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Human Resource Management

CHAPTER 10

Learning Objectives

10-1 Discuss how companies use human resource management to gain competitive advantage.

10-2 Give reasons companies recruit both internally and externally for new hires.

10-3 Identify various methods for selecting new employees.

10-4 Evaluate the importance of spending on training and development.

10-5 Discuss options for who appraises an employee’s performance.

10-6 Describe the fundamental aspects of reward systems.

10-7 Summarize how unions and labor laws influence human resources management.

Human Resource Management (HRM)

The formal systems for the management of people within an organization.

A pervasive aspect of organizational and managerial life.

It has historically been known as personnel management.

Practices vary greatly from company to company, depending on top executives’ preferences, organizational size, and the extent and type of international activities.

Strategic Human Resource Management

Strategic impact of human resources:

Creates value.

Is rare.

Is difficult to imitate.

Is organized.

Human capital is the knowledge, skills, and abilities of employees that have economic value.

Recall (Chapter 4) that firms hold a competitive advantage when they possess or develop resources that are valuable, rare, inimitable, and organized. We can use the same criteria to talk about the strategic impact of human resources.

These four criteria highlight the importance of people and show the closeness of HRM to strategic management.

Because the HR function is so important, HR managers must know their organization’s business and line managers must know how to hire well and motivate their people.

The HR Planning Process

Demand Forecasts

Determining how many and what types of people are needed.

Labor Supply Forecasts

Estimating the number and quality of current employees and the available external supply of workers.

Reconciling Supply and Demand

Balancing a labor deficit or a labor surplus.

Job Analysis

Determine what is done on a given job and what should be done on that job.

Exhibit 10.1 An Overview of the HR Planning Process

Planning	Programming	Evaluating
HR environmental scanning Labor markets Technology Legislation Competition Economy HR Planning Demand forecast Internal labor supply External labor supply Job analysis	HR activities Recruitment Selection Diversity and inclusion Training and development Performance appraisal Reward systems Labor relations	Results Productivity Quality Innovation Satisfaction Turnover Absenteeism Health

The HR planning process occurs in three stages: planning, programming, and evaluating.

Exhibit 10.1 illustrates the components of the human resources planning process.

Social Entrepreneurship Is Social Enterprise Becoming Big Business?

More social enterprises than ever are being created and brought to scale. Forty-two percent of existing social enterprises were created in the past ten years.

Assume you are the manager of a social enterprise. How would you go about growing your business?

To what degree do you see commercial businesses adopting the social enterprise model?

What was once known as a collection of small, philanthropic start-ups on the periphery of mainstream business is now becoming the new paradigm for what mainstream business should be.

Staffing the Organization

Recruitment

The development of a pool of applicants for jobs in an organization.

Internal and external.

Selection

Choosing from among qualified applicants to hire.

Selection Practices

Applications and résumés.

Interviews.

Reference checks.

Background checks.

Personality tests.

Drug testing.

Cognitive ability tests.

Performance tests.

Integrity tests.

Once HR planning is completed, managers can focus on staffing the organization. The staffing function consists of three related activities: recruitment, selection, and outplacement.

Recruitment activities increase the pool of candidates who can be hired. Recruitment may be internal to the organization (considering current employees for promotions and transfers) or external.

Selection builds on recruiting and is a decision about whom to hire. As important as these decisions are, unfortunately they sometimes are made in careless or cavalier ways.

Interviews

Structured interview

Selection technique that involves asking all applicants the same questions and comparing their responses to a standardized set of answers.

Situational: uses hypothetical situations.

Behavioral: explore what candidates have done in the past.

Chris Ryan/Age Fotostock

The most popular selection tool is interviewing.

In a structured interview, the interviewer conducts the same interview with each applicant.

Employers can conduct unstructured interviews, where they ask each potential employee different questions, or structured interviews in which the employer asks everyone the same questions.

Reliability and Validity

Reliability: the consistency of test scores over time and across alternative measurements.

Validity: the degree to which a selection test predicts or correlates with job performance.

Workforce Reductions

Outplacement

The process of helping people who have been dismissed from the company regain employment elsewhere.

Employment-at-will

The legal concept that an employee may be terminated for any reason.

A termination interview is a discussion between a manager and an employee about the employee’s dismissal.

Unfortunately, managers sometimes must make difficult decisions to terminate people's employment. To some extent, employers can help employees with these problems by offering outplacement.

People sometimes get fired for poor performance or other reasons. Employment-at-will, or termination-at-will, means that an employee may be fired for any reason. A Tennessee court established this in 1884 and the Supreme Court upheld it in 1908. The logic is that if an employee can quit at any time, the employer can dismiss at any time.

Exhibit 10.3 Advice on Termination

Do’s	Don’ts
Make termination the last step in a clear and fair process, being certain you have the facts.	Don’t spring a termination on an employee as a total surprise.
Be sure the person terminating the employee is the employee’s direct supervisor.	Don’t start a meeting unprepared, causing the terminated employee to wait awkwardly while you find answers or call in an HR representative.
Be prepared with answers to basic questions such as the official end date and any severance benefits.	Don’t beat around the bush; state the termination simply and briefly.
Consult with the human resource department to identify any benefits available; give the employee a written list of information about benefits and policies.	Don’t get caught up in responding to the employee’s emotions or views about fairness; focus on practical realities including the need to move on.
Invite a trained HR representative to attend the meeting.	Don’t argue with the employee or apologize.
Listen respectfully.	Don’t offer to help the employee find another job, if you cannot honestly give a good reference.

Terminations can lead to lawsuits, so the manager should prepare carefully by knowing all the facts of the situation and reviewing any documents to make sure they justify the termination.

SOURCES: Ashkenas, Ron, “If You Have to Fire an Employee—Here’s How to Do It Right,” Forbes, March 11, 2013, http://www.forbes.com; Haden, Jeff, “The Best Way to Fire an Employee,” Inc., March 19, 2012, http://www.inc.com; Korn, Melissa, “The Best Ways to Fire Somebody,” The Wall Street Journal, October 26, 2012, http://online.wsj.com.

Legal Issues and Equal Employment Opportunity

Adverse impact

When a seemingly neutral employment practice has a disproportionately negative effect on a protected group.

One common reason employers are sued is adverse impact. For example, if equal numbers of qualified men and women apply for jobs but a particular employment test results in far fewer women being hired, the test had an adverse impact and can be challenged on that basis.

U.S. Equal Employment Laws

Fair Labor Standards Act (1938)

Equal Pay Act (1963)

Title VII of Civil Rights Act (1964)

Executive Orders 11246 and 11375 (1965)

Age Discrimination in Employment Act (1967)

Vocational Rehabilitation Act (1973)

Americans with Disabilities Act Amendments Act (2008)

Civil Rights Act (1991)

Family and Medical Leave Act (1991)

Exhibit 10.4 provides a description of the provisions and enforcement/remedies of these laws.

Training and Development

Training

Teaching lower-level employees how to perform their present jobs.

Development

Helping managers and professional employees learn the broad skills needed for their present and future jobs.

Needs assessment

An analysis identifying the jobs, people, and departments for which training is necessary.

Training usually starts with a needs assessment. Managers conduct an analysis to identify who and what needs training. Job analysis and performance measurements are useful for this purpose.

Types of Training

Orientation training

Training designed to introduce new employees to the company and familiarize them with policies, procedures, culture, and the like.

Team training

Training that provides employees with the skills and perspectives they need to collaborate with others.

Diversity training

Programs that focus on identifying and reducing biases against people with differences and developing the skills needed to manage a diversified workforce.

This slide presents three frequent areas of training.

Performance Appraisal

Performance appraisal (PA) is the assessment of an employee’s job performance.

Generates information.

Used for development.

Assess three categories of performance:

Traits.

Behaviors.

Results.

One of the most important responsibilities you will have as a manager is performance appraisal (PA), the assessment of employees’ job performance. Performance appraisal serves two basic purposes. First, it provides the information managers need to make salary, promotion, and dismissal decisions; helps employees understand and accept the basis of those decisions; and, if necessary, provides documentation that can justify those decisions in court. Second, and at least as important, appraisal serves a developmental purpose.

Exhibit 10.5 Example of BARS for Evaluating Team Member Effectiveness

Outstanding	5	Made critical contributions to the team’s final product. Came to all team meetings prepared. Completed work in a timely and high-quality manner. Offered to help teammates. Took on extra work.
	4	Made important contributions to the team’s final product. Came to all team meetings prepared. Completed work in a timely and high-quality manner.
Average	3	Made a solid contribution to the team’s final product. Came to all team meetings prepared. Completed work in a generally timely and acceptable-quality manner.
	2	Made a moderate contribution to the team’s final product. Missed some team meetings and was inadequately prepared for many. Completed work sporadically and it lacked quality.
Poor	1	Made no meaningful contribution to the team’s final product. Missed most team meetings and deadlines. Did low-quality work.

Team member effectiveness includes several areas, including how much each member contributes to the team’s work.

SOURCE: Adapted from Ohland, M., Loughry, M. and Woehr, D., et al., “The Comprehensive Assessment of Team Member Effectiveness: Development of a Behaviorally Anchored Rating Scale for Self- and Peer Evaluation,” Academy of Management Learning & Education 11 (2012), pp. 609–30.

Exhibit 10.5 contains an example of a behaviorally anchored rating scale (BARS) for evaluating quality.

MBO

Management by objectives (MBO)

A process in which objectives set by a subordinate and a supervisor must be reached within a given time period.

Avoids biases and measurement difficulties of trait and behavioral appeals.

Employee likely to understand and be more committed to reaching objectives.

One approach to results appraisals—management by objectives (MBO)—involves a subordinate and a supervisor agreeing in advance on specific performance goals (objectives).

Who Should Do the Appraisal?

360-degree appraisal

Process of using multiple sources of appraisal to gain a comprehensive perspective on one’s performance.

Provides a more complete picture of employee’s strengths and weaknesses.

Employee motivated to improve their ratings.

Employees not always willing to rate their colleagues harshly.

imtmphoto/Shutterstock

Managers and supervisors are the traditional sources, because they often are in the best position to observe an employee’s performance. However, companies also can use peers, team members, and customers to provide input.

