful and effective managers: Successful managers are those who get promoted faster. Effective managers are those with high-performing units and satis�ied employees. Although they share similar behaviors, successful managers were found to spend signi�icantly more time networking, socializing, politicking, and interacting with outsiders than performing traditional management functions such as planning and decision making or undertaking HR activities such as developing and motivating their followers. In contrast, effective managers spent most of their time on communication and HR management activities and spent the least amount of their time on networking and playing politics. Unfortunately, the activities that contribute the least to effectiveness tend to be the ones rewarded by success and promotion in the world of leadership (Luthans, 1988). Of course, management and leadership overlap in that effective managers often exhibit superior leadership skills, and excellent managerial skills often characterize effective leaders as well. Thus, the two are not mutually exclusive but may have different emphases.

In this book, we will de�ine leadership as the process of in�luencing a group of people to achieve a speci�ic vision or goal. This de�inition has three important components. First, leadership is a process, which implies that it is not a single trait or characteristic and may thus be achieved by all people. Second, leaders must in�luence followers to achieve a desired outcome, a task that requires leaders to act socially using a positive personal style. Third, leadership is effective only to the extent that it is able to promote the achievement of speci�ic goals and outcomes. Throughout this chapter, we will refer to people who engage in leadership processes as leaders, and those whom the leaders in�luence will be called followers.

Emergent Leadership Versus Assigned Leadership

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One type of leadership, called assigned leadership, stems from a person’s formal job title or position within the organization. Plant managers, team leaders, frontline supervisors, and members of senior management (CEOs, presidents, senior vice presidents, etc.) are examples of assigned leaders. On the other hand, when a person displays behaviors that the group perceives to be leader-like, that person exhibits emergent leadership, regardless of his or her job title or position within the company. Unlike assigned leaders, emergent leaders are not de�ined as leaders due to any of�icial assignment. Researchers have identi�ied a number of personality traits that are linked to emergent leadership, including con�idence, dominance, and intelligence (Smith & Foti, 1988).

The most important thing to keep in mind is that people are not effective leaders simply because they are assigned a leadership role. Effective leadership stems not from a job title but from actions and behaviors.

Are Leaders Born or Made?

The question of whether leaders are born or made is one of the fundamental issues in leadership research. Until recently, the answer to this question remained elusive. However, with the help of identical-twin studies, researchers believe they now know the answer. Because identical twins who are raised away from each other share the same DNA but not the same environment, genetic in�luences are believed to account for their similarities.

Scientists looked at whether identical twins reared apart shared leadership (or lack of leadership) qualities. In one study, researchers tallied the number of leadership roles that were held in professional associations and organizations by 110 identical twin pairs and 94 nonidentical twin pairs who were reared in different environments (Arvey, Rotundo, Johnson, Zhang, & McGue, 2006). Interestingly, the researchers determined that 30% of leadership- role occupancy was due to heredity, whereas 70% was due to the environment in which the twin was raised. Thus, genetics do help to determine a person’s propensity for leadership, but environmental factors exert the stronger in�luence. Additional research has replicated these results and re�ined our understanding of them, �inding that 17% of leadership emergence is due to speci�ic environmental factors or differences in work experiences (Arvey, Zhang, Avolio, & Krueger, 2007). This body of research is very important to our understanding of leadership because, for the �irst time in history, we can say that leaders are both born and made. Thus, organizations must attempt not only to identify both innate leadership traits and learned leadership behaviors during selection processes but also to provide effective experiences to promote leadership development.

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7.2 Traditional, Contingency, and Relational Theories of Leadership

Although the importance of effective leadership is widely recognized, leadership scholars and practitioners hold different and sometimes even contradictory views on the characteristics and behaviors that make a leader. Speci�ically, leadership theories vary in the emphasis they place on the leader, the followers, their interaction, and the context or environment within which they operate.

Traditional Theories

Although current research supports the idea that leadership is based on a combination of genetic and environmental factors, leadership research at the turn of the 20th century debated which one was more important. Those who supported trait theories, which assume leadership has a biological origin, believed that leadership was an innate quality that only a very few possess. Proponents of behavioral theories of leadership, which suggest that leadership is attainable by anyone who has the correct training and experiences, focus less on leaders’ traits and more on their observable behaviors. Even though research from this period is limited due to both its polarity and datedness, information gleaned from both perspectives is still relevant to current conceptualizations of leadership. Let’s take a closer look at each set of theories in turn.

Trait Theories In general, trait theories of leadership differentiate leaders from nonleaders by their personal traits and characteristics. These theories are often referred to as great-men theories because they tried to identify innate characteristics shared by the great leaders in history, such as Abraham Lincoln, George Washington, Mohandas Gandhi, Martin Luther King Jr., and John F. Kennedy. Proponents asserted that only a few “great” people possessed these traits and ascended to leadership positions. Those without these traits were destined to take roles as followers. According to trait theory, then, leaders are special people, different from the average human being (Kirkpatrick & Locke, 1991).

On the surface, trait theories seem to make sense. However, even researchers of the time were unable to identify a consistent set of characteristics that differentiated between leaders and nonleaders. One researcher from the late 1960s, for example, examined 20 trait-theory studies and found that of the nearly 80 leadership traits identi�ied, only 5 were consistent across only 4 of the studies (Geier, 1967). By the early 1990s researchers were thoroughly confused by the lack of consistency in the leadership traits identi�ied in various studies. Indeed, the only thing I/O psychologists could say for sure was that leaders were different from nonleaders— they just didn’t know exactly how.

With the identi�ication of the Big Five personality traits in the 1990s (see Chapter 3), researchers were able to assign each of the leadership traits identi�ied thus far into one of the �ive personality categories (extraversion, agreeableness, openness to experience, conscientiousness, and neuroticism). Of the Big Five traits, extraversion is the strongest predictor of leadership emergence (Judge, Bono, Ilies, & Gerhardt, 2002). This makes sense; it is really no surprise to learn that people who are energetic, dominant, social, and outgoing are often described as leader-like. However, not all leaders display extraversion. For example, Bill Gates, founder of Microsoft, is known to be introverted, as was Steve Jobs, founder of Apple. Other elements of Big Five traits, such as aspects of conscientiousness (“disciplined” and “keeps commitments”) and openness to experience (“takes risks” and “�lexibility”), are also related to leadership emergence.

Another trait that shows a relationship to leadership effectiveness is emotional intelligence (EI). Leaders with high EI are self-aware, good at detecting others’ emotions, and able to manage their own emotions (Goleman, 2000). Once again, it is easy to see how managers who can effectively read and manage emotions and skillfully handle social interactions would also have greater in�luence over their followers. For example, a study of division heads in a global food and beverage company found that 87% of leaders with EI competencies were also in the top third for

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performance-based bonuses, and their divisions outperformed annual revenue targets by 15% to 20%. Contrarily, a study by the Center for Creative Leadership found inadequate EI to be a primary cause of executive failure and to be much more detrimental for leaders than lack of technical skills (Luthans, 2002a). Much has yet to be determined regarding the scienti�ic dimensions and trainability of EI, which has led to criticism of the concept (Locke, 2005). However, the notion that social aptitude is critical for leaders is impossible to ignore.

Concepts in Action: Emotional Intelligence

Emotional intelligence is the ability to identify and manage your own emotions and the emotions of others. This session will help viewers learn the importance of emotional intelligence in the work place.

Find Out for Yourself: Your EI

Are you emotionally intelligent? To help you determine your level of EI, access and complete the assessment provided by the Greater Good Science Center at the University of California–Berkeley.

Test Your Emotional Intelligence (http://greatergood.berkeley.edu/ei_quiz/)

What Did You Learn?

1. What is your overall level of EI? 2. Which types of emotional expression do you seem to detect the most? Why? 3. Which types of emotional expression do you seem to detect the least? Why? 4. Which of the characters were easier to “read”? Why? 5. Which of the characters were more dif�icult to “read”? Why? 6. Were there any consistencies in your ability or inability to read characters based on gender or race? 7. What are some of the lessons you learned from this assessment? 8. Based on this assessment, how can EI help you become a better communicator? 9. Based on this assessment, how can EI help you become a better leader?

Self-awareness From Title: Emotional Intelligence: Leadership Essentials

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Overall, then, trait theories have both strengths and weaknesses. Their greatest strength lies in their long history. After more than a century of study, trait theories boast the deepest and broadest set of published research in the leadership canon. Furthermore, the simplicity of working with a few broad leadership traits makes trait theories easier for organizations and workers to understand and apply. However, these theories are oversimpli�ications of the leadership process, as they do not take into consideration situational factors or followers’ characteristics. Finally, because the main focus of trait theories is to identify established characteristics, trait theories often face criticism for being useless in terms of helping develop leaders.

Consider This: The Best Leader You Have Ever Had—Part 1

Think about your best leadership experience or the best leader you have ever had.

Question to Consider

1. What were some of the traits that this leader possessed? Based on your knowledge of individual differences from previous chapters, be sure to list only traits and not attitudes, behaviors, or other characteristics that can be trained or developed.

Behavioral Theories The inconsistency of early trait theories led some I/O psychologists in a new direction. In the late 1940s researchers at Ohio State University conducted the most extensive study of the time on the leadership behaviors important to worker performance. During the study, researchers asked workers to identify behaviors of effective leaders. From the hundreds of identi�ied behaviors, they discovered that the vast majority clustered around two broad dimensions: task-centric leadership and people-centric leadership.

Table 7.1: Task-centric versus people-centric leadership styles

Leadership style

Pros Cons

Task- centric

Creates clear, easy-to- follow work schedules. Clearly de�ines requirements and deadlines. Maintains high standards with optimal ef�iciency. Is best for employees who need structure and struggle with time management.

Can lead to a lack of employee autonomy and creativity, which can result in low morale. Generally not a good �it for self-motivated employees.

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Leadership style

Pros Cons

People- centric

Acknowledges individual employees for the work they do. Focuses on employee relationships. Encourages employees to feel like they are a part of the company’s success.

Employees may feel like they need more task-oriented direction. Focus on the manager–employee relationship might displace the focus on other important aspects, which can result in ineffective decision making.

Source: Based on “Task-Oriented vs. People-Oriented Management Styles: Which Is Better?” by E. Friedman, 2016 (http://blog.eskill.com/task-people- oriented-management (http://blog.eskill.com/task-people-oriented-management) ).

The task-centric leadership style, known as initiating structure, includes behaviors by which the leader provides clear guidance and structure to help employees achieve speci�ic goals. Leaders who are high in initiating structure typically do things such as set and maintain high performance standards, schedule and assign work, and set clear deadlines.

The people-centric leadership style, also called consideration, includes relationship behaviors expressed as displays of trust, camaraderie, and regard for workers’ feelings. Subordinates of a highly considerate leader would likely describe him or her as approachable, respectful, and supportive of others.

Which of these two styles is more effective? At �irst, researchers hypothesized that leaders high in both styles would be the most effective, because such leaders would not only guide employees toward reaching goals but also support them emotionally along the way (Kerr, Schriesheim, Murphy, & Stogdill, 1974). Research, however, has not always supported this notion. More recent studies show that initiating structure is more strongly related to employee performance, whereas consideration is more important for employee attitudes such as organizational commitment, job satisfaction, and overall morale (Judge, Piccolo, & Ilies, 2004).

As with trait theories, the behavioral theories of leadership have both advantages and disadvantages. On the positive side, research into the two behavioral leadership styles is extensive and strongly supports their link with employees’ performance and attitudes. A major distinction between behavioral theories and trait theories is that the former suggests the possibility of leader development—that is, leaders are not born and can be made. As a negative, this set of theories has failed to identify a universal style of leadership that works with all people in every situation.

Consider This: The Best Leader You Have Ever Had—Part 2

Re�lect on your best leadership experience or the best leader you have ever had.

Questions to Consider

1. What were some of the behaviors this leader exhibited? 2. When, how often, and in what ways did he or she initiate structure? 3. When, how often, and in what ways did this leader show consideration?

Contingency Theories

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iStockphoto/Thinkstock

Better leader–follower relationships, greater job structure, and higher levels of leader power increase the amount of control a leader possesses. For example, the army is an organization that highly favors leader control.

Although trait and behavioral theories both signi�icantly contributed to our understanding of leadership, we now know that predicting leadership success involves more than simply pinpointing a few key traits or identifying desired behaviors. Contingency theories of leadership were developed to address the complex ways in which situational factors interact with a leader’s style and impact his or her effectiveness. Simply put, these theories maintain the basic premise that understanding a leader’s performance requires understanding the situation in which he or she leads. In the next section, we will examine two contingency theories: Fiedler’s contingency model and path–goal theory.

Fiedler’s Contingency Model Fiedler’s contingency model (Fiedler, 1967) is considered the �irst contingency model of leadership. The theory categorizes leaders as either task oriented or relationship oriented (similar to the two leadership styles discussed earlier, initiating structure and consideration), yet it maintains that the effectiveness of either type depends on the situation and the amount of control the leader has over it.

Within the theory, Fiedler identi�ies three conditions that describe the situation: leader–follower relationship, degree of task structure, and formal authority or power. As each condition increases in strength (e.g., better leader–follower relationships, greater job structure, and higher levels of leader power), so too does the amount of control the leader possesses. For example, a situation that highly favors leader control might feature an army sergeant who has developed positive relationships with subordinates, clearly conveys speci�ic expectations, and has the authority to reward and punish the soldiers. On the other hand, a situation that does not favor leader control might feature the president of a sporting club who has offended the membership, neglected to set any formal goals, and has no authority to hold any of the other volunteer board members accountable for their actions. Fiedler’s theory concludes that, in extreme situations (i.e., very favorable or very unfavorable for leader control), a task- oriented leader will be more effective. However, in

moderately favorable situations, the relationship-oriented leader will be more effective.

Although Fiedler was the �irst to try to incorporate situational factors into the overall understanding of leadership effectiveness, his model has a number of limitations. First, it assumes that leaders have only one leadership style and that organizations must match leaders to appropriate situations to promote peak leadership effectiveness. Of course, we all know leaders who are able to adapt their style to �it the situation. Second, the model does not explain what to do should a mismatch arise between the leader and his or her situation. Finally, although appropriate theoretically speaking, Fiedler’s ideas would be impractical to use, because organizations would have to try to evaluate every work situation and potential leader and then somehow match the two.

Hersey and Blanchard’s Situational Leadership Model Shortly after Fiedler’s model was introduced, Hersey and Blanchard (1977) developed another contingency model, which they named situational leadership. Unlike Fiedler’s model, which assumed a leader usually has one preferred style, Hersey and Blanchard’s model proposed that leaders can adapt their styles to the situations at hand. Speci�ically, leaders shift among four leadership styles, based on their followers’ maturity level. In turn, followers’ maturity is determined by their (a) willingness (motivation) and (b) ability (skills) to perform their tasks or responsibilities. Immature followers are neither willing nor able to perform. Mature followers are both willing and able to perform. Between these two extremes, followers vary in their levels of maturity, and leaders adapt their styles accordingly.

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1. Telling is the leadership style used with followers who are neither willing nor able to perform. The leader- follower relationship is de�ined by one-way communication, with the leader de�ining the followers’ roles and providing the parameters for completing tasks.

2. Selling is used with followers who are able but not willing to perform. The leader–follower relationship relies on two-way communication, allowing the leader to maintain direction while providing support and encouraging followers to buy into the process.

3. Participating is used with followers who are willing but not able to perform. The leader-follower relationship relies on shared decision making, with the leader focusing on relationship building.

4. Delegating is used with followers who are both willing and able to perform. The leader–follower relationship is mostly one of support, with followers being in charge of their assigned tasks and how they are accomplished and the leader monitoring this process.

Unfortunately, despite the intuitive appeal of this theory, subsequent empirical scienti�ic research did not support it (Fernandez & Vecchio, 1997; Vecchio, 1987). However, the tenets of the theory remain viable, especially the importance of adapting leadership style to followers and situations.

Path–Goal Theory Path–goal theory focuses on the behaviors leaders use to motivate workers to achieve their goals. As discussed earlier in this chapter, effective leaders help employees reach their professional and organizational goals by guiding them along a path to success and supporting them with resources and rewards.

Path–goal theory proposes four styles leaders can utilize to motivate employees to achieve their goals (House, 1996):

Directive leadership provides task structure by instructing employees what work to do and when to complete it. Supportive leadership displays concern for the best interest of the employees. Participative leadership involves employees in decisions that affect their work. Achievement-oriented leadership sets challenging goals for employees and emphasizes high performance expectations.

The effectiveness of each style is contingent on the characteristics of both the situation and the followers. Unlike Fiedler’s model, which suggests that leaders’ behaviors are �ixed, path–goal theory assumes that effective leaders can and in fact should adapt their behaviors to suit each situation and group of followers. For example, if employees face an ambiguous task, leaders should adopt a directive leadership style and provide the missing structure and organization. A team of high-performing professionals, on the other hand, would be more motivated by a leader who adopted an achievement-oriented style of leadership.

Path–goal theory has a number of positive attributes. Most importantly, it suggests that leaders are able not only to change their leadership styles but also adapt them to �it the situation. Furthermore, it highlights the ways in which leaders can motivate employees’ performance, which is essential if leadership is to be effective. Despite these strengths, path–goal theory has faced criticism for its complexity and the lack of research to support it.

Relational and Followership Theories

So far in this chapter, we have examined leadership theories that deal with the ways in which innate traits, observable behaviors, and situational factors can in�luence leadership effectiveness. However, none of these theories address the in�luence of the critical relationship between leader and follower. Two theories that do so are called leader–member exchange theory and implicit leadership theory. Furthermore, leadership does not occur in a vacuum. Followers can play an important role in allowing leaders to emerge and become effective. In other words, where there is no followership, there is no leadership. Although followership theories and leadership theories that emphasize the role of followers are not as abundant as those that focus on leaders, we will discuss followership toward the end of this section.

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Leader–Member Exchange Theory Take a moment to think about a manager for whom you have worked. Did he or she treat you and your fellow employees exactly the same? If not, how did the treatment differ? Did some employees receive better work assignments, greater communication, or more interpersonal attention? These are some of the main topics of leader– member exchange theory (LMX), which deals with the way in which the leader–follower relationship affects the leadership process (Dansereau, Graen, & Haga, 1975). LMX proposes that leaders develop special relationships with a small segment of followers, called the in-group, and place the remaining followers in the out-group. The leader makes placements based on early interactions, and these placements remain relatively stable over time. The leader views the in-group followers as competent, trustworthy, and highly motivated and views the out-group as lacking these qualities. Although there are questions about how leaders establish in-group and out-group membership, it is clear that leaders treat members of the two groups differently. Speci�ically, in-group followers receive more information, rewards, and support and gain more con�idence than out-group members (Dansereau et al., 1975). Conversely, out-group members receive more punishments, less communication, and fewer personal interactions.

The manner in which a leader interacts with members of each group has important implications for workers’ job performance and attitudes. High-quality leader–member exchange relationships lead to less employee turnover and counterproductive behaviors, higher job performance, higher quality promotions, and greater job satisfaction, organizational commitment, and citizenship behaviors (Chen, Kirkman, Kanfer, Allen, & Rosen, 2007; Graen & Uhl- Bien, 1995; Martin, Guillaume, Thomas, Lee, & Epitropaki, 2016). These �indings have also been supported across cultures, although they are stronger in Western cultures (Rockstuhl, Dulebohn, Ang, & Shore, 2012). One interesting study found that in-group members were more likely to engage in creative work due to increased levels of positivity garnered from having a closer relationship with the leader (Atwater & Carmeli, 2009).

One of the most frequently cited criticisms of LMX is that it seems unfair. The notion of in-groups and out-groups is offensive to most people, as is the experience of being treated differently by one’s boss. Workplaces in which LMX seems to hold true can be �illed with animosity, con�lict, and isolationism between members of the two groups. Furthermore, if the leader makes in- and out-group placements based on age, gender, race, cultural background, or physical abilities, charges of discrimination may be warranted. Leaders must be aware of personal biases and strive to allocate resources based on employees’ needs and competence instead of �irst impressions, personal relationships, or physical characteristics.

Consider This: Being in the In-Group Versus Being in the Out-Group

Think about a situation in which you believe you were in a leader’s in-group.

Questions to Consider

1. How did the leader treat you differently? 2. Were you the only one favored by the leader, or were there others, too? 3. What common traits, values, beliefs, or KSAOs (e.g., gender, age, religion, race, color, cultural

background, physical appearance, hobbies, interests) did you share with the leader? 4. What common traits, values, beliefs, or KSAOs did you share with other members of the in-group? 5. On what traits, values, beliefs, or KSAOs did you, the leader, or others in the in-group vary from

members of the out-group? 6. How did being in the in-group make you feel—for example, competent, appreciated, accepted,

ful�illed, proud, guilty, ashamed?

Implicit Leadership Theory

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Implicit leadership theory (ILT) de�ines leadership from the follower’s point of view (see Figure 7.1). According to ILT, followers use observations and experiences to create a model of their ideal leader and then compare all leaders against this standard (Lord & Maher, 1993). Leaders who �it the standard will be viewed as good; those who do not will be viewed as poor. Followers whose leaders match their ideal standard are more likely to develop more positive attitudes, greater well-being, and a higher quality relationship with their leader (Epitropaki & Martin, 2004).

Figure 7.1: ILT and leadership ratings

This sample rating shows that Helen, a potential leader, meets three of the four speci�ied criteria of an effective leader. This makes her a strong candidate for being an effective leader to this particular group of followers.

From Industrial/Organizational Psychology: Understanding the Workplace (5th ed., Fig. 13.1), by P. E. Levy, 2016, New York, NY: Worth Publishers. Copyright 2017 by Worth Publishers. All rights reserved. Reprinted by permission of Worth Publishers.

Although you might assume that each person would develop his or her own unique standard of leadership, this is surprisingly not the case. Typically, employees identify six characteristics on which they evaluate their leaders’ effectiveness. The �irst four—sensitivity, intelligence, dedication, and dynamism—are indicative of positive leadership; the last two, tyranny and masculinity, are associated with negative leadership (Epitropaki & Martin, 2004). Although ILT has important implications for understanding how followers evaluate leadership effectiveness, there is little consensus on how organizations should apply the theory to help select and develop leaders.

Consider This: Your ILT

Using your own observations and experiences, write a one-page description of your ideal leader. In your description, be sure to include the traits, values, beliefs, and behaviors you would expect him or her to exhibit

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in particular situations, as well as characteristics of your relationship with the leader. Now make a brief list of three to �ive leaders who have in�luenced you personally, socially, academically, or professionally. Rank order these leaders, starting with the one who in�luenced you the most. Compare each of the leaders on your list against your ideal leader description.

Questions to Consider

1. To what extent do the three to �ive leaders you listed �it your original description of an ideal leader? To what extent do they deviate? To what extent are they similar to or different from each other? To you?

2. Based on your answers, what is your ILT that in�luenced your perceptions of your leaders’ potential or effectiveness?

3. Optional: Repeat the above exercise with a list of the worst leaders you have ever had. To what extent did your ILT, rather than these leaders’ actual characteristics or behaviors, in�luence your perceptions of them?

What About Followers and Followership? It is hard to imagine a leader with no followers. While a leader may be assigned to a position and given authority over others, the leader may not be able to exercise effective leadership unless the followers choose to allow him or her to do so. Keep in mind that followership is not the same as obedience or submission. Some leaders may exercise their authority through dominance, fear, or control over rewards and punishment. These leaders may force their followers to do what they want them to do. However, obeying orders is vastly different from willingness to buy into a leader’s vision and committing to shared goals and strategies. The notion of leadership as the ability to in�luence and achieve goals through others necessitates the latter.

The limited research on followership shows that followers play an active role in effective leadership. Almost all of the leadership qualities discussed in this chapter are only important to the extent that they are perceived by followers. Moreover, followers are willing to follow leaders with whom they share mutual identi�ication and trust (Hollander, 1992). Research shows that leaders’ trustworthiness is determined through their followers’ perceptions of their ability (e.g., knowledge and skills), benevolence (e.g., having the followers’ best interest at heart), and integrity (e.g., honesty, fairness, and consistency in words and actions) (Colquitt, Scott, & LePine, 2007).

Furthermore, in the same way that trust and respect are earned over time, perceived leadership and desired followership also change and evolve. Leaders gain legitimacy based on how they are perceived to have been selected, how they behave, and the extent to which they meet their followers’ expectations. For example, emergent or elected leaders tend to earn more legitimacy than assigned leaders, but they are also subject to more scrutiny and criticism.

Moreover, followers tend to respond positively to leaders who demonstrate, through positive past encounters and conformity to norms, that they can consistently meet followers’ expectations. These types of leaders tend to earn what is called idiosyncrasy credit, or the freedom and discretion to deviate from group expectations. For example, a leader who has established perceptions of competence and has earned the trust, respect, and loyalty of his or her followers can afford to “rock the boat” and bring about unusual changes that may otherwise be unacceptable (Hollander, 1992). This leader has already earned enough “credit” in the idiosyncrasy credit “bank” to draw from when such situations arise, which makes the followers more accepting of such deviations from expectations.

Finally, many organizations are now moving away from the traditional leadership framework and are using various forms of shared leadership, where no one person is assigned all the authority associated with leadership. For example, team members can be assigned various leadership responsibilities based on experience, or leadership roles can be rotated periodically among team members over time or across projects. Shared leadership, also sometimes referred to as distributed leadership or collective leadership, blurs the line between leadership and followership and has been shown to contribute signi�icantly to team effectiveness (Wang, Waldman, & Zhang, 2014).

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Consider This: Shared Leadership—an Orchestra Without a Conductor?

Watch the following video in which members of the Orpheus Chamber Orchestra discuss how they practice shared leadership by operating without a conductor!

A Case of Shared Leadership: The Orpheus Chamber Orchestra (https://www.youtube.com/watch? v=r5G-g911awE)

Questions to Consider

Think about the following questions the next time you work on a leaderless team project for a class, at work, or as a volunteer.

1. What are some aspects of the project that require leadership? 2. Who emerged as the leader of each of those aspects? Who emerged as the leader of the project in

general? 3. What were the contributing factors to the emergence of each leader? 4. When and why do some of these leaders cease to be perceived as leaders?

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7.3 Contemporary and Emerging Theories of Leadership

Although the identi�ication of leadership components and styles has long been of interest to researchers, more recent topics of study have focused on leaders’ ultimate motives and how these in�luence their behaviors. We will examine some of these special topics in the next section.

Charismatic Leadership

When you hear the phrase “charismatic leadership,” speci�ic leaders undoubtedly spring to mind, such as Barack Obama, John F. Kennedy, Martin Luther King Jr., Mohandas Gandhi, and Indira Gandhi. Each of these individuals is considered charismatic, but why? According to the research, charismatic leaders challenge the status quo, rally followers around an inspirational vision, empower followers, support followers’ needs, and take personal risks to achieve success. Based on the expression of these behaviors, followers make heroic attributions about their leader, which enhances the leader’s credibility and effectiveness (Conger & Kanungo, 1998).

Of course, charismatic leaders are not always moral or ethical. Individuals such as Adolf Hitler, Benito Mussolini, and Charles Manson displayed all of the above-mentioned charismatic leadership behaviors, yet they used their power in deplorable ways. Thus, it is important to distinguish between positive and negative charismatic leaders. First, creating and maintaining personal power is the main goal for the negative charismatic leader. These individuals care more about creating personal devotion than generating commitment to the originally espoused ideals. Second, the negative charismatic leader attempts to keep followers weak and subservient in order to maintain power. On the other hand, a positive charismatic leader supports, empowers, and challenges followers to achieve more. Finally, the negative charismatic leader uses his or her attributed heroic appeal for self-interest instead of the interest of the followers.

Within the workplace, charismatic leaders can use their power to inspire innovation, collaboration, creativity, and industry leadership—or they can misuse their power to inspire anxiety, mistrust, and inequality (e.g., a CEO who brokers a multimillion-dollar salary, replete with vacation homes and private jets, at the expense of employees’ bene�its and jobs). On the negative side, one study showed that charismatic CEOs were able to negotiate higher salaries even when the organization’s performance was mediocre (Tosi, Misangyi, Fanelli, Waldman, & Yammarino, 2004). Although negative charismatics are often successful at convincing others to follow what might once have been a worthy goal, their misuse of power and focus on personal instead of public good can result in disaster both for followers and the organization as a whole.

Transactional Leadership Framework

Most of the theories presented so far have dealt with leaders who work within a transactional leadership framework, in which they guide and motivate followers along a path toward established goals. Transactional leadership contains three distinct sets of behaviors: laissez-faire leadership, management by exception, and contingent rewards.

Laissez-faire leadership is actually neither management nor leadership. Laissez-faire leaders make no decisions, deny responsibility, provide no support to employees, and refuse to take action. This is the most ineffective form of transactional leadership.

Management by exception provides followers with constructive criticism and punishes them for poor performance; this type of leadership can be active or passive. In the active form, leaders monitor workers closely and search for performance deviations, which they then immediately address. In the passive form, leaders wait for a performance deviation to occur and then react to it. In either case the goal for such leaders is to �ix problems quickly and return the situation to the status quo as soon as possible. Both forms are inherently negative, and management by exception is considered to be an ineffective form of management.

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Positive feedback represents a powerful reward that can signi�icantly motivate employees. The performance improvements realized as a result of these intrinsic rewards are equivalent to those of �inancial incentives.

In contrast to laissez-faire leadership and management by exception, transactional leaders who practice contingent rewards exhibit good management. Here, leaders provide agreed-upon rewards to followers who work hard and meet goals. A meta-analysis by Judge and Piccolo (2004) found a strong relationship between contingent reward leadership and employee job satisfaction, employee motivation, leader effectiveness, and group/organizational performance.

The power of positive feedback, and positivity in general, was discussed in detail in Chapters 3 and 4. However, it is important to note here that positive feedback and recognition, when administered contingently by leaders to their employees based on their performance, represent powerful rewards that can realize strong motivational results. The magnitude of those positive results on employee performance has been found to be comparable to that of �inancial rewards (Stajkovic & Luthans, 1997, 2001, 2003).

In fact, employees can become saturated with �inancial rewards, in the sense that more money, although good to have, will not necessarily motivate them to work harder. Actually, it may motivate them to work less and reallocate their time to other personally meaningful goals such as spending time with family and friends, retiring early, or investing their additional �inancial resources on other hobbies and interests. On the other hand, nobody ever complains of having too much positive feedback or

recognition! These two things have the advantage of being inexhaustible.

Thus, leaders should realize that they have at their disposal powerful tools to reward their employees that cost them and their organizations absolutely nothing: positive feedback and recognition. They can leverage those tools by learning to intentionally observe their followers’ behaviors and contingently rewarding the appropriate behaviors through positive feedback and recognition, instead of, or at least less frequently than, focusing on punishing negative behaviors. Contingent rewards and behavioral management were discussed in more detail in Chapter 6.

Transformational Leadership Framework

Leaders who work within a transformational leadership framework differ from transactional leaders in that they are more concerned with improving followers’ performance and developing them to their fullest potential (Avolio, 1999). Ultimately, transformational leaders attempt to motivate followers beyond their own self-interest in order to accomplish something for the greater good. Research on transformational leadership has dramatically spiked in the past few decades (Judge & Bono, 2000) and has led to the identi�ication of four speci�ic sets of behaviors: inspirational motivation, idealized in�luence, intellectual stimulation, and individualized consideration.

With inspirational motivation, leaders attempt to inspire followers to achieve more than they thought was possible by setting high standards of excellence, using stories and symbols to enhance followers’ understanding, and motivating followers to overcome barriers and setbacks. Idealized in�luence provides a vision of the future that transcends followers’ self-interest and creates a collective sense of mission. Transformational leaders who exhibit idealized in�luence also possess very high standards of moral and ethical conduct, which in turn increases followers’ respect of and trust in them. As you can probably guess, intellectual stimulation focuses on stimulating followers’ creativity and challenges them to think outside the box. Followers are encouraged to question the status quo, come up with new ideas, and experiment with new ways to solve big problems. Finally, individualized consideration provides followers with a supportive environment and attends to their relationship needs. Typically, transformational leaders who practice these behaviors act as coaches or

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mentors for their followers. This support and guidance helps followers develop new skills, which then enhance their work performance and potential.

