Discuss how you can increase your cultural intelligence. List two or three specific action steps you will take to improve your scores.

Chapter One What Is Organizational Behavior?

Learning Objectives

After studying this chapter, you should be able to do the following:

1.1: Define the concept of organizational behavior (OB).
1.2: List and give examples of the four sources of information used in evidence-based management (EBM).
1.3: Define critical thinking, and explain the critical thinking skills leaders need.
1.4: Describe the scientific method used in OB research.
1.5: Discuss five types of outcome variables studied in OB.
1.6: Compare the levels of analysis in OB research.
1.7: Develop plans for using OB research to improve employee job performance.
1.8: Compare and contrast Theory X and Theory Y assumptions.

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A Crisis of Leadership?

Recent polls conducted by the Gallup organization show that about 70% of people who hold full-time jobs in the United States either hate their jobs or have “mentally checked out.”¹ In December 2015, the majority of workers were “not engaged” (50.8%), while another 17.2% were “actively disengaged.” This is a large impact considering that an estimated 100 million people work full time in the United States. Even worse, many of the Gallup survey respondents reported actively engaging in destructive behavior by spreading their dissatisfaction throughout their organizations. Workers who hate their jobs affect the organization’s bottom line. One recent analysis estimates that low engagement costs U.S. companies over $350 billion in revenue every year, and disengaged employees are more likely to quit their jobs, resulting in another $11 billion that employers spend to replace them, according to statistics from the Bureau of National Affairs.² One of the most important things the Gallup study found is that the source of dissatisfaction is not pay or the number of hours worked, however.

Most employees in Gallup’s studies consistently report that the reason for their disengagement from work is their boss. And this is not new. This study was a follow-up of an earlier study conducted since 2010, which showed similar discontent with work and bosses. The graph in Figure 1.1 shows that employee engagement has been stagnant over the years, with no significant improvement. Why? Isn’t there something that can be done to improve the well-being, motivation, and productivity of people at work? Is anyone working on addressing the concerns of the workforce? The answer is yes. There is a field of study called organizational behavior (or sometimes called OB for short) that studies the challenges leaders face in the workforce. Unfortunately, much of the knowledge that could help leaders improve the experience of work is tucked away in scientific journals that few managers have the time to read.

Figure 1.1 Employee Engagement Stagnant

Source: Gallup (2016). Employee engagement in U.S. stagnant in 2015. Retrieved from http://www.gallup.com/poll/188144/employee-engagement-stagnant-2015.aspx

The goal of this book is to help you become an effective leader—not the kind of leader described in the Gallup poll that produces discontented and unengaged workers. You can choose to be a leader who understands the fundamentals of OB—how to motivate followers, resolve conflicts, lead teams, and even help them manage stress during change. For example, effective communication is essential for leadership, and this is covered in Chapter 12. After reading this textbook, your approach to leading others will be grounded in the most important and current research conducted on organizations.

What Is Organizational Behavior?

Learning Objective 1.1: Define the concept of organizational behavior (OB).

OB is defined as the study of individuals and their behaviors at work. It is a multidisciplinary and multilevel research area that draws from applied psychology, cultural anthropology, communication, and sociology. This textbook draws upon all of these areas with a focus on applied social psychology. Social psychologists study the behavior of individuals in groups, so it makes sense that the study of how leaders influence people and their OB is grounded in this field of psychology.

OB is a relatively young field in comparison to areas in the field of medicine—and even psychology from which it draws. There were management practices in place since the early 1900s with Frederick Taylor’s approach to “scientific management,” which was the study of how work could be designed to make production work (particularly assembly lines) more efficient.³ Most scholars agree, however, that OB originated with the human relations movement⁴ ignited by the Hawthorne studies (conducted between 1927 and 1932), which led to a focus on the role of human behavior in organizations. The Hawthorne studies were two studies conducted by Australian-born psychologist Elton Mayo at the Western Electric Company near Chicago.⁵

Mayo spent most of his career at Harvard University and was interested in how to increase productivity in assembly lines. The first study was designed to examine the effects of lighting in the plants on worker productivity. However, the research team had a surprise. Productivity increased rather than decreased even though the lights were being dimmed. Perplexed by this finding, the research team interviewed the workers and learned that the workers appreciated the attention of the research team and felt that they were receiving special treatment. And then productivity declined after the researchers left the plant. This has been called the Hawthorne effect and refers to positive responses in attitudes and performance when researchers pay attention to a particular group of workers.

The second Hawthorne study was designed to investigate a new incentive system. However, instead of the incentive system increasing workers’ production, the social pressure from peers took over and had more impact on worker productivity than pay increases. Workers formed into small groups and set informal standards for production, requiring coworkers to reduce their production so pay was more equal among the group members.

The Hawthorne researchers concluded that the human element in organizations was more important than previously thought, and they learned that workers want attention. This is still relevant today. For example, recent work demonstrates that when employers provide gifts to employees (termed empathy wages), it elicits feelings of gratitude from them.⁶ The “human relations” movement followed the Hawthorne studies, and OB emerged as a distinct field of study in the 1950s. The term organizational behavior first appeared in 1957 in a book by Chris Argyris, Personality and Organization: The Conflict Between System and the Individual.⁷ Today, OB researchers have PhDs from psychology departments (in the area of industrial and organizational psychology) and business schools. They teach from the research base on OB and conduct research that addresses important challenges facing organizational leaders today.

Disciplines Contributing to Organizational Behavior

There are a number of disciplines that contribute to the study of OB. Studies of individual differences such as personality (Chapter 2 of this textbook) draw from the fields of psychology and industrial and organizational psychology. These fields also contribute to our understanding of human performance. Individual reactions to work, such as emotions and attitudes, also draw from psychology research but also from social psychology. Motivation theory has been influenced by psychology as well as economics. Understanding decision making (Chapter 5) draws from economic theory. Research on leaders as influencers and motivators (Section III) draws from applied social psychology. Applied social psychology is the study of how people interact in groups and addresses significant challenges facing leaders as organizations use teams more regularly to get things done (Chapter 10). Trends such as the need to compete in a global marketplace, organizational restructuring, and rapid changes in technology have resulted in the need to lead through change. Research in the areas of sociology and anthropology help us understand organizational culture and leading change. OB is an applied field of study aimed at problem solving for organizational leaders. Thus, OB is a multidisciplinary field that draws upon the best ideas and research from several disciplines.

The goal of OB as a field is to improve the functioning of the organization and how employees experience their work. For example, OB researchers study how job satisfaction affects employee well-being. Another example is how a leader’s vision affects follower motivation and performance toward goals. A third example is how perceptions of politics at work might lead to an employee quitting the organization (this is called turnover). Low productivity and turnover cost organizations millions of dollars. Beyond the impact on costs, employee well-being is a major concern for forward-thinking organizations today. OB researchers develop guidelines that directly address such challenges. Based on research, leaders can make better decisions to make their organization more effective and better places to work. It’s important for OB researchers to translate their evidence into practical guidelines for managers to follow. Next, the journey from theory to practical applications will be discussed.

From Theory to Practice

OB is an applied science, so first it is necessary to briefly review what science is all about. The goals of science—any science—are as follows:

Description: What does the process look like?
Prediction: Will the process occur again? And when?
Explanation: Why is this happening?
Control: Can we change whether or not this happens?

For example, the forecasting of extra workers needed for a toy store during the holiday season is an important process for ensuring the best customer service. Human resource managers have an understanding of how many customers will visit the store based upon prior holiday seasons (in other words, a theory) and can describe their need for extra workers. This theory is also fairly high on explanation since the store managers have some understanding of why customers visit their store and when volume increases. Prediction is important since managers need to project with some accuracy how many extra seasonal workers they will need to hire to ensure that customers will be served and not have long wait times at the cash registers. However, hiring forecasts are not always accurate, resulting in unhappy customers or the hiring of too many seasonal workers that wait idly for customers to visit. In this example, the science is moderate for prediction. For control, one could say that the science is low because there are many reasons why customers may not visit the store that are outside of the organization’s control (e.g., customers may be able to purchase the toys online). This example illustrates why theories are so important to applied science. The better the initial understanding of how many workers will be needed, the better the store manager should be able to predict how many seasonal workers to hire for the season and for how long. Theories are important to OB as a science since theory is translated into practical advice for managers, and this is illustrated by Google’s Project Oxygen in the boxed insert.

The phrase “there is nothing as practical as a good theory” has been attributed to social psychologist Kurt Lewin. Theories build upon prior research and extend into new areas of importance to leaders. A researcher generates hypotheses about human behavior in organizations and then gathers data to test it. Research eliminates the guesswork about what will work (or not work), and this helps leaders solve the problems they face every day. The ability to translate research to practice has been termed evidence-based management (EBM).

Research in Action

How Google Proved Management Matters

Google faced a challenge. Ever since the company started, it’s highly trained and self-motivated engineers questioned whether they needed managers. In the high-technology culture, employees actually believed that managers did more harm than good. But Google grew rapidly and by 2013 had 37,000 employees with just 5,000 managers, 1,000 directors, and 100 vice presidents. The organizational structure was flat rather than hierarchical. How could Google’s managers convince its skeptical employees that they needed managers to operate effectively and remain competitive?

Google launched Project Oxygen to prove that managers don’t make a difference (this was their hypothesis). “Luckily, we failed,” said project co-lead Neal Patel. To accomplish the goal, they hired several PhD researchers to form a people analytics team. As with everything Google does, they applied hypothesis-driven research methods to analyze the “soft skills” of managers. Project Oxygen was a multiyear research study designed to uncover the key management behaviors that predict employee satisfaction and organizational effectiveness. One part of the project was an employee survey about their managers’ behaviors. The research team also interviewed employees who were quitting about the behaviors of their managers and why they were leaving Google. The team discovered that there was less turnover on teams with the best managers. They also documented a statistical relationship between high-scoring managers’ behaviors and employee satisfaction. So they concluded that managers did matter and then conducted another study to learn specifically what Google’s best managers did.

Here’s what they found. Project Oxygen identified eight behaviors shared by high-scoring managers:

Is a good coach
Empowers the team and does not micromanage
Expresses interest in, and concern for, team members’ success and personal well-being
Is productive and results-oriented
Is a good communicator — listens and shares information
Helps with career development
Has a clear vision and strategy for the team
Has key technical skills that help him or her advise the team

Because this project was evidence-based, the sceptical engineers were convinced that the best managers did make a difference. In describing Project Oxygen, David A. Garvin from the Harvard Business School notes: “Data-driven cultures, Google-discovered, respond well to data-driven change.” Google now offers training and feedback to low-scoring managers. However, they learned that the best approach is to have panels of highly rated managers tell their stories about how they coach and empower their teams. Rather than being told what to do by upper management, they get advice from their colleagues.

Discussion Questions:

Why did they use an evidence-based approach? Describe the type(s) of evidence Google used in their research.
Are you convinced that managers matter? Why or why not? What additional evidence would you like to see?
Create a brief description of the design for the next steps in Project Oxygen to further develop Google’s managers.

Source: Garvin, D. A. (2013). How Google sold its engineers on management. Retrieved from https://hbr.org/2013/12/how-google-sold-its-engineers-on-management; Kamensky, J. M. (2014). Does management matter? Retrieved from http://www.businessofgovernment.org/blog/business-government/does-management-matter

Evidence-Based Management

Learning Objective 1.2: List and give examples of the four sources of information used in evidence-based management (EBM).

The term evidence-based was originally employed in the field of medicine to guide how doctors make decisions regarding patient care. EBM improves a leader’s decisions by disciplined application of the most relevant and current scientific evidence. Although many definitions of EBM are available, this is the most frequently quoted and widely used:⁸ EBM means making decisions about the management of employees, teams, or organizations through the conscientious, explicit, and judicious use of four sources of information:

The best available scientific evidence—for example, research published on OB
The best available organizational evidence—for example, interviews or surveys completed by people in an organization
The best available experiential evidence—for example, the intuition of the leader and his or her expert opinions
Organizational values and stakeholders’ concerns—for example, stock price or groups that focus on whether the organization employs environmentally friendly practices

How can a leader use these sources of evidence to make better decisions? First, leaders must have the ability (basic skills and competencies), motivation (behavioral beliefs, behavioral control, and normative beliefs), and opportunity (support that overcomes barriers) to practice EBM.⁹ For example, EBM was applied to an operational problem in a hospital. Researchers tracked the process through interviews. An EBM decision process was implemented by a physician manager. This research concluded that the “fit” between the decision maker and the organizational context enables more effective evidence-based processes.¹⁰ Leader involvement at all levels is essential for EBM to work in practice,¹¹ as well as collaboration with researchers.¹²

The following standards may be applied by leaders using EBM to ask questions and challenge their thinking about their organizations:¹³

Stop treating old ideas as if they were brand new. This has resulted in a cynical workforce that may view innovations from leaders as short-term fads (e.g., positive changes such as total quality management, teams, and engagement). Progress cannot be made by treating old ideas as new ones; cynicism could be reduced by presenting ideas that have been able to “stand the test of time” as best practices rather than new ideas.
Be suspicious of “breakthrough” studies and ideas. Question whether some new ideas in management are really breakthroughs, and be wary of claims about new management principles that may be either overstated or understated.¹⁴
Develop and celebrate collective brilliance.¹⁵ In theory, a diverse collection of independent decision makers (although not expert) makes better predictions on the average compared to an expert decision maker. In a sense, this is how the “ask the audience” lifeline works on the game show Who Wants to Be a Millionaire? A contestant can ask the audience for the answer to a question and the audience votes. The contestant then sees the percentages of people who chose each answer. It’s interesting to see that often the audience is right. The contestant is thus gathering the collective brilliance of a random group of decision makers. See the following box for another method that may be used to develop collective brilliance: the Delphi decision-making method.
Emphasize drawbacks as well as virtues. An interesting example of this is the marketing of an energy drink called Cocaine. Cocaine contains three and a half times the amount of caffeine as Red Bull. It was pulled from U.S. shelves in 2007 after the FDA declared that its producers, Redux Beverages, were marketing their drink as an alternative to street drugs, and this was determined to be illegal. The FDA pointed to the drink’s labeling and advertising, which included the statements “Speed in a Can” and “Cocaine—Instant Rush.” Despite the controversy, Redux Beverages continued to produce and market the beverage in limited markets and online.¹⁶
Use success (and failure) stories to illustrate sound practices but not in place of a valid research method. For example, Circuit City went bankrupt in 2009 but was a “great company” in the now-classic book Good to Great. What happened to Circuit City? Alan Wurtzel, the former CEO and the son of the founder, saw the threats coming from Best Buy and Amazon in the early 2000s, and he knew the company was headed for decline. “After I left, my successors became very focused on the bottom line—the profit margin,” Wurtzel told a group at the University of Richmond. “They were too focused on Wall Street. That was the beginning of the end,” said the former CEO as he recalled the rise and fall of the great company.¹⁷ The lesson here is that no matter how great a company is, care must be taken not to simply copy what they do in today’s changing business environment. There is no substitute for a careful analysis and diagnosis before embarking on a search for solutions.
Adopt a neutral stance toward ideologies and theories. An example of this is that most management “gurus” are from North America (e.g., Peter Drucker, Tom Peters, Ken Blanchard). This is not to say that their ideology isn’t useful. However, in a global world, EBM demands that we question whether ideology developed in North America applies abroad. EBM would also suggest that we search for theories developed overseas to locate experts from other countries with important ideas.

Best Practices

Using the Delphi Method to Harness Collective Brilliance

The Delphi method is a systematic decision-making technique that employs a panel of independent experts. It was developed by the RAND Corporation in the 1950s by Olaf Helmer and Norman Dalkey to systematically solicit the view of experts related to national defense. The term Delphi originates from Greek mythology. Delphi was the site of the Delphic oracle, where people would go to get insight from the gods. Thus, the method was thought of as brainstorming by a panel of experts.

Here’s how it works. An expert panel is chosen and given a proposal. Members of the group are selected because they are experts or they have information related to the problem. Next, a series of questionnaires or surveys are sent to the experts (the Delphi group) through a facilitator who oversees the process. The group does not meet face-to-face. All communication is normally in writing (typically e-mail). Experts are given a proposal and complete an assessment of it over several rounds. These experts can be co-located or they can be dispersed geographically and submit their ideas from anywhere in the world electronically. The responses are collected and analyzed to determine conflicting viewpoints on each point. The process continues in order to work toward synthesis and building consensus. After each round, a facilitator provides an anonymous summary of the experts’ predictions or problem solutions from the previous round as well as the rationale each expert provided. Participants are encouraged to revise their earlier solutions in light of the replies of other members of the group. Over time, the expert panel converges on the best solution or prediction. This technique allows a leader to gather information from a wide range of expert sources to make better decisions, thereby utilizing the wisdom of many (or collective brilliance).

The success of this process depends upon the facilitator’s expertise and communication skills. Also, each response requires adequate time for reflection and analysis. The major merits of the Delphi process are

elimination of interpersonal problems,
efficient use of experts’ time,
diversity of ideas, and
accuracy of solutions and predictions.

Discussion Questions:

How should experts used in a Delphi decision-making process be selected? Would paying experts influence their participation in the process and/or the outcome?
To harness collective brilliance using Delphi, how many decision makers do you think should be invited to participate? In other words, is there a minimum number to gain a broad-enough perspective? How many is too many?
Do you feel that this process is worth the time and effort to improve a decision? Why or why not?

Sources: Delbecq, A. L., Van de Ven, A. H., & Gustafson, D. H. (1975). Group techniques for program planning: A guide to nominal group and Delphi processes. Glenview, IL: Scott, Foresman; Clark, D. R. (2010). Delphi decision making technique. Retrieved from http://nwlink.com/~donclark//perform/delphi_process.html; Hsu, C. C., & Sandford, B. A. (2007). The Delphi technique: Making sense of consensus. Practical Assessment, Research & Evaluation, 12(10), 1–8.

In making important organizational decisions, the leader may include information gathered from one or all four of the sources described previously in the definition of EBM. This can result in a lot of information. So how can a leader sort through it all and determine what is most relevant to the problem at hand? The answer lies in critical thinking, a process that has been developed for over 2,500 years, beginning with the ancient Greeks and the Socratic Method, which is the process of learning by questioning everything. Critical thinking skills are applied to sort through all of the information gathered and then prioritize it (and even discard evidence that appears to be invalid or irrelevant to the problem).

What is Critical Thinking?

Learning Objective 1.3: Define critical thinking, and explain the critical thinking skills leaders need.

Critical thinking can be defined as follows: “Critical thinking calls for persistent effort to examine any belief or supposed form of knowledge in the light of evidence that supports it and the further conclusions to which it tends.”¹⁸ Critical thinking is a mode of thinking about a problem we face where the problem solver improves the quality of the process by taking control of it and applying rigorous standards. The process has been described as having three interrelated parts:

the elements of thought (reasoning);
the intellectual standards that applied to the elements of reasoning; and
the intellectual traits associated with a cultivated critical thinker that result from the consistent and disciplined application of the intellectual standards to the elements of thought.¹⁹

Critical thinking involves using justification; recognizing relationships; evaluating the credibility of sources; looking at reasons or evidence; drawing inferences; identifying alternatives, logical deductions, sequences, and order; and defending an idea. Critical thinking requires the decision maker in an organization to apply a complex skill set to solve the problem at hand. A set of guidelines for critical thinking is shown in Table 1.1.²⁰ Critical thinking is, in short, self-directed, self-disciplined, self-monitored, and self-corrective thinking. It requires rigorous standards of problem solving and a commitment to overcome the inclination to think that we have all of the answers.²¹ A recent study demonstrated that students’ attitudes toward and beliefs about critical thinking skills is related to their GPA due to effective argumentation and reflective thinking. ²²

Source: Kurland, D. (2000). Critical thinking skills. Retrieved from www.criticalreading.com

When it comes to asking questions, some of the best ideas come from a book by Ian Mitroff called Smart Thinking for Crazy Times: The Art of Solving the Right Problems.²³ Mitroff warns us about solving the wrong problems even though leaders solve them with great precision in organizations. This happens because they don’t ask the right questions. Mitroff provides advice to managers who fall into the trap of solving the wrong problems by spelling out why managers do it in the first place. The five pathways to error are

picking the wrong stakeholders by not paying attention to who really cares about the problem;
selecting too narrow a set of options by overlooking better, more creative options;
phrasing a problem incorrectly by failing to consider at least one “technical” and one “human” variation in stating a problem;
setting the boundaries of a problem too narrowly by ignoring the system the problem is embedded in; and
failing to think systemically by ignoring the connection between parts of the problem and its whole.

So what questions should a manager be asking? Mitroff provides the following list of the basic questions facing all organizations (and ones we should be asking frequently if we expect to gain buy-in from employees for the implementation of their solutions):

What businesses are we in?
What businesses should we be in?
What is our mission?
What should our mission be?
Who are our prime customers?
Who should our customers be?
How should we react to a major crisis, especially if we are, or are perceived to be, at fault?
How will the outside world perceive our actions?
Will others perceive the situation as we do?
Are our products and services ethical?

In OB, there is a systematic method to answer questions. As the field was developing, scholars adopted much of their methodological approach from the social sciences, which were following research methods from the physical sciences. These methods are applied to address problems and opportunities faced by organizational leaders.

Critical Thinking Questions: Why does asking these questions improve employee buy-in for the implementation of plans? Are there other questions you feel are important to ask?

The Scientific Method

Learning Objective 1.4: Describe the scientific method used in OB research.

How do OB researchers know what they know? As discussed earlier, it begins with a problem to solve. For example, a problem might be a leader’s concern that only about 50% of their employees are satisfied with their work. First, the leader reviews the available knowledge on job satisfaction (i.e., the scientific evidence from EBM) and learns that the way supervisors treat followers may improve job satisfaction. Based on theory, the leader forms hypotheses, or predictions, regarding what might improve job satisfaction. An example of a hypothesis is “A leader’s appreciation of workers’ efforts will lead to increased job satisfaction.” The next step is to collect observations from the organization. This might be, for example, through interviews with employees or surveys completed by employees. Once data are collected, the hypothesis is tested with statistical techniques. For additional information on the research designs that are used by open researchers, refer to the Appendix of this textbook.

The basic research process described previously is depicted in Figure 1.2. As the figure shows, research is an ongoing process that begins with observations that lead to interesting questions. Next, hypotheses and testable predictions are formulated. Data are collected to test these predictions and are then refined, altered, expanded, or rejected (the center of the figure). Based on these results, additional predictions and data collections follow until general theories of OB begin to emerge. These theories then lead us to frame additional observation, and the research cycle continues. As noted in the introduction to this chapter, OB is an applied field, and this is underscored by the typical outcome variables that are studied. Researchers focus on outcomes that are of interest to leaders in organizations, such as employee job satisfaction and productivity. Next, the types of outcomes typically studied in OB research will be reviewed.

Figure 1.2 The Scientific Method as an Ongoing Process

Source: Garland, T., Jr. (2016). The scientific method as an ongoing process. Riverside: University of California. Archived from the original on August 19, 2016.

Outcome Variables in Organizational Behavior

Learning Objective 1.5: Discuss five types of outcome variables studied in OB.

In the preceding example, leader appreciation of workers is the independent variable. Worker engagement is the dependent variable (i.e., it depends on the independent variable: leader appreciation). Since OB is an applied science, the outcome variables studied are typically variables that leaders are interested in improving. There are five broad groups of outcome variables studied: performance, work-related attitudes, employee well-being, motivation, and employee withdrawal.

Performance

Productivity (or job performance) is one of the most important outcomes in OB. Performance can be actual performance as collected in organizational records (e.g., the number of forms correctly processed in an insurance company) or it may be rated by supervisors and/or peers (e.g., the supervisor rates the follower’s work quality on a scale of 1 to 7, with 1 being poor and 7 being outstanding). Organizational citizenship behavior (OCB) is the worker’s willingness to go above and beyond what is required in his or her job description to help others at work.²⁴^,25 OCB is considered to be performance beyond the expectations of a person’s job description—extrarole performance. While OCB is often studied as an important performance outcome variable, it has also been shown that OCB predicts individual and organizational outcomes as well. A large-scale review of the OCB literature found that OCB predicts employee performance, reward-allocation decisions, and a variety of withdrawal-related criteria (employee turnover intentions, actual turnover, and absenteeism).²⁶

Work-Related Attitudes

The measurement of work-related attitudes is an important aspect of OB research, and job satisfaction has long been studied as an outcome variable. For example, there is a measure of job satisfaction dating back to 1935 that is still employed in organizational studies today: the Hoppock Job Satisfaction Blank shown in Table 1.2.²⁷ Loyalty to an organization, known as organizational commitment, is another key attitude that has proven to be important because it is related to job satisfaction and is one of the strongest predictors of turnover.²⁸^,29,30 Organizational commitment is an employee’s relationship with the organization he or she works for.³¹ In other words, OB researchers can measure a person’s loyalty, and this predicts whether or not they will quit in the future. Also, lack of loyalty results in people being absent from work more often. Uncommitted workers are less motivated and perform at lower levels.³² Another contemporary outcome variable that is gaining research attention is employee engagement.³³ Employee engagement can be defined as “a relatively enduring state of mind referring to the simultaneous investment of personal energies in the experience or performance of work.”³⁴ In Chapter 4 of this book, you will learn more about these and other work attitudes and how they are studied in OB research.

Source: Hoppock, R. (1935). Job satisfaction. New York, NY: Harper; McNichols, C. W., Stahl, M. J., & Manley, T. R. (1978). A validation of Hoppock’s job satisfaction measure. Academy of Management Journal, 21(4), 737–742.

Employee Well-Being

In addition to job satisfaction, researchers are also interested in other indicators of employee well-being. Some studies examine outcomes such as emotional exhaustion, psychosomatic health complaints, and physical health symptoms.³⁵ Recent research has shown that leaders not doing their job (i.e., passive leadership) undermines employee well-being because having a weak leader increases role stress and depletes employees’ psychological resources for coping with the stress.³⁶ Another study found that being asked to do an illegitimate task predicted lower employee well-being (lower self-esteem and job satisfaction with increased anger and depression). An illegitimate task is one that is outside of the boundaries of a person’s job: “For example, an administrative assistant asked to care for an executive’s child, while the executive attends a meeting may be feeling ‘this is not my job!’”³⁷ The recommendations from these two studies for leaders seem clear: Being passive will affect your followers’ well-being negatively, but so will giving them tasks that are inappropriate. Well-being has emerged as an important outcome variable in OB, and some studies have added engagement as another indicator of well-being.

Motivation

Classic views on motivation describe both extrinsic and intrinsic motivation as being equally important. Extrinsic motivation is based on the rewards from the organization’s compensation system such as pay and bonuses. Intrinsic motivation, on the other hand, is related to the value of the work itself.³⁸ As with attitudes, motivation has been studied as an outcome variable but also as an independent variable that predicts productivity. Prosocial motivation is a new concept of motivation³⁹ that assesses the degree to which employees behave in a way that benefits society as a whole. You will learn more about motivation and rewards in Chapters 8 and 9 of this textbook.

Employee Withdrawal

As noted earlier, an employee quitting the organization is costly in terms of the money and time spent to recruit, hire, and train replacements. There is much research in OB on the reasons why employees think about quitting (turnover intentions) and actual turnover.⁴⁰ The availability of outside employment opportunities is a factor, but thoughts of quitting may be related to other outcomes such as lower job satisfaction and engagement. And if the economy improves and the job market improves with it, workers may eventually leave for other opportunities. Another costly form of employee withdrawal is absenteeism, since workers may not come to work when they are dissatisfied and there are few alternative jobs available.

Critical Thinking Questions: Is employee productivity the most important outcome variable? If not, what outcome(s) do you think is/are more important?

Levels of Analysis in Organizational Behavior

Learning Objective 1.6: Compare the levels of analysis in OB research.

Individual behavior in an organization may be influenced by processes at different levels in the organization. The most basic level is the individual level. For example, an individual’s personality and experiences would explain much of their behavior, and differences in these variables among people would help explain why people behave differently. Other differences between people’s behavior occur at the dyad (or two-party) level. An example would be a mentor and a protégé. Still, other sources include group- and team-level influences on individual behavior. An example would be a team that has high-performance norms that encourage a team member to perform at his or her best. Additional influences on individual behavior may come from the organizational level. For example, in organizations with strong cultures, the cultural characteristics can have a profound influence on an individual member’s behavior. To illustrate this, one needs to look no further than the U.S. Marine Corps. The Marine Corps has a strong culture that includes pride, and this inspires Marines to excel (this is evident in their recruiting ads: “The few, the proud, the Marines”; you will learn more about organizational culture in Chapter 14 of this book). There is also the industry level of analysis where comparisons are made across different industries (this is more typical for research in strategic management than OB). However, this level is included here to provide a complete listing of levels of analysis in organizational research. All levels may influence employee performance in organizations, and this is discussed in the next section.

How OB Research Increases Employee Performance

Learning Objective 1.7: Develop plans for using OB research to improve employee job performance.

The chapters in this book will address all of the levels that may influence individual behavior and show how processes at one level may affect processes at another level. For example, a positive organizational culture may increase the commitment of individuals to their work and, in turn, their performance. Table 1.3 provides examples of hypotheses at the different levels of analysis discussed previously. This table illustrates how OB research at all levels may help leaders improve employee performance.

As this table illustrates, understanding OB has strong influences on employee performance. Thus, understanding behavior in organizations is every manager’s job. But some managers engage in behaviors that decrease employee performance. One of the reasons why managers do this is because they hold subconscious assumptions regarding employees’ willingness to work hard. An important theory of such managerial assumptions emerged in the 1960s and suggested that managers’ assumptions regarding their followers’ motivation affects the way they treat them. If a manager assumes that followers are lazy and will perform poorly, they treat them in ways that control their behavior and decrease creativity. In contrast, if a manager assumes that their followers are smart and motivated, they allow them to participate in decisions and give them goals that stretch their talents. This theory described two sets of leader behaviors related to these assumptions—Theory X and Theory Y. This theory provides a good opportunity to apply your critical thinking skills.

Critical Thinking Question: Which level(s) do you think have the most influence on individual behavior in organizations and why?

Theory X and Theory Y

Learning Objective 1.8: Compare and contrast Theory X and Theory Y assumptions.

One of the most influential books in OB is The Human Side of Enterprise by Douglas McGregor.⁴¹ This book is important because it presents the idea that leader behaviors are influenced by fundamental assumptions and beliefs about human nature. Most managers are not aware of their underlying assumptions; thus, their influence on behavior is pervasive yet hard to detect. These assumptions are divided into pessimistic (Theory X) and optimistic (Theory Y) views of human nature. Theory X leaders assume that people are basically lazy, don’t like to work, and avoid responsibility. This type of manager’s related behaviors include being directive, engaging in surveillance, and coercion. In contrast, Theory Y leaders assume that people are internally motivated, like to work, and will accept responsibility. These managers’ related behaviors are to allow discretion, participation, and the encouragement of creativity on the job.

Although McGregor proposed Theory X and Y over 55 years ago, most quantitative research did not emerge until relatively recently. However, research findings on these managerial assumptions are interesting. For example, one study showed that Theory Y assumptions were more related to participative decision-making by leaders. Further, participative decision-making is actually perceived as a threat by Theory X managers because it reduces their power. Theory Y managers viewed participation differently and saw it as a positive influence on their power and effectiveness.⁴² Another study of 50 military leaders and 150 of their followers found that the Theory Y management style was significantly and positively associated with subordinates’ satisfaction with the leader, organizational commitment, and organizational citizenship behaviors. The Theory X management style had a significantly negative impact on subordinates’ satisfaction with the leader but no significant impact on commitment and organizational citizenship behavior.⁴³ The findings of this study in the military environment are interesting because they suggest that Theory Y relates to satisfaction but may not always relate to commitment and performance. The authors concluded that Theory X/Y assumptions provide unique insights into leadership behavior and outcomes.

One of the key themes of this textbook is to encourage you to think critically about the theories and approaches presented. Theory X/Y is no exception. Over the years, Theory X/Y has been criticized for being too simple and not considering the situation leaders and followers find themselves in.⁴⁴^,45 For a long time, research was also hindered because good measures of Theory X/Theory Y did not exist. However, Richard Kopelman and his associates have developed a measure of Theory X and Y that shows promise for the valid assessment of these diverse management philosophies.⁴⁶ Their measure appears in the Toolkit at the end of this chapter (Self-Assessment 1.1), and you can learn about your own Theory X and Y assumptions by completing it. Despite its critics, McGregor’s book The Human Side of Enterprise was voted the fourth most influential management book of the 20th century in a poll of top management scholars.⁴⁷ McGregor’s theory continues to hold an important position in OB research due to the implication that it is important for leaders to understand their subconscious fundamental assumptions about how human beings relate to work. It appears that the assumptions of Theory X and Theory Y are worthy of further study.

Critical Thinking Questions: Why do you think that Theory X/Y has had such a strong influence on understanding leadership? Can you think of other assumptions that managers may hold in their subconscious mind that influence how they treat their followers?

Plan for This Textbook

There are numerous challenges facing leaders of organizations today. Most organizations are experiencing rates of change unlike anything we have seen in the past.⁴⁸ External pressures have been created from mergers, downsizing, restructuring, and layoffs as organizations strive to remain competitive or even survive. Other external forces are global competition, product obsolescence, new technology, government mandates, and demographic changes in the workforce itself. Internally, leaders must effectively communicate to followers, peers, and bosses. Managing poor performance is one of the most challenging tasks a manager must do. As noted at the beginning of this chapter, addressing the pervasive problem of worker disengagement will be a challenge for leaders in the years ahead. The changes organizations have undergone have resulted in followers who are filled with cynicism and doubt about their leaders and organization.⁴⁹ Ethics scandals in business have fueled the perception that leaders have lost the credibility to lead their organizations in a principled way.

By now, you have realized that OB is a problem-focused discipline aimed at making organizations more effective. Your ability as a leader will be enhanced through knowledge of the theory and applications from OB research. Each chapter will review the essential and most current theory and research, and relate it to how you can develop your leadership skills. At the end of each chapter, there are tools for your “toolkit,” where you will directly apply the theories through cases, self-assessments, and exercises. At the end of this chapter, Toolkit Activity 1.1 is a personal leadership development plan where you can apply the concepts and research covered in the textbook to your own development as a leader by setting goals and specific behavior strategies to meet them. For example, a student who set a specific goal to improve their coaching of other students that they tutor in accounting would formulate specific coaching behaviors and commit to engaging in them once per week. To gain feedback, the student would have the tutored students rate their coaching behavior by providing a yes or no answer to the following statement after each tutoring session: My tutor provides specific knowledge that has improved my accounting performance. Since leaders are expected to be coaches, this process should help the student improve their coaching skills for the future.

The figure on page 1 (Section I opening page) shows an overview of the entire book and how the material is tied together to impact the challenges of shaping organizational culture and leading change. Leadership is a theme that runs through the textbook with each chapter concluding with implications for leaders. This introductory chapter has provided an overview of EBM and critical thinking that should be applied to all of the following chapters. Next, the importance of understanding individuals in organizations is covered in Chapters 2 through 5, including personality, emotions and moods, job attitudes as well as perception, and decision making. The next section addresses the leader’s role as an influencer and motivator (Chapters 6 through 9). First, leadership is covered, highlighting evidence-based recommendations for you to follow to become effective. Organizations are political entities, and the role of power and politics is discussed in Chapter 7. The role of leaders as motivators is covered next in Chapters 8 and 9. Following this, the role of leaders as relationship builders is covered in Chapters 10 through 13, which builds upon the core leadership theories covered in Chapter 6 (leadership). Section IV addresses the topics of teams, conflict, organizational communication, diversity, and leading across cultures. Finally, the role of leaders as change agents is discussed in Chapters 14 and 15, which discuss organizational culture, leading change, and stress management. As you read this book, refer back to this figure as a map of how to organize the vast amount of theory and research on OB that has been generated for decades. It won’t seem so overwhelming if you can place the material in the four broad groupings as shown in the figure. This textbook generally follows the levels of analysis noted in the current chapter: individuals, dyads (leadership and influence), groups, and organizations.

Leadership Implications: Thinking Critically

The goal of this book and your OB course is for you to become a more effective leader in organizations. To accomplish this, you will need to learn to think critically about the material you encounter. This may go against your intuition, which tells you to “see what you want to see” and confirm what you already believe. For example, you may think that OB is just all “touchy-feely” stuff that has no practical value. Try to keep an open mind and overcome any biases or preconceived ideas you may have about leadership or management. Linda B. Nilson, author of several books including Creating Self-Regulated Learners: Strategies to Strengthen Students’ Self-Awareness and Learning Skills, suggests that you ask the following questions about your readings:⁵⁰

What is your interpretation/analysis of this argument?
What are your reasons for favoring that interpretation analysis? What is your argument?
How well does your interpretation/analysis handle the complexities of the reading/data/argument?
What is another interpretation/analysis of the reading/data/argument? Any others?
What are the implications of each interpretation/analysis?
Let’s look at all the interpretations/analyses and evaluate them. How strong is the evidence for each one?
How honestly and impartially are you representing the other interpretations/analyses? Do you have a vested interest in one interpretation/analysis over another?
What additional information would help us to narrow down our interpretations/analyses?