Exhibit 10.6 A PA Interview for Underperforming Employees

Step	Action
1.	Summarize the employee’s performance. Describe the performance in behavioral or outcome terms, such as sales or absenteeism. Don’t say the employee has a poor attitude; rather, explain which employee behaviors indicate a poor attitude.
2.	Describe the expectations and standards and be specific.
3.	Determine the causes for the low performance; get employee’s input.
4.	Discuss solutions to the problem with the employee playing a major role.
5.	Agree to a solution. As a supervisor, you have input into the solution. Raise issues and questions but also provide support.
6.	Agree to a timetable for improvement.
7.	Document the meeting.
8.	Follow up with meetings if needed.

There is no one best way to do a PA interview and one of the most difficult interviews comes when an employee is performing poorly.

Pay Decisions

Three types of decisions:

Pay level: high, average, or low.

Pay structure: pricing different jobs within organization.

Individual pay: different pay rates for different people holdings jobs of similar worth.

Exhibit 10.7 Factors Affecting the Wage Mix

Internal Factors	External Factors
Compensation policy of organization	Conditions of labor market
Worth of job	Cost of living
Employee's relative worth	Collective bargaining
Employer's ability to pay	Legal requirements

Snell, S. A. and Bohlander, G. W., Managing Human Resources, 16th ed. Boston, MA: Cengage Learning, 2012

Allocating rewards is a vital HR activity. Traditionally pay has been the primary monetary reward, but benefits receive a great deal of attention today.

Reward systems serve the strategic purposes of attracting, motivating, and retaining people. Wages are based on a complex set of forces.

Exhibit 10.8 Pay Structure

Sherman, A., Bohlander, G. and Snell, S., Managing Human Resources, 11th ed. Boston, MA: South-Western, 1998.

The pay structure decision is how to price different jobs within the organization. Jobs similar in worth usually are grouped into job families. Each job family has a pay grade with a floor and a ceiling.

Incentive Systems and Variable Pay

Various incentive systems have been devised to encourage and motivate employees to be more productive.

Individual incentive plans.

Group incentive plans.

Profit-sharing plans.

The most common type of incentive system is the individual incentive plan.

Group incentive plans base pay on group performance. These plans can give employees a sense of shared participation and even ownership in the performance of the team or unit.

Profit-sharing plans usually apply to a division or organization as a whole, although some incentives may still be tailored to unit performance.

Executive Pay and Stock Options

Stock options are the fastest-growing part of executive compensation.

Gives holder right to purchase shares at a specified price.

Aligns managers’ interests with that of shareholders.

Employee Benefits

Three required benefits:

Workers’ compensation.

Social Security.

Unemployment insurance.

Cafeteria benefit program:

Allows employees to choose from a menu of options to create a benefit package tailored to their needs.

Workers’ compensation provides financial support to employees suffering a work-related injury or illness. Social Security, as established in the Social Security Act of 1935, provides financial support to retirees; in subsequent amendments, the act was expanded to cover employees with disabilities. The funds come from payments made by employers, employees, and self-employed workers. Unemployment insurance provides financial support to employees who are laid off for reasons they cannot control.

Because of the wide variety of possible benefits and considerable differences in employee preferences and needs, companies often use cafeteria or flexible benefit programs. Employees received credits that they spend on benefits they desire. They use their credits toward customized benefit packages of benefits—medical and dental insurance, dependent care, life insurance, and so on.

Legal Issues in Compensation and Benefits

Fair Labor Standards Act.

Equal Pay Act (EPA) of 1963.

Equal vs. comparable work.

Pregnancy Discrimination Act of 1978.

Employee Retirement Income Security Act (ERISA) of 1974.

Occupational Safety and Health Act (OSHA) of 1970.

The comparable worth doctrine implies that women who perform different jobs of equal worth as those performed by men in the same company should be paid the same wage.

Labor Relations

Labor relations

The system of relations between workers and management.

National Labor Relations Act, or Wagner Act (1935).

Labor-Management Relations Act, or Taft-Hartley Act (1947).

Labor-Management Reporting and Disclosure Act, or Landrum-Griffin Act (1959).

Labor relations is the system of relations between workers and management.

The National Labor Relations Act (also called the Wagner Act after its legislative sponsor) ushered in an era of rapid unionization by (1) declaring labor organizations legal, (2) establishing five unfair employer labor practices, and (3) creating the National Labor Relations Board (NLRB).

The Labor-Management Relations Act, or Taft-Hartley Act (1947), protected employers’ free speech rights, defined unfair labor practices by unions, and permitted workers to decertify (reject) a union as their representative.

The Labor-Management Reporting and Disclosure Act, or Landrum-Griffin Act (1959), swung the public policy pendulum midway between organized labor and management. By declaring a bill of rights for union members, establishing control over union dues increases, and imposing reporting requirements for unions, Landrum-Griffin was designed to curb abuses by union leadership and rid unions of corruption.

Exhibit 10.9 Determinants of Union Voting Behavior

First, economic factors: unions attempt to raise the average wage rate for their members. Second, job dissatisfaction: specific triggers include poor supervisory practices, favoritism, and perceived unfair or arbitrary discipline and discharge. Third is the belief that the union can obtain desired benefits. Finally, the image of the union: headline stories of union corruption and dishonesty can discourage workers from unionizing.

Collective Bargaining

Union shop

An organization with a union and a union security clause specifying that workers must join the union after a set period of time.

Arbitration

Use of a neutral third party to resolve a labor dispute.

Right-to-work

Legislation that allows employees to work without having to join a union.

In a union shop, a union security clause specifies that workers after a while must join the union.

Right-to-work states, through restrictive legislation, do not permit union shops; that is, workers have the right to work without being forced to join a union. The southern United States has many right-to-work states. The wage component of the contract spells out pay rates, including premium pay for overtime and paid holidays. Individual rights usually specify how seniority is considered in decisions such as pay, job bidding, and layoffs.

Exhibit 10.10 Decline in Union Membership, 1983-2018

SOURCE: Data adapted from the Bureau of Labor Statistics, “Union Membership Rate 10.5 Percent in 2018, Down from 21.1 Percent in 1983,” press release, January 25, 2019, https://www.bls.gov/opub/ted/2019/union-membership-rate-10-point-5-percent-in-2018-down-from-20-point-1-percent-in-1983.htm?view_full.

In recent years, union membership has declined to 10.5 percent of the U.S. labor force—down from a peak of more than 33 percent at the end of World War II. Automation eliminated many of the types of manufacturing jobs that used to be union strongholds. Employees in most office jobs are less interested in joining unions and are more difficult to organize.

Management in Action Google: Hiring for Change

Google is focused on creation and innovation. Projects and roles at Google are fluid and dynamic, which requires a workforce that is able to adapt and change according to ever-evolving demands.

HR specialists look to hire generalists, not specialists.

What are your thoughts about the preference of generalists over specialists? What benefits and drawbacks do you see in this approach?

Do you think Google’s HR strategy will enable it to maintain a competitive advantage? Why or why not?

Part of ensuring that Google is hiring curious generalists is implementing a rather unorthodox element to its hiring practice. In most organizations, one person ultimately decides who gets hired or not. At Google, however, all hiring is done by committee.

Do you think Google’s HR strategy will enable it to maintain a competitive advantage? Why or why not?

Answers will vary. In explaining their opinion, students should consider the validity and reliability of Google’s measurements, the competition for labor, and the considerations that influence tech workers in deciding where they want to work. They also should consider whether Google’s use of data for HRM decisions is something it can do better than other firms trying to hire and keep the same kinds of employees.

Managing Diversity and Inclusiveness

CHAPTER 11

Learning Objectives

11-1 Describe how changes in the U.S. workforce make diversity a critical organizational and managerial issue.

11-2 Distinguish between affirmative action and managing diversity.

11-3 Explain how diversity, if well managed, can give organizations a competitive edge.

11-4 Identify challenges associated with managing a diverse workforce.

11-5 Define monolithic, pluralistic, and multicultural organizations.

11-6 List steps managers and their organizations can take to cultivate diversity.

Managing Diversity

Diverse workforce

One in which there are both similarities and differences among employees in terms of age, cultural background, physical abilities and disabilities, race, religion, sex, and sexual orientation.

Managing diversity

Managing a culturally diverse workforce by recognizing the characteristics common to specific groups of employees while dealing with employees as individuals and supporting, nurturing, and utilizing their differences to the organization’s advantage.

This chapter discusses why a proactive approach to developing and managing a diverse workforce has become not only a legal or moral obligation but a fundamental business requirement as well.

Managing diversity involves, first, such basic activities as recruiting, training, promoting, and using to full advantage people with different backgrounds and perspectives. It also means understanding and deeply valuing employee differences to build a more effective and effective organization.

Diversity: A Brief History

Most immigrants to the United States from late 1800s to early 1900s were from Italy, Poland, Ireland, and Russia.

It was considered poor business practice for white Protestant-dominated insurance companies to hire Irish, Italians, Catholics, or Jews.

It was not until the 1960s that the struggle for acceptance by various ethnic and religious groups had, on the whole, made progress.

Managing diversity is not a new management issue. From the late 1800s to the early 1900s, most of the groups immigrating to the United States were from Italy, Poland, Ireland, and Russia. They struggled to gain acceptance in industries such as steel, coal, automobile manufacturing, insurance, and finance. As late as the 1940s, and in some cases later yet, colleges routinely discriminated against immigrants, Catholics, and Jews, and established strict quotas if admitting any at all. Discrimination severely diminished the employment prospects of many groups, and it wasn’t until the 1960s that the struggle for acceptance by successful white ethnic and religious groups made notable progress.

Diversity: A Brief History

When the women’s rights movement launched in 1948, most occupations, colleges, and professional schools were off limits to women.

Until the Civil Rights Act of 1964, women:

Were excluded from certain jobs.

Needed a male cosigner for a bank loan.

Were not issued credit cards if they were married.

Women’s struggle for acceptance in the workplace was in some ways even more difficult. When the women’s rights movement was launched in Seneca Falls in 1848, most occupations were off-limits to women, and colleges and professional schools were totally closed to them. Women could not vote and lost all property rights once they were married.