In general, research has shown transformational leadership to be more effective than transactional leadership in producing favorable performance and attitudinal outcomes (Bass, Avolio, Jung, & Berson, 2003; Dumdum, Lowe, & Avolio, 2013; Howell & Avolio, 1993). Keep in mind, however, that transactional and transformational frameworks of leadership are not mutually exclusive. Indeed, the best leaders actually use both: transactional to build the initial framework, then transformational to inspire even greater motivation and levels of performance.

Emerging Theories of Positive Leadership

Over the past several years, there has been a reorientation toward positive leadership theories, including ethical leadership theory, spiritual leadership theory, and authentic leadership theory.

Ethical Leadership Theory Ethical leadership theory has four dimensions: integrity and altruism of the leader and collective motivation and encouragement for the followers (Martin, Resick, Keating, & Dickson, 2009; Resick, Hanges, Dickson, & Mitchelson, 2006; Toor & Ofori, 2009). Ethical leadership is clearly needed in today’s business environment, which is dominated by greed and unethical behavior, as portrayed by the extensive media coverage of recent corporate scandals. Ethical leadership is also critical for corporate social responsibility, reputation, and environmental sustainability, which are currently hot topics in the business landscape.

Spiritual Leadership Theory Spiritual leadership theory (Fry, 2003) includes intrinsic motivation of followers through a sense of membership or community and a sense of calling. Membership and calling are promoted by the spiritual leader through vision, hope and faith, and altruistic love. Altruistic love incorporates a wide range of positively oriented dimensions such as kindness, forgiveness, integrity, courage, empathy and compassion, honesty, patience, trust and loyalty, and humility. Spiritual leadership also follows nine spiritual anchors: perfection, compassion, passion, inspiration, investigation, dedication, appreciation, determination, and cooperation (Karakas, 2010). Most importantly, spiritual leadership is different and more inclusive than religious leadership, because it is based on a value system that lends itself to most religious and cultural backgrounds. Thus, it is more suitable for global leaders who are leading across cultures, because it is not as speci�ic to the United States or to the West as are most other leadership theories.

Authentic Leadership Theory The third emerging positive leadership theory introduced here is authentic leadership theory. Harter (2002) de�ines authenticity as “owning one’s own personal experiences, be they thoughts, emotions, needs, wants, preferences, or beliefs[,] . . . [acting] in accord with the true self, expressing oneself in ways that are consistent with inner thoughts and feelings” (p. 382). Thus, authentic leaders are expected to remain true to themselves, admit their strengths and weaknesses, and openly express their true thoughts and feelings. Authentic leadership comprises self- awareness, relational transparency, internalized moral perspective, and balanced processing. Balanced processing is the leader’s ability to objectively consider different viewpoints when making decisions (Avolio, Gardner, Walumbwa, Luthans, & May, 2004). Authentic leaders are also capable of exploring and striving toward multiple “possible selves” for the future if their present, “actual self” is less than desirable, without compromising their true self.

Avolio and Luthans (2006) explain that authentic leadership is a long-term developmental process. This process draws from the following factors:

The leader’s life experiences

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The leader’s psychological capital (hope, ef�icacy, resilience, and optimism) The leader’s moral perspective A highly supportive organizational climate

These factors are expected to result in higher self-awareness in leaders, which in turn helps leaders better self- regulate their behaviors toward continuous self-development.

Most notable about authentic leadership development are how it systematically unfolds and the role that a positive organizational context can play. Imagine the hypothetical situation in which an individual is endowed with an ideal combination of talents, resources, and opportunities and has parents, teachers, and role models cheering her on every step of the way. Of course, that person’s emergence as a leader may be easy to predict and explain. She is set up for success. Now imagine the opposite: an individual who is considered below-average and has limited resources and opportunities but emerges as a leader against all odds. Both of those situations are rare. It is unlikely that a potential leader will �ind himself in a situation in which his development is perfectly planned. It is also unlikely that an effective leader will result from a haphazard combination of uncontrollable situational factors. Authentic leadership development is a more realistic process in which planned and unplanned trigger events are purposefully orchestrated within a supportive organizational climate in order to enhance self-awareness, self-regulation, and self- development. In turn, authentic leaders are characterized by being keen to develop their followers into authentic leaders as well. Of course, the ultimate goal of authentic leadership development is veritable, sustainable performance from the leader and the followers.

Find Out for Yourself: Warren Buffett and Bill Gates as Authentic Leaders

Warren Buffett and Bill Gates are two of the richest and most successful businessmen in the world. They are known for investing time and energy in imparting their wisdom, knowledge, and experience to the next generation of leaders, both in their respective companies and in their numerous interactions with college students. Watch the following video for a great example of one of those many occasions.

Buffet and Gates Go Back to School: Good Business Habits

Bill Gates recalls his habits from college that did not serve him well in the world of business. His primary advice is, "Do not procrastinate." Warren Buffett urges students to invest in themselves, have the right heroes, and follow their passion.

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What Did You Learn?

1. In what ways could Buffett and Gates be considered authentic leaders? 2. In what ways do Buffett’s and Gates’s leadership styles in�luence the authenticity of their followers

and, in turn, their development into authentic leaders?

Good Business Habits From Title: Buffett and Gates Go Back to School

(https://fod.infobase.com/PortalPlaylists.aspx?wID=100753&xtid=40885)

  0:00 / 3:16 1x © I f b All Ri ht R d L th 03 16

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7.4 Leadership and Power

Power is the capacity of one person to in�luence the behaviors of another. In many ways this de�inition is similar to that of leadership. So, are leadership and power the same thing? The answer is no, but the two concepts are intertwined. Power is a tool; leadership is use of that tool. Like any tool, power may be used effectively or poorly, positively or negatively. Finally, not all leaders have the same kind or amount of power, many can lose it, and some have none at all.

Where do leaders get their power? Why do some leaders have power and others do not? Raven (1993) has identi�ied �ive types of power—legitimate, coercive, reward, expert, and referent—that address these and other power-related questions.

Leaders begin their tenure with a certain amount of legitimate power, which stems from their job title or position within the organization. Workers will follow their boss because he or she is, quite simply, the boss. Typically, leaders who have a higher position of authority will also have greater legitimate power than lower level managers. Keep in mind that leaders, should they prove to be ineffective or incompetent, can quickly lose some or all of their legitimate power.

Coercive power is based on fear. Followers do what the leader says because they are afraid of negative consequences if they do not. Within an organization, negative consequences can include reprimands, micromanagement, limitations in movement or chances for promotion, revocation of assignments, or job termination. Leaders who use coercive power reinforce compliance, which tends to limit the amount of effort employees put into excelling at their jobs.

Reward power is the opposite of coercive power. Followers comply with the leader in order to obtain positive rewards. In order to have reward power, leaders must be able to give rewards. Examples include pay, bene�its, promotions, job assignments, and other recognition.

Expert power stems from a leader’s special skills, knowledge, and expertise. This is one of the strongest forms of power because it is based on the leader’s actual competence rather than his or her job title. Note that leaders who lack expert power can always gain it by increasing their knowledge or competence.

Finally, if you have ever liked and admired another person, chances are that person had great in�luence over your thoughts and behaviors. Referent power is power that develops out of admiration for and the desire to be like the leader. Followers can grant referent power to anyone, regardless of the person’s formal level of leadership or relationship to them. For example, many people attribute referent power to famous actors, singers, athletes, political leaders, and even historical �igures whom they have never met or directly interacted with. Charismatic, transformational, and authentic leaders are also likely to exert referent power over their followers.

Leaders may hold any of the �ive sources of power or combinations thereof, but the question remains, which sources are the most effective? Research has shown that formal power sources (legitimate, coercive, and reward) are less effective in in�luencing followers than informal sources (expert and referent). Expert and referent power are positively related to employee satisfaction, commitment, and performance (Carson, Carson, & Roe, 1993; Podsakoff & Schriesheim, 1985). This is because employees often follow leaders with expert and referent power willingly and voluntarily. On the other hand, legitimate, coercive, and reward power may not always be seen as “earned.” As soon as a leader loses his or her position, that leader will likely lose these formal sources of power. However, expert and referent power may last regardless of formal position.

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Structured interviews and assessment tools are key to identifying potential leaders.

7.5 Identifying and Developing Effective Leaders

Although it is important to understand the hows and whys of effective leadership, organizations need to know how to apply this information to help them identify and develop leaders. I/O psychologists have researched a variety of approaches organizations can use to accomplish this important task.

Leadership Selection

As discussed earlier in this chapter, as well as in other chapters of this book, not all human characteristics are open to development. For example, we know that a good portion of leadership emergence and effectiveness is based on stable personality traits, which tend to be hardwired and almost impossible to change in adults. This is the “born” part of leadership. Thus, it is important to select leaders who possess these traits, because they cannot be developed. Identifying and selecting effective leaders is one of the most important yet most dif�icult tasks for organizations. Nadler and Nadler (1998) clearly summarized this challenge, writing that

in their most introspective moments, most executives readily acknowledge that selecting the right people for the right jobs constitutes one of the most important responsibilities. Few decisions that they make will have as direct an impact on every facet of the organization. Yet, few other decisions are made in such an illogical, slipshod manner. (p. 229)

To improve their leadership selection process, organizations should always include the following two steps: First, perform a rigorous job analysis of the leadership position in question, and second, introduce structured interviews and assessments into the selection process.

In Chapter 2 we discussed the value of the job analysis in de�ining the characteristics a worker needs to perform a job successfully. When applied to positions of leadership, a job analysis also provides the data needed to select a successful job candidate, including the critical KSAOs necessary for success, the essential tasks the leader will perform, and the situational factors the leader will experience. Situational factors are especially important when an organization wants to establish �it between a candidate and the work environment. After the organization thoroughly de�ines the leadership position through a job analysis, it will be able to design an effective evaluation process.

As already mentioned, structured interviews and assessment tools are key to identifying leaders. Structured interviews give the organization the opportunity to learn about and evaluate the candidate’s experiences and how they relate to the position, and they are especially effective at evaluating the candidate’s communication, persuasion, in�luence, and negotiation abilities. Assessment tools, in the form of personality tests, measure critical leadership traits, such as extraversion, conscientiousness, and openness to experience. Although not as commonly used as interviews and personality tests, assessment centers also help organizations evaluate leader candidates. Because they require candidates to demonstrate essential leadership skills (such as coaching, delegating, persuading, in�luencing, making decisions, communicating, and formulating strategy) within a simulated work environment, assessment centers provide clearer insights than any other selection method into an individual’s leadership skills.

Find Out for Yourself: Criteria for Selecting Leaders

Browse the Internet for leadership position openings. Use free search engines, or if you subscribe to more specialized or higher end recruitment sites, you can use those as well.

What Did You Learn?

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1. What are some of the most common selection criteria that organizations use for leadership position candidates?

2. To what extent do each of those selection criteria relate to personality, individual differences, past experience, or KSAOs?

3. How would you recommend assessing potential candidates on each of those criteria? What speci�ic methods, tools, or tests would you use? You may use additional research to �ind the most effective approaches for assessing each criterion.

Leadership Development

According to the ATD, organizations spend billions of dollars each year on leadership training and development (American Society for Training and Development, 2010; Dvorak, 2007a). Much of that investment is made in formal education. Some organizations send leaders to leadership programs offered by elite business schools, including Harvard, MIT, Stanford, and Wharton. Despite their cost—some have a price tag of $100,000 per person—these programs have the advantages of a prestigious faculty, an elite reputation, and a socially powerful student body. Other companies also make a considerable investment in internal-development programs. General Electric, for example, has created a world-renowned leadership-development facility called Crotonville, where the company develops executive leaders.

Some researchers and practitioners have proposed that organizations use job experiences instead of formal education to develop their leaders. One study found that leaders who were asked to recall speci�ic factors that were most valuable to their development as leaders most frequently cited experiences, not education (McCall, Lombardo, & Morrison, 1988). Clearly, people do learn to be effective leaders on the job, so organizations must provide leaders with speci�ic hands-on development opportunities that stretch and challenge their KSAOs. This is also consistent with the authentic leadership development process, discussed earlier, which relies on planned and unplanned trigger events and experiences rather than just formal education or training.

Executive Leadership Derailment

The reason organizations spend so much time, money, and effort trying to identify, select, and develop leaders is simple: They do not wish to hire ineffective, incompetent, or harmful leaders. Leadership derailment, or the process by which a leader displays increasingly ineffective behavior, is very expensive. Costs associated with leadership derailment have been estimated to range from $750,000 to $1.5 million per executive leader (DeVries & Kaiser, 2003). One study even estimated that the cost per derailed executive leader exceeds $2.7 million (Smart, 1999). How can this be? By the time a leader derails, the organization has already spent a large amount of money both to recruit the executive (including executive search �irm fees, interview travel expenses, signing bonuses, and relocation costs) and to help him or her improve performance. At the time of termination, the organization loses still more money to the former executive in the form of exiting costs, including retirement plan and severance package payments. Finally, most estimates of leadership derailment expenses do not include the hidden costs associated with an incompetent leader, such as losses in business opportunity, customers, employees, and intellectual property.

Studies on the prevalence of incompetent leaders have shown astonishingly high numbers. Participants in one study indicated that only 38% of their bosses, both current and former, were worthy of working for again (Curphy, 2008). After examining a dozen published studies on the investigation of the base rate of leadership failure, Hogan, Hogan, and Kaiser (2010) found that results ranged from 30% to 67% and placed the average at 50%. In other words, on the basis of the data, the authors concluded that “two-thirds of existing managers are insufferable, and at least half will eventually be �ired” (p. 556).

The question is, why do leaders derail? Although there are of course many reasons why a person can fail as a leader, research has been able to �ind some consistent signs of derailment (Hogan & Warrenfeltz, 2003):

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Displaying a lack of self-awareness Having a narrow focus and lack of strategic perspective Being arrogant or overly cocky Exhibiting overly controlling behaviors, such as micromanagement Showing insensitivity and abrasiveness toward others Allowing stress to become overwhelming Favoring self-interest over the company’s interest

As you can see, many of these factors are directly related to the leader’s EI. Indeed, as explained earlier, when it comes to leader derailment, lack of EI is much more detrimental and directly connected to failure than technical abilities and skills (Goleman, 2000; Luthans, 2002a).

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7.6 The Importance of Communication

Communication, the transfer of meaning from one person to another, is an essential quality of the effective leader. Because leaders spend the majority of their time communicating, they must focus not only on being heard but also on being understood. With all the choices for methods of communication—including traditional (memos, letters, meetings, presentations, face-to-face interactions) and emerging (instant messaging, e-mail, texting, social networks) forms—leaders often struggle to �ind the best way to communicate each message.

The Process of Organizational Communication

The purpose of communication is to convey a message from a sender to a receiver. Interestingly, even with the advent of instant messaging, e-mail, and the like, the process of communication has remained relatively consistent over time. In 1949 Shannon and Weaver de�ined seven elements that are still regarded as essential for the process of communication (a model of this process is shown in Figure 7.2): source, message encoding, channel, noise, receiver, message decoding, and feedback loop. To communicate, a source (for our purposes, the leader) encodes a message and transmits it through a channel (method of communication) to a receiver (the follower), who then decodes the message to make sense of the information. Sometimes, a channel may contain noise that blocks or distorts the message. Examples of noise are language barriers, information overload, emotion, or perceptual problems. The �inal element of communication is the feedback loop. By obtaining feedback, the sender con�irms that he or she has in fact transferred the desired message and that the receiver has properly decoded the message.

Figure 7.2: The communication process

The seven essential elements of the communication process.

Barriers to Effective Communication

Effective communication is inherently dif�icult. As mentioned above, many factors can interfere with a person’s ability to send, receive, or interpret a message. One such factor, information overload, deals with the amount of information a person is able to meaningfully process. People have a �inite capacity for processing information, and the continual onslaught of information sent through methods such as e-mail, instant messages, social media, meetings, and phone calls places people at a higher risk of information overload. Another factor, called selective perception, occurs when receivers process only the portions of the message that relate to their own needs, motivations, personal characteristics, and/or experiences. In this situation, the receiver skews the message to meet his or her reality. Emotions can also affect the way in which a person sends or receives messages. A person who comes to work angry, for example, may interpret a manager’s e-mail differently than a coworker who is having a good morning. Finally, language barriers impede how we communicate. Even when communicating in the same language, people can attribute different meanings to the same words. Newly hired employees can also struggle to

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understand the slang and jargon used by veterans in the organization. With so many different barriers to communication, it’s truly a miracle we are able to understand as much as we do!

Key Functions of Organizational Communication

From globalization to advances in technology to the troubled economic climate, the enormous changes and challenges faced by businesses today have made effective communication increasingly important to overall organizational performance. Although the primary function of communication is to affect receiver understanding, research suggests it does much more than this (Poole, 2010). For example, Neher (1997) emphasized the effect of communication on organizational and social aspects within the workplace over and above the basic exchange of information. Speci�ically, Neher drew attention to the role of communication in establishing order and control as well as its in�luence on functions such as problem solving, con�lict management, negotiation, and bargaining. Similarly, Myers and Myers (1982) identi�ied three primary functions of communication over and above that of message conveyance: coordination and regulation of production activities, socialization of workers, and innovation.

Structure of Communication

The structure of organizational communication can be very complicated. In large companies communication can involve hundreds or even thousands of workers using many different channels across a number of hierarchical levels. In the past, large bureaucratic organizations relied almost exclusively on formal (e.g., downward or hierarchical), one-way methods of communication. They believed that workers who lacked a structured, controlled communication process would be unable to obtain the information they needed to perform their jobs properly. Furthermore, these organizations feared that informal (e.g., lateral) methods of communication would create uncontrolled chaos and block the �low of information. However, it is important to note that no formal communication system can account for all of the possible paths and directions of communication within an organization. Therefore, such systems are inherently limited. Indeed, some researchers have proposed that informal communication is critical for managing and maintaining an organization’s culture (D’Aprix, 1996).

In addition to supporting an organization’s culture, informal processes can also make communication speedier and more effective than formal processes can through the establishment of communication networks. A communication network, also known as the grapevine, arises when workers establish lines of communication among themselves, including peers, members of both higher and lower hierarchical levels, and workers in different areas of the company. Figure 7.3 shows an example of a simple communication network.

A number of properties in�luence the way in which networks and the people within them work. First, network density compares the number of existing connections between network members with the total number that could possibly form. The sample network in Figure 7.3 is a dense network because almost all possible connections have been made. Second, networks can be described according to the strength of the relationships between members. Those who communicate more often will have stronger relationship ties, whereas those who seldom communicate with others will have weak ties. Networks with many strongly tied workers will be more cohesive than those with weakly tied workers (Poole, 2010). Network centralization, the third property, is the number of people in charge of controlling the �low of communication. In highly centralized networks, only a few members control the �low of communication. In decentralized networks (of which Figure 7.3 is an example), the opposite is true. Finally, network connectivity is the extent to which all members of a network are connected to each other, either directly or indirectly. In Figure 7.3 the sample network is highly connected.

Figure 7.3: Networking example

Effective communication depends on communication networks that establish open lines of discourse between all parties.

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Interestingly, contrary to the notion that they are breeding grounds for rumor and gossip, informal networks have been found to channel communication as accurately as more formal methods (Monge & Contractor, 2003). Furthermore, employees who are actively involved in informal networks are more knowledgeable about their organization, better at improvising to solve problems, and better able to innovate (Albrecht & Hall, 1991; Bach, 1991; Bastien, 1992). Informal networks may demonstrate their effectiveness most clearly during times of turbulence and change, because they allow for the speedy development of solutions to problems and require no command and control structure to accomplish work (McPhee & Poole, 2000).

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7.7 Direction of Communication

Communication within an organization can �low vertically (from the leader to the follower and vice versa), laterally (from one peer to another), or diagonally (from a leader to a follower in another area of the organization and vice versa). Traditionally, organizations have placed greater emphasis on vertical communication, but that is no longer the case. As organizations have become more complex, so has their communication, making lateral and diagonal forms increasingly important.

Downward Vertical Communication

Downward vertical communication, sometimes referred to as hierarchical communication, �lows from a higher to a lower level of the organizational hierarchy. When we think of leadership communication, this is the type we typically think of. Leaders at all levels of the organization use downward communication to share information, set goals, provide feedback, and reward or punish behavior. Surprisingly, although organizations engage in downward communication frequently, they generally do not do it well. Based on a survey of 30,000 employees, Morgan and Schieman (1983) found that a majority of the workers felt their organization was ineffective at communicating down to them. The lowest level employees—those who probably received the least amount of communication—felt the most negative about the communication they did receive.

Organizations can improve downward communication in a number of ways. One relatively simple way is to provide employees with explanations as to why leaders made the decisions they did. In one study, employees were twice as likely to commit to a decision if they understood the reason behind it (Dvorak, 2007b). Another way to improve downward communication is to try to counteract its one-way nature by encouraging followers to provide input and opinions. The best downward communication, then, occurs when a leader explains the reasons for decisions and gathers input from his or her employees.

Upward Vertical Communication

Upward vertical communication �lows from a lower to a higher level of a work group. Employees use this method to inform management of the status of projects, to express feedback, and to alert management of goal attainment. Organizations have established a number of formal ways for employees to engage in upward communication, including employee surveys, grievance programs, suggestion boxes, and employee participation programs such as quality circles and team meetings.

As with downward communication, employee satisfaction with upward communication is quite low (Gibson & Hodgetts, 1991). There are a number of reasons for poor upward communication: Employees may fear reprisal for speaking their mind, managers may not pay adequate attention due to time constraints, and managers may steal employees’ ideas (McClelland, 1988). Leaders need information and feedback from their followers in order to make more informed decisions; they must therefore create an environment in which followers feel safe engaging in upward communication.

Lateral Communication

Lateral communication �lows between peers at the same level of a work group. The trend to �latten the hierarchical structure of organizations has reduced the emphasis on strictly downward communication, resulting in increased importance of communication between peers. The rise of the work team and the emergence of virtual workers and geographically separated work groups has also mandated the use of lateral communication to promote the sharing of ideas, expertise, best practices, and lessons learned.

Diagonal Communication

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Diagonal communication �lows between managers and workers located in different parts of the business (Wilson, 1992). As communication has changed within the modern organization, diagonal communication has emerged as an important method of communication. The concept was originally introduced to address the communication challenges associated with new organizational formats, such as matrix and project-based organizations.

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Photos.com/Thinkstock

Communication is faster and more interconnected than ever before, thanks to advances in information technology. As a result, it has never been easier to exchange ideas that can lead to enhanced creativity and innovation.

7.8 Special Issues and Challenges in Organizational Communication

Think about how communication within organizations has changed over the past three decades. Several decades ago, it was relatively slow and involved a lot of physical effort, as managers made requests (and left a lot of messages), and employees searched for information (making false starts, traveling circuitous routes, hitting dead ends, and also leaving many messages). Managers’ main concern was sharing information through a formal top- down communication system. Today communication is not only much more interconnected and varied, but faster as well. Modern workers have a world of information at their �ingertips; they can access libraries, newspapers, research publications, encyclopedias, and more from their computers instead of having to physically visit the library or wait for information to arrive by courier or in the mail.

Technological Changes

Advanced information technology allows organizations unprecedented opportunities to openly and quickly communicate and exchange ideas, which can enhance creativity, innovation, customer satisfaction, and employee engagement. However, there are also problems with the excessive use of electronic media for communication. First, despite the ease of modern forms of communication, being connected to one’s job 24 hours a day—as many of today’s employees are—can result in an overload of communication. Second, ongoing electronic communication can upset work–life balance, because an employee with a company-issued cell phone is never really off the clock. Third, electronic communication threatens to violate employee privacy, because many devices today are equipped with a Global Positioning System (GPS) tracking device, making employees’ whereabouts traceable at all times. Fourth, the risks of industrial espionage and intellectual property pirating are exacerbated by technology and electronic communication. Finally, when electronic communication replaces richer media such as face-to-face interaction, leaders and employees can feel distant and estranged, making it harder to relate to each other and build trust.

Similarly, social networking is a powerful tool for career development and organizational success. Research shows that the ties created through even the brief interactions typical of social networking can contribute valuable resources for employment, career advancement, and new knowledge transfer (Inkpen & Tsang, 2005; Montgomery, 1992, 1994). However, social networking, especially when mediated by technology, presents the same challenges of electronic communication, including communication overload, work–life imbalance, estrangement, and violation of employee privacy and organizational intellectual property. For example, as part of their selection processes, many employers now routinely visit social networking websites and take into consideration the information that candidates choose to reveal on their pages and the friends they choose to associate with.

Cross-Cultural and Gender Differences

Increasing diversity in the workplace poses its own set of unique communication challenges. Indeed, cross-cultural differences can shape our perceptions and interpretations of communicated messages. On the other hand, contrary to common beliefs, gender differences in communication are not as prevalent (Aries, 1996). The very large within- group variations in men and women’s communication styles most likely account for the inconsistent and inconclusive research �indings in this area (Reeder, 1996).

While some of the most recognized cross-cultural differences are covered in this section, this is by no means an exhaustive list of issues to consider.

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Concepts in Action: Cross-Cultural Communication

Economic development transcends cultural boundaries. People traveling to another country or culture should use common sense, courtesy, civility, and compassion. Keep an open mind and research that culture or learn some of its language.

Hofstede’s National Cultural Dimensions The national culture model (Hofstede, Hofstede, & Minkov, 2010) was established after Professor Geert Hofstede and his research team analyzed value scores reported by IBM employees in 40 countries. Hofstede found that employees’ preferences in relation to six speci�ic cultural dimensions could be used to distinguish countries and their values from one another. These six dimensions are power distance, individualism, masculinity, uncertainty avoidance, long- term orientation, and indulgence. Table 7.2 further de�ines and compares these dimensions.

As you can see from Table 7.2, the way societies relate to speci�ic cultural dimensions can affect how that society communicates internally as well as externally. Consider, for example, how a businessperson from a culture with a low degree of uncertainty avoidance might discuss a risky but potentially pro�itable endeavor with a partner from a culture that has a high degree of that same dimension. Or similarly, how a leader from a low power distance culture may not receive genuine input and feedback from his or her followers in a high power distance culture.

Table 7.2: National cultural dimensions

Dimension Description Cultures with high degree of dimension

Cultures with low degree of dimension

Power distance

The degree to which members of a society accept and expect that power is distributed unequally

Accept a hierarchical order in which everybody has a place and which needs no further justi�ication

Strive to equalize the distribution of power and demand justi�ication for inequalities of power

Cross-Cultural Communication Summary From Title: Cross-Cultural Communication

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Dimension Description Cultures with high degree of dimension

Cultures with low degree of dimension

Individualism The degree to which members of a society depend on one another to provide care; can be detected in whether people de�ine their self-image as “I” or as “we”

Prefer a loosely knit social framework in which individuals are expected to take care of only themselves and their immediate families

Prefer a tightly knit societal framework in which individuals can expect their relatives or members of a particular in-group to look after them in exchange for unquestioning loyalty

Masculinity The degree to which a society is more competitive or consensus-oriented

Prefer achievement, heroism, assertiveness, and material rewards for success

Prefer cooperation, modesty, caring for the weak, and quality of life

Uncertainty avoidance

The degree to which members of a society feel comfortable with uncertainty and ambiguity

Maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and ideas

Maintain a more relaxed attitude in which practice counts more than principles

Long-term orientation

The degree to which a society maintains links with its own past while dealing with the challenges of the present and the future

Encourage careful use of resources and modern education as a way to prepare for the future

Prefer to maintain established traditions and norms while viewing societal change with a level of distrust

Indulgence The degree to which a society allows for the grati�ication of needs and drives

Allow relatively free grati�ication of basic and natural human drives related to enjoying life and having fun

Suppress grati�ication of needs and regulate it by means of strict social norms

Source: From “Geert Hofstede: National Culture,” by Hofstede Centre, n.d. (http://geert-hofstede.com/national-culture.html (http://geert- hofstede.com/national-culture.html) ).

Trompenaars’s Cultural Factors In a similar attempt at understanding cultural differences, Dutch organizational theorist Fons Trompenaars identi�ied seven cultural factors that can act as a guideline for cross-cultural communication. Table 7.3 provides a breakdown of each of these seven factors.

Table 7.3: National culture differences

Trait Differences Description Cultures with a high degree of Trait A

Cultures with a high degree of Trait B

Trait A: universalism vs. Trait B: particularism

The degree to which a culture applies ideas and practices

Focus on broad, general rules that can be applied to all situations; tend to be more rational and task focused

Focus on applying rules on a case-by-case basis; tend to place greater emphasis on relationships

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Trait Differences Description Cultures with a high degree of Trait A

Cultures with a high degree of Trait B

Trait A: individualism vs. Trait B: communitarianism

The degree to which members of a culture regard themselves as part of their community

People regard themselves primarily as individuals; focus on individual contributions and achievements

People regard themselves primarily as part of a group; focus on community �irst

Trait A: neutral vs. Trait B: affective

The degree to which our interactions should include emotion

Typically prefer objective and/or detached interactions

Expect emotion to be part of all interactions, including in business

Trait A: speci�ic vs. Trait B: diffuse

The degree to which the whole person is involved in an interaction

Tend to adhere to a speci�ic relationship, such as one prescribed by a contract

Emphasize the importance of building a relationship that encompasses more than the immediate goal

Trait A: achievement vs. Trait B: ascription

The way in which a society acknowledges status

Acknowledge status based on recent accomplishments and record

Acknowledge status based on birth, kinship, gender, age, connections, and educational record

Trait A: sequential vs. Trait B: synchronic

The way in which society views time

View time as moving along a straight line; focus on the present and plans for the future

View time as moving in a circle; past and present are considered alongside future possibilities

Trait A: internal vs. Trait B: external

The way in which society views its relationship to the environment

See motivation, values, and other major aspects affecting individuals as coming from within

See the environment as affecting individual behaviors; nature is something to be feared or emulated

Source: From Riding the Wave of Culture: Understanding Diversity in Global Business (3rd ed.), by F. Trompenaars and C. Hampden-Turner, 2012, New York, NY: McGraw-Hill.

You may notice some similarities between Trompenaars’s and Hofstede’s cultural dimensions. However, an important distinction is that Trompenaars’s work was based on more diverse samples, while Hofstede’s work was based primarily on employees of one company.

Trompenaars’s Four Diversity Cultures Trompenaars also developed another model for understanding cultural differences, known as the four diversity cultures. Rather than comparing cultures over a range of seven differences, however, the four diversity cultures model establishes two major dimensions: person/informal style vs. task/formal style, and egalitarian/decentralized vs. hierarchical/centralized. Depending on how a culture aligns with each of these dimensions, it can fall into one of four culture types: incubator, guided missile, family, or Eiffel Tower. Figure 7.4 provides a visual representation of how these dimensions and culture types are divided, as well as a closer look at the characteristics of each of the four types.

Figure 7.4: Trompenaars’ four diversity cultures

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These culture types have notable organizational implications. For example, leaders need to be aware of the type of culture in which they operate and must adapt their leadership style accordingly. A leadership style that relies on formal power, authority, and structure may be effective in Eiffel Tower cultures but may be overbearing and counterproductive in an incubator culture. Similarly, many North American multinationals attempt to introduce guided missile principles in countries that are predominantly hierarchical and reliant on personal relationships (family cultures). This mis�it tends to create con�lict and promote an “us-and-them” mentality between leaders from the parent company and locals who may perceive them, at best, as culturally naive or incompetent and, at worst, as condescending and imposing on their cultural heritage.

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Consider This: Adapting Your Communication Style to Cross-Cultural Differences

Based on what you have learned in this section, how would you vary your verbal and nonverbal communication approaches in order to communicate each of the following messages to one of your employees if you were leading a team in Canada, France, India, Switzerland, Brazil, and Saudi Arabia?

“You are a superior performer. Well done!” “Your performance does not meet expectations.” “You need to express your opinions more assertively.” “You need to stop asking for advice every step of the way and start thinking more independently.” “We have to let you go.” “I am very interested in your ideas and opinions.”

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Summary and Conclusion

Although leadership and communication are critical for organizational success, they are two of the most dif�icult organizational processes to understand, develop, and effectively manage. Organizational decision makers are strongly advised to give these two dimensions of organizational success special attention and to leverage them as a sustainable source of competitive advantage. This is because—unlike many other tangible resources such as buildings, machinery, equipment, or even state-of-the-art technology, which are becoming easier for competitors to copy and imitate—effective leadership and communication are unique for each organization. One size does not �it all. Every organization has to incrementally develop its own leadership and communication processes, which should �it its mission, vision, values, and strategic orientation. The approaches in this chapter offer a starting point for thinking more strategically about leadership and communication. Whether you are a leader or a follower in a large or midsize organization or are considering starting your own business or working for a small business, leadership and communication should be in the forefront as you make decisions for your organization.