Let’s practice critical thinking. Try to apply these questions to your results for the Theory X/Y Self-Assessment 1.1. In completing the Theory X/Y Self-Assessment, you learned that your subconscious assumptions about human nature will influence how you treat your followers. Interpret your results and check your arguments by asking the questions above. If you are Theory X, try to develop an alternative explanation for your results. Examine your Theory Y scores to determine if you have some tendency to believe that workers are self-motivated. If you are Theory Y, look at your Theory X scores to better understand the strength of your Theory Y assumptions. If you are a strong Theory Y leader, you are on your way to creating a participative and empowering work environment for your followers. In every chapter of this textbook, you will have the opportunity to take additional self-assessments that will challenge you to examine your own assumptions, attitudes, and behaviors by applying the critical thinking questions above. Through this understanding, you will be able to adjust your leadership style to become more effective.

A critical thinking filter has already been applied to the OB literature since this book includes the most relevant and evidence-based theory and research. You will need to think critically yourself and decide whether this approach will be a useful one for you to adopt into your management skill set. Throughout this textbook, you will be challenged to apply your own critical thinking skills based upon your own experiences with behavior in organizations and your study of this book. This is the evidence-based approach to learning OB. For example, Self-Assessment 1.2 tests your experiential evidence—what you already know about OB. To aid in this process, you will find Critical Thinking Questions to challenge you to think critically about the material throughout the book. You may choose to read further from the Suggestions for Further Reading or conduct your own research on topics you find particularly interesting. Complete the activities in the Toolkit sections to apply the material to your own leadership development. In this chapter, the activity is for you to start a Personal Leadership Development Plan where you can log the most useful approaches and develop plans to track your progress. The Case Studies found at the end of each chapter encourage you to apply organizational science to a real-world problem. By studying the chapters and completing the activities, this book should serve as a point of departure for your growth as you become an effective organizational leader with a comprehensive understanding of behavior in organizations.

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Key Terms

absenteeism, 14
applied social psychology, 4
critical thinking, 8
employee well-being, 14
evidence-based approach, 18
evidence-based management (EBM), 5
Hawthorne effect, 3
individual level, 14
industry level, 15
job performance, 13
job satisfaction, 13
organizational behavior (OB), 2
organizational citizenship behavior (OCB), 13
organizational commitment, 13
organizational level, 15
team level, 15
Theory X, 16
Theory Y, 16
turnover, 14
turnover intentions, 14

TOOLKIT ACTIVITY 1.1: Personal Leadership Development Plan

As you study the evidence-based research in this textbook, use the following development plan to tie the concepts to specific action plans and measurable outcomes that you find most useful.

Name: _____________________________________________________________________________________

Date: ______________________________________________________________________________________

Leadership Development Plan

Plan Detail

Complete the following for each of the goals listed previously.

1. Goals: This section is where you enter your development objectives. These objectives should be written so they read as goals you desire to achieve—for example, “I want to improve my team communication skills.”
- A. Connection to course material: This section is where you tie each of your development objectives into the material you learned in this course. This will reinforce course material and help translate it into practice. For example, you would write a few paragraphs relating the exercises or material on communication to why you find your listening skills to need development. Be specific (e.g., cite exercises, articles, material from text or lecture). Fill out this chart: 1A to 3A.
- B. Behavior strategies and frequency: This section is the “how” portion. How will you achieve your goals? How often will you perform these tasks? This is the heart of your development plan. You should create specific strategies that will push you toward the completion of your goals—for example, “Practice active listening once a day.” Fill out this chart for each goal: 1B to 3B.

GOAL: 1B

GOAL: 2B

GOAL: 3B

- C. Measurable outcome: This section helps you measure your success toward each goal.

Note: You can have more than three goals in your plan. Just be sure to complete all sections.

Discussion Questions

If you are achieving your goal, how would you notice the change in your leadership?
Specifically what will improve?
How will you measure it? Develop or find a metric—for example, “I will have the person who I listen to fill out an evaluation of my listening skills, rating them on a 1 (poor) to 5 (excellent) scale” (1C to 3C).

CASE STUDY 1.1: Organizational Science in the Real World

The skills and techniques of research are valuable to an organization’s leaders. The following case study illustrates how research can be used to solve a challenge facing a government organization. Imagine that you are the leader in this organization. As you read the case, consider how you might use the four sources of EBM rather than your own intuition to solve the pressing problems.

The state of Florida implemented the federal government’s decree that individuals applying for or renewing their driver’s license must provide a number of documents to verify their identity. Resulting from the REAL ID Act of 2005, these measures were set forth by the federal government to help develop a national identity database through the Department of Motor Vehicles (DMV; or Bureau of Motor Vehicles [BMV] depending on the state) to not only prevent identity theft but also prevent terrorists and illegal immigrants from accessing identities. Phase 1 of the act had to be completed by 2014, with the target completion of all the phases by 2017. This was clearly an important mandate, and attention to the details of implementation was essential to ensure both compliance and success.

The mandate to make these changes came at a challenging time. This requirement was not the only major change Florida was making to its driver’s license processes. Prior to this, the state of Florida merged the state’s DMV with each county’s tax collector. County tax collectors are often small organizations with 100 employees or fewer working at a handful of offices in each county to serve their patrons. Previously, tax collectors’ offices handled vehicle registration, license plates, property taxes, and hunting and fishing licenses. The DMV handled only driver’s licenses and identification cards. The purposes of this merger were to save money for the state, save time for citizens, and make the entire process easier. Thus, most DMV employees were not retained when the organizations were merged. So the organization had already undergone downsizing, and remaining employees were nervous about their jobs. Also, tax collector employees had to be trained on a variety of new processes and procedures within a short period of time.

After these initiatives were rolled out statewide, the general manager of one county’s tax collector offices noticed a number of changes. Employees were discontented and turnover skyrocketed. Large numbers of employees began to quit where previously they worked for the organization until they retired. Similarly, only 1 of 6 new hires was retained for more than 6 months after the changes. Retaining a skilled workforce became a major concern for the offices.

Customer service declined. Before the merger, customers typically handled their transactions within half an hour or less. However, driver’s licenses take significantly longer. Because the REAL ID Act requires documentation to be scanned into state and nationwide databases, it takes about an hour to apply for or renew licenses if there are no problems or delays. This has resulted in excessive wait times for customers. The tax collector tried to address this issue with requiring appointments for those seeking driver’s licenses. However, not all patrons made appointments; instead, they continued to just show up, creating delays for those with appointments. While these patrons were denied and offered to schedule an appointment, they often became belligerent and sometimes verbally abusive to the staff.

Customers were often upset and irritated not only by the excessive wait time but also by the amount of documentation they had to produce. They were also upset by having to renew driver’s licenses in person whereas previously they could renew by mail or the Internet. Tax collector employees were still friendly and polite with customers, but there was definitely some underlying tension resulting from the more complicated transactions. The camaraderie and morale among employees deteriorated; employee engagement was low.

Now it is your turn. Imagine that you are the office manager and are trying to solve the organization’s problems. You simply can’t revert the business back the way it was before the state’s mandated changes, and you’re not sure what needs to be fixed and where to go in the future.

Discussion Questions

How could research help this small organization? What would you hope to gain as the leader?
What dependent variables should you, as the leader, consider researching? Why?
Review the sources of EBM discussed in this chapter. Which ones would you rely most on and why?
Think about the research designs discussed in the Appendix on Research Designs used in OB at the end of the book. Which one(s) do you think would be appropriate for the manager to use? Would there be any benefit to using multiple methods, and if so, in what order would you conduct the research studies?

SELF-ASSESSMENT 1.1: Are You Theory X or Theory Y?

This self-assessment exercise identifies whether your leadership philosophy is Theory X or Theory Y as determined by research. The goal of this assessment is for you to learn about your general assumptions about people and work, and to understand how this may affect how you lead them. There are no right or wrong answers, and this is not a test. You don’t have to share your results with the others unless you wish to do so.

Part I. Taking the Assessment

For each of the statements below, circle the number that indicates the degree to which you agree or disagree.

Part II. Scoring Instructions

In Part I, you rated yourself on 10 questions. Add the numbers you circled in each of the columns to derive your score for Theory X and Theory Y. During class, we will discuss each approach, its strengths and weaknesses, and how this may affect your leadership style.

Source: Adapted from Kopelman, Prottas, and Falk (2012).

Interpretation

If your Theory X score is greater than 12, your assumptions are more in line with Theory X.

If your Theory Y score is greater than 12, your assumptions are more in line with Theory Y.

Discussion Questions

Were you surprised by your results? What does this tell you about how you view human nature?
Compare your scores with five other students in the class. Do you believe that most people are more Theory X or Theory Y?
How will your X/Y assumptions relate to how you may listen to the ideas of your followers and allow them to participate in decisions you are responsible for?

SELF-ASSESSMENT 1.2: Assessing Your Experiential Evidence Base

Some students think OB is common sense. Are the following statements true or false? The answers follow.

Answers

True. What is important is what the worker is happy about. But generally, happier people are more productive. You’ll learn why in Chapter 4.
False. No. In fact, larger teams underperform due to increased conflict, free-riding, and other group dysfunctions. Research shows that there is an optimal group size for high performance, and you will learn what it is in Chapter 10.
False. No. There are a number of perceptual biases that can affect how a leader evaluates followers. You need to be aware of them so you can guard against these errors, and you will know about them after reading Chapter 5.
False. While this seems intuitive, people actually achieve higher performance when the leader gives them a specific goal rather than a “do your best goal.” You will read more on the motivating properties of goals in Chapter 8.
False. No. Research on trust repair shows that admitting guilt may not be the best strategy. You will learn what the research shows you should do in Chapter 6.
False. While this may surprise you, pay may actually decrease intrinsic motivation. You will learn about how to best reward employees in Chapter 9.
False. Research on the leader–member exchange (LMX) model of leadership shows that effective leaders treat each follower differently based upon their skills, motivation, and need for development on the job. You will read more about this in Chapter 6.
True. What? Yes, it can. Multilevel research has shown that negative affect (a “blue” mood) can be aggregated to the group level—and it affects group functioning. You will learn more about this in Chapter 3.
False. While cohesion can be a positive force in teams, it does not always result in the best decisions. Too much group spirit can result in groupthink and impair a group’s decision making. You will read about this and other group dysfunctions in Chapter 10.
False. Actually, research shows that some conflict can be healthy since it can generate interest and challenge for followers. In Chapter 11, you will learn more about how to harness conflict and channel it toward increased motivation.
False. Research on cultural differences indicates that we need to consider cultural values before we generalize research findings from one country to another. You will learn about cross-cultural differences in Chapter 13.
False. While it is important to commit to goals, research shows that escalation of commitment to a failing course of action is a decision trap. Learn how to avoid this and other traps in Chapter 5.

Discussion Questions

How did you do? Were you surprised by some of the research evidence on these topics?
Which of these topics are particularly of interest to you? Why?
Did you feel that you had to guess at some of these?

OB research takes the guesswork out of being an effective leader! So keep reading!

Chapter Two Personality and Person–Environment Fit

Learning Objectives

After studying this chapter, you should be able to do the following:

2.1: Define personality, and discuss the role of heredity.
2.2: Discuss the benefits and limitations of using the Myers-Briggs Type Indicator in organizations.
2.3: List and explain the five factors in the Big Five theory of personality.
2.4: Compare and contrast the Type A and Type B behavior pattern.
2.5: Develop an example of a job that would benefit from risk taking.
2.6: Summarize the elements of psychological capital.
2.7: Explain the effects of positive and negative core self-evaluations.
2.8: Compare and contrast person–organization fit and person–job fit.

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The Right Stuff at the Wrong Time?

On July 1, 2013, Mark Pincus, the founder and CEO of Zynga, resigned as CEO of the Internet gaming company and announced that he had “fired himself.” The Internet gaming company was a rising star due to the success of the innovative game Words With Friends but experienced difficulties maintaining market share following its IPO in December 2011. Pincus hired Don Mattick, former head of Microsoft’s Xbox division, to replace him.¹ While Pincus remained at Zynga as chairman and chief product officer, the organization needed a different type of leadership style to address the persistent company problems of a company culture that was widely viewed as toxic with employees quitting in droves. Research conducted by Noam Wasserman, who studied founder–CEO succession, concluded that founders often find it difficult to remain as CEO as the company grows and the organization grows and adds employees.² A different leadership skill set is needed to manage others, and 80% of the time the founder is not able to make the adjustment to leader of a larger and more complex organization. For example, he or she may keep the original management team on board and be reluctant to make changes to ensure long-term market success and continued growth. The technical guru with the brilliant idea for an Internet start-up like Pincus might not have the right personality for the demands of leading a large organization, which include leadership and political skills. However, in 2015, Pincus returned to Zynga after 2 years of lackluster stock performance under Mattick. To survive against competitors like King (Candy Crush), Zynga needed to become nimble and innovative again. Some questioned whether Pincus’s leadership style could change.³ And after only 11 months, Pincus again stepped down as CEO in March 2016 after its stocks got slammed under his watch.⁴ It seems that Pincus had the right personality and risk-taking traits for a start-up but had difficulty leading a larger organization. From this example, it is clear that understanding personality is essential for being an effective leader.

What Is Personality?

Learning Objective 2.1: Define personality, and discuss the role of heredity.

Understanding your own personality—and the personalities of others—is critical. This is because personality and other individual differences are relatively stable over the life course. For example, personality has been generally defined as “regularities in feeling, thought and action that are characteristic of an individual.”⁵ Also, personality matters because it is linked to social behavior in organizations. Personality may affect our work habits and how we interact with our coworkers. However, personality and most individual differences aren’t like other areas of organizational behavior (OB) where the manager can influence the outcomes by intervention. Individual differences are aspects of OB that must be understood, and leaders must often work with them rather than try to change people. This is why we often hear people speak about two people who just don’t get along as a “personality clash.” As the example of Marc Pincus suggests, a real question for Zynga is whether they will be able to name a successor with the right personality traits to lead the organization and be innovative again. Next, we will discuss research that addresses whether personality can change.

The Role of Heredity

Can a brilliant engineer who is introverted change his personality and become an extraverted visionary leader? In other words, are personality traits inborn or learned? This question has been addressed by the famous Minnesota twin studies. To conduct this research, twins born in Minnesota from 1936 through 1955 were asked to join a registry.⁶ Identical twins (monozygotic and dizygotic reared apart, MZAs and DZAs, respectively) were confirmed through birth records, and 80% of the surviving intact pairs were located and recruited for participation in various psychological studies. Some twins were reared apart for various reasons (e.g., adoption). These twins tell us a great deal about the contribution of heredity compared to the child-rearing environment. A study showed that 50% of the variation in occupational choice (whether a person is a dentist or a soldier, for example) is due to heredity.⁷ Most people are surprised to learn this. Another study of MZA and DZA twins showed that 40% of the variance in values related to work motivation could be attributed to heredity, whereas 60% was due to the environment (and measurement error).⁸ The implications for a leader are that while personality might change, most psychologists believe that it is a relatively stable individual difference. Instead of trying to change a coworker’s personality, it is perhaps better to learn about personality differences, understand how different personalities operate at work, and then learn to work effectively with different types. Psychologists have developed inventories (personality tests) to assess personality differences. These tests are useful in training programs on conflict resolution and team building.

Myers-Briggs Type Indicator

Learning Objective 2.2: Discuss the benefits and limitations of using the Myers-Briggs Type Indicator in organizations.

The Myers-Briggs Type Indicator (MBTI) is the most often administered personality test to nonpsychiatric populations (i.e., the “well population”).⁹ The publishers of the MBTI, Consulting Psychologists Press, report that over 2 million people take the MBTI every year. Because it was developed and normed on “well people,” it has been a popular approach with organizations and is used by Hallmark, GE, and many other large organizations in their leadership training and development programs. The MBTI was developed by a mother and daughter team, Katherine Briggs and Isabel Myers-Briggs, following World War II and is based upon the personality theories of Carl Jung.¹⁰ The MBTI is based upon four general personality preferences:

Introversion (I) vs. extraversion (E): Extraverts tend to be outgoing; introverts tend to be shy.
Sensing (S) vs. intuition (N): Sensing types tend to be practical; intuitive people tend to be “idea people.”
Thinking (T) vs. feeling (F): Thinking types tend to use logic; feeling types tend to use emotion.
Judging (J) vs. perceiving (P): Judging types tend to make quick decisions; perceiving types tend to be more flexible.

Research in Action

Leaders: Are They Born or Made?

With the research on the twins reared apart and evidence from the Big Five personality theory relating personality traits to leader emergence in groups, one question that arises is whether leaders are born to greatness or if leadership can be acquired by anyone. There are arguments on both sides of this issue among scholars of OB. For example, research suggests genetic factors contribute as much as 40% to the explanation of transformational leadership. This suggests that much of charismatic, visionary leadership is an inborn trait. On the other hand, many people believe that transformational leadership can be learned, and experimental research has shown that leaders can be trained to exhibit charismatic behaviors. Also, followers responded positively to leaders that have been trained, and their performance increased. An integrative perspective suggests that leaders have certain inborn traits that predispose them to self-select into leadership positions. For example, an employee who exhibits extraversion might be more likely to pursue a high-level position in an organization. Once hired into a leadership role, these people may respond to leadership training more than those who are not as interested in becoming leaders. The best thinking on this at present is that leadership is most likely a combination of inborn traits and learned behavior. The implications for organizations are to carefully select those hired into leadership and then provide the training needed to enhance leader effectiveness. Those with innate leadership skills have an advantage, but an individual may be able to enhance his or her leadership capabilities by learning about the behaviors that comprise effective leadership and then practicing the behavioral skills needed.

Discussion Questions:

In your opinion, is leadership born (hereditary) or learned (through training, for example)? Support your position.
If leadership is both born and made, as some researchers believe, what do you think is the best way to identify leadership potential?
What type of leadership training would you recommend to complement the selection process?

Sources: Arvey, R. D., Rotundo, M., Johnson, W., Zhang, Z., & McGue, M. (2006). The determinants of leadership role occupancy: Genetic and personality factors. Leadership Quarterly, 17, 1–20; Howell, J., & Frost, P. (1989). A laboratory study of charismatic leadership. Organizational Behavior and Human Decision Processes, 43, 243–269; Judge, T. A., & Long, D. M. (2012). Individual differences in leadership. In D. V. Day & J. Antonakis (Eds.), The nature of leadership (pp. 179–217). Thousand Oaks, CA: Sage.

People who take the MBTI are grouped into 16 personality “types” based on these characteristics. For example, an ENTP would be extraverted, intuitive, thinking, and perceiving. This person might be attracted to starting their own business, for example. In contrast, an INTJ is introverted, intuitive, thinking, and judging, and may be attracted to a scientific career. ISTJs are detail-oriented and practical, where ESTJs are organizers and may be comfortable in managerial roles.

Limitations of the Myers-Briggs Type Indicator

There has been limited research support for the reliability and validity of the MBTI. If you take the test again, you may not receive the same score, and the matter of whether people are actually classifiable into the 16 categories is questionable.¹¹^,12 However, the MBTI remains the most popular personality test in use for organizations. Also, it is important to note that the MBTI has not been validated for selection; in other words, its publisher makes it clear that you should not use the MBTI to hire people for particular jobs in an organization.¹³

Critical Thinking Question: Given the limited research support for the MBTI, what are the concerns regarding organizations continuing to use it?

How the Myers-Briggs Type Indicator Is Used in Organizations

The best uses for the MBTI appears to be for conflict resolution and team building, and this is where it is most often used in management training programs and classrooms. The value of the MBTI is to enable people in organizations to discuss personality differences in their approach to work in a nonjudgmental way. All of the labels in the MBTI are neutral; it is not better or worse to be judging or perceiving, for example. Briggs and Myers-Briggs titled their book Gifts Differing, and this captures the essence of this approach to understanding personality. At the workplace, everyone has something to offer, and it takes all types of people for teams and organizations to be effective. For a leader, this underscores the importance of understanding individual differences because to build effective teams, everyone needs to feel valued to be engaged. The MBTI is, of course, not the only personality assessment available; next, will discuss another personality theory that has had more research support (although it is currently not as well-known as the MBTI to most practicing managers and the general population). This personality assessment is known as the “Big Five” personality theory.

“The Big Five”

Learning Objective 2.3: List and explain the five factors in the Big Five theory of personality.

After much research examining personality inventories, the developers of the Big Five theory of personality concluded that personality could be summarized using five factors: openness,conscientiousness, extraversion, agreeableness, and neuroticism.¹⁴ These factors and their definitions are summarized in Table 2.1. Note that the table is organized such that the first letters of these personality traits are an acronym that spells OCEAN, and this will help you to remember them.

Source: Barrick, M. R., & Mount, M. K. (2005). Yes, personality matters: Moving on to more important matters. Human Performance, 18, 359–372.

Openness is a person’s willingness to embrace new ideas and new situations. Conscientiousness represents the characteristic of being a person who follows through and gets things done. Extraversion is a trait of a person who is outgoing, talkative, and sociable as well as enjoys social situations. Agreeableness is being a nice person in general. Finally, neuroticism represents a tendency to be anxious or moody (this trait is often referred to by its opposite: emotional stability). There has been a good deal of research on whether these five traits predict job performance, and results indicate that the conscientiousness dimension best predicts performance on the job (it makes sense that people who are achievement-oriented and dependable would be better employees and also better leaders).¹⁵ This translates into success; conscientiousness is related to job satisfaction, income, and higher occupational status (e.g., being an executive, business owner, or professional).¹⁶ While conscientiousness is the big one in terms of job performance, extraversion also has a moderate but significant relationship to performance, particularly in sales.¹⁷

Other Big Five traits relate to other positive work outcomes. Research has also shown that emotional stability relates to the ability to cope with stress, and those with higher openness adjust better to organizational change.¹⁸ Given the strong research support for the relationships of the Big Five personality variables and relevant performance and career outcomes, leaders need to know that instruments such as the Big Five inventories successfully predict performance and can be used as one component in making hiring decisions. For this reason, personality research has a great deal of practical utility for organizations. You can learn what your scores are on the Big Five personality dimensions by taking Self-Assessment 2.1 at the end of this chapter.

Critical Thinking Question: What are the fairness issues involved in using personality tests for selection of new employees?

Personality Traits and Health Research

Learning Objective 2.4: Compare and contrast the Type A and Type B behavior pattern.

We have heard the phrase stress kills, but is there any truth to this? Some years ago, cardiologists showed a link between a personality trait called Type A behavior and cardiovascular heart disease. Their theory was based on observing patients in their waiting room; some sat patiently reading a magazine, for example. Others sat on the edge of their seats and got up frequently (they literally wore out the edges of the chairs and armrests)! The doctors conducted a study over a long period of time and asked questions such as the following:

Do you feel guilty if you use spare time to relax?
Do you need to win in order to derive enjoyment from games and sports?
Do you generally move, walk, and eat rapidly?
Do you often try to do more than one thing at a time?

Study respondents were then classified into one of three groups: Type A (competitive, aggressive), Type B (relaxed, easygoing), or Type C (nice, hardworking people who try to appease others). By the end of this long-term study, 70% of the men who were classified as Type A had coronary heart disease. This study had several limitations, including that it was only conducted on men who were middle-aged, and the researchers didn’t take into account other factors such as the dietary habits of the study participants. However, this study generated media interest and led to additional research. A review of this research indicated that there is an association between Type A behavior (particularly hostility) and heart disease.¹⁹ Examples of hostility-related questions are “Do you get irritated easily?” and “Are you bossy and domineering?”²⁰ And research has shown that the Type A behavior pattern (i.e., “stress energized”) is exhibited in samples of women also.²¹

More recently, researchers have discussed an additional personality type and its relationship to health risks: the Type D personality. The Type D, also called the distressed personality, is a combination of negative affect (“I feel unhappy”) and social inhibition (“I am unable to express myself ”). Research has indicated that the rates of recovery were lower for coronary heart disease patients with Type D personality.²² A review of 10 studies of Type D personality have concluded that “Type D patients are also at increased risk for psychological distress, psychosocial risk factors, impaired quality of life, and seem to benefit less from medical and invasive treatment.”²³ Thus, while research on personality and health risk continues, there seems to be a clear association between certain personality traits and higher risk of disease, suppressed immune system functioning, and slower recovery from illnesses.

Figure 2.1 summarizes the four personality types, and you can reflect on the checklists in each cell to get a sense of whether you may fall into Type A, B, C, or D. This may be scary news if you think you may have Type A or D personality characteristics. However, there is some good news. Being able to express your emotions may also reflect a “healthy” Type A pattern.²⁴ It is important for people with a Type A personality to be able to talk to another person about the stress they are experiencing. Second, research has shown that having a “hardy” personality (e.g., letting stress roll off of your back rather than ruminating on your problems) has been shown to reduce the potential for personality type to affect health.²⁵^,26 Also, social support from family, friends, and coworkers can alleviate some of the detrimental effects of personality traits on health.²⁷

Figure 2.1 Personality Types A, B, C, and D

Sources: Adapted from Denollet, J. (1998). Personality and risk of cancer in men with coronary heart disease. Psychological Medicine, 28(4), 991–995; Denollet, J. (2000). Type D personality: A potential risk factor refined. Journal of Psychosomatic Research, 49(4), 255–266; Riggio, R. E. (2012). Are you a Type A or Type B personality? Cutting edge leadership. Retrieved from https://www.psychologytoday.com/blog/cutting-edge-leadership/201206/are-you-type-or-b-personality

Critical Thinking Questions: How might knowledge of whether you have the Type A personality affect your decision about taking a job in a high-stress environment? If you were to accept such a position, how would you plan to cope with the stress?

Other Relevant Personality Traits

Learning Objective 2.5: Develop an example of a job that would benefit from risk taking.

Machiavellianism

The trait of Machiavellianism (sometimes abbreviated Mach) refers to a person who believes that the “ends justify the means.” In other words, such a person will do whatever it takes to win. The trait is named for Niccolo Machiavelli, who wrote a book called The Prince,²⁸ which detailed his strategies for gaining and holding onto power in the 16th century. High Mach individuals believe that other people can be manipulated and that it is permissible to do so to realize their goals. Recent research has conceptualized Mach as being comprised of a complex set of characteristics: a tendency to distrust others, a willingness to engage in amoral manipulation, a desire to accumulate status for oneself, and a desire to maintain interpersonal control (see Figure 2.2). Thus, Mach appears to involve behaviors as well as internal beliefs and motivations.²⁹ This research also found that high Mach employees engage in counterproductive work behaviors (for example, purposely wasting office supplies). However, they reported lower job satisfaction and experienced more stress on the job. The relationship of Mach and task performance was interesting: High Mach employees’ performance improved over time, suggesting that they need time to learn the organization’s political system and work themselves into power networks. Despite the positive long-term relationship with task performance, Mach has been related to negative outcomes for others. High Mach behavior has been linked to workplace bullying³⁰ and abusive supervision.³¹ Abusive supervision is even more prevalent when supervisors perceive that they have a great deal of power over their employees. Recent experiments have demonstrated that when individuals perceive that they are in a rivalry situation, their high Mach behavior increased and they falsely inflated their own performance and even deceived their rival for self-gain.³² Therefore, the high Mach personality may engage in unethical behavior to achieve their goal. Remember—they believe that the end justifies the means, even if it involves lying to manipulate others.

Figure 2.2 The Structure of Machiavellianism

Source: Dahling, J. J., Whitaker, B. G., & Levy, P. E. (2009). The development and validation of a new Machiavellianism scale. Journal of Management, 35(2), 219–257.

Researchers have added to our understanding of high Mach behavior by articulating a combination of personality traits known as the Dark Triad. The Dark Triad is comprised of Machiavellianism, narcissism, and psychopathy.³³ Narcissism is the expression of grandiosity, entitlement, dominance, and superiority.³⁴ Narcissists can therefore appear charming or pleasant in the short term but in the long term, they have difficulty trusting others and fail to develop effective working relationships.³⁵ Psychopathy has been described as impulsivity and thrill seeking combined with low empathy and anxiety.³⁶ Such individuals lack feelings of guilt, are impulsive, and seek immediate gratification of their needs.³⁷ A study of Dark Triad personality and the exercise of power at work found that psychopathy and Machiavellianism were associated with the use of hard tactics such as threats and manipulation. However, Machiavellianism and narcissism were related to reliance on soft tactics such as charm, ingratiation, and giving compliments. This study also found that the Dark Triad pattern results in men using hard tactics (being forceful).³⁸ You might be wondering if such toxic employees or “bad guys” win at work. A study of 793 employees in their early careers found that narcissism was positively related to salary and Machiavellianism was positively related to leadership position and career satisfaction; however, psychopathy was negatively related to all career outcomes. Thus, the Dark Triad as a combination did not predict career satisfaction and success, but individual traits may have a relationship to higher salary.³⁹

Self-Monitoring

Have you ever known someone who had a chameleon-like personality and adapted to a situation they were in? Such individuals are keenly sensitive to the cues they see in every situation they are in and adapt their behavior to fit in. This is known as self-monitoring and is defined as “self-observation and self-control guided by situational cues to social appropriateness.”⁴⁰ High self-monitors are very adaptable to situations, and low self-monitors are not able to pretend that they are someone that they are not. In other words, low self-monitors are true to themselves and don’t take cues to change their behavior from social situations. They are consistent in their display of feelings and attitudes regardless of the situation. For example, a person may give others honest feedback, even if it is hurtful. High self-monitors pay more attention to the actions of others and adjust to fit the situation.⁴¹ For example, this type of person will withhold negative feedback to allow the other person to “save face.” In the workplace, high self-monitors receive higher performance ratings and become leaders but have lower organizational commitment.⁴² They do, however, develop better working relationships with bosses than low self-monitors, and this helps explain the higher performance ratings they receive.⁴³ Not surprisingly, they achieve more rapid career mobility since they are able to attain central positions in the powerful networks in the organization.⁴⁴ Despite the positive outcomes associated with self-monitoring behavior, there may be a downside to this trait. A research study found that high self-monitors may engage in counterproductive work behavior toward the organization (e.g., falsifying a receipt to get reimbursed for more money, or taking an additional or longer break than is acceptable). They may reach their goals by doing whatever it takes to win (similar to behavior of high Mach employees). A research study found that the relationship of self-monitoring to counterproductive work behaviors was especially the case in private settings where the behavior was not visible to others.⁴⁵ In other words, they do this when they have read the situation and determined that they can get away with it.

Critical Thinking Questions: Explain why you think high Mach and high self-monitoring behaviors are good or bad for organizations. List some other positive and negative consequences of these traits.

Risk Taking

Some people are naturally prone to taking risks, and others are risk-averse. Risk taking is a personality trait defined as “any purposive activity that entails novelty or danger sufficient to create anxiety in most people. Risk taking can be either physical or social, or a combination of the two.”⁴⁶ Rock climbers are an example of people who assume the physical aspect of risk taking. Firemen can be considered risk-takers that are both social and physical because they risk physical harm, but it is to help others so it has a social component. Entrepreneurs can be considered social risk-takers but not physical. Entrepreneurs have been found to have a higher risk-taking propensity than general managers. Moreover, there are larger differences between entrepreneurs whose primary goal is venture growth versus those whose focus is on producing family income.⁴⁷ Risk taking has been examined in the general population and across cultures, and the evidence is interesting. Survey data from 77 countries (147,118 respondents) suggests that risk taking declines across the life span—as we get older, we take fewer risks. However, there are differences across countries. In countries in which hardship (e.g., social unrest and economic strife) exists, risk does not decline as the people get older. These findings suggest that when resources are scarce, people must continue to assume risk to compete for resources, so risk taking does not decline as they age.⁴⁸

Research on risk taking found that there were some changes over the life span (from age 15 to 85). So this does suggest that some personality traits may change or be malleable over a long period of time. The discussion about Mach and self-monitoring revealed that some traits may not always be desirable, so you may be wondering if there is any theory or research in OB that suggests that personality traits can change. Some scholars believe that certain personality characteristics are state-like instead of trait-like. Trait-like implies that the personality characteristic is relatively stable over time. State-like, on the other hand, refers to personality characteristics that are relatively changeable, and a person can develop (or reduce) them through either self-awareness and/or training. New research suggests that psychological capital (PsyCap) characteristics are more stable than fleeting states of mind, but they are open to change. This is an emerging area of study within the movement called positive psychology, and research is showing promising results.

Psychological Capital

Learning Objective 2.6: Summarize the elements of psychological capital.

Positive organizational behavior (POB), borrowed from Positive Organizational Scholarship, is an emerging field. POB is “the study and application of positive-oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed for performance improvement in today’s workplace.”⁴⁹ In POB, only positive psychological capacities are included. Being state-like versus trait-like, these positive aspects could be developed through performance improvement solutions such as training programs and other engagement interventions (see boxed insert for an example of a training program to increase PsyCap). PsyCap has been shown to be positively related to employee empowerment and engagement.⁵⁰ Fred Luthans and his colleagues have articulated a four-part explanation of PsyCap. Just like we have financial capital, these state-like qualities represent the value of individual differences at the workplace. In other words, PsyCap is more than “what you know” or “who you know.” It is focused on “who you are” and “who you are becoming.”⁵¹ These four characteristics are as follows:

Efficacy: a person’s belief that they have the ability to execute a specific task in a given context
Optimism: a positive outcome outlook or attribution of events, which includes positive emotions and motivation
Hope: the will to succeed and the ability to identify and pursue the path to success
Resiliency: coping in the face of risk or adversity; the ability to “bounce back” after a setback⁵²

Best Practices

Can Psychological Capital Be Acquired Through Training?

Fred Luthans and his colleagues implemented a training program for management students at the University of Nebraska designed to increase PsyCap. Participants in the training program were first asked to identify personally valuable goals that would be used throughout the session. Once they recorded these goals, the facilitator explained the process to implement their goals: (1) concrete end points to measure success, (2) an approach which allows participants to positively move toward goal accomplishment, and (3) the importance of identifying subgoals to reap the benefits of small “wins.” To increase optimism, participants were asked to anticipate potential obstacles and then create alternative pathways to minimize the obstacles. Worst-case scenarios were anticipated and preparations were put in place. To build confidence (self-efficacy), the facilitator engaged participants to experience and model success in accomplishing the personal goals set earlier in the session. This efficacy-building process elicited positive emotions and built up the participants’ confidence to generate and implement their plans to attain goals. To affect participants’ resiliency, asset factors, risk factors, and influence processes were discussed. Assets refer to factors that increase levels of resiliency (e.g., a good education). Risk factors are those factors that lead to lower levels of resilience, such as a lack of mentors. Participants then identified recent personal setbacks. This could be major (receiving a D in a course) or minor (having a computer that is slow). Participants were then instructed to write their immediate reactions to the identified setbacks. The facilitator then elaborated on a realistic view of reality and how to mentally reframe a setback. Throughout the training program, participants discussed their goals and PsyCap with others to share ideas and get feedback.

The results of the training program were promising. Participants’ PsyCap was measured before and after the training program for both the training group and a control group that participated in a non-PsyCap group exercise. The training significantly increased the students’ level of PsyCap by 3%. The control group, on the other hand, showed no increase in their level of PsyCap. The training was next implemented in a sample of managers from all types of organizations who volunteered to participate in the training. The managers’ PsyCap significantly increased about the same as the student sample (3%). Another study in a very large high-tech manufacturing firm with a sample of engineering managers resulted in a slightly lower, but still significant, increase in PsyCap. The authors projected that the improvements in productivity from increased PsyCap could be estimated at $73,919.

Discussion Questions:

Do you think that things such as hope and optimism can be increased through training? Explain your position.
Which of the four PsyCap variables do you think accounted for the results the most (hope, optimism, self-efficacy, and/or resiliency)? Explain your choice(s).
Why do you think that the results for the high-tech manufacturing firm were slightly lower than the student and manager group?

Source: Luthans, F., Avey, J. B., Avolio, B. J., Norman, S. M., & Combs, G. M. (2006). Psychological capital development: Toward a micro-intervention. Journal of Organizational Behavior, 27(3), 387–393.

While research on PsyCap is relatively new as an area of study for individual differences, initial results show that the four elements predict job performance and satisfaction.⁵³ Some might argue that high performance causes people to be more optimistic, hopeful, resilient, and believing more in their own abilities, but a longitudinal study found that PsyCap predicts performance and not the other way around.⁵⁴ Training interventions may increase PsyCap.⁵⁵ Thus, PsyCap is important for human development, but it is also related to an organization’s competitive advantage due to its impact on job performance.⁵⁶ Figure 2.3 summarizes the relationships of the four PsyCap elements and organizational outcomes that relate to the competitive advantage of organizations.

Figure 2.3 Dimensions of Positive Psychological Capital

Source: Adapted from Luthans, F., & Youssef, C. M. (2004). Investing in People for Competitive Advantage. Organizational Dynamics, 33(2), 152.