Diversity: A Brief History

Many legal rights—equal opportunity, fair treatment in housing, the illegality of religious, racial, and sex discrimination—received their initial impetus from the civil rights movement.

Racial segregation remained for 100 years after the end of the Civil War.

Blacks suffered voting right suppression and discrimination in education, employment, and housing.

Brown v. Board of Education (1954) declared segregation unconstitutional, setting the stage for the Civil Rights Act of 1964.

American Photo Archive/Alamy Stock Photo

The most difficult and wrenching struggle for equality involved America’s nonwhite minorities. Rigid racial segregation remained a fact of American life for 100 years after the end of the Civil War.

Today nearly half of the U.S. workforce consists of women, 17 percent of U.S. workers identify themselves as Hispanic or Latino, and 12 percent African American. Women own one-third of all businesses in the United States, employing about 20 percent of America’s workers.

The traditional American image of diversity has been one of assimilation: the absorption into the cultural tradition of a population or group.

Diversity Today

Diversity

Differences that include education, political belief, religion, and income in addition to gender, race, ethnicity, and nationality.

Managing diversity requires awareness of aspects common to a group of employees while also working with each employee as an individual.

Today diversity refers to far more than skin color and gender. It is a broad term used to refer to all kinds of differences.

Diversity Today

The Changing Workforce

White American-born males are largest percentage of workers, but their share of labor force declining.

Numbers of Asian American, African American, and Hispanic American workers growing faster.

One in three U.S. residents is a racial or ethnic minority.

Hispanics are fastest-growing group.

By 2045, one-time minority groups together will represent majority of U.S. population.

Exhibit 11.1 Components of a Diversified Workforce

Today diversity refers to far more than skin color and gender. It is a broad term used to refer to all kinds of differences, as summarized in Exhibit 11.1. These differences include education, political belief, religion, and income in addition to gender, race, ethnicity, and nationality. About one in three U.S. residents is a racial or ethnic minority. The largest and fastest-growing minority group is Hispanics, closely followed by Asian Americans.

Exhibit 11.2 Examples of Diversity Initiatives in Companies

Company	Diversity Initiatives
Kaiser Permanente	Placing women in executive positions
EY	Offering mentoring programs
Comcast NBCUniversal	Using diverse suppliers
Northrup Grumman	Employing veterans
Abbvie	Including LGBT employees
Johnson & Johnson	Sponsoring diversity councils
AT&T	Organizing employee resource groups
Accenture	Including people with disabilities

Adapted from “The 2018 DiversityInc Top 50 Companies for Diversity,” DiversityInc, https://www.diversityinc.com/ di_top_50/, accessed March 21, 2019.

Gender Issues

Women make up about 47 percent of the workforce.

About 54 percent of marriages are dual-earner marriages.

One of every four married women in two-income households earns more than her husband does.

The percentage of women in the labor force earning college degrees has nearly quadrupled over the past 45 years.

The average full-time working woman earns about 83 percent as much as men in the same job. While career interruptions to care for family reduce women’s long-term earnings,17 another possible explanation for the wage gap is that women may not be negotiating pay as effectively as men.

Glass Ceiling

Irene Rosenfeld has broken through the glass ceiling as chair and CEO of Mondelez International, overseeing the company with revenues of over $30 billion.

An invisible barrier that makes it difficult for women and minorities to move beyond a certain hierarchical level.

Chris Ratcliffe/Bloomberg/ Getty Images

As women and minorities move up the corporate ladder, they encounter a glass ceiling: an invisible barrier that makes it difficult for women and minorities to move beyond a certain level in the corporate hierarchy. At this writing, just 24 women are chief executives of S&P 500 companies—that’s 24 out of 500. Looking at all board members of those companies, about 21 percent are women.

Exhibit 11.3 Top Women Executives and Their Companies

Rank	Name	Company	Title
1	Marillyn Hewson	Lockheed Martin	Chair, president, and CEO
2	Mary Barra	General Motors	Chair and CEO
3	Abigail Johnson	Fidelity Investments	Chair and CEO
4	Ginni Rometty	IBM	Chair, president, and CEO
5	Gail Boudreaux	Anthem	President and CEO
6	Sheryl Sandberg	Facebook	COO
7	Safra Catz	Oracle	Co-CEO
8	Phebe Novakovic	General Dynamics	Chair and CEO
9	Ruth Porat	Google, Alphabet	SVP and CFO
10	Susan Wojcicki	Google, Alphabet	CEO, YouTube

Adapted from “The Most Powerful Women in Business,” Fortune, 2018, http://www.fortune.com.

Sexual Harassment

Sexual harassment

Unwelcome sexual conduct that is a term or condition of employment.

Quid pro quo.

Hostile environment.

Affects more than female employees:

Men.

Lesbian, gay, bisexual, transgender.

Sexual harassment falls into two categories.

The first, quid pro quo harassment, occurs when submission to or rejection of sexual conduct is used as a basis for employment decisions.

The second type, hostile environment, occurs when unwelcome sexual conduct “has the purpose or effect of unreasonably interfering with job performance or creating an intimidating, hostile, or offensive working environment.”

Harassment by a hostile work environment is now more common than quid pro quo.

Minorities and Immigrants

Organizations that do not take full advantage of the skills and capabilities of minorities and immigrants are severely limiting their potential.

The number of businesses started by Asian American, African American, and Hispanic entrepreneurs is growing much faster than the overall growth in new companies.

Virtually every large organization has policies and programs dedicated to increasing minority representation, including compensation systems that reward managers for increasing diversity.

Exhibit 11.5 Some Top Executives of Color

Name	Company	Title
Ajay Banga	MasterCard	President and CEO
Jin Sook and Do Won Chang	Forever 21	Co-founders and owners
Gisel Ruiz	Sam's Club	Executive vice president and COO
John Thompson	Microsoft	Chairman
Marvin Ellison	JCPenney	President and CEO
Kenneth Frazier	Merck	CEO and chairman
Ann-Marie Campbell	The Home Depot	Executive vice president
David Huntley	AT&T	Senior executive vice president and chief compliance officer
Orlando Ashford	Holland America Line	President
Arnold Donald	Carnival Corporation	CEO

SOURCES: Company website, “Our People,” https://newsroom.mastercard.com; “Billionaires 2019,” Forbes, www.forbes.com; Company website, “Gisel Ruiz: Executive Vice President and Chief Operating Officer, Sam’s Club,” www.walmart.com; Company website, “Leadership,” www.microsoft.com; Shoulberg, W., “How Did Marvin Ellison Do on His First Quarterly Report Card at Lowe’s?” Forbes, August 29, 2018, www.forbes.com; Company website, “Leadership,” www.merck.com; Company website, “The Home Depot Leadership,” www.homedepot.com; Company website, “Corporate Governance,” www.att.com; Company website, “Meet Holland America Line President Orlando Ashford,” July 15, 2015, www.hollandamerica.com; Company website, “Governance,” www.carnivalcorp.com.

Mental and Physical Disabilities

This group is the largest unemployed minority population in the United States.

The share of the population with a disability is growing.

The ADAAA defines a disability as “a physical or mental impairment that substantially limits one or more major life activities.”

New assistive technologies are making it easier for companies to comply with the ADAAA and for those with disabilities to be productive on the job.

Employers frequently find that employees with disabilities are more dependable than other employees, miss fewer days of work, and exhibit lower turnover.

Education Levels and Age

Today’s service and technology economy relies more on college-educated employees.

Science and technology degrees in high demand.

Baby Boomers retiring at a record rate.

Entry-level workers in short supply.

Employers need strategies to retain older workers.

Approximately 10,000 Boomers (those born between 1946 and 1964) are retiring each day in the United States. Industries most at risk of losing this talent include health care (hospitals and nursing facilities), transportation, social assistance, and mining and construction At the same time, the Bureau of Labor Statistics projects that entry-level workers will be in short supply.

Understanding Diversity and Inclusion

Legally mandated efforts introduced a few decades ago in the United States.

Affirmative Action: special efforts to recruit and hire qualified members of groups that have been discriminated against in the past.

Diversity and inclusiveness are not the same things.

Inclusion: offering to a diverse workforce a fair opportunity to participate and contribute fully, support to be authentically themselves, and reasonable access to decision-making processes.

For many organizations, the original impetus to diversify their workforces was social responsibility and legal necessity. Companies introduced affirmative action. The intent was not to prefer these group members to the exclusion of others but to correct for the long history of discriminatory practices and exclusion. Viewed from this perspective, amending these wrongs is moral and ethical as well as a legal necessity. As you can imagine, diversity creates opportunity to innovate and strengthen the organization, but inclusion is what really brings its potential advantages to fruition for both people and organization.

Managing Change

Managing diversity involves making changes to remove obstacles that keep people from reaching their full potential.

Mark Bowden/Getty Images

Advantage through Diversity and Inclusion

Attracting, Motivating, and Retaining Employees.

Understanding Differentiated Markets.

Creative Problem Solving.

Organizational Flexibility.

Diversity can provide an organizational strength, especially if managers know how to leverage it.

Some potential advantages of diversity and inclusion are listed on this slide.

Managing Diversity and Inclusion

Unexamined Assumptions.

Lower Cohesiveness.

Communication Problems.

Mistrust and Tension.

Stereotyping.

Leveraging Differences.

Managers of the diverse organization need to identify and overcome difficulties including unexamined assumptions, lower cohesiveness, miscommunications , mistrust and tension, stereotyping, while leveraging differences.

Social Entrepreneurship A Popular Business Model

Social entrepreneurship has grown in popularity in recent years. It’s become especially relevant with younger entrepreneurs who are looking for more than just profit; they’re looking to make a difference.

Do you think social entrepreneurship will become a mainstream business model? Why or why not?

Do you think that young people today are in fact more civic minded? Do you yourself want to make a difference in people’s lives?