Chapter 7 Flashcards

Key Terms

achievement-oriented leadership

authentic leadership theory

behavioral theories of leadership

charismatic leader

coercive power

communication

communication network

Choose a Study ModeView this study set

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consideration

contingency theories of leadership

diagonal communication

directive leadership

downward vertical communication

emotional intelligence (EI)

ethical leadership theory

expert power

Fiedler’s contingency model

idiosyncrasy credit

implicit leadership theory (ILT)

initiating structure

lateral communication

leader–member exchange theory (LMX)

leadership derailment

legitimate power

network centralization

network connectivity

network density

participative leadership

path–goal theory

power

referent power

reward power

spiritual leadership theory

supportive leadership

trait theories

transactional leadership

transformational leadership

upward vertical communication

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Learning Outcomes

After reading this chapter, you should be able to

Describe how perceptions affect your judgment of others.

Compare and contrast rational decision making with bounded rationality.

List and discuss the common decision-making biases.

Discuss techniques for improving individual decision making and problem solving.

Consider how emotions affect decision making and problem solving.

Explain how positivity impacts creativity and decision making.

8Decision Making, Problem Solving, andCreativity

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8.1 The Importance of Perception

Perception is the process people use to bring meaning to their world; it involves organizing and interpreting the stimuli around us. Objective reality is often much different from perceived reality, however, and one person’s reality may be signi�icantly different from another’s.

Consider this situation: A manufacturing company is merging with another company, giving it the greatest market share and pro�itability in the industry. The CEO decides to share this exciting news with the rest of the company. After a series of presentations in which he makes a convincing case for the merger and states the positive impact it will have on the company and its employees, the CEO asks a group of employees for their opinion. The CEO is shocked to hear the employees make comments such as “I don’t understand why we made this move” and “In the long-term, this won’t help the company.” The CEO cannot understand why the employees are not viewing this opportunity as positively as the board of directors and senior management. What’s going on?

Unfortunately, the CEO failed to realize that the employees’ perceptions of the current merger were in�luenced by bad experiences from 2 years earlier, when the CEO decided to roll out a defective product, the company lost money, and the employees did not receive any pay raises.

It is important that organizations understand perceptions, because perceptions impact workers’ behavior. In the previous example, whether workers accepted or verbally sabotaged the merger were based on their individual perceptions—not on the CEO’s opinion or the objective reality of the merger’s impact. The world as it is perceived, then, is what matters most.

Components of Perception

Humans receive stimuli through the recognized senses of hearing, sight, touch, smell, and taste. How, then, can two people who hear or see the same information interpret it so differently? The reason is precisely because they do not really hear and see the same information; this is due to the difference between sensation and perception. Sensation is the experience of stimuli’s physical characteristics. On the other hand, perception has three separate components: the characteristics of the perceiver, the target that is being perceived, and the situational context in which the perception is occurring. In order for reality to be perceived, it must move through a personal �ilter. As a result, no two people will ever interpret the same event in exactly the same way. Let’s look at how each component affects perception.

The perceiver is the person who is attending to a target. A person’s interpretation of reality is based on his or her personal characteristics, including experiences, emotions, motives, values, culture, and physical abilities. Our personal experiences are some of the most signi�icant in�luences on perception because they lead us to develop expectations. If, for example, you worked for a manager who treated you with consideration, mentored you, and helped you get a promotion, your experience might lead you to trust all organizational leaders and give them the bene�it of the doubt. The reverse might be true if, on the other hand, you worked for an overbearing, capricious manager who treated you poorly. The perceiver’s emotional and physical states also affect perception. Generally, people see what they want to see; when in positive moods, people view targets more positively, and vice versa. Finally, people who are ill or otherwise physically impaired (forgetting to wear their glasses, for example) will likely perceive a target differently than they normally would.

The target is one of the stimuli to which the perceiver is attending. People are bombarded with countless stimuli throughout the day, but they consciously perceive only those to which they actually pay attention. Depending on the stimuli, a target may receive more or less attention from the perceiver. Attractive people (targets), for example, get noticed more than unattractive people, as do high-status targets or targets that share characteristics with or hold personal interest for the perceiver. Ultimately, the more a person attends to a target, the more information she will be able to learn about it. However, even close attention is unlikely to uncover all of a target’s details; the causes of an event or the emotions behind a coworker’s behavior, for example, often remain hidden. Ambiguity or lack of information about a target can therefore prompt the perceiver to make additional subjective interpretations about it.

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The woman giving this presentation is the target for all of the perceivers in her audience. The amount of attention paid to her presentation will vary from person to person.

The situation is the context (social, physical, etc.) in which the target is being perceived. Situations can affect whether a target receives any attention and thus whether it is perceived at all. For example, if you went to a party at the beach and a guest arrived wearing a three-piece suit instead of a bathing suit, you might think it unusual and observe him closely, wondering who he is and why he is there. If, on the other hand, you were at a wedding reception and the same man, dressed in the same suit, walked into the room, you might not even notice he was sitting at the table next to you. In the �irst situation, the man’s dress is unusual for the social context, but in the second, it �its. Thus, even though the target and perceiver in this example are the same, different perceptions are created by different situations.

Attribution Theory: Perceiving Causes and Motives

Some of the most common perceptions we make are about other people. As mentioned earlier, we rarely have access to all the information about a target, and this is especially true when the target is a person. Without complete information, our interpretations of others can never be perfect. How, then, are we able to make judgments of people? Attribution theory provides a framework for understanding this process.

Developed by Harold Kelley in 1967, attribution theory describes how people establish explanations for their own and others’ actions and the outcomes that arise from them. When we think a person’s behavior is caused by his or her innate personal characteristics, we are attributing it to dispositional, or internal, factors. Conversely, when we think behavior is caused by factors outside a person’s control, we are attributing it to situational, or external, factors. As you might expect, continued experience with the behavior of a target person will increase the amount of information we receive to help us determine whether behavior is dispositional or situational (Kelley, 1973). For example, if a new employee turns in a very important project late, a manager might attribute this behavior to the person’s being lazy or disorganized, both internal, or dispositional, characteristics. On the other hand, if the manager was aware from previous interactions that the employee had been having computer dif�iculties or that he had trouble getting key information from another department, the late assignment might instead be attributed to external, or situational, factors.

Let’s look now at the different types of information people gather as they make behavior attributions. According to attribution theory, there are three main sources:

Consistency. Does the same thing happen every time? Perceptions of a behavior are based partly on how consistently it is displayed. Think of a rude retail-store clerk. The more consistent the behavior (customers complain about the clerk every few weeks), the more likely the observer will attribute the behavior to internal characteristics (the clerk has poor customer service skills). On the other hand, inconsistent behavior (a complaint has never been received about this clerk) is more easily attributable to external factors (the customer was being dif�icult and unreasonable). Consensus. Would other people act similarly in the same situation? If most people facing the same or a similar situation respond with the same or similar behavior, that behavior is said to show consensus. If a sales representative failed to meet her monthly sales quota, her behavior would show consensus if all of the other representatives also failed to meet their quotas. The high consensus would likely clue the manager to look for external causes (e.g., slow economy, defective product, ineffective marketing strategy) for the poor sales numbers. Conversely, if the representative was the only one on the team not to make quota, the manager would likely attribute the poor performance to the rep’s internal characteristics (e.g., laziness, ineffective communication skills).

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Distinctiveness. Do other situations and stimuli elicit the same behavior? Behaviors that are uncharacteristic of a speci�ic person are more likely to be attributed to external causes and vice versa. An employee who often comes to work late but never has trouble completing projects on time might lead a manager to wonder if child care arrangements, transportation challenges, or other external factors are interfering with the employee’s morning commute. If another employee is always late—arriving at work late, turning in projects late, returning phone calls late, and so forth—the manager might attribute the behavior as being due to the employee’s inherent tendency to procrastinate.

In summary, then, low consistency, high consensus, and high distinctiveness tend to lead to external behavior attributions, whereas high consistency, low consensus, and low distinctiveness tend to lead to internal behavior attributions. Keep in mind that external and internal attributions are, by themselves, neither good nor bad. Depending on the circumstance, however, the target may think one is more desirable than the other. For example, Olympic swimmer Michael Phelps achieved his success by demonstrating high consistency (consistent practice and high performance), low distinctiveness (winning 14 gold and 2 bronze medals over the course of two Olympic games), and low consensus (extraordinary natural talent and relentless drive to succeed). Most of us would unquestionably attribute Phelps’s success more to these internal sources and not just to luck, good coaching, or a high-tech swimsuit. In this case, then, an internal attribution is quite positive; after all, we all want others to believe we achieve success based on our own merits and not because someone handed it to us. In other situations, we may hope for the reverse. Being late to work, breaking a valuable piece of equipment, making a mistake on a huge project: These are the times when we want others to attribute the outcome to something—anything!—but ourselves.

Despite their best efforts, however, people make mistakes when they try to �igure out why others act the way they do. Research has shown that we are very aware of others’ behavior, and that this high level of attention leads us to overattribute behavior to dispositional factors such as abilities, traits, and motives, and to underattribute behavior to situational factors outside of the target’s control (Ross, 1977). This tendency is so common that it is known as the fundamental attribution error. The fundamental attribution error helps explain how managers can attribute an employee’s tardiness one morning to laziness and poor judgment instead of the 10-car pileup he heard about on his drive in to work. In contrast, the self-serving bias describes the common tendency to attribute our successful behaviors and outcomes to dispositional characteristics but to blame external factors for poor behaviors and failures (Jones & Nesbitt, 1971).

Consider This: Your Own Attributions

Think about two to three positive events that recently happened in your life. They can be personal (perhaps you �inished a dif�icult home improvement project), social (met a special person), or professional (got a promotion).

Now think about two to three recent negative events in your life. Again, these can be personal, social, or professional. Choose events that are important to you.

Finally, consider positive and negative events that happened to people close to you. They can be friends, family members, coworkers, or classmates.

Questions to Consider

1. To what extent do you believe each of these events should be attributed to internal causes? What about external causes?

2. Think about the causes that led to these events. To what extent are those causes characterized by consistency, consensus, and distinctiveness?

3. Are your �indings consistent with Kelley’s attribution theory? 4. Do you have predominant attribution biases for events in your own life? In others’ lives?

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8.2 Shortcuts in Person Perception

Humans have a limited capacity to attend to and interpret the myriad of stimuli to which they are exposed every day. In order to function in our complex world, we use a number of shortcuts to streamline and simplify the process of perception. Although these shortcuts are valuable for making quick, accurate evaluations, they are certainly not perfect. Trouble occurs when they are overused or used to make overgeneralizations, which can cause us to signi�icantly distort a target’s actual characteristics. One of the best ways to mitigate distortion is to learn about different perception shortcuts and recognize how each can mar our judgments.

Primacy and Recency Effects

When people attempt to evaluate and make sense of their world, they tend to rely on information gathered from their earliest as well as most recent experiences with a target or series of targets. The primacy effect is the tendency to rely on information gathered from our earliest experiences with a target or series of targets. The recency effect, on the other hand, is the tendency to rely on information gathered from our most recent experiences. In the workplace, the primacy effect often in�luences the way interviewers evaluate potential job candidates. First impressions, such as clothing, timeliness, or even a �irm handshake, can have a big impact on the interviewer’s judgment of a candidate’s suitability for a job. After seeing a series of job candidates, interviewers also tend to more clearly remember their interactions with the earliest (primacy effect) and most recent (recency effect) candidates.

Selective Perceptions

For safety and other reasons, people need to be able to make quick judgments about their environment. Therefore, we tend to pay attention to people, objects, and events that stand out. This tendency to make selective perceptions extends to the social realm as well. For example, we are likely to notice the loud and colorful woman at a party or the jocular, well-dressed man at a conference, but not their more subdued counterparts. In general, we attend more closely to stimuli that are loud, attractive, or have something in common with us. By selectively attending to certain characteristics, we are able to speed up our evaluations of people and more quickly make sense of the world. As you might recall from Chapter 4, people also tend to pay more attention to negative or threatening events or stimuli for the same reasons: They stand out more and signal a need for more immediate action.

Contrast Effect

According to the contrast effect, our reactions to others are in�luenced by previous interactions with other people. When two things appear close together in time, we tend to evaluate them against one another rather than against a �ixed standard. For example, an extrovert appears more sociable when in a crowd of introverts. In an interview situation, a stellar candidate may make the next candidate lose some of her luster. Similarly, if a longtime coworker retires, his replacement may never seem to be able to measure up, regardless of the new coworker’s actual performance.

Stereotyping

Stereotyping occurs when we categorize information and assume that objects, people, or experiences that fall into the same group share more characteristics than they actually do. Stereotypes are quick and easy and help keep us from having to relearn the same information over and over again. Think how dif�icult life would be if we faced a �light of stairs as a completely new invention every time we happened upon a �light we had never climbed or if we had to start from scratch every time Microsoft Of�ice was updated!

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Stereotyping allows us to quickly categorize these people into their different professions, but it can also be harmful.

Of course, stereotypes quickly get muddled when we use them with people, and they can be counterproductive in today’s diverse workplaces. Anytime stereotypes are based on group status—such as age, gender, religion, ethnicity, or race—discrimination can occur. “Women are weak and emotional,” “senior citizens are slow,” “overweight people have no discipline”—each of these stereotypes assumes that people in speci�ic groups are all the same, even though the range of human experience and identity is so extraordinarily diverse that such assumptions are, if we stop to think about it, illogical. Even though stereotypes can result in erroneous perceptions of an individual’s actions, beliefs, and abilities, they are, unfortunately, one of the �irst tools we use when encountering any new situation. Therefore, it is critical that we gather additional information about others and revise our initial impressions to ensure that we do not unfairly apply stereotypes and fall into the trap of discrimination.

Consider This: Common Stereotypes

The following videos present stereotypes in a humorous yet eye-opening way.

What Kind of Asian Are You? (https://www.youtube.com/watch?v=DWynJkN5HbQ)

What Are the American Stereotypes? (https://www.youtube.com/watch?v=tR_QiqxDxyI)

Childhood Gender Roles in Adult Life (https://www.youtube.com/watch?v=381belOZreA)

Questions to Consider

1. Recall situations when you treated others stereotypically. What were your stereotypes? Were they accurate or justi�ied?

2. Recall situations when others treated you stereotypically. Were their stereotypes accurate or justi�ied?

3. What were some of the lessons you learned from these situations? 4. How do you think these stereotypes can affect how you treat others or how others treat you in the

workplace? 5. How should organizational leaders take these stereotypes into consideration when dealing with a

diverse workforce?

Consider This: Perceptual Biases

Recall a time that you were wrong in judging somebody’s character, motives, or actions.

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Questions to Consider

1. What are some of the attributes or behaviors of that person that led to your wrong judgment? 2. To what extent did some of the perceptual biases discussed earlier contribute to your wrong

judgment? 3. What did you learn from that experience? Did it make you more aware of your biases? How will you

handle similar people or situations differently in the future to mitigate those perceptual biases?

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Managers base their decisions—such as whom to hire and what to sell— largely on their perceptions.

8.3 The Role of Perception in Decision Making

One of the most important things both managers and employees do is make decisions. Managers make decisions about whom to hire and what products to sell, which processes to implement, and what resources to allocate, to name a few. Employees make decisions about how to structure their work, deal with customer challenges, improve product quality, and many other things. How we make decisions—as well the quality of our decisions—is based largely on our perceptions.

The �irst step in the decision-making process is to determine that a problem exists. Because problem identi�ication is discretionary, perceptions play an important role in this step. For example, an inexperienced manager may interpret a 5% drop in customer satisfaction scores as a major problem that requires immediate attention; an experienced manager, on the other hand, may perceive the drop to be acceptable because she knows that such scores always go down temporarily after a new product is launched. What one person perceives to be a problem may not be viewed as problematic by another person.

Perceptions also affect the way we interpret and evaluate information, which is an essential part of making a decision after a problem has been identi�ied. Once again, people have choices about the data and information they will gather to help them understand or solve problems. Individual perceptions guide beliefs about what information may be relevant to the decision. For example, a college student might consider

price the most important factor when purchasing a car, whereas a farmer might put greater importance on a vehicle’s towing capacity. Finally, like stereotyping, perceptional distortions can bias both analyses and conclusions.

As you can see, perceptions play a critical role in the decision-making process. In the next section, we will examine the process of making decisions, biases that affect this process, and ways to improve it.

Decision Making in Organizations

Effective decision making is critical to an organization’s success. Consider the following situations:

You are a product of�icer for a high-tech company. You have two new products to take to market but have funding for only one. How will you determine which product to introduce? A large advertising agency is working with a client who wants to gain market share from its competitors by marketing to young professionals. The agency needs to decide whether to spend all of the marketing funds on a single medium (Internet, television, or radio) or spread it across all three. You are the corporate acquisitions of�icer for a large oil company that has an interest in acquiring a small- to medium-sized renewable energy company (e.g., solar, wind) in order to diversify its capabilities. What type of company should your organization acquire?

Though each of these decision-making situations is unique, all three share some characteristics. First, a gap—called the problem—exists between the current situation and the desired outcome. Second, each problem has more than one solution. How do organizations decide to solve problems? How do they solve the problem of deciding which solution to pursue? Let’s look at some models organizations can use when solving problems and making decisions.

The Rational Decision-Making Model

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The basic tenet of the rational decision-making model is to identify and select the outcome that is of maximum value to the organization. In this model, the decision-making process has six steps:

1. De�ine the problem. Often, identifying the problem is fairly straightforward, as it is in the previous sample scenarios. This is not always the case, however, and managers must be careful not to act too quickly, lest they make the mistake of solving the wrong problem. For example, instead of quickly identifying assemblers as the problem after a series of line shutdowns, an assembly-line manager might investigate further and discover that the real problem is an ineffective protocol or a faulty machine.

2. Identify the criteria. After de�ining the problem, the organization should determine its objectives for the decision and the process needed to accomplish it. Looking back at the scenario about the high-tech company with two new products, the company may have the ultimate objective of increasing sales, but it may also desire greater brand awareness, improved customer loyalty, and greater market share. The company also needs to consider how it plans to mass-produce, distribute, and sell each of the two possible new products. The rational decision-making process requires the decision maker to identify all relevant criteria.

3. Weigh the criteria. Different criteria will have different levels of importance to the decision maker. The rational decision maker will determine relative values for the various criteria by examining the pros and cons of each. Our high-tech company, for example, would weigh the relative importance of brand awareness versus customer loyalty or the high cost of producing a more innovative product versus the lower cost of producing a new version of an already popular product.

4. Generate alternatives. The fourth step is to generate all possible solutions to the problem. Instead of limiting the scope of the decision to choosing either product A or product B, the high-tech company might also consider the feasibility of releasing both products on a smaller scale or even waiting on both products in favor of developing a third. The company might also revisit the various development and marketing criteria for each of the original products to see if more effective or lower cost alternatives exist. In the rational decision-making approach, this investigation continues until the cost of the search for alternatives exceeds the value of any additional information (Bazerman, 2002).

5. Rate each alternative on each of the criteria. With this step, organizations assign numeric ratings to each of the alternatives generated in step 4 in relation to each of the criteria identi�ied in step 2, in an effort to determine how well each alternative is able to satisfy the criteria. This step can be especially dif�icult because it requires the decision maker to forecast future events. For our high-tech company, trying to predict which product—the innovative, expensive item or the less expensive revamp—will ultimately be most pro�itable will be tricky, indeed. This is because the �irst alternative may have a less favorable rating on price and risk but a more favorable rating on quality or consumer appeal; however, the second alternative may be at the opposite end of the rating scale on each of these criteria.

6. Compute the optimal decision. In a perfect situation, the optimal decision is calculated simply by multiplying the rating of an alternative by the value of weighted importance given to each criterion and then adding the totals for an aggregate score. This is done for each alternative, the scores are compared, and the one with the highest score is chosen.

The rational model of decision making assumes that the decision maker ful�ills each step in a completely rational manner by fully de�ining the problem, identifying all criteria, accurately weighing the criteria, identifying all possible alternatives, accurately assessing the alternatives, and choosing the alternative that yields the maximum value. Following the model will always produce a solution that is completely informed, perfectly logical, and economically oriented.

As you can probably guess, however, this model is really more useful for theoretical purposes; it describes how decisions should be made, not how they really are made. Real decision makers will always be in�luenced by subjective factors such as emotions and perceptual biases. They are limited by their ability to acquire and process information and their ability to creatively generate alternatives. Time constraints, budgets, and political considerations also interfere with perfect rationality. These limitations inspired a decision-making model based on the more realistic assumption of bounded rationality.

Bounded Rationality

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Herbert A. Simon was an American sociologist, psychologist, economist, and political scientist whose research engendered an amazing number of important scienti�ic topics, including arti�icial intelligence, information processing, and decision making, to name a few. In 1957 he proposed that a number of bounds, or limitations, interfere with people’s ability to make decisions. His theory of bounded rationality states that humans’ limited mental abilities combined with external factors over which they have little or no control (such as time or money) prevent them from making perfectly rational decisions. The decision maker may not identify all possible alternative solutions or be able to determine accurate probabilities of success for the alternatives he does know about. Rational decision making is overwhelmingly complex. On the other hand, according to the model of bounded rationality, decision makers often “satis�ice” their decisions instead of maximizing them. Satis�icing means that the decision maker establishes an adequate level of acceptability for the outcome to a problem and then screens alternative solutions until one is deemed to be satisfactory or suf�icient (Simon, 1957).

People make satis�icing decisions every day. Think about the last time you purchased a car. Did you consider every possible criterion or review the characteristics of every single car on the market in order to truly make the optimal decision? Probably not. Just think of how much time and effort would be involved in a truly exhaustive search for a new car. Instead, you probably identi�ied a few very important criteria, such as gas mileage, color, “coolness,” and affordability, while ignoring other criteria which, to you, were less important. Using your limited list of criteria, you probably then began to evaluate a few alternatives until you found one that best �it your criteria. Instead of maximizing, you satis�iced. With all of the choices people make every day, making decisions using bounded rationality enables us to �ind acceptable solutions while maintaining ef�iciency.

Variations of the bounded rationality model include intuitive decision making, naturalistic decision making, and affective decision making. Most decisions are not purely rational. Although they are not irrational, they can be based on subjective processes rather than conscious systematic logic. Intuitive decision making depends on instincts or feelings. Similar to bounded rationality, it may be based on limited or �lawed information or emotional biases. However, intuition is also an important foundation of creativity and innovation (Matzler, Bailom, & Mooradlan, 2007). Naturalistic decision making occurs in challenging jobs that involve high risks and unde�ined goals, such as �ire�ighters, military commanders, and nurses, where relevant information may be limited or nonexistent and the situation continuously changing. Thus, much of the decision making is based on the experience of the decision maker and adapted as the situation unfolds (Klein, 2016). Affective decision making places an equal weight on cognitive rational processes and affective or emotional processes in making decisions. Resultant subjective biases include the optimistic bias, in which the decision maker may anticipate the outcome of the decision to be more favorable than logically warranted. Optimistic bias can lead to risky decisions and behaviors due to underestimation of risks (Bracha & Brown, 2012).

Consider This: Rational Decision Making and Bounded Rationality

The following clip from the television show The Big Bang Theory offers a humorous depiction of a rational decision-making process for building a friendship. The decision maker gets “stuck” due to an implied display of bounded rationality and is helped by another perspective so that he can reach an acceptable satis�icing solution.

The Friendship Algorithm (https://www.youtube.com/watch?v=k0xgjUhEG3U)

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8.4 Cognitive Biases

Although the vast majority of people apply bounded rationality to their decision-making processes, research suggests that people do have the tendency to acquire and process information in an error-prone way. Seminal research by Amos Tversky and Daniel Kahneman (1974) discovered that people make a variety of systematic and predictable mistakes in their judgments. People form general rules of thumb, called heuristics, which help them reduce the complexities of information processing. Even though using heuristics, like other mental shortcuts, often results in accurate decisions, cognitive biases can distort information processing if they are generalized too frequently or applied inappropriately. The following are the most common biases in the decision-making process.

Concepts in Action: Cognitive Biases

Psychology professors Dan Ariely, Christopher Chabris, and Daniel Khaneman discuss cognitive biases, inlcuding preset bias focus, the "spotlight effect," the "Ikea effect," and "the halo effect."

Anchoring Bias

The anchoring bias is the tendency for people to make judgments based on initial information without utilizing new information to adequately adjust the original assessment. This bias occurs because the mind gives disproportionate attention to the information it initially receives. Consider the anchoring bias the next time you negotiate the starting salary for a new job. When the hiring manager asks you how much you made at your previous job, your answer will stick with the manager and will anchor his salary offer for the new job. To achieve the highest starting salary possible, it is important to propose a salary that is as high as reasonable—without being outside the competitive range—so that the manager anchors his offer on the high end of the range.

Availability Bias

Availability bias is the tendency for people to assess the frequency or probability of an event based on information that is readily available to them (Tversky & Kahneman, 1973). For example, people are often more afraid of �lying than they are of riding in a car. Of course, most of us know that this fear is irrational, because signi�icantly more people die every year in car accidents than in plane crashes. Yet plane crashes are spectacular events that typically make the national news, and vivid, emotional, easily imagined, and speci�ic events are more readily available for recall than unemotional, uninteresting, or vague events (Bazerman, 2002).

Con�irmation Bias

Cognitive Biases From Title: The Battle in Your Mind (https://fod.infobase.com/PortalPlaylists.aspx?

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Con�irmation bias suggests that people look for information that con�irms or supports what they believe to be true and discount information that disproves or does not support it. People tend to accept con�irmatory information at face value but meet contradictory information with criticism and skepticism. Con�irmation bias also suggests that individuals will be more likely to collect information from people who they know will support their beliefs, such as friends, family members, or coworkers. Finally, this bias leads people to assign greater importance to con�irmatory information and less importance to contradictory information. Asking a friend to act as devil’s advocate by challenging or suggesting contradictory information can help reduce the in�luence of con�irmation bias.

Escalation of Commitment Bias

Escalation of commitment bias was �irst described in Barry Staw’s (1976) paper “Knee-Deep in the Big Muddy: A Study of Escalating Commitment to a Chosen Course of Action.” Staw’s image—that of a person stuck in the mud, unwilling to backtrack but certain to sink even deeper if she continues in the current direction—vividly describes this bias, which occurs everywhere from the workplace to warfare to romantic relationships. When people make a decision, they tend to stick with it. The more invested they become in their choice, the less likely they are to abandon it—because they want to be “right,” because they don’t want to be seen as weak or stupid, because they’ve spent a lot of money and don’t want it to have been for nothing—even when the costs of the solution outweigh the bene�its.

Imagine the following scenario: Recently, you hired Joe, a person with a great education and signi�icant work experience. Despite your high expectations, Joe seems to be struggling. Should you just �ire him and try to �ind someone new? Because it took such a long time to �ind a quality candidate, you decide to give Joe a few more months to settle in. Two months pass, and you start receiving customer complaints about your new employee. Unwilling to give up just yet, you decide to provide Joe with additional training opportunities. Three months later, Joe is still not meeting performance expectations. Should you cut your losses now, even though you have made a signi�icant investment in this employee? When is the right time to give up on an investment?

In this scenario, you, as the manager, made a series of unfortunate choices based on your initial decision to hire Joe. The justi�ication for continuing to make poor choices is best illustrated by the irrational treatment of sunk costs. Sunk costs are permanent losses of resources incurred as the result of a decision. The key word here is permanent. Even though they are gone for good, sunk costs can lead people to throw good money after bad (that is, make poor choices) in a fruitless attempt to recoup their losses. Research shows this to be especially true if the decision maker is believed to be at fault (Brockner & Rubin, 1985), perhaps because changing one’s mind, or �lip-�lopping, is often perceived as a weakness.

Consider This: Escalation of Commitment

The following video shows irrational decisions made by participants in an auction of a $5 bill due to escalation of commitment.

Irrational Escalation of Commitment (https://www.youtube.com/watch?v=-23suv6p-cM)

Questions to Consider

1. Why do you think participants continued to bid higher, even when they were incurring a loss? 2. How would you have acted if you were part of this scenario? When would you have stopped bidding?

Why?

Hindsight Bias

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Suppose you are watching your favorite football team attempt to win the championship. The team is behind 27–21 with just seconds left in the game. With the ball on the 1-yard line, the coach calls a pass play that the quarterback overthrows into the back of the end zone just as the clock runs out. Devastated, you fall to your knees and shout, “Why did we choose that stupid play? I knew a pass play would never work!” This tendency for people to believe that they could have predicted the correct outcome, after they know the actual outcome, is called hindsight bias (Fischhoff, 1975). Unfortunately, hindsight bias frequently makes people overcon�ident in their decision-making abilities, even in situations in which they do not have all the required information. Our armchair quarterback, for example, was satis�ied simply to believe he “knew a pass play would never work” and felt no need to learn why the coach called the play or why the play failed. Hindsight bias also reduces a person’s ability to learn from past experiences.

Overcon�idence Bias

One of the most prominent and potentially disastrous biases in decision making is that of overcon�idence (Plous, 1993). One series of studies showed that people were 65% to 70% con�ident of being correct in their decisions when in reality they were correct only about half the time (Lichtenstein & Fischhoff, 1977). Overcon�idence is especially dangerous because it occurs more often when people lack the intellectual ability or expertise necessary to evaluate a situation adequately before making a decision. In fact, research shows that overcon�idence subsides in situations in which a person possesses expertise about the problem or issue under consideration (Kruger & Dunning, 1999).

Consider This: Rational Decision Making Versus Bounded Rationality

Think about an important decision you have recently made. It can be choosing a college to attend or a person to marry, accepting a job offer, purchasing a home, or ending a dif�icult relationship. Try to remember as many details as possible about the decision, including your thoughts and emotions while making the decision, information that was available or unavailable, advice you received from others, the decision itself, and the consequences of the decision.

Questions to Consider

1. To what extent did your decision-making process resemble the rational decision-making model described in this chapter?

2. To what extent did you satis�ice? How would your decision have changed if you had the time, resources, and information to make a more rational decision?

3. Which of the cognitive biases discussed in this chapter had an impact on your decision? 4. Would the consequences have been different if those cognitive biases were not present?

Conjunction Fallacy

Consider the following scenario: Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice and also participated in antinuclear demonstrations. Which is more probable?

a. Linda is a bank teller. b. Linda is a bank teller and is active in the feminist movement.

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Interestingly, most people are likely to select the second choice, even though its probability is much lower because it involves two occurrences in conjunction. The probability of two events occurring in conjunction is always lower than the probability of one of them occurring alone. This cognitive bias, known as conjunction fallacy, is common because the more speci�ic choice seems more representative of the scenario than the more general one. Researchers have found this type of bias to be prevalent in many areas, including politics and business. It is important for decision makers to avoid this type of bias by following sound logic and regularly examining their assumptions (Kahneman, 2013).

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8.5 Improving Individual Decision Making

Generally speaking, humans are not bad decision makers; however, we do often fall short of making fully rational decisions. As you have seen, our ability to make good choices is easily in�luenced by emotions, intellectual limitations, external forces such as time and money, and a myriad of perceptive and cognitive biases. How can decision makers overcome these de�iciencies?

Acquiring Expertise and Experience

Gaining experience and expertise in the domain area of the decision is one way to improve decision-making skills. In the workplace, workers can gain expertise by enhancing their education or obtaining feedback on their past decisions. Feedback provides a learning mechanism that not only helps decision makers create a conceptualization of what actions make effective decisions but also enables them to identify the best strategies for overcoming common negative biases (Neale & Northcraft, 1989). To gain experience, decision makers must have the opportunity to make decisions in a broad array of contexts. When people have only a narrow set of experiences upon which to base their decisions, they tend to focus too much on surface criteria, which limits their ability to identify novel solutions (Thompson, 2001).