PsyCap variables are relatively stable but can change. However, there is research in OB on states or things that change frequently—over the course of a day or even hours. These are known as emotions and moods, and research demonstrates that they also significantly impact OB. For example, a study of PsyCap and organizational change showed that efficacy, hope, optimism, and resiliency were related to positive emotions at work, which in turn affected the acceptance of organizational change.⁵⁷ Experiencing positive emotions enhanced the role of PsyCap in explaining why employees were less cynical and showed more citizenship during the change. PsyCap involves self-efficacy, which is our belief in our own ability to execute a specific goal. Another personality trait that relates to our self-concept is core self-evaluation, which represents a more generalized positive self-view and is covered next.

Core Self-Evaluations

Learning Objective 2.7: Explain the effects of positive and negative core self-evaluations.

Core self-evaluations (CSE) are defined as “fundamental premises that individuals hold about themselves and their functioning in the world.”⁵⁸ People who have a high core self-evaluation see themselves as competent and in control. An experimental study found that management students who scored high on core self-evaluations chose more complex tasks.⁵⁹ Core self-evaluations relate to job satisfaction, and this is, in part, due to high CSE employees taking on more challenging tasks and seeing their work as personally fulfilling. Having a positive core self-evaluation predicts employee voice; in other words, such individuals are more likely to speak up and make suggestions about how to improve the work situation.⁶⁰ Core self-evaluations have also been related to job performance in a meta-analysis of 81 studies including thousands of employees.⁶¹ For example, a study of 1,486 employees and 145 managers in grocery store departments found that core self-evaluations were positively related to managers’ service quality orientation, even after dimensions of the Big Five model of personality were taken into account.⁶² Given the relationships of CSE and job performance, it is not surprising that the research evidence shows a positive relationship between CSE and higher salaries. However, this relationship holds when the manager had strong networking relationships with select mentors rather than lots of relationships.⁶³ CSE has implications for your career as well. Core self-evaluations have also been strongly related to both persistence in job search behavior and success.⁶⁴ Higher core self-evaluations are associated with early job success as well as higher career success over time.⁶⁵ In sum, the evidence on CSE shows that your concept of self-worth will likely translate into net worth. To learn about your own core self-evaluations, complete Self-Assessment 2.3 in the Toolkit at the end of this chapter.

Person–Environment Fit

Learning Objective 2.8: Compare and contrast person–organization fit and person–job fit.

Research on person–environment (PE) fit has shown that when an individual’s personality is aligned with his or her environment, it results in job satisfaction, organizational commitment, and better performance on the job. Also, employees that fit their work environment are less likely to quit.⁶⁶ There are different forms of how a person fits into his or her work environment, and two types of PE fit are important: person–organization (PO) fit, which is the match between the person and the organization, and person–job (PJ) fit, which is the match between the person and the job.⁶⁷

Person–Organization Fit

Person–Organization (PO) fit is viewed as the match between a person’s individual values and those of the organization they work for. PO fit is often considered in the context of recruiting employees who will “fit in” with the organizational culture.⁶⁸ Organizations seek applicants that embrace their organizational culture and values. Job candidates are interested in working for an organization that has values similar to their own. This is because people are attracted to and trust others that they view as being similar to themselves.⁶⁹ Good fit is the result of better communication among employees, increased predictability, interpersonal attraction, and trust in the organization, with trust being the key component that explains the positive outcomes of PO fit.⁷⁰ Research evidence shows that good PO fit is positively related to job satisfaction, organizational commitment, and job performance. Employees feel a sense of psychological ownership for their work because they feel a sense of belonging and experience the organization as a place that makes them feel comfortable, positive, and safe.⁷¹^,72 Also, employees that feel they fit well with the values of the organization are also less likely to quit.⁷³ PE fit is multidimensional, and in addition to PO fit, employees want to feel that they have a job that fits their personality as well. This is known as person–job (PJ) fit.

Person–Job Fit

One study found that the lack of fit between the person and the job they do significantly relates to higher job burnout and physical symptoms. Thus, poor fit may be detrimental to employee well-being. The authors offer the following scenarios:

Imagine an accountant who actually is an outgoing person, enjoys being in company and seeks closeness in her social relationships. However, at her workplace, she most of the time works on her own with hardly any contact with colleagues or clients. Thus, her job does not offer many opportunities to socialize and to be in a trusting mutual exchange with other people. And now imagine another employee, a mid-level manager, who is expected to take on responsibility for his team, motivate and supervise his staff members, find compromises between conflicting interests, make personnel decisions, in short, to influence on other people. When at his workplace, though, he is out of his element as he does not like to take center stage and actually feels awkward in his role as a leader. As different, at first sight, the situation of these two employees might seem, there is one commonality between them: their motivational propensities with respect to the two social motives, namely affiliation and power, do not match with the demands and opportunities their job offers them, that is, a motivational person-environment misfit exists.⁷⁴

The above examples demonstrate poor person–job fit. Good person–job (PJ) fit occurs when job characteristics are aligned with employees’ personalities, motivations, and abilities. The concept of PJ fit also includes the fit with the work group and the supervisor.⁷⁵ PJ fit is comprised of two forms. The first is demands–abilities (DA) fit, which refers to the compatibility between the employee’s knowledge, skills, and abilities, and the demands of the job. In other words, the job characteristics are neither too easy nor too difficult for the abilities of the employee; they match. The second type of fit refers to the extent to which the job supplies the employee’s needs and is therefore called needs–supplies (NS) fit.⁷⁶ This form of PJ fit addresses whether the job fulfills the employee’s needs for interesting work and a sense of meaning in their work.

One of the best researched theories of PJ fit is John Holland’s personality-job fit theory. He discovered six different personality types and examined occupations that match these types. As shown in Figure 2.4, the personality types are Realistic (R), Investigative (I), Artistic (A), Social (S), Enterprising (E), and Conventional (C). This is sometimes referred to as the RIASEC model, and this acronym is helpful in remembering these personality types. Holland developed a questionnaire known as the Vocational Preference Inventory to assess these personality types and their match to 160 occupational titles. Research evidence supports these six personality types.⁷⁷ Personality types that are closer to one another on the hexagon shown in the figure are more similar. Types that are opposite are most dissimilar. For example, realistic people may be more introverted, and they are practical people that get things done. Investigative people are analytical and may enjoy research work. Artistic types are imaginative and may best match with being a musician or writer. Social individuals are more extroverted and may enjoy teaching or social work. Enterprising people are confident and energetic and may match with being a lawyer or small business ownership. Conventional people are conforming and might best match with accounting or corporate management.

Figure 2.4 Personality–Job Fit Theory

Sources: Holland, J. L. (1997). Making vocational choices: A theory of vocational personalities and work environments. Odessa, FL: Psychological Assessment Resources; Psychological Assessment Resources, Inc. from Making Vocational Choices, copyright 1973, 1985, 1992 by Psychological Assessment Resources, Inc. All rights reserved.

Critical Thinking Questions: Evaluate the personality–fit theory by explaining why you think the personalities adjacent to one another in the hexagon are most similar. Which personality type is most like you? Does this provide insight into which occupations you might best fit with?

A recent meta-analysis of 92 studies found that the match between personality traits and job demands significantly predicts job performance.⁷⁸ In addition, the research evidence found that PJ fit job knowledge relates to lower turnover intentions.⁷⁹ When personality is aligned with the work that we do, it increases our goal direction, vigor, and persistence, resulting in high motivation—this is true for both academic and job performance.⁸⁰ The “Fitting in Somewhere Great!” activity (Toolkit Activity 2.1) gives you an opportunity to locate an organization and job, and then reflect on your personality traits and how well you will experience PO fit and PJ fit.

Leadership Implications: Understanding Others

In this chapter, you have learned about a number of different personality characteristics. You also learned that personality is something that is relatively stable over the life course (the exception might be PsyCap, since research has shown that these personality characteristics are state-like and may be changed through training). As a leader, you may not be able to change the personalities of your boss, your followers, or your peers. Since some of the research evidence (recall the Minnesota twin studies) suggests that personality may be in part hereditary or determined at birth, trying to change another person’s personality traits might be a futile effort. Thus, it is important for leaders to understand others and work effectively with different personality types. Leaders can do two important things. One is to examine each applicant’s personality type and vocational interests when making hiring decisions. The robust research program on Holland’s personality–job fit theory has demonstrated that congruence between the person and the job predicts job performance and reduces the chances that the person will quit. Paying attention to the RIASEC traits during the interview process may help a leader select the applicant that best fits the demands of the job. The second thing that leaders can do is to assess personality characteristics of their team members. The assessments in the Toolkit will be helpful for this purpose (Big Five, Type A, and CSE); however, there are others that can be purchased and administered by an industrial/organizational psychologist. For example, the MBTI is often used by organizations for conflict resolution and team building.

All leaders want followers who are agreeable and conscientious. However, this chapter has revealed that there are some personality traits that are challenging for a leader to work with on a day-to-day basis. Difficult personality traits are Machiavellianism, narcissism, and perhaps the Type A behavior pattern when taken to an extreme. These types may engage in bullying, explode at work, throw tantrums, and yell. Connie Merritt, a registered nurse and public health nurse, and author of the book Too Busy for Your Own Good: Get More Done in Less Time—With Even More Energy, offers the following advice for disarming these difficult personalities at work:⁸¹

Adopt a neutral stance. Picture an inflated balloon that you just let go … fssuuuu all around the room. Do not interrupt or touch the person.
Rise slowly if you are seated; make eye contact, cross your arms or make a “stop sign” gesture.
Snap them out of it by saying their name.
Ask for a solution. Say, “Al, I can see this is a big problem for you. What can we do together to help solve it?”
Ask them to leave. Say, “I feel overwhelmed right now. I would like you to come back when you’re less angry.”
Leave. Say, “I’m going to leave now, and I’ll come back when we can talk about this in a more productive way.”

Merritt cites a book by Jim Grigsby, Don’t Tick Off the Gators, who suggests that after you have addressed the outburst from a difficult personality, ask yourself:

Did I cause or contribute to the problem by not knowing enough about the other person?
Did I create the environment that allowed the situation to flourish by ignoring it or hoping it would go away?
Was the cause of the problem a lack of communication or bad information?
How did I respond to each event? Did I know when to “hold ’em and when to fold ’em”?
Can this situation be prevented in the future? What can I learn from this experience?

As a leader, you’ll encounter difficult personalities sooner or later. By taking the actions above, you should be able to diffuse the situation. Asking the questions listed and thinking critically about the answers may help you to avoid negative encounters with difficult personality types in the future. It’s important to own your contributions to the negative behaviors of a person that exhibits the dark side of personality at work.

Personality has the potential for both positive and negative contributions to the workplace. Understanding personality differences is thus essential for leader effectiveness. Personality is like a diamond and has many facets. This chapter has reviewed the personality traits that are most relevant to the workplace. As a leader, you may not be able to change personality, but it is important to assess personality traits of your followers, coworkers, and boss. Then be ready to take action and develop an individualized relationship with them that is based upon their unique personality. If the follower has a difficult personality, be ready to disarm it using the steps above. Difficult personalities may have negative moods and engage in emotional outbursts. The next chapter (Chapter 3) discusses the role that emotions and moods play in the workplace.

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Key Terms

agreeableness, 29
conscientiousness, 29
core self-evaluation (CSE), 36
Dark Triad, 32
demands–abilities (DA) fit, 38
extraversion, 29
Machiavellianism, 31
Minnesota twin studies, 27
narcissism, 32
needs–supplies (NS) fit, 38
neuroticism, 29
openness, 29
personality, 27
personality–job fit theory, 39
person–environment (PE) fit, 37
person–job (PJ) fit, 38
person–organization (PO) fit, 38
psychological capital (PsyCap), 34
psychopathy, 32
risk taking, 34
self-monitoring, 33
state-like, 34
trait-like, 34
Type A behavior, 31
Type B behavior, 31
Type C behavior, 31
Type D behavior, 31

TOOLKIT ACTIVITY 2.1: Fitting In Somewhere Great!

Explain the difference between person–job fit and person–organization fit.
Select a small, medium, or large organization you would like to work for and explain why you would be a good fit there (person–organization fit). For example, you can search for great organizations to work for using search engines or the glassdoor.com best places to work list:

https://www.glassdoor.com/Best-Places-to-Work-LST_KQ0,19.htm

What would be your ideal position in this organization? Again, you can search jobs within the organization using search engines or the glassdoor.com list. Explain why this would be a good fit for you (person–job fit).
In your responses to 2 and 3 above, include a discussion of personality traits covered in this chapter, including things such as:
- Big Five Personality Test (Self-Assessment 2.1 results)
- Type A/Type B Behavior Pattern (Self-Assessment 2.2 results)
- Core Self-Evaluations (Self-Assessment 2.3 results)
- Self-Monitoring
- Risk-Taking
- PsyCap (optimism, hope, self-efficacy, resiliency)
- RIASEC (Realistic, Investigative, Artistic, Social, Enterprising, Conventional)

For this activity, you will need a high level of self-awareness and also do some insightful research into the job and organization you select.

Discussion Questions

Why did you select the organization that you would like to work for? What factors did you consider after doing your research on what working there would be like?
Why did you select the job that you would like to hold? Did you consider factors other than how you would fit in there such as location, pay, or benefits?
Which personality traits do you feel are most important regarding how well you would fit in with the organization and job you selected?

Source: Adapted from an exercise developed by Marie Dasborough, University of Miami.

CASE STUDY 2.1: Who Would You Hire?

Worldwide Manufacturing Inc. has just weathered intense scrutiny after it was investigated and fined for violations of improper chemical storage and waste disposal. Worldwide is a special-order manufacturer that makes plastic products in whatever shapes and sizes a customer specifies. In order to do so, it makes special molds for each project for pouring and shaping the plastic into the forms requested by customers. Each order takes retooling and reorganizing of the manufacturing floor. To help prevent further issues in the future, the company has decided to add a compliance department that will ensure that not only are EPA regulations followed but also other legal regulations, from proper accounting to ensuring everything is in compliance with OSHA. You have been promoted to be the firm’s compliance officer and are now looking to hire several new members of the compliance department, including a compliance manager, compliance analyst, as well as an auditor and inspector.

You decide to begin with filling the compliance manager position. A compliance manager is a professional that keeps the legal and ethical integrity of a company intact through policy enforcement and program planning. He or she makes sure all departments of a business are complying with the rules and regulations the company is required to uphold and should regularly meet with managers in the areas of finance and accounting, cybersecurity, human resources, and operations. Compliance managers are responsible for keeping up to date with changing laws that affect the corporate world and are responsible for preparing reports to present to their upper management detailing these laws and how the policies of the company are ensuring that employees are following them. After advertising for 2 weeks on indeed.com and Monster.com, you’ve begun to look through resumes. You have two promising candidates who have made it through initial phone interviews, and you have flown them out to meet with you and see the headquarters and manufacturing operations. Now you have to review what you have learned about each candidate and make your decision.

Aarya Song

Aarya Song grew up on military bases and joined the military after completing high school. Over a 15-year career, Aarya worked with base operations managers on a team that handled everything needed for running a base. Aarya worked in supply chain management, both in procurement and disposal, in facilities planning, inventory management, and even in operations planning for setting up new bases. All of these positions required great organization and time-management skills. In addition, part of Aarya’s job was to ensure everything was to regulation and followed local regulations as well. While serving in the military, Aarya earned a bachelor’s degree in logistics and later an MBA.

After leaving the military with highest honors, Aarya worked as the transportation manager for an international manufacturer of wind turbines. However, after talking on the phone during the first round of interviews, you have learned that Aarya is now looking for a new job that will provide new challenges.

During the onsite interview, Aarya excitedly chatted with you about how Worldwide could ensure compliance and start building interorganizational teams to ensure companywide compliance. Aarya shared the logic behind these ideas, which you found impressive and well thought out. Your only concern is that Aarya seems to be very direct and no-nonsense, and while a zero tolerance stance on policy violations is likely needed after the investigation, it may be too rigid for the organization’s existing culture.

Francis Simmonne

Francis grew up in an industrial city and began working in manufacturing while in high school at a plant that made various rubber-based components for automobile assembly. After attending a regional university to learn about engineering for product design, Francis began working as a designer for a firm that designed and manufactured toys. However, Francis was better at helping the men and women on the manufacturing floor fix the problems that arose with making the first batches of new toys. After a few moderately successful products, Francis was promoted to production manager because of the skills he demonstrated on the shop floor. Three years later, Francis started working on an MBA and ended up taking a materials manager position with a construction firm. It was very important in this position that all materials were to code, and Francis took that responsibility very seriously. Five years later, Francis took a position as a work site inspector for the construction company, examining work sites and ensuring all health and safety policies as well as building codes were being followed. While these later positions had increasing responsibility, he did not have any direct reports.

Francis is getting married and is looking to move to the city Worldwide calls home, and so has applied for the compliance manager position. When you spoke on the phone, Francis seemed practical yet reserved, a perception you had reinforced during the site interview. Francis relies on instinct more than evidence to make decisions, which helps to quickly provide a course of action. However, you have concerns that Francis might not be a firm-enough manager as he likes to work with the production teams and crews and has had very little direct management of teams or departments.

So now you have a choice: Simmonne or Song? Both candidates have strong points and weak points, and both could do the job.

Discussion Questions

Identify each candidate’s personality characteristics using the Big Five and the Myers-Briggs typology.
Based on personality, is there a candidate that you think would fit the position better?
Why is it important to consider personality in hiring? What other individual differences should you consider in hiring?

SELF-ASSESSMENT 2.1: The Big Five Personality Test

Introduction

This is a personality test; it will help you understand why you act the way that you do and how your personality may be structured. Please follow the instructions below. The scoring and interpretation follow the questions. There are no right or wrong answers. You don’t have to share your results with others if you do not wish to do so.

Instructions

In the following table, for each statement 1 through 25, rate each with the following scale of 1 through 5:

The question numbers are shown in parentheses below. Write your score (1 to 5) on the blank following the question. For example, if you answered question (1) with a score of 2, write 2 on the blank.

O = (5) ___ + (10) ___ + (15) ___ + (20) ___ + (25) ____ = ____ (Openness to Experience)
C = (3) ___ + (8) ___ + (13) ___ + (18) ___ + (23) ___ = ____ (Conscientiousness)
E = (1) ___ + (6) ___ + (11) ___ + (16) ___ + (21) ___ = ____ (Extraversion)
A = (2) ___ + (7) ___ + (12) ___ + (17) ___ + (22) ___ = ____ (Agreeableness)
N = (4) ___ + (9) ___ + (14) ___ + (19) ___ + (24) ____ = ____ (Neuroticism)

The scores you calculate for each personality characteristic should be between 5 and 25. Scores from 5 to 10 can be considered lower, and scores above 10 can be considered higher.

Following is a description of each trait.

Openness to Experience (O) is the personality trait of seeking new experience and intellectual pursuits. High scorers may daydream a lot. Low scorers may be very down-to-earth.
Conscientiousness (C) is the personality trait of being honest and hardworking. High scorers tend to follow rules and prefer clean homes. Low scorers may be messy and cheat others.
Extraversion (E) is the personality trait of seeking fulfillment from sources outside the self or in community. High scorers tend to be very social, while low scorers prefer to work on their projects alone.
Agreeableness (A) reflects that many individuals adjust their behavior to suit others. High scorers are typically polite and like people. Low scorers tend to “tell it like it is.”
Neuroticism (N) is the personality trait of being emotional.

Discussion Questions

Discuss your personality profile based upon the results of the Big Five personality assessment.
Are there any traits that you would like to improve upon (for example, low openness to experience)? How will you go about improving on them?
How will you use the results of the assessment to become a more effective leader?

Source: Adapted from the NEO Big 5 Scales at http://ipip.ori.org. Finholt, T. A., & Olson, G. M. (1997). From laboratories to collaboratories: A new organizational form for scientific collaboration. Psychological Science, 8(1), 28–36.

SELF-ASSESSMENT 2.2: Type A/Type B Behavior Pattern

This assessment measures the extent to which you are a Type A or Type B personality. There are no right or wrong answers, and this is not a test. You don’t have to share your results with other classmates unless you wish to do so.

Part I. Taking the Assessment

For each of the statements below, circle the number that indicates the degree to which you agree or disagree.

Part II. Scoring and Interpretation

Subtract your answers to questions 3, 8, and 12 (marked reversed) from 8, with the difference being your new score for those questions. For example, if your original answer for question 12 was 3, your new answer is 5 (8 – 3). Then add up your answers for the 12 questions. Compare your answer to the following scale:

Discussion Questions

Are you Type A or Type B? Are you concerned about your results? Give some examples from your daily life that are consistent with your type (for example, do you get impatient waiting in line)?
If you are Type A, list some coping strategies that you will use to start to address the stress based upon the reading in this chapter.
If you are Type B, find a friend or classmate that is Type A and explain to them how you react to stressful situations.

Source: Jenkins, C. D., Zyzanski, S. J., & Rosenman, R. H. (1971). Progress toward validation of a computer-scored test for the Type A coronary-prone behavior pattern. Psychosomatic Medicine, 22, 193–202. Reprinted with permission of Lippincott, Williams and Wilkins.

SELF-ASSESSMENT 2.3: Core Self-Evaluations Assessment

This self-assessment exercise identifies your core self-evaluations. There are no right or wrong answers, and this is not a test. You don’t have to share your results with the class unless you wish to do so.

Part I. Taking the Assessment

You will be presented with some questions representing how you might see yourself. For each of the statements below, circle the number that indicates the degree to which you agree or disagree.

Part II. Scoring Instructions

For questions 1, 3, 5, 7, 9, and 11, assign the following points:

5 = Very much like me 3 = Somewhat like me 1 = Not like me at all

4 = Mostly like me 2 = Not much like me

For questions 2, 4, 6, 8, 10, and 12, assign the following points:

1 = Very much like me 3 = Somewhat like me 5 = Not like me at all

2 = Mostly like me 4 = Not much like me

In Step 1, you rated yourself on 12 questions. Add the numbers you circled in each of the columns to derive your score for your core self-evaluations.

Interpretation

Your scores can range from 12 to 60. In general, scores from 12 to 24 can be considered having low core self-evaluations and scores above 25 can be considered higher core self-evaluations.

Discussion Questions

If your core self-evaluation (CSE) was low, how can you improve it? If it was high, can you cite experiences that you have had that have led to this positive self-evaluation?
Compare your results with a friend or another student in the class. Were your results similar or different? What experiences do you share that provide insight into how you developed your CSE? If your results are different, learn about the other person’s experiences and compare them to your own.
List some ways that you will gain control over your work and schoolwork to increase your CSE.

Source: Adapted from Judge, T. A., Erez, A., & Bono, C. J. (2003). The core self-evaluations scale: Development of a measure. Personnel Psychology, 56(2), 303–331.

Chapter Three Emotions and Moods

Learning Objectives

After studying this chapter, you should be able to do the following:

3.1: Illustrate, with an example, the differences between emotions and moods.
3.2: Summarize the affective events theory with an example.
3.3: Explain how affective climate (positive and negative) of a work group relates to team conflict.
3.4: Demonstrate with an example how positive and negative state affect relates to customer service.
3.5: Demonstrate understanding of emotional labor by providing examples of jobs that require “surface acting” and “deep acting.”
3.6: Discuss the case for training in emotional intelligence in the workplace.
3.7: Explain how positive and negative emotions can spread from one individual to a group through the emotional contagion process.
3.8: Explain affective neuroscience and provide an organizational example.

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Does Lack of Sleep Make You Grumpy?

Have you ever stayed up late studying and then noticed that the next day everything seemed to go wrong? You get stuck in traffic, and you find your classmate who asks to see your notes annoying. However, this might be more due to your own emotions and mood than other people. Research has shown that the lack of sleep has a dramatic influence on emotions. Sleep researchers conduct experiments to figure out how the lack of sleep affects emotions and moods. Researchers bring people into their laboratories and keep them up all night. Would you do this for science? This research evidence has documented that when people are sleep deprived they feel more irritable, angry, and hostile. Loss of sleep is even associated with feeling more depressed: A meta-analysis of the literature found that sleep deprivation depresses mood.¹ Also, sleep deprivation results in people reacting more emotionally—especially when something doesn’t go well for them. So your angry feelings about classmates asking to see your notes for days they missed class might be due to your lack of sleep. Sleep loss leads to increased negative mood and a reduction in the ability to regulate anger due to biochemical changes that occur in the brain.² Even small changes in normal nightly sleep inhibit the ability to regulate emotions at work the next day.³

We have all heard stories about employees who didn’t get enough sleep and then subjected their coworkers to a cranky mood the following workday.⁴ Organizational behavior (OB) research has found that sleep loss results in lower self-control and higher workplace deviance (e.g., dragging out work to get more overtime pay).⁵ A fascinating study found that lack of sleep by managers led them to be more likely to abuse their followers.⁶ Insomnia has been related to lower job satisfaction.⁷ A recent study found that the use of smartphones late at night rather than sleeping soundly resulted in lower work engagement the next day.⁸ So how much sleep should you be getting? According to the National Sleep Foundation, adults aged 18 to 64 should aim to get around 7 to 9 hours of sleep each night.⁹ So put that smartphone or computer down at night start getting your Zs!

Emotions and Moods at Work

Learning Objective 3.1: Illustrate, with an example, the differences between emotions and moods.

Unfortunately, we have all had the experience of being treated rudely by someone—a coworker, supervisor, or a clerk in a retail store. We wonder, “Why is this person such a crab?” One reason, as noted above, might be that they didn’t get enough sleep. But what are other reasons for negative emotions and moods at work? Research on emotions at work seeks to address these questions.

Despite the clear implications of employee feelings about the experience of work, emotions and moods were largely ignored in most early OB literature.¹⁰ It was assumed that employees left their feelings at home when they came to work in the morning. Yet we can all think of situations in which people react based on their emotions at work and don’t act rationally. And as you saw in Chapter 1, the measure of job satisfaction (how employees feel about their work) contains strong emotion, since the first item asks employees how they feel about their job and has “I hate it” as a possible response.

With the exception of job satisfaction, emotions at the workplace were not regularly studied until relatively recently. This is likely because societal expectations of leaders are that—in order to be most effective—they should be logical, detached, and rational decision makers. Showing one’s feelings or caring about the feelings of followers and coworkers was attributed to weakness and not sound leadership. However, in the mid-1980s and the 1990s, organizational researchers began studying the effects of emotions and moods on behavior in organizations. By 2003, scholars referred to this research as “the affective revolution” in OB.¹¹ Affect is a general term that refers to the range of feelings that employees experience at work. Affect is comprised of emotions and moods.¹² State affect refers to feelings experienced in the short term, and fluctuate over time, whereas trait affect refers to stable individual differences. Emotions are triggered by specific events and are brief but intense enough to disrupt a person’s thinking—lasting only seconds or minutes. Some emotions are internal to a person, such as pride and love.¹³ Other emotions emerge in relationships with others, such as shame and guilt.¹⁴ Moods, on the other hand, are general feeling states that are not related to a specific event, but they are not intense enough to interrupt regular thought patterns or work.¹⁵ Emotions are more fleeting than moods. In other words, a felt emotion, such as anger at your boss, may pass. But being in a foul mood may last for hours. Moods aren’t typically caused by a person or something that happens to us. However, emotions are directed at another person or situation (i.e., we are happy to see our coworkers when they come back from a vacation). Obviously, emotions and moods are related—being in a good mood can result in the experience of feeling happy (an emotion). The relationship between affect and emotions and mood is shown in Figure 3.1.

Figure 3.1 The Relationship Between Affect and Emotions and Mood

Source: Adapted from Watson, D. (2000). Mood and temperament. New York, NY: Guilford Press.

Critical Thinking Questions: Do you think a leader should suppress their emotions and moods to be effective? Why or why not?

As noted above, the study of emotions and moods has revolutionized thinking about OB. Next, we turn to the key foundation for studying emotions at work: the affective events theory (AET). This framework will be a useful reference for you to follow as you read further about research on emotions and moods.

Affective Events Theory: An Organizing Framework

Learning Objective 3.2: Summarize the affective events theory with an example.

Affective events theory provides a useful roadmap for the material we cover in this chapter.¹⁶ This framework integrates personality, emotions, and moods, and considers the impact of the work environment and events that may trigger emotional reactions (positive and negative affect). Areas in the work environment that leaders should pay close attention to are the characteristics of the job (e.g., is it boring or interesting?), the job demands (e.g., is the job just too difficult for the person to handle?), and the requirements for emotional labor (e.g., does the person have to interact with the public and be courteous to irate customers?). Notice that in Figure 3.2, these work environment factors lead to work events such as daily hassles and uplifts (uplifts are moments when everything is going just great). Personality and moods play a role in how people react to hassles and uplifts. For example, a person low on emotional stability may have a stronger reaction to a daily hassle. Taken together, the work environment, events, personality, and moods combine to evoke emotional responses—positive or negative. This, in turn, leads to job satisfaction and performance. Affective events explain the development of effective working relationships between leaders and followers.¹⁷ A review of AET discusses the large number of studies that have supported the AET and considers it to be a “classic” OB model.¹⁸ This review summarizes what we know about affective events at work:

Satisfaction is not emotion. Research has demonstrated that emotions influence outcomes such as job performance and turnover independent of job satisfaction. The fluctuating experiences of emotions and moods are not the same thing as a judgment of job satisfaction. For example, a person can be satisfied with their work in general, but their negative emotions can reduce their ability to attend to details in their work.
Events cause emotions. This is a distinct aspect of AET from other OB theories. Both job-related and non-job-related events can instigate emotional states at work and therefore have work consequences. For example, being treated negatively by a coworker can cause an employee to have negative affect (job-related). Also, getting into an argument with a person’s spouse can cause an employee to experience negative affect all day at work (non-job-related).
Affect-driven behaviors are different from judgment-driven behaviors. Affect-driven behaviors are decisions and judgments that have (relatively) immediate consequences. In comparison, judgment-driven behaviors are decisions, or judgments, that are driven by more long-term attitudes about the job or organization. For example, an affect-driven behavior occurs when a person feels negative about being treated badly by a customer and then raids the department’s refrigerator and eats a coworker’s donut (immediate consequence).
Affective experiences change over time. This is important since research has shown that a person is more likely to perform better when he or she is happy than when he or she is less happy.¹⁹ For example, a person could come to work experiencing negative affect, but they receive a compliment from their boss in the late morning that lifts them up and they perform better in the afternoon.
Affect is structured as emotions and moods. As noted above, AET specifies that emotions are distinct from moods. This distinction is important since moods lack a specific causal event, whereas emotions are reactions to something that provokes a person at work. For example, a person can be in a bad mood for no reason, but when they get into an argument with a coworker, they also experience negative affect.

Figure 3.2 Affective Events Theory (AET)

Source: Ashkanasy, N. M., & Daus, C. S. (2002). Emotion in the workplace: The new challenge for managers. Academy of Management Executive, 16(1), 77.

Research on AET sometimes asks employees to keep diaries of their emotions and moods at work. An example of such a study²⁰ asked 218 employees to keep diaries of negative and positive events at work. Positive events were when they were enthusiastic, and negative events were when they were worried or angry. Most positive events were related to goal attainment and task success. Also, praise and appreciation generated enthusiasm. Negative events were most related to hindrances and obstacles encountered at work. Also, employees reported managerial problems and poor organizational climate as generating worry or anger. Decades of research supports the relationships shown in Figure 3.2. AET serves as an evidence-based and useful way to summarize what we cover in this chapter. This theory really puts it all together for us.

One of the key aspects in AET is the work environment. Research has found that the overall emotional climate of the work group matters. This is known as the affective climate.

Affective Climate

Learning Objective 3.3: Explain how affective climate (positive and negative) of a work group relates to team conflict.

Affective climate refers to the shared affective experience of a work group or team.²¹ The climate, or tone, of the group can be considered feelings that arise from, or in, groups.²² Affective climates are typically referred to as being affectively “positive” or “negative.”²³ For example, a positive affective climate includes “participation, warmth, social rewards, cooperation.”²⁴ The range of emotions that may be experienced has been summarized in the circumplex model of affect shown in Figure 3.3. This model locates specific emotions in the conceptual space defined by two orthogonal primary dimensions: pleasantness (pleasure–displeasure) and arousal (low activation–high activation). Affective climate is described as having different facets as shown in the figure.²⁵ A study using the circumplex model examined team conflict in 156 bank branches and found that disagreements about the work (task conflict) and difficulties with other team members (relationship conflict) were significantly related to the creation of a tension affective climate. This climate is characterized as the group mood being nervous, tense, and anxious rather than enthusiastic.²⁶

Figure 3.3 The Circumplex Model of Group Affective Climate

Source: Gamero, N., González-Romá, V., & Peiró, J. M. (2008). The influence of intra-team conflict on work teams’ affective climate: A longitudinal study. Journal of Occupational and Organizational Psychology, 81(1), 47–69.

A positive affective climate in the work group enhances the effects of good leader–member relationships. Research has shown that leader–member relationships result in more friendships at work, but the positive affective climate in the work group enhances this relationship. A feeling that team members are friends was related to more effective teamwork.²⁷ Another study of 97 teams in a car factory in Belgium found that positive team affective climate reduced psychological distress. All team members benefited from a positive affective climate, even those workers who had a negative perception of their emotional work environment.²⁸ Affective climate is related to team creativity, especially when the groups work together effectively (for example, by asking a lot of questions of one another).²⁹

As studies of affective climate have shown, emotions can have a positive impact within a group. They may also build over time into positive cycles of emotions. This happens because positive emotions change a person’s outlook and how they see other people with whom they work. This is explained in the broaden-and-build model of emotions.

The Broaden-and-Build Model of Emotions

Emotions serve to both broaden employee experiences and then allow them to build better functioning in organizations. This is known as the broaden-and-build model.³⁰ Positive emotions such as pride in one’s work can transform organizations and the people in them.³¹ This is because positive emotions open people’s minds and they begin to build personal and social resources, which enable them to work more effectively. Positive emotions can be contagious: A person’s positive outlook at work affects the emotional reactions of their coworkers.³² Also, positive workers are more likely to have positive interactions with customers. The broadening and building of emotions has also been linked to creativity at work (see the boxed insert).

Being grateful is an example of an emotion that may broaden and build positive spirals of positive emotion and behaviors at work.³³ Gratitude has been studied as a trait (in other words, some people are more grateful than others). Trait gratitude is defined as “a generalized tendency to recognize and respond with grateful emotion to the roles of other people’s benevolence in the positive experiences and outcomes that one obtains.”³⁴ Gratitude may also be a state that is related to being in a particular work situation. For example, state gratitude at work would result from a person having a job that gives them a sense of purpose, which evokes positive emotions.³⁵ Feeling grateful for having a purpose in your work creates additional positive emotions that result in higher motivation and performance.

Research in Action

Affect and Creativity

A study by Teresa Amabile of Harvard University and her colleagues found a link between positive emotions and creativity. Creativity is affectively charged, and complex cognitive processes are shaped by both emotions and moods. Creativity may be particularly susceptible to affective influence, mainly because positive affect leads to the sort of thought processes that stimulate creativity. Consider these emotional reactions to creative outputs cited in Amabile’s research study:

I figured out why something was not working correctly. I felt relieved and happy because this was a minor milestone for me. (Female participant in a high-tech company)

I smashed that bug that’s been frustrating me for almost a calendar week. That may not be an event to you, but I live a very drab life, so I’m all hyped. No one really knows about it; three of the team that would be involved are out today—so I have to sit here rejoicing in my solitary smugness. (Male participant in a high-tech company)

Both of these individuals are expressing positive emotions resulting from their creativity. This qualitative analysis showed that positive affect as a consequence of creative thought events, as well as occurring alongside the creative process, result in an affect–creativity cycle. This research identified positive affect as an antecedent of creative thought, with incubation periods of up to 2 days. In other words, creativity both evokes and accompanies creative performance. Positive affect has three primary effects on creativity. First, positive affect makes additional information available for processing by increasing the number of associations that can be made. Second, it leads to more complex contexts by defocusing people’s attention on one solution, and this increases the number of things that are treated as relevant to the problem. Third, it increases cognitive flexibility by increasing the probability that diverse cognitive elements will become associated with one another. These processes generate more positive affect, and this, in turn, has a positive influence on creativity. As noted earlier in this chapter, the broaden-and-build model of positive emotion suggests that positive emotions, such as joy and pride, broaden a person’s available repertoire of thoughts and actions. The experience of positive emotions leads people to pursue more novel ideas. Positive emotions broaden the scope of attention and the scope of ideas during the creative problem-solving process. Thus, positive affect leads to greater variation and thus increases the probability of creativity occurring.

Discussion Questions:

Discuss the impact of affect on creativity.
Recall an experience where you felt that you had produced a creative work. What emotions did you experience during the time you were being creative?
How can leaders create work environments where affect leads to enhanced creativity? Provide an example of this process.

Sources: Amabile, T. M., Barsade, S. G., Mueller, J. S., & Staw, B. M. (2005). Affect and creativity at work. Administrative Science Quarterly, 50(3), 367–403; Frederickson, B. L. (1998). What good are positive emotions? Review of General Psychology, 2, 300–319; Isen, A. (1999). On the relationship between affect and creative problem solving. In S. W. Russ (Ed.), Affect, creative experience and psychological adjustment (pp. 3–18). Philadelphia, PA: Brunner/Mazel.