Exhibit 11.6 Leveraging Employee Differences

Objective	Key Individual Practices	Key Organizational Practices
Seeing	Adopt a stance that relevant differences are ubiquitous. Attend to points of conflict. Observe silence.	Attend to intergroup tension. Reduce the climate of secrecy.
Understanding	Build skill in acquiring data. Listen. Ask questions. Learn and share your own story. Include people who are different in your inner circle or network.	Acquire information via survey and other data gathering. Create and institutionalize inclusive structures.
Valuing	Lower the levels of unnecessary carefulness when dealing with differences. Be willing to persist in the midst of conflict and its accompanying discomfort. Incorporate data into your worldview.	Reward and hold employees accountable for engaging in difference-related activities. Recruit and develop people who add diversity to the organization.

Davidson, M. N., The End of Diversity as We Know It: Why Diversity Efforts Fail and How Leveraging Difference Can Succeed. San Francisco: Berrett- Kohler Press, 2011.

Leveraging difference starts with recognizing that we all bring something different, contributing different strengths, values, and ways of thinking and problem solving. To capitalize on these differences, Exhibit 11.6, (recreated on this slide) offers suggestions applicable to the whole spectrum of organizational activities such as innovating, learning, working as a team, and interacting with customers.

Multicultural Organizations

Monolithic organization

An organization that has a low degree of structural integration—employing few women, minorities, or other groups that differ from the majority—and thus has a highly homogeneous employee population.

Pluralistic organization

An organization that has a relatively diverse employee population and makes an effort to involve employees from different gender, racial, or cultural backgrounds.

Multicultural organization

An organization that values cultural diversity and seeks to utilize and encourage it.

Some organizations are monolithic , having very little diversity inclusiveness. The pluralistic organization comes up short by failing to adequately address the cultural aspects of integration. In contrast, in multicultural organizations diversity not only exists but is valued.

Exhibit 11.7 Diversity Assumptions and Implications

Common / Misleading Assumptions	Description	More Appropriate Assumptions	Description
Homogeneity	Melting pot myth: We are all the same.	Heterogeneity	Image of cultural pluralism: We are not all the same; groups within society differ across cultures.
Similarity	Similarity myth: “They” are all just like me.	Similarity and difference	They are not just like me: Many people differ from me culturally. Most people exhibit both cultural similarities and differences when compared with me.

Adler, Nancy J., “Diversity Assumptions and Their Implications for Management,” Handbook of Organization, 1996.

To capitalize on the benefits and minimize the costs of a diverse workforce, one of the first things managers need to do is examine prevailing assumptions about people and cultures.

Exhibit 11.7 Diversity Assumptions and Implications

Common / Misleading Assumptions	Description	More Appropriate Assumptions	Description
Parochialism	Only-one-way myth: Our way is the only way. We do not recognize any other way of living or working.	Equifinality	Our way is not the only way: There are many culturally distinct ways of reaching the same goal, of working, and of living one’s life.
Ethnocentrism	One-best-way myth: Our way is the best way. All other approaches are inferior versions of our way.	Culture contingency	Our way is one possible way: There are many and equally good ways to reach the same goal. The best way depends on the culture of the people involved.

Adler, Nancy J., “Diversity Assumptions and Their Implications for Management,” Handbook of Organization, 1996.

To capitalize on the benefits and minimize the costs of a diverse workforce, one of the first things managers need to do is examine prevailing assumptions about people and cultures.

Cultivating Inclusiveness

Secure top management’s leadership and commitment.

Assess the organization’s progress toward goals.

Attract employees.

Train employees in diversity.

Retain employees.

Steps three through five are discussed on subsequent slides.

Attracting Employees

Recruiting.

Accommodating Work and Family Needs.

Alternative Work Arrangements.

Companies can attract a diverse, qualified workforce by using effective recruiting practices, accommodating employees’ work and family needs, and offering alternative work arrangements.

The following slide discusses training.

Training Employees

Two types of diversity training:

Awareness Building.

Teach the myths, stereotypes, and cultural differences.

Offer a better understanding of corporate culture, requirements for success, and behaviors that affect advancement.

Skill Building.

Tying training to business goals increases usefulness.

Best training relates to actual employee challenges.

Training Employees

Traditionally, most management training was based on the unstated assumption that managing means managing a homogeneous, often white-male, full-time workforce. But diversity creates an additional layer of complexity. Diversity training programs attempt to identify and reduce hidden biases and develop the skills needed to manage a diversified workforce effectively.

Retaining Employees

Support Groups.

Mentoring.

Career Development and Promotions.

Systems Accommodation.

Accountability.

As replacing qualified and experienced workers becomes more difficult and costly, retaining good workers becomes vitally important. Most executives know that a "lack of attention to diversity and inclusion contributes to employee turnover." Strategies such as the ones listed can improve employee retention.

Management in Action Sweet: How to Build an Inclusive Environment

Creating diverse and inclusive workforces has proven challenging to many organizations across a wide array of industries. Accenture, being ranked first among all companies for diversity and inclusion, clearly has found a way to overcome many of these obstacles.

Suppose you were charged with increasing the diversity at Accenture. What specific recommendations would you make as part of its action plan?

Many firms struggle with achieving a more diverse and inclusive workplace. What do you see as the primary obstacles to progress on this front?

Leadership

CHAPTER 12

Learning Objectives

12-1 Discuss what it means to be a leader.

12-2 Summarize what people want and organizations need from their leaders.

12-3 Explain how a good vision helps you be a better leader.

12-4 Identify sources of power in organizations.

12-5 List personal characteristics that contribute to leader effectiveness.

12-6 Describe behaviors that will make you a better leader and know when situations call for them.

12-7 Distinguish between charismatic and transformational leadership.

12-8 Describe types of opportunities to lead.

12-9 Discover how to further your own leadership development.

What Do We Want from Our Leaders?

In broad terms:

People want help in achieving their goals.

Organizations need help in creating and implementing strategic direction.

The best leaders:

Challenge the process.

Inspire a shared vision.

Enable others to act.

Model the way.

Encourage the heart.

Adapted from Kouzes, J. and Posner, B., The Leadership Challenge, 2nd ed. San Francisco: Jossey-Bass, 1995

What is leadership? To start, a leader is one who influences others to attain goals.

A set of five key behaviors identified by James Kouzes and Barry Posner, two well–known authors and consultants (see Exhibit 12.1 and summarized on this slide).

Vision

A mental image of a possible and desirable future state of the organization.

Necessary for effective leadership.

Can be developed for any job, work unit, or organization.

People who do not develop a clear vision focus on performing day-to-day activities.

Tetra Images/Getty Images

Putting a jigsaw puzzle together is much easier if you have the picture on the box cover in front of you. Without the picture, or vision, the lack of direction is likely to result in frustration and failure. That is what communicating a vision is all about: making clear where you are heading.

Exhibit 12.2 Reasons Why Visions Fail

Adapted from Conger, J. A., “The Dark Side of Leadership,” Organizational Dynamics 19 (Autumn 1990), 44–55.

Not just any vision will do. Visions can be inappropriate, or fail, for a variety of reasons.

Leading and Managing

Supervisory leadership

Behavior that provides guidance, support, and corrective feedback for day-to-day activities.

Strategic leadership

Behavior that gives purpose and meaning to organizations, envisioning and creating a positive future.

Some people dislike the idea of distinguishing between management and leadership, maintaining that it is artificial or derogatory toward the managers and the management processes that make organizations run. An alternative distinction is between supervisory and strategic leadership.

Strategic leadership involves anticipating and envisioning a viable future for the organization and working with others to initiate changes that create such a future.

Exhibit 12.3 Behaviors of Effective Followers

Volunteering to handle tasks or help accomplish goals.

Accepting assignments in a willing manner.

Exhibiting loyalty to the group.

Voicing differences of opinions, but supporting the group's decisions.

Offering suggestions.

Maintaining a positive attitude, even in confusing or trying times.

Working effectively as a team member.

Adapted from Holden Leadership Center, University of Oregon, http://leadership.uoregon.edu/resources/ exercises_tips/skills/followership.

As a manager, you will be asked to play the roles of both leader and follower.

Good followership doesn’t mean merely obeying orders, although some bosses may view it that way. The most effective followers are capable of independent thinking and at the same time are actively committed to organizational goals.

Exhibit 12.3 (recreated on this slide in text form) lists additional behaviors of effective followers.

Power and Leadership

Power

The ability to influence others.

Legitimate: right to tell others what to do.

Reward: controls with valued rewards.

Coercive: controls with punishments.

Referent: compliance based a desire for approval.

Expert: compliance based on gaining from expertise.

Central to effective leadership is power—the ability to influence other people. In organizations, this influence often means the ability to get things done or accomplish one’s goals despite resistance from others.

One of the earliest and still most useful approaches to understanding power identifies five important potential sources of power.

Traditional Approaches to Understanding Leadership

Trait approach

A leadership perspective that attempts to determine the personal characteristics that great leaders share.

From 1904 to 1948, researchers conducted more than 100 leadership trait studies. At the end of that period, management scholars concluded that no particular set of traits is necessary for a person to become a successful leader. Enthusiasm for the trait approach diminished, but some research on traits continued.

Exhibit 12.5 Personal Attributes That Aid Leader Effectiveness

By the mid-1970s, a more balanced view emerged. Although no traits ensure leadership success, certain characteristics are potentially useful. The current perspective is that some personality characteristics—many of which a person need not be born with but can strive to acquire—contribute to leader effectiveness.

Leader Behaviors

Behavioral approach

A leadership perspective that attempts to identify what good leaders do—that is, what behaviors they exhibit.

Three general categories of leadership behavior:

Task performance behaviors.

Group maintenance behaviors.

Participation in decision making.

Leader-member exchange theory.

Task performance behaviors: Actions taken to ensure that teams, organizations, or individuals achieve their work goals.

Group maintenance behaviors: Actions taken to ensure the satisfaction of group members, develop and maintain harmonious work relationships, and preserve the social stability of the group.

Leader–member exchange (LMX) theory highlights the importance of leader behaviors not just toward the group as a whole but toward individuals on a personal basis.

Participation in decision making: managers perform in involving their employees in making decisions.

Exhibit 12.4 Sources of Leader Power

Adapted from French, J. R. P. and Raven, B., “The Bases of Social Power,” Studies in Social Power, ed. D. Cartwright. Ann Arbor, MI: Institute for Social Research, 1959.

Exhibit 12.6 Questions Assessing Task Performance and Group Maintenance Leadership

Task Performance Leadership

Is your superior strict about observing regulations?