There are a number of practical steps decision makers can take to more effectively apply their newfound expertise and experience to decision-making situations. First, the most effective decision makers are those who effectively combine experience with expertise. For example, just because a manager learned about transformational leadership does not make that manager a transformational leader; nor does it make transformational leadership an effective leadership style in every situation. Thus, what researchers suggest and what practitioners know is that to improve decision making, people must learn as much as possible about the speci�ic domain of the decision and then �ind opportunities to make decisions in the same or a similar domain. For example, the manager may need to practice transformational leadership on a small scale with a few trusted associates to master the style, build con�idence and experience, and assess its success before gradually expanding use of that style with other associates who appear to be ready for it. Additionally, after making a decision, decision makers must re�lect on the effectiveness of their choice. If a decision turns out to be poor, decision makers should try to learn why it was poor, perhaps by asking an expert for feedback. When they make successful decisions, decision makers can look for other situations in which the same strategy could be applied.

Debiasing Judgments

Debiasing judgment is a process of eliminating cognitive biases from the decision-making process. Because cognitive biases exist outside the decision maker’s perceptual awareness, the process of debiasing our judgments involves consciously employing strategies to make ourselves aware of biases and how they impact our decision- making accuracy. There are three things individuals must receive in the debiasing process: (a) descriptions of the common biases, (b) an explanation for the causes of the biases, and (c) assurance that biased decision making is common and can be overcome (Bazerman, 2002). Although eliminating bias from everyday decision making is a constant challenge, one important way to do so is to increase the decision maker’s awareness of biases and their impact on decisions.

Daniel Kahneman, winner of a Nobel Prize in Economics, found that humans are predictably irrational. In other words, while humans do not make rational decisions, their irrationality is systematic and follows logical patterns. These patterns are the foundation of behavioral economics, a method of economic analysis which has challenged many of the established economic theories that are based on rational decision making. The key to many of these theories is to become aware of and work with one’s biases, rather than deny that they exist or completely give in to them (Kahneman, 2013).

Consider This: Why Do We Make Predictably Irrational Decisions?

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Being able to take an outsider’s view can be crucial to the decision-making process.

In this entertaining video, Duke University professor Dan Ariely illustrates why people tend to make predictably irrational decisions.

We’re All Predictably Irrational (https://youtu.be/JhjUJTw2i1M)

Questions to Consider

1. Did you �ind the illusions Ariely used to illustrate predictable irrationality surprising? Why or why not?

2. Can you think of a speci�ic time when you made an irrational decision? What do you think in�luenced you to do so?

Taking an Outsider’s View

When making a choice, a decision maker can take one of two perspectives: that of the insider or the outsider. Typically, the insider views her situation as unique and believes that a solution will result in a different outcome if employed in other, similar circumstances. In contrast, the outsider is not in�luenced by the unique emotions of a particular circumstance, which allows her to generalize across and identify similarities between the current and other situations.

As an example, imagine a project team that is beginning the design process for a new product. The company has hired a consultant who has worked with other companies in the industry on similar projects to help prepare an estimated budget and timeline (outsider view). The team leaders, however, feel con�ident they can complete the project 6 months ahead of schedule and 50% under the estimated budget; they believe their team is uniquely talented and has access to better resources than their competitors (insider view).

Research suggests that outsiders make more accurate estimates and decisions than insiders because outsiders are better able to apply more relevant data from past decisions (Kahneman & Lovallo, 1993). However, people are much more likely to take the insider’s view. Why? Optimism and overcon�idence often lead insiders to believe that the speci�ic situation is different from situations mentioned by the outsider. Unfortunately, by focusing on the speci�ic situation, insiders miss the opportunity to incorporate historical information into their judgments. Thus, another way to reduce bias and improve the accuracy of decision making is to include insights and information from outsiders during the decision-making process.

The next time you have to make an important decision, be sure to invite an outsider or two to share their perspective on the situation. If a trusted outside source is not available, try to take the outsider’s perspective yourself by pretending the decision is someone else’s to make, and then think about what advice you would offer that person. Although not perfect, playing the role of the outsider can help decision makers view the problem and potential solutions from a different perspective.

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Creativity is important for solving problems and making decisions. It helps expand a decision maker’s perspective and increases the number of potential solutions he or she can generate.

8.6 Creative Decision Making

Organizations are constantly striving to discover, create, or produce the next big thing. This insatiable need for innovation has led many researchers and practitioners to think critically about creativity: What is it? How does it work? How do we get more of it into our company? In this section, we identify people’s potential for creativity, review a model of creativity, and discuss ways to improve it.

What Is Creativity?

Simonton (2009) de�ines creativity as the generation of ideas that are both original and adaptive. Creativity occurs when a product, service, or procedure is proposed that is novel and useful (Zhou & Shalley, 2010). For example, if an engineer who was working on a new supersonic jet for commercial �lights were to propose an innovative way to adapt the space shuttle design to commercial aircraft, this would be considered both novel and useful, and thus creative. If, on the other hand, he were to submit plans for a gigantic hot-air balloon, this would not be considered useful, although it might be novel. Keep in mind, then, that coming up with a wild, unique, or bizarre idea does not make a person creative unless the idea helps solve a problem.

Creativity is an important part of effectively solving problems and making decisions. Creative thought expands the decision maker’s perspective and increases the number and type of alternatives available to solve a problem. Creativity drives the great ideas and innovations made by people across the world every day. Although creativity is often associated with revolutionary ideas, it also includes the ability to �ind novel approaches for incremental day-to- day problem solving (Simonton, 2004).

Creative Potential Are you creative? Many of us look at the spectacular creations of people like Albert Einstein, Steve Jobs, Pablo Picasso, Amadeus Mozart, and William Shakespeare and immediately shake our heads, sigh, and say, “I am so not creative!” Don’t be discouraged! Research suggests that each of us, regardless of our role, function, or level in an organization, has potential for creativity—albeit some of us more than others (Oldham & Cummings, 1996).

Several personal traits have been discovered to increase a person’s potential for creativity. One study examined trait differences between artists and nonartists and between scientists and nonscientists. It found that artists and scientists were signi�icantly more likely to score high on the Big Five personality trait “openness to experience” (Feist, 1998). Because both jobs are highly creative, this �inding suggests that people who are open to new ideas and experiences are more likely to be creative. Individuals with higher intelligence have also been found to be more creative (Feist & Barron, 2003). Other personal traits that have been shown to have a relationship with creativity include self-con�idence, high energy, attraction to complexity, propensity for risk taking, and tolerance

for ambiguity (Barron & Harrington, 1981; Woodman, Sawyer, & Grif�in, 1993).

The Three-Component Model of Creativity If everyone has at least some potential to think creatively, what can people do to maximize their creative potential? Teresa Amabile’s (1996) three-component model of creativity proposes that creativity is the result of a person’s expertise, creative-thinking skills, and motivation. The research indicates that all three of these components are needed to make creative decisions, and that the higher the level of each component, the greater the person’s capacity for creativity.

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Expertise. The potential for creativity increases when a person has knowledge, skills, and experience in the domain of a problem. Sometimes people need to link ideas from multiple sources and recognize the relevance of information to new problems. Experts have the knowledge necessary to put the facts together. Creative-thinking skills. Creative-thinking skills are demonstrated by how �lexibly and imaginatively people approach problems. One creative-thinking skill involves using analogies. Creativity requires �inding connections between diverse sources of information, and analogies encourage people to look at different situations in new ways so as to discover how they are related. Another creative thinking skill is conceptual expansion, which involves combining two disparate domains (of knowledge, experience, etc.) to make a novel idea or product (Shalley & Perry-Smith, 2008). Often, people’s ideas are limited by their current knowledge; they keep using the same tools to �ix the same problems. However, when people are able to identify and apply information from a source that is completely new, unrelated, or unexpected, they experience conceptual expansion. An example is the evolution of commercial spaghetti sauce. While working with PepsiCo in the early 1970s, Howard Moskowitz had the notion that the company should stop looking for the single perfect Pepsi that everyone would like and instead make different varieties of its product that would appeal to different people’s different tastes. At the time, PepsiCo chose not to listen, but years later Moskowitz took his idea for soda—to make a variety of products that appealed to many different tastes— and used it to revolutionize the spaghetti sauce industry, making millions for Prego and resulting in a huge expansion of Americans’ concept of what spaghetti sauce should be. So the next time you need a good idea, instead of looking to see what everyone else in your industry is doing, look to see what organizations in unrelated �ields are doing—and see if you can �ind a connection! Motivation. The most important component of creativity is intrinsic task motivation. As you recall from Chapter 6, motivation is intrinsic if it results from the individual’s interest and involvement in and curiosity about the positive challenge of the task itself, regardless of external recognition or reward. Intrinsic motivation is essential for creativity because, without it, people would not be motivated to engage in or persist with a task, regardless of their expertise or skill in creative thinking (Amabile, 1996). Zhou and Ren (2012) refer to intrinsic factors that can enhance creativity in the workplace as the “task context.” These factors include job complexity, feedback, goals, creativity expectations, autonomy and discretion, time, and stress. Some extrinsic factors can also enhance creativity. These factors, which Zhou and Ren refer to as the “social context,” include leadership and supervision, coworker in�luences, social networks, cultural in�luences, adequate resources, and rewards and incentives. Amabile and Fisher (2009) recommend that organizations and leaders synergistically utilize intrinsic and extrinsic factors to promote and reward creative behaviors.

Stimulating Creativity at Work

People can improve their creativity by increasing their expertise, expanding their creative-thinking skills, and searching for the intrinsically motivating element in every task. However, certain managerial and organizational practices can also motivate employees to display greater creativity. First, the organization must have an atmosphere that encourages creative expression. One way is to offer �inancial rewards for creative suggestions. Another is to avoid reacting to honest mistakes with punishments or overly critical feedback (Osland, Kolb, & Rubin, 1991). Second, organizations should include creativity goals for their employees. In comparison to production goals, creativity goals help workers focus on producing novel solutions, which increases creativity (Shalley, 1991). For example, for many years 3M encouraged creativity by allowing its employees to spend 15% of their time on creative projects of their choice. Finally, supervisors can encourage their subordinates’ creativity by giving them the autonomy to solve their own work problems. Speci�ically, research has found that employees who work for transformational leaders are more creative (Shin & Zhou, 2003). As you can see, there are many practical steps organizations can take to unleash the creative potential of their workforce.

The physical work environment can also in�luence creativity. For example, of�ice space with lower complexity, more plants, bright lighting, windows, attractive colors, and access to technology has been rated higher on creative potential (Ceylan, Dul, & Aytac, 2008). However, when compared to other factors, a creative personality and a social environment that supports creativity have been found to be more important than the physical environment in stimulating creativity (Dul, Ceylan, & Jaspers, 2011).

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8.7 Special Issues in Decision Making

The topics of ethics and emotions have garnered considerable attention among I/O psychologists and behavioral scientists. Stories of corporate greed and scandal have fueled efforts to improve the ethics of decision making, while studies question the role of emotions in and their in�luence on effective decision making.

Ethical Decision Making

Ethics are an important component of any decision-making process. Ethics are de�ined as “standards of behavior that tell us how human beings ought to act in the many situations in which they �ind themselves—as friends, parents, children, citizens, businesspeople, teachers, professionals, and so on” (Markkula Center for Applied Ethics, 2009). Although the ethicality of a decision is often hard to judge, �ive basic ethical standards can help people guide their decisions (Cavanagh, Moberg, & Valasquez, 1981).

1. The utilitarian approach states that the ethical decision is the one that provides the most amount of good while doing the least amount of harm. In simple terms, the utilitarian approach deals with consequences. It attempts to maximize the positive outcomes while minimizing the negative. The CEO of a company would be using the utilitarian approach if he decided to eliminate 10% of the company’s workforce in an attempt to save the company during an economic recession. Even though many workers would lose their jobs, the CEO is able to justify his decision by keeping negative outcomes as low as possible while saving the company and keeping 90% of the workers employed during hard times. The utilitarian approach is very common in business because it supports logical business principles such as ef�iciency, pro�its, and productivity.

2. The rights approach suggests that the ethical decision is the one that best protects and respects people’s moral rights. This approach stems from the belief that all people are entitled to basic human rights, such as freedom to choose how they live their lives, the right to have a certain degree of privacy, and the right to be treated with dignity. A whistle-blower (a person who reports unethical behavior or practices in his or her organization) would be utilizing the rights approach if, for example, she reported systemic sexual harassment of subordinates by her company’s executives. Economically speaking, the employee’s decision might not be the best, because it would likely result in expensive lawsuits, executive upheaval and turnover, and bad publicity; however, the rights approach maintains that human rights should always take precedence over any other consideration.

3. The justice approach states that in order to be ethical, decisions must treat people equally, or at least equitably, and be based on a defensible standard. This approach requires organizations to impose and enforce rules so that workers will receive both bene�its and costs equitably. Many organizations pay their top-producing workers more because of their larger contribution, and this is generally considered a fair practice. The equity of other practices is not as clear. For example, married heterosexual couples receive a number of valuable bene�its from organizations that are not afforded to homosexual partners, and many ask whether this disparity is based on a defensible standard or whether it is unfair.

4. The common-good approach suggests that ethics should consider the welfare of everyone. This approach proposes that the interlocking relationships of society form the basis of ethical reasoning and that respect and compassion for others—especially those who are vulnerable or defenseless—are requirements for ethical behavior. One argument for the national health care law, for example, is that many children and much of our nation’s poor do not have access to basic health care, which they desperately need.

5. The virtue approach suggests that people’s actions ought to be consistent with certain ideal virtues that provide for the full development of humanity. These virtues are dispositions and habits that develop through experience and help mold character; they include honesty, courage, compassion, generosity, tolerance, loyalty, fairness, and self-control. The virtue approach to ethical decision making requires people to consider how decisions align with their virtues by asking themselves whether a decision will help them become a better person and whether an action is consistent with their character.

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There are a number of advantages and disadvantages to each ethical standard. Although the utilitarian approach results in the greatest bene�it for the most people, it can also impinge on the welfare of many people, often the most disadvantaged members of society. The rights approach ensures that people maintain their basic rights, which reduces prejudice and discrimination, but it can also create a work environment that focuses on minute laws and policies that get in the way of productivity and ef�iciency. The justice approach promotes equality, but it can also create feelings of entitlement that reduce worker motivation. The common-good approach aims not to leave anyone out of the equation, but it is often impractical because it fails to take into consideration the fact that budgets and resources are limited. Finally, even though all decision makers can employ the virtue approach, not all have high standards of virtue.

The Role of Emotions in Decision Making

Conventional wisdom has long held that the best way to make rational decisions is to remove emotions from the process (Sayegh, Anthony, & Perrewé, 2004). The assumption has been that emotions wreak havoc on the decision- making process by distorting peoples’ ability to objectively evaluate and interpret problems and alternatives. More recently, however, researchers have determined that instead of being irrational, emotions are critical for rational decision making. The work of Antonio Damasio, a leading neurobiologist, is one of the major reasons for this change in thinking.

Damasio (1994) studied patients with lesions in their prefrontal cortex, an area of the brain responsible for emotion. He found that these patients became emotionally neutral and, even though they maintained all of their other cognitive functions—and therefore theoretically had the ability to make purely rational choices—they ended up making irrational decisions or no decisions at all. Damasio concluded that the patients’ inability to make rational choices was due to their lack of emotions. He argued that emotions allow people, when facing dif�icult choices or uncertain outcomes, to have a hunch or a gut instinct that some alternatives are �lawed, which results in fewer irrational decisions. Decision making, then, is a process that requires both cognition and emotion. Although cognition is responsible for generating ideas, emotion plays a regulating role. Emotion helps the decision maker decide what is important to attend to as well as what is relevant and irrelevant about a target.

Keep in mind that not all emotions affect decision making in the same way. In general, emotions can be categorized as either positive or negative. Each has a different impact on decision making. Positive emotions, such as joy and serenity, have a positive impact on decision making. People with positive emotions tend to integrate information ef�iciently, adapt their problem-solving strategies, and make more creative decisions. A meta-analysis of creativity studies found that positive emotion increased individuals’ ability to generate ideas (Davis, 2009). In contrast, people who experience negative emotions, such as anger, have been found to be less effective at making decisions because they do not process information accurately and often overestimate their ability to make decisions (Sinclair & Mark, 1992). Additionally, strong emotions such as guilt, shame, fear, and anxiety tend to distort the way people process information and make choices.

As you can see, emotions are central to our attempt to make sense of the world. As such, they play a very important role in rational decision making. The key to making quality decisions is to employ creative thinking and to maintain positive emotions.

Concepts in Action: António Damásio's Gambling Experiment

Damásio’s experiment shows that neurologically healthy individuals make certain types of choices before they can articulate their reason for doing so. Dave, who has lost a portion of his brain, does poorly in the experiment.

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António Damásio’s Gambling Experiment From Title: Into the Mind: Emotions (https://fod.infobase.com/PortalPlaylists.aspx?

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iStockphoto/Thinkstock

People with positive emotions tend to make better decisions, since they are able to integrate information ef�iciently, adapt their problem- solving strategies, and generate more innovative ideas.

8.8 Applying Positive Psychology to Creativity and Decision Making

You might be wondering why positive emotions lead to better and more creative decisions than negative emotions do. The answer was unclear until recently. Barbara Fredrickson (2001, 2003, 2009; Fredrickson & Joiner, 2002) developed what she calls the broaden-and-build model of positive emotions. According to this model, when we experience positive emotions, they change our thinking and our actions in two ways. First, positive emotions broaden our thought–action repertoires. To use the terminology of the rational decision-making model, positive emotions help us consider more options, more alternatives, and more criteria. They also motivate us to act on and pursue those alternatives without excessive fear, inhibition, or hesitation. This broadening effect is critical for more rational and more creative decisions and solutions. In fact, recent studies show that positivity—or more speci�ically, psychological capital, which constitutes one’s hope, optimism, self-con�idence, and resilience—is positively related to creative performance (Sweetman, Luthans, Avey, & Luthans, 2011).

Second, positive emotions help us build our mental, physical, social, and psychological resources. When we experience positive emotions, we are more relaxed, nicer, more attractive to be around, have more energy, and feel on top of the world. Although these resources may not be immediately needed during good times (which is typically when we experience positive emotions), they gradually accumulate during those times. When we experience dif�iculties, challenges, and problems at a later time, those inventories of resources come in handy. They can be drawn on when we experience negative emotions, and they act as a cushion against setbacks and adversities. If we do not experience positive emotions and accumulate those resource inventories at good times, we will feel drained, helpless, and ready to give up during bad times.

Let’s compare the broadening and building effects of positive emotions to the effects of negative emotions. Negative emotions trigger a �ight-or-�light mode, narrowing our thought–action repertoires to familiar, tried-and-true

solutions to problems. This is when we see the dark side of bounded rationality, satis�icing, and perceptual biases. Second, as mentioned earlier, negative emotions drain our mental, physical, social, and psychological resources, leaving us too exhausted, depressed, and lonely to function optimally, let alone excel, take control, solve problems, make decisions, and be creative.

What, then, can managers do to help their employees experience more positive emotions and fewer negative ones? There is a wide range of possibilities; offering intrinsically motivating jobs, learning and growth opportunities, supportive supervision, and work–life balance are some examples. As discussed in Chapter 4, a particularly relevant approach would be to give employees more positive feedback and recognition when they perform well, rather than just negative feedback and criticism when they perform poorly. A recent study supports the notion that when positive psychological capital (hope, optimism, con�idence, and resilience) is coupled with positive feedback, the quantity and creativity of the solutions generated by employees can be enhanced (Luthans, Youssef, & Rawski, 2011).

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Summary and Conclusion

In organizations, making decisions, �inding solutions to impending problems, and doing so creatively, ef�iciently, and effectively are critical for success. In order for managers and employees to make quality decisions, they need to leverage their knowledge, skills, abilities, experience, creativity, and expertise. They must also become aware of their perceptual biases and the limitations of human rationality. Most importantly, although we may not be perfectly rational in our decisions, our perceptions and emotions are unique to each of us and make us each approach situations differently, which has tremendous value to our personal, social, and professional lives.

Chapter 8 Flashcards

Key Terms

anchoring bias

attribution theory

availability bias

bounded rationality

broaden-and-build model of positive emotions

common-good approach

con�irmation bias

consensus

consistency

contrast effect

Choose a Study ModeView this study set

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creativity

debiasing judgment

distinctiveness

escalation of commitment bias

ethics

fundamental attribution error

heuristics

hindsight bias

justice approach

perception

primacy effect

rational decision-making model

recency effect

rights approach

satis�icing

selective perception

self-serving bias

stereotyping

sunk costs

three-component model of creativity

utilitarian approach

virtue approach

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Learning Outcomes

After reading this chapter, you should be able to

Compare and contrast organizational groups and teams.

Identify the characteristics of effective teams.

Describe various types of teams.

Apply the stages of team development.

Determine when to use teams.

Explain the process for and challenges of team decision making.

Explain the contagion effects of positivity in teams.

9Groups and Teams

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9.1 The Importance of Groups and Teams

The use of groups and teams has become increasingly common not only in organizational settings but also in education, public policy, and international relations. However, groups and teams can present signi�icant challenges in terms of their design and implementation. Consider the following example.

A large agricultural manufacturing company decides to update its GPS-enabled precision farming products with a revolutionary new color touch-screen display, a signi�icant advancement over its unwieldy, now obsolete monochrome version. To thwart possible competitors, the company quickly assembles a team comprising members from across the company, including sales, marketing, product quality, engineering, and supply management, and sets a 6-month project timeline. At �irst, team members embrace their assignment with energy and conviction. However, as challenges arise and the original excitement begins to wane, the team begins to experience con�lict. Never having worked together prior to this assignment and not having established trust before beginning the project, team members start to turn work disagreements into personal attacks. Soon team members stop attending meetings and begin completing assignments individually, meeting only when absolutely necessary.

As the project’s due date nears, the team members realize they have made critical errors due to lack of communication on certain design elements. The project is delayed and delayed again. Eventually, the team delivers the �inal product—nearly a year behind schedule and $1 million over budget.

Although unfortunate, the above scenario is relatively common. In fact, one survey of IT teams found that nearly 75% of them failed to meet one or more important project milestones (Bull Survey, 1998). This statistic becomes even more alarming when you consider that organizations often use teams as an attempt to increase work productivity. Are all teams doomed to failure? Is teamwork an impractical notion? Thankfully, the answer to both questions is no. Research shows that with careful planning, hard work, and commitment, organizations can create effective teams. However, given scenarios like the one above, is it worth it to do so? In other words, do effective teams produce spectacularly better results than individually run projects? Based on research �indings, the answer is that it depends on the team and the tasks assigned to it. I/O psychologists help organizations make practical decisions that allow them to design, maintain, and leverage effective teams.

Concepts in Action: Increased Teamwork and Worker Participation

Competition in the auto industry lead American managers to adopt some of the practices of their Japanese counterparts, including emphasizing teamwork and worker participation in decision-making.

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Consider This: Working in Teams

Recall several situations in which you worked with a team to complete a task or achieve a goal.

Questions to Consider

1. To what extent did you enjoy your team experiences? What were some of the characteristics of each of these teams, tasks, and environments that you believe contributed to your positive (or negative) experience?

2. Which of the above tasks or projects do you believe would have been better completed individually? Why?

3. Which of the above tasks or projects do you believe were better suited to be completed in teams? Why?

4. In which of the above tasks or projects do you believe that working in teams or individually would have made no difference? Explain.

Comparing Groups and Teams

The terms group and team are often used interchangeably to describe a collection of people who work together to achieve a common goal. Even though a work team is a type of work group, it is very different from basic work groups both in terms of processes and outcomes. In this section, we describe the similarities and differences between work groups and work teams.

A work group consists of two or more individuals who interact and share ideas in order to achieve a common goal. Most people have experienced working in a dependent work group, such as the traditional departmental group led by a strong manager. Workers in this type of group depend largely on the manager to set goals, assign tasks, and resolve con�licts. In independent work groups, on the other hand, workers tend to complete tasks and assignments with little direct managerial supervision and only basic direction. Think of teachers who work at the same school: As a group, all wish to promote the success of the school and its students, and most will work together from time to time,

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Although the terms group and team are often used interchangeably, they are not the same. Teams require interdependence, relying on the skills, expertise, knowledge, and resources of each member to achieve a shared goal.

especially when dealing with changes or challenges. However, the principal does not tell every teacher every day how to teach a subject, develop curriculum, or motivate students.

Beyond dependent and independent work groups, some groups can develop into true work teams. Interdependence is the key: Members of work teams are truly unable to achieve their goals by themselves and must rely on the skills, expertise, information, and resources of other team members. Teams exist to accomplish goals that require collective responsibility. In other words, success and failure are attributable to the team as a whole, not just to one person. Instead of having one supervisor to dictate members’ every move, teams have the authority to decide how to interact, function, and make decisions. Whereas other types of work groups are more inclusive and can thus be quite large, work teams tend to include only a few members that possess complementary skills (Katzenbach & Smith, 1993). Finally, work teams function within the broader organizational context, with and alongside other teams.

To return to the example of a school and its teachers, an instance of a team within a school would be a Student

Assistance Team, which is formed when a student experiences signi�icant performance dif�iculties within the general classroom. The student’s classroom teacher or teachers, school professionals (counselor, nurse, psychologist, etc.), one or more administrators, and other specialists as needed work together to devise a speci�ic plan to promote the student’s future success. The Student Assistance Team meets regularly to assess progress and make revisions to and recommendations for the student’s Individual Education Plan. The team is interdependent, and members must trust each other, communicate extensively, collaborate when challenges arise, and share responsibility in order to meet the student’s needs and promote the student’s highest level of success.

Although all types of groups can be organizationally useful, this chapter focuses mainly on teams and their place within and signi�icance to the organization. Teams have become increasingly important to organizations and have been estimated to be used by over 80% of U.S. companies (Blanchard, 2006). Why? Quite simply, employees who work as teams are better able to solve problems than employees who work alone. However, as much as management might wish to make use of this problem-solving resource, one cannot simply throw people together and call them a team. The synergy and positive group dynamics created within a true team are not instant; teams are built only through careful thought and hard work. Furthermore, creating teams can be costly and time consuming. The challenge is how best to enable organizations to improve their chances of creating effective teams without wasting valuable resources. To address this challenge, it is important for I/O psychologists to understand how teams work, how to create and make them successful, and �inally, when not to use them.

Find Out for Yourself: The Use of Groups and Teams

Browse the websites of the most recognized organizations in your current or desired �ield of employment— or of 10 organizations you are interested in for various reasons (e.g., for employment, as an investment, because it provides a regularly purchased product or service). Look for the organizations’ values as well as statements and information about their structure, culture, and processes.

What Did You Learn?

1. Which of these organizations mention teams and teamwork as one of the strategies they use to accomplish their goals? As a goal in and of itself? As a critical success factor?

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2. In your opinion, which statements on the websites ring true, and which statements seem to be there for marketing or public relations purposes?

3. How many of those organizations present speci�ic, quanti�iable evidence for how important teams are to the success of their operations?

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9.2 Developing Teams

Organizations use teams for all sorts of reasons—to solve problems, make decisions, design products, implement services, and manage projects. Selecting the right type of team for the task is critical to achieving the desired goals. However, assigning a group of individuals to a task does not automatically make them function as a team. In addition to being the right type, teams must also be developed in order to be functional and productive.

Types of Teams

Different types of teams are better suited to working on different types of tasks. Five common types of work teams are self-managed teams, manager-led teams, cross-functional teams, project teams, and virtual teams.

Self-Managed Teams A self-managed work team (SMWT) is a group of people who work together to accomplish a goal by managing their own work. Together, members make decisions, assign tasks, plan and schedule work processes, and solve work problems. A central notion of the SMWT is that team members are better suited to evaluate processes and make decisions than managers or any other of�icially designated leader, and that this collaborative environment will increase productivity, enhance quality, reduce cycle time, and hasten responses to the rapidly changing workplace.

Naturally, the key question is whether SMWTs are actually as good as they sound. In fact, much data supports the SMWT. Sirkin (1993) indicates that SMWTs can produce greater worker satisfaction, reduced costs, improved decision making, and increased market share. SMWTs also share leadership responsibilities, which has been found to increase effectiveness in terms of team performance and team attitudes, especially when the team’s work is complex in nature (Wang, Waldman, & Zhang, 2014). For manufacturing giant Procter & Gamble, SMWTs helped reduce costs by 30% to 50%; for General Mills, they increased productivity by 40% as compared to traditional factories; and for Federal Express, they reduced service glitches by 13% in just 1 year (Fisher, 1993). In a longitudinal study, Banker, Field, Schroeder, and Sinha (1996) found that in the 2 years after their inception, SMWTs in an electromechanical assembly plant were able to improve both quality and labor production.

Despite the continuous parade of success stories, not all companies have been satis�ied with SMWTs. Contrary to expectations, newly formed SMWTs do not instantly and miraculously revolutionize an organization’s business. Instead, members of SMWTs often make a slow transition from their old work style to the new one and sometimes do not adopt the team-based style at all. As Wageman (1997) notes, some members of SMWTs can have trouble adjusting, choosing to “divide their work and do it independently, showing no inclination to join in a collective effort to improve their work strategies, take responsibility for different decisions, or solve problems” (p. 50). Of course, resistance by team members to the SMWT concept will negate the potential bene�its this work format has to offer.

The effectiveness of self-managed teams depends on the degree to which their structure is aligned with the tasks to be accomplished. Structurally aligned teams have higher performance. Moreover, when change is necessary, aligned teams focus on the structural changes that can help them continue to restore alignment and effectiveness. For example, they may implement changes in team members’ roles or reward systems to meet the new demands of their situation. In contrast, structurally misaligned teams tend to focus on changes in processes and personnel. For example, they may blame, remove, or replace members perceived to be low performers, or they may focus on monitoring, evaluating, or adapting the mission, goals, or performance. While these activities are generally valuable, emphasizing them can slow down adaptation and change, which can cause performance to deteriorate (Johnson, Hollenbek, DeRue, Barns, & Jundt, 2013).

Manager-Led Teams The most common type of team is the traditional manager-led team. Here, in contrast to the SMWT, a manager acts as team leader and is responsible for de�ining goals, methods, and functions. The team has little operational input and is responsible only for completing the work outlined by the manager. Examples of

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manager-led teams include military squadrons, sports teams, and assembly-line crews.

Manager-led teams have a number of advantages and disadvantages. On the positive side, the manager has maximum control over team members and the work they perform, which allows the manager to use his or her experience to actively guide the team to optimal performance. The manager can then ensure that the work of team members is adequately coordinated and integrated to reduce duplication and redundancies. At the same time, the manager can work to avoid gaps in team performance as a result of uncompleted tasks. Manager-led teams also encourage team members to spend their energy on work actions instead of the planning, goal setting, managing, and other duties associated with SMWTs. On the other hand, members of manager-led teams may experience less autonomy and empowerment than they would in an SMWT; this can be a serious drawback for workers who value these characteristics. Additionally, an overly controlling team leader may inspire too much conformity, resulting in poor decisions and mistakes that could have been corrected in a more open environment. Overall, manager-led teams are ideally suited for straightforward tasks in which there is a clear goal.

Cross-Functional Teams Suppose an insurance company plans to bring a new disability insurance product to market. Management puts together a team made up of actuarial, marketing, sales, and �inance professionals, along with representatives from support areas such as HR, information technology, customer service, compliance, and the legal department. This team is an example of a cross-functional team, in which representatives of approximately the same hierarchical level from many functional areas of an organization combine forces to solve problems.

Cross-functional teams can be quite powerful because of their ability to leverage the diverse expertise, skills, and abilities from throughout the entire organization. However, they can be problematic, largely because of the amount of time needed for the group to coalesce into a fully functioning team. Because members of cross-functional teams typically do not work together outside of the team, they will need time to build trust and get to know and understand their fellow team members’ diverse perspectives. As you can guess, cross-functional teams are susceptible to con�lict, especially when they are in the early stages of development and are working to de�ine goals and outcomes.

To minimize con�lict, cross-functional teams can appoint a leader to help direct and unify the team as it clari�ies goals and processes at the beginning of the project. However, manager-led cross-functional teams can experience another type of con�lict. Members of these teams now have to report to at least two leaders: the team leader and their functional department leaders. If they are involved in multiple projects, members may need to report to multiple team leaders in addition to their functional leaders. Each individual leader often has different priorities, and each may try to compete for the employee’s time, attention, and expertise.

Consider This: Who Should Be on the Team?

Below are several examples of work projects. Read the description of each project and recommend which type of team is best suited for it. (If a cross-functional team is necessary, note which functional areas should be represented.)

Project 1: A wireless phone provider would like to introduce a new shared plan that would attract a 25% share of the market for family plans over the next 2 years and yield at least 5% pro�it margin above the current margin of existing plans.