An example of gratitude³⁶ in action happened when Sherilyn Joseph, who works at World Duty Free Group’s Tampa gift shop at Tampa International Airport, was on duty when a passenger came in asking for help finding her coat and gloves. The passenger was about to board a flight to New York when she realized she had lost them. After airport officials were unable to find the coat, Sherilyn gave her own jacket to the woman. “I just felt I should do something to help her,” Sherilyn said in a news release. “I wanted her to be warm and have a blessed trip.” Company officials said Joseph showed exceptional customer service with her compassionate deed. Joseph received a letter of gratitude from the customer: “If not for your giving nature and helping another in a time of need, I would have walked into LaGuardia Airport shivering and looking to purchase a coat in the middle of the night!” And in addition to the gratitude from the customer, the company expressed its gratitude as well. Sherilyn was rewarded with a trip to London, including round-trip airfare, accommodations, and $1,000 in spending money.

Sherilyn may not have expected to receive gratitude, but this may create positive expectations of being thanked for her and other employees. The expectation that others will show gratitude at work motivates employees to help others.³⁷ Research has also shown that employees that have an orientation toward the well-being of others are more likely to expect gratitude, and this expectation increased their job performance.³⁸ Meta-analytic research has concluded that the positive emotion of gratitude is enhanced by training interventions in which people practice feeling grateful for what they have, and this increases their well-being.³⁹ You can learn to practice feeling the emotion of gratitude by following the steps in the 5-minute gratitude exercise in the Toolkit at the end of this chapter (Activity 3.1).

In addition to emotions, people may experience moods throughout the workday that affect their relationships with others and performance. The next section discusses the importance of individual moods at work.

Moods

Learning Objective 3.4: Demonstrate with an example how positive and negative state affect relates to customer service.

Moods are generally more enduring than emotions. Positive and negative state affect are the most studied moods at the workplace (i.e., being happy or sad). Positive state affect (PA) is defined as the extent to which a person feels enthusiastic, active, and alert. High PA is a state of high energy, full concentration, and pleasurable engagement. In contrast, negative state affect is defined as a general dimension of subjective distress and unpleasant engagement that subsumes a variety of aversive mood states. These states may be anger, contempt, disgust, guilt, fear, and nervousness.⁴⁰ Research has shown that happier people perform better and have higher incomes.⁴¹^,42,43 Mood at the start of the workday (i.e., “waking up on the wrong side of the bed”) related to perceptions of customer emotions in a call center, and this affected the employees’ moods after the calls.⁴⁴ Positive affect was, in turn, related to performance quality, whereas negative affect was negatively related to productivity. The results of this research study are summarized in Figure 3.4. The start-of-workday mood affected their perceptions of customers’ moods, which in turn affected their own moods. These moods were related to performance quality and quantity. So if you get up on the wrong side of the bed in the morning, pay attention to your mood. You just might be less productive that day. Self-Assessment 3.1 provides you with the opportunity to learn about your own tendencies toward having positive or negative affect.

Figure 3.4 The Effects of Mood, Work Events, and Employee Affect on Performance

Source: Rothbard, N. P., & Wilks, S. L. (2011). Waking up on the right or wrong side of the bed: Start-of-workday mood, work events, employee affect, and performance. Academy of Management Journal, 54(5), 959–980.

Emotions play an important role in the workplace. To this point, much of our discussion has been focused on relationships among coworkers. However, how leaders and employees interact with those outside the organization (including customers) is also important to organizational success. This is the focus of another area where there has been significant research: the study of emotional labor.

Emotional Labor

Learning Objective 3.5: Demonstrate understanding of emotional labor by providing examples of jobs that require “surface acting” and “deep acting.”

As noted above, employees feel a range of emotions and moods during the course of the workday. However, they don’t always show it. For example, if you have ever had a service job such as a waiter or waitress, you knew that you had to smile and be pleasant regardless of your emotions (“I am disgusted by your table manners!”) or moods (“It’s raining outside and I just feel blah.”). Jobs that require employees to suppress affect (emotions and moods) are said to require emotional labor. Other jobs require you to express affect. Emotional labor is defined as “the management of feeling to create a publicly observable facial and bodily display.”⁴⁵ In other words, it is the effort required to effectively manage emotions to be successful on the job. The feeling of having to act differently than true emotions creates emotional dissonance for employees. Emotional dissonance is the result of the difference between the organizationally expected emotions and an employee’s inner or “real” emotions.⁴⁶ In other words, employees are told to “fake it until they make it.” All jobs have this requirement to some extent, but some have higher requirements than others (e.g., flight attendants, salespeople, customer service representatives, and nurses).

The concept of emotional labor was introduced by sociologist Arlie Hochschild,⁴⁷ who investigated flight attendants and demonstrated that a significant part of their job was attending to the emotions of passengers. Emotional labor has been studied with convenience store clerks and customers. Clerks had differing expectations of their roles and followed scripts (like actors in a role) to control customer service interactions.⁴⁸ This is known as “deep acting” since the employees actually feel the emotions they are acting out. Deep acting happens when a desired emotional expression is achieved by changing one’s underlying felt emotion. For example, a college professor may “psych himself up” to present a lecture to students after learning of a family member’s illness. The professor actually becomes more enthusiastic. In contrast, surface acting refers to producing a desired outward emotional expression without modifying the underlying emotions.⁴⁹ Research has, however, shown that surface and deep-level acting occur simultaneously.⁵⁰ Such acting may come with costs, however. Surface acting emotional labor (acting out service roles) has been related to emotional exhaustion and burnout.⁵¹^,52 The emotional exhaustion from surface acting may be reduced by team members’ positive actions.

When team members engage in deep acting, the deep acting spreads to their team members. Thus, not every person in a team needs to deep act—there is an emotional division of labor that occurs in teams. Emotional division of labor is defined as any explicit or implicit division of roles in which individuals vary in their requirement to use emotional abilities.⁵³ For example, in a car dealership, the general manager, customer service representatives, and sales representatives need to have high emotional abilities, but the service technicians don’t.⁵⁴

Team leaders should engage in positive deep acting and encourage key team members to do the same. Research has demonstrated that some people are better at emotional labor (surface and deep acting) than others.⁵⁵ However, training programs can discuss the benefits of deep acting and provide strategies for genuinely changing one’s feelings during difficult situations to reduce the stress of emotional labor.⁵⁶ Training can also help individuals be more aware of their emotions and employ different emotional labor strategies.⁵⁷ Emotional labor has a bright side: It may have positive outcomes when organizations grant more autonomy and adopt norms that call for the expression of positive emotions.⁵⁸ For example, allowing a call-center employee to work without being watched increases her motivation to help customers.

This overview of emotional labor further illustrates that emotions and feelings at work do matter. Emotional labor causes stress; however, when properly managed, it increases performance. To engage in emotional labor, an employee needs to be sensitive to their own emotions and those of others. Some people are more adept than others at reading the emotions and/or moods of coworkers or customers. There has been a great deal of research and practitioner interest in recent years on understanding emotional intelligence (EI), and next we will review EI research and practice.

Emotional Intelligence

Learning Objective 3.6: Discuss the case for training in emotional intelligence in the workplace.

Research from the field of psychology shows emotional regulation may be a form of intelligence.⁵⁹^,60 Organizational leaders and human resource professionals find this concept, EI, relevant to the workplace. In fact, having EI abilities may be essential to be an effective leader.⁶¹ EI is considered to have four aspects:⁶²

Ability to perceive emotion in self and others (e.g., correctly identifying a perceived emotional expression as fear)
Ability to use emotion to facilitate cognitive activities like thinking and problem solving (e.g., knowing how to capitalize on a happy mood swing to engage in a creative task)
Ability to understand emotional information (e.g., understanding how two emotions can blend into a third emotion)
Ability to manage emotion in self and others (e.g. detaching from fear states that interfere with one’s functioning)

Emotion regulation is one of the important abilities that high EI people possess. To determine your emotional regulation, you can take Self-Assessment 3.2, the Emotion Regulation Questionnaire (ERQ).

EI is related to job performance.⁶³ This is especially true in jobs that have high emotional labor requirements.⁶⁴ However, EI becomes a stronger predictor of performance and organizational citizenship behavior (OCB) when intelligence is lower.⁶⁵ In other words, employees with lower intelligence perform tasks correctly and engage in OCBs frequently if they are also emotionally intelligent. This may be explained by the results of a study that found that employees with high EI are better able to control and reduce the counterproductive outcomes of challenging developmental job experiences (EI reduced the unpleasant feelings associated with demanding tasks that required new learning). Taking on these difficult tasks resulted in employees being seen as having more advancement potential.⁶⁶ In a study of retail stores, store managers’ EI increased team cohesiveness, which resulted in higher sales volume.⁶⁷ A study conducted with U.S. Air Force recruiters found that EI was related to success in meeting recruiting quotas.⁶⁸ In addition, a study of more than 300 managers at Johnson & Johnson found that managers who scored higher on a measure of EI were rated as more effective by their followers.⁶⁹ Meta-analyses have shown that leaders’ EI relates to follower job satisfaction.⁷⁰^,71 Another meta-analysis review of 2,168 individuals reported significant positive correlation between EI and performance.⁷² Other benefits of EI demonstrated by research are enhanced employee creativity,⁷³ teamwork effectiveness,⁷⁴ and the ability to resolve conflict.⁷⁵ Given the benefits of EI in the workplace, organizations are interested in whether EI measures can be used for personnel selection. In other words, can leaders be confident in using EI to decide who to hire for a job (or who to promote to a higher one)? Based upon a meta-analytic review, researchers offer the evidence-based practical advice for using EI for hiring employees shown in Table 3.1.⁷⁶

Source: Adapted from Joseph, D. L., & Newman, D. A. (2010). Emotional intelligence: An integrative meta-analysis and cascading model. Journal of Applied Psychology, 95(1), 54–78.

Can Emotional Intelligence Be Learned?

Given the interest of organizational leaders in EI, there has been research to determine if the attributes of EI can be learned. In other words, can we send employees to a training program to increase their EI and improve their ability to get along with others? Many scholars believe that EI can be learned. First, people need to develop emotional literacy and be able to label their emotions. Second, they need to learn how to manage or regulate their emotions.⁷⁷ Research has compared managers who received EI training to a group receiving no training (a control group). After the training, managers showed higher EI, and they also reported lower work-related stress, higher morale, and treated one another in a more civil manner.⁷⁸^,79

EI training programs vary in their content; however, they include both emotional awareness exercises and emotion regulation strategy practice. For example, people are shown a series of photos of faces and then asked to identify the emotions expressed in the photos (emotional awareness). An example of an emotion regulation strategy exercise is the Stop! Technique in which participants are asked to shout the word stop in their mind whenever an anxious or troubling thought appears. Then they replace it with a word like calm.⁸⁰ While the research on training interventions in organizations is not extensive, a review of training interventions from diverse fields including OB, education, mental health, and sports concluded that “it is possible to increase emotional intelligence and that such training has the potential to lead to other positive outcomes.”⁸¹

Limitations of Emotional Intelligence

EI has supporters. Yet researchers disagree on its definition. Some researchers believe that EI is a trait or ability similar to IQ.⁸² Others argue that EI is a mixed combination of intelligence, personality traits, and affect (they use grab-bag measures of EI that have a number of different measures of personality traits and EI combined).⁸³ A third approach is that EI is an ability that can be learned.⁸⁴ Due to differences in definitions and a great number of researchers interested in EI, there are various measures of EI, and they don’t converge.⁸⁵ Some scholars even argue that the concept is too vague and can’t be measured at all.⁸⁶^,87,88 A critical review of the literature on EI in the workplace concluded initial claims of the predictive value of EI may have been overstated.⁸⁹

How Emotional Intelligence Is Used in Organizations

Despite its critics, the EI concept has definitely impacted the workplace through EI training programs, specialized EI consultants, and articles in the business press and popular press.⁹⁰^,91 For example, the FedEx Global Leadership Institute is charged with continuously updating and innovating in keeping with Fred Smith’s call for continuously “raising the standards.” FedEx Express implemented a training program for new managers in action-based EI that had three steps for using emotional intelligence on a day-to-day basis:

Know Yourself—increase self-awareness of emotions and reactions (Competencies: Enhance Emotional Literacy and Recognize Patterns).
Choose Yourself—shift from unconscious reaction to intentional response (Competencies: Apply Consequential Thinking, Navigate Emotions, Engage Intrinsic Motivation, and Exercise Optimism).
Give Yourself—align the moment-to-moment decisions with a larger sense of purpose (Competencies: Increase Empathy and Pursue Noble Goals).

Results of the training at FedEx indicated an 8% to 11% increase in EI competencies from before to after the training, which was a statistically significant difference. By supporting new managers in this way, FedEx gains by having more competent leaders and also by showing employees that the company puts its values into action. This training models the kind of people-centered leadership that FedEx expects from all managers. One of the key principles of the EI training at FedEx is: “Emotions drive people, people drive performance.”⁹²

The following summarizes what we can safely conclude about EI:⁹³

EI is distinct from, but positively related to, other intelligences (such as IQ).
EI is an individual difference, where some people are more endowed and others are less so.
EI develops over a person’s life span and can be enhanced through training.
EI involves, at least in part, individuals’ abilities to effectively identify and perceive emotion (in themselves and others), as well as possession of the skills to understand and manage those emotions successfully.

Critical Thinking Questions: Do you believe that training can improve EI? Why or why not? What are the limits on the degree to which a person with low EI can change?

EI may also improve employees’ ability to cope with stressful situations. A study conducted in a law enforcement setting found that coping strategies such as venting, denial, and disengagement might be adaptive for short-term performance. Organizations could manage employee emotions via awareness of appropriate coping responses for jobs that involve emotions (i.e., jobs that require emotional labor).⁹⁴ The Best Practices box describes some strategies that have been found to be effective in regulating emotions.

Best Practices

Regulating Emotions Through Affect Spin, Relabeling, and Reappraisal

Emotion regulation theory is “the processes by which individuals influence which emotions they have, when they have them, and how they experience and express these emotions.”⁹⁵ Emotional regulation focuses on the causes, responses, and/or mechanisms through which employees respond to emotional events at work.⁹⁶ For example, a bill collector may encounter an angry person on the phone, which raises the emotional labor required to interact with the person. Suppressing emotions in responding to the angry person is needed for the bill collector to perform their job well. Research has shown that customer service employees can reduce feelings of burnout by engaging in affect spin. Affect spin is the ability to vary responses to emotional events by knowing which people are more reactive than others to both internal and external events. In other words, employees with higher affect spin ability can read other people’s emotions and change their reaction to fit the person’s expressed emotions. A study of restaurant servers found that affect spin buffered the servers from the fatigue caused by difficult customers.⁹⁷ Another effective emotion regulation strategy is to relabel and reappraise an undesirable situation. Affect relabeling is verbally labeling the initial reaction of something negative (e.g., I am angry) and then relabeling it to be less intense (e.g., I am annoyed). Reappraisal is intentionally decreasing the intensity of an emotional response to a situation or reinterpreting it in a positive way. For example, reappraisal occurs when the person “looks for the silver lining” in a bad situation.⁹⁸

This line of research has clear evidence-based best practice implications. An individual can regulate his or her emotional responses to work by reading others and adapting to their emotional response to reduce the impact of fatigue (affect spin). Also, when encountering a negative or undesirable situation, they can relabel it as something less upsetting and then look for something good that may come from the situation (i.e., treat it as a learning experience). As noted above, emotional regulation has been shown to be an important component of EI, and it is also necessary for the surface-level acting requirements of emotional labor.

Discussion Questions:

Recall a negative situation that was upsetting to you. How did you respond? Did it make the situation better or worse? Why?
What could you have done differently in the situation you described above? Apply the techniques of affect spin, affect relabeling, and reappraisal to the situation.
Based on what you have learned about emotion regulation, what strategies will you use to diffuse emotional situations you encounter in the future? Be specific.

Sources: Beal, D. J., Trougakos, J. P., Weiss, H. M., & Dalal, R. S. (2013). Affect spin and the emotion regulation process at work. Journal of Applied Psychology, 98(4), 593–605; Burklund, L. J., Creswell, J. D., Irwin, M., & Lieberman, M. (2014). The common and distinct neural bases of affect labeling and reappraisal in healthy adults. Frontiers in Psychology, 5, https://doi.org/10.3389/fpsyg.2014.00221; Gross, J. J. (1998). The emerging field of emotion regulation: An integrative review. Review of General Psychology, 2(5), 271–299; Grandey, A. A. (2000). Emotional regulation in the workplace: A new way to conceptualize emotional labor. Journal of Occupational Health Psychology, 5(1), 95–100.

Emotional Contagion

Learning Objective 3.7: Explain how positive and negative emotions can spread from one individual to a group through the emotional contagion process.

Even groups can be in a bad mood. Emotional labor is essential for high performance in certain jobs, but may also result in stress for employees who must suppress their own emotions and moods. For example, consider whether the magical people at Walt Disney World always feel magical. Such stress may cause coworkers to complain to one another because they have to hold in negative emotions toward customers. When this happens, an emotional contagion effect may occur, which is defined as the negative mood of one employee spreading to others in their group. Negativity spreads like a virus; employees “catch” the negative moods of others.⁹⁹ Positive moods are also contagious.

By adding up responses to measures of mood from individuals in groups, researchers have discovered that mood can be defined for a group, and it is consistent. In other words, groups can be characterized as having a negative mood.¹⁰⁰ Also, the “group mood” spreads to the moods of individuals in the group. In other words, if a group is positive, then members of the group typically experience positive mood states as well. This happens because of the linkages that emerge among group members. For example, convergent linkage occurs when individuals share the interpretations of emotional events. Divergent linkage occurs when interpretations of emotional events differ. Complementary linkage occurs when the other person is the stimulus. In other words, one individual identifies with another person and this identification causes the emotions to spread, as in “misery loves company.” To assess the degree that emotional contagions may be affecting a work group, leaders should ask the following questions:¹⁰¹

To what extent are people on the same side of the table?
What events and environmental conditions do they tend to face together?
What are the hot buttons to which a lot of people are reacting?
Even when people share the same viewpoint, how do they interpret what is going on around them?
Do people converge in their interpretation, or do people disagree in terms of their reactions?

Leaders have a strong influence on how emotional contagions emerge and spread from individuals to teams, and the organization as a whole.¹⁰² The spread of negative emotions in groups has a “ripple effect,” and the emotional contagion reduces team cooperation and creates conflict.¹⁰³ But keep in mind that positive moods are also infectious—when an employee smiles at a coworker, their positive mood spreads.¹⁰⁴^,105 Research has demonstrated that the contagion of positive emotions is associated with higher teamwork engagement. The sharing of positive emotions between team members leads the team to feel fully absorbed in their work, elevating feelings of pride and joy.¹⁰⁶ A study found that leaders created positive emotional contagion in their work groups, and followers responded by spreading the positive emotions.¹⁰⁷ In longitudinal studies of large social networks, researchers have shown that the spread of emotions is likened to infectious diseases, influencing the experience of positive affect for large numbers of individuals. In other words, the spread of happiness moves through social networks through social ties.¹⁰⁸ The same happens for negative emotions. For example, one study found that when employees feel a climate of job insecurity, safety outcomes were negatively impacted (i.e., there were more injuries and accidents).¹⁰⁹

Another new development in the field of emotions and mood is the idea that we might be able to understand emotions and moods (for example) by studying the ways that our brains function biologically. Next, we will discuss an emerging field—brain science (or neuroscience)—which may help us understand affect in new ways.

Affective Neuroscience

Learning Objective 3.8: Explain affective neuroscience and provide an organizational example.

You might have read about the case of Phineas Gage in your psychology courses. Phineas was a railroad worker who survived a 3-foot, 7-inch, 13½-pound iron bar being blown right through his skull by an explosion. The bar removed part of the frontal lobe in his brain. It is remarkable that he survived the explosion given the level of medical care available for such an injury in 1848. But he did—and what happened next gave rise to research that examines the effects of the brain on personality and emotions: brain science. Before the accident, Phineas was one of the most capable and reliable workers. He was well liked and professionally successful. But after a portion of his brain was accidentally removed, he became “fitful, irreverent, and grossly profane, showing little deference for his fellows” and unable to keep his job.¹¹⁰ His case is widely cited as a breakthrough in understanding that the brain has an influence on emotions and moods. Today, brain science is being applied to OB.

An emerging topic to understand affect is organizational neuroscience, which is the study of how understanding the functions of the brain may enhance prediction of OB, and an area of research known as affective neuroscience has emerged. Affective neuroscience is the study of the neural mechanisms of emotion. This interdisciplinary field combines neuroscience with the psychological study of personality, emotion, and mood.¹¹¹ There is not a great deal of research in this area in OB yet, but research in psychology is demonstrating that affect may be the result of brain chemistry. Understanding how networks of brain systems operate may finally allow researchers to enter the “black box” to understand what happens in the brain when emotions such as anger and gratitude are experienced by people in organizations. For example, mirror neurons (brain processes that regulate a person’s ability to imitate another person, either consciously or unconsciously) may increase understanding of role modeling and learning through watching others at work.¹¹² Experimental data suggest key roles of drive and motivation in the wanting, liking, and learning processes underlying the pleasure cycle supporting survival of individuals’ reactions to rewards they receive.¹¹³ Some emotions may be embedded in a deeper part of the brain, making them implicit rather than explicit. For example, being fearful of organizational change may be rooted in an older and deeper part of our brains, making employees react automatically rather than logically to change. Neuroscience will increase our understanding of the range of emotions shown in the circumplex model of affect (shown in Figure 3.3 in this chapter).¹¹⁴ For example, research has already determined that pleasure and displeasure are located in different regions of the brain.¹¹⁵

Ethical Issues in Neuroscience

Debates have already begun regarding the ethics of applying brain science to OB, and there are clearly issues that will need to be addressed.¹¹⁶ One can imagine that knowledge of a person’s brain chemistry may be employed to justify their promotion. On the other hand, this same knowledge might be employed to fire them. Would it be an invasion of privacy to be asked to submit to a brain scan in order to be hired for a position? Organizational neuroscience represents a potentially exciting field that would integrate OB theories with biology. However, the ethical concerns clearly need attention before this field moves from prediction to control and applications in organizational settings.

Neuroscience represents perhaps the deepest level of understanding emotions and moods since it focuses on biological differences that underlie emotional expressions. For example, a researcher on leadership concludes that “research at the nexus of biology and psychology should yield interesting and high-impact research: It is likely that leadership researchers will start venturing further into this very fertile research landscape.”¹¹⁷ One study found that a mindfulness meditation reduced negative affect and was associated with prefrontal cortical regulation of affect through labeling of negative affective stimuli.¹¹⁸ In other words, practicing mindfulness resulted in changes in the brain. Next, we discuss the leadership implications of being mindful.

Critical Thinking Questions: Should there be governmental regulations on the applications of neuroscience in OB? Why or why not?

Leadership Implications: Affective Coaching

We have all had the experience of asking someone what’s wrong and they reply, “Nothing, I’m fine.” But we know from their tone of voice and body language that they are upset about something. People have a tendency to deny their emotional pain. For example, they may feel worthless, rejected, not listened to, or even invisible. There are a number of reasons why people conceal their hurt emotions, but what these reasons all have in common is fear. In other words, people conceal their emotions because they don’t want to feel weak and powerless. The bottom line, according to psychologist Leon F. Seltzer, is that people don’t trust others to respond in caring, supportive ways.¹¹⁹ What are organizations doing to increase the levels of trust so that employees can discuss their emotions? And what can we do as leaders?

Companies such as Aetna, Google, General Mills, and Goldman Sachs now provide training and meditation rooms for their employees. David Gelles, author of the book Mindful Work, states that mindful meditation programs resulted in a 28% reduction in employee stress levels, a 20% improvement in sleep quality, and a 19% reduction in pain. Employees who participated in the programs also became more effective on the job, gaining an average of 62 minutes per week of productivity each, which Aetna estimates is worth $3,000 per employee per year. This may not seem like a lot, but considering that about one fourth of Aetna’s 50,000 employees have participated in the program, this works out to be about $37,500,000 per year. And Gelles reports that the classes continue to be full and are overbooked.¹²⁰

Mindfulness is a new area of research in psychology, and it is being applied to the study of emotion regulation in the workplace. A study of employees who engaged in surface acting found that mindfulness training reduced emotional exhaustion.¹²¹ Mindfulness is a state of open attention on what is happening in the present without thinking about the past or worrying about the future. When a person is in a mindful state, they look at their emotions and moods without labeling them as bad or good. On the other hand, much behavior in organizations may be “mindless.” To assess mindlessness, some of the following questions are asked:¹²²

I forget a person’s name almost as soon as I’ve been told it for the first time.
I find myself listening to another person with one ear and doing something else at the same time.
I find myself preoccupied with the future or the past.

Being mindful is significantly related to well-being. Are you mindful or mindless in how you go about your study, work, or life in general? Being mindful is related to the EI aspect of being self-aware (recognizing emotions when you experience them), but it is more than this. By focusing on the present, we can learn about the individual differences of followers and also be attentive to their emotions and moods. Research has shown that mindfulness training increases empathy (the ability to feel what another person is feeling).¹²³

Here are mindfulness guidelines from the Mayo Clinic that may help a leader understand followers and coach more effectively. The first three steps help prepare for a coaching session with a follower:*

* Reprinted with permission, courtesy of Mayo Clinic.

Make the familiar new again. Even if you have worked with someone for a long time, learn one new thing about them. As you become more aware of this person, you will be able to identify what their personality type might be. Are they a Type A person? Are they conscientious?
Focus on your breathing when you are preparing to listen to another person. Sit in a quiet place and pay attention to your nostrils as the air moves in and out. Notice how your abdomen expands and contracts with each breath. Remember that you are not trying to accomplish anything. You are just becoming aware of your breathing and mentally preparing yourself to hear the other person’s words.
Prepare to pay attention. Get in the habit of delaying judgment and/or the urge to “categorize” them (e.g., don’t be too quick to put them in the in-group or the out-group). Plan to focus on the person and what they have to say—their words and the meaning of their words. Don’t forget to also be ready to pay attention to emotions or moods that may get expressed, since we have learned that they matter as well.

Next, begin the coaching session by following steps from the Center for Creative Leadership for mindful leadership coaching:¹²⁴

Based on your preparation, start with an empty mind. Try not to judge or think about what the person should have done in the past or should do in the future.
Be nonreactive. Remember that during this coaching session “no reaction is required, regardless of the provocation.” Create a safe emotional space for the person to express himself or herself.
Practice permissive attention. Try to draw the person into moments of connection where distractions disappear (cell phones, street noise, or anything else that might impair their ability to focus). Try to stay focused for more than a moment on one serious line of thought, perception, judgment, or action that you might observe. Draw the person’s attention to what is important (but not in a coercive way).

With a bit of practice, leaders should be able to create an affective coaching environment where they attend with a focus on their followers’ emotions. Athletes refer to this as being “in the zone” where you are focused and behavior seems effortless.¹²⁵ A great coach can evoke this state from a follower and maintain it so that the person can hear their feedback without becoming defensive. Thus, mindful coaching is about preparation and execution of a few steps in each phase. Research has shown that people can be trained to experience mindfulness and that this state is related to increased attention (alerting, orienting, and conflict monitoring).¹²⁶ Like any skill, with practice, a leader can become more mindful and then use this skill to understand the entire range of the emotions and moods expressed by their followers. Leaders can then develop the ability to react and then do so in an appropriate way to reduce emotional exhaustion and enhance their followers’ well-being.

In this chapter, you have learned about the importance of affect (emotions and moods) to job performance and employee well-being. Affective events theory serves as a guide and overall framework to understand how emotions and moods influence workplace outcomes. Emotional intelligence has emerged as a major area of research as well as practice applications through EI training such as that conducted at FedEx Express. Emotions (both positive and negative) can spread through groups and organizations through the emotional contagion process, so it’s important to understand them and keep them positive. Finally, the role of brain science and the potential for affective neuroscience to shed light on how emotions and moods influence OB has been discussed. In sum, emotions are a relatively new area of OB, but an “affective revolution” has taken place in the field, which has led to new implications for effective leadership.

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Key Terms

affect, 51
affect spin, 61
affective climate, 53
affective neuroscience, 63
broaden-and-build model, 54
complementary linkage, 62
convergent linkage, 62
deep acting, 58
divergent linkage, 62
emotion regulation, 61
emotional contagion, 62
emotional dissonance, 57
emotional division of labor, 58
emotional intelligence (EI), 58
emotional labor, 57
emotions, 51
gratitude, 54
mindfulness, 64
moods, 51
negative state affect, 56
organizational neuroscience, 63
positive state affect, 56
self-awareness, 60
state affect, 51
surface acting, 58
trait affect, 51

TOOLKIT ACTIVITY 3.1: The 5-Minute Gratitude Exercise

Everyone at one time or another experiences problems that consume them. Some examples are:

Schoolwork challenges
Work problems
Health issues
Financial challenges

The list is numerous. These issues grab hold and overwhelm you and your energy, sometimes so much so that you are exhausted from the problem. They grab so tight you wonder if you will ever move forward. How do you lessen the grasp your challenges have on you and your energy? What if something could have you seeing a way of positive change? The 5-Minute Gratitude Exercise just may be what you have been looking for. The practice of acknowledging gratitude lessens the heaviness issues have on you, your energy, and your inability to see through your challenges. With slack on the problem, you create space for new and more harmonious views on the situation.

The exercise takes 5 minutes and has seven steps.

For 1 minute, ponder the issue that has consumed your energy.
Focus on how you are feeling as you think about the problem.
For the second minute, think of something you are grateful for around that issue. Some examples might be:
- My best friend and I are having difficulties at the moment. I am grateful for my best friend, as I can call and talk with her and feel I have someone with whom I can share my feelings. Focus on something you love about your best friend.
- I received a C on an exam. I felt that I studied hard, but I don’t do well on multiple-choice exams. I am grateful that the course has other assignments where I can shine. I am really good at writing papers.
- The workload on my job has been heavy, and I am stressed about it. I worry about whether or not I will be able to keep up. I am thankful to have a job that pays my bills and gives me the opportunity to learn new things.

These are just examples to get you going. Think of what is in your life around the issue that you can honestly be grateful for, even though the issue seems to hold you so. There’s always something to be grateful for, even in a difficult situation. It may require a bit of searching, but it’s there.

Once you have identified that for which you are grateful, close your eyes and focus on it. Let your thoughts wander, and soon other things for which you are grateful in other areas of your life will begin to speak up. Positive thoughts attract positive thoughts.
As these thoughts speak to you, imagine there is a volume knob inside your head, a physical knob like the one on a car radio, not the digital one. Now, envision reaching out and turning up the volume on these thoughts of gratitude to a point where it is comfortable but stretches you a little bit.
Just like that song that you crank up the volume to because it feels good, let this volume of gratitude fill you with that same sense.
Notice how you feel. Hold onto this feeling, and when you feel yourself stuck by the situation, go find this feeling and think of another thought of gratitude to add. When you find yourself being sucked down into the “woe is me” syndrome, or consumed by your problems, stop for 5 minutes and practice gratitude with this exercise.

Discussion Questions

Did you find it difficult to let go of your “woe is me” negative feelings? Why or why not?
How did you feel when you “turned up the volume” on your thoughts of gratitude?
Explain how the 5-minute gratitude exercise broadens and builds your psychological capital (PsyCap). Describe your feelings of hope, optimism, self-efficacy, and resiliency after doing the exercise (for definitions of PsyCap, refer back to Chapter 2).

Source: Adapted from The 5-Minute Gratitude Exercise. Retrieved from http://www.livingwhole.net/uploads/1/3/0/7/13072851/the_5_minute_gratitude_exercise.pdf

CASE STUDY 3.1: Managing Your Boss’s Moods and Emotions

Ted is a forensic accountant at the law firm of Chambers, Bergweitz, and Rowe. He has worked there for 10 years and is called in on cases when his unique skills are needed by the different attorneys and partners. He reports to Richard, who has been his boss for 8 years. Richard is responsible for all of the specialized personnel used on cases, not just the forensic accountants. He has been a decent boss—fair with clear standards for performance and what it takes to get promotions, raises, and bonuses. However, Richard suffered a heart attack last month and is going to be taking early retirement in order to take care of his health. As a result, the specialists under Richard are now being divided out to the different department heads they serve until a replacement can be hired in a few months (as Richard is on medical leave, he can’t be replaced in his position for legal reasons at this time).

Ted now reports to Margret, the head of the divorce department, and finds her a difficult boss to work for on most days. She always seems to start her day in a bad mood, where she denies any subordinates’ requests or finds that the requests (as well as requestor) are stupid if she is approached before 11 a.m. Whereas Richard had a clear process for assigning cases to the accountants, Margret seems to let her emotions guide her choices. For instance, when Seeru, another forensic accountant, was late getting Margret a report because he had to get an emergency crown repair, Margret was angry with him. She seemingly retaliated by dumping three cases on him in one week and left Ted with nothing to do. She also required Seeru to complete his analysis of all the cases by Monday, thus requiring him to work the weekend. However, when Ted and Seeru’s work helped a client get a large divorce settlement, and thus the firm a large cut of the settlement, she was pleased and gave both of them Friday off on a whim so they could enjoy a long weekend. Additionally, Ted has found her sobbing in her office on more than one occasion when he has gone to get files or clarification on cases from her. To make matters worse, Margret often screams at her assistant and other employees outside of her office, which disturbs those in nearby offices and cubicles.

Margret’s emotionally charged behaviors are very disruptive to Ted and Seeru’s work. It is hard for them to concentrate when she is yelling, and they do not feel comfortable working in their cubicles because they never know when she is going to have an outburst that makes it impossible to have a phone conversation or to have clients, clients’ financial managers, or other attorneys over for meetings. They also can’t get information they need from her when she is in a rage or fit of despair, as they don’t dare go near her.

Ted would like to request a transfer to the partner that handles corporate trials and investigations. He has talked to some of the attorneys in that department, and it seems a much nicer working environment. However, until he can get transferred over, he and Seeru are employing a number of strategies to deal with their boss and her volatile moods. These include:

Avoidance. The guys work out of the office when possible by meeting with clients and their financial managers at their homes or offices. When they have to work in the office, they try to work in the archives, libraries, or conference rooms away from Margret.
Gray Rocking. By not emoting, even when Margret’s emotions are affecting their own feelings, Ted and Seeru are not fueling her fire. Oftentimes they have seen her react even more harshly if someone cried or yelled back, and so do their best to not only not say anything but not have any facial expressions that could communicate how they are feeling.
Gifting and complimenting. In the last few weeks, the guys have brought what they consider peace offerings whenever they go see Margret—from coffees to bagels or bars of chocolate. Whenever she gets these little things, Margret perks up and is a bit easier to get information from or permission to use company resources.
Overdelivering. After getting that Friday off for doing good work, and knowing what can happen if they don’t deliver on time, the guys work hard to ensure they do excellent work and beat deadlines.

Discussion Questions

What other strategies might you employ in dealing with Margret or your own moody boss? Are there any actions or behaviors you should avoid?
What can Ted and Seeru do to help themselves not catch their boss’s negative emotions and moods, and cope with the emotional stress and turmoil working for Margret causes?
Why do you think working for Margret is so emotionally stressful?
Think about the legal and ethical ramifications of the behavior of bosses like Margret. Organizations in the United States have the legal obligation to provide safe workplaces, including ones that are safe from harassment. What would you do if you were Margret’s boss or another leader in the organization, and why do you think she was even hired for this position?

SELF-ASSESSMENT 3.1: Positive and Negative Affect Schedule (PANAS)

This scale consists of a number of words that describe different feelings and emotions. There are no right or wrong answers, and this is not a test. You don’t have to share your results with other classmates unless you wish to do so.

Part I. Taking the Assessment

Read each item and then list the number from the scale below next to each word. Indicate to what extent you feel this way right now, that is, at the present moment OR indicate the extent you have felt this way over the past week (circle the instructions you followed when taking this measure):

(Circle one):

Momentary: I feel this way right now (state affect)
Weekly: I have felt this way over the past week (trait affect)

Part II. Scoring and Interpretation

Positive Affect Score: Add the scores on items 1, 3, 5, 9, 10, 12, 14, 16, 17, and 19. Scores can range from 10 to 50, with higher scores representing higher levels of positive affect. You can compare your scores to the following norms:

Mean Scores: Momentary = 29.7 (SD = 7.9); Weekly = 33.3 (SD = 7.2)

Negative Affect Score: Add the scores on items 2, 4, 6, 7, 8, 11, 13, 15, 18, and 20. Scores can range from 10 to 50, with lower scores representing lower levels of negative affect. You can compare your scores to the following norms:

Mean Score: Momentary = 14.8 (SD = 5.4); Weekly = 17.4 (SD = 6.2)

Source: Copyright ©1988 by the American Psychological Association. Reproduced with permission. Watson, D., Clark, L. A., & Tellegan, A. (1988). Development and validation of brief measures of positive and negative affect: The PANAS scales. Journal of Personality and Social Psychology, 54(6), 1063–1070.

Discussion Questions

Overall, do you display more positive or negative affect? Do you think your results would be different if you had chosen another time frame (momentary vs. weekly)? Explain.
How did you compare to the average scores on this self-assessment? Are you above or below average in positive and negative affect?
Explain how your knowledge of your own mood states may influence how you interact with others at work. How can you use this information to change your behavior?