To what extent does your superior give you instructions and orders?

Is your superior strict about the amount of work you do?

Does your superior urge you to complete your work by a specified time?

Does your superior try to make you work to your maximum capacity?

When you do an inadequate job, does your superior focus on the inadequate way the job is done?

Does your superior ask you for reports about the progress of your work?

How precisely does your superior work out plans for goal achievement each month?

Misumi, J. and Peterson, M., “The Performance-Maintenance (PM) Theory of Leadership: Review of a Japanese Research Program,” Administrative Science Quarterly 30, no. 2 (June 1985).

What specific behaviors do performance- and maintenance-oriented leadership imply? To help answer this question, assume you are asked to rate your boss on these two dimensions. If a leadership study were conducted in your organization, you would be asked to fill out a questionnaire similar to the one in Exhibit 12.6 (recreated in two parts on this slide and the next). The behaviors indicated in the first set of questions (this slide) represent performance-oriented leadership; those indicated in the second set (next slide) represent maintenance-oriented leadership.

Exhibit 12.6 Questions Assessing Task Performance and Group Maintenance Leadership

Group Maintenance Leadership

Can you talk freely with your superior about your work?

Does your superior generally support you?

Is your superior concerned about your personal problems?

Do you think your superior trusts you?

Does your superior give you recognition when you do your job well?

When a problem arises in your workplace, does your superior ask your opinion about how to solve it?

Is your superior concerned about your future benefits, such as promotions and pay raises?

Does your superior treat you fairly?

Misumi, J. and Peterson, M., “The Performance-Maintenance (PM) Theory of Leadership: Review of a Japanese Research Program,” Administrative Science Quarterly 30, no. 2 (June 1985).

Exhibit 12.6 (recreated in two parts on this slide and the previous). The behaviors indicated on the previous slide represent performance-oriented leadership; those indicated on this slide represent maintenance-oriented leadership.

Participation in Decision Making

Autocratic leadership

A form of leadership in which the leader makes decisions on his or her own and then announces those decisions to the group.

Democratic leadership

A form of leadership in which the leader solicits input from subordinates.

How should a leader make decisions? More specifically, to what extent should leaders involve their people in making decisions? As a dimension of leadership behavior, participation in decision making can range from autocratic to democratic. Autocratic leadership makes decisions and then announces them to the group. Democratic leadership solicits input from others. Democratic leadership seeks information, opinions, and preferences, sometimes to the point of meeting with the group, leading discussions, and using consensus or majority vote to make the final choice.

The Effects of Leader Behaviors

Laissez-faire

Leadership philosophy characterized by an absence of managerial decision making.

University of Michigan studies:

Effective managers: task-oriented behaviors, relationship-oriented behaviors.

Blake and Mouton’s Leadership Grid.

laissez-faire style, in which the leader essentially made no decisions, led to more negative attitudes and lower performance.

The Blake and Mouton Leadership Grid is presented on the next slide.

Exhibit 12.7 The Leadership Grid

Blake, Robert Rogers and McCanse, Anne Adams, The Leadership Grid Figure from Leadership Dilemmas— Grid Solutions. Houston, TX: Gulf Publishing Company, 1991, p. 29.

The performance and maintenance dimensions of leadership are independent of each other. In other words, a leader can behave in ways that emphasize one, both, or neither of these dimensions. Some research indicates that the ideal combination is to engage in both types of leader behaviors.

The best-known leadership training model to follow this style is Blake and Mouton’s Leadership Grid. In grid training, managers are rated on their performance-oriented behavior (called concern for production) and maintenance-oriented behavior (concern for people). Then their scores are plotted on the grid shown in Exhibit 12.7 .The highest score is a 9 on both dimensions.

Situational Approaches to Leadership

Nurses experience situational leadership on a daily basis. How would you handle a leadership role under pressure?

Situational approach

A perspective proposing that universally important traits and behaviors do not exist and that effective leadership behavior varies from situation to situation.

monkeybusinessimages/Getty Images

According to proponents of the situational approach to leadership, universally important traits and behaviors don’t exist. They believe effective leader behaviors vary from situation to situation. The leader should first analyze the situation and then decide what to do. In other words, look before you lead.

The Vroom Model of Leadership

Vroom model

Emphasizes the participative dimension of leadership.

Operates as a decision tree.

Five decision styles:

Decide alone.

Consult individuals.

Consult multiple group members.

Facilitate a whole-group decision.

Delegate to others.

The Vroom model emphasizes the participative dimension of leadership: how leaders go about making decisions. The model uses the basic situational approach of assessing the situation before determining the best leadership style.

The Vroom model operates as a decision tree in which you answer a series of questions one at a time, choosing high or low for each; the specifics are not important here. Eventually you reach one of 14 possible endpoints. For each endpoint, the model states which of five decision styles is most appropriate. Several decision styles may work, but the style recommended is the one that takes the least amount of time.

Exhibit 12.8 Fiedler’s Analysis of Situations

Organ, Dennis and Bateman, Thomas, Organizational Behavior, 4th ed. New York: McGraw-Hill, 1990.

According to Fiedler’s contingency model of leadership effectiveness, effectiveness depends on two factors: the personal style of the leader and the degree to which the situation gives the leader power, control, and influence over the situation. Exhibit 12.8 illustrates the contingency model. The upper half of the figure shows the situational analysis, and the lower half indicates the appropriate style. In the upper portion, three questions are used to analyze the situation.

1. Are leader–member relations good or poor? (To what extent is the leader accepted and supported by group members?)

2. Is the task structured or unstructured? (To what extent do group members know what their goals are and how to accomplish them?)

3. Is the leader’s position power strong or weak (high or low)? (To what extent does the leader have the authority to reward and punish?)

Based on the LPC score, Fiedler considered two leadership styles. Task-motivated leadership places primary emphasis on completing the task and is more likely exhibited by leaders with low LPC scores. Relationship-motivated leadership emphasizes maintaining good interpersonal relationships and is more likely from high-LPC leaders. These leadership styles correspond to task performance and group maintenance leader behaviors, respectively

Fiedler’s theory was not always supported by research. It is better supported if three broad rather than eight specific levels of situational control are assumed: low, medium, and high. The theory was quite controversial in academic circles; among other arguable things, it assumed that leaders cannot change their styles but must be assigned to situations that suit their styles.

Hersey and Blanchard’s Situational Theory

Postulates that a manager should consider an employee’s psychological and job maturity before deciding whether task performance or maintenance behaviors are more important.

Job maturity: the level of the employee’s skills and technical knowledge relative to the task being performed.

Psychological maturity: an employee’s self-confidence and self-respect.

Hersey and Blanchard’s situational theory highlights the maturity of the followers as the key situational factor.

Path-Goal Theory

Path goal theory concerns how leaders influence subordinates’ perceptions of their work goals and paths they follow toward attainment of those goals.

Four leadership behaviors:

Directive: a form of task performance-oriented behavior.

Supportive: a form of group-maintenance behavior.

Participative: decision style.

Achievement-oriented: behaviors geared toward motivating people.

Perhaps the most comprehensive and generally useful situational model of leadership effectiveness is path–goal theory. Developed by Robert House, path–goal theory gets its name from its concern with how leaders influence followers’ perceptions of their work goals and the paths they follow toward goal attainment.

Exhibit 12.9 The Path-Goal Framework

There are three key follower characteristics.

Authoritarianism is the degree to which individuals respect, admire, and defer to authority.

Locus of control is the extent to which individuals see the environment as responsive to their own behavior. People with an internal locus of control believe that what happens to them is their own doing; people with an external locus of control believe that it is just luck or fate.

Ability is people’s beliefs about their own abilities to do their assigned jobs.

Appropriate leadership style is also determined by three important environmental factors: people’s tasks, the formal authority system of the organization, and the primary work group:

Substitutes for Leadership

Factors in the workplace can exert the same influence on employees as leaders would provide.

This can provide useful prescriptions for

how to manage more efficiently.

Sometimes leaders don’t have to lead, or situations constrain their ability to lead effectively. The situation may be one in which leadership is unnecessary or has little impact. Research indicates that substitutes for leadership may be better predictors of commitment and satisfaction than of performances.

Contemporary Perspectives on Leadership

Charismatic leaders

A person who is dominant, self-confident, convinced of the moral righteousness of his or her beliefs, and able to arouse a sense of excitement and adventure in followers.

Trinity Mirror/Mirrorpix/Alamy Stock Photo

The charismatic leader articulates ideological goals and makes sacrifices in pursuit of those goals. Such leaders have a compelling vision. The charismatic leader also arouses a sense of excitement and adventure. He or she is an eloquent speaker who exhibits superior verbal skills, which help communicate the vision and motivate followers.

Leaders who possess these characteristics or do these things inspire in their followers trust, confidence, acceptance, obedience, emotional involvement, affection, admiration, and higher performance. Martin Luther King Jr. was a brilliant, charismatic leader who had a compelling vision, a dream for a better world.

Transformational vs. Transactional

Transformational leader

A leader who motivates people to transcend their personal interests for the good of the group.

Transactional leaders

Leaders who manage through transactions, using their legitimate, reward, and coercive powers to give commands and exchange rewards for services rendered.

Charisma contributes to transformational leadership. Transformational leaders motivate people to transcend their personal interests for the sake of the larger community. They generate excitement and revitalize organizations.

The transformational process moves beyond the more traditional transactional approach to leadership. Unlike transformational leadership, transactional leadership is dispassionate; it does not excite, transform, empower, or inspire people to focus on the interests of the group or organization. Transactional approaches may be more effective for individualists than for collectivists.

Other Leadership Styles

Level 5 leadership

A combination of strong professional will (determination) and humility that builds enduring greatness.

Authentic leadership

A style in which the leader is true to himself or herself while leading.

Pseudotransformational leaders

Talk about positive change but allow their self-interests to take precedence over followers’ needs.

Level 5 leadership, a term well-known among executives, is considered by some to be the ultimate leadership style. Level 5 leadership is a combination of strong professional will (determination) and personal humility that builds enduring greatness. Thus a Level 5 leader is relentlessly focused on the organization’s long-term success while behaving modestly, directing attention toward the organization rather than him- or herself.