Project 2: A chain of physicians’ of�ices would like to update and improve its patient database.

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Virtual teams allow colleagues to interact and collaborate through electronic meetings, e-mail, instant messages, and social networking sites. This enables organizations to draw from diverse talent pools and retain highly skilled employees.

Project 3: A department store would like to implement a new inventory system, called Just in Time, in which it holds limited inventories but develops close relationships with suppliers and links into their inventory systems so that suppliers are signaled to restock items when the store’s inventories hit a certain threshold.

Project 4: A privately held organization is considering going public.

Project 5: A grocery store would like to designate a group of employees to choose items for weekly promotions and design the weekly sales �lyer mailed throughout the neighborhood.

Project Teams Project teams have a number of de�ining characteristics. First, these teams are relatively small. Second, they are temporary and usually disband at the project’s end. Third, they are created for a speci�ic reason and are given a very clear goal to accomplish. Finally, they are led by a project manager, who coordinates the people and materials needed to complete the task. For example, management might assemble a project team composed of a team leader and representatives from each of the major departments in order to plan and implement a company-wide changeover to a new type of �inancial accounting software. This team would exist solely to accomplish its goal and would likely dissolve as soon as employees had transitioned to the new software.

Because project teams exist outside the formal chain of command, they encourage team members to identify with the project, which often leads to high team morale and productivity. Additionally, because project teams typically work toward very clear goals, it is easier to determine their level of success or failure. However, team members continue to perform their regular duties and responsibilities in their own departments and report to their managers within the permanent organizational structure. As with cross-functional teams, project teams can sometimes cause role con�lict if the project workload and schedule are not adequately coordinated with project team members’ permanent roles.

Virtual Teams Virtual teams are groups of individuals who work across time, space, and organizational boundaries and interact primarily through electronic communications (Minton- Eversole, 2012). Up to this point, we have described teams that interact face-to-face. However, technological advancements have made it possible for a physically dispersed team to collaborate via electronic communication. These virtual teams interact and collaborate through electronic meetings, e-mail, instant messages, and social networking sites. Being open to the concept of the virtual team is an increasingly important way for organizations to recruit and retain highly valuable employees who do not want to relocate, and to draw from diverse talent pools for short-term assignments.

According to a recent survey, nearly half of organizations today use virtual teams. However, multinational organizations are more than twice as likely to use virtual teams as U.S.-based organizations (66% versus 28%, respectively). Government agencies are least likely to use virtual teams (9%). Almost 40% of organizations that use virtual teams report increased productivity. Other equally important reasons to use virtual teams include travel cost savings and facilitating global collaboration (Minton-Eversole, 2012).

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However, virtual teams are quite different from traditional teams. The absence of face-to-face interaction creates signi�icant challenges (Driskell, Radtke, & Salas, 2003). For example, research shows that virtual teams using primarily text-based media (e.g., e-mail, instant messaging, or texts) are less likely to build trusting relationships than are virtual teams using media that simulate face-to-face interactions (e.g., Skype or videoconferencing; Bos, Gergle, Olson, & Olson, 2001). Another disadvantage stems from the relative anonymity that exists within the virtual world, lowering inhibitions and making it easier for people to make inappropriate comments or �lamboyant statements they would not normally make in a face-to-face interaction (Sproull & Kiesler, 1991). These types of comments can hurt feelings, impair teamwork, and reduce team performance. As you can see, the biggest challenges for virtual teams are communication and building effective team relations. These challenges alone compromise the effectiveness of over 50% of virtual teams. Other important challenges include time differences, work distribution, cultural differences, and leadership (Minton-Eversole, 2012).

Despite these challenges, the use of virtual teams is a growing trend. Organizations must thus consider how best to implement this type of team and ensure its optimum effectiveness. If possible, organizations should consider having members of the virtual team meet and interact face-to-face prior to entering the virtual environment. Additionally, workers should receive training on how to work in the virtual realm. A survey of 440 organizations found that those companies that implemented such training programs (e.g., learning how to use and communicate effectively with electronic media and how to collaborate in a virtual environment) were more likely to experience success with their virtual teams, reporting them as a positive competitive advantage for their organization (Rosen, Furst, & Blackburn, 2007). The surveyed managers also reported that the traditional methods of communication, goal setting, performance management, reward allocation, coaching, and feedback were not as effective in the virtual environment; they needed to adjust their methods to effectively manage the team.

Similarly, supportive structures and shared leadership are more effective than hierarchical leadership in virtual teams. Keep in mind that being a virtual team is a matter of degree. In today’s networked world, even face-to-face teams interact virtually through e-mail, instant messaging, and conferencing programs such as Skype, GoToMeeting, and WebEx. Similarly, many virtual teams have opportunities for face-to-face interaction. However, the more virtual a team’s interactions tend to be, the more important it becomes for that team to be supported and empowered to make decisions through shared leadership and other participative processes, rather than being led in a traditional, hierarchical manner (Hoch & Kozlowski, 2014; Kirkman, Rosen, Tesluk, & Gipson, 2004).

Consider This: Virtual Project Teams

Think about a recent project you were involved in. It can be a class project, a project at work, or a personal or family project. Identify the tasks and participants involved as well as the timeline for completing the project. Now, imagine completing the same project virtually. If the project is tangible (such as a home improvement project), imagine having to remotely offer guidance to the person or team completing the project on the ground.

Questions to Consider

1. Which communication media would you use? 2. How would each of the tasks be adapted to be more effectively completed? 3. Which of the members of the project team could be remote, and which ones would have to be local? 4. How should the schedule be adapted? 5. What would be some of the advantages and challenges of moving this project to a virtual

environment?

Stages of Team Development

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As previously stated, effective teams do not develop instantly. Over time, groups progress through �ive stages: forming, storming, norming, performing, and adjourning (Maples, 1988; Tuckman, 1965; Tuckman & Jensen, 1977).

Stage 1: Forming. In this initial stage, members are eager to learn about the new team’s purpose, structure, and power. This period of orientation involves members getting to know each other, and it ends when the individuals see themselves as part of a team. Stage 2: Storming. Teams in the storming stage often experience con�lict. This can be something of a shakedown period, with hostility, in�ighting, tension, and confrontation as members attempt to clarify expectations, assign roles, and determine the distribution of power. Not everyone will be happy with the decisions made or roles assigned, and the storming can continue until challenges are resolved. The storming stage ends after the team has established a clear hierarchy and basic assignment of roles. Stage 3: Norming. In the norming stage, the team begins to structure itself by establishing roles and deeper social relationships. Members begin to identify with the team and develop cohesiveness and commitment. Team norms evolve, and members know what behaviors will be acceptable (and unacceptable) to their teammates. Challenges are met with support and advice, and individuals volunteer to assist one another if necessary. Stage 4: Performing. In this stage, the team moves from foundational stages (getting to know each other and setting ground rules and roles) to accomplishing its key tasks. Team members believe they are working for a common purpose and become an ef�iciently functioning unit. The team becomes a well-oiled machine, meeting regularly to discuss successes, address challenges, and brainstorm new opportunities. When working together, each team member has an equal say in the project, and disagreements are discussed and dealt with constructively. Stage 5: Adjourning. For temporary work teams, such as task forces, project teams, and committees, the �inal stage of development is the dissolution of the team at the completion of the project. After meeting one last time to evaluate the project and tie up loose ends, the team members leave the group, having formed important relationships they can build on in the future.

Teams must address each stage effectively, or they risk having to go back and deal with unresolved issues from earlier stages. As you can guess, one of the key goals for managers is to help teams move quickly and successfully through the �irst three stages to the performing stage. This can be tricky, because each team is unique, and some teams spend more time in the early stages than others.

Team Dynamics and Emergence Patterns

Traditional models of team development such as the forming, storming, norming, performing, and adjourning model have been recently criticized for being too static (Cronin, 2015). Teams are dynamic entities that are constantly changing beyond these predictable stages. For example, every time members leave or are added to the team, it may need to get involved in some additional forming, storming, and norming. In today’s dynamic business environment, the “rules of the game” change all the time. When teams face changes in sequence and patterns of events, they can experience unexpected storming that may require �lexibility and frequent renorming. Thus, it is almost impossible to “catch” a team at one particular stage of development. In reality, these stages may be occurring concurrently and dynamically at all times.

Although it makes sense to think of teams as dynamic entities, this poses notable challenges for the scienti�ic study of teams (Cronin, 2015). In general, most researchers take a “snapshot” approach. They collect their data at one or more points in time, analyze it, and make deductions about relationships between the variables they study. Even longitudinal studies that span several years and collect data over time, or experimental studies that use interventions to manipulate some factors and observe their impact on outcomes of interest, are still considered static. They may resemble multiple snapshots, but they are nowhere near a high-resolution video capture of the richness and dynamism of these situations.

Similar to team development stages, team phenomena are also dynamic. For example, the “teamness” of a team emerges over time. As you will learn later in this chapter, teams develop collective characteristics, thought patterns, and emotions that are unique and different from those of the team’s individual members. Therefore, most

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researchers use an “average” approach when they measure team phenomena. For example, it is very common in research studies to measure the level of work engagement of each team member, and then take the average as a representation of team engagement (Harter, Schmidt, & Hayes, 2002). However, the average is not always representative of a team phenomenon. For example, let’s compare the engagement levels of two hypothetical teams. In the �irst team, all members are moderately engaged. In the second team, half the members are highly engaged and the other half are highly disengaged. The average level of engagement in these two teams may be the same, but the dynamics of these two teams are likely to be very different.

To better understand team phenomena, scholars have recommended a number of approaches. One approach is to try to understand some team phenomena, like diversity, in terms of the level of agreement or dispersion across team members. Team diversity is not some kind of “average” that can be taken across team members to represent the team’s level of diversity. Instead, each member’s uniqueness and variability across members are more meaningful representations of team diversity.

Other team phenomena are more appropriately understood in terms of “maximum emergence,” or the team’s highest contributor. For example, in leaderless or self-managed teams, leadership emerges depending on unique characteristics or behaviors of the emergent leader. It is not necessary for every member of the team to exhibit these characteristics, only for one member to be determined as the highest contributor of these characteristics.

Another pattern is “minimum emergence,” where the adage “We are only as strong as our weakest link” applies. For example, one member’s de�icient performance can cause the whole team to fail. Finally, in some cases the average, dispersion, minimum, or maximum do not matter as much as the “pro�ile” or combination of team members’ abilities. In these truly dynamic cases, the mix of team members, like pieces of a puzzle, forms the full picture that determines the team’s effectiveness. Unfortunately, these cases are the hardest to study. However, new scienti�ic research methods have emerged to study such complex phenomena and show substantial promise in shedding additional light on team dynamism (Chan, 1998; Kozlowski, Chao, Grand, Braun, & Kuljanin, 2013; Kozlowski & Klein, 2000).

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9.3 Effectiveness of Teams

The extensive study of teams has resulted in a better understanding of why some are more effective than others. One of the most frequently cited conceptualizations of team effectiveness originates from a systems perspective, which proposes that the team works as a system: Team inputs lead to team processes, which in turn lead to team outcomes (Williams & Allen, 2008). As shown in Figure 9.1, this input-process-outcome model provides an effective heuristic for understanding team effectiveness (McGrath, 1964).

Figure 9.1: Input-process-outcome model of team effectiveness

Team Task Design

Hackman and Oldham’s (1976) job characteristics model (see Chapter 6) was designed to show how individual-level jobs could be enriched to improve both individual and organizational outcomes. Interestingly, it appears that many of these techniques apply not only to individual workers but to teams of workers as well. Additionally, concepts from the job characteristics model could explain team member motivation and effectiveness.

Like individual tasks, team tasks are more motivating if they possess the �ive job-design characteristics: skill variety, task identity, task signi�icance, autonomy, and feedback. The basic nature of the work team tends to promote these characteristics: Team tasks provide variety because they require workers to use many different skills and learn new skills; they provide task identity because team members usually work on tasks from start to �inish; and they provide signi�icance because teams usually work on projects that are important for the organization. Additionally, members of all effective teams enjoy some autonomy in deciding how to handle their assigned tasks. Finally, the overall success or failure of the team’s �inished product provides the team with feedback about its performance. The �ive job-design characteristics should motivate members not only to perform well on the team task but also to cooperate with the other team members (Campion, Medsker, & Higgs, 1993).

Team Composition

A major driver of a team’s effectiveness is its composition. Forming a team, however, can be complicated—not only because the organization must consider the various attributes workers will need, but also because of the manner in which those individual attributes should be con�igured (Levine & Moreland, 1990). Although researchers have investigated the ways in which a number of different characteristics affect team performance, four have been found to have the greatest in�luence: member personality, member cognitive ability, team diversity, and team size.

Personality

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Personality has been found to have an effect on both individual employee and team performance. Although all of the Big Five personality variables (extraversion, conscientiousness, agreeableness, openness to experience, and emotional stability) have shown some relationship to team performance, agreeableness and emotional stability show the strongest relationship (Bell, 2007; Peeters, Van Tuijl, Rutte, & Reymen, 2006). As you might expect, teams composed of emotionally stable individuals are more successful than those composed of emotionally unstable individuals. A more interesting inverted-U-shaped relationship exists between team performance and agreeableness: Teams are less effective both when team members have a high level of agreeability and when they have a low level of agreeability (see Figure 9.2). Highly agreeable team members usually get along, but they may not want to challenge each other suf�iciently to explore new options. Team members with low levels of agreeability, on the other hand, may have too much con�lict, which can be dysfunctional. A moderate amount of con�lict tends to be most effective; hence the inverted-U-shaped relationship. Teams have also been found to bene�it differentially from team con�lict based on the prevalent personality traits of team members. For example, con�lict tends to enhance performance in teams with higher emotional stability and openness to experience but tends to have a negative effect on performance in teams that have lower levels of these personality traits (Bradley, Klotz, Postlethwaite, & Brown, 2013). Similarly interesting is the role of conscientiousness in promoting teamwork quality. Vır̂gă and colleagues (2014) found that conscientiousness buffers the harmful effects of relationship con�lict on teamwork quality.

Figure 9.2: Inverted-U-shaped relationship between team performance and agreeableness

In addition to Big Five personality characteristics, two other personality traits have an important in�luence on team effectiveness: tolerance for ambiguity and the need for autonomy. Because teams often solve problems or perform new tasks for which no clear solution, organization, or method has yet been established, people who have a low tolerance for ambiguity tend to �ind working on teams frustrating and unful�illing and are thus less motivated to embrace this type of work environment (Kirkman & Shapiro, 2001). A person’s relative need for autonomy is also important to team dynamics (Kirkman, 2000). Workers who have a high need for autonomy tend to �lourish on teams because they have more freedom and independence to develop and implement their own ideas.

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Consider This: Teams and EI

A recurring theme of this text is the importance of EI in the organizational context. Read the following article from the Harvard Business Review for a discussion on the importance of EI for teams.

Building the Emotional Intelligence of Groups (https://hbr.org/2001/03/building-the-emotional- intelligence-of-groups)

Questions to Consider

1. Why is it important for teams to build EI? 2. How does team EI differ from individual EI?

Cognitive Abilities An individual’s cognitive ability is the strongest single predictor of job success (see Chapter 3). This result also appears to hold true in the team work environment. A meta-analytic study conducted by Stewart (2006) found that the average cognitive ability of a team’s members is strongly related to team performance, regardless of task type. Even though it appears that, in most cases, high-ability teams have a signi�icant advantage over lower ability teams, higher cognitive ability may not be an advantage in some situations. For example, if the task is simple, high-ability teams are likely to lose interest or become bored. Conversely, lower ability teams confronted with the same task will remain focused, regardless of whether they are intellectually stimulated. Therefore, organizations should save their high-ability teams to work on the most challenging and complex assignments.

Team Diversity Within the workplace, diversity is popularly believed to positively increase team effectiveness. However, researchers have discovered that surface-level demographic diversity, such as race, gender, and age, can have a negative effect on team performance (Mannix & Neale, 2005). Apparently, demographic diversity can disrupt team communication and cohesion while also increasing member con�lict (Mohammed, Cannon-Bowers, & Foo, 2010), at least initially, although these effects tend to dissipate over time (Chatman & Flynn, 2001).

On the other hand, more recent studies demonstrate that the relationship between demographic diversity and organizational performance is not linear; it is instead industry speci�ic and depends on organizational strategy. For example, gender and racial diversity have been shown to have a nonlinear relationship with organizational performance, moderated by two dimensions of the organization’s strategy: entrepreneurial orientation and risk taking (Richard, Barnett, Dwyer, & Chadwick, 2004). A study of the banking industry also showed that racial diversity can have a positive effect on organizational performance when banks pursue an innovative strategy but a negative effect in banks that are low on innovation (Richard, McMillan, Chadwick, & Dwyer, 2003). Overall, meta- analytical �indings show that culturally diverse teams gain from increased creativity and satisfaction but realize losses due to increased task con�lict and decreased social integration; net gains or losses depend on the context (Stahl, Maznevski, Voigt, & Jonsen, 2010).

Whereas demographic diversity can challenge a team’s effectiveness, task-related diversity tends to improve it. Teams whose members represent a variety of educational backgrounds, experiences, tenure, skill sets, and so forth have been shown to be more effective than teams with less task- related diversity (Horowitz & Horowitz, 2007). As is the case

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Culturally diverse teams pro�it from increased creativity, effectiveness, and satisfaction.

with demographic diversity, the signi�icance of task-related diversity may also depend on the type of task the team is assigned. Speci�ically, teams with low task-related diversity perform better on low-dif�iculty tasks but worse on high- dif�iculty tasks (Bowers, Pharmer, & Salas, 2000).

Similar to task-related diversity, Liang and colleagues (Liang, Liu, Lin, & Lin 2007) found that the knowledge diversity of team members was positively related to team performance. On the other hand, they found that value diversity was related to relationship con�lict and, in turn, lower team performance. This is especially relevant in today’s local and global business environments, given increasing cultural diversity. Cultural diversity can be manifested in terms of varied values and beliefs, which can be challenging to reconcile. However, research shows that cultural diversity can enhance performance when team members’ goals are focused on

learning, rather than just on performance. Although performance is important, overemphasizing it can lead to what are called avoidance goals, which emphasize tried-and-true processes and avoiding mistakes. On the other hand, a learning orientation results in what are called approach goals. Approach goals encourage pursuit of new challenges and exploration of new solutions, which can reduce con�lict, encourage collaboration, promote information sharing, and enhance team performance (Pieterse, Van Knippenberg, & Van Dierendonck, 2013).

Team Size Determining how many people to include on a team can be critical to its overall success. Leaders often choose to follow the maxim “The more, the merrier,” believing that greater input will result in more accurate decisions and better results. However, too many people on a team can impair team performance, reduce cohesiveness, increase con�lict, and interfere with coordination. Research suggests that the most effective teams are made up of �ive to nine members who possess the combination of KSAOs required to solve the problem (Thompson, 2003). In general, it is best for managers to create teams with the smallest number of workers needed to get the job done.

Context for Team Success

Many contextual factors, such as support, rewards, and culture, play a signi�icant role in a team’s success or failure. As Richard Hackman (1999) explains, “There are no free-standing groups, as each is embedded in several larger contexts—whether they be the organization, its environment (e.g., marketplace or industry), or the wider culture in which the team operates” (p. 238).

Support Organizations can send mixed messages about their support for teams and their tasks. When managers say that they value their teams but do not give them the autonomy to make their own decisions, this suggests that management is not really on board with the team concept (Mathieu, Gilson, & Ruddy, 2006). The actions taken by the organization to either support or restrict teams will in�luence the way team members feel about their team, its goals, and their participation on it.

Rewards Typical performance appraisals and compensation programs are designed for individuals and do not work within a team-based environment. Organizations need to modify their systems to evaluate both individual- and team-based behaviors and performance outcomes (McClurg, 2001). Including incentives and rewards that relate to team

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performance will encourage team members to concentrate on team outcomes and shift their focus from personal to collective work and accountability.

Culture Some researchers have suggested that a country’s culture may affect team performance, with four cultural characteristics being especially in�luential: collectivism, power distance, a “doing” orientation, and determinism (Nicholls, Lane, & Brechu, 1999; Kirkman & Shapiro, 2001). As discussed in previous chapters, collectivist societies (such as many in Asia) emphasize the harmony, success, and needs of the group over personal needs and desires. Thus, teams should be more successful in these societies because workers already have much experience working as part of a group and, because of cultural norms, will be less likely to instigate competition within the team. In contrast, individualistic cultures emphasize the success and goals of the individual, so teams can be more challenging to implement. In individualistic cultures, it is particularly important to promote teamwork through team rewards and job design in order to align individual and team goals. If jobs continue to be designed and rewarded based on individual achievement, as is the case in many U.S. organizations, teams can be unsuccessful; team goals tend to con�lict with individual goals, which can reduce team members’ commitment to team goals.

Power distance is the relative importance cultures place on hierarchical structure, authority, and acceptance of unequal distribution of power. Cultures with high power distance—in which leadership leans toward or is openly totalitarian and subordinates expect speci�ic instructions and guidance on work tasks—may have more dif�iculty implementing successful teams, because workers may be unfamiliar or uncomfortable with the higher levels of autonomy and task ambiguity inherent in the team work concept.

Cultures that promote and appreciate a high “doing” orientation should have more success implementing team work models than cultures that are more appreciative of re�lection and contemplation. Americans have a very high doing orientation—we idealize the go-getter at work, admire people who take the initiative, characterize children who are bold and outspoken as leaders, and become frustrated with coworkers who can’t multitask. Everything is in constant motion and done for a purpose; we often judge others (or ourselves) as lazy or frivolous for taking time to think, re�lect, or talk about nothing in particular. Organizations expect their teams and the people on them to meet deadlines, take action, think proactively, speak up, and be ef�icient.

Finally, determinism, or the degree to which people believe they control what happens in their lives, can impact team effectiveness. Some cultures perceive their environments as unchangeable and their positions and duties as �ixed and determined by others. These highly deterministic cultures may not be as successful in implementing teams as cultures in which people feel they have the power to address problems and improve their situation. It makes sense to predict that, in order to be successful, team members need to believe that their work is meaningful and will solve the problem.

Consider This: Too Much of a Good Thing?

1. When might a high doing orientation be detrimental to a team? Can you think of a speci�ic task or situation that would be better served by a team that is more contemplative?

2. Can you think of speci�ic tasks or situations where individualism, determinism, and/or high power distance can be conducive to effective team dynamics? What about a task or situation where collectivism, low power distance, and/or low determinism can compromise the team’s effectiveness?

Team Cohesion

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Team cohesion is the tendency for a team to stick together and remain united in the pursuit of its objectives (Carron, Brawley, & Widemeyer, 1998). The notion that closely knit teams are more effective than those that are more loosely bound is so widely held that most team-training programs include segments with the speci�ic goal of enhancing team cohesion (Healy, Milbourne, Aaronson, & Errichetti, 2004). It is surprising, then, that research does not de�initively support this belief. A classic study by Schachter and his associates (Schachter, Ellertson, McBride, & Gregory, 1951) revealed an interesting set of relationships between team cohesion and performance. Cohesion was associated with higher productivity when the environment was positive but with lower productivity when the environment was negative. In other words, cohesion acted as a double-edged sword. In positive work environments, cohesion can magnify the functional dynamics that lead to higher productivity, but in negative work environments, cohesion can exacerbate negative behaviors and further compromise performance.

A meta-analytical study by Mullen and Cooper (1994) found that team cohesion has only a weak effect on team performance, though the relationship tends to be stronger for small teams than for larger ones. However, in a more recent comprehensive study, the relationship between team cohesion and performance was found to be reciprocal and to grow over time. In other words, this relationship becomes stronger the longer a team works together, and the more cohesive a team becomes, the better it performs (Mathieu, Kukenberger, D’Innocenzo, & Reilly, 2015). Other research has shown a stronger relationship between team cohesion and performance when teams exhibit high interdependence (Gully & Devine, 1995). Interestingly, although there is some debate about whether team cohesion directly affects overall team performance, it does seem to have an effect on speci�ic aspects of performance. For example, Beal, Cohen, Burke, and McLendon (2003) found that team cohesion is a strong predictor of team performance on behavior and ef�iciency measures but not on effectiveness measures. Finally, cohesive teams are more likely to accept group goals, decisions, and norms, which can help improve a team’s overall functionality.

Team Processes

A cohesive team is able to produce work that is greater (in quantity, creativity, innovation, ef�iciency, etc.) than the sum of the work its members can produce independently. This effect, called synergy, is one of the major reasons organizations are attracted to the team work concept. But how do teams create synergy, and what can organizations do to promote it? In a nutshell, synergy evolves through the development and accrual of interpersonal interactions, also called team processes, including information sharing, con�lict, collective ef�icacy, goal setting, and shared mental models.

Information Sharing Information sharing is one of the most fundamental team processes. Whether it occurs within the team (during team meetings, breakout sessions, etc.) or outside the team (one team member calling another for help while working on an individual component of the project), communication will positively impact team performance (Barry & Stewart, 1997). If a team member hoards data or keeps key information secret in a bid for power or self-promotion, the whole team—and the project itself—suffers, because the other team members must waste precious time and resources hunting for information they should already be putting to use. One way to improve a team’s level of information sharing is to increase its task-related diversity (using members who represent a variety of educational backgrounds, experiences, tenure, skill sets, etc.; Drach-Zahavy & Somech, 2001).

Con�lict Another team process that affects team performance is con�lict. The term con�lict often carries a negative connotation, suggesting dysfunction, interpersonal challenges, and hostility. With teams, however, there is a difference between con�lict that arises in the course of working on the task, called task con�lict, and con�lict that stems from interpersonal disagreements between team members, called relationship con�lict. Relationship con�lict is usually detrimental to a team’s effectiveness. Although a certain amount of task con�lict occurs in even the best teams, research demonstrates that it does not facilitate positive team performance (De Dreu & Weingart, 2003). Successful teams take steps to manage con�lict by (a) proactively setting ground rules for dealing with disagreement and (b) transforming con�lict into competition (Alper, Tjosvold, & Law, 2000).

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Collective Ef�icacy Effective teams believe in themselves and have con�idence they will be successful, a characteristic known as collective ef�icacy (Marks, Mathieu, & Zaccaro, 2001). Collective ef�icacy has been de�ined as “a group’s shared belief in its conjoint capabilities to organize and execute the courses of action required to produce given levels of attainments” (Bandura, 1997, p. 477). This collective ef�icacy develops in teams over time as they share small successes, and each success serves to make the team believe it will be successful in the future (Tasa, Taggar, & Seijts, 2007). Extensive research has shown that collective ef�icacy is positively related to team performance (Gully et al., 2002; Stajkovic et al., 2009).

Ef�icacy is not the only psychological resource that can emerge at the team level. Research supports the emergence of other positive psychological resources in teams and organizations, such as compassion and resilience (Hamel & Välikangas, 2003). Similar to the many synergies experienced in larger groups, these positive characteristics are more than the sum of their individual parts. For example, a resilient team is not simply a team that is composed of resilient individuals. When resilience occurs at the collective level, it takes on unique characteristics such as resilient systems and practices. Similarly, team emotions take on unique characteristics that are in�luenced by, and in turn in�luence, the emotions of team members (Barsade & Gibson, 2014).

Goal Setting Effective teams also use goal setting to translate the common purpose of the group into speci�ic, actionable goals and then devise strategies to accomplish them. Just as they do with individuals (see Chapter 8), speci�ic and challenging goals lead to improved team performance and help focus the team’s effort in the right direction. Additionally, such goals have been found to raise a team’s levels of energy and effort, which leads to high performance (Weldon & Weingart, 1993). To be effective, teams should articulate speci�ic goals that both challenge their capabilities and include a de�ined deadline.

Shared Mental Models Much recent attention has been paid to the ability of team members to apply a shared understanding of how the team’s work will be done. Teams that are able to construct shared mental models of team processes, tasks, and roles are more likely to outperform teams that construct highly divergent mental models (Mohammed & Dumville, 2001). Teams that share mental models bene�it from fewer misunderstandings among members, which promotes rapid coordination, reduced con�lict, and ultimately, more time spent performing the task (Williams & Allen, 2008). On the other hand, teams whose members have divergent ideas on how to complete the assigned task will likely struggle to get work done, because they will spend more time arguing than actually doing their job.

Social Loa�ing and Free Riding Two of the most detrimental team processes are social loa�ing and free riding, which occur when a member or members of a team coast through a project, letting others do the brunt of the work. Social loa�ing and free riding both lead to process losses within groups; however, social loa�ing is a less deliberate reduction in individual effort. Free riding, on the other hand, occurs when an individual believes others will pick up the slack, so he or she does less work (Forsyth, 2010). Social loa�ing and free riding are more common when individual contributions are not easily identi�iable. Therefore, teams can reduce social loa�ing and free riding by making each member of the team accountable to an identi�iable segment of the work effort. By proactively setting both individual and team tasks, the team will ensure that everyone takes an equal share of the work—and enjoys an equal measure of the team’s success.

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Consider This: Social Loa�ing

Social loa�ing is a common problem in teamwork. For example, one team member may not show up for meetings on time or perform the tasks assigned to him. Another team member may do minimal work and depend on the rest of the team to carry her through the project.

Questions to Consider

1. Review your experiences of being part of a team (at work, in school, on the playing �ield, or elsewhere). Were any of your team members (or you!) guilty of social loa�ing?

2. What did your team do, if anything, to address loafers? 3. What could you or your team have done differently to prevent loa�ing?

High-Performance Work Teams Some teams have been found to exhibit exceptionally high levels of effectiveness. These teams are referred to as high-performance work teams. These teams possess a combination of the factors discussed throughout this chapter. Riggio (2011) identi�ies 10 practices of these types of teams:

1. De�ine and create interdependencies. 2. Establish goals. 3. Determine how teams will make decisions. 4. Provide clear and constant feedback. 5. Keep team membership stable. 6. Allow team members to challenge the status quo. 7. Learn how to identify and attract talent. 8. Use team-based reward systems. 9. Create a learning environment. 10. Focus on the collective mission.

A study by MIT’s Human Dynamics Lab (Pentland, 2012) shows that highly effective teams tend to communicate more frequently and intensely than a typical team, not only in terms of the content communicated, but also in terms of voice tone and body language. Highly effective teams display a lot of energy and engagement when communicating with team members and often take the opportunity to communicate outside the team and bring back valuable information and new perspectives. Communication also tends to be short, focused, and spread equally among team members. Interestingly, effective teams tend to engage in a lot of side conversations, about 50% of the time. This contradicts conventional wisdom, in which side conversations are considered disruptive and usually discouraged.

Find Out for Yourself: Teams at Whole Foods

Whole Foods, an American supermarket chain, is recognized for its unique structure, which is designed entirely around teams, from the front lines all the way to the top of the organization, including the founders. Read this article to gain insights into how Whole Foods uses teams to increase the quality of hiring and in turn how high-quality teams can improve the performance and effectiveness of the organization.

Why Whole Foods Builds Its Entire Business on Teams (http://www.forbes.com/sites/davidburkus/2016/06/08/why-whole-foods-build-their-entire-business-on-

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teams/#7175c0fe483d)

What Did You Learn?

1. What strikes you as most distinctive about Whole Foods’ team-based structure? 2. Why do you think Whole Foods’ team-based structure is conducive to high-performance work teams? 3. What are the most important factors within the organization’s structure and culture that cause this

team-based structure to work? Consider aspects of job design, recruitment, selection, performance appraisal, and reward systems.

4. Do you think you would personally enjoy working for Whole Foods? Why or why not?

Consider This: Models of Team Effectiveness

Over the years, many models of team effectiveness have emerged. Of course teams are unique, and no one model can capture all of their characteristics and success criteria, so it is helpful to examine multiple models. I/O psychologist Kenneth De Meuse (2009) summarizes and compares some of these models in the following article.

A Comparative Analysis of the Korn/Ferry T7 Model With Other Popular Team Models (http://www.kornferry.com/media/lominger_pdf/teamswhitepaper080409.pdf)

Questions to Consider

1. What are the most notable similarities between the models discussed in this article? 2. What are the most notable differences? 3. Did you observe any consistencies, inconsistencies, or trends between older and newer models? Why

do you think that’s the case?

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9.4 Decision Making in Teams

“Two heads are better than one.” This common saying describes the essence of team decision making, a process in which multiple individuals act collectively to analyze a problem and select a solution or solutions that best address the problem. There are, of course, advantages and disadvantages of team decision making as well as practical techniques to help teams make better decisions.