SELF-ASSESSMENT 3.2: Emotion Regulation Questionnaire (ERQ)

We would like to ask you some questions about your emotional life, in particular, how you control (that is, regulate and manage) your emotions. The questions below involve two distinct aspects of your emotional life. One is your emotional experience, or what you feel like inside. The other is your emotional expression, or how you show your emotions in the way you talk, gesture, or behave. Although some of the following questions may seem similar to one another, they differ in important ways. For each item, please answer using the following scale:

Scoring

Source: Gross, J. J., & John, O. P. (2003). Individual differences in two emotion regulation processes: Implications for affect, relationships, and well-being. Journal of Personality and Social Psychology, 85, 348–362. https://spl.stanford.edu/resources

Note: Cognitive reappraisal is a form of cognitive change that involves construing a potentially emotion-eliciting situation in a way that changes its emotional impact. For example, during an admissions interview, one might view the give-and-take as an opportunity to find out how much one likes the school rather than as a test of one’s worth. Items 1, 3, 5, 7, 8, and 10 make up the Cognitive Reappraisal facet. Expressive suppression is a form of response modulation that involves inhibiting ongoing emotion-expressive behavior. For example, one might keep a poker face while holding a great hand during a card game. Items 2, 4, 6, and 9 make up the Expressive Suppression facet.

The scoring takes the average of all the scores (i.e., the score lies between 1 and 7). The table below shows the averages of 1,483 undergraduate students around 20 years of age.

Source: Emotion Regulation Questionnaire. Retrieved from http://www.psytoolkit.org/survey-library/emotional-regulation-erq.html

Discussion Questions

Which of the two strategies do you rely on most (cognitive reappraisal or expressive suppression)? Give an example of when you used this strategy.
How do your results compare to the averages (male or female)? Were you surprised by your results? Explain why or why not.
How can you use the results of this self-assessment to improve your strategies for emotion regulation?

Chapter Four Attitudes and Job Satisfaction

Learning Objectives

After studying this chapter, you should be able to do the following:

4.1: Define the concept of an attitude, and know its three components.
4.2: Understand why the measurement of attitudes is important for the workplace.
4.3: Define job satisfaction, and know what the consequences of dissatisfaction are.
4.4: Explain the role of job attitudes and core self-evaluation in the job search process.
4.5: Discuss the concept of organizational commitment and its three components.
4.6: Define perceived organizational support (POS), and explain its relationship to fairness at the workplace.
4.7: Explain psychological empowerment and its relationship to job performance.

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Job Satisfaction: An Upward Trend

The Society of Human Resource Management (SHRM) conducts a survey each year of employee attitudes toward their work. In November and December of 2015, they surveyed about 600 U.S. employees to track their job satisfaction and factors that contribute to their satisfaction at work. The trends for job satisfaction over time show an interesting pattern. As shown in Figure 4.1, overall job satisfaction (the global rating of how much a person is “somewhat satisfied” or “very satisfied” with their job) experienced a positive trend from 2005 to 2009. Job satisfaction peaked at 86% of workers saying they were very satisfied with their jobs in 2009. However, the following few years saw a downward trend, with only 81% of respondents indicating high job satisfaction in the years 2012 and 2013. This may have been due to the economic stress and uncertainty resulting from the recession of 2008. It appears that job satisfaction recovered from this slump, with 88% of the respondents reporting that they were very satisfied with their jobs in 2015—the highest level in 10 years. The survey also looked at the reasons why people are satisfied with their jobs. Respectful treatment of employees at all levels was the most important contributor (67% of respondents reported this was “very important”). Overall compensation and pay was second with 63% of respondents rating this is very important to them, with 60% also listing benefits as very important. Trust between employees and senior management emerged as fourth most important (55% of respondents), and opportunities to use their skill and abilities at work was equally rated (55%). Consistent with research on leadership (covered in Chapter 6 of this textbook), having a positive relationship with the boss was a close sixth factor contributing to job satisfaction (53%).

Figure 4.1 Employee Job Satisfaction 2005–2015

Source: Employee Job Satisfaction and Engagement (SHRM, 2016). Retrieved from https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/pages/job-satisfaction-and-engagement-report-revitalizing-changing-workforce.aspx

Note: Figure represents those employees who answered “somewhat satisfied” or “very satisfied” with their current job.

Critical Thinking Questions: Why do you think job satisfaction has been increasing in recent years? Explain why respectful treatment is more important to employees than pay or benefits. What can a leader do to increase employee job satisfaction by allowing followers to use their skills and abilities at work (give a specific example)?

Job satisfaction is the most often studied work attitude. In this chapter, we review research on job satisfaction and other important work attitudes. First, the concept of attitude is defined followed by a discussion of why attitudes matter for both individuals and the organizations they work for.

What Is an Attitude?

Learning Objective 4.1: Define the concept of an attitude, and know its three components.

Captain Jack Sparrow in Pirates of the Caribbean utters “the problem is not the problem; the problem is your attitude about the problem. Do you understand?” Most people have an idea of what an attitude is from such statements in films and Dilbert cartoons that parody concepts such as empowerment. Attitudes have been researched in psychology for many years and are one of the earliest concepts studied. From the outset, researchers maintained that it is possible to measure attitudes but also recognized that attitudes are complex.¹ It has been noted that the concept of attitude is indispensable to the study of social psychology.² An attitude is defined as “a psychological tendency that is expressed by evaluating a particular entity with some degree of favor or disfavor.”³ Attitudes are, thus, a person’s evaluation of something else. These evaluations have three components: cognitive, affective, and behavioral.⁴ The existence of this three-component structure has generally been supported by research.⁵^,6 The cognitive component of an attitude is a statement of belief about something—for example, “My boss is a mean person” reflects a person’s statement that they believe to be factual. The affective component of an attitude is the emotional part. As we learned in Chapter 3, emotions often have a powerful effect on employee motivation and work behaviors—for example, an affective statement related to the previously stated cognitive component might be, “I am angry because my boss is mean.” The behavioral component of an attitude refers to an intention to act based upon the cognitions and affect experienced—for example, “I am going to go to the Human Resources department and report my mean boss.”

This three-part conceptualization of an attitude helps us understand that attitudes are complicated; it isn’t just that we think something and believe it to be true. We also experience feelings related to our beliefs, and we contemplate taking actions based on them. These components are all related to one another, as shown in Figure 4.2. This figure provides an additional example of the three-component model. The cognitive component is that the person thinks their job is boring. Therefore, they don’t like the job (the affect part). This results in a behavioral intention to withdraw from the work by planning to spend more time on Facebook during work hours rather than working on things that are boring, and they don’t like being bored (the behavioral intention).

Figure 4.2 Three Components of an Attitude

While this three-part conceptualization is useful in explaining the complexity of attitudes, the three components are typically closely related and converge.⁷ In other words, cognitions may not cause affect or vice versa; these components move in the same direction. This is actually useful for a leader to recognize since research has shown that behavior does not always follow an attitude. In fact, thoughts and feelings can be changed by changing behaviors first. For example, having followers state their perceptions of the mission of the organization during a team meeting may have the effect of changing their belief that the mission is worthwhile, and they may also change the way they feel about the mission. Another example would be to have students read the honor code statement to change their thoughts (“cheating is not okay”) and feelings (“I would be embarrassed if I were caught cheating”). This is because when behaviors don’t line up with thoughts and feelings, cognitive dissonance may occur.

Critical Thinking Question: Give an example of three parts of an attitude that you have experienced at either work or school (cognitive, affect, and behavioral intention).

Cognitive Dissonance

Cognitive dissonance is the incompatibility between two or more attitudes or between attitudes and behavior.⁸ This creates stress for an individual, and the person will be motivated to resolve the stress by making a change in one or both of the other components. Our thoughts (cognitions) need to be consistent with our feelings (affective), and these need to line up with our behavioral intentions. In other words, thoughts, feelings, and behaviors need to be aligned. Very few people can completely avoid dissonance in their lives. For example, you may be reminded of this when a child corrects you for swearing because you have told them not to do this in the past. Festinger proposed that the degree to which people are motivated to resolve dissonance is related to the importance of what creates it and how much influence the person has over it.⁹ The final motivating element is reward. So one of the best ways to learn to stop swearing is to have your children remind you, because it is important to you and you do have influence over what you say. The reward from swearing isn’t all that much, so you are probably willing to change it to be a positive role model for your child, which is more rewarding.

Critical Thinking Questions: How can the theory of cognitive dissonance be used to change the attitude of the employee depicted in Figure 4.2? In other words, how can a leader reduce the time an employee spends on Facebook during work hours?

Do Attitudes Matter?

Learning Objective 4.2: Understand why the measurement of attitudes is important for the workplace.

As noted in Chapter 1, work-related attitudes are often key outcome variables in organizational behavior (OB) research. In some cases, these same attitudes are employed as predictors. As in social psychology, attitudes have become indispensable to the understanding of people’s reactions to their work and leaders. Attitudes are, thus, important in and of themselves. Knowing how satisfied people are with their work or how engaged they are is important because this contributes to their well-being and life satisfaction. Also, OB research has shown that attitudes are related to behaviors that organizations care about, such as job performance and turnover. A meta-analysis and additional research were conducted to examine the link between attitudes and behaviors that relate to productivity.¹⁰ The findings strongly suggest that job satisfaction and organizational commitment are significantly related to job performance and turnover. The authors conclude that job attitudes are one of the most important things for a leader to know about their followers.

Attitudes make a difference in employee behaviors such as job performance. However, there are contingency factors that have been found to influence the relationship between attitudes and behavior.¹¹ The importance of an attitude and the correspondence between the attitude and the behavior increases the prediction of behavior.¹² In other words, more specific attitudes predict more specific behaviors. For example, it is better to ask an employee how much they trust the boss rather than how much they trust all of the leaders in the organization to predict job performance. Social pressure from others may also strengthen the relationship of an attitude toward behavior. A meta-analysis of research examining the link between attitudes and behavior found that how accessible an attitude is makes a difference, as well as how stable the attitude is over time.¹³ For example, having direct experience with an attitude such as having a job you love increases the relationship to performance. Also, being asked frequently about an attitude increases the link to behavior (stability). Organizations that implement yearly employee attitude surveys may actually be increasing the awareness of favorable aspects of the work, and this might decrease turnover.

OB research has identified and researched dozens of work-related attitudes. The following sections discuss the best-researched attitudes and how they significantly and positively affect outcomes for organizations, such as higher job performance and lower turnover.

Job Satisfaction

Learning Objective 4.3: Define job satisfaction, and know what the consequences of dissatisfaction are.

As suggested in the research conducted by SHRM at the beginning of this chapter, most people are satisfied with their jobs, and this is showing an upward trend. Job satisfaction is defined as “a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experience.”¹⁴ Job satisfaction can be measured as an overall (or global) concept as shown in Chapter 1, Table 1.2 (in fact, the Hoppock Job Satisfaction Measure is one of the oldest measures from OB research dating back to the 1930s). Job satisfaction is viewed as one part of a person’s reactions to their life resulting in happiness and life satisfaction.¹⁵ Current perspectives on positive OB suggest that it is important for organizations to care about the well-being and health of their employees, even if this is unrelated to performance and other outcomes.¹⁶ Thus, job satisfaction is important because it shows how positive an employee is regarding their work. This translates into better performance. For example, one study found that frontline employee job satisfaction is significantly related to customer satisfaction and engagement.¹⁸

Research in Action

The Curious Case of Post-9/11 Job Satisfaction

Can a public event change how satisfied government workers are with their jobs? Job satisfaction in the public sector may not only depend on facets such as pay, coworkers, and supervisor satisfaction but may also depend on larger national events or crises.¹⁷ Van Ryzin proposed that the image of public service in times of crisis may become more positive since citizens look to government institutions for security, leadership, and a sense of national purpose. Government workers may see themselves as heroes following a crisis and view their work as more meaningful. This increase in the positive image of the public sector boosts the everyday morale of government workers. Also, government workers may find renewed meaning and purpose in their work since the government responds to a crisis, and this has a positive effect on their job satisfaction. The researcher compared job satisfaction data from the General Social Survey (GSS) for a sample of government workers compared to private sector workers from the years 2000 to 2010. The findings indicate that the national crisis of 9/11 may have boosted government workers’ job satisfaction 5 to 10 percentage points, representing 1 to 2 million additional satisfied government workers in the United States. These results suggest that people found more meaning in their work since national crises remind them of the important role that they play in the lives of other people. These feelings appeared to influence government workers’ job satisfaction. It’s important to remember that job satisfaction is complex, and may be affected by the employee’s personality but also external events may influence the thoughts and feelings people have regarding their work.

Discussion Questions

This study was conducted for government employees. Do you think that the results would be different for employees in the business sector? Why or why not?
Police officers are an example of government employees who would likely be affected by a national crisis. Provide some other examples and explain them.
List and discuss two other factors outside of the job that may affect job satisfaction.

Source: Van Ryzin, G. G. (2014). The curious case of the post 9-11 boost in government job satisfaction. American Review of Public Administration, 44(1), 59–74.

Job satisfaction may change over time. A study of 132 newcomers with data collected at four time periods showed a curvilinear pattern for job satisfaction, such that satisfaction increased after they started their jobs and then decreased as they settled into their jobs at the 1-year point.¹⁹ A research study of new employees earning a college or graduate degree in a recession or an economic boom found that the recession had lasting effects on job satisfaction. Across three studies, well-educated graduates who entered the workforce during economic downturns were more satisfied with their current jobs than those who entered during more prosperous economic times.²⁰ Another study conducted for an even longer period of time—40 years—examined survey data from 21,670 participants in nationally representative samples. Results found interesting patterns for age and organization tenure. People appeared to become less satisfied as their tenure within a given organization increased. However, as people became older and moved to different organizations, their satisfaction increased. This finding is, in part, explained by pay increases over time.²¹ Thus, external factors such as the economy or a national crisis may influence job satisfaction (see the boxed insert for an example of how a national event influenced job satisfaction).

Job satisfaction has been examined across cultures. Typically, studies seek to understand whether U.S.-based models of job satisfaction hold in other cultures. For example, a study of over 70,000 employees in four cultural regions (Asia, Europe, North America, and Latin America) found employees’ sense of achievement from work was related to job satisfaction in all regions.²²

A review of cross-cultural research on job satisfaction concluded that the relationship of job satisfaction to performance in a number of other cultures was similar to that in the United States, with an average correlation of .20 (the review included studies from India, Poland, Australia, Canada, Israel, and South Africa).²³ However, international research was more likely to focus on nonwork attitudes such as adaptive behaviors. In addition, job satisfaction was found to be related to life satisfaction and withdrawal behaviors (lateness and absenteeism) in other cultures.

Job Satisfaction Facets

It is recognized that it is possible for a person to be satisfied with one aspect of their work but dissatisfied with others. In other words, an employee might love the work they do but dislike their gossiping coworkers. Thus, measures of facet job satisfaction have been developed. One of the most widely known measures of facet satisfaction is the Job Descriptive Index (JDI).²⁴ This measure includes different scales that measure various aspects of the work experience: pay, promotions, supervision, coworkers, and the work itself. Examples of items from the JDI are shown in Table 4.1. Research has suggested the strongest relationship of these facets to overall job satisfaction is the work itself, followed by supervision and coworker satisfaction. While it may be surprising, satisfaction with pay has the lowest relationship to overall job satisfaction.²⁵^,26 You will learn more about the role of extrinsic rewards such as pay on motivation in Chapter 9. Toolkit Activity 4.1 gives you the opportunity to evaluate what workers want from various aspects of their jobs.

Source: The Job Descriptive Index, © Bowling Green State University (1975, 1985, 1997).

Critical Thinking Questions: Why do you think that the most important aspect of job satisfaction is the work itself? Which aspect is most important to you?

If work is the most important component of job satisfaction, then you may be wondering what the relationship is between pay and job satisfaction. In a review study including over 90 samples, researchers found that pay was only weakly related to job satisfaction. In fact, employees who were highly paid were just as satisfied as those who made less. The results of their study are summarized in Figure 4.3. Once a person reaches an income level where they can live comfortably (around $40,000 in the United States), the relationship between income and job satisfaction goes away. A recent study examined pay over a wider range and found that the relationship between pay and job satisfaction may be more complex. Researchers obtained data from 25,465 working adults in the United States using the company rating website www.careerbliss.com. They found that income and pay satisfaction had a significant curvilinear relationship such that people began reporting decreased pay satisfaction above income levels of $260,000.²⁷ These findings suggest that income is not related to job satisfaction once we achieve a comfortable standard of living but that when we attain very high salaries, we become dissatisfied. More research is needed to understand this intriguing finding.

Figure 4.3 The Relationship Between Average Pay in a Job and Job Satisfaction

Source: Judge, T. A., Piccolo, R. F., Podsakoff, N. P., Shaw, J. C., & Rich, B. L. (2010). The relationship between pay and job satisfaction: A meta-analysis of the literature. Journal of Vocational Behavior, 77(2), 157–167.

Job satisfaction matters because progressive organizations care about the well-being of their workforce. It is also important because it is related to other work attitudes, which we review next in this chapter (such as organizational commitment and engagement). The research is clear that job satisfaction increases performance on the job: A meta-analysis including over 300 samples showed that job satisfaction is significantly and positively related to performance.²⁸ But what happens when employees are dissatisfied?

Dissatisfaction with work produces four possible responses that are summarized in Figure 4.4. As shown in this figure, these responses can either be active or passive.²⁹ Thus, the employee can actually do something about it or choose not to respond in an active way. The second dimension is whether the response is constructive or destructive. The employee who is dissatisfied can respond by trying to do something positive or negative about the situation. There are thus four reactions shown in the figure, and their definitions follow:

Exit. The employee can search for another job and leave. This response is active and destructive.
Voice. The employee can discuss their dissatisfaction with their supervisor, making suggestions for improvement. This is an active and constructive response to being dissatisfied.
Loyalty. The employee can wait for the situation to improve, showing loyalty and trust in the management to address it in time. This is a passive response, but it is constructive.
Neglect. The employee allows the situation to get worse and may be late or absent from work and put in less effort on the job. This is a passive response that is destructive.

Figure 4.4 Responses to Job Dissatisfaction

Source: Rusbult, C. E., Farrell, D., Rogers, G., & Mainous A. G., III. (1988). Impact of exchange variables on exit, voice, loyalty, and neglect: An integrative model of responses to declining job satisfaction. Academy of Management Journal, 31(3), 599–627.

This framework is also known as the EVLN (Exit-Voice-Loyalty-Neglect) approach to job dissatisfaction. Research has shown that voice leads to turnover—when employees speak out about their concerns they are more likely to quit. However, this research also found that leaders who allowed participation and provided support were able to prevent turnover from occurring.³⁰ This effect is even more pronounced when leaders and followers agree on the extent to which followers voice their concerns. By leaders having open discussions with followers regarding what makes their input valuable, followers are able to get their concerns addressed. This may also avoid potential negative consequences for being out of sync with follower perceptions and the destructive responses of exit or neglect.³¹ For followers, it isn’t just a matter of speaking up (voice); it is also a matter of being heard.

The previous sections reviews research that shows that attitudes make a difference on the job. But what happens when a person is looking for a job? The next section discusses how having a positive attitude about oneself and the job search process can lead to a higher degree of success in finding a great job.

Job Search Attitudes

Learning Objective 4.4: Explain the role of job attitudes and core self-evaluation in the job search process.

OB research has shown that the job search is like a “roller coaster,” with ups and downs in attitudes during the process.³² Perceived progress, experienced affect, and the belief that a job will be found may vary on a day-to-day basis during the job search process. In this research, individuals were asked about how confident they were that they would find another job. The researchers asked questions such as the following:

Will you find a job if you look?
Will you get a good paying job?
Will you find a job that you like?
Will you land a job as good as or better than the one you left?

This research found that it is important to keep a positive attitude and maintain a positive self-image during a job search. This positive attitude about oneself is known as core self-evaluations, which you learned about in Chapter 2 of this textbook. A recent study found that career adaptability was related to university graduates’ beliefs that they would have a great career and their success in finding a job. Career adaptability has been defined as “a psychosocial construct that denotes an individual’s resources for coping with current and anticipated tasks, transitions, traumas in their occupational roles.”³³ It is comprised of the adaptive resources of concern, control, curiosity, and confidence (known as the 4 Cs).³⁴ A meta-analysis of 90 studies found that career adaptability is significantly associated with measures of adaptability (e.g., optimism), adapting responses (e.g., career planning), and outcomes (e.g., higher organizational commitment, lower job stress, and life satisfaction).³⁵ Keep in mind, however, that some forms of flexibility may have a downside with respect to finding a good career match. Another research study examined flexible job search behavior (FJSB) with three general forms: flexibility with respect to pay/hierarchical level, skill use, and commuting time. Researchers found that this FJSB may result in poor person–job fit, so it’s important to balance flexibility with finding the best match.³⁶ To summarize, keep a positive attitude about both yourself and the job search process, which have both been related to job search success. Also, remain flexible and curious about different career options and jobs, but remember to look for a job that is a good match. Self-Assessment 4.1 provides you with the opportunity to learn about how adaptable you are with respect to your career search.

Best Practices

Your Attitude May Derail Your Job Search

Those seeking employment need to pay attention to their attitudes. Your attitudes may manifest themselves in how you conduct yourself during the process. Bob McIntosh, a career trainer who leads job search workshops and an authority on the job search process, offers the following advice:

Don’t be arrogant. People don’t appreciate being looked down upon.
“Dress for success.” Make sure you are well groomed and presentable when you might be in contact with a potential employer or someone who could help you.
Your countenance matters. Try not to look down at the floor or frown. Be positive and upbeat.
Be outgoing (or at least fake it). Use every opportunity you can to network. Don’t view networking as only formal, arranged events.
Mind your manners. Remember to say thank you as well as something such as, “It was great seeing you.”
Don’t appear desperate and despondent. People will want to help you, but don’t look like you are giving up. If you doubt yourself, it will show, and then others will begin to doubt you.
Hide your anger. Keep your composure at all times. If you are angry about how you were treated unfairly in your last job, don’t show this in an interview. Also, if you are frustrated with the job search, try to focus on the positive things that are happening.

Here is some sound advice from McIntosh:

Simply put, your job search is ongoing. You are being judged wherever you go. Those who try to help you take into account the aforementioned aspects of your overall attitude. Be mindful at all times how you appear to others.

Discussion Questions

How many people could you let know that you are searching for a job? List their names and how you know them (e.g., your internship mentor or a former boss).
How would you ask them to help you in a positive and upbeat way? Write a brief speech or e-mail with your job search request.

Source: McIntosh, B. (2013). 7 things you need to consider about your attitude when looking for work. Retrieved on February 10, 2014, from http://thingscareerrelated.com/2013/12/23/6-things-you-need-to-consider-about-your-attitude-when-looking-for-work

In addition to core self-evaluations, work-related attitudes are important because they reflect an employee’s reactions to work and serve as an important barometer of how well the organization is attending to employee needs. The next section discusses job satisfaction, which is one of the most often studied work-related attitudes.

Critical Thinking Questions: What limitations do you see on the effect of being positive in the job search process? What is the right balance between optimism and being realistic?

Organizational Commitment

Learning Objective 4.5: Discuss the concept of organizational commitment and its three components.

Organizational commitment is another work-related attitude that has proven to be important in OB. Reviews (including several meta-analyses) have shown that organizational commitment relates to turnover.³⁷^,38,39 OB research has also shown that people who are not committed to their jobs are absent more often, less motivated, as well as perform at lower levels.⁴⁰ Organizational commitment is a psychological state that describes an employee’s relationship with their organization and a propensity to continue the relationship with the organization.⁴¹ It links an individual to the organization because of their identification with the organization’s values and goals.⁴² A three-component model of organizational commitment captures different aspects of this work attitude.⁴³ First, affective commitment refers to an employee’s emotional attachment to an organization (they stay because they care about the organization and are loyal to it). Second, continuance commitment is the degree to which an employee is aware of the costs of leaving the organization (they stay because they are not able to leave). Third, normative commitment is the moral obligation to stay with the organization (they stay because it is the right thing to do). Employees that are more committed to the organization are less likely to engage in organizational deviance (e.g., overly long breaks, intentionally poor work quality) and interpersonal deviance (e.g., gossiping about peers, making fun of others).⁴⁴

Job Involvement

Job involvement is how much an employee identifies with his or her job and views their performance at work as an essential part of their self-esteem. Job involvement has been related to employee turnover,⁴⁵ organizational citizenship, and job performance.⁴⁶

By combining organizational commitment and job involvement, we can better understand the relationship of these variables to employee withdrawal behaviors (absenteeism and turnover).⁴⁷ This relationship is shown in Figure 4.5. As this figure shows, when organizational commitment and job involvement are both high, employees can be viewed as institutionalized “Stars” because their efforts are focused on both the task and the group they belong to. The other extreme case is when both organizational commitment and job involvement are low. In this case, employees are “Apathetics” because they don’t put forth much effort on the task and are not concerned about the maintenance of group norms of goals. The other two quadrants represent interesting scenarios in which “Lone Wolves” are involved with their jobs to a high degree and have a task focus, but they are not concerned about the maintenance of the group. They prefer to “go it alone” and are more likely to leave the organization than the final group, “Corporate Citizens.” Corporate Citizens are not focused on the task, but they do attend to the maintenance of the group. They may not be star performers, but they are loyal to the organization and the group. The figure also indicates suggestions for what aspects of satisfaction are important for each type of employee. For example, the Corporate Citizen is most concerned with coworker satisfaction to maintain their organizational commitment. In contrast, if the leader has a Lone Wolf in their group, they should focus more on the satisfaction with the work itself, working conditions, and pay to avoid absenteeism and turnover.

Figure 4.5 The Relationship of Organizational Commitment and Job Involvement to Employee Turnover

Source: Blau, G. J., & Boal, K. B. (1987). Conceptualizing how job involvement and organizational commitment affect turnover and absenteeism. Academy of Management Review, 12(2), 288–300. Adapted from p. 293.

Critical Thinking Question: Which component of organizational commitment do you feel is most related to turnover (and why)?

Employee engagement has emerged as an important concept due to research conducted by both OB professors and consultants. Engagement appears to be distinct from job involvement and adds to our understanding of the relationships of attitudes such as job satisfaction.

Employee Engagement

Employee engagement is related to job involvement and enthusiasm for the work performed.⁴⁸ Engagement has been defined as “the investments of an individual’s complete self into a role.” A study of 245 firefighters and their supervisors found that engagement plays a key role in the relationship between perceived organizational support (POS) (discussed in the next section) and job performance. This study included job involvement, but engagement explained additional variance in performance. A large-scale study of 7,939 business units in 36 companies found that engagement was related to customer satisfaction, productivity, profit, employee turnover, and safety (fewer accidents).⁴⁹ Improving employee engagement may increase business-unit outcomes including profit since disengaged employees cost organizations due to low motivation, poor customer service, and higher turnover.

Gallup estimates that these actively disengaged employees cost the United States between $450 billion and $550 billion each year in lost productivity.”⁵⁰ In 2012, Gallup conducted its eighth meta-analysis on their engagement measure (the Q12) using 263 research studies, including 49,928 business and work units, with almost 1.4 million employees. Gallup researchers statistically analyzed business- and work-unit-level relationships between employee engagement and performance outcomes. In 2016, this meta-analysis was repeated and the results were similar to the prior analysis (shown in Figure 4.6). Median differences between top-quartile and bottom-quartile units were 10% in customer loyalty ratings, 21% in profitability, 20% in sales production, –24% in turnover (high-turnover organizations), –59% in turnover (low-turnover organizations), –70% in safety incidents, –28% in shrinkage, –41% in absenteeism, –58% in patient safety incidents, and –40% in quality (defects).⁵¹

Figure 4.6 Employee Engagement and Work Outcomes

Source: Gallup. (2016). The relationship between engagement at work and organizational outcomes. 2016 Q12 meta-analysis (9th ed.). Retrieved from http://www.gallup.com/services/191489/q12-meta-analysis-report-2016.aspx

Given these positive findings, many organizations are implementing formal engagement programs. The Aberdeen Group, a Boston-based research organization that identifies best-in-class practices by working with industry practitioners, conducted a study that compared companies that have engagement programs with those that don’t. Their analysis found that companies that have a formal engagement program reduce the loss of customers due to better responsiveness. In fact, customer referrals actually increased. As shown in Figure 4.7, additional outcomes of engagement were higher revenues, sales teams meeting their quotas more often, and improved cost savings.⁵²

Figure 4.7 Employee Engagement Improves Financial Results

Source: Minkara, O. (2015). Employee engagement and customer satisfaction: “Why” and “how” to bridge the gap. Retrieved from http://v1.aberdeen.com/launch/report/research_report/13091-RR-Employee-Engagement.asp

Engaged employees feel valued by their organization. A longitudinal panel study found employee perceptions of how much they were valued by the organization were related to changes in affective commitment.⁵³ Also, the resources employees feel that they have on their job positively relate to engagement. A research study found that three job resources in particular relate to engagement: performance feedback, social support from colleagues, and supervisory coaching.⁵⁴ Another study found that resources of supervisor support, innovativeness, appreciation, and organizational climate mattered even more when the demands of a job were high.⁵⁵ Thus, employees respond positively to the work environment when they feel their supervisors and organization support them. This attitude—POS—is discussed next.

Critical Thinking Questions: Do you see a significant difference between the concepts of job involvement and employee engagement? If so, what is this difference?

Perceived Organizational Support

Learning Objective 4.6: Define perceived organizational support (POS), and explain its relationship to fairness at the workplace.

An emerging line of research suggests employees pay attention to whether the organization values their contributions and cares about their well-being: POS.⁵⁶ Organizational justice and fair rewards are important to the perception of organizational support.⁵⁷ A review of over 70 studies of POS indicate that there are three major categories of beneficial treatment: fairness, supervisor support, and organizational rewards along with favorable job conditions.⁵⁸ The supervisor also plays an important role in the perception of POS, and it is important for employees to feel that they have a voice in decisions.⁵⁹ Employees with higher POS engage in more citizenship behavior and are less likely to show up late for work.⁶⁰ A meta-analysis of studies found strong positive effects of POS on job satisfaction and organizational commitment, a moderate positive effect on employee performance, and a strong negative effect on intention to leave.⁶¹ More than 20 years of research suggests that POS appears to be distinct from other attitudes and adds to understanding why some employees perform at higher levels than others. Robert Eisenberger and his colleagues note that leadership drives POS and provide eight evidence-based tactics for increasing POS in organizations to enhance employee engagement.⁶²

Implement supportive workforce services that are discretionary—“Don’t just do the things you are required to do.”
Be fair and equitable in the making, monitoring and enforcement of all management practices.
Set achievable goals and reward proportionately.
Offer individualized benefits—“Learn and provide the type of support your workers and workforce need.”
Support supervisors so they will foster POS in their subordinates.
Train subordinates to be supportive.
Promote strong social networks.
Begin organizational support prior to the start of employment.

Research on POS indicates that employees respond positively when they feel the organization values them. Such employees want to have a voice in decisions that affect them. Feeling a sense of power to have an impact at work is another work attitude that has been researched in recent years, with results indicating strong relationships to other work attitudes and organizational effectiveness. The next section discusses the research findings for psychological empowerment.

Psychological Empowerment

Learning Objective 4.7: Explain psychological empowerment and its relationship to job performance.

Psychological empowerment refers to “intrinsic task motivation manifested in a set of four cognitions reflecting an individual’s orientation to his or her work role: competence, impact, meaning, and self-determination.”⁶³ These four cognitions are defined as follows:

Meaning—how much work goals align with your personal standards (i.e., how well the work “fits” your values)
Competence (or self-efficacy)—your belief in your capabilities to show mastery in your work role
Self-Determination—the degree to which you feel that you have a choice in your work and autonomy to carry it out according to your own preferences
Impact—refers to how much you believe that you can influence important work outcomes (e.g., administrative policies at work)

Research has shown that psychological empowerment is positively related to managerial effectiveness, innovation,⁶⁴ and organizational commitment.⁶⁵^,66 Empowerment is related to lower stress as well.⁶⁷ Meaning is the driver of psychological empowerment; however, all four components make unique contributions to outcomes. For example, competence is most related to ratings of managerial effectiveness. Today, more than 70% of organizations have adopted some kind of empowerment initiative.⁶⁸ It is important for leaders to allow their followers to experience meaning in their work but also feel that they have an impact. Also, leaders should coach followers to develop their sense of competence and allow them discretion in how they do their work. A study of leaders who coached their teams found that team members felt more empowered, and this translated into higher team performance.⁶⁹ Self-Assessment 4.2 provides you with feedback on how empowered you feel in your work or school projects.

Critical Thinking Question: Researchers suggest that meaning is the driver of psychological empowerment. Why do you think this is the case?

As noted previously, leaders can develop their followers’ feelings of empowerment. They may also create positive attitudes through developing a sense of meaning with respect to the work performed. By creating a sense of meaning, leaders may be able to activate other positive attitudes about work and improve employee motivation.

Leadership Implications: Creating Meaning at Work

Research on attitudes and job satisfaction shows that attitudes relate to important workplace outcomes such as improved job performance and lower turnover. Moreover, positive attitudes at work give people a sense that their work has meaning. A research study found that, over time, individuals who feel committed to their career derive more meaning from their work and are more satisfied with their jobs. These individuals believed that they were living a “calling” rather than going to work for money every day.⁷⁰ The sense of having a calling in work also predicts goal-directed effort (work effort and career strategies) and psychological career success (life meaning and career adaptability) over time.⁷¹ The questions used to measure the meaning of work are shown in Table 4.2.⁷²

Source: Steger, M. F., Dik, B. J., & Duffy, R. D. (2012). Measuring meaningful work: The work and meaning inventory (WAMI). Journal of Career Assessment, 1–16.

Leaders must recognize that attitudes can change and that the behaviors of leaders affect attitudes. They should think about how they can increase followers’ responses to these questions by engaging in empowering leadership and increasing engagement. First, leaders can discuss how their followers’ work relates to developing a meaningful career over the long term (positive meaning). Second, leaders should delegate challenging work to their followers to increase their sense of meaning (meaning-making through work). Third, leaders can point out ways that their followers’ work impacts others in a positive way (greater-good motivations). When people experience these three aspects of their work, they will be more engaged and should also experience a higher level of well-being.

Certain leadership styles inﬂuence the degree to which work is perceived as meaningful.⁷³^,74 A review of the literature on finding meaning in work concluded, “leaders can imbue work with meaningfulness by prompting employees to transcend their personal needs or goals in favor of those tied to a broader mission or purpose.”⁷⁵ Empowering leadership increases work engagement by giving followers a sense of work meaningfulness.⁷⁶ Research on leadership similarly shows that developing high-quality working relationships with followers relates to higher levels of job satisfaction, organizational commitment, and empowerment.⁷⁷ In sum, leaders play a powerful role in creating meaning for their followers by developing high-quality relationships and then sharing the organization’s overall mission with followers. This provides followers with a sense of meaning in their work, which has been shown to relate to job satisfaction.⁷⁸ In turn, employees respond with high levels of engagement and job performance.

Top managers play a role in the development of meaning as well. OB research has demonstrated that work meaningfulness trickles down from strategic leaders to mid-level leaders to employees through visionary leadership. This effect is even more prevalent for followers that are new to an organization.⁷⁹ Followers with a transformational leader are more committed because they experience psychological empowerment at work.⁸⁰ A recent study found that CEOs who make work interesting for followers by encouraging innovation increase their followers’ work meaningfulness.⁸¹ Such charismatic leaders increase their followers’ commitment by (1) promoting higher levels of intrinsic motivation through goal accomplishment, (2) emphasizing the linkages between follower effort and goal achievement, and (3) creating a higher level of personal commitment by leader and followers to a common vision, mission, and organizational goals.⁸² In sum, feeling part of the larger mission of the organization increases followers’ meaning in their work and their organizational commitment.

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Key Terms

active, 79
affective, 74
affective commitment, 82
attitude, 74
behavioral, 74
career adaptability, 80
cognitive, 74
cognitive dissonance, 75
constructive, 79
continuance commitment, 82
destructive, 79
employee engagement, 83
flexible job search behavior (FJSB), 81
job involvement, 82
normative commitment, 82
passive, 79
perceived organizational support (POS), 83
psychological empowerment, 86
sense of meaning, 87
social pressure, 76

TOOLKIT ACTIVITY 4.1: What Do Workers Want From Their Jobs?

Objective: To identify what satisfies people at work.

Instructions: Rank each item under the column titled “Individual Factors” from 1 to 10, with 1 being the most important and 10 being the least important.

When you have completed the ranking, meet with a group of four to five classmates and calculate the average individual weights within the group. Rank the 10 items under the column titled “Group Factors.” Discuss your answers with your group before reading further.

This same scale has been given to thousands of workers across the country. Supervisors ranked the items in this order:

High wages
Job security
Promotion in the company
Good working conditions
Interesting work
Personal loyalty of supervisor
Tactful discipline
Full appreciation of work being done
Help with personal problems
Feeling of being in on things

However, when employees were given the same exercise, their rankings tended to follow this pattern:

Full appreciation of work being done
Feeling of being in on things
Help with personal problems
Job security
High wages
Interesting work
Promotion in the company
Personal loyalty of supervisor
Good working conditions
Tactful discipline

Discussion Questions

In comparing the different ratings, what might account for the different opinions between you and your group?
What might be the cause of the supervisors’ rankings being so different from the employees?
Do you think the results of this survey will change over time?