Authentic leadership is considered to be rooted in the ancient Greek philosophy “To thine own self be true.” In your own leadership, strive to be self-aware and authentic by being genuine, open with others, and trustworthy. Authentic transformational leaders care about public interests (community, organizational, or group), not just their own.

Pseudotransformational leaders are the opposite: they talk a good game, but they ignore followers’ real needs as their own self-interests (power, prestige, control, wealth, fame) take precedence.

Many Opportunities to Lead

Servant-leader

Serves others’ needs while strengthening the organization.

Responsible leadership

Leader focuses on decision-making processes and choices that support corporate social responsibility.

Lateral leadership

Colleagues at the same hierarchical level are invited to collaborate and facilitate joint problem solving.

Intergroup leader

Leads collaborative performance between groups or organizations.

Shared leadership

People rotate through the leadership role based on which person has the most relevant skills at a particular time.

Social Entrepreneurship Engineering Disaster-Resilient Homes

Energized to put her engineering skills to use to reduce the scale of loss from unsafe buildings, Hausler founded the nonprofit Build Change. It marshals the efforts of relief agencies, government, and local architects, engineers, and builders to design and build safe, affordable, and appropriate housing to withstand disasters.

What makes Elizabeth Hausler such an effective leader?

To what degree is Hausler a servant leader? A Level 5 leader?

What makes Elizabeth Hausler such an effective leader?

Hauser was able to take a vision and turn it into a reality. She mentored local organizations and people in order to multiply her impact.

To what degree is Haulser a servant leader? A Level 5 leader?

Level 5 leadership is a combination of strong professional will (determination) and personal humility that builds enduring greatness. Hauser had a strong determination to limit the devastating impact of earthquakes in the developing world. These ideas then turned into a reality when Hauser partnered with local individuals, organizations, and other international organizations. Her organization is succeeding in many ways, not only saving lives and homes but also nurturing new talent.

Courage

Fulfilling your vision takes certain acts of courage:

See things as they are and face them head on.

Say what needs to be said to those who need to hear it.

Persist despite resistance, criticism, abuse, and setbacks.

Courage includes stating the realities, even when they are harsh, and publicly stating what you will do to help and what you want from others.

Developing Your Leadership Skills

Begin by behaving with integrity, learning from your mistakes, become competent in your chosen field.

Most effective experiences have three components:

Assessment.

Challenge.

Support.

How do you go about developing your leadership abilities? You don’t have to wait until you land a management job or even finish your education. You can begin establishing credibility by behaving with integrity, learning from your mistakes, and becoming competent in your chosen field.

Seeking Challenge

Challenges expand knowledge and experiences. Being open to new ideas allows managers to learn, grow, and succeed even though the challenge may be out of their comfort zone.

Karl Weatherly/Getty Images

Management in Action Kenneth Frazier: Leadership Through Experience

For Frazier, the ability to effectively communicate strategy and vision to those who need to execute it is an invaluable tool for a leader. “I think it helped me a lot as a jury trial lawyer to have been raised where I was raised,” he says, “because for me, talking to the normal, average person wasn’t a hard thing. I didn’t feel like I had to talk down to them. I understood them.”

In what way have you capitalized on your life experiences to develop such skills?

What evidence do you see that Frazier is a charismatic leader? Transformational? Authentic? Servant-leader?

Motivating for Performance

CHAPTER 13

Learning Objectives

13-1 Identify the kinds of behaviors managers need to motivate in people.

13-2 List principles for setting goals that motivate employees.

13-3 Summarize how to reward good performance effectively.

13-4 Describe the key beliefs that affect people’s motivation.

13-5 Discuss ways in which people’s individual needs affect their behavior.

13-6 Define ways to create jobs that motivate.

13-7 Summarize how people assess fairness and how to achieve fairness.

13-8 Identify causes and consequences of a (dis)satisfied workforce.

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Exhibit 13.1 Motivating for Performance

Motivation

Forces that energize, direct, and sustain a person’s efforts.

All behavior, except involuntary reflexes such as eye blinks (which have little to do with management), is motivated. A highly motivated person will work hard toward achieving performance goals.

As shown in Exhibit 13.1 (recreated in text form on this slide), managers must motivate people to (1) join the organization, (2) remain in the organization, and (3) come to work regularly. On these points, you should reject the common notion that loyalty is dead and accept the challenge of creating an environment that will attract and energize people so that they commit to the organization.

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Setting Goals

Goal-setting theory

A motivation theory stating that people have conscious goals that energize them and direct their thoughts and behaviors toward a particular end.

Stretch goals

Targets that are particularly demanding, sometimes even thought to be impossible.

SMART Goals

Specific

Measurable

Achievable

Results-based

Time-specific

Goal-setting theory states that people have conscious goals that energize them and direct their thoughts and behaviors toward a particular end.

The acronym SMART (see Exhibit 13.2 recreated here) may be used to build effective goal statements. SMART is an acronym for: specific, measurable, achievable, results-based, and time-specific.

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Limitations of Goal Setting

People lack relevant ability and knowledge.

Goals designed to maximize individual performance hurt group performance.

Can generate manipulative game-playing and unethical behavior.

photobac/123RF

Reinforcing Performance

Law of effect

Formulated by Edward Thorndike in 1911 stating that behavior followed by positive consequences will likely be repeated.

Four potential consequences of behavior:

Positive reinforcement.

Negative reinforcement.

Punishment.

Extinction.

Goals are universal motivators. So are the processes of reinforcement described in this section.

This powerful law of behavior laid the foundation for countless investigations into the effects of the positive consequences, called reinforcers, that motivate behavior. Four key consequences of behavior either encourage or discourage people’s behavior (see Exhibit 13.3 next slide but terms are listed on this one.)

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Exhibit 13.3 Behavior, Consequences, and Effects

Positive reinforcement: Applying consequences that increase the likelihood that a person will repeat the behavior that led to it.

Negative reinforcement: Removing or withholding an undesirable consequence.

Punishment: Administering an aversive consequence.

Extinction: Withdrawing or failing to provide a reinforcing consequence.

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(Mis)Managing Rewards and Punishments

At 10:30 every morning, when Richard Sheridan, CEO, passes the Viking helmet, Menlo Innovations employees must talk about their day.

Reward system should support the firm’s strategy.

Innovative managers use nonmonetary rewards:

Intellectual challenge.

Meaningful responsibilities.

Autonomy.

Recognition.

Greater influence over decisions.

Andre J. Jackson/MCT/Newscom

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Managing Mistakes

Punishment appropriate when people violate laws, ethical standards, safety rules.

Overuse of punishment creates a climate of fear.

Exhibit 13.4 Basic Concepts of Expectancy Theory

A theory proposing that people will behave based on the perceived likelihood that their effort will lead to a certain outcome and on how highly they value that outcome.

According to expectancy theory, the person’s work efforts lead to some level of performance. Then performance results in one or more outcomes for the person. This process is shown in Exhibit 13.5. People develop two important beliefs linking these three events: expectancy, which links effort to performance, and instrumentality, which links performance to outcomes.

The first belief, expectancy, is people’s perceived likelihood that their efforts will enable them to attain their performance goals.

Instrumentality is the perceived likelihood that performance will be followed by a particular outcome.

Each outcome has an associated valence. Valence is the value the person places on the outcome. Valences can be positive or negative.

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Managerial Implications of Expectancy Theory

Three crucial implications:

Increase expectancies.

Identify possible valence outcomes.

Make performance instrumental toward positive outcomes.

Understanding People’s Needs

The best-known approaches are:

Maslow’s need hierarchy.

Alderfer’s ERG theory.

McClelland’s needs.

Maslow’s need hierarchy A conception of human needs organizing needs into a hierarchy of five major types.

Alderfer’s ERG theory A human needs theory postulating that people have three basic sets of needs that can operate simultaneously.

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Exhibit 13.5 Maslow’s Need Hierarchy

Source: Organ, D. and Bateman, T., Organizational Behavior, 4th ed. New York: McGraw-Hill, 1991

Maslow’s need hierarchy is commonly understood as operating from the bottom to the top of a pyramid, because people need to satisfy the lower needs before they try to satisfy the higher needs

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Alderfer’s ERG Theory

A human needs theory suggesting that people have three basic sets of needs that can operate simultaneously.

Existence.

Relatedness.

Growth.

Maslow’s theory has general applicability, but Alderfer aimed his ERG theory expressly at understanding people’s needs at work.

Maslow’s theory is better known to American managers than Alderfer’s, but ERG theory has more research support. Both have practical value in that they remind managers of the types of reinforcers or outcomes that can be used to motivate people. Regardless of whether a manager prefers the Maslow or the Alderfer theory, he or she can motivate people by helping them satisfy their needs, particularly by offering opportunities for self-actualization and growth.

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McClelland’s Needs

Different needs motivate different people.

Need for achievement.

Need for affiliation.

Need for power.

David McClelland also identified a number of basic needs that motivate people.

Need for achievement: Characterized by a strong orientation toward accomplishment and an obsession with success and goal attainment.

Need for affiliation: Reflects a strong desire to be liked by other people.

Need for power: A desire to influence or control other people.

Low need for affiliation and moderate to high need for power are associated with managerial success for both higher- and lower-level managers.

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Designing Motivating Jobs

Extrinsic reward

Reward given to a person by the boss, the company, or some other person.

Intrinsic reward

Reward a worker derives directly from performing the job itself.

Justin Sullivan/Getty Images

Jobs can be rewarding both extrinsically and intrinsically. Extrinsic rewards are given to people by the boss, the company, or some other person. In contrast, a person derives an intrinsic reward directly from performing the job itself. An interesting project, an intriguing subject that is fun to study, a completed sale, helping a co-worker achieve a difficult task, and the discovery of the perfect solution to a difficult problem all can give people the feeling that they have done something meaningful and well

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Social Entrepreneurship Veterans on a Mission

Staffed by veterans, Team Rubicon bridges the gap between the moment a natural disaster happens and when other aid organizations respond.

What types of rewards are likely to keep veterans who work for Team Rubicon motivated: extrinsic, intrinsic, or both?

How and to what degree do you think Team Rubicon will make a positive impact on natural disaster victims?