Concepts in Action: Decision-Making and Teamwork

Management expert William G. Ouchi talks about the challenge of creating an environment that values teamwork, which is critical if decisions are to be reached by consensus.

Advantages of Team Decision Making

There are a number of reasons why organizations utilize teams. Because teams are able to leverage more resources, such as KSAOs, time, and energy, they are able to generate more complete knowledge and information to use in the decision-making process. Additionally, team decision making can take advantage of the diverse strengths and expertise of its members, which enables the team to generate more, higher quality alternatives. As a result, teams are often more likely than a single individual to reach a superior solution.

Another bene�it of team decision making has to do with the way people accept solutions to problems, especially dif�icult ones. Teams develop a collective understanding of the chosen course of action, which promotes a sense of ownership of the decision. Team members can say, “We made this choice,” instead of, “Someone made this choice for us,” so they are more likely to support the decision, commit to it, and encourage others to accept it.

Disadvantages of Team Decision Making

Although teams hold great potential for performing superior work and producing superior results, potential pitfalls do exist. Generally speaking, team decision making is more time consuming than individual decision making, which makes it dif�icult, if not impossible, to use when decisions need to be made quickly. Additionally, teams can fall prey

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NASA

Groupthink has contributed to some of the most damaging decision-making failures in American history, including the 1986 catastrophe involving the Challenger Space Shuttle.

to a domineering team member, which, if the member is of low or medium ability, can result in poor outcomes. Finally, conformity pressures can in�luence team decisions, leading to group polarization and groupthink.

Group Polarization Team decision-making situations almost always involve some degree of risk or uncertainty. Research has found a tendency for group polarization, or convergence on extreme positions on either side of an issue. For example, the risky shift phenomenon occurs when, after discussion, a team makes decisions that are riskier than those advocated by individual team members. The cautious shift, on the other hand, occurs when discussion prompts teams to make decisions that are more conservative than those originally proposed by individual members (Isenberg, 1986; Stoner, 1968). Why does this polarization occur? In both cases individuals propose various ideas, and then the entire team engages in discussion. Discussion can prompt individuals to generate more and more information in support of their preferred solution, resulting in an ever more polarizing game of one-upmanship. Caught in a desire to support one side or defeat another, team members feel pressure to take sides, and polarization escalates until the �inal solution is much more extreme than anything originally intended. Another possible reason for group polarization is accountability and responsibility. Individuals sometimes choose to acquiesce to an extreme decision instead of continuing to work on a tough challenge, because if the action fails, they can shrug and say, “Well, I told you that would never work. It’s your fault, not mine!”

Groupthink One of the most serious and detrimental disadvantages of team decision making is groupthink. In his 1972 book, Victims of Groupthink, Irving Janis describes this phenomenon as the “deterioration of mental ef�iciency, reality testing, and moral judgment resulting from in-group pressure” (p. 9). Groupthink occurs when views dissenting from the majority opinion are suppressed and alternative courses of action are not fully explored.

Groupthink has been the main driver of some of the most damaging decision-making failures in American history. The disaster of the Space Shuttle Challenger is a tragic example of how social pressure and conformity lead teams to make poor decisions. In response to heavy demands to meet strict launch timelines, NASA of�icials chose not to spend time investigating their engineers’ concerns about the potential for O-ring failure and proceeded with the scheduled launch, resulting in the shuttle’s destruction and the death of all its crew members (Moorhead, Ference, & Neck, 1991).

There are many reasons why teams fall victim to groupthink (see Figure 9.3). Teams with high cohesiveness are more likely to experience groupthink, as are those with members who place a high value on consensus and a need for approval. Such teams make a collective effort to rationalize and discount potential warning signs. Additionally, teams that isolate themselves from or do not look for con�licting sources of information begin to believe that the lack of dissenting information is proof that their solution is the best one. The most common cause of groupthink, however, is a charismatic or powerful leader who champions a speci�ic idea or solution. In such situations, the other team members feel social pressure to censor their ideas, align themselves with the leader, and avoid questioning the leader’s direction. To address this issue, Janis (1982) developed �ive practical steps teams can use to help avoid the groupthink trap:

1. Team leaders should explicitly encourage dissent and criticism. 2. Team leaders should gain participation from all members before stating their own opinion. 3. Team members can create a separate team with its own leader to tackle the same problem.

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4. Team members should ask trusted advisors to provide feedback on the team’s decision-making process and to challenge the team’s decisions.

5. Team members should appoint one person to serve as devil’s advocate, who purposefully takes the contrary perspective.

Figure 9.3: Groupthink

Adapted from Decision Making: A Psychological Analysis of Con�lict, Choice, and Commitment, by I. L. Janis and L. Mann, 1977, New York, NY: Free Press.

Each of these techniques legitimizes the value of disagreement in the decision-making process and helps teams capitalize on the fact that dissenting perspectives reduce conformity and groupthink.

Over the decades, some of the underlying assumptions of Janis’s theory have been questioned by scholars who have noted that groupthink can actually be related to positive performance outcomes. Team activities were found to be more important predictors of team performance than groupthink alone (Choi & Kim, 1999). Some research even negates the existence of groupthink, in essence casting doubt on the concept (Grossman, 2011). Ironically, this would actually make the idea of groupthink, which has been supported for decades by scholars and practitioners alike, a clear example of groupthink! However, these more recent �indings do not negate the importance of Janis’s practical steps, outlined above, to ensure that team members engage in productive activities.

Team Decision-Making Techniques

There are numerous techniques teams can employ to help them make better decisions. Two of the most common team decision-making methods are brainstorming and the nominal group technique.

Brainstorming Brainstorming is a process in which team members attempt to increase the number and creativity of solutions by verbally suggesting ideas or alternative courses of action. A typical brainstorming session is relatively unstructured and begins with the leader describing the problem. Team members then generate as many solutions as possible for a given amount of time. No criticism or evaluation is allowed; all ideas, no matter how unusual, are recorded. Once the time has expired or the group members have run out of ideas, the group begins evaluating the utility of each of the suggestions.

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Although brainstorming tends to generate an abundance of possible solutions, it is an inef�icient way to solve problems. Research consistently shows that individuals working alone can generate more solutions than a brainstorming group. Production blocking, which occurs when individual participants lose their train of thought and become cognitively blocked, limiting their potential to share, is one reason (Kerr & Tindale, 2004). Another is individual team member shyness. Finally, some team members may keep controversial or unusual ideas to themselves due to fear of being personally judged by other group members. Thus, even though brainstorming is a popular and much used technique, it is �lawed.

Nominal Group Technique The nominal group technique has been shown to produce much better results than brainstorming. This method is a structured decision-making process in which team members generate ideas on their own, without any interaction, and then bring their ideas to the entire group to be evaluated. The process involves four steps:

1. Prior to group discussion, each individual composes a comprehensive written list of ideas or proposed alternatives.

2. Individuals gather as a team and present, in turn, one item from their list until all ideas or alternatives have been presented and recorded. No discussion occurs at this point.

3. The team discusses the ideas for clarity. 4. Each team member privately puts the ideas in rank order. The solution with the highest aggregate ranking is

chosen.

The nominal group technique has a number of advantages over brainstorming. First, it has been shown to produce more effective decisions (Faure, 2004). Second, the pressure to conform is limited, because members work independently. And third, because ideas are presented and recorded in an orderly fashion, production block is reduced. Thus, if you ever have the option of choosing between brainstorming and nominal group technique to make an important team decision, you would be better served by the latter.

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9.5 When Teams Are a Bad Idea

Organizations have become enamored with teams—not because they are necessarily the best way to increase productivity but because “everyone” is using them. However, in certain situations, teams can be a big mistake. For example, creating cohesive teams takes a considerable amount of time and effort. When speed is essential, new, inexperienced teams may make more blunders than they are worth (Staats, Milkman, & Fox, 2012). Additionally, teams put a big burden on team members and leaders to share information, manage con�lict, and solve complex problems, which can lead to team members’ frustration and burnout.

Speci�ic conditions do exist under which only teams should be used. For example, when tasks are highly interdependent, employees are required to collaborate in order to perform their jobs. An example of highly interdependent jobs is a surgical team: Nurses, doctors, technicians, and specialists each rely on communication with and the complementary skills of the others to complete a successful operation. These individuals must work as a team or risk the safety of their patients.

On the other hand, if jobs are relatively independent or sequential, teams can add an unnecessary layer of coordination that can be impractical and time consuming. For example, a large transportation company decided to implement teams across most of its operations. The implementation process was torturous, especially for drivers who are on the road most of the time, but senior management persisted and demanded that all operations should convert to the new team design. Sacri�icing road time to attend team meetings was costly to the organization and frustrating to the teams, who complied with the changes but without any real engagement or commitment to the new design. Deliveries became chronically late, customer complaints increased, turnover skyrocketed, and the initiative was abandoned within 1 year.

Before rushing into implementing the team concept, organizations must assess whether the problem is better addressed with individual or collective effort. Are multiple individuals required to complete the task? If so, organizations must then determine the complexity of the project. Teams are best suited for situations that are challenging and complex, whereas simple problems that require limited input and information sharing should be left to individuals.

Teams are often viewed as a universal remedy within the organization. They can, however, be overused and poorly designed, and they are almost always a bad idea when they are not needed. Ultimately, it is important that organizations use teams only when there is true interdependence between team members and the task requires leveraging their diverse skills.

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9.6 Collective Positivity: Can Positivity Be Contagious?

Positivity can bene�it not only individuals, but also groups and organizations. Research shows that positivity as well as negativity can be contagious. Encounters with positive individuals can lift our spirits and make us more positive and energetic. On the other hand, interactions with negative individuals can make us feel down, defeated, or discouraged. These �indings were revealed in a fascinating set of experiments in which a trained actor was embedded in groups assigned to negotiate the distribution of a limited bonus pool across their departments. Regardless of the intensity of the emotions expressed by the actor, or even the degree of pleasantness of the actor to the other members, positive mood expressions produced a ripple effect that shaped the group’s interactions, improving cooperation and group performance and decreasing group con�lict (Barsade, 2002).

The contagious effects of managers’ positive emotions and moods on their employees have also been demonstrated as a mechanism for effective leadership (Barsade & Gibson, 2014; Bono & Ilies, 2006). Positivity should therefore be taken into consideration when forming teams, selecting team leaders and members, and training employees to become effective contributors to their teams. Leadership styles also affect team functioning beyond their effects on individual performance. For example, although LMX quality (see Chapter 7) is generally positively related to employee performance at the individual level, bimodal LMX differentiation (treating team members differently based on their classi�ication into an in-group and out-group) has a negative effect on team coordination and ultimately causes the team’s �inancial performance to suffer (Li & Liao, 2014).

However, just selecting positive individuals will not automatically make a positive team or organization. Positive organizing is also needed, in which the organization’s context, processes, and outcomes also become more positive in order to facilitate positive organizational phenomena (Cameron & Caza, 2004). For example, as discussed earlier, team members need to build collective ef�icacy, a shared belief in their joint abilities to achieve their goals (Bandura, 1997). However, collective ef�icacy is not the sum of the individual ef�icacies of the team members. In fact, if team members possess extremely high levels of ef�icacy, they may become overcon�ident, which may hinder their motivation or desire to collaborate with other team members. Therefore, for collective ef�icacy to develop among team members, trusting relationships, open communication, and information sharing may be more important than the individual ef�icacy of each team member.

Recently, there has also been an increasing interest in organizational resiliency, or the ability of an organization to survive and recover from crises. Again, however, organizational resiliency is not the same as individual resiliency. A resilient organization (or group) does not necessarily make its members more resilient, nor does a resilient group of individuals necessarily make a resilient team or organization. In fact, the processes leading to individual resiliency may sometimes be detrimental for groups and organizations. For example, individuals may bounce back from adversity at the expense of others, using coping mechanisms and strategies that resemble survival of the �ittest (Coutu, 2002), which are not conducive to team or organizational resiliency. On the other hand, the dynamic processes that help teams adapt to change and recover from crises need to go beyond the capabilities and limitations of any one individual. These processes include �lexibility, ability to learn and evolve, and norms of respectful interaction (Weick, 1993).

Consider This: A Recent Crisis or Challenge

Think about a challenging situation that you have recently faced and successfully overcome in the context of work, family, or social relationships.

Questions to Consider

1. How did you overcome the crisis or challenge you faced? 2. To what extent did you do it alone? What were some of the personal resources you drew upon? 3. To what extent did you get help from others? What were some of the ways others contributed to your

success in overcoming this crisis or challenge?

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4. In hindsight, which aspects of the situation were best handled alone, and which aspects should have been handled with the help of others? Use the knowledge you gained from this chapter to explain your answer.

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Summary and Conclusion

Currently, many organizations are focusing heavily on groups and teams to solve dif�icult and complex problems. However, the team outcomes show mixed results. First, not all tasks and projects lend themselves to teamwork. Second, just because a group of individuals are assigned a common goal does not mean that they will function as a team and realize the synergies expected from teamwork. Numerous individual, group, organizational, and contextual factors will shape the dynamics of the group and make it more or less effective. Managers are strongly advised to consider those factors and thoroughly analyze them, rather than just choosing to design operations around teams simply because everyone else in their industry is doing the same. If analysis reveals that teams are the correct approach, then many factors discussed in this chapter should be evaluated and adopted in order to facilitate teamwork, motivate team members, promote positive team dynamics, and ultimately increase teams’ effectiveness within the organization.

Chapter 9 Flashcards

Key Terms

brainstorming

cautious shift

collective ef�icacy

collectivist

cross-functional team

determinism

“doing” orientation

free riding

Choose a Study ModeView this study set

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group polarization

groupthink

manager-led team

nominal group technique

power distance

production blocking

project teams

relationship con�lict

risky shift

self-managed work team (SMWT)

shared mental model

social loa�ing

synergy

task con�lict

team cohesion

virtual teams

work group

work teams

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Learning Outcomes

After reading this chapter, you should be able to

Describe the three components of employee attitudes.

Discuss the causes and effects of employee attitudes on performance and behavior.

Compare and contrast how workers from different generations view work.

Explain how stress impacts employee performance.

Discuss the factors that affect employee health, safety, violence, and stress.

Identify emerging perspectives on organizational health and well-being.

Describe how positivity in�luences worker happiness, health, and success at work.

10Health and Well-Being

Creatas Images/Thinkstock

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10.1 The Importance of Employee Well-Being

Employers in the United States and worldwide are becoming increasingly aware of the importance of having healthy employees and maintaining a workplace that is conducive to employee health and well-being. While the focus of research in this area has traditionally been on the bene�its of reducing insurance costs, this section will also cover the nonmonetary bene�its to both employees and organizations.

Reducing the Cost of Health Care Bene�its

According to a study conducted by the U.S. Chamber of Commerce in 2007, more than 168 million Americans received health insurance through their employers. This substantial number indicates the signi�icant value employers place on their employees’ health, as well as employees’ expectation that their employers will provide such bene�its.

However, the costs of health care bene�its have skyrocketed. For example, the 2011 annual national survey by the Kaiser Family Foundation and the Health Research & Educational Trust showed that, on average, insurance premiums have more than doubled since the previous decade, from $7,061 to $15,073 per employee for family coverage. Although some employers have tried to absorb as much of the added cost as possible, the substantial increases in costs coupled with the economic recession has made cost containment challenging. This cost increase— along with the introduction of the 2010 Patient Protection and Affordable Care Act, commonly known as Obamacare —resulted in a signi�icant drop in employer-sponsored health insurance. In 2011 many states witnessed as much as a 10% decrease in nonelderly adult coverage; low-income persons were affected the most (Robert Wood Johnson Foundation, 2013). This trend essentially shifts the decisions and costs of health care coverage to employees, taxpayers, and society at large (Irwin, 2014).

Consequently, there has been increased emphasis on how workplaces can manage the costs of health care. There have been two main approaches for doing so:

1. Reducing employer contributions: The Kaiser Family Foundation’s 2015 survey shows a substantial increase in health insurance premiums of about 61% since 2005, and about 27% compared to 2010. In 2015 the average annual premium was $6,251 for single coverage and $17,545 for family coverage. Even though employers continue to cover the lion’s share of health insurance premiums, the relative cost to employees is much higher. Considering that wages grew by only about 6% per year since 1960, with record lows of about 6% decline during the peak of the 2008 economic recession (Trading Economics, 2016), the impact on employees’ disposable income has been substantially negative.

2. Enhancing employees’ health: In contrast to reactively managing health care costs (by passing increases along to employees), many employers and employees are �inding it more effective to proactively promote employee health and well-being. For example, the U.S.-based supermarket chain Safeway has kept its health care costs steady for several years, while on average U.S. organizations have experienced signi�icant increases during the same time period. Safeway contained these costs by emphasizing health, wellness, and preventive care. Four speci�ic health conditions—cardiovascular disease, cancer, diabetes, and obesity— account for 75% of all health care costs. Safeway focused its energy and resources on monitoring, preventing, or managing the causes of those four health conditions by promoting health initiatives such as smoking cessation and weight control. As a result, it was able to signi�icantly reduce insurance premiums rather than reducing coverage or passing costs on to employees (Strassel, 2009).

Increasing Employee Wellness

In addition to reducing health care costs for both employers and employees, many organizations now view employee well-being as a goal in itself. Well-being is no longer limited to physical health and safety; it also includes mental, social, psychological, and spiritual health and well-being. For example, the U.S. Army established the Comprehensive Soldier and Family Fitness training program in 2008 to proactively enhance health and well-being in soldiers and their families. In this way, focusing on health and wellness is viewed as a preventive measure and a positive

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alternative to the prevailing reactive treatment programs (Seligman & Matthews, 2011). The program focuses on �ive dimensions of well-being: physical, emotional, spiritual, social, and family (U.S. Army, 2013).

Ensuring that employees are happy, healthy, and safe speaks to the interests of a broad spectrum of stakeholders, including employees, customers, and society. Emphasizing employee well-being as a valuable and worthy goal—and proactively pursuing that goal by enhancing physical, mental, social, and psychological health and safety at work— aligns the organization’s values, strategies, and human investments.

Find Out for Yourself: Comprehensive Soldier and Family Fitness

Watch the following video on the Comprehensive Soldier and Family Fitness training program.

Introduction to Comprehensive Soldier Fitness (https://www.youtube.com/watch?v=I3MuUMHoXIM)

Employee Wellness Programs

Growing understanding of the importance of employee health and wellness has promoted a more integrated approach to the issue. Rather than offering distinct bene�its such as health insurance, paid time off, and employee assistance programs, employers are now adopting more comprehensive employee wellness programs. Similar to the Comprehensive Soldier and Family Fitness program, an employee wellness program is a systematically designed, multicomponent program that promotes and supports employees’ physical, mental, social, and psychological health, safety, and well-being. All of the program’s components are strategically integrated for maximum impact, and employees receive incentives for participating in the program and achieving wellness-related goals and milestones. An employee wellness program might include health screenings and assessments; health fairs, workshops, newsletters, and other communication on wellness issues; discounted or free access to on- or off-site healthy meal offerings, �itness facilities, smoking cessation classes, or weight loss programs; or employee counseling. Participation incentives may include bonuses and awards, discounts on insurance premiums, public recognition for achieving various milestones, or tokens such as T-shirts, water bottles, pedometers, and more (California Department of Public Health, n.d.).

The primary distinction between these comprehensive programs and traditional health initiatives is that integrated programs emphasize a whole-person perspective and promote wellness along a variety of dimensions. An integrated approach tends to be more effective because it has a better chance of spreading across the organization, and this across-the-board commitment is necessary for promoting a variety of wellness initiatives. For example, Johnson & Johnson has seen outstanding results from its employee wellness programs, including a more than 50% reduction in high blood pressure, more than 65% smoking cessation, $250 million in health care cost savings, and 271% ROI! Other studies show reductions in absenteeism by as much as 80%, turnover rates cut in half, and more (Berry, Mirabito, & Baun, 2010). In sum, healthy employees tend to be happier, more productive, and less likely to leave the organization, in addition to saving their organizations millions of dollars.

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10.2 Developing Healthy Employee Attitudes

What would life be like without work? Simple, laid back, stress free—a veritable paradise of rest and relaxation? Not necessarily. Without a job, how could people pay for food, shelter, and clothing—the basic necessities of life? Work enables people to support themselves and their families. Relationships with coworkers also provide social and emotional connections. Although most of us regard work as a required chore at least some of the time, a large portion of our overall life satisfaction stems from how satis�ied we are with our jobs (Judge & Watanabe, 1993; Bernardo, 2016). To this end, I/O psychologists have studied how to make work environments more ful�illing.

Types of Employee Attitudes

Every day, people make positive or negative evaluations about speci�ic people, places, and situations in their lives, which they then use to guide their actions. These evaluations, called attitudes, have cognitive, affective, and behavioral components (Eagly & Chaiken, 1999; Schleicher, Watt, & Greguras, 2004). The cognitive component is a person’s beliefs about and mental evaluations of something. For example, a person’s attitude toward work could include cognitive beliefs such as “this job makes good use of my skills” or “this job doesn’t pay very well.” Our mental evaluations have a strong impact on our beliefs, even beyond the objective characteristics of a situation—hence the common adages “Attitude is everything” and “Perception is reality.”

The affective component is a person’s feelings or emotional response to his or her cognitive beliefs. People who believe their job effectively uses their skills may feel happy or satis�ied; people who believe their job doesn’t pay well might feel content or indifferent if they believe the pay level is appropriate, or they may feel angry and disgruntled if they believe they deserve more.

Finally, the behavioral component refers to people’s actions in response to their feelings and beliefs. People who are satis�ied with the good �it of their job might respond by working harder, taking on extra tasks, supporting company policies, or speaking positively about the company to others. On the other hand, people who are angry because they believe they are being underpaid might react by complaining to coworkers, performing poorly, or even leaving the company to �ind another job.

Although it may seem obvious to assume that our beliefs and feelings dictate our actions, researchers have discovered that the link between cognitive and affective attitudes and resultant behavior is only strong when the attitudes are closely related to the behaviors. For example, beliefs and feelings about a manager may in�luence an employee’s actions when it comes to volunteering to help that manager on a special project, but not when it comes to helping coworkers on a team project. Interestingly, research shows that attitudes seem to be better predictors of how people intend to behave than how they actually do behave (Ajzen, 1991). If an employee is extremely satis�ied with a job, he or she may have every intention of staying with that organization for a long time—but whether that actually happens is another story. Employee actions are informed not only by personal attitudes but by external factors: The organization may go bankrupt, forcing a change in position, or a spouse could lose his or her job, making it necessary to seek a higher paying job elsewhere. Therefore, even though attitudes provide a good indication of probable actions, they cannot perfectly predict actual behaviors, which can be in�luenced by situational constraints. Organizations, then, must focus on attitudes that are strongly related to desired work behaviors.

Consider This: Your Attitudes Toward Your Supervisor and Coworkers

1. Think about the best and the worst boss you have ever worked for. How did your opinions of those individuals affect your actions toward them? Did you treat each other similarly or differently? Why?

2. Now think about the best and the worst coworker you have ever had. Again, how did your opinions of those individuals affect your actions toward them? Did you treat each other similarly or differently? Why?

3. Can you think of other situations when your attitudes have in�luenced your behaviors?

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Normative commitment might cause a doctor to forgo a higher salary and the prestige associated with working for a large hospital in favor of working for a small clinic or humanitarian organization.

Organizational Commitment Organizational commitment is a worker’s level of psychological attachment to the organization. Meyer and Allen (1991) proposed that this attitude has three dimensions: affective, continuance, and normative. Affective commitment refers to employees’ emotional attachment to their organization. Innovative, dynamic companies or those that have overcome obstacles may engender their workers to have positive emotional attachments to them. Those who work for Apple, for example, may be emotionally connected to the company because they are proud if its vision, its world-changing products, or the legacy of its innovative founder, Steve Jobs. Of the three components, affective commitment appears to be the most positively related to organizational outcomes. Continuance commitment refers to how employees perceive the economic value of staying with an organization. Employees may be signi�icantly committed to their job simply because they would experience economic hardship without it. Finally, normative commitment refers to the degree to which employees remain with an organization because they feel a moral obligation to do so. For example, a physician might forgo the higher pay and greater prestige that comes with working for a large university hospital in order to work for a small rural clinic if he or she felt morally obligated to provide care for people who live in an underserved community. Or someone may choose to work for the family business out of a sense of obligation to his or her family. In other words, those who experience affective commitment stay with an organization because they want to; those with continuance commitment stay because they have to; and those with normative commitment stay because they feel they ought to (Dunham, Grube, & Castaneda, 1994).

Decades of research support this three-factor model of organizational commitment, although the relative weights of the factors vary across national cultures (Meyer et al., 2012). Furthermore, studies show that affective commitment is much more important and effective in retaining employees than continuance or normative commitment (Meyer, Stanley, Herscovitch, & Topolnytsky, 2002). In other words, it is much more important to give employees a place they love to work than to merely entice them with lucrative salaries, bene�its, and future career prospects. These types of incentives are often dubbed “golden handcuffs” due to their focus on continuance or normative commitment.

Organizational commitment is also related to job performance and numerous other desirable work outcomes such as job satisfaction, regular attendance, organizational citizenship behaviors (e.g., going above and beyond job requirements), and lower stress, burnout, and turnover (Cohen, 1993; Meyer et al., 2002; Rikketa, 2002). However, the relationship between commitment and performance becomes stronger the longer the individual has worked for the organization, which suggests that organizations can improve job performance in the long run by taking steps to increase their employees’ commitment early in their careers (Wright & Bonett, 2002). In other words, by creating an environment in which employees want to work, organizations promote affective commitment and tend to see improved rates of both retention and positive outcomes. Factors that can enhance organizational commitment include treating employees equitably (Quirin, Donnelly, & O’Bryan, 2001) and providing a favorable work unit culture (Lok & Crawford, 2001).

Employee Engagement Employee engagement is the level of enthusiasm a person feels for his or her job. Employee engagement has become popular among both I/O psychologists and HR managers because it seems useful for predicting organizational outcomes. Highly engaged employees are emotionally invested in their jobs to a degree that goes

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beyond either job satisfaction or organizational commitment (Kahn, 1990); they perform their jobs with vigor, dedication, and absorption. Vigor refers to high levels of energy and effort investment, as well as resilience and persistence when faced with challenges. Dedication refers to a sense of pride and personal identi�ication with one’s work. And absorption is a pleasant sense of being completely immersed in one’s work; one tends to lose track of time and naturally enjoys staying on task, as if the work was a favorite hobby or exciting personal activity (Schaufeli, Bakker, & Salanova, 2006). Thus, highly engaged employees are willing to put all their energy and resources into their work to ensure the organization’s success (Thomas, 2009).

A Gallup Organization study of more than 1.4 million employees in nearly 50,000 business units across 192 organizations, 49 industries, and 34 countries showed that unit-level engagement is positively related to productivity, pro�it, customer satisfaction, safety, and quality and negatively related to absenteeism, turnover, and employee theft (Sorensen, 2013). However, some researchers theorize that employee engagement is not just a single attitude but an amalgamation of several, including job satisfaction, organizational commitment, job involvement, and even intrinsic motivation. Although the �indings thus far are compelling, more research is needed to better understand if and how employee engagement adds to our understanding of worker well-being and performance.

Job Satisfaction The most frequently studied work attitude is job satisfaction, which is how people feel about their job based on its characteristics (Spector, 1997). People with high job satisfaction have more positive feelings about their job, whereas dissatis�ied people have negative feelings. A survey of working adults by the Gallup Organization found 90% of respondents to be “at least somewhat satis�ied” with their jobs and 48% to be “very satis�ied,” whereas only 2% were “completely dissatis�ied” (Saad, 2008). Because job satisfaction is associated with important employee outcomes, most companies believe this attitude is especially important to measure and in�luence.

One of the most important outcomes of job satisfaction is that it is associated with an increase in job performance (Judge, Thoresen, Bono, & Patton, 2001). This relationship applies not only to individual employees but to entire work units as well (Harter et al., 2002). Furthermore, when satisfaction and performance data are gathered for the entire organization, organizations that have a high number of satis�ied employees tend to be more effective overall than those that have a large percentage of dissatis�ied employees.

Although the relationship between job satisfaction and job performance is signi�icant, keep in mind that it is not necessarily consistent. Sometimes, even highly satis�ied employees cannot perform well due to circumstances beyond their control. A malfunctioning computer, safety concerns, or illness can interfere with even the best employee’s performance. Similarly, not all dissatis�ied workers will intentionally perform poorly. Personal and environmental factors such as a desire to be promoted, ethical standards, cultural expectations, and economics can inspire even the most disgruntled worker to perform to the best of his or her ability.

Research has also found that in addition to being more likely to perform well at their jobs, highly satis�ied workers are more willing to go beyond formal job expectations, talk positively about the organization, and proactively help other team members (Organ, Podsakoff, & MacKenzie, 2006). These pro-organizational behaviors are referred to as organizational citizenship behaviors (OCBs). Additional research suggests that the relationship between job satisfaction and OCBs is in�luenced, in part, by workers’ perceptions of fairness (Konovsky & Organ, 1996). Each time a worker experiences a fair outcome, process, or treatment, his or her level of satisfaction grows, which results in increasingly greater trust in the organization. Eventually, the worker begins to reciprocate these positive experiences by voluntarily putting in extra effort and routinely going beyond the call of duty.

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Counterproductive work behaviors (CWBs) are the opposite of OCBs; they include negative outcomes such as employee theft, absenteeism, and sabotage. As you might expect, one of the causes of CWBs is job dissatisfaction. Employees who do not like their work environment tend to respond negatively. Although it is impossible to predict exactly how a dissatis�ied worker will act, evidence suggests that these workers will �ind some way to get even. Whether they steal, work slowly, or intentionally make mistakes, counterproductive employees cost organizations billions of dollars each year, accounting for even more loss than retail shoplifters (Hollinger, 2009). To address CWBs, organizations should focus on �ixing the real problem—job dissatisfaction—instead of implementing costly control systems, which have the potential to make the work environment even more negative and less trusting.

Job dissatisfaction is also one of the most common reasons why workers voluntarily quit (Griffeth, Hom, & Gaertner, 2000). Turnover costs organizations dearly. Every time an employee quits, the organization incurs substantial costs not only in the form of recruitment, selection, and training, but in lost productivity as well. Turnover is most strongly related to job dissatisfaction when workers have other employment opportunities (Trevor, 2001). Dissatis�ied employees are thus more likely to act on their intentions to quit once alternative employment becomes available. Employees who do not or cannot quit may become less motivated to report to work and may miss work more often than usual. Unlike turnover, however, the relationship between absenteeism and job satisfaction is surprisingly weak

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(Scott & Taylor, 1985). Instead, it appears that other situational factors, such as personal or family illness, work– family con�licts, or company sick-leave policies play a stronger role in employees’ decisions to miss work.

Finally, job satisfaction has a strong relationship to life satisfaction (Judge & Watanabe, 1993). According to Gallup polls, one of the most important needs of people around the world is a “good job.” A good job is de�ined as constituting 30+ hours per week and offering a stable paycheck. Having a good job is directly related to life satisfaction and general well-being. Unfortunately, only about 45% of Americans currently have what would be considered a good job by these standards (Gallup, 2016).

Consider This: Job Satisfaction

1. Think about the most satisfying job you’ve ever had. What made it so great? Your coworkers? Your boss? Your salary? The work you performed? The location?

2. Think about the most dissatisfying job you’ve ever had. What made it so dissatisfying? 3. From your experience, are job satisfaction and job dissatisfaction driven by the same or different

factors? 4. Review Herzberg’s two-factor theory of motivation in Chapter 6. To what extent are your experiences

consistent with or different from the tenets of this theory?

Drivers of Employee Attitudes

Perceptions and evaluations of a job or its various facets can vary greatly from one person to the next, even when the work is the same. What one person loves about a job, another person may hate. I/O psychologists have studied many personal and environmental factors that in�luence workers’ attitudes about their jobs, especially their job satisfaction.

Personality As discussed in Chapter 3, personality is a strong predictor of job performance. It also shapes employee attitudes and behaviors. Some employees never seem to be satis�ied no matter how good their work environment is; however, others seem to be happy even when working conditions are dif�icult.