Source: Kovach, K. A. (1987). What motivates employees? Workers and supervisors give different answers. Business Horizons, 30(5), 58–65. Retrieved from http://www.nwlink.com/~donclark/leader/want_job.html#sthash.86o3taW7.dpuf

CASE STUDY 4.1: A Crisis in Nursing

Los Rayos del Sol Medical Center is a hospital and surgery center located in Florida. Its main facility has 500 beds and several outpatient centers, it employees 2,600 people, and has recently partnered with the Mayo Clinic. Despite this seeming success, Los Rayos is experiencing high turnover amidst its nursing staff. The nurse average turnover rate is 14% for hospitals,⁸³ while Los Rayos has a turnover rate of 21%. New graduate nurses turn over at a rate of 27% within their first year, with an additional 37% of those new nurses wanting to leave, according to a survey conducted nationwide.⁸⁴ At Los Rayos, new-nurse turnover is 40%. The hospital spends an average of 13 weeks⁸⁵ to fill a vacant position and thousands of dollars per hire.⁸⁶ Turnover often leaves units understaffed, which creates poor patient experiences, nurse burnout, and lower quality of care. It also cuts into the firm’s bottom line.

Why are the nurses leaving? Los Rayos strives to provide the highest quality in patient care, but it also has to manage costs and comply with the new government regulations from the Affordable Care Act. Thus, over the last 10 years, Los Rayos has made a number of changes.

Ten years ago, Los Rayos changed the staffing model. All units had two licensed nurses and a housekeeper. Housekeepers were minimum-wage staff that helped the nurses do things like wash linens and stock the nurses’ station with basics. These tasks can take a lot of time away from the normal nurses’ job duties of doing rounds, required charting, administering doctors’ orders, and helping patients. Los Rayos promoted the housekeepers to health techs, which were supposed to do more patient care tasks, but most were not equipped with the skills needed to do these advanced tasks and were not given training by the hospital. At the same time, Los Rayos reduced the number of nurses per unit by one. This raised staffing ratios from 12 patients to one nurse to 24 patients to one nurse.
Eight years ago, Los Rayos cut the annual employee picnic and Christmas party in order to save money.
Five years ago, Los Rayos expanded nurses’ jobs to engage in activities like cost cutting and quality control. It required nurses to provide three to five cost saving ideas per year or they would be negatively evaluated on their performance appraisals. The next year, the firm put a cap on each position’s wage brackets, which resulted in nurses with greater than 12 years of service not receiving raises.
Three years ago, Los Rayos removed the intake coordinator position from all units except the ER and laboratory. This means that unless a patient is admitted to the hospital in the ER or immediately after laboratory testing, the nurse(s) on the unit has to complete the admission paperwork when the patient is brought to the unit.
Two years ago, Los Rayos began using tablets for patients’ charts and tracking and dispensing medicine. To prevent drug theft, medicine carts were equipped with a new security system that requires nurses to scan a patient’s hospital bracelet with the tablet, select the medication,and confirm the order before the tablet will send the information to the cart and unlock the needed medicine. The process often has technical problems or delays and causes frustration to both nurse and patient.
A year ago, Los Rayos began requiring all its nurses to take turns developing, planning, and presenting continuing education courses to reduce training costs. Nurses are required to complete 60 hours of continuing education annually for license renewal. The nurses did not receive any additional compensation for the training they developed, nor were they given any nonmonetary rewards.
Six months ago, Los Rayos changed from 8- to 12-hour shifts to reduce costs and to allow patients to be closer to their caretakers. However, patients from the maternity and geriatrics wards have complained about only seeing nurses at the start and end of shift and have negatively rated their hospital experience on surveys. Some employees like 12-hour shifts; however, most employees agree these shifts are exhausting, and the nurses often state they don’t have the time and energy to “go the extra mile” for colleagues and patients.

Discussion Questions

How do you think the changes Los Rayos made affected nurses’ attitudes? What problems to the business may poor nurse attitudes cause in addition to turnover?
Which of the job attitudes from the chapter do you feel is the biggest contributor to nurse turnover? The smallest contributor? Why do you think so?
How might leadership and personality of managers and administrators be affecting the situation?
If you were the director of a hospital and going to do a survey of employee attitudes, which attitudes would you want to know?

SELF-ASSESSMENT 4.1: How Much Career Adaptability Do You Have?

Part I. Taking the Assessment

Different people use different strengths to build their careers. No one is good at everything; each of us emphasizes some strengths more than others. Please rate how strongly you have developed each of the following abilities using the scale below each question.

Part II. Scoring Instructions

In Step I, you rated yourself on 16 questions. Add the numbers you circled in each of the columns to derive your scores for four aspects of Career Adaptability. Add your scores to determine your overall Career Adaptability score.

Interpretation

Your scores can range from 4 to 20 for each dimension. A score above 15 can be considered a strength. For your overall Career Adaptability, your scores can range from 16 to 80. An overall score over 60 suggests that you have a strong level of Career Adaptability.

The Four Cs:

Concern helps individuals look ahead and prepare for what might come next.
Control enables individuals to become responsible for shaping themselves and their environments to meet what comes next by using self-discipline, effort, and persistence.
Curiosity prompts a person to think about self in various situations and roles.
Confidence increases aspirations so that the person can actualize choices to implement their life design.

Discussion Questions

What are your greatest strengths related to your ability to adapt to your career? Your greatest weaknesses?
Overall, do you feel that being adaptable to your career is a positive thing? How will you balance your flexibility with finding a good fit to an organization and a job?
What did you learn about yourself from this self-assessment, and how will you use it to be more strategic in your career search?

Source: Adapted from Savickas, M. L., & Porfeli, E. J. (2012). Career Adapt-Abilities Scale: Construction, reliability, and measurement equivalence across 13 countries. Journal of Vocational Behavior, 80(3), 661–673. p. 672.

SELF-ASSESSMENT 4.2: Do You Experience Empowerment?

This self-assessment exercise provides feedback on how empowered you feel at work. If you don’t have work experience, consider how you feel working on team projects for your classes. There are no right or wrong answers, and this is not a test. You don’t have to share your results with others unless you wish to do so.

Part I. Taking the Assessment

You will be presented with some questions representing how you feel about your work.

Part II. Scoring Instructions

In Step I, you rated yourself on 12 questions. Add the numbers you circled in each of the columns to derive your score for empowerment.

Note: Meaning—how much work goals align with your personal standards (i.e., how well the work “fits” your values); Competence (or self-efficacy)—your belief in your capabilities to show mastery in your work role; Self-Determination—the degree to which you feel that you have a choice in your work and autonomy to carry it out according to your own preferences; Impact—refers to how much you believe that you can influence important work outcomes (e.g., administrative policies at work).

Information on the empowerment profiles for different contexts and norm data for the empowerment dimensions can be found in Spreitzer (2001). Norm data for each of the four dimensions and the total empowerment scale (for each dimension, divide by 3 and divide your total score by 12 to compare your results) are shown in the following table.

Empowerment Norming Scores

Source: Spreitzer, G. M. (2001). Psychological Empowerment Instrument. Retrieved from http://webuser.bus.umich.edu/spreitze/Pdfs/12-item%20empowerment%20instrument%2002-2015.pdf

Discussion Questions

Which of the four factors contributing to empowerment was highest for you? Do you feel that your work (or schoolwork) has meaning?
How much control (impact) do you have over your work (or schoolwork)? How can you increase the amount of influence you have? List two strategies.
Compare your scores to the norm data shown in the previous table. Are you in the top 80% on any dimension? The bottom 20%? Where does your overall score fall compared with the norms?

Sources: Spreitzer, G. M. (1995). Psychological empowerment in the workplace: Dimensions, measurement, and validation. Academy of Management Journal, 38(5), 1442–1465; Spreitzer, G. M. (1996). Social structural characteristics of psychological empowerment. Academy of Management Journal, 39(2), 483–504; Spreitzer, G. M., & Quinn, R. E. (2001). A company of leaders: Five disciplines for unleashing the power in your workforce. San Francisco, CA: Jossey-Bass.

Chapter Five Perception, Decision Making, and Problem Solving

Learning Objectives

After studying this chapter, you should be able to do the following:

5.1: Illustrate common perceptual biases with examples.
5.2: Explain how self-fulfilling prophecies affect job performance.
5.3: Provide two examples of how decision making affects organizational performance.
5.4: Explain the rational decision-making model and bounded rationality.
5.5: Demonstrate understanding of prospect theory and the impact of framing on decisions with an example.
5.6: Describe the role of intuition in decision making.
5.7: List and explain three major decision traps and how to avoid them: hindsight, hubris, and escalation of commitment.
5.8: Discuss the elements in Amabile’s three-component model of creativity.

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Would You Be Happier if You Were Richer?

This question was investigated in a survey of working women, asking them to estimate the amount of time they were in a bad mood the previous day.¹ Respondents were then asked to estimate the percentage of time people were in a bad mood with pairs of high- and low-income situations. These estimates were compared to the actual reports of mood provided by high- and low-income participants. The researchers learned that the women in the study exaggerated the bad moods of other people with low-income levels. The average person estimated that people with incomes below $20,000 per year spend 58% of their time in a bad mood, compared with 26% for those with incomes above $100,000 per year. However, the actual percentages were 32% and 20%, respectively. This perception bias can be explained as the focusing illusion, which is the tendency to overestimate the effect of a single factor on one’s life satisfaction (in this example, the factor tested was income). Income actually has less effect on a person’s moments of pleasurable experience than on their response to questions about their overall well-being. Why? The authors cite research suggesting that material goods are not all that strongly related to general well-being. Also, income is seen as relative (as others in a society get richer, people shift their reference point with respect to life satisfaction and income). Finally, research shows that with higher income, people spend more time working and commuting to and from work (often reported as the low points of the day) rather than spending time with family or doing other pleasurable activities. They also report higher levels of stress. So the focusing illusion explains why people in general are not more satisfied if they are richer. If people focus only on income and ignore other factors related to well-being, they feel less satisfied with their lives.

Perception is the process through which people organize and interpret their sensory information (what they hear and see) to give meaning to their world. Perception plays a large role in how people view their work, their coworkers, their boss, and the overall organization they work for. Unlike individual differences, such as personality traits and cross-cultural differences, research shows that perceptions can change. Given the example above, and now that you understand the focusing illusion, will you look at your income differently? In this chapter, other perceptual biases are covered, as well as individual decision making. Group decision making is covered in the chapter on Group Processes and Teams in this textbook. We begin with perception because understanding why people perceive situations differently is essential for a leader to be effective in making decisions. It is important to a leader to remember that perceptions are the reality experienced by followers.

Critical Thinking Questions: How can leaders employ the focusing illusion to improve follower satisfaction with pay and benefits? What aspects of the job can employees focus on besides pay and benefits?

Understanding Why People Don’t See Eye to Eye

Learning Objective 5.1: Illustrate common perceptual biases with examples.

People may see things differently in organizations because they make perceptual errors. Perceptual errors are defined as flaws in perception due to mental shortcuts people make to simplify information that is processed. These errors matter for a number of reasons. First, they affect interpretations of leaders’ and coworkers’ behavior. Second, perceptual errors (or biases) affect how job applicants are seen in interviews. Third, they affect performance appraisals. Thus, leaders need to know about these perceptual biases and guard against them. Examples of important decisions leaders make that may be affected by perceptual errors include hiring the best person for a job and making an ethical choice. This chapter covers perceptual biases that have been most studied in workplace settings and are most relevant to effective leadership. These biases can be remembered with the acronym PRACH for primacy, recency, availability, contrast, and halo.

The Primacy Effect

We have heard the statement “you never get a second chance to make a good first impression.” But do first impressions really matter? There is a significant body of research that suggests they do, and this is the primacy effect or “belief perseverance.”² For example, if a person smells like smoke when met by an interviewer who doesn’t smoke, this impression may last and influence whether they get the job. Once a person has formed an initial impression, they maintain it even when presented with concrete evidence that it is false. Classic experimental research in psychology has demonstrated that this affects problem solving³ and the persistence of stereotypes.⁴ Specifically, order-effects research confirms that information presented early in a sequence affects judgments made later.⁵ This may be due to fatigue or not paying attention. People discount information presented later due to the need to confirm their first impressions. They seek only consistent information and rule out alternatives that conflict with their initial impression.⁶ More recently, experimental research has shown that the primacy effect persists due to belief updating, where initial information affects the conclusion one draws, and this conclusion then impacts later judgments.⁷

How quickly do we form a first impression? It may be much faster than you might think. In experimental research, subjects were shown a photograph of a person’s face for only a tenth of a second.⁸ Based on this flash photo of a face, people gave ratings of the person’s attractiveness, likeability, trustworthiness, competence, and aggressiveness. Moreover, when the exposure time was increased, there was no change in the assessments. The authors concluded increased exposure time only seems to bolster a person’s initial first impressions.

What can be done to address the primacy effect? An experimental study found that accountability influences a person’s vigilance and improves processing of all information presented.⁹ When people are asked to justify their decisions to others, they are more likely to process all of the information available. So a leader should keep this in mind when making important decisions. Imagine that you would have to justify a decision to your boss or in public (you never know—you might end up having to do so). Second, based upon research on belief updating, the leader should be willing to “hit the reset button” and look at a situation as if they had no prior exposure to it. From this review, it seems clear that primacy is important and first impressions do matter.

Critical Thinking Question: If you make a bad first impression in an interview, what would you try to do to change it? Provide examples of the specific behaviors you would engage in.

The Recency Effect

Not only do people remember what they experience first, they also remember the most recently presented items or experiences. This perceptual bias is called the recency effect. For example, if you are given a long list of names to remember, you will probably remember the ones you heard last and forget the ones in the middle. Actually, in terms of free recall on tasks, there is a U-shaped pattern in which the primacy effect results in the first words that are mentioned being remembered, followed by a decline in the middle words presented, then a steep increase, and then leveling off (an S-shaped curve) for the words presented last.¹⁰ For example, after a job interview, it is important to end on a positive note by showing the interviewer appreciation for their time.

The recency effect is pervasive.¹¹ Recency may affect performance appraisals (the manager remembers their direct reports’ most recent behavior rather than behavior in the middle of the evaluation period). In experimental studies involving role-plays of performance appraisal sessions, recency effects were present regardless of whether the appraisal was made at the end of each task or at the end of the entire rating process.¹² However, people can improve their short-term memory by employing control processes that affect how information is stored and retrieved.¹³ So how can a leader guard against the recency effect?

First, rehearsal, or repetition of information, has been shown to improve recall (think about how you might repeat a phone number you hear over and over in your mind several times to remember it until you can write it down). Coding is another technique, in which you link the information you need to remember to something familiar and easily retrievable (e.g., you remember passwords by creating combinations of your pet’s name with other alphanumeric characters and symbols). Another example is mnemonic coding, in which you create acronyms to remember information (such as PRACH to remember these perceptual biases: primacy, recency, availability, contrast, and halo). Another technique to improve recall is called imaging, in which verbal information is linked to visual images. For example, a person would visualize an image that is associated with a word that sounds like the person’s name, so someone named D. J. who is a finance professor could be remembered as Dow Jones. These types of memory techniques have been shown to improve short-term memory of long lists of information significantly.¹⁴ By now, you have probably realized research on recency and memory improvement has implications for how you can improve your study habits and performance on exams!

The Availability Bias

Sometimes, a person’s judgments are based upon what most readily comes into a person’s mind. In the most frequently cited study of the availability bias, subjects were read two lists of names, one presenting 19 famous men and 20 less-famous women, and the other presenting 19 famous women and 20 less-famous men.¹⁵ When asked, subjects reported that there were more men than women in the first list but more women than men in the second list, even though the opposite was true (by a difference of one). Presumably, the famous names were easier to recall than the nonfamous ones, resulting in an overestimate. In fact, subjects were able to recall about 50% more of the famous than of the nonfamous names. Another study conducted by the same researchers found that people tended to overestimate the number of words that began with the letter r but to underestimate the number of words that had r as the third letter.¹⁶ The first letter likely prompts people to remember more words; however, there are actually more words in the English language that have r as the third letter.

Best Practices

Remember Every Name Every Time

According to Benjamin Levy, who has trained thousands of executives to improve their memory, there is nothing as pleasant to another person as hearing their own name spoken. For leaders to really connect with a large constellation of different people, they need to be able to remember their names. Research on perception has indicated there are some tricks you can employ to remember people’s names. Levy suggests the FACE method for remembering names: FACE stands for “Focus, Ask, Comment, and Employ.”¹⁷

Focus: Lock in on the person’s face. Lean forward and turn your head slightly to one side. You should give the other person your ear (literally).

Ask: Inquire about his name (Is it Robert or Bob? What is the origin of your last name?). Ask or clarify that you heard the name correctly. Genuinely pay attention, and show that you really care.

Comment: Say something about the name, and cross-reference it in your head (“My best friend in high school’s name was Bob”). Or relate the name to a famous movie star; for example, if the person’s name is Benjamin, ask if they like to be called “Ben” like Ben Affleck.

Employ: Put the name to use right away: “Great to meet you, Bob!” A great aid to memory is to teach material to someone else. You can introduce the person to another person in the room to further fix the name in your mind. At the end of the conversation, use the name again: “It’s a pleasure to meet you, Ben.”

Once you master the FACE technique, you can learn the NAME technique. NAME stands for “Nominate, Articulate, Morph, and Entwine.”

Nominate: Pick a feature of the person’s face and then nominate it as the feature you will use to link the name to the face. Try to focus on the eyes, nose, lips, ears, chin, or eyebrows.

Articulate: Silently make a note to yourself of what is unique about the feature you have nominated. For example, Ben’s eyes are green.

Morph: Change the name into another word you can remember, but retain an element of the original name. For example, Ben becomes a Lens.

Entwine: You nominated a physical characteristic of a person you just met. Then you articulated a mental description of the person. Third, you morphed the name into a sound-alike word. Try to create as vivid an image as you can. For example, think of Ben wearing large, funny glasses with green lenses (LENS = BEN, a person with GREEN EYES).

These tips are only the basics of how to learn to remember names every time. More detail can be found in his book Remember Every Name, Every Time. Does it work? Benjamin Levy stuns corporate training audiences by remembering the names of 100 to 150 people! With practice, you can learn his techniques to enhance your ability to connect with others—an essential leadership skill.

Discussion Questions

Explain how the primacy effect helps you remember people’s names during the focus phase of the FACE technique.
Practice remembering names by developing memory aids using the NAME technique for the following names: Laura Ray and Kevin Rankin.
Give an example of a situation when you will need to remember people’s names using this technique.

Source: Levy, B. (2002). Remember every name, every time: Corporate America’s memory master reveals his secrets. New York, NY: Fireside Books.

Both the ease and difficulty of recall affects how well people remember information.¹⁸ In addition to information that is readily available, information that is more difficult to recall is more likely forgotten. There is evidence that shows events are judged to be more common when instances more easily come to mind, even when a smaller absolute number of instances are generated. For example, a lot of people have a fear of flying because incidents of plane crashes make headlines and high-profile news reports. However, the probability that one will die in a plane crash is much lower than in a car crash (a chance of 1 in 108 for a car accident compared to 1 in 7,229 for a plane crash based on data reported by the National Safety Council). This is a demonstration of the availability heuristic.

How can a leader guard against making the availability bias mistake? First, they can make the things that are desired for decision making (perhaps at a later date) vivid and very easy to bring to mind (e.g., with repetition and visualization). They can also try to minimize things that influence decisions by making them more difficult to recall by using vague, abstract, complex, or uncomfortable language to describe them. Increasing the number of counterexplanations reduces the persistence of the availability bias.¹⁹^,20 Elaborative interrogation increases the willingness to let go of preconceived notions and learn material that challenges beliefs. Elaborative interrogation requires people to generate their own explanations of factual statements that are presented to them.²¹ For example, a leader can write out a statement challenging their decision and then generate arguments for why this statement is false to check their thinking and perhaps avoid the availability bias effect.

When making important decisions, pause and think why you are making the decision. Is it because of information you see frequently? What is the source of the information? What motivated the person to provide it? It’s important to keep in mind that we rely on what is familiar and most readily available, but taking shortcuts when making important decisions can have serious negative consequences. Another shortcut happens when we make comparisons based upon what has happened just before we make a decision or judgment: the contrast effect. Contrast effects are among the most significant decision biases for a leader to guard against.

Critical Thinking Question: How can elaborative interrogation be used to change perceptions of a follower who does not like to work on a team?

Contrast Effects

Figure 5.1 shows the Ebbinghaus illusion as an example of a perceptual contrast effect. The center circle is exactly the same size in Groups 1 through 3, but it looks larger in Group 1 than in Group 2 because the circles that surround it are small in Group 1 and large in Group 2. Contrast effects also happen in organizational decision making. For example, a leader’s performance evaluation of a person is affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics.

Figure 5.1 The Ebbinghaus Illusion

Experimental research has demonstrated that contrast effects influence performance evaluations. When a leader has followers who are poor performers, they tend to give very high ratings to average-performing subordinates. On the other hand, when all subordinates were high performers, fewer rewards and lower performance ratings were given—even to the most outstanding performers.²²^,23 The contrast effect has been found in real organizational settings as well. The greater the proportion of engineers who had low performance ratings (unsatisfactory), the more likely supervisors were to assign favorable ratings and provide rewards to just average performance engineers.²⁴ Thus, the poor performance of other engineers generated a contrast effect in which a satisfactory performer stood out even though they were not actually stellar. Leaders need to focus on individual performance and avoid comparisons that may result in the contrast effect.

Another potential contrast effect may happen in the interviewing process. An applicant for a position may be rated more favorably if they follow a sequence of poor applicants, although they may not be the best person for the job. Training managers to eliminate biases including the contrast effect results in improved evaluations.²⁵ There is some indication that becoming aware of the contrast effect may help a leader reduce the bias when making hiring decisions and performance appraisals. In addition, using a structured interview process may reduce the contrast effect.²⁶ A structured interview should have the following elements:

Use standard and numerical score sheets.
Use behavioral and situational questions.
Ask the same questions in the same order for each applicant.
Avoid questions that are unrelated to the position you are interviewing for.

Training and the use of structured interviews may also reduce another pervasive decision error that may affect managerial judgments of all types, including performance appraisals and hiring decisions: the halo error effect.

Halo Error

Halo error (or its opposite horns error) occurs when the rater’s overall positive (or negative in the case of horns) impression or evaluation strongly influence ratings of specific attributes.²⁷ For example, wearing a fraternity or sorority pin to an interview may invoke a positive impression if the interviewer is a person who assumes membership in the organization translates to high performance. Research on halo errors in rating can be traced back to early organizational behavior (OB) research,²⁸ and there has been steady interest in its study over time.²⁹^,30 Some researchers consider halo error to be ubiquitous in organizations and perhaps the most serious of rating errors that are made by managers.³¹ A meta-analytic review of research on halo effects in ratings of job performance concluded that halo error “substantially” increased both supervisory and peer ratings of performance.³² Halo error results in an overall positive impression of a follower that clouds evaluation of actual performance because it is assumed that if a follower is good at one aspect of the job, they are good at everything.

Halo effects in OB may occur for many reasons. A manager might form a general impression after having seen a few successful task accomplishments, and subsequent judgments may be heavily influenced by this first impression (i.e., the primacy effect + halo error resulting in a strong influence on perception). Some managers may be too busy and stop paying attention to a follower’s performance. Another manager may strive to make later ratings consistent with earlier ratings to prove they are right. Halo effects may also be compounded by the contrast effect in which a previously rated person interviewed influences the ratings of those interviewed later (halo + contrast). As noted earlier for contrast effects, training and the use of structured interviews may be effective in reducing halo error. Another recent study found that providing feedback to interviewers regarding how their ratings compared with average ratings of others (norms) reduced halo and horn errors (leniency and severity).³³

Critical Thinking Question: What are your perceptions of leaders? Provide an example of a situation where leaders are believed to have the power to make major changes in society.

The evidence reviewed above demonstrates that perceptions play a role in how leaders view their followers’ performance. But do perceptions play a role in how a job applicant is viewed before they are hired? The research described next suggests that how potential employers perceive you influences whether or not you will get the job.

Employability: Self-Fulfilling Prophecies During the Application Process

Learning Objective 5.2: Explain how self-fulfilling prophecies affect job performance.

Recent research on employability suggests the degree to which you are perceived as employable may determine whether or not you are hired for a position. The ability to gain a job in a formal organization is an emerging area in OB research.³⁴ Employability is defined as “an attribution employers make about the probability that job candidates will make positive contributions to their organizations.”³⁵ An important question, then, is what determines employer’s perceptions of whether or not a job applicant has this potential and is employable by their organization. There are three important aspects to an applicant’s profile that affect employers’ perceptions and subsequent attributions about employability, as shown in Figure 5.2. What matters to employers is proposed to be the candidate’s social or interpersonal compatibility, which leads to the perception that the candidate will have positive interactions with others on a daily basis. Next, abilities, expertise, and know-how lead to the perception that the candidate is able to do the job. Finally, ambition, work ethic, and drive lead to the perception that the candidate is willing to work hard. These factors combine to form the employer’s attribution of employability and therefore relates to whether or not the applicant gets a job offer. Once hired, perceptions of employability explain who gets mentored and subsequently experiences career success and a higher number of promotions.³⁶

Figure 5.2 Determinants of Employability

Source: Hogan, R., Chamorro-Premuzic, T., & Kaiser, R. B. (2013). Employability and career success: Bridging the gap between theory and reality. Industrial and Organizational Psychology, 6(1), 3–16.

Research examined individual differences believed to be related to employability, such as openness to change at work and optimism. The next question you may be wondering is “How do I know if I am employable as perceived by employers?”³⁷ To see your ratings on the dimensions of employability, complete Self-Assessment 5.1 at the end of this chapter. While research on employability is relatively new, it is a very important concept that offers practical advice for students preparing for their job search. Applicants for positions need to pay attention to how they present their qualifications so employers make the attribution that they are employable and will become a significant contributor to the organization’s success.

Critical Thinking Questions: How can you use the knowledge of employability to improve your chances of getting hired? What dimensions of employability will you focus on?

Individual Decision Making

Learning Objective 5.3: Provide two examples of how decision making affects organizational performance.

Business leaders make decisions every day, but are there some decisions that have a defining impact on the future of an organization? This question is addressed in the book The Greatest Business Decisions of All Time.³⁸ Based on the author’s analysis, the greatest business decisions follow:

Henry Ford’s decision to double the salaries of Ford’s workforce to attract top talent and increase income so that people could afford his cars
The Apple board’s decision to bring back Steve Jobs after he had been fired 10 years earlier, leading to innovations that have created the most valuable brand in the world
Sam Walton’s decision to hold Saturday morning all-employee meetings for Walmart to create a culture of information sharing and rapid decision making, creating one of the largest retailers in the world
Samsung’s decision to create a sabbatical program that allows their top performers to travel all over the world, which continues to be one of the secrets to their global brand success
Jack Welch’s decision to create Crotonville, a training and development center that produced hundreds of great leaders who practice the “GE Way”

From these examples, it’s clear that making the right decisions plays a large role in leader effectiveness. The next sections cover both classic and contemporary research on decision making that every leader must know to make the right decisions—at the right time.

Critical Thinking Question: What is it about each of these decisions that caused them to be listed as the most important business decisions? Propose a recent business decision that is a candidate for this list.

Decision Processes and Organizational Performance

The greatest business decisions discussed previously suggest that decision making affects firm performance. For example, decision rationality is related to the success of strategic decisions ranging from restructuring to the introduction of new products or processes. Managers who collect information and use analytical techniques make decisions that are more effective and profitable. However, political behavior on the part of managers is negatively related to decision effectiveness. The use of power or hidden agendas hinders sound decisions. The bottom line is that good information and analysis are more important than politics for effective decision making.³⁹

Decision making is central in Mintzberg’s classic analysis of the nature of managerial work.⁴⁰ He found that managers have four decisional roles, including entrepreneur (looking for new ideas and opportunities), disturbance handler (resolving conflicts and choosing strategic alternatives), resource allocator (deciding how to prioritize the direction of resources), and negotiator (protecting the interests of the business by interacting within teams, departments, and the organization). Decision making is a fundamental part of a leader’s job, and followers expect leaders to make the right decisions.⁴¹ As a manager, you will likely be promoted on the basis of your track record for making decisions that positively impact the organization (enhancing profitability, for example).

Why Some People Can’t Make Decisions

Indecisiveness is when a person cannot prioritize activities in order of importance. The book Why Quitters Win reports that effective leaders weigh both sides of an issue, decide quickly, and then work to gain support from those on both sides for effective execution.⁴² The author, Nick Tasler, believes that it is possible to improve decisiveness through training by encouraging decisive action. People need a clearly defined starting and ending point so that they feel empowered to move forward. Also, providing incentives for decision making may boost the speed of decisions made by leaders. Tasler cites the case of the CEO of Agilent Technologies who created a “speed to opportunity” metric in which leaders in the organization are regularly rated by their followers on decisiveness. This approach makes leaders aware that decisions are valued by the organization.

Why are some people more indecisive than others? Personality traits play a role. Less emotionally stable leaders who fear upsetting others allow debates to drag on for too long and make compromise decisions that are not optimal.⁴³ Feeling out of control and pessimism also lead to indecisiveness. Low self-esteem predicts indecisiveness, as well as attributing events to external causes and irrational beliefs.⁴⁴ Indecisiveness may also affect students faced with the decision of which job offer to take. Career indecision “refers to the difficulties preventing individuals from making a career decision.”⁴⁵ Career indecision is related to personality characteristics of neuroticism and agreeableness but lower extroversion and openness to experience (the Big Five personality theory is discussed in Chapter 2). Also, students’ tendencies toward perfectionism are related to career indecision.

Constraints on Individual Decision Making

Indecisiveness may also be due to the complex nature of situations leaders face in today’s rapidly changing environment. Three situational factors may hinder decision making: lack of information, unclear or conflicting goals, and the uncertainty of outcomes.⁴⁶ There may be constraints on decisions due to time, rewards, and regulations. Also, stakeholders within and outside of the organization are invested in a leader’s decisions. These stakeholders may have conflicting interests that must be balanced. Decision making is arguably at the core of leadership, but it is not always easy. Leaders must often make decisions under pressure and with incomplete information.

Employees as well as leaders may suffer from indecisiveness, which may be a source of frustration for a leader. Some employees are able to support their decisions with facts and evidence. However, others rely on historical precedents or personal experiences. In addition, employees are confronted by an overload of information that is nearly impossible to sort through and often under time constraints. The results are often poorly researched and supported decisions that waste company resources and possibly risk the effectiveness of the organization.

The Rational Decision-Making Model

Learning Objective 5.4: Explain the rational decision-making model and bounded rationality.

One prevalent model of decision making presents a series of logical steps decision makers follow to determine the optimal choice.⁴⁷^,48 For example, optimization involves maximizing value and/or minimizing cost. The six-step process for rational decision making is shown in Figure 5.3.⁴⁹ In this model, the problem (or opportunity) is defined, and then information is gathered and analyzed. Based on this information, a broad set of alternatives or possible courses of action are identified. Next, these alternatives are analyzed in terms of the feasibility, costs, and benefits. A decision is based upon the analysis of the alternative courses of action (i.e., the decision with the lowest costs and greatest benefit). The final step is to develop a specific set of action steps for the implementation of the decision. This model includes a number of assumptions. Decision makers must have complete information, be able to develop an exhaustive list of alternatives, weight them, and then choose a decision with the highest value and/or lowest cost to the organization. As you may have noticed, this rational model is often emphasized in business schools through the case study method to learn the decision-making process.

Figure 5.3 The Rational Decision-Making Process

Limitations of the Rational Model

Managers sometimes fail to identify the problem correctly at the start of the decision-making process.⁵⁰ Also, some only consider a few alternatives rather than a broad set of possible options. They may only consider the most obvious alternatives and not brainstorm creative solutions (creative problem solving is discussed later in this chapter). Managers sometimes suboptimize rather than choose an optimal alternative resulting in lose-lose decisions.⁵¹^,52 Finally, decisions are sometimes made without complete information due to the lack of availability of information relevant to the problem or time pressure. For example, a recent study found that entrepreneurs were unable to accurately assess the quality of potential venture capital partners in an information-sparse environment.⁵³ Decision makers have limits on their ability to assimilate large amounts of information, and this is known as bounded rationality.

Critical Thinking Question: In your opinion, do leaders follow the rational decision-making model in practice? Give an example of when the process is followed and an example when it is not followed. Compare and contrast the outcomes of these decisions.

Bounded Rationality

Human beings have a limited capacity to process large amounts of information in the context of decision making to make optimal decisions. In many instances, people satisfice—in other words, they make a decision that is satisfactory but perhaps not optimal. Decision makers operate within bounded rationality rather than perfect rationality.⁵⁴ What this means is that decision makers simplify complex problems to limit the amount of information processing needed. Within the boundaries of this simplified model, they behave rationally.⁵⁵ In addition to limiting the information analyzed, they also limit the number of alternatives considered. They accept the first acceptable alternative they encounter rather than continue their information search, analysis, and alternative generation until they find an optimal one.

Decision making is susceptible to the perceptual errors discussed in the first part of this chapter: Primacy, recency, availability, contrast, and halo errors may all affect how information is presented to decision makers and processed.⁵⁶ In sum, bounded rationality in decision making is the result of organizational factors (e.g., political behavior around a decision), individual limits on the ability to process information (e.g., limiting the information search), and perceptions (e.g., perceptual errors related to the limited availability of information to make a decision).

Bounded rationality is also the result of two guesses the decision maker must address: (1) a guess about uncertain future consequences and (2) a guess about uncertain future preferences.⁵⁷ In other words, the decision maker at the time of the decision can’t know the future, nor can they know what they would like to see happen in the future. So the decision-making process may be influenced by other organizational processes such as the situation, interpersonal gaming, and the need to justify prior decisions. This perspective highlights the importance of uncertainty and risk to the decision-making process. The next section explains prospect theory, which is one of the most important frameworks for decision making under risk and uncertainty.

Prospect Theory

Learning Objective 5.5: Demonstrate understanding of prospect theory and the impact of framing on decisions with an example.

Daniel Kahneman won the Nobel Prize in Economics in 2002, in part for his work with Amos Tversky on the prospect theory of decision making. Their work focused on the risk perceptions in decisions people make. The authors conducted studies in which subjects were asked to make decisions when given two monetary options that involved prospective losses and gains. Consider the following options used in their studies:⁵⁸

You have $1,000, and you must pick one of the following choices:

Choice A: You have a 50% chance of gaining $1,000 and a 50% chance of gaining $0.

Choice B: You have a 100% chance of gaining $500.

You have $2,000, and you must pick one of the following choices:

Choice A: You have a 50% chance of losing $1,000 and a 50% chance of losing $0.

Choice B: You have a 100% chance of losing $500.

Choosing B indicates that the person is more risk averse than someone choosing A. If you chose B for question 1 and A for question 2, you are like the majority of people who are presented with these decision scenarios. If people made decisions according to rational decision-making norms, they would pick either A or B in both situations (i.e., they should be indifferent because the expected value of both outcomes is the same). However, the results of this study showed that an overwhelming majority of people chose B for question 1 and A for question 2. Why? People are willing to settle for a reasonable gain (even if they have a reasonable chance of earning more) but are willing to engage in risk-seeking behaviors where they can limit their losses. In other words, losses weigh more heavily emotionally in decision making than an equivalent gain.

The Importance of How Decisions Are Framed

Prospect theory explains why decisions are sometimes irrational. People put more emphasis on gains rather than losses; they make decisions that increase their gains and avoid loss. According to the theory, people treat the two types of risk (gain versus loss) in a completely different way to maximize their perceived outcome. However, this may result in irrational decisions that are not based on a correct calculation of expected utility.