What types of rewards are likely to keep veterans who work for Team Rubicon motivated: extrinsic, intrinsic, or both?

Intrinsic rewards are likely to keep these veterans motivated. As the case describes, helping others in a time of crisis provides them with a sense of self-worth and accomplishment. This is not to say that an answer of both is incorrect as an extrinsic reward, such as compensation for being a staff member, may be motivating as well. However, the main motivation here is intrinsic.

How and to what degree do you think Team Rubicon will make a positive impact on natural disaster victims?

Answers will vary, but Team Rubicon should hopefully make a high degree of positive impact on natural disaster victims. The resources brought to these areas during times of crisis, especially the knowledgeable and experienced veterans, are priceless.

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Job Rotation, Enlargement, and Enrichment

Job Rotation

Changing from one task to another to alleviate boredom.

Job Enlargement

Giving people additional tasks at the same time to alleviate boredom.

Job Enrichment

Changing a task to make it inherently more rewarding, motivating, and satisfying.

With job rotation, workers who spend all their time in one routine task can instead move from one task to another. Rather than working in a single section of a department store for an entire month, an employee might be rotated through housewares, shoes, and toys. Job rotation is intended to alleviate boredom by giving people different things to do at different times.

Job enlargement is similar to job rotation in that people are given different tasks to do. But whereas job rotation involves doing one task at one time and changing to a different task at a different time, job enlargement means that the worker has multiple tasks at the same time. With job enlargement, the person’s additional tasks are at the same level of responsibility.

Job enrichment creates more profound changes by adding higher levels of responsibility. This practice includes giving people not only more tasks but higher-level ones, such as making more important decisions.

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Herzberg’s Two-Factor Theory

Hygiene factors

Characteristics of the workplace, such as company policies, working conditions, pay, and supervision, that can make people dissatisfied.

Motivators

Factors that make a job more motivating, such as additional job responsibilities, opportunities for personal growth and recognition, and feelings of achievement.

Frederick Herzberg’s two-factor theory distinguished between two broad categories of factors that affect people in their jobs. The first category, hygiene factors, are characteristics of the workplace: company policies, working conditions, pay, co-workers, supervision, and so forth. According to Herzberg, the key to true job satisfaction and motivation to perform lies in the second category: the motivators. The motivators describe the job itself—that is, what people do at work.

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Exhibit 13.6 Hackman and Oldham Model of Job Enrichment

Hackman, J. Richard, et al., “A New Strategy for Job Enrichment,” California Management Review 17, no. 4 (Summer 1975), pp. 57–71.

As you can see, well-designed jobs lead to high motivation, high-quality performance, high satisfaction, and low absenteeism and turnover.

A person’s growth need strength will help determine how effective a job enrichment program might be. Growth need strength is the degree to which an individual wants personal and psychological development.

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Empowerment and Engagement

Empowerment

Sharing power with employees, enhancing their confidence in their ability to perform their jobs and their belief that they are contributors to the organization.

Engagement

When employees invest their physical, mental, and emotional energy into performing their jobs, including working hard and producing, taking initiative, and contributing additional citizenship behaviors.

We frequently hear managers talk about empowering their people. Individuals may—or may not—feel empowered, and groups can have a culture of empowerment that predicts work unit performance.

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Exhibit 13.7 Equity Theory

Your Ratio		Other’s Ratio	Likely Perception	Actions You May Take to Restore Equity
Your Outcomes Your Inputs	=	Other’s Outcomes Other’s Inputs	Equitably treated.	No action necessary.
Your Outcomes Your Inputs	<	Other’s Outcomes Other’s Inputs	Inequitably treated. Feel underrewarded.	Reduce your inputs. Try to increase your outcomes (ask for a raise). Change your perception of inputs or outcomes (maybe so-and-so really did deserve the bonus).
Your Outcomes Your Inputs	>	Other’s Outcomes Other Inputs	Inequitably treated. Feel overrewarded.	Increase your inputs by putting in extra effort. Help other person increase her outcomes (urge her to ask for a larger bonus).

Equity theory states that people assess how fairly they have been treated according to two key factors: outcomes and inputs.

If the ratios are equivalent, people believe the relationship is equitable, or fair. Equity causes people to be satisfied with their treatment. But the person who believes his or her ratio is lower than another’s will feel inequitably treated. Inequity causes dissatisfaction and leads to an attempt to restore balance to the relationship.

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Procedural Justice

Procedural justice

Using fair process in decision making and making sure others know that the process was as fair as possible.

Perceptions of justices may be increased by:

Making sure the process is open and visible.

Stating decision criteria in advance.

Making sure appropriate people are viewed as trustworthy.

Allowing for participation and appeal.

Inevitably, managers make decisions that have outcomes more favorable for some than for others. Those with favorable outcomes will be pleased; those with worse outcomes, all else equal, will be more displeased. The key is for people to believe that managers provide procedural justice—using fair process in decision making. When people perceive procedural fairness, they are more likely to support decisions and decision makers.

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The Impact of Worker Dissatisfaction

Higher turnover.

Higher absenteeism.

Less good citizenship.

More grievances and lawsuits.

Strikes.

Stealing, sabotage, and vandalism.

Poorer mental and physical health.

More injuries.

Poor customer service.

Lower productivity and profits.

If people feel fairly treated from the outcomes they receive and the processes used, they will be satisfied. A satisfied worker is not necessarily more productive than a dissatisfied one; sometimes people are happy with their jobs because they don’t have to work hard!

But job dissatisfaction, aggregated across many individuals, creates a workforce that is more likely to exhibit the behaviors on the slide.

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Quality of Work Life

Quality of work life (QWL) programs create a workplace that enhances employee well-being.

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QWL Program Categories

Adequate and fair compensation.

A safe and healthy environment.

Jobs that develop human capacities.

A chance for personal growth and security.

An environment that fosters personal identity, freedom from prejudice, a sense of community, and upward mobility.

Constitutionalism, or the rights of personal privacy, dissent, and due process.

A work role that minimizes infringement on personal leisure and family needs.

Socially responsible organizational actions.

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Psychological Contracts

The contract is a set of perceptions of what employees owe their employers, and what their employers owe them.

Viewing employment as an alliance is much more likely to produce a mutually beneficial and satisfying relationship and a high-performing, successful organization.

The relationship between individuals and employing organizations typically is formalized by a written contract. This contract, whether it is seen as being upheld or violated—and whether the parties trust one another or not—has important implications for employee satisfaction and motivation and the effectiveness of the organization. Experiencing significant breach of psychological contract also can adversely affect physical and mental health.

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Management in Action How the SAS Culture Leads to Employee Satisfaction

SAS emphasizes management responsibility for employee development, a culture of trust and ensures that work is meaningful.

How closely aligned do you feel employee satisfaction is to productivity? To what degree does a firm’s culture contribute to employee satisfaction?

If you were trying to motivate a workforce, what strategies would you use?

What convinces employees that SAS values their contributions? We have already talked about employee benefits, but it’s the culture of SAS that seems to be the biggest difference. And that culture starts at the top. CEO James Goodnight puts his time and money on the line for his people.

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Teamwork

CHAPTER 14

Learning Objectives

14-1 Discuss how teams can contribute to an organization’s effectiveness.

14-2 Describe different types of teams.

14-3 Summarize how groups become teams.

14-4 Explain why groups sometimes fail.

14-5 Describe how to build an effective team.

14-6 List methods for managing a team’s relationships with other teams.

14-7 Identify ways to manage conflict.

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The Contributions of Teams

Teams can be the building blocks for organizational structure.

Teams can increase productivity, improve quality and reduce costs.

Teams can enhance speed and promote innovation and change.

Teams promote member development.

David Paul Morris/Getty Images

More companies are increasingly turning to teams to keep their organizations competitive. Used properly, teams can be powerfully effective as a building block for organization structure.

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Types of Teams

Work

Teams that make or do things like manufacture, assemble, sell, or provide service.

Project and development

Teams that work on long-term projects but disband once the work is completed.

Parallel

Teams that operate separately from the regular work structure and are temporary.

Management

Teams that coordinate and provide direction to the subunits under their jurisdiction and integrate work among subunits.

Your organization may have hundreds of groups and teams, and the variety of different types is vast. This slide and the next give a few of the best-known examples. Team descriptions continue on the following slide.

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Types of Teams

Transnational

Teams that differ from other work teams by being multicultural and by often being geographically dispersed, being psychologically distant, and working on highly complex projects having considerable impact on company objectives.

Virtual

Teams that are physically dispersed and communicate electronically more than face-to-face.

Teaming

A strategy of teamwork on the fly, creating many temporary, changing teams.

Transnational teams tend to be virtual teams, communicating electronically more than face-to-face. Although other types of teams may operate virtually as well.

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Exhibit 14.1 Best Practices of Virtual Team Leaders

Establish and maintain trust through the use of communication technology.

Ensure diversity in the team is understood, appreciated, and leveraged.

Manage virtual work cycle and meetings.

Monitor team progress through the use of technology.

Enhance external visibility of the team and its members.

Ensure individuals benefit from participating in virtual teams.

Adapted from Malhotra, A., Majchrzak, A. and Rosen, B., “Leading Virtual Teams,” Academy of Management Perspectives, February 2007, pp. 60–70.

Virtual teams face difficult challenges: building trust, cohesion, and team identity, and overcoming the isolation of virtual team members. Exhibit 14.1 (recreated on this slide) suggests ways that managers can improve the effectiveness of virtual teams.

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Self-Managed Teams

Autonomous work groups in which workers are trained to do all or most of the jobs in a unit, have no immediate supervisor, and make decisions previously made by frontline supervisors.

Autonomous work groups

Groups that control decisions about and execution of a complete range of tasks.

Self-designing teams

Have responsibilities of autonomous work groups, plus control over hiring, firing, and deciding what tasks members perform.

Work Groups and Real Teams

Group and team should not be used interchangeably.

A working group is a collection of people who work in the same area or have been drawn together to undertake a task but do not necessarily come together as a unit and achieve significant performance improvements.

A real team is formed of people with complementary skills who trust one another and are committed to a common purpose, common performance goals, and a common approach for which they hold themselves mutually accountable.