Interestingly, research suggests there could be a genetic component to attitudes. I/O psychologists have explored the role of genetics in job satisfaction by performing twin studies, which look at similarities and differences between identical twins who have been raised in different environments. The twin studies show a strong positive correlation between the subjects’ levels of job satisfaction: If one twin was satis�ied, the other twin tended to be satis�ied, too (Arvey, Bouchard, Segal, & Abraham, 1989). This research suggests that genetic factors are at least partly responsible for determining workers’ overall levels of job satisfaction. Regardless of the work environment, then, people who have a more positive affective disposition will be more likely to be satis�ied with their job and committed to their company than people who have a more negative affective disposition (Brief, Butcher, & Roberson, 1995).

In addition to dispositional affective tendencies, a person’s emotional stability affects job satisfaction. Emotional contentment leads to greater worker happiness, which in turn results in greater employee job satisfaction (Boehm & Lyubomirsky, 2008). Research has also documented positive relationships between job satisfaction and personality traits such as conscientiousness, extraversion, self-esteem, ef�icacy, and internal locus of control (Bowling, 2007; Connolly & Viswesvaran, 2000; Judge, Heller, & Mount, 2002). Similar results have also been reported on the linkages between the Big Five personality traits (see Chapter 3) and organizational commitment (Erdheim, Wang, & Zickar, 2006).

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Job Characteristics A survey of 27,000 U.S. workers found that some jobs, such as �ire�ighter, teacher, and power plant engineer, are inherently more satisfying than others, such as laborer, assembly-line worker, and cashier (Bryner, 2007). In general, highly satisfying jobs are more complex and require workers to utilize a variety of skills and deal with unpredictable situations. Less satisfying jobs, on the other hand, involve repeating the same relatively simple tasks throughout the workday. As mentioned in Chapter 6’s discussion on motivation, jobs with greater complexity tend to be more interesting, more challenging, and more likely to require responsibility (Maynard, Joseph, & Maynard, 2006). Workers will therefore experience high job satisfaction when their jobs possess these intrinsically motivating characteristics—so long as they enjoy intellectually stimulating work.

Another recent study explores the effects of overemployment and underemployment on employee well-being. This study found that both overemployment (e.g., working very long hours) and underemployment (e.g., working insuf�icient hours or being in a job that does not suf�iciently utilize one’s KSAs) can negatively affect well-being. However, these negative effects tend to be short lived and dissipate over time. On the other hand, being consistently overemployed for over 2 years can leave long-lasting negative effects on well-being (Angrave & Charlwood, 2016).

Salary Many people feel they are underpaid; but do these feelings actually impact workers’ job satisfaction or general well- being? The answer is yes, but the relationship is not as straightforward as one might think. For workers who are poor, pay has a signi�icant in�luence on job satisfaction and happiness in general. However, as pay increases to a level that allows workers to live comfortably, the relationship diminishes to nearly zero. Recall from Chapter 6 that Daniel Kahneman and Angus Deaton’s study found that happiness is related to money only up to an annual income of about $75,000 (in 2008/2009 dollars). So, while lack of money can make you unhappy, more money does not make you happier (Kahneman & Deaton, 2010). Another study found that workers in handsomely paid positions, such as executives, have approximately the same levels of job satisfaction as workers in much-lower-paying positions (Judge, Piccolo, Podsakoff, Shaw, & Rich, 2010). Therefore, higher salaries alone do not lead to higher levels of job satisfaction. A good salary may not compensate for a job’s unsatisfactory aspects (such as poor working conditions or an overbearing boss). On the other hand, consistent with Herzberg’s two-factor theory, positive aspects of the job itself (such as interesting work) can compensate for a lower salary. Furthermore, some studies suggest that pay affects only continuance commitment but not affective or normative commitment.

Person–Organization Fit Person–organization �it is the extent to which employees and their company share values; people will be happiest and most successful working for organizations where there is a good �it (Chatman, 1989). In fact, a meta-analysis of 172 studies found that a strong �it between workers and their place of employment results in a very high level of worker job satisfaction (Kristof-Brown, Zimmerman, & Johnson, 2005). Person–organization �it is also related to organizational commitment (Valentine, Godkin, & Lucero, 2002). The relationship between person–organization �it and job satisfaction and organizational commitment has also been supported across cultures (Silverthorne, 2004). Organizations often use preemployment personality inventories (see Chapter 3) to help determine whether prospective employees’ values will be a good �it with the company’s mission and the requirements of the speci�ic position for which they are applying. Matching persons to an organization can positively affect employees and encourage them to achieve positive outcomes for the organization.

Organizational Justice How our employers treat us strongly in�luences our job attitudes. People who believe they are treated unfairly are likely to have more negative job attitudes, especially in areas of job satisfaction and organizational commitment; they are also more likely to exhibit poorer job performance (Cropanzano, Bowen, & Gilliland, 2007). To improve employees’ sense of organizational justice, employers should treat them with dignity and respect, allow them to participate in decision-making processes, and provide them with information about why decisions were made (review Chapter 6 for information on organizational justice).

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A good employee–boss relationship leads to increased work engagement, job satisfaction, and organizational commitment.

Relationship With the Manager One of the strongest predictors of work engagement, job satisfaction, and organizational commitment is the manager–employee relationship. Indeed, it has been said that workers do not leave companies; they leave managers (Buckingham & Coffman, 1999). Research shows that when managers listen to employees, care about their opinions, and value their performances, employees tend to feel happy at work. Building trust-based relationships is also critically important to long-term job satisfaction and organizational commitment (Dirks & Ferrin, 2002). Therefore, organizations should take care to hire managers who have positive people skills and train them to engage in activities that build employee–manager trust, such as giving feedback, coaching, mentoring, and communicating respectfully.

Work–Life Balance Changing workplace demographics are placing new demands on both employers and employees. For example, single-parent families and dual-income households have become common in the industrialized world, as have the attendant dif�iculties and con�licts that arise as people try to achieve balance between their work and family lives. The work–family balance has been found to be especially challenging for women because they devote an average of 7 more hours per week to their families than do men (Rothbard & Edwards, 2003), although fathers are taking on more responsibilities at home and increasingly experiencing higher degrees of work–family con�lict. In fact, in a recent study, 70% of men reported that they would take a pay cut to spend more time with family, and 50% reported that they would turn down a promotion if it would take away from family time (Brady, 2004). Unfortunately, higher levels of work–family con�lict, often caused by high job demands and job insecurity, are strongly and consistently associated with lower job satisfaction (Ford, Heinen, & Langkamer, 2007). Overall, it appears that when work life interferes with family life, employees are more stressed and unhappy with their jobs. In contrast, social support at work and the ability to in�luence what happens in the work environment can promote work–life balance, satisfaction, and well-being (Behan, & Drobnic, 2010). Similar results were found for schedule �lexibility, particularly for women (Carlson, Grzywacz, & Kacmar, 2010).

Many organizations have taken steps to help working couples and single parents balance their work and family obligations. For example, some companies provide on-site day care facilities, which can help alleviate logistical concerns for workers who have small children. Providing part-time and �lexible work scheduling options are other ways organizations can meet working parents’ needs. Each of these programs has been associated with higher levels of employee job satisfaction and lower levels of absenteeism among employees with children (Scandura & Lankau, 1997). Furthermore, a survey of 231 Fortune 500 companies found that those that offered programs to promote work–family balance actually had higher stock values than those that did not offer such bene�its (Arthur, 2003).

However, employees with families are not the only ones who experience con�lict between their personal and professional lives. That is why opportunities for work–life balance have now been expanded beyond the work–family front to enhance the satisfaction and commitment of employees who have diverse needs. For example, younger and older workers view �lexible work arrangements and the opportunity to give back to the community as even more important than pay, compared to the middle age group (Hewlett, Sherbin, & Sumberg, 2009).

Furthermore, research has moved beyond work–family con�lict, and even work–life balance, to what is referred to as work–family enrichment or work–life enrichment. The theory behind work–family or work–life enrichment is that one life domain can actually have positive and enriching, rather than negative or neutral, effects on another. Research shows that such enrichment cannot simply happen by providing formal family-friendly bene�its or policies. Work– family enrichment requires supportive supervisors and effective job design (Baral & Bhargava, 2010).

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Find Out for Yourself: Your Work Attitudes—Part 2

Fortune magazine publishes an annual list of the top 100 companies to work for. Visit the magazine’s website and review the policies and programs available to employees of some of these companies.

Fortune 100 Best Companies to Work For (http://fortune.com/best-companies)

What Did You Learn?

1. Which of these policies or programs would increase your job satisfaction? Organizational commitment? Work engagement?

2. Based on your review of these top companies, would you consider your current organization a “best place to work”? Why or why not?

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Generational Differences in Work Expectations

Particularly relevant to employee attitudes is the fact that �ive generations of workers are currently participating in the workforce, and each has its own set of expectations (Meister & Willyerd, 2010). Table 10.2 summarizes these generations.

Traditionalists were the �irst generation to be grouped by age. Young adults in this generation and generations prior were expected to work or start a family even before �inishing a secondary education, which many never completed. Financial resources and public assistance programs were limited, particularly in the 1930s due to the Great Depression. As a result, this generation considers work to be a privilege. Members of this generation believe in hard work and dedication; they work long hours and expect others to do the same.

Baby boomers are the most educated generation and continue to be driven by both personal and professional development. They are characterized by their long hours of hard work, extrinsic motivation, and loyalty and commitment to their employers at the expense of work–life balance (Cennamo & Gardner, 2008). They value job security and a stable working environment (Wong, Gardiner, Lang, & Coulon, 2008).

On the other hand, Generation Xers have grown up around change and diversity and rarely stay long at any one organization. According to a recent LinkedIn study (see Figure 10.1), on average, members of Generation X changed jobs twice in their �irst 10 years out of college (Berger, 2016). They seek better opportunities, whether these include a higher salary, improved bene�its, or better working conditions (Collins, Hair, & Rocco, 2009; Twenge, Campbell, Hoffman, & Lance, 2010; Wong et al., 2008). They value individualism, skepticism, and the desire to enjoy life. This joy for life is centered on a desire for work–life balance that stems from having watched their parents work many long hours (Dries, Pepermans, & De Kerpel, 2008; Collins et al., 2009).

Table 10.2: The �ive generations currently participating in the workplace

Generation Birth date Top values

Traditionalists or matures

Before 1946 Family, hard work, loyalty, scarce resources

Baby boomers Between 1946 and 1964

Job security, stable working environment

Generation X Between 1965 and 1976

Individualism, skepticism, work–life balance

Generation Y or millennials

Between 1977 and 1997

New opportunities, self-development, transparency, social responsibility

Generation Z After 1997 Technology, independence

Figure 10.1: Average number of companies each generation works for

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“Will This Year’s College Grad’s Job-Hop More Than Previous Grads?” by G. Berger, 2016 (https://blog.linkedin.com/2016/04/12/will-this-year_s-college-grads-job-hop-more-than-previous-grads (https://blog.linkedin.com/2016/04/12/will-this-year_s-college-grads-job-hop-more-than-previous-grads) ).

Members of Generation Y, also known as millennials, are very comfortable with technology and change and worry less about job security and job commitment (Twenge et al., 2010). They like to be challenged by new opportunities and self-development. Members of this generation have seen the devastation that unethical companies such as Enron, Tyco, and Arthur Andersen have caused to families and careers, so they seem more concerned with an organization’s values than any other factor. They are civic minded and instill a sense of moralism into all aspects of their lives (Dries et al., 2008). They demand transparency and social responsibility from their employers. For example, a PricewaterhouseCoopers (2008) study showed that 86% of millennials would consider leaving an employer whose behavior no longer met their corporate responsibility expectations.

Generation Z is the youngest generation. This generation has never lived without ready access to personal computers and the Internet. Members learn to rely on technology at a very young age. Having lived through the Great Recession of 2008 may have instilled in this generation a sense of insecurity and independence.

Employers are �inding it necessary to shun traditional climb-the-ladder career opportunities and carrot-and-stick approaches in favor of allowing employees to rely on intrinsic motivators that encourage them to pursue the career paths of their choice. Younger generations do not want a slow trip up the corporate ladder that includes a midyear evaluation, a yearly evaluation, and other traditional measures. They are looking for nonmonetary rewards such as increased �lexibility, work-at-home options, control over their schedules, and additional opportunities to develop their knowledge and skills during work hours or through employer-�inanced educational or learning opportunities (D’Amato & Herzfeldt, 2008). They are seeking a nonlinear career that will evolve and change; it should ideally include stops at several companies over a period of years and feature multiple career paths that meaningfully take advantage of their talents and realize their passions and full potential. The 2008 recession added to this challenge. The constant fear of downsizing, pay cuts, and relocations made employees uneasy as they scoured the landscape for more secure opportunities, which weakened employee commitment and motivation.

Large-scale changes in the U.S. population’s demographic makeup have created the most diverse incoming American labor force in history. However, these changes have also resulted in challenges to the nation’s global competitiveness (Collins et al., 2009; Meister & Willyerd, 2010). Based on the most current census data available, the U.S. workforce is in the middle of an extensive demographic revolution (U.S. Census Bureau, 2010). Between 2010 and 2050, the United States is projected to experience substantial growth in its older population. The U.S. Census Bureau projects that in 2050, the number of Americans aged 65 or older will reach over 88 million, which is double the number of seniors there were in 2011. Concurrently, between 2010 and 2050, the U.S. population is projected to grow from 310 million to 439 million, an increase of 42%. The nation will also become more racially and ethnically diverse. By 2042 the U.S. population will be more non-White than White (U.S. Census Bureau, 2010), resulting in a minority population and an increase in diversity that will yield yet another generation with its own unique set of worker expectations.

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Consider This: Generational Differences in Work Expectations

1. To which generational group do you belong? 2. To what extent do the chapter’s research �indings regarding your generation’s work expectations

resonate with you?

Find Out for Yourself: Generational Differences in Work Expectations

Find at least one member from each of the �ive generations who you personally know and who is currently employed. They can be family members, friends, coworkers, or acquaintances. Have a brief conversation with these individuals about their work expectations.

What Did You Learn?

1. To what extent are their responses consistent with the research �indings previously discussed regarding their respective generations’ work expectations?

2. To what extent do your respondents agree with the descriptions of the work expectations of other generations?

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Millions of U.S. workers suffer work-related injuries every year.

10.3 Employee Health

Thus far, we have discussed factors that are associated with and help lead to workers’ psychological well-being. However, even the most psychologically ful�illing job can be harmful to a worker’s health. Some jobs are just plain dangerous. Each year, millions of workers are hurt, sickened, or even killed while doing their job. When examining the overall health of an organization, it is important to understand how job safety, workplace violence, and workplace stress affect workers’ physical health.

Job Safety

In 2015, 4,836 people died from injuries suffered in American workplaces, which amounts to approximately 13 people dying each day while on the job (Bureau of Labor Statistics, 2016c). Even more shocking is the fact that, during the same year, almost 3 million U.S. workers suffered nonfatal work injuries. Although these numbers are down by almost 25% compared to a decade ago, the cost of on-the-job accidents is still enormous. In addition to these indirect costs, direct costs from worker’s compensation claims can be staggering. In 2008 claims for the 10 most debilitating types of workplace injuries and illnesses cost organizations $53.4 billion (Liberty Mutual Research Institute for Safety, 2010).

I/O psychologists have long tried to identify ways to reduce accidents and improve workplace safety. Over time, they have been able to identify a number of key safety considerations. Hazards, or situations that could potentially threaten a person’s health or life, can be very predictive of workplace accidents. Poor equipment design and a lack of safety devices on machinery are especially dangerous. However, lighting, temperature, and vibration hazards pose less serious risks (Melamed, Luz, Najenson, Jucha, & Green, 1989).

In addition to hazard prevention, making sure workers have reasonable workloads plays an important role in keeping them safe. A workload is the amount of work an employee is assigned or expected to perform in a given amount of time. When an employee’s workload is too high, he or she will often compensate by taking shortcuts, such as using incorrect tools,

removing safety devices, ignoring safety protocols, or looking the other way when others violate safety protocols. Accidents often happen when workers try to meet the demands of their workload at the expense of safety (Hofmann & Tetrick, 2003).

Shift work, or work that does not follow a traditional 9-to-5 schedule, can also decrease employee safety. Round-the- clock scheduling is especially common in industries such as manufacturing, public safety (i.e., police and �ire�ighters), and public service (i.e., health care and call centers). Workers are more likely to be injured while working nighttime shifts (Smith, Folkard, & Poole, 1994); the proportion of nighttime fatal injuries is almost double that of daytime fatal injuries (Williamson & Feyer, 1995). People are more susceptible to nighttime injuries for obvious reasons: Working at night is inconsistent with the typical wake–sleep cycle and can lead to fatigue, irritability, and reduced alertness and vigilance—outcomes that in turn lead to errors and injuries (Dinges, 1995).

Finally, accidents are more likely to occur when a workplace’s climate of safety is poor. This environmental factor refers to the relative importance (or unimportance) an organization places on safety as evidenced by its policies, procedures, and practices. To ensure that employees follow of�icial policies and procedures, companies should implement practices, such as adequate safety training for employees and thorough and frequent safety inspections, and mandate that supervisors communicate with employees about the importance of safety. Each of these practices has been shown to improve an organization’s climate of safety and decrease accidents (Hansez & Chmeil, 2010; Neal & Grif�in, 2004).

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Concepts in Action: On-Site Monitoring of Employee Health

To avoid liabilities, industries with potential workplace hazards will often hire medical personnel and industrial hygienists to monitor employee health and safety. Two such employees at Boeing Corporation demonstrate their efforts to limit worker exposure to harmful substances and practices.

Find Out for Yourself: Safety Regulations

Visit the OSHA website and review the “Regulations” tab.

OSHA Laws & Regulations (https://www.osha.gov/law-regs.html)

What Did You Learn?

1. What hazards does the federal government regulate? Why are these regulations important for preventing workplace accidents, illness, and death?

2. Without OSHA, how might today’s work environment be different?

Workplace Violence

Clark French remembers coworkers scattering like deer from a “popping” noise inside the Royal Oak Post Of�ice 20 years ago today. The morning of November 14, 1991, something French and other postal employees had feared for weeks occurred: Thomas Paul McIlvane, a disgruntled, recently �ired coworker, showed up at the post of�ice armed with a sawed-off .22-caliber ri�le. “Someone started running and then all of us—like deer—ran to get out,” said French, now 57. “Then I was shot. And I knew I had to keep

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running because he must be right behind me, and I didn’t want to be an easy target.” Within minutes, McIlvane had killed four of French’s coworkers and shot himself to death. (Adapted from Martindale, 2011)

When violent incidents like this occur in the workplace, the media erupts. Television, print media, radio, and now the Internet report these events loudly and often. Because of the heightened attention it receives, workplace violence often seems more common than it actually is. In reality, acts of workplace violence are rare; approximately just 6% of Americans have experienced physical violence at work (Schat, Frone, & Kelloway, 2006). Employees who deal directly with the public, handle money, and work alone at night—such as convenience store clerks, taxi drivers, and pizza delivery drivers—are particularly susceptible to violent acts perpetrated by strangers. Indeed, most workplace fatalities come at the hands of strangers, not disgruntled employees.

Bullying and psychological abuse are less publicized but more common forms of workplace aggression. In one study 41% of employees reported having experienced an act of psychological aggression (Schat et al., 2006). Another study involving 2,000 public sector workers found that 71% experienced at least one act of incivility sometime over the course of the previous 5 years. This study also showed that employees who are subjected to aggressive actions report lower job satisfaction, greater psychological stress, and increased turnover (Cortina, Magley, Williams, & Langhout, 2001; Lim, Cortina, & Magley, 2008). Abusive supervision is particularly detrimental to employees’ performance, attitudes, and well-being (Mackey, Frieder, Brees, & Martinko, 2015).

Most of the research on workplace violence has attempted to identify characteristics that indicate which people are more likely to act aggressively. Contrary to common belief, research does not support the notion that violent workers are likely to be mentally ill (Barling, Dupré, & Kelloway, 2009). However, even though no one personality trait can perfectly predict who will be aggressive, some traits have been found to play a role in a person’s likelihood of engaging in violent or aggressive acts, including dispositional anger, negative affectivity (pessimism), narcissism, and type A personality. Dispositional anger, which is a person’s tendency to experience anger in almost any situation, shows a direct link with workplace aggression. In a study of 115 workers in two companies, employees with a higher level of dispositional anger exhibited a greater preponderance of aggressive behaviors (Douglas & Martinko, 2001).

Workplace Stress

Most people are familiar with stress and its ability to impair physical wellness. Workplace stress is made up of the harmful physical and emotional responses caused by a poor match between a job’s demands and an individual’s capabilities, resources, or needs (National Institute for Occupational Safety and Health, 1999). Unfortunately, workplace stress abounds in the organizational environment. One in six workers in the United Kingdom reported being extremely stressed at work (Health and Safety Executive, 2008), and an online survey by the American Psychological Association found that 74% of respondents cited work as the primary cause of their stress (Anderson, 2008). In the same survey, more than half of all respondents reported that stress was not only harming their job performance but also that they had considered leaving their organization because of it.

The cost of this common problem should not be underestimated. Stress results in lower worker productivity and motivation, as well as increased errors, accidents, turnover, and counterproductive behaviors. People who report high work stress miss more days of work than those who are less stressed (Holland, 2008). Most importantly, stress makes people sick, resulting in high health care costs for companies and much misery for workers. A study of more than 10,000 British government workers found that the risk of heart disease was 68% greater for workers who reported chronic job stress than for those who reported little or none (Chandola et al., 2008). Another study showed that stress is signi�icantly positively related to worker depression (Blackmore et al., 2007). Finally, a study of 46,000 workers found that those with high stress levels were responsible for nearly 50% higher health care costs than their low-stress counterparts (Goetzel et al., 1998). When workers had both high levels of stress and depression, the difference in health care costs skyrocketed to 150%, accounting for an increase of more than $1,700 per person annually.

I/O psychologists have identi�ied a number of stressors in the work environment that can result in worker dissatisfaction and stress (see also Figure 10.2):

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Role con�lict, which is two or more incompatible demands at work or across work and nonwork roles Role ambiguity, which occurs when role responsibilities and functions are vague or unclear Workload incompatibility, which occurs when the amount of work to be accomplished exceeds the employee’s capabilities Job insecurity, which is the feeling that one’s job status is insecure or unstable

Figure 10.2: Causes of job stress

From Applying Psychology: Individual & Organizational Effectiveness (6 ed., p. 240), by A. J. DuBrin, 2004, Upper Saddle River, NJ: Pearson. Reprinted by permission of Pearson Education Inc., New York, NY.

Employees who feel little or no control over their stressors also experience increased stress (Thompson & Prottas, 2005). In other words, people get stressed out over stress! When people feel as though they have control over their work environment, stressors are more likely to be viewed as challenges to overcome. Overcoming challenges leads to job ful�illment and increased job satisfaction. In contrast, workers who feel that they have little control perceive stressors as obstacles that hinder their progress and frustrate their goal pursuit. Consequently, they feel helpless and unable to manage their workload, which results in dissatisfaction and resentment.

Organizations can help alleviate stress by clearly de�ining job roles and expectations, increasing workers’ control over their jobs, and even training workers on techniques to control stress (i.e., relaxation). However, everyone responds to stress in different ways. A work environment that is debilitating for one employee might be exhilarating for another. Personality studies provide some insight into why employees experience stress differently. Workers who are high in extraversion and conscientiousness are more likely to look at stressors as challenges to overcome and to utilize problem-solving coping strategies (Watson & Hubbard, 1996). Furthermore, people who are characterized as being high in hardiness, or the belief that they control the events in their lives, are better able to positively reappraise their situation and engage in quality problem solving as compared to those low in hardiness (Crowley, Hayslip, & Hobdy, 2003). Finally, individuals who have an internal locus of control are more likely to perceive work stressors as manageable and unthreatening (Ng, Sorensen, & Eby, 2006). For highly stressful jobs, organizations can use preemployment personality inventories to help identify workers who are more likely to perform well under or react positively to stress.

It is important to note that not all types of stress are negative. A moderate level of stress can be motivating, and positive events such as getting a promotion or enjoying well-earned recognition can yield a positive form of stress known as eustress. Moreover, many causes of stress are not work related, such as aspects of a worker’s personal life. Additionally, even work-related stress may stem from contextual factors that may not be directly related to the tasks assigned to a worker. Examples include relationships with coworkers, career progress, change, poor leadership, and

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organizational policies. Although an organization can help alleviate some of these sources of stress, many may be beyond its control. Thus, many organizations also help workers deal with their stress by providing stress management programs that teach effective coping mechanisms.

Concepts in Action: Stress, Hazardous to Your Health

Every year, approximately 15,000 Americans die from workplace stress. Chronic stress increases our risk for a recurrent heart attack or death. Andrea Canning shares ways to reduce stress.

Stress, Hazardous to Your Health From Title: Fighting Stress (https://fod.infobase.com/PortalPlaylists.aspx?

wID=100753&xtid=54319)

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10.4 Organizational Health

Unlike employee health, little is known or agreed upon among I/O psychologists about organizational health and well-being. Externally, investors characterize healthy organizations as those that are pro�itable according to established accounting standards and �inancial ratios. Society identi�ies healthy organizations by their positive reputations, socially responsible actions, and sustainable practices. Internally, managers and employees assess organizational health through ef�iciency measures such as productivity and optimal resource allocation, as well as effectiveness dimensions such as creativity and innovation, �lexibility and adaptability to change, effective communication, positive organizational culture, and ethical practices. Recently, however, more formalized perspectives have emerged to identify critical dimensions of organizational health and well-being.

Built-to-Change Organizations

A critical characteristic of healthy organizations is the ability to change and adapt to their environments. Most classic organizational-change theories view change as moving an organization from its current state to a desired state of higher ef�iciency or effectiveness. In this paradigm, change is a goal-oriented process, with speci�ied performance standards and outcomes that add value for speci�ic stakeholders. For example, a change that targets HR may assess the breadth and depth of the current workforce’s KSAs in relation to market trends and predicted talent needs and design ways to develop the workforce’s competencies and capabilities accordingly. Similar processes may be applied to develop material, technology, and other more tangible resources.

Although this structured approach to change is necessary and can help meet organizational goals, it may also hinder the organization’s ability to change in the future. Many years ago, Kurt Lewin’s (1951) force-�ield theory offered three stages for organizational change:

1. Unfreezing, which involves preparing the organization for change (by dealing with resistance to change, communicating the bene�its of change, ensuring that resources are available to implement the change, and ensuring that people are committed to making the change)

2. Change, which involves implementing the changes 3. Refreezing, which involves restabilizing the organization (by creating new structures, cultural dimensions,

and processes after the changes have been successfully implemented)

Lewin’s model emphasizes that after an organization is “unfrozen” and change is implemented, the organization needs to be “refrozen” at a new, more desirable state; this is what sustains the change. However, the new structural, cultural, and process dimensions may create resistance to future changes. Even though additional changes can yield successes in the desired performance dimensions, they often require another cycle of unfreezing newly created structures, cultures, and processes (Lawler & Worley, 2006).

Periodic change may be appropriate for steady, predictable environments or as a normal part of any organization’s life cycle (Jawahar & McLaughlin, 2001). On the other hand, today’s fast-paced business environment places a higher emphasis on organizational agility. Survival and success in this environment require that organizations not only be able to build sustainable competitive advantage by implementing evolutionary and revolutionary change; they must also be able to develop robust strategies that prepare them to quickly and effectively respond to multiple environmental scenarios; in other words, organizations must be built to change (Lawler & Worley, 2006).

Building Talent-Based Competitive Advantage When organizations are built to change, talent management is central to organizational development and change (Bartlett & Ghoshal, 2002). People have always been viewed as integral to change, because change is planned, implemented, and evaluated by people. However, the relationship between people and change has been predominantly negative, as people are often viewed as a source of resistance to change due to fear, in�lexibility, or unwillingness to change (Ford, Ford, & D’Amelio, 2008; Kegan & Lahey, 2001). To meet the challenges of fast-paced, dynamic, and hard-to-predict environmental change, many organizations are choosing to become more human- capital-centric rather than structure-centric. A human-capital-centric organization has been de�ined as “one that

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aligns its features (reporting systems, compensation, division and department structure, information systems, and so on) toward the creation of working relationships that attract talented individuals and enable them to work together in an effective manner” (Lawler, 2008, p. 9). This special treatment of talent goes beyond merely relying on the quantity and quality of HR, which characterizes most organizations in today’s service economy.

Learning From Virtuous Spirals The direct, reciprocal correspondence between strategy and talent management in a human-capital-centric organization can promote its ability to experience and intentionally learn from virtuous spirals. These are periods of dynamic alignment with the environment when the organization is able to seamlessly string together a series of temporary competitive advantages. For example, an organization can use its success in creating and marketing a new product line to learn more about its competencies and capabilities, as well as its employees’ talents and strengths. This in turn can inform future strategic direction and fuel continuous research and development of new products that would align those competencies, capabilities, talents, and strengths with future market needs.

Furthermore, the organization’s members may experience similar virtuous spirals on an individual level (Lawler, 2003), which leads to a strong employer and leadership brand (Ulrich & Smallwood, 2007). This in turn can sustain the organization’s human-capital-centric identity and strategic intent. An organization that recognizes and promotes its competencies and capabilities, as well as its employees’ talents and strengths, will likely pursue a strategic direction that will be attractive to similar-minded investors, employees, and community partners, who in turn can leverage those same sources of competitive advantage.

Appreciative Inquiry

Appreciative inquiry is another positive approach to organizational health and well-being that a number of organizations have successfully applied over the past decade. Appreciative inquiry is “the cooperative, coevolutionary search for the best in people, their organizations, and the world around them” (Cooperrider & Whitney, 2005, p. 8). This search involves systematically discovering “what gives life to an organization or a community when it is most effective and most capable in economic, ecological, and human terms” (Cooperrider & Whitney, 2005, p. 8).

Appreciative inquiry diverges from the more common problem-oriented approaches and views organizations not as problems to be solved but rather as potential sources of life, meaning, and ful�illment. Emphasis is on the organization’s strengths and capabilities, what makes it unique, and how it functions when it is at its best. Understanding these positive characteristics and their underlying conditions facilitates their maintenance and replication over time, which can lead to sustainable competitive advantage. In other words, emphasizing what is positive in an organization promotes its health and well-being over time.

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10.5 Positivity Matters: Can Happiness Make You Healthier and More Successful?

Happiness and well-being have received more attention in more af�luent populations and nations such as the United States, where the pursuit of happiness is considered a constitutional right. However, these subjects have also received increased attention worldwide, across a variety of cultures. In response, well-being experts such as Ed Diener (2000) have proposed a national index of happiness that raises happiness to a level comparable with economic, social, and political priorities that have traditionally received more emphasis and resources. As discussed earlier, the importance of worker happiness is becoming increasingly recognized due to the connection between physical and mental well-being and the escalating costs of health care and resulting decrease in productivity. However, the question remains: Does happiness make people healthier and more successful, or is it that healthier and more successful people just have more reasons to be happy?

Positivity and Success

As you know from previous chapters, a correlation between two variables does not explain which one causes the other or the mechanisms through which that causation takes place. Until recently, this applied to the correlation between positivity and happiness. A few years ago, happiness expert Sonja Lyubomirsky and her colleagues conducted a meta-analytical study that integrated the �indings of many previous studies. They were able to show that positivity and happiness indeed cause success, rather than the other way around. Happiness leads to positive outcomes in numerous life domains, including higher work productivity, stronger relationships, and even better physical and mental health (Lyubomirsky, King, & Diener, 2005). Therefore, in order to improve the chances of experiencing successful outcomes in the workplace, organizations should make happiness a strategic priority.

Increasing Your Own Level of Positivity

Positivity and happiness are determined by many factors. Although some of these factors are genetic, others are hardwired at a very early age due to cultural factors and parenting styles. Positivity also tends to be in�luenced by circumstances such as age, income, marital status, looks, daily interactions, and even the weather. Many people have given up on trying to become happier, adopting the deterministic belief that their level of happiness is beyond their control. There is even extensive literature on the possibility of a “hedonic treadmill” that makes people revert back to their original levels of happiness and well-being after temporarily experiencing happiness or unhappiness (Kim- Pietro, Diener, Tamir, Scollon, & Diener, 2005). There is some truth to this theory; recent research shows that about 50% of our happiness level is determined by a set point, or a happiness baseline that is controlled by stable factors (e.g., genetics). Another 10% is determined by situational factors. However, this leaves 40% open to development by intentionally engaging in happiness-inducing activities (Lyubomirsky, Sheldon, & Schkade, 2005).