Framing refers to whether questions are presented as gains or losses. Leaders must pay attention to how decisions are framed when they are presented. As the examples of monetary choices under losses and gains illustrated, decisions may be affected by how options are presented (people are more risk averse when decisions are framed in terms of loss). Table 5.1 shows real-world examples to illustrate the role of framing in decision making and highlights the importance of considering both the probability of an outcome and the associated gain or loss from the decision. For example, in scenario A, as a manager you might take a risk on an idea that is outside of the box. There is a low probability that it would pan out, but the gains would be huge. In scenario B, a business owner sells off a business that is doing well to avoid potential losses from new entrants into the market. For scenario C, there is a high probability of gain, so a business in expansion mode sells delayed invoices to a financial institution for 70% to 80% of their value just to get cash needed to grow the business. In scenario D, there is a high probability of loss, so an entrepreneur in a failing business ignores advice to divest the business and increases efforts to succeed. So it is important for managers to recognize risk as a part of business decision making that is essential for innovation. Järrehult states the following:

Doing what is rational is usually good, but if we only would be rational, we would miss out on many of the “Black Swans.” The trick is to strike the appropriate balance between the few expensive rational decisions we need to take and the inexpensive, but plentiful, irrational decisions that we take more on a gut feeling.⁵⁹

Note: A “black swan” is a highly consequential but unlikely event that is easily explainable, but only in retrospect.⁶⁰

Source: Järrehult, B. (n.d.). The importance of stupid, irrational decisions. Retrieved from www.innovationmanagement.se/2013/09/06/the-importance-of-stupid-irrational-decisions

It is important to consider how information regarding risk and uncertainty is presented. Decision makers expect uncertainty and can effectively use information on uncertainty to make better decisions. In one study, college students made daily decisions about whether or not to order roads to be salted to prevent ice on roads during several winter months. Decisions were based on actual archived forecasts of the nighttime low temperature. In one condition, participants used the nighttime low temperature alone (i.e., the conventional deterministic forecast). In the other condition, students were also provided with the probability of freezing. Participants were given a budget of $30,000. The salt treatment cost $1,000 per application, but if they didn’t decide to salt the roads and the temperature dropped below freezing, they were penalized $6,000. Participants were informed of the outcome each day (the temperature). At the end of the experiment, participants were paid based upon their remaining budget (about $10), so they had an incentive to make good decisions. Results of these experiments indicated that people can make good use of probability information in making decisions if they are provided with it during the decision process and if it is presented in a way that they can use. The authors concluded: “Our view is that not only do people need explicit uncertainty information to make better, more individualized decisions, but also they can understand it as long as some care is taken in how it is presented.”⁶¹

Critical Thinking Questions: How can you use knowledge of prospect theory to improve your chances of getting a good deal during a negotiation? What role do you think framing of options as gains or losses plays in negotiations?

The book Thinking Fast and Slow examines two modes of thinking that psychology has labeled System 1 and System 2 Thinking.⁶² System 1 Thinking represents automatic and effortless decision making that is often involuntary. System 2 Thinking is complex thinking that demands mental effort, including complex calculations. System 2 Thinking is what is most often taught in business schools to prepare students to be effective decision makers. Yet System 1 Thinking represents intuition, which has received research attention as well as a great deal of interest in the popular press.

Intuition

Learning Objective 5.6: Describe the role of intuition in decision making.

Blink: The Power of Thinking Without Thinking popularized the idea that intuition may play an important role in decision making.⁶³ Author Malcolm Gladwell noted that people learn by their experiences; they may not know why they know things, but they are certain they know them. He acknowledges the influences of the unconscious mind on decisions and put forth the premise that there can be value in a decision made in the “blink of an eye” rather than months of analysis. Gladwell introduced the idea of “thin-slicing” in which the unconscious mind finds patterns in situations and behaviors based upon very narrow experiences. However, he cautioned there may be errors made when thin-slicing is used to make decisions. Such quick decisions may be affected by perceptual errors discussed in this chapter or by stereotypes about people, and leaders need to be aware of these biases.

Intuition has been described as follows: “The essence of intuition or intuitive responses is that they are reached with little apparent effort, and typically without conscious awareness. They involve little or no conscious deliberation.”⁶⁴ Four characteristics comprise intuition: “a (1) nonconscious process (2) involving holistic associations (3) that are produced rapidly which (4) result in affectively charged judgments.”⁶⁵ Intuition may be a potential means of helping managers make both fast and accurate decisions. While research on such unconscious thought processes is new, available evidence supports the idea that intuitive processes should be considered part of a leader’s decision making.

Intuition is not the same thing as common sense. Intuition is perception without conscious thinking and can seem like common sense. However, intuition varies greatly from basic gut feelings to complicated judgments like a physician’s quick diagnosis. According to Simon, “intuition and judgment—at least good judgment—are simply analyses frozen into habit and into the capacity for rapid response through recognition.”⁶⁶ In other words, intuition is the unconscious operation in the brain formed by freezing sensing and judgment. By contrast, common sense is not typically repetitive; it is a more simplified thought process. Another major difference is intuition is individual and common sense is often social (i.e., what the majority of people think as a consensus).⁶⁷

Benefits of Intuition

Leaders often rely on their gut feelings or instincts in making important decisions, particularly related to innovation.⁶⁸ In-depth interviews with 60 professionals across a variety of industries and occupations revealed the role that intuition plays in decision making.⁶⁹ Professionals often rely on their intuition and report the following benefits:⁷⁰

Expedited decision making—quicker decisions that get the job done; adapting to a changing environment.
Improvement of the decision in some way—provides a check and balance; allows for fairness; avoids having to rework the decision; causes one to pay more attention.
Facilitation of personal development—gives one more power; develops instincts; helps to apply one’s experiences; allows for positive risk taking.
Promotion of decisions compatible with company culture—helps make decisions in accord with the organization’s values.

Intuition in decision making has a bad reputation, but most managers acknowledge that it plays a role in their decisions. It may be risky to apply intuition to certain types of organizational problems, because they are complex and changing decision scenarios that leaders are facing with more frequency. Such problems have been termed wicked organizational problems.

Critical Thinking Questions: What are the risks of relying on intuition to make decisions? What can a leader do to address these risks and gain the benefits from intuition?

Wicked Organizational Problems

It is important for managers to know when to “think” (i.e., rely on analysis), “blink” (i.e., rely on intuition), or “smink” (employ heuristics and algorithms). An example of a heuristic is the way credit scores are computed and used to determine interest rates. An important consideration is the complexity of the task. For example, if the task is simple, rely on analysis. Such problems have learning environments that are “kind” in that they can be structured so analysis or heuristics can be applied. Other problems are “wicked” because they are complex, dynamic, and constrained, so there are limits to whether analysis or heuristics can be applied. Also, stakeholders disagree on the preferred solution. Wicked organizational problems have the following characteristics:⁷¹

There are no clear boundaries, many actors, and high connections to other problems.
They require holistic strategies—piecemeal solutions do not work.
They have nonlinear cause-effect relationships that are difficult to determine.
They lack finality of resolution.
Patterns continually emerge, so predictability is impossible.
They lack ultimately “right” answers; situational factors mean every solution is temporary.

The complexity of wicked organizational problems increases the likelihood that leaders will fall into decision traps if they are not careful. The next sections review common decision errors leaders make when they are faced with wicked organizational problems. Leaders need to be aware of these traps and know how to avoid them.

Critical Thinking Question: Give an example of a wicked organizational problem (one that is complex, dynamic, and constrained with most of the characteristics listed above).

Decision Traps

Learning Objective 5.7: List and explain three major decision traps and how to avoid them: hindsight, hubris, and escalation of commitment.

Hindsight Bias

Hindsight bias, also commonly referred to as the I-knew-it-all-along effect,⁷² is well established and has been shown to have far-reaching effects. Hindsight bias is defined as “the tendency for individuals with outcome knowledge (hindsight) to claim they would have estimated a probability of occurrence for the reported outcome that is higher than they would have estimated in foresight (without the outcome information).”⁷³ Four processes underlie this belief. First, the person recalls the old event and responds consistently with the memory of it. Second, the person focuses on the outcome and adjusts their belief, pretending that they didn’t know the outcome. Third, the belief is reconstructed based upon what the judgment would have been prior to the outcome. Research shows people do this by first sampling evidence related to the judgment from their long-term memories and the external world. Once an outcome is known, people seek out and retain evidence that fits the outcome rather than evidence that contradicts it. The fourth process is based upon a person’s motivation to present themselves favorably to others. People want to be seen as accurate, and they claim when something happens that they “knew it all along.” A meta-analysis of 90 studies of hindsight bias showed moderate support for the effect.⁷⁴

Hindsight bias is a process that may influence how outcomes of decisions are interpreted after the fact and lead to poor decision making since a leader may ignore important information in the present and then reconstruct the past as if they had the knowledge. Thus, a leader’s ability to learn from past mistakes is compromised by hindsight bias. This may be compounded if the leader is also overconfident in their decision-making ability, and this is another decision trap.

Overconfidence

British Petroleum (BP) executives were confident that there were no serious risks with their Deepwater Horizon oil well in the Gulf of Mexico. They repeatedly assured government regulators that an accident was almost impossible. Several months later, one of their oil rigs exploded. Eleven people were killed and 17 were injured. The leak spread to over a mile, resulting in one of the worst disasters in recent history, with damage to the natural environment and the wildlife that relies on the Gulf for survival (over 8,000 animals were reported dead 6 months after the spill). Top decision makers had engaged in a long-standing practice of inattention to safety precautions. Investigations reveal that this accident could have been prevented with more attention to mitigation and preparation for oil spills of this nature.⁷⁵ How could decision makers fail to accurately assess the risks involved with operating these oil rigs? One reason for the Deepwater Horizon oil rig explosion has been attributed to overconfidence bias (sometimes referred to as hubris).⁷⁶ Overconfidence bias is an inflated confidence in how accurate a person’s knowledge or estimates are.⁷⁷

As we have seen with the rational decision-making model and bounded rationality, the ability to estimate probable outcomes is critical to a leader’s ability to make sound decisions in organizations. For example, accurate forecasting is significantly related to a leader’s ability to create an effective vision for their organization.⁷⁸ However, leaders with more power are more likely to exhibit the overconfidence bias.⁷⁹ Those higher in the organizational hierarchy feel more empowered and overestimate their ability to accurately forecast the future. Hiring experts to assist with making decisions may not be the answer either, because experts sometimes fail to make accurate predictions.⁸⁰ In one study, experts in information technology (IT) were as likely to make errors due to overconfidence as novices (people with little expertise in IT).⁸¹

How can leaders avoid the overconfidence bias? Leaders may keep the overconfidence bias in check by assigning a trusted follower to critique the decisions (i.e., play the devil’s advocate role), by being open to different opinions, and by placing limits on their power by having someone else approve decisions (a peer, for example). Reminding oneself of past decision-making errors might be an effective way to keep the power effect on overconfidence in check.⁸²

Overconfidence can result in poor decision making and can even result in serious disasters, as in the BP oil spill case. It is estimated that the oil spill cost BP over $100 billion, and Tony Hayward, the CEO, was moved to a role in the company with much less power. A recent analysis of four studies found that overconfidence significantly predicts another decision trap that is called the escalation of commitment.⁸³

Escalation of Commitment

Escalation of commitment occurs when individuals continue a failing course of action after receiving feedback that shows it isn’t working. In effect, they try to turn the situation around by investing more after a setback.⁸⁴ People continue to invest in failing courses of action to recoup their losses to show they had made the right decision all along. One experiment found that decision makers continued to invest in research and development (R&D) of a failing company when they had personal responsibility for the negative outcomes.⁸⁵ This occurs because of self-justification, or the need to demonstrate that one’s actions are rational. In addition to self-justification, escalation may be caused by risk perceptions (prospect theory), group decision-making dysfunctions, and an organization’s tendency to avoid change.⁸⁶ This is sometimes called the sunk costs fallacy because the continued commitment is because a person has already invested in this course of action and does not recognize what they invested initially is sunk (or gone). Lunenburg provides the following example:

Denver’s International Airport set out to add a state-of-the-art automated baggage handling system to its airport construction. The project was never completed, which caused a delay in the opening of the airport by nearly two years and $2 billion over budget.⁸⁷

Figure 5.4 shows the reasons why leaders may engage in escalation of commitment. Instead of viewing the money already spent as sunk costs, decision makers focus on how much they have already spent.⁸⁸ Also, leaders want a sense of completion; they have the need to finish what they have started, and this may also contribute to escalation.⁸⁹ Leaders may also let their ego get in the way, and the feeling of pride in their own decision-making ability (or the need to avoid “losing face”) may lead to increased investment in poor decisions. Finally, being unsure of oneself may increase the need to “prove” to others they were right.

Figure 5.4 Reasons for the Escalation of Commitment Effect

Source: Adapted from Staw, B. M. (1981). The escalation of commitment to a course of action. Academy of Management Review, 6(4), 577–587.

There are other examples of poor decisions due to escalation. Venture capitalists sometimes continue to invest in start-up companies even after results indicate the ideas are not panning out in the marketplace.⁹⁰ Supervisors of clerical workers in a large public-sector organization provided positively biased performance evaluations for the workers they originally supported hiring or promoting.⁹¹ Senior bank managers escalated commitment to loans they initiated by retaining them even after the loans were not being paid on time.⁹² Finally, a study of Wall Street analysts found that radical stock picks were followed with more extreme earnings projections after a company’s yearly earnings reports showed their initial forecasts were wrong.⁹³ These examples illustrate that escalation, or “throwing good money after bad,” is a serious decision trap leaders may fall into because they want to avoid regret.⁹⁴ What can a leader do to avoid escalation?

The following four antidotes to escalation have been proposed:⁹⁵

Separate the initial decision maker from the decision evaluator. In other words, remove the ego of the decision maker from the evaluation of it.
Create accountability for decision processes only, not outcomes. Ask employees to explain or justify their decision processes (i.e., how they made the decision in the first place).
Shift attention away from the self. Make a balanced assessment by considering the impact of the decision on other people.
Be careful about compliments. Try not to inflate the decision maker’s ego. Research has shown positive feedback increases the risk of becoming overconfident about one’s decisions.

Critical Thinking Question: Why do you think leaders suffer from overconfidence and escalation of commitment? List some personality traits that may contribute to escalation of commitment.

Creative Problem Solving

Learning Objective 5.8: Discuss the elements in Amabile’s three-component model of creativity.

Albert Einstein wrote the following famous quote on creativity:

Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.

Albert Szent-Gyorgyi, the Hungarian chemist who won the Nobel Prize for Medicine in 1937, defined creativity as follows: “Discovery consists of seeing what everybody has seen and thinking what nobody has thought.” A contemporary definition of creativity is “the tendency to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.”⁹⁶ In the organizational context, applied creativity is a process “occurring in a real-world, industrial, organizational, or social context; pertaining to the finding or solving of complex problems; and having an actual behavioral creative product (or plan) as the final result.”⁹⁷ There is a growing consensus that creativity can be defined as “production of a novel and appropriate response, product, or solution to an open-ended task.”⁹⁸ Given the challenges of organizational change and the need to remain competitive, leaders desire more creative problem solving in all aspects of the work followers perform.⁹⁹ You have the opportunity to test your creative problem-solving skills and assess your creativity in Self-Assessment 5.2 at the end of this chapter.

Certain personality traits are related to creativity—particularly openness to experience.¹⁰⁰ Also, intelligence (general mental ability, known as “g”) relates to creativity. In a meta-analysis, creativity was compared for both academic and work performance. Ratings of creativity were a faculty member’s or work supervisor’s evaluation of a person’s creativity or potential for creative work. The implications of this study are that selecting students or workers on the basis of their intelligence may also result in scholars and employees who are creative and have high potential.¹⁰¹

Critical Thinking Questions: Do you believe that creativity is an inborn trait that only a few people have? If so, why? If not, how would you encourage creativity in your followers?

Going With the “Flow”

Creative experiences are linked to emotional states called flow—when a person experiences a challenging opportunity aligned with their skills.¹⁰² In other words, when both challenges and skills are high, a person may learn more during the experience. A study of 78 individuals’ flow states during both work and leisure found most flow experiences are reported when working, not during people’s leisure time.¹⁰³ Moreover, a recent study found that employees that were more motivated during flow reported more work engagement.¹⁰⁴ Csikszentmihalyi believes that creativity results from the interaction of a supportive culture for innovation.¹⁰⁵ For example, an employee brings a novel idea for product packaging to their work and a group of marketing experts validates the idea as a worthwhile innovation.

Despite some evidence that personality traits and intelligence relate to creativity, many experts believe most people can learn to be more creative with training.¹⁰⁶^,107 There are a number of misconceptions about creativity in the book The Myths of Creativity: The Truth About How Innovative Companies and People Generate Ideas, which challenges commonly held “myths” about creative people and innovation processes.¹⁰⁸ This book addresses common misunderstandings about how innovative organizations actually encourage creativity. For example, rather than the lone genius working alone in a laboratory all night, creative ideas are more likely to come from teams that work on problems—especially teams that have a leader who provides a supportive climate for innovation to flourish.

Three-Component Model of Creativity

One of the most important models of creativity in organizations is the three-component model of creativity developed by Teresa Amabile from Harvard University.¹⁰⁹ As shown in Figure 5.5, creativity is a function of three intersecting components: expertise, creative thinking skills, and motivation. Expertise refers to knowledge (technical, processes, and academic). Creative thinking skills are how adaptable and imaginative individuals in the organization are. Finally, motivation refers to the intrinsic form of motivation—the urgent need to solve the problem faced and not the monetary rewards expected. Given that the person has the expertise related to the problem, their creative thinking skills can be enhanced through training. In addition, leaders can create the right processes and workplace climates to enhance creativity. For example, leaders can give followers challenging problems to work on and allow them the freedom to innovate (see the boxed insert for a summary of research on leading creativity). Support from the organization also matters—for creativity to thrive, people need resources, a positive work group climate, and encouragement.

Figure 5.5 Three Component Model of Creativity

Source: Amabile, T. M. (1998, September-October). How to kill creativity. Harvard Business Review, 77–87.

Leadership Implications: Making Ethical Decisions

As we have shown throughout this chapter, perceptions can be flawed and they can impact the quality of a leader’s decisions. Decision shortcuts are convenient, but they result in perceptual errors that guide leaders in the wrong direction. Perceptual biases may lead to unethical decisions, and leaders need to be on guard against them.¹¹⁰ This chapter reviews perceptual errors and decision theory and provides tools that have proven to improve the quality and effectiveness of decision making. Also, the traps that leaders may fall into have been identified, including hindsight, overconfidence, and escalation of commitment. Leaders need to carefully plan their decision process and follow the rational decision-making model presented in this chapter as closely as possible.

Research in Action

Leading Creativity

Creativity expert Min Basadur states:

The most effective leaders of the 21st century will help individuals and teams to coordinate and integrate their differing styles to drive change through a process of applied creativity that includes continuously discovering and defining new problems, solving those problems, and implementing the new solutions.¹¹¹

He has conducted numerous field experiments over many years and demonstrated that training in creative problem-solving skills, attitudes, and behaviors improves creative performance.¹¹²^,113 Leaders can create the right conditions for creativity to occur in organizational settings.¹¹⁴

Basadur’s model of leading people to think creatively in organizations involves three creative activities: problem finding (which has two separate phases), problem solving, and solution implementation. He pointed out the first step is to use creative problem-solving skills to articulate the problem correctly. Next, engage in problem solving, and creativity must also apply to the implementation of solutions. The problem-finding phase is split into two phases: problem generating (creating new possibilities) and problem conceptualizing (defining the problem). Next, alternative solutions to the problem are generated in the optimizing phase. Basadur also suggests that creative problem-solving attitudes, skills, and behaviors must be applied during implementation to generate options for how the solution will be implemented and for how the needed support in the organization will be obtained. Basadur’s four-phase model is shown in Figure 5.6. This is a comprehensive model of problem solving and how leaders can influence all four steps of the process by modeling the desired behaviors and providing necessary support and encouragement to followers.

Figure 5.6 The Creative Leadership Model

Source: Basadur, M. S. (1995). The power of innovation: How to make innovation a way of life and put creative solutions to work. Pitman Professional Publishing, available at www.basadur.com

Discussion Questions

What phase of the creative leadership model do you think is the most important and why?
Why do you think it is important to separate idea generation and conceptualizing from optimizing? Why is it necessary to create options in the implementation phase also?
Explain how the creative leadership process cycles from the implementing stage (Stage IV) back to the generating stage (Stage I) by providing an example.

Guidelines for effective planning include referencing your moral compass. Three fundamental ethical philosophies guide ethical decisions in organizations.¹¹⁵ First, utilitarianism is the consideration of decisions that do the most good for the most people. A person who believes that the “ends justify the means” is advocating the utilitarian approach. When using this approach, the decision maker tries to maximize the satisfaction of the most people. Second, individual rights protect individuals, such as the right to appeal a decision that affects them. These rights include such things as the right of free consent, the right to privacy, the right to freedom of conscience (i.e., not having to do something that violates their moral standards), the right of free speech, and the right to due process. For example, allowing employees to have a voice in decisions that affect them is a decision process that reflects individual rights. Third, justice emphasizes social justice. In following this approach, decision makers are guided by equity, fairness, and impartiality. For example, rewards should be distributed fairly by compensating individuals based on their efforts and not on arbitrary factors. In addition to these three philosophies, the ethics of care focuses on the need to maintain relationships with others, and connections to others guide decisions.¹¹⁶ For example, in following the ethics of care, a decision maker considers the damage that might be done to a relationship if a decision is made that they feel is unfair. Most individuals follow one of these philosophies in making decisions; however, the utilitarian approach is the most common among business leaders.¹¹⁷ Despite the best of intentions, however, leaders do succumb to external forces such as economic conditions, scarce resources, and competition, and make decisions that are unethical.¹¹⁸ Recent research has shown that excessively focusing on the desired outcome (i.e., career advancement and monetary gain) results in selfish and unethical behavior.¹¹⁹

Some unethical decisions may be unintended. Leaders may have bounded ethicality: an unconscious psychological process that hinders the quality of decision making. In other words, ethicality is limited in ways that are not visible. Similar to bounded rationality discussed earlier in this chapter, bounded ethicality refers to systematic and predictable ethical errors due to the limited capacity to process information.¹²⁰ For example, a leader may not be able to articulate the ethical challenge in a decision to rate followers’ performance lower because there is a limited salary pool. Research has shown that people may even lie to get more money while feeling honest about it.¹²¹ Under conditions of bounded ethicality, people make unethical decisions that they are unaware of and then engage in self-justification to explain their behavior. Leaders may lack awareness of ethical violations (bounded awareness), and they need to develop systems that uncover violations in their organization.¹²²

Guidelines for creating awareness and encouraging ethical decisions follow:¹²³

Talk “ethics”—make it a part of your workplace culture.
Publish your guiding principles.
Select, train, and retain employees who behave ethically.
Make ethical behavior part of business and performance reviews.
Work on increasing moral sensitivity from as many different perspectives as possible.
Attach consequences to desired behavior and measure its occurrence.
Assure that structure and resources exist to monitor and enforce commitment to an ethical climate.
Invite external review by an ethics audit team.
Establish a set of criteria to evaluate your own actions and share those with others.
Encourage, model, and help others establish a method to discuss actions and increase alertness to the ethical issues in everyday decisions.

Following these guidelines should increase awareness of ethics in your organization and help avoid decision traps leading to compromised ethics. Another theme of this chapter is leading creativity. The ability to avoid decision traps and bounded ethicality often requires keeping one’s mind open and being able to view problems from a variety of perspectives. Thus, the ability to think creatively may help avoid making decision errors and avoid unethical decisions due to bounded ethicality. A leader must be willing to hear the truth—no matter how difficult it may be. Ethical leadership has emerged as a research area of great interest in the past decade. The next chapter (Chapter 6) discusses leadership theories, and you will learn that several of them have a moral component.

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Key Terms

availability bias, 98
belief updating, 97
bounded ethicality, 116
bounded rationality, 105
career indecision, 104
coding, 98
contrast effect, 100
creativity, 112
disturbance handler, 103
elaborative interrogation, 100
employability, 102
entrepreneur, 103
escalation of commitment, 110
ethics of care, 115
flow, 112
framing, 106
halo error, 101
heuristic, 109
hindsight bias, or I-knew-it-all-along effect, 109
horns error, 101
imaging, 98
individual rights, 115
justice, 115
negotiator, 103
overconfidence bias, 110
perception, 96
perceptual errors, 97
primacy effect, 97
prospect theory, 105
recency effect, 98
rehearsal, 98
resource allocator, 103
satisfice, 105
solution implementation, 115
stereotypes, 97
sunk costs fallacy, 111
utilitarianism, 115
wicked organizational problems, 109

TOOLKIT ACTIVITY 5.1: The Oil Drilling Partnership

Part 1

Your company has acquired a good-sized lease position within a well-known North American basin. The position was acquired at a cost of $235,000. The company has recently drilled a 50 bopd (barrels of oil per day) discovery well on the lease. The acreage position is such that a minimum of five more wells can be drilled. The drilling partnership provides a $1 million budget for the five subsequent wells. The budgeted cost per well is $400,000 ($200,000 drilling cost; $200,000 completion cost). You have been given the final authority to authorize all expenditures on this project. The discovery well has proven out both your original exploration approach and associated geophysical data. However, the confirmation well was a $200,000 dry hole. Your total cost for this nonproducing well is, thus, $200,000 (because you do not incur the completion costs).

Part 2

Assume that you decided to drill the second well and it turned out to be another $200,000 dry hole. Your total expenditure for the two dry holes has been $400,000.

Discussion Questions

Did you consider the total amount of your expenditures when you made your decision on the next well to be drilled? Why or why not?
Assume that you decided to drill the third and fourth holes and they also turned out to be dry. Your total expenditures are now $800,000. Will you authorize the fifth hole (on the same scale of 1 to 100 as above)? What are the chances that the fifth hole will produce 50 or more bopd (on the same scale of 1 to 100 as above)?
How does the concept of escalation of commitment explain your decision process? Circle all that apply.

Money already spent Need to finish what is started

Pride issues Self-interest

Being unsure Losing face

How enthusiastic were you about the prospects of producing an acceptable return on investment? Did you continue to drill even though you thought the chances of the third and fourth holes would not produce a good investment (i.e., 50 or more bopd)? Or, if you stopped authorizing the investment, when and why did you stop? What factors did you consider in your decision?

Source: Adapted from Garland, H., Sandefur, C. A., & Rogers, A. C. (1990). De-escalation of commitment in oil exploration: When sunk costs and negative feedback coincide. Journal of Applied Psychology, 75(6), 721–727.

CASE STUDY 5.1: Do You Have to Spend Money to Make Money?

That is the question SABMiller, the world’s second-largest brewing company that controls about 90% of the South African market, is asking itself. Looking for ways to gain greater sales and increase market share, SABMiller is trying to generate more sales by attracting women in South Africa to drink its beers. The company makes Brutal Fruit Mango-Goji Fusion Beer and Flying Fish Premium Flavored Beer, which are sweeter and generally preferred by female customers.

The problem is that most women in South Africa don’t frequent bars and pubs—and with good reason. For many years, the country’s major religions, Christianity and Islam, kept most South African women out of bars, as drinking did not fit in with their religious principles. These days, religion has little impact on a woman’s decision to visit bars, but the attractiveness, cleanliness, and safety of the establishments certainly do. Leftover from the days of apartheid, illegal shebeens (informal bars often with just a few plastic chairs set up in the proprietor’s front room) have transitioned to licensed bars but have yet to lose their unclean appearance. Most former shebeens would be considered dives in the United States, with no toilets and ramshackle conditions. Thus, going out to a bar to drink doesn’t appeal to “respectable” women.

SABMiller sees women as a way to generate more money in a market with increasing competition from Heineken and Diageo. There are 17 million women of legal drinking age in South Africa. But how can the company get them to frequent bars, SABMiller’s preferred sales avenue, and spend money? SABMiller’s managing director in Johannesburg, Mauricio Leyva, thinks the answer can be found by working with the 6,000 bar and tavern keepers to make their establishments more attractive to women. Leyva wants to finance $5 million in bar renovations that include adding or updating bathrooms, painting, and redesigning the establishments’ seating arrangements. The company is also considering buying bar supplies, such as beer glasses, because focus groups have revealed that many women don’t like drinking from bottles.

You’re the director of African and Asian sales and Leyva’s boss. It’s your decision to approve or deny Leyva’s idea of helping establishments upgrade their look to appeal to women customers.

Discussion Questions

What are the key issues regarding the decision? What information are you going to want to find out before you decide on this investment?
Recall from the chapter the four key decision-making approaches (rational decision-making model, intuition, wicked organizational problems, and creative problem solving). Try to come to a decision for the organization using the tenets of each of these styles.
What differences in the results do you see?
What personal biases might have influenced you?
What elements of the situation might have made the decision easier or harder to make?
How do you think making a decision with others would have influenced the decisions and decision-making process? How might have others’ perspectives, pressure, and persuasion influenced you?

Source: Developed from Kew, J., & Fletcher, C. (2014, May 29). SABMiller cleans up South Africa’s bars to attract women. Retrieved from http://www.businessweek.com/articles/2014-05-29/sabmiller-cleans-up-south-africas-bars-to-attract-women

SELF-ASSESSMENT 5.1: Employability—Perceptions of Prospective Employers

This self-assessment exercise suggests your level of employability as measured by OB researchers. There are no right or wrong answers, and this is not a test. You don’t have to share your results with others unless you wish to do so.

Part I. Taking the Assessment

You will be presented with some questions representing different approaches to work. If you are not currently employed, answer the questions as you would if you were employed. There is no “one best” approach. All approaches have strengths and weaknesses, and the goal is for you to be adaptable to different change situations.

Part II. Scoring Instructions

In Part I, you rated your approaches to work on 25 questions. Add the numbers you circled in each of the columns to derive your score for the five different aspects of employability. During our session, we will discuss each approach—its strengths and weaknesses—and how you can develop employer perceptions of your employability based on this research.

Work and career resilience—Individuals with work and career resilience possess some combination of the following attributes: optimistic about their career opportunities and work, feel that they have control over the destiny of their careers, and/or feel that they are able to make genuinely valuable contributions at work. Scores can range from 8 to 56. In general, a lower score is from 8 to 24; a higher score is above 25.
Openness to changes at work—Individuals who are open to changes at work are receptive and willing to change and/or feel that the changes are generally positive once they occur. Scores can range from 5 to 35. In general, a lower score is from 5 to 14; a higher score is above 15.
Work and career proactivity—A proactive career orientation reflects people’s tendencies and actions to gain information potentially affecting their jobs and career opportunities, both within and outside their current employer. Scores can range from 3 to 21. In general, a lower score is from 3 to 11; a higher score is above 12.
Career motivation—Individuals with career motivation tend to make specific career plans and strategies. People in this category are inclined to take control of their own career management and set work or career-related goals. Scores can range from 3 to 21. In general, a lower score is from 3 to 11; a higher score is above 12.
Work identity—Work identity reflects the degree to which individuals define themselves in terms of a particular organization, job, profession, or industry. Work identity is characterized by a genuine interest in what one does, how well it is done, and the impression of others. Scores can range from 6 to 42. In general, a lower score is from 6 to 18; a higher score is above 19.

To determine your overall level of employability, add together your scores for the five dimensions above. This total employability score can range from 25 to 175. In general, a lower score is from 25 to 75; a higher score is above 76.

Discussion Questions

What was your overall level of employability? Which of the five dimensions did you score highest on? Lowest?
How can you increase your employability based on these results? What specific strategies will you work on (for example, being more proactive)?
Ask someone who is currently working to complete this assessment about you and compare your perceptions of your employability to theirs. Do you see any differences? How can you explain them?

Source: Adapted from Fugate, M., & Kinicki, A. J. (2008). A dispositional approach to employability: Development of a measure and test of implications for employee reactions to organizational change. Journal of Occupational and Organizational Psychology, 81(3), 503–527.

SELF-ASSESSMENT 5.2: How Would You Rate Your Creativity?

Creative people have a lot in common. This self-assessment tool identifies the characteristics of creative people. Check it out for yourself to see how you rate. Just by completing it you will get some ideas for improving your creativity.

Please indicate your level of agreement or disagreement with each of the following statements using a scale from 1 to 5, where 1 means strongly disagree and 5 means strongly agree, by writing the number in the corresponding box. There are no right or wrong answers. Just choose the one that best represents your view of yourself. You don’t have to share your results with others unless you wish to do so.

Significance of This Assessment

We are all creative but in varying degrees depending upon many factors and experiences in our lives. Perhaps the most important aspect of who has creative capabilities is dependent on the encouragement or discouragement of the use of these capabilities by others and the motivation and efforts exerted by the individuals themselves. Dozens of research studies, combined with informed opinions, point to one conclusion about creative people: Creative people may be nonconformist, but they certainly have a lot in common.

The purpose of this assessment is to evaluate creative predispositions in adults. The statements of characteristics are based on research found to be common and recurrent among creatively productive people. The statements are inclusive of behaviors, traits, interests, values, motivation, and attributes of creative people.

Completion of this assessment will help you determine which of the characteristics you already possess and which you may want to develop further if you would like to be a more creative person. Research has shown that creativity can be learned, developed, and nurtured.

Use this assessment to determine actions to improve your lowest scores. Examine the underlying reasons for the results. Discuss your results with someone who knows you well and who can act as a coach or buddy in helping you further develop these areas.

Your Results

First, add your scores for each column, then add the columns together for your total score. If your raw score is over 90: Congratulations! By your own assessment, you possess the characteristics of highly creative people. It is important that you continue to look for opportunities to tap into your creativity and create an environment for yourself where your creativity can continue to flourish. The bad news is that creative people can have habits or dispositions that can upset others. Researchers have narrowed these down into seven categories: egotistical, impulsive, argumentative, childish, absentminded, neurotic, and hyperactive. In business or a professional setting, the highly creative person will need to maintain patience and understanding of others if they want to be successful.

If your raw score is between 75 and 90: By your assessment, you are a fairly creative person. It is important, at this point, that you continue to nurture these creative characteristics and further develop the ones where you had a lower score. Take a look at the end of this section to see a further breakdown of the test and identify the characteristics you want to develop further.

If your raw score is between 50 and 75: It is important to celebrate the fact that you possess some of the characteristics of a creative person; however, additional development of the characteristics—where you are not so strong—would go a long way. Take a look at the end of this section to see a further breakdown of the test and identify the characteristics you want to develop further. There are many books and courses to help develop your creativity.

If your score is below 50: Don’t fret. Perhaps you have not been in an environment that nurtured your creativity or you were told as a child that you were not creative and have held that belief ever since. The truth is that creative attitudes and personality traits can be strengthened. Take a look at the end of this section to see a further breakdown of the test and identify the characteristics you want to develop further. There are many books and courses to help develop your creativity.

Further Interpretation of the Test

Source: Davis, G. A. (1998). Creativity is forever. Dubuque, IA: Kendall/Hunt.

Discussion Questions

Were you surprised by your results? Do you consider yourself to be a creative person?
Which of the aspects of creativity did you score highest on? What specific characteristics and cognitive abilities do you exhibit?
How can you use the results of this self-assessment to develop your creative abilities?

Chapter Six Leadership

Learning Objectives

After studying this chapter, you should be able to do the following:

6.1: Define leadership, and explain the difference between being a manager and being a leader.
6.2: Describe how the trait approach differs from other theories of leadership.
6.3: Explain the difference between initiating structure and consideration.
6.4: Demonstrate the role of leaders in the motivation process using path–goal theory (PGT).
6.5: Illustrate the leader–member exchange (LMX) model with an example.
6.6: Explain why trust is important and how to repair it.
6.7: Compare and contrast the elements of transactional and transformational leadership.
6.8: Illustrate the role of morality in ethical, servant, and authentic leadership.

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Have Leaders Lost Their Followers’ Trust?

Each year, Richard Edelman conducts a global survey on which people and institutions we trust and how much we trust them.¹ Edelman is the president and CEO of the world’s largest public relations company. In 2016, they surveyed over 33,000 respondents in 28 countries around the world and measured their trust in institutions, industries, and leaders. This year, the Global Results Report highlights why trust matters. As shown in Figure 6.1, when people distrust companies, they share negative opinions about the company (26%), criticize the company online (42%), and even refuse to buy products and service (48%). In contrast, when a company is trusted, people share positive experiences online (41%), recommend the company to a friend or colleague (59%), and chose to buy the trusted company’s products and services (68%). Interestingly, the most trusted content creators online were friends and family. And the most trusted media source was online search engines like Google. There appears to be a “trust gap” because many organizations are no longer trusted to do the right thing. Within organizations, followers have lost trust in their leaders. Given these findings, it is no surprise that trust has emerged as a major concern for research in organizational behavior (OB). The key role of trust and how to repair it when it is broken is covered later in this chapter.

Figure 6.1 Trust Matters

Source: Edelman, R. (2016). 2016 Edelman Trust Barometer Global Results. http://www.edelman.com/insights/intellectual-property/2016-edelman-trust-barometer/global-results/

As mentioned in Chapter 1, the objective of this textbook is to develop leadership skills. In this chapter, we review the essential theories of leadership—both classic and contemporary—that you will use to guide your thinking about influencing and motivating followers. The next chapter discusses power and influence tactics to round out your leadership skill set. It is important that you grasp these core leadership concepts since they are essential for motivating your team, which is covered in Chapter 10. This chapter will not cover all theories of leadership, but it focuses on the ones that have the strongest research base and/or best applicability to OB today. For a more comprehensive treatment of leadership theories, you can read a textbook by Peter Northouse.²

What Is Leadership?

Learning Objective 6.1: Define leadership, and explain the difference between being a manager and being a leader.

Yukl³ has reviewed various definitions of leadership over the past 50 years and offers the following synthesis:

Leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives.

This definition captures the essence of leadership as an influence process (power and influence tactics are covered in the next chapter). It also has the idea that leadership involves directing individuals and groups toward organizational goals. Yukl notes that there has been confusion in the literature about the difference between leadership and other terms like management—so a distinction regarding whether or not management is the same as leadership is needed.

Differentiating Management and Leadership

In his classic book On Becoming a Leader, Warren Bennis composed a list of the differences between being a manager and being a leader:⁴

The manager administers; the leader innovates.
The manager is a copy; the leader is an original.
The manager maintains; the leader develops.
The manager focuses on systems and structure; the leader focuses on people.
The manager relies on control; the leader inspires trust.
The manager has a short-range view; the leader has a long-range perspective.
The manager asks how and when; the leader asks what and why.
The manager has his or her eye always on the bottom line; the leader’s eye is on the horizon.
The manager imitates; the leader originates.
The manager accepts the status quo; the leader challenges it.
The manager is the classic good soldier; the leader is his or her own person.
The manager does things right; the leader does the right thing.

Zalesnick also posed the question, “Leaders and managers: Are they different?”⁵ He made an important point that both managers and leaders are needed for an organization to function optimally. The manager is a day-to-day problem solver, and the leader is focused on developing new approaches and options for the future. To some extent, leaders must engage in some problem-solving activities, and in reality, the two overlap (see Figure 6.2). As shown in the figure, leadership is about inspiring others to follow their vision for the organization. Managers, on the other hand, are concerned with controlling the operations of the organization so things run efficiently. Both are needed, and some managers have the adaptability to do both and switch between the roles of leader and manager as the situation demands. These are managerial leaders as shown in the figure where the two roles overlap.

Figure 6.2 Leadership and Management

Trait Approaches

Learning Objective 6.2: Describe how the trait approach differs from other theories of leadership.

Leadership has been of interest to human beings dating back to the days of the Ancient Greeks. Modern theory and empirical research, however, began in the early 1900s with the “great man” theory, also known as the trait approach. Figure 6.3 shows a timeline with the general dates for the periods of the development of modern leadership theory. The dates are approximate, and research on these approaches continues to the present. For example, interest in researching leader traits was abandoned but has now seen recent interest by OB researchers. In the trait approach, it is believed that leaders are born with the talent and abilities for leadership. This is in contrast with most other leadership theories, which propose that leadership can be learned. The focus on traits suggests that the best way to ensure effective leadership is to select the right people for leadership positions rather than to train them. Leaders are believed to be different than followers because they hold special attributes that make them great leaders. Early research identified traits such as drive, vigor, and originality in people that held leadership positions.⁶ The trait-based perspective of leadership has a long history, and dozens of traits have been studied. Trait approaches were largely dismissed by OB researchers because they didn’t show reliable differences between leaders and followers. Interest in traits lessened when the behavioral approaches began (described in the next section). But interest in traits resurfaced when a review from the early 1990s urged scholars to reconsider traits and suggested that the following traits do matter for leadership: drive (achievement, ambition, energy, tenacity, initiative), leadership motivation, honesty, integrity, self-confidence (including emotional stability), cognitive ability (IQ), and knowledge of the business.⁷ Recently, OB researchers found that the personality trait of extraversion helps us to understand leadership emergence and effectiveness.⁸ A review of decades of research on traits suggests that it may be the combination of traits rather than a single one that best explains how traits may influence leadership.⁹

Figure 6.3 Development of Modern Leadership Theory

When the trait approach did not fully explain leadership in the 1940s and 1950s, researchers turned their focus on what leaders do. The behavioral approaches followed and are covered in the next section. These approaches represent those that are focused on understanding the behavior of leaders rather than their inborn traits and talents. In contrast to trait theories, the leader behavior approach assumes that leaders are made and not born. In other words, anyone can learn the behaviors needed to be an effective leader.

Leader Behaviors

Learning Objective 6.3: Explain the difference between initiating structure and consideration.

The best-known research program on leader behaviors was conducted at Ohio State University in the late 1950s.¹⁰ Researchers asked followers to describe what their leaders did and created a list of over a thousand leader behaviors but were able to combine them into two broad categories using statistical analyses. These two categories were labeled Initiating Structure and Consideration.¹¹ Initiating structure refers to defining tasks for employees and focusing on goals. Consideration is the degree to which the leader shows trust, respect, and sensitivity to employees’ feelings. These two leader behaviors have been studied for decades, and a meta-analytic review of over 150 studies found that both consideration and initiating structure have moderately strong relationships with outcomes. Consideration was more strongly related to follower satisfaction (with the leader and job), motivation, and leader effectiveness. Initiating structure was slightly more strongly related to leader job and group performance.¹² A recent review expanded the behaviors of leaders to include three task-oriented behaviors (enhancing understanding, strengthening motivation, and facilitating implementation) and three relation-oriented behaviors (fostering coordination, promoting cooperation, and activating resources). Task-oriented behaviors are directed toward the accomplishment of shared objectives; however, relation-oriented behaviors support the coordinated engagement of team members.¹³

Which leader behavior is more effective? It appears that what matters is behavioral flexibility and knowing when to engage in the right behavior at the right time. The ability to switch leadership behaviors when needed is highlighted in the contingency approaches to leadership. Behavioral approaches were critiqued because they did not consider the influence of the followers or the situation on the emergence of leadership. The next phase in the development of leadership theory was the contingency or situational approach. For example, the situational leadership theory considers the “readiness” of followers in terms of their ability, motivation, and confidence to perform a task.¹⁴ The leader changes their behavior based upon how able and willing a follower is to perform a specific task. One of the best researched situational theories of leadership is the path–goal theory (PGT), which is discussed next.

Path–Goal Theory

Learning Objective 6.4: Demonstrate the role of leaders in the motivation process using path–goal theory (PGT).

Leaders motivate followers to accomplish goals by establishing the paths to the goals.¹⁵ Specifically, leaders increase the quality and number of payoffs from reaching goals and then make the path to the goals clear by removing obstacles.¹⁶

PGT specifies four different motivating leadership behaviors:

Directive leadership—giving followers specific instructions about their tasks, providing deadlines, setting standards for performance, and explaining rules
Supportive leadership—showing consideration, being friendly and approachable, and paying attention to the well-being of followers
Participative leadership—allowing followers to have a voice in decisions that affect them, sharing information, inviting followers’ ideas and opinions
Achievement-oriented leadership—challenging followers to perform at high levels, setting standards for excellence, showing confidence in followers’ ability to reach goals

Adapting to the Situation

The leader should be flexible and adapt their leadership behavior to followers and the situation. PGT incorporates a number of considerations, but it is useful because this model reflects key aspects of followers and the situation that leaders need to consider to increase motivation. The expectancy theory of motivation is employed to explain the motivation process. As shown in the PGT model in Figure 6.4, motivation is represented as the follower path perceptions that have three elements. First, the E->P Expectancy is the follower’s effort path to performance (in other words, if a person tries, they will achieve their goal). The performance-to-outcome expectation (P->O) is the belief that the leader will provide a reward that is wanted, and these rewards are of value to the follower, or valences (Vs). Thus, the leader’s behavior affects follower motivations to assure the leader will provide the rewards that are valued. The leader learns of obstacles that the follower faces and helps by removing them. For example, a follower may need market data from the research department in the organization to complete a report. The leader can help by calling the department and asking them to expedite the requested report. The removal of barriers and strengthening of expectancies and instrumentalities results in follower satisfaction, effort, and performance. Expectancy theory is covered in more detail in Chapter 8.

Figure 6.4 The Path–Goal Theory

Sources: House, R. J. (1971). A path–goal theory of leadership effectiveness. Administrative Science Quarterly, 16, 321–328; House, R. J., & Mitchell, T. R. (1974). Path–goal theory of leadership. Journal of Contemporary Business, 3, 81–97.

A key aspect of the situation that the leader needs to consider is follower ability—the leader must adjust expectations in relation to a person’s ability to complete a task. As we learned in Chapter 2, individual differences matter, including personality. For example, some followers have a higher need to socialize with others at work. Other followers may have a higher need for control or a preference for more structure in their work. The PGT framework also considers aspects of the situation including the task itself; if the task is not clear, the leader must explain what needs to be done. In highly repetitive tasks, leaders can show concern for followers’ well-being (supportive leadership). The formal authority system is another situation characteristic to consider. In other words, if the formal authority system is strong, the leader can enforce rules. Finally, the norms of the work group may influence individual motivation, and the leader can build cohesion to support the followers’ expectancies (the effects of work-group norms on performance is discussed further in Chapter 10).

Research on PGT has shown support for propositions of the model.¹⁷^,18 However, its strength lies in the application of motivation theory (expectancy theory, in particular) to leadership. When you read about expectancy theory, recall that no other leadership theory makes such a direct linkage to motivation. The framework informs leaders about what aspects of followers and the situation to consider when setting up pathways to their goals. The model is practical in that it helps leaders to clarify the motivational aspects of their expectations of goals and performance. It is also important that PGT stresses the removal of barriers to effective performance.

Critical Thinking Question: Explain how a leader can intervene using PGT if followers are having difficulty getting help from the purchasing department to get the supplies they need to do their job.

Path–goal theory and other theories focusing on leader behavior were criticized because they assumed that leaders treated all followers the same. Research in the 1970s found that this was not the case. In fact, leaders develop unique relationships with each of their followers. A theory emerged that focuses on these unique working relationships that develop between the leader and each follower called leader–member exchange (LMX), and this approach is discussed next.

Leader–Member Exchange

Learning Objective 6.5: Illustrate the leader–member exchange (LMX) model with an example.

Should a boss treat everyone alike? Leaders treat subordinates differently based upon their unique abilities and contributions to the work group and organization. LMX is defined as the quality of the working relationship developed with each follower and is characterized by more delegation of authority to those with high-quality LMX.¹⁹ In a relatively short period of time, leaders decide on their in-group members and out-group members. Out-group members perform to the specifications in their job descriptions, but they don’t go above and beyond and don’t take on extra work. In-group members do. A diagram of what in-groups and out-groups might look like in a seven-person work group is shown in Figure 6.5.

Figure 6.5 Leader–Member Exchange in a Work Group With Seven Direct Reports

Note that there is a poor performer in the work group (labeled P7). This is a different type of relationship where the supervisor is monitoring performance and attempting to get the minimally accepted level of performance. The first goal would be to move this person to the out-group where they are performing to the basic expectations of the job. If performance does not improve, in time, they may be transferred to another work group (where they get a second chance) or dismissed from the organization altogether.

Critical Thinking Questions: Is the LMX process fair? Should managers treat all followers alike? Why or why not?

The other important thing the diagram shows is that norms of fairness must pervade this entire process.²⁰^,21 Fairness must be established to avoid possible negative effects on the performance of the entire work team. Table 6.1 contains the questions that are used by leadership researchers to assess the follower’s evaluation of their relationship with their boss (known as the LMX7 measure). A meta-analytic review study found that follower answers to these questions strongly relate to their performance on the job.²² A recent meta-analysis of 3,327 studies with over 930,000 observations demonstrated that LMX consistently predicts performance compared to other theories of leadership. This study underscores the importance of LMX relationships for understanding what contributes to individual performance at work.²³

Source: Scandura, T. A., & Graen, G. B. (1984). The moderating effects of initial leader–member exchange status on the effects of a leadership intervention. Journal of Applied Psychology, 69, 428–436.

Leader–Member Exchange Development

So how do effective LMX relationships develop? There are three steps in the process: role taking, role making, and role routinization.²⁴ In role taking, the boss tests the commitment of the follower by offering extra work. Through this testing and response, the boss forms an overall assessment of whether the follower is in-group or out-group. It is important to pay attention to the boss’s signals when a person takes a new job or has a new boss. If a person wants the benefits of more challenging work, promotion potential, or higher salary, they need to respond in a way that the boss views positively. During the process of role making, mutual expectations of the working relationship are established, and the follower’s role is clearer. The final step is role routinization. Once roles are made, they become stable since the leader and follower both know what to expect. For example, relationships develop best when the leader is able to delegate tasks to the member.²⁵ Therefore, everyone who reports to a boss (and that’s most of us) should be concerned with managing the relationship and developing a relationship by being dependable. The next sections focuses on how to manage your boss and develop a high-quality relationship.

Critical Thinking Questions: Develop an example by having two people you know complete the LMX questionnaire in Table 6.1. What do you see when you compare their responses? Do you see differences in the quality and effectiveness of the working relationships?

Managing Your Boss

Research on the LMX model of leadership has demonstrated that an effective working relationship with your boss predicts all of the outcomes of OB that we have discussed in Chapter 1 (performance, job satisfaction, organizational commitment, motivation, well-being, and lower turnover). Outcomes of interest to many students include career progress, and LMX predicts promotions and salary increases. A classic Harvard Business Review article²⁶ termed the upward exchange process managing your boss and described how to develop an effective working relationship with the boss: understanding your boss, understanding yourself through self-assessment, and developing a compatible working relationship. Remember that leaders and their followers depend upon one another for success, and it is the follower’s responsibility to ensure that an effective working relationship develops.²⁷ Jean Kelley²⁸ offers the following guidelines for effectively managing the boss:

Find out from your boss what “good” looks like and who is involved in measuring good. Make sure you are meeting everyone’s expectations.
Ask your boss what kind of follow-up he or she wants for his or her comfort level. Take the initiative to set expectations for every project you are assigned.
Examine your boss’s style and adjust to that style. Is your boss a reader or a listener? Does your boss want data before you talk (a reader)? Or does your boss want to talk through the project and gather the data later (a listener)?
Muster up the courage to tell your boss when you feel you haven’t been fully heard. It’s your responsibility to speak up when you feel you are not being heard. Use I instead of you—for example, “I was really upset by you not hearing me” rather than “You don’t listen to me.”
Become aware of other managers’ styles, especially when they have a stake in the outcome of a project. Do you have more than one boss or person who evaluates your work? Ask each one what is most important so that you can focus your efforts.
Manage up. No matter how poorly you may have managed your relationship with your boss in the past, the good news is that you can start over with a new project. It’s about understanding your boss and teaching your boss how to work with you.

Some people may have a negative reaction to this process, feeling that it is manipulative. It is important to point out that this is not about flattering the boss or becoming a “pet” employee. Rather, this is a process of developing an effective working relationship based upon mutual expectations. Focus on your strong points—what you can offer your boss to make them more effective. This is where relationship compatibility comes in. For example, if your boss is quiet and reserved and you are more outgoing, you could be his go-to person for making public contacts and networking.

Critical Thinking Question: Do you feel that the process of “managing your boss” is manipulative or just being a smart and dependable employee? Explain your position.

Follower Reactions to Authority

Part of being able to adjust to your boss’s style is your understanding of how you feel about authority. Some people resent authority and being told what to do (counterdependent). Others are compliant and give in all of the time (overdependent). According to Gabarro and Kotter, the best approach is to avoid these two extremes and recognize that most followers are dependent on their boss to some extent. Ideally, you will be able to create a working relationship where you feel interdependent (you depend on one another to get things done in the group and organization). In developing an effective working relationship, you should be dependable and honest above all, keeping your boss informed (but also using their time wisely). Effective working relationships with the boss can permeate the entire organization. Leaders with great boss relationships have more resources to exchange with their own followers and therefore develop more effective working relationships with them.²⁹ Thus, the leader in the middle is viewed as a “linking pin” between upper management and followers below, sharing important information about the organization’s vision and goals with followers. These linking-pin leaders become valuable members of the organization, and they gain power and influence due to their position in organizational networks.

In developing a working relationship with each follower, leaders make judgments regarding the reasons for their behaviors, particularly in the case of poor performance. These judgments may or may not be accurate, but they have a strong influence on whether or not a follower will become a member of the leader’s in-group. Thus, it is important to understand what causes these judgments (known as attributions) to guard against inaccuracies. Leadership research has examined the attributions that leaders make about the causes of follower poor performance, and this is addressed next.

Attributions and Leader–Member Relationships

There is a great deal of OB research that shows that the attributions of what causes behavior in organizations matter. Attributions represent a person’s attempt to assign a cause to a behavior or event they observe. Attribution theory proposes that the attributions people make about events and behavior can be either internal or external.³⁰ In organizational settings, attributions are particularly important when events are important, novel, unexpected, and negative. Attributions are particularly important when a follower fails to meet performance expectations of the leader.³¹ In the case of an internal attribution, people infer that an event or a person’s behavior is due to his or her own character traits or abilities. If a person makes an external attribution, they believe that a person’s behavior is due to situational factors. For example, Damon is late to class. If the professor believes the tardiness happened because of Damon’s lack of motivation to attend class, he is making an internal attribution. On the other hand, if the professor believes Damon is late because he could not find a parking space in overcrowded university lots, he is making an external attribution. Thus, internal attributions will lead the professor to infer that Damon is a poor student.

Research on attribution theory has demonstrated attributions can bias how we process information and make decisions. The first way this occurs is called the fundamental attribution error. This is the tendency to attribute other people’s behavior to internal factors such as character traits or abilities, but when explaining one’s own behavior, people tend to attribute the cause to the situation.³² The second way attributions may cloud judgment is the self-serving bias that occurs when a person attributes successes to internal factors and failures to situational factors. And the further an event is in the past, the more likely the cause of a failure will be attributed to the situation. For example, Mindy gets a poor grade on a quiz and attributes her failure to unfair test questions rather than not studying for the quiz. The third way attributions may affect judgment is the just-world hypothesis, which is the need to believe that the world is fair and that people get what they deserve. This gives people a sense of security, particularly when they encounter a challenging situation. For example, Manny gets laid off at work due to downsizing, and his coworkers attribute the layoff to him being an argumentative person rather than the business situation or a bad economy.

Critical Thinking Questions: Why do you think the just-world hypothesis is so pervasive? Why do you think leaders might believe that people get what they deserve?

How can a leader avoid attribution bias? When we ascribe a cause to behavior, we should gather additional information. By paying attention to overall patterns of behavior, we make more accurate conclusions by considering the following:

Consensus information—information about how other people would behave if they were in the same situation. High consensus means others would behave the same way. Low consensus means other people would behave differently.
Distinctiveness information—information about how the individual behaves the same way in different situations. Low in distinctiveness means the individual behaves the same way to different situations. High in distinctiveness means the individual behaves a particular way toward a particular situation only.
Consistency information—information about how the individual behaves toward a certain stimuli across time and circumstances. High in consistency means the individual behaves the same way almost every time they are in a particular situation.

Based on this perspective, if a leader wants to improve judgments and avoid the attribution error, they should consider how well other people would do in the same situation. For example, do all employees make the same mistake when filling out forms for customers? If so, maybe the form needs to be revised. Second, how distinctive is the behavior? For example, does the employee behave rudely to all coworkers or just one in particular? Finally, how consistent is the behavior? For example, over time, the leader observes that an employee does not pay close attention to their work every Friday afternoon, and this is a consistent pattern. Attending to these three possibilities alerts the leader to investigate and gather additional information before making a definitive conclusion about the cause of behavior. This is important because attributions play a role in how leader–member relationships develop.

Attributions play a clear role in the development of work relationships between leaders and followers.³³^,34 A dyadic (two-party) relational approach to attribution theory is shown in Figure 6.6.³⁵ As shown in the figure, an internal or an external attribution might be made as we have previously discussed—for example, “I did not get a positive performance review” could be attributed to “I did not put in enough effort” (internal) or “The human resources department is incompetent” (external). A relational attribution offers a third and potentially powerful explanation: “My boss and I don’t have a positive relationship.” The actions a person might take to remedy the situation will vary depending upon the attribution. In the case of an external attribution (the most likely according to the fundamental attribution error), the person may feel helpless to change it except for finding another job. However, if a relational attribution is made, the person might try to improve the working relationship with the boss. Thus, relational attribution theory offers another way a person might improve their work situation by changing what they attribute the causes of an event to. If it is the relationship (and not internal or external), actions can be taken to improve the working relationship.

Figure 6.6 Relational Attributions in Response to Negative Achievement-Related Events

Source: Eberly, M. B., Holley, E. C., Johnson, M. D., & Mitchell, T. R. (2011). Beyond internal and external: A dyadic theory of relational attributions. Academy of Management Review, 36(4), 731–753.

When the right attributions are made, the working relationship between a leader and follower will develop into a high-quality one. Next, we turn to how you can increase investment in the LMX relationship with your boss so that it develops into a mentoring relationship, which has also been shown to relate to performance and positive career outcomes for the junior person, or mentee.

The Mentor Connection

Mentoring is defined as follows:³⁶

Mentoring is an intense developmental relationship whereby advice, counseling, and developmental opportunities are provided to a protégé by a mentor, which, in turn, shapes the protégé’s career experiences.

One of the best things that can happen is when the boss becomes a mentor. Career mentoring from a boss contributes to performance, promotions, and salary increases above and beyond a high-quality LMX relationship.³⁷ Research on mentoring in organizations shows that having a mentor can have a powerful impact on your career, and the boss is an important place to begin. You want to show him or her that you want to be a trusted member of the in-group and that you are willing to take on more responsibility. Hopefully, he or she will then view you as a mentee—someone worth the investment of time and energy to develop. There are many cases where a boss gets promoted and a trusted in-group member is promoted along with him. So you want to be sure to do an inventory of what you have to offer your boss in exchange for career investment. For example, you might offer to take on a challenging problem that the boss has been working on (particularly if it fits your strengths). Or you might lead the team meeting while your boss is out of town (and be sure to keep them informed with a summary of how the meeting went).

RESEARCH IN ACTION

Getting Your Boss to Invest in You: Be Proactive!

How can you proactively adapt to a new organization? Research by Susan Ashford and Stewart Black identified the following proactive socialization tactics for organizational newcomers:

Seek information. Regularly ask for information regarding the formal and informal organizational system, policies and procedures, politics, and organizational culture: How do things really get done in the organization?
Seek feedback. Ask for honest feedback about your performance during and after assignments from your boss(es) and others. Don’t wait for your annual performance appraisal to learn how you are doing on the job.
Manage your boss. Learn as much as you can about him or her. Ask them to lunch to discuss your plans (i.e., develop an effective working relationship).
Negotiate more job challenge. Ask for changes to your job, and craft it so you can be most effective, playing to your strengths but at the same time meeting organizational goals.
Be positive. View every problem as an opportunity, and try to see others in your group and organization in positive ways. Be optimistic unless someone proves you wrong.

Discussion Questions

How important is it to be proactive during your first 6 months in a new job? How often should you meet with your new boss?
Develop some examples of how you can ask for more challenging work assignments. Draft an outline of talking points for how you would present these requests to your boss (or future boss).

Source: Adapted from Ashford, S. J., & Black, J. S. (1996). Proactivity during organizational entry: The role of desire for control. Journal of Applied Psychology, 81, 199–214.

Mentors provide two general types of support to protégés: (1) career support and (2) social support.³⁸ In addition, mentors may serve as role models to mentees. Cultivating a mentoring relationship enhances your job satisfaction and performance.³⁹ Mentoring is now seen as a network of developmental relationships⁴⁰ including peers, managers other than your boss, and people outside of the organization. However, keep in mind that research has demonstrated that the boss is a key node of your mentoring network since supervisory mentoring has been associated with higher potential, productivity, and organizational commitment.⁴¹ Belle Rose Ragins, mentoring expert, points out that mentoring relationships can become transformative and “change the way we view our careers, our environment, and ourselves.”⁴² She further notes that mentoring relationships are characterized by a willingness to be vulnerable and trust one another. For a high-quality relationship to mentees, expect the mentors to be trustworthy and dependable. A study of 315 health care workers found that health care managers’ mentoring behaviors influenced worker perceptions of their trustworthiness in terms of ability, integrity, and benevolence.⁴³ Trust is at the heart of all effective working relationships—with bosses, mentors, and peers. Next, we discuss research on trust, which is essential for a leader to understand to be effective, and address the “trust gap” highlighted at the beginning of this chapter.

The Importance of Trust

Learning Objective 6.6: Explain why trust is important and how to repair it.

The following definition of trust is often cited: “the willingness to be vulnerable.”⁴⁴ Trust is related to important outcomes, including risk taking and job performance.⁴⁵ A review of the various definitions of trust offers the following summary:⁴⁶ Trust is a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another. A meta-analytic study found that trust is related to LMX as well as job satisfaction and performance.⁴⁷ Several other theories of leadership mention trust (e.g., servant leadership, which is discussed later in this chapter). Trust is therefore fundamental to the development of effective working relationships with bosses (and others).

There are some helpful frameworks to organize your thinking about how trust operates in organizations. A three-part view of trust is a useful way to think about trust development with another person: calculus-based, knowledge-based, and identification-based.⁴⁸ Each of these forms is explained in detail in the following sections.

Calculus-Based Trust

Calculus-based trust (CBT) is a form of trust based upon keeping records of what another person does for you and what you do for them. It is an “arm’s length” form of trust in which neither party really becomes that vulnerable to the behavior of the other person. The expectations are like contracts, and the consequences of violating trust are punishment or the severing of the relationship. An example of CBT (sometimes called deterrence-based trust) in an organization is a leader telling a follower to perform a task because it is in their job description and reminding them that they are paid to do it (in other words, “Do it or you are fired!”). Many relationships in organizations (and in our daily lives) operate on this level. For example, this is the type of relationship most people have with the person who they hire to cut their grass. It is a straightforward transaction. If the person shows up, cuts the grass, and it looks good, you pay them. If not, you don’t.

Knowledge-Based Trust

In this framework, the second level of trust is called knowledge-based trust (KBT). This level of trust is grounded in how predictable the other person is. Over time, through interactions where benefits are exchanged between two parties, people come to expect the other person to come through for them. It is based upon information gathered about the other person in a variety of circumstances. An example of this form of trust in an organization would be a follower becoming the go-to person for the boss in terms of creating her PowerPoint decks for important presentations. The boss can jot down a list of bullet points in a document and send them to the follower. Within a day, the boss receives a professional-looking presentation deck to review and edit. The boss does not have to remind the person that it is in their job description (and it may or may not be). They just make the request, and it happens because the follower’s behavior is predictable.

Identification-Based Trust

Finally, the highest degree of trust in this model is called identification-based trust (IBT). This form of trust is characterized by the leader and follower sharing the same goals and objectives. In other words, the follower identifies with the leader’s vision. There is no need for record keeping, and the predictability of the follower’s behavior is assumed. The follower sees the work group and organization in the same way that the leader does and will perform the right tasks without being asked. For example, a trusted follower would step in and resolve a conflict with another work-group member for the leader. IBT becomes a highly efficient form for the leader since followers take care of details while the leader focuses on the strategic vision or negotiating resources for the group with her boss (i.e., working the “linking pin,” as suggested by the LMX model).

Lewicki and Bunker built upon Shapiro et al.’s work and described the process through which trust develops over time.⁴⁹ As shown in Figure 6.7, trust may transform over time and develop different “faces” as it matures. In other words, the types of trust build upon one another over time based on the nature of the working relationship. CBT develops to a point (J1), and the trust level becomes KBT as the behavior of the parties becomes predictable. As noted in the figure, most relationships in organizations fall into the KBT range of trust. Once stable, a few relationships will reach the next point (J2) and will become stable IBT relationships. At this point, both parties fully understand what the other party cares about, and there is a level of empathy that emerges (i.e., the ability to put oneself in the boss’s place and see the organization the way they do). As noted previously, at this level, the follower becomes able to act effectively for the boss. There is a sense of harmony in thoughts, emotions, and behavior. Activities that strengthen IBT are the creation of joint projects, shared goals, and shared work values.

Figure 6.7 The Development of Trust

Source: Lewicki, R. J., & Bunker, B. B. (1996). Developing and maintaining trust in work relationships. In R. M. Kramer & T. R. Tyler (Eds.), Trust in organizations: Frontiers of theory and research. Thousand Oaks, CA: Sage.

The development of trust is viewed as “tactical climbing” in which there are increasing levels of risk and vulnerability over time. A longitudinal study of new hires found that the cues that are perceived early in employment predict the emergence of trust. In fact, information attended to in the first hours on a job is crucial.⁵⁰ Trust becomes stable, but it is important to remember that trust is vulnerable. Even in high-quality leader–follower relationships, IBT can revert to the CBT stage, so followers and bosses must be careful about maintaining relationships.⁵¹ According to this model, movements between the stages of trust can be smooth and incremental or they can be dramatic and transformational. Remember that the development of trust takes time and that trust does require testing to see how durable it is.

From the examples provided, you can see the critical role that trust plays in the development of working relationships with bosses (and others, including peers) in the organization. It’s hard to imagine an organization that could function without trust. So it’s important to understand what you need to do should you damage trust with your boss (of course, the best strategy is to never damage trust, but it can happen). Research on trust repair has examined what strategies work to get the relationship back on track.

Critical Thinking Questions: Describe how calculus-based trust explains how people view their jobs. How can a leader move a person to the two higher levels of trust?

Repairing Broken Trust

There are three important questions to ask after a trust violation has occurred (the trustee is the person who is the target of the trustor’s trust):⁵²

Is the trustee innocent or guilty of committing the transgression?
If the trustee is guilty of the transgression, should this be attributed to the situation or to the person?
If the transgression is attributed at least in part to the person, is the personal shortcoming fixable or is it an enduring characteristic of the trustee?

These questions are important because they offer guidance for repairing trust. Regarding question 1, if a trustee is actually innocent, they should emphasize lack of guilt through denial and offer any available exonerating information.⁵³ Not addressing the issue—remaining reticent (e.g., saying “no comment”)—can be risky because people usually assume the worst.⁵⁴

Regarding question 2, if the trustee is guilty, an apology may be an effective way to repair trust because the expressions of remorse and repentance, which are part of an apology, can alleviate some of the trustor’s concerns. However, the way the apology is given also matters. Research shows that if extenuating factors also played a role, there is benefit to mentioning these circumstances when the apology is offered.⁵⁵ Keep in mind that though explanations and excuses can restore trust, they have to be seen as adequate; incomplete explanations don’t work.⁵⁶

Excuses might be effective, depending on the characteristics of the person violating the trust and the relationship quality, but adding reparations (i.e., attempts to “make it right”) increase the effectiveness of explanations.⁵⁷^,58 However, further research suggests that it depends on other contingencies, and these are described next.

Finally, question 3 represents one of the most important—but least obvious—contingencies for trust repair. Will the trustor see the cause of the transgression as stemming from an enduring flaw in the trustee or something the trustee can, in fact, address? If the transgression stems from an honest mistake or lack of knowledge (i.e., a competence-related issue), people are more likely to give the benefit of the doubt and trust again. However, if the act is seen as demonstrating a lack of integrity, trust is much more difficult (if not impossible) to repair. For example, promises may restore trust but not if the trust is broken because the person has initially lied. Lying is one of the most damaging behaviors.⁵⁹ If someone feels deceived, trust may not be restored, even if apologies, promises, and repeated trustworthy actions follow the deception. Even more “substantive” (rather than verbal) responses such as offering reparation or paying a personal cost are limited in their effectiveness when questions of integrity are at the center of the issue.⁶⁰

Critical Thinking Question: Think of a time when you tried to restore trust after it was broken. Based on this section, what would you do differently?

If you are interested in becoming a leader at the top levels of an organization or starting your own business, you will tend to be interested in research on transformational and visionary leadership. You may view yourself as charismatic. However, for those of you who view yourselves as managers who sometimes take the leadership role, you will also benefit from knowledge about leadership. Leadership is a “full range” of behaviors, and the next section discusses both management (i.e., transactional behaviors) and leadership (i.e., transformational behaviors).

Full-Range Leadership Development

Learning Objective 6.7: Compare and contrast the elements of transactional and transformational leadership.

The full-range leadership development model is based upon over 25 years of research on transformational leadership.⁶¹^,62,63 People are more engaged when their leaders behave in certain ways at the highest end of the full-range model. The full-range model starts at the lower end of leadership, which is termed transactional leadership. Leadership is a continuum, with transactional leadership being the foundation upon which transformational leadership is built. These behaviors range from passive to active and ineffective to effective as depicted in Figure 6.8. The specific elements of transactional and transformational leadership are described in the following sections.

Figure 6.8 The Full Range of Leadership Model

Source: Bass, B. M., & Avolio, B. J. (1994). Improving organizational effectiveness through transformational leadership. Thousand Oaks, CA: Sage.

Transactional Leadership

Transactional leadership is defined as behaviors that motivate followers through rewards and corrective actions. The transactional leader behaviors are (from worst to best):

Nonleadership/laissez-faire leadership. This is the “near-avoidance of leadership,”⁶⁴ the least active and least effective of all of the leadership styles in the full-range model.
Management by exception. This has two forms: active and passive. In management by exception, active (MBE-A), the leader looks for the follower to make errors and then corrects them. In management by exception, passive (MBE-P), the leader does not actively look for errors or deviations from work standards, but when noticed, they take corrective action.
Contingent reward. This is promising or delivering rewards to followers contingent on their performance.

There are times when a manager must use the transactional approach. For example, if they have a low-performing employee, a leader may need to employ the management-by-exception approaches. At the next level in the full-range model are the transformational leadership behaviors.

Transformational Leadership

Transformational leadership is defined as behaviors that mobilize extra effort from followers through emphasis on change through articulating a new vision for the organization. As noted earlier, it is this set of behaviors that is most related to positive attitudes, commitment, and performance of followers. Leadership is active, and this leads to effectiveness, as shown in Figure 6.8. These behaviors include the following (known as the four Is):

Idealized influence. Being admired and respected by followers is the core of this leadership component. They are seen as change agents in the organization.
Inspirational motivation. Leaders inspire others to work hard toward organizational goals by providing challenge. They are positive and upbeat and get others to feel optimistic.
Intellectual stimulation. Transformational leaders encourage innovation and new ideas. They listen to followers openly and don’t criticize novel solutions to problems.
Individualized consideration. Transformational leaders treat each follower as a unique person. They get to know people one-on-one and mentor them.

Transformational leaders increase intrinsic motivation by aligning followers’ tasks with their own interests and what they value most. Meta-analyses have confirmed that transformational leadership behaviors are positively and significantly related to both productivity and performance ratings by supervisors.⁶⁵ Transformational leadership also predicts employee creativity, especially when leaders communicate high expectations for creative behaviors.⁶⁶

Moral Approaches

Learning Objective 6.8: Illustrate the role of morality in ethical, servant, and authentic leadership.

Ethical Leadership

There has been an increase in attention to ethics and morality in the study of leadership in the past 10 years. Following the scandals of Enron, Wells Fargo, and others, researchers in OB responded by working on new theories that incorporate a moral component and placing followers first. These theories discuss the ethical leadership role and how leaders today must be authentic and serve followers rather than their own goals exclusively. These emerging theories are a good example of how OB research responds to current challenges organizations face and how researchers generate new knowledge to guide leaders. The study of ethics and morality in leadership will continue to be of interest to OB researchers as they continue to demonstrate relationships of ethical leadership with employee well-being and performance. Development of these new approaches now appears in textbooks for students and in corporate training programs to sensitize the next generation of managers to ethical aspects of leadership and improve leadership practice.

Leadership and ethics are intertwined; the tests described in the boxed insert must be applied. Ethical decision making is important to the practice of leadership, and contemporary theories of leadership address morality. Research on ethical leadership has found four components:

Moral sensitivity involves recognizing that our behavior impacts others.
Moral judgment involves determining the right decision.
Moral motivation is having the need to do the right thing.
Moral action.⁶⁷

Ethical leadership has been found to be positively related to work-group-level ethical behavior and negatively related to relationship conflict among coworkers.⁶⁸ A review of the research on ethical leadership concludes:

The research quite consistently shows that if employees indicate that their leaders are ethical and fair role models who communicate and reward ethical behavior, there is less deviance and more cooperative behavior, and employees perform better and are more willing to both expend effort and report problems to management.⁶⁹

If leaders at the top of the organization are viewed as ethical by their followers, then ethics have a cascading effect throughout the organization; lower-level employees also view their manager as ethical.⁷⁰ Thus, ethical leadership at the top of an organization has a trickle-down effect to lower organizational levels. The moral component is emerging as a key aspect of contemporary leadership theories. Next, we discuss two other recent approaches to leadership that directly incorporate aspects of morality: servant and authentic leadership.

Servant and Authentic Leadership

As indicated previously, there is a “new wave” of leadership research that emphasizes morality. In addition to ethical leadership, two other theories have emerged: servant leadership⁷¹ and authentic leadership.⁷²^,73 While research on these theories is relatively new, findings indicate that followers respond positively to these leader behaviors. Servant leadership dates back to the 1970s when Robert Greenleaf was inspired about leadership while reading Herman Hesse’s Journey to the East. In this novel, a group of men undertake a long journey. A servant named Leo sings to them and inspires them while doing his tasks. Leo disappears along the way, and the group falls into chaos and cannot complete their journey. The basic idea is that followers are first rather than leaders. Greenleaf’s definition of the servant leader is as follows:

The servant-leader is servant first…. It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possessions.⁷⁴

Researchers have recently developed measures of servant leadership, and it has been shown to relate to positive attitudes and performance of followers.⁷⁵ Seven servant leadership dimensions have been identified: emotional healing, creating value for the community, conceptual skills, empowering, helping subordinates grow and succeed, putting subordinates first, and behaving ethically.⁷⁶^,77 Servant leaders facilitate team confidence, affirming the strengths and potential of the team and providing developmental support.⁷⁸ This developmental support is also characteristic of humble leadership, where a leader’s humility allows them to show followers how to grow as a result of work. This leads followers to believe that their own developmental journeys are legitimate in the workplace