The words group and team often are used interchangeably. Making a distinction between groups and teams can be useful.

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Exhibit 14.2 Stages of Team Development

Adapted from Tuckman, B. W., “Developmental Sequence in Small Groups,” Psychological Bulletin 63 (1965), pp. 384–99.

Assume you are the leader of a newly formed group—actually a bunch of people. What will you face as you attempt to develop your group into a high-performing team? If groups are to develop successfully, they will engage in various processes, including the broad categories detailed in Exhibit 14.2, recreated on this slide.

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Teaming Challenges

Helpful practices:

Emphasizing the team’s purpose.

Building psychological safety.

Embracing failure.

Putting conflict to work.

g-stockstudio/Shutterstock

Practices that are particularly helpful in the team context include:

(1) emphasizing the team’s purpose, including why we exists, what’s at stake, and what its shared values are;

(2) building psychological safety, making clear that people need to and can freely speak up, be honest, disagree, offer ideas, raise issues, share their knowledge, ask questions, or show fallibility without fear that others will think less of them or criticize them;

(3) embracing failure, understanding that mistakes are inevitable, errors should be acknowledged, and learning as we go is a way to create new knowledge while we execute;

and

(4) putting conflict to work by explaining how we arrive at our views, expressing interest in one another’s thinking and analyses, and attempting fully to understand and capitalize on others’ diverse perspectives.

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Building Effective Teams

Team effectiveness is defined by three criteria.

Productive output of the team meets or exceeds standards of quantity and quality.

Team members realize satisfaction of their personal needs.

Team members remain committed to working together again.

What does it really mean for a team to be effective? Team effectiveness is defined by three criteria.

Team productivity. The output of the team meets or exceeds the standards of quantity and quality expected by the customers, inside and outside the organization, who receive the team’s goods or services.

Member satisfaction. Team members realize satisfaction of their personal needs.

Member commitment. Team members remain committed to working together again; that is, the group doesn’t burn out and disintegrate after a grueling project. Looking back, the members are glad they were involved. In other words, effective teams remain viable and have good prospects for repeated success in the future.

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Performance Focus

Core of effective teamwork is commitment to a common purpose.

Work at developing a common understanding.

Be willing to try creative new ideas.

Translate general purpose into specific, measurable performance goals.

Define team-based performance goals.

Receive feedback on performance.

Motivating Teamwork

Social loafing

Working less hard and being less productive when in a group.

Social facilitation effect

Working harder when in a group than when working alone.

Ultimately, teamwork is motivated by tying rewards to team performance.

Sometimes individuals work less hard and are less productive when they are members of a group. Such social loafing occurs when a person believes that their contributions are not important, others will do the work for them, their lack of effort will go undetected, or they will be the lone sucker if they work hard but others don’t. Conversely, sometimes individuals work harder when they are members of a group than when they are working alone. This social facilitation effect occurs because individuals usually are more motivated when others are present, they are concerned with what others think of them, and they want to maintain a positive self-image.

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Norms and Roles

Norms

Shared beliefs about how people should think and behave.

Roles

Different sets of expectations for how different individuals should behave.

Task specialist role.

Team maintenance role.

Two important sets of roles must be performed.

Task specialist roles are filled by individuals who have particular job-related skills and abilities. These employees keep the team moving toward accomplishment of the objectives.

Team maintenance roles develop and maintain harmony within the team. They boost morale, give support, provide humor, soothe hurt feelings, and generally exhibit a concern with members’ well-being.

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Social Entrepreneurship Is Co-Working Here to Stay?

Co-working offers space on a temporary basis in which to work and connect with other people. Such interactions can lead to the exchange of business or project ideas, providing strategic advice, or acquiring new projects.

Do you think co-working can help entrepreneurs or remote workers feel like part of a team?

What do you think the owners of co-working spaces can do to promote collaboration and information sharing among their clients?

Do you think co-working can help entrepreneurs or remote workers feel like part of a team?

The model may work in the United States, but it is important to keep in mind that Americans like to have more personal space when working on projects, as compared to Europe, Asia, and the Middle East. Overall, there is nothing really stopping this model form working in the United States.

What do you think the owners of co-working spaces can do to promote collaboration and information sharing among their clients?

Student answers will vary, but in general, are expected to focus on facilitating the exchange of information or project ideas through collaboration and networking. These activities can lead to great strategic advice and the ability to network and acquire new projects.

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Exhibit 14.3 Cohesiveness, Performance Norms, and Group Performance

One of the most important properties of a team is cohesiveness. Expanding the Chapter 13 description, cohesiveness refers to how attractive the team is to its members, how motivated members are to remain in the team, and the degree to which team members influence one another. In general, it refers to how tightly knit the team is.

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Building Cohesiveness and High-Performance Norms

Recruit members with similar attitudes, values, and backgrounds.

Maintain high entrance and socialization standards.

Keep the team small.

Help the team succeed and publicize its successes.

Be a participative leader.

Present a challenge from outside the team.

Tie rewards to team performance.

Managers should build teams that are cohesive and have high-performance norms. The actions listed on the slide can help create such teams.

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Managing Outward

Gatekeeper: A team member who keeps abreast of current developments and provides the team with relevant information.

Informing: A strategy that entails making decisions with the team and then informing outsiders.

Parading: A strategy that entails simultaneously emphasizing team building and external visibility.

Probing: A strategy that requires team members to interact frequently with outsiders, diagnose their needs, and experiment with solutions.

Several vital roles link teams to their external environments—that is, to other individuals and groups both inside and outside the organization.

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Exhibit 14.4 Teams Link to the External Environment in Different Ways

Lateral Role Relationships

Workflow relationships emerge as materials are passed from one group to another.

Service relationships exist when top management centralizes an activity to which a large number of other units must gain access.

Advisory relationships are created when teams with problems call on centralized sources of expert knowledge.

Audit relationships develop when people not directly in the chain of command evaluate the methods and performances of other teams.

Stabilization relationships involve auditing before the fact.

Liaison relationships involve intermediaries between teams.

Teams do not function in a vacuum; they are interdependent with other teams. These interdependencies require coordination and leadership. To understand the process and make it more productive, it helps to know the different types of lateral role relationships .Different teams, like different individuals, have roles to perform.

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Managing Conflict

Conflict can be constructive and foster creativity.

Ambiguities, competition, different perspectives can all lead to destructive conflict.

Teams inevitably face conflicts and must decide how to manage them.

Juice Images/Glow Images

Many factors cause great potential for destructive conflict: the sheer number and variety of interpersonal contacts, ambiguities in jurisdiction and responsibility, differences in goals, competition for scarce resources, different perspectives held by members of different units, and varying time horizons in which some units attend to long-term considerations and others focus on short-term need. For many reasons, and very commonly, subgroups form along conflict fault lines.

consent of McGraw-Hill Education

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Exhibit 14.5 Conflict Management Strategies

Thomas, K., “Conflict and Conflict Management,” Handbook of Industrial and Organizational Psychology, ed. M. D. Dunnette. Skokie, IL: Rand McNally, 1976

Avoidance: A reaction to conflict that involves ignoring the problem by doing nothing at all or deemphasizing the disagreement.

Accommodation: A style of dealing with conflict involving cooperation on behalf of the other party but not being assertive about one’s own interests.

Compromise: A style of dealing with conflict involving moderate attention to both parties’ concerns.

Competing: A style of dealing with conflict involving strong focus on one’s own goals and little or no concern for the other person’s goals.

Collaboration: A style of dealing with conflict emphasizing both cooperation and assertiveness to maximize both parties’ satisfaction.

An important technique is to invoke superordinate goals—higher-level organizational goals toward which everyone should be striving and that ultimately need to take precedence over personal or unit preferences

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Being a Mediator

Mediator

A third party who intervenes to help others manage their conflict.

Four-stage model of dispute resolution

Investigate.

Review findings.

Apply solutions.

Follow-up.

You already may have served as a mediator, a third party intervening to help settle a conflict between other people. Third-party intervention, done well, can improve working relationships and help the parties improve their own conflict management, communication, and problem-solving skills.

Mediators may wish to follow a four-stage strategy, summarized in Exhibit 14.6 (recreated in text form on this slide.)

They investigate by interviewing the disputants and others and gathering more information.

They review the findings to determine how best to resolve the dispute, often in conjunction with the disputants’ bosses. They do not assign blame prematurely; at this point they explore solutions.

They take action by applying solutions and explaining their decisions and the reasoning, and advise or train the disputants to avoid future incidents.

And they follow up by making sure everyone understands the solution, documenting the conflict and the resolution, and monitoring the results by checking back with the disputants and their bosses.

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Virtual and E-conflict

When teams are geographically dispersed, as is often the case for virtual teams, team members tend to experience more conflict and less trust.

To limit issues:

Monitor and reduce or eliminate problems as soon as possible.

When problems arise, express willingness to cooperate, and then actually be cooperative.

When teams are geographically dispersed, as is often the case for virtual teams, team members tend to experience more conflict and less trust. Conflict management affects the success of virtual teams. Try to prevent conflicts before they arise; for example, make sure your information system is running smoothly before linking with others. Monitor and reduce or eliminate problems as soon as possible. When problems arise, express your willingness to cooperate, and then actually be cooperative. Even technical problems require the social skills of good management.

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Management in Action Balancing Teamwork and Diversity at Whole Foods Market

A sense of mission and shared values unifies employees at Whole Foods Market. The company also stresses a commitment to diversity in hiring which poses a challenge to team cohesiveness.

Whole Foods empowers the individual to help bring a diverse workforce together. What other strategies can be employed to reach this same end?

In 2017, Amazon bought Whole Foods. How is it doing? Has the culture changed or remained the same?

Employees at Whole Foods Market are unified by the company’s sense of mission and shared values. However, in its appreciation of diversity, Whole Foods also creates an environment in which cohesiveness requires some extra effort. Shoppers at Whole Foods may notice that its employees represent many different backgrounds and have wide latitude for dressing in self-expressive ways. Though appearances differ, employees focus on achieving team goals (sometimes in competition with other teams). In spite of this, conflicts do erupt, such as an episode over two employees’ use of Spanish during a team meeting in Albuquerque.

Ch4

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