Many psychological interventions, when properly implemented, have been shown to successfully increase happiness levels (Fredrickson, 2009; Luthans et al., 2015; Lyubomirsky, 2007). These include the following methods:

Setting challenging and meaningful goals Disputing negative thinking and deliberately practicing positive self-talk Choosing to forgive others and letting go of grudges and hard feelings Counting one’s blessings and intentionally expressing gratitude for them Visualizing future success Practicing healthy habits such as a balanced diet, adequate sleep, and regular exercise

These approaches are backed by an extensive tradition in psychological research and practice. They all use as their foundation the notion that people’s appraisals of events are more in�luential on their well-being than the actual, objective dimensions of those events (Kim-Pietro et al., 2005). For example, a job transfer can be interpreted positively (as a promotion or opportunity for added visibility and exposure to new information) or negatively (as

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being unwanted or increasing the probability of failure). Well-being can be increased, with measurable impact on success in and beyond the workplace, when employees are taught to more positively interpret their circumstances.

Consider This: Increasing Your Happiness Level

Review the list of ways to increase your level of happiness:

Set challenging and meaningful goals. Dispute negative thinking and deliberately practice positive self-talk. Choose to forgive others and let go of grudges and hard feelings. Count one’s blessings and intentionally express gratitude for them. Visualize future success. Practice healthy habits such as a balanced diet, adequate sleep, and regular exercise.

Next, rank these methods from high to low in terms of which resonate with you most based on your personality, comfort level, or need to pursue them. Try the �irst method on your list this week and commit to pursue it for at least 1 full week. At the end of the week, re�lect on the outcome. Have you felt happier? If this method has worked for you, incorporate it into your weekly schedule and commit to it for a longer period of time. If not, repeat this exercise, going down your list of preferences, until you �ind a method that works for you.

Find Out for Yourself: Your Happiness Level

Visit the University of Pennsylvania’s Authentic Happiness website and take some of the tests provided to assess your level of positivity and happiness.

Authentic Happiness Questionnaire Center (https://www.authentichappiness.sas.upenn.edu/testcenter)

Making Employees Happier

Although intentionally undertaking certain individual activities can increase happiness, context also plays an important role. For example, perceived supervisory and organizational support is a strong predictor of employee positivity and well-being (Glaser, Tatum, Nebeker, Sorenson, & Aiello, 1999; Luthans, Norman, Avolio, & Avey, 2008). Positive leaders also promote positivity in their followers. These followers in turn can learn strategies to maintain higher positivity levels, both through the leader’s in�luence and independently (Avolio & Luthans, 2006).

Spillover and crossover effects have also been recognized as having direct in�luence on employees’ happiness and well-being. Spillover effects cause positivity in one life domain to in�luence positivity in another (Judge & Ilies, 2004). Crossover effects occur when the positivity of one individual in one domain in�luences the positivity of others in different domains (Bakker, Westman, & Van Emmerik, 2009). For example, a positive experience at work can increase one’s positivity at home, which in turn can increase one’s positivity at work. These �indings further expand on the importance of work–life balance, wellness, stress reduction, and con�lict management in the workplace.

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Consider This: Spillover and Crossover Effects

1. To what extent does your mood at work affect your mood at home, and vice versa? Think about some examples from the past week.

2. To what extent does your mood affect your family members’ moods and behaviors? Think about some examples from the past week.

3. Have you ever had a bad day at work simply because someone you live with (your spouse, signi�icant other, or roommate) had discussed their own bad day at work with you the night before? What were some of the symptoms of this crossover effect?

How Can Happy Employees Make Their Organization More Successful?

In addition to the conventional wisdom that happy workers are productive workers, when employees are happy at work, their engagement levels may increase. The Gallup Organization has conducted numerous studies on organizations and found that engaged employees have higher productivity and can signi�icantly increase business- unit pro�itability (Harter et al., 2002). The reason why is that engaged employees have higher vitality and energy levels, experience better interactions with coworkers and customers, identify more closely with their organization, and consequently are generally more willing and able to perform well and go beyond their immediate role expectations.

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Summary and Conclusion

Employees’ physical, mental, psychological, and social well-being is critical for individual and organizational success. Indicators of employee well-being include positive attitudes such as job satisfaction, work engagement, and organizational commitment; positive behaviors such as high productivity, organizational citizenship behavior, and safe practices; and low levels of aggression, stress, burnout, and counterproductive work behaviors. Numerous factors can shape employee well-being, including personality, job characteristics, working conditions, person– organization �it, work–life balance, relationships with managers and coworkers, and employee expectations. Managers should learn to proactively promote and support employee well-being. They should also learn to recognize the symptoms of negativity and poor physical or psychological health and manage their causes. Organizations, too, can be healthy by adopting values and practices that are consistent with their strengths and capabilities. They can leverage these characteristics toward continuous change and improvement to meet changing market demands and build a sustainable, talent-based competitive edge.

Chapter 10 Flashcards

Key Terms

affective commitment

appreciative inquiry

attitudes

continuance commitment

counterproductive work behaviors (CWBs)

crossover effects

dispositional anger

Choose a Study ModeView this study set

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employee engagement

employee wellness program

hardiness

human-capital-centric organization

job insecurity

job satisfaction

normative commitment

organizational citizenship behaviors (OCBs)

organizational commitment

person–organization �it

role ambiguity

role con�lict

spillover effects

virtuous spirals

workload

workload incompatibility

workplace stress

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Glossary abilities Innate, enduring basic aptitudes for performing a range of activities.

achievement-oriented leadership A leadership style that sets challenging goals for employees and emphasizes high performance expectations.

action research An approach that focuses on the practical applications of scienti�ic theories and rigorous methods to solve everyday problems.

affective commitment Employees’ emotional attachment to their organization.

Age Discrimination in Employment Act (ADEA) A law that prohibits discrimination against employees over age 40.

agency The willpower, or investment of determination and energy, to set and achieve realistic but challenging goals.

Americans With Disabilities Act (ADA) A law that prohibits discrimination against and requires reasonable accommodations for physically or mentally disabled people who are otherwise quali�ied for a job.

anchoring bias The tendency to make judgments based on initial information without utilizing new information to revise the original assessment.

appreciative inquiry The cooperative, coevolutionary search for the best in people and their organizations, as well as the world around them.

attitudes Cognitive, affective, and behavioral evaluations about speci�ic people, places, or situations.

attribution theory A theory about how people establish explanations for their own and others’ actions and the outcomes that arise from them.

authentic leadership theory A long-term developmental process that draws from the leader’s life experiences, psychological capital (hope, ef�icacy, resilience, and optimism), moral perspective, and a highly supportive organizational climate. The result of this process is higher self-awareness, relational transparency, internalized moral perspective, and balanced processing, which in turn helps the leader better regulate his or her behaviors toward continuous self-development.

autonomy A component of self-determination theory; perception of being in control of one’s own behavior.

availability bias The tendency to assess the frequency or probability of an event based on the most readily remembered information.

behavioral criteria The training-evaluation level in which actual changes in job performance that occur as a result of training are assessed.

behaviorally anchored rating scale (BARS) A method for rating worker performance in which performance dimensions and critical incidents that exemplify both effective and ineffective job performance are identi�ied, transformed into behavioral statements that describe different levels of performance, assigned numerical values, and used as anchors in a typical graphic rating scale.

behavioral observation scale (BOS) A method for rating worker performance that is similar to BARS, except that instead of performance quality, it rates the frequency with which a worker is observed to perform a critical job behavior.

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behavioral theories of leadership Theories that focus more on leaders’ observable behaviors than on their traits, suggesting that leadership is attainable by anyone with the correct training and experiences.

bounded rationality The notion that humans’ limited mental abilities combined with external factors over which they have little or no control prevent them from making perfectly rational decisions.

brainstorming A process in which team members attempt to increase the number and creativity of solutions by verbally suggesting ideas or alternative courses of action.

broaden-and-build model of positive emotions The notion that positive emotions broaden our thought–action repertoires and help build mental, physical, social, and psychological resources.

career Changes in job or organizational level over the course of a person’s work life.

cautious shift A phenomenon that occurs when discussion prompts teams to make decisions that are more conservative than those originally proposed by individual members.

charismatic leader A leader who challenges the status quo, rallies followers around an inspirational vision, empowers followers, supports followers’ needs, and takes personal risks to achieve success.

coercive power Power that is based on fear of punishment.

collective ef�icacy A group’s shared belief in its capabilities to organize and execute courses of action that will produce a given level of attainment.

collectivist Tending to value harmony, success, and the needs of the group over individuals’ personal needs and desires.

common-good approach The notion that ethics should consider the welfare of everyone.

communication The transfer of meaning from one person to another.

communication network Also known as the grapevine, a network that arises when workers establish lines of communication among themselves, including peers, members of both higher and lower hierarchical levels, and workers in different areas of the company.

competence A component of self-determination theory; perceived ability and effectiveness.

compressed workweek An alternative work arrangement in which an employee works the same number of hours as a typical workweek (usually 40 hours) but in fewer days.

con�irmation bias The tendency to look for information that con�irms or supports what we believe to be true and to discount information that disproves or does not support it.

consensus The extent to which behavior is common across individuals.

consideration A people-centric leadership style that includes relationship behaviors expressed as displays of trust, camaraderie, and regard for workers’ feelings.

consistency The extent to which a behavior is repeated over time.

constructs Abstract, intangible personal attributes.

content theories of motivation Motivation theories that try to comprehensively identify what motivates people.

contingency theories of leadership Theories that address the complex ways in which situational factors interact with a leader’s style and impact his or her effectiveness.

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continuance commitment Employees’ perceptions of the economic value of staying with an organization.

contrast effect The tendency to evaluate two things that occur close together in time against one another rather than against a �ixed standard.

counterproductive work behaviors (CWBs) The opposite of organizational citizenship behaviors; negative behaviors against the organization.

creativity The generation of ideas that are both original and adaptive.

Cronbach’s alpha A statistical measure of the intercorrelations across items in a test.

cross-functional team A team in which representatives of approximately the same hierarchical level from many functional areas of an organization combine forces to solve problems.

crossover effects Effects that occur when the mood of one individual in one domain in�luences the moods of others in different domains.

debiasing judgment A process of becoming aware of cognitive biases in order to eliminate them from the decision- making process.

determinism The degree to which people believe they control what happens in their lives.

development Discretionary activities that help the worker learn the knowledge and skills that will be required in his or her profession.

diagonal communication Communication that �lows between managers and workers located in different parts of the business.

directive leadership A leadership style that provides task structure by instructing employees what work to do and when to complete it.

disparate impact An illegal situation in which a policy or selection procedure that does not explicitly discriminate against members of a protected class has a discriminatory effect, whether intended or unintended.

disparate treatment An illegal situation in which an organization explicitly discriminates against an individual based on one of the protected classes.

dispositional anger A person’s tendency to experience anger in almost any situation.

distinctiveness The extent to which a behavior is unique to a particular situation.

distributive justice According to equity theory, the fairness of the outcomes received.

“doing” orientation The tendency to value action over contemplation.

downward vertical communication Sometimes referred to as hierarchical communication, messages that �low from a higher to a lower level of the organizational hierarchy.

ef�icacy One’s belief about his or her ability to mobilize the motivation, cognitive resources, and courses of action necessary to execute a speci�ic action within a given context.

emotional intelligence (EI) Self-awareness and the ability to detect others’ emotions and to manage one’s own emotions.

employee engagement The level of enthusiasm a person feels for his or her job.

employee life cycle Stages of an employee’s relationship with an organization.

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Employee Polygraph Protection Act A law that limits the scope of lie detector use and prohibits it as the sole determinant in hiring and �iring decisions.

employee wellness program A systematically designed, multicomponent program that promotes and supports employees’ physical, mental, social, and psychological health, safety, and well-being.

Equal Pay Act A law that prohibits pay differentials for equal jobs across genders.

equity theory The notion that motivation is in�luenced by our perception of how equitably or fairly we are treated at work, through comparing the ratio of our inputs (effort, experience, education, and competence) invested in a job and the outcomes (pay, bene�its, recognition, and promotions) with the ratio of another person’s or group’s inputs and outcomes in the same or a similar job.

escalation of commitment bias The notion that when people make a decision they tend to stick with it, and the more invested they become in their choice the less likely they are to abandon it, even when the costs of the decision outweigh the bene�its.

ethical leadership theory An emerging theory that emphasizes integrity and altruism of the leader, and collective motivation and encouragement for the followers.

ethics Standards of behavior that provide guidelines for how human beings ought to act in various situations.

existence, relatedness, and growth (ERG) theory A content motivation theory that recognizes three basic categories of needs—existence, relatedness, and growth—which are hierarchical but can be pursued simultaneously or in any order.

expectancy Effort–performance relationship in Vroom’s expectancy theory; the probability perceived by the worker that expending effort on an activity will lead to high performance.

expectancy theory The notion that motivation is determined by the outcomes that people expect as a result of their actions on the job.

expert power Power that stems from a leader’s special skills, knowledge, and expertise.

extrinsic motivation Motivation triggered by tangible, externally generated rewards and/or punishments.

Family and Medical Leave Act A law that grants employees who have worked for 1 or more years for an organization that employs 50 or more workers up to 12 weeks of unpaid leave for family or medical reasons in any given 1-year period.

Fiedler’s contingency model A contingency model of leadership that categorizes leaders as either task oriented or relationship oriented and maintains that the effectiveness of either type depends on the situation and the amount of control the leader has over it.

�lextime Short for �lexible work time; an alternative work schedule in which the worker has the discretion to determine his or her arrival and quitting times.

�low A state in which one experiences activities that are so intrinsically motivating and rewarding that time may seem as though it is standing still.

forced distribution A subjective performance measure in which managers place employees into performance categories based on preestablished proportions.

free riding A belief that sometimes occurs in a team context, where a team member believes the other members will pick up the slack so he or she does less work.

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frustration-regression principle A corollary of Alderfer’s ERG theory, according to which existence and/or relatedness needs resurface when growth needs are frustrated.

fundamental attribution error The tendency to overattribute others’ behavior to dispositional factors such as abilities, traits, and motives and to underattribute their behavior to situational factors outside their control.

goal-setting theory The notion that speci�ic, dif�icult goals lead to greater performance than vague goals.

graphic rating scale The most commonly used method for rating worker performance, in which managers observe speci�ic employee behaviors or job duties along a number of predetermined performance dimensions and rate the quality of performance for each dimension on a scale ranging from high to low.

group polarization Convergence on extreme positions on either side of an issue.

groupthink Deterioration of mental ef�iciency, reality testing, and moral judgment resulting from in-group pressure.

hardiness The belief that one controls the events in one’s life.

Hawthorne effect The notion that human dimensions and interpretations (positive or negative) are more signi�icant contributors to behavior than the physical environment.

heuristics General rules of thumb that help reduce the complexities of information processing involved in making decisions.

hierarchy of needs The most in�luential of the needs-based theories of motivation; proposes �ive hierarchical levels of needs, from the most basic to the most advanced: (1) physiological, (2) safety, (3) belonging, (4) esteem, and (5) self-actualization.

hindsight bias The tendency for people to believe that they could have predicted the correct outcome after they know the actual outcome.

hope A positive motivational state that is based on an interactively derived sense of successful (a) agency (goal- directed energy) and (b) pathways (plans to meet goals).

hostile work environment A discriminatory and thus illegal form of harassment where some employees create an uncomfortable or offensive environment for others, causing them undue hardship and hindering their ability to adequately perform their jobs.

human-capital-centric organization An organization that aligns its features toward the creation of working relationships that attract talented individuals and enable them to work together effectively.

human relations A �ield that studies the factors that produce motivated and satis�ied employees.

hygiene factors According to Herzberg’s theory of motivation, hygiene factors tend to be associated with the job context—such as pay, working conditions, and leadership style—which can prevent negative feelings about and dissatisfaction with one’s job.

idiosyncrasy credit The latitude and discretion to deviate from expectations based on positive past encounters and conformity to norms.

Immigration Reform and Control Act A law that prohibits the hiring of illegal aliens.

implicit leadership theory (ILT) A leadership theory that de�ines leadership from the follower’s point of view; leaders who �it their followers’ model of their ideal leader are likely to be more effective.

industrial/organizational (I/O) psychology The scienti�ic study of the workplace that applies the rigorous methods of psychology to issues of critical relevance to business, including talent management, coaching,

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assessment, selection, training, organizational development, performance, and work–life balance.

industrial psychology The study of individual-level phenomena in the workplace, such as assessing workers’ personalities, knowledge, skills, and abilities in order to match them with the right jobs; measuring and managing employee attitudes and emotions; motivating workers through the right working conditions and reward systems; training and developing employees for their current and future roles; and ensuring that workers have healthy, safe, and balanced jobs and lives.

informational justice The thoroughness of the explanation for an outcome.

initiating structure A task-centric leadership style in which the leader provides clear guidance and structure to help employees achieve speci�ic goals.

instrumentality Performance–outcome relationship in Vroom’s expectancy theory; the degree to which the worker believes that successful performance will lead to the desired outcome.

interpersonal justice Also called interactional justice; the degree to which the individual is treated with dignity and respect.

intrinsic motivation Motivation generated by one’s interest in the job for its own sake.

job A set of related tasks or activities that are performed by one or more people.

job analysis The systematic study of a job based on information that is collected about the directly observable and veri�iable job tasks and worker behaviors for that speci�ic job.

job characteristics model A model that identi�ies �ive speci�ic characteristics that impact workers’ attitudes and motivation: skill variety, task identity, task signi�icance, autonomy, and feedback.

job context External factors that in�luence the way work is performed.

job description What a worker is expected to do to perform a job.

job enlargement Increasing a job’s diversity by expanding the number and variety of tasks workers perform within that job.

job family A group of similar jobs.

job insecurity The feeling that one’s job is not permanent.

job involvement The degree to which workers are involved in decisions that affect their work.

job rotation Periodically moving workers from one job or task to another.

job satisfaction The feelings people have about their job based on its characteristics.

job speci�ication Quali�ications of the ideal candidate for a job.

justice approach The notion that in order to be ethical, decisions must treat people equally, or at least equitably, and be based on a defensible standard.

knowledge A set of related facts and information about a speci�ic �ield or work domain.

lateral communication Communication that �lows between peers at the same level of a work group.

leader–member exchange theory (LMX) A leadership theory that emphasizes the way in which the leader– follower relationship affects the leadership process.

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leadership derailment The process by which a leader displays increasingly ineffective behavior.

leadership development Expanding the collective capacities of organizational members to effectively engage in leadership roles and processes.

learning A permanent change in knowledge or skill produced by experience.

learning criteria The training-evaluation level in which trainers measure how much trainees have learned during the course of a training program.

legitimate power Power that stems from one’s job title or position within the organization.

manager-led team The traditional, most common type of team, in which a manager acts as team leader and is responsible for de�ining goals, methods, and functions, and the team has little operational input and is responsible only for completing the work outlined by the manager.

mastery experiences Repeated opportunities to experience success.

mentoring A process in which an experienced or higher ranking worker provides guidance for a junior-level worker.

merit-based pay Also called variable pay; a common pay-for-performance method that attempts to link pay with performance in white-collar jobs; managers periodically evaluate their employees’ performance on preestablished dimensions and recommend whether employees should be rewarded some amount of merit pay over and above their base salaries.

meta-analysis A combination of the results of several studies that address a set of related research hypotheses.

motivators According to Herzberg’s theory of motivation, motivators tend to be associated with the actual job dimensions—such as job content, responsibilities, and achievements—which can yield positive feelings about and satisfaction with one’s job.

National Labor Relations Act A law that legalizes unionization and collective bargaining.

need for achievement A component of McClelland’s needs theory; the drive to excel and achieve results; the desire to gain satisfaction from personal attainment.

need for af�iliation A component of McClelland’s needs theory; the desire to form close personal relationships and to be liked by others.

need for power A component of McClelland’s needs theory; the drive to in�luence or control others; the desire to be responsible for others.

network centralization The number of people in charge of controlling the �low of communication.

network connectivity The extent to which members of a network are connected to each other, either directly or indirectly.

network density The number of connections that exist between network members in relation to the total number that could possibly form.

nominal group technique A structured decision-making process in which team members generate ideas on their own, without any interaction, and then bring their ideas to the entire group to be evaluated.

normative commitment The degree to which employees remain with an organization because they feel a moral obligation to do so.

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objective performance measures Quantitative measures of performance that can be found in unbiased organizational records.

objective tests Tests that have one clearly correct answer.

occupation A job that is essentially the same across organizations and locations.

opportunity costs of training Alternative uses of employee and trainer time and effort and organizational resources forgone in order to allocate these resources to training.

optimism General positive future expectancies; an explanatory style that attributes positive events to personal, permanent, and pervasive causes and negative ones to external, temporary, and situation-speci�ic factors.

organizational analysis An organizational-level assessment that identi�ies training needs based on the organization’s mission, business strategy, and performance objectives; it is used to determine the broad direction for the organization’s training programs as well as where and when they are needed.

organizational citizenship behaviors (OCBs) Pro-organizational behaviors that go beyond formal job expectations.

organizational climate Shared beliefs about an organization’s environment to which members attach psychological meaning to help them make sense of their environment.

organizational commitment A worker’s level of psychological attachment to the organization that is composed of three dimensions: affective, normative, and continuance.

organizational culture Shared assumptions that guide employees’ interpretations of and actions in an organization by de�ining appropriate behavior for various situations.

organizational development A systematic approach to organizational-level change and improvement.

organizational justice According to equity theory, the overall perception of the fairness of actions that occur in the workplace.

organizational psychology The study of group- and organizational-level phenomena in order to understand the interactions and relationships among individuals and collectives working toward the achievement of common goals.

paired comparison A subjective performance measure in which managers systematically evaluate each worker’s performance compared to the other workers on the team by comparing one pair of workers at a time, judging which of the two demonstrates superior performance, and then creating a rank ordering based on the number of times each worker is considered the better performer of a pair.

participative leadership A leadership style that involves employees in decisions that affect their work.

participative management A form of job involvement in which the employee and supervisor work jointly to make decisions and thus share the decision-making power equally.

path–goal theory A theory that proposes four leadership styles leaders can utilize to motivate employees to achieve their goals: directive, supportive, participative, and achievement oriented.

pathways The “waypower,” or ability to generate alternative paths to goals, even when the original ones become blocked.

Patient Protection and Affordable Care Act A law that increases the responsibilities of employers, employees, and insurance companies to expand health care coverage’s accessibility and affordability and progressively penalizes them for failing to do so.

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people costs The costs associated with �inding, hiring, and retaining employees.

percentile scores The percentage of people in the standardized sample who scored below an individual’s raw score.

perception The process by which people bring meaning to their world by organizing and interpreting the stimuli around them.

performance appraisal The formal process in which employee performance is assessed, feedback is provided, and corrective action plans are designed.

person analysis A training-needs assessment that attempts to discover not only who needs to be trained but also what training each person needs.

person–organization �it The extent to which employees and their company share values; people will be happiest and most successful working for organizations in which there is a good �it.

piece-rate pay A common pay-for-performance method in production jobs; workers do not typically get a base salary but receive a set amount of money for each unit they complete.

positive organizational behavior (POB) The study and application of positively oriented HR strengths and psychological capacities in order to improve performance in the workplace.

positive organizational scholarship (POS) A movement in organizational science that focuses on the dynamics that lead to exceptional individual and organizational performance, such as developing human strength, producing resilience and restoration, and fostering vitality.

power The capacity for one person to in�luence the behaviors of another.

power distance The relative importance cultures place on hierarchical structure, authority, and acceptance of unequal distribution of power.

Pregnancy Discrimination Act A law that prohibits an employee from being dismissed due to pregnancy and ensures job security during maternity leave.

primacy effect The tendency to rely on information gathered from earliest experiences with a target or series of targets.

procedural justice According to equity theory, the fairness of the processes used to determine outcomes.

process theories of motivation Motivation theories that attempt to discover how motivators trigger the drives that can lead to speci�ic behaviors.

production blocking Individual team members lose their train of thought and become cognitively blocked, limiting their potential to generate solutions.

project teams Relatively small teams that are temporary, created for a speci�ic reason, given a clear goal, and usually disband at project’s end; usually led by a project manager, who coordinates the people and materials needed to complete the task.

psychological capital (PsyCap) A positive psychological state of development that is characterized by con�idence, optimism, hope, and resiliency.

psychological climate A lasting, multidimensional phenomenon that shapes how individuals within an organizational unit behave in response to organizational demands. This phenomenon is based on experience or observation of the given environment.

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quid pro quo Latin for “this for that”; when used in regard to harassment, it refers to the discriminatory and thus illegal practice of requiring the harassed employee to exchange sexual favors against his or her will.

rank ordering A subjective performance measure in which managers rank their employees from best to worst.

rational decision-making model The process of identifying and selecting the outcome of maximum value to the organization through six steps: de�ining the problem, identifying the criteria for the solution, weighing the criteria, generating alternatives, rating alternatives according to the criteria, and computing the optimal decision.

raw scores The number of points a person scores on a test.

reaction criteria The initial training-evaluation level in which trainees report their general satisfaction with the training after it is over.

recency effect The tendency to rely on information gathered from a person’s most recent experiences with a target or series of targets.

referent power Power that develops out of admiration for and the desire to be like the leader, regardless of formal level of leadership or actual relationship to follower.

relatedness A component of self-determination theory; feeling understood and cared for by others.

relationship con�lict Con�lict that stems from interpersonal disagreements between team members.

reliability The extent to which the results from a predictor such as a selection tool, method, or procedure can be consistently replicated over time and across situations.

resilience The capacity to rebound or bounce back from adversity, con�lict, failure, or even positive events, progress, and increased responsibility.

responsibilities Groups of related tasks that represent a generic behavior, which helps accomplish major goals.

results criteria The highest level of training evaluation; indicates the economic value of the training program to the organization.

reverse discrimination An illegal practice in which the majority group is discriminated against in favor of a minority group.

reward power In�luence through positive rewards.

rights approach The notion that an ethical decision is one that best protects and respects people’s moral rights.

risky shift A phenomenon that occurs when, after discussion, a team makes decisions that are riskier than those originally advocated by individual team members.

role ambiguity A condition that occurs when one is vague or unclear about one’s role responsibilities and functions.

role con�lict Two or more incompatible demands at work or across work and nonwork roles.

role incumbents People who currently hold a particular job or have held it in the past.

satis�icing The notion that the decision maker establishes an adequate level of acceptability for the outcome to a problem and then screens alternative solutions until one is deemed satisfactory or suf�icient.

scienti�ic management The use of scienti�ic methods to design work that optimizes worker productivity.

selective perception The tendency to pay attention to people, objects, or events that stand out.

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self-determination theory (SDT) A contemporary theory of motivation that proposes that motivation is determined by both content and process.

self-managed work team (SMWT) A group of people who work together to accomplish a goal by managing their own work in a collaborative environment without an of�icially designated leader.

self-serving bias The tendency for people to attribute their own successful behaviors and outcomes to dispositional characteristics and to blame external factors for poor behaviors and failures.

shared mental model A team’s shared understanding of team processes, tasks, roles, and how the team’s work will be done.

skills The minimum level of competency at which a worker must perform a task or learned activity.

social loa�ing Coasting through a team project, letting other members of the team do the brunt of the work.

spillover effects Effects that occur when the mood in one life domain in�luences another life domain.

spiritual leadership theory An emerging theory that emphasizes intrinsic motivation of the followers through a sense of membership or community and a sense of calling.

standardization sample A large group of people who take a test and act as a comparison group against whose scores an individual applicant’s scores can be compared.

stereotyping The tendency to assume that objects, people, or experiences that fall into the same group share more characteristics than they actually do.

subjective performance measures Performance measures that rely on human judgments.

subjective tests Tests that have no de�initive right or wrong answer; thus, scores rely heavily on the evaluator’s interpretation and judgment.

sunk costs Permanent losses of resources incurred as the result of a decision.

supportive leadership A leadership style that displays concern for the best interest of the employees.

synergy The notion that the total is greater than the sum of its independent parts.

task A cognitive and/or physical operation that is performed actively and with purpose.

task analysis A training-needs assessment that identi�ies the tasks performed on the job and the speci�ic KSAs needed to perform them.

task con�lict Con�lict that arises in a team in the course of working on a task.

team cohesion The tendency for a team to stick together and remain united in the pursuit of its objectives.

telecommuting An alternative work arrangement that lets employees work at home while staying in touch with their of�ice.

test A method used to make an employment decision about whether to hire, retain, promote, place, demote, or dismiss someone; an instrument or procedure that measures an individual’s employment and career-related quali�ications and characteristics or measures samples of behavior or performance.

test norms The comparison scores provided by a standardization sample.

three-component model of creativity A model that proposes that creativity is the result of a person’s expertise, creative-thinking skills, and motivation.

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360° appraisal A multisource evaluative process that utilizes performance feedback from a variety of sources, such as an employee’s supervisor, peers, subordinates, and internal or external customers, as well as self-evaluation.

Title VII of the Civil Rights Act A law that prohibits discrimination based on sex, religion, race, or national origin in hiring, promoting, �iring, setting wages, testing, training, apprenticeship, and other terms and conditions of employment.

training The formal process of helping workers learn job-relevant knowledge and skills that enable them to perform their current job-related duties.

training generalization The extent to which the trainee is able to apply trained skills and behaviors to �it appropriate, though not necessarily the same, situations on the job.

training-needs assessment The analysis of organizational priorities and worker needs in order to determine when and where to allocate training resources.

trait theories Theories that assume leadership has a biological origin and that leadership is an innate quality that only a very few possess.

transactional leadership A framework in which leaders use rewards and punishment to guide and motivate followers along a path toward established goals.

transfer of training The extent to which trainees effectively apply what they have learned to their jobs.

transformational leadership A framework in which leaders are concerned with improving followers’ performance and motivation and developing them to their fullest potential through inspirational motivation, idealized in�luence, intellectual stimulation, and individualized consideration.

turnover rate The percentage of all the employees in an organization who leave in a given year.

two-factor theory of motivation Also known as motivation-hygiene theory; attributes job satisfaction to job content factors, or motivators, and job dissatisfaction to job context factors, or hygiene factors.

upward vertical communication Communication that �lows from a lower to a higher level of a work group.

U.S. Equal Employment Opportunity Commission (EEOC) An agency that enforces antidiscriminatory laws and facilitates their application in organizations through education and technical assistance.

utilitarian approach The notion that an ethical decision is one that provides the most amount of good while doing the least amount of harm.

utility analysis A scienti�ic approach that uses statistical formulas to quantify the ROI in effective selection and other organizational practices related to people.

valence Rewards–personal goals relationship in Vroom’s expectancy theory; the degree to which an activity’s outcomes have suf�icient personal value (based on needs, goals, and interests).

validity The extent to which a selection tool or procedure can accurately predict subsequent performance.

validity generalization The notion that validity evidence transfers across situations.

virtual teams Groups of individuals who work across time, space, and organizational boundaries and who interact primarily through electronic communications.

virtue approach The notion that people’s actions ought to be consistent with certain ideal virtues that provide for the full development of humanity.

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virtuous spirals Periods of dynamic alignment with the environment when the organization is able to seamlessly string together a series of temporary competitive advantages.

Worker Adjustment and Retraining Noti�ication Act A law that requires employers to give employees a 60-day notice prior to shutting down or conducting massive layoffs.

work group Two or more individuals who interact and share ideas in order to achieve a common goal.

workload The amount of work an employee is assigned or expected to perform in a given amount of time.

workload incompatibility A situation in which the amount of work to be accomplished exceeds the employee’s capabilities.

work log A detailed record of work being done.

workplace stress Harmful physical and emotional responses caused by a poor match between a job’s demands and an individual’s capabilities, resources, or needs.

work teams Work groups characterized by interdependence; collective responsibility for outcomes; authority to decide how to interact, function, and make decisions; and exclusiveness to a few members who possess complementary skills.

written narrative A subjective performance measure in which the manager writes a paragraph or two summarizing a speci�ic employee’s performance over a certain length of time.

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Legislative and Executive Materials

Meadows v. Ford Motor Co., 510 F.2d 939, 949 (6th Cir. 1975).

Uniform Guidelines on Employee Selection Procedures, 29 C.F.R. 1607(1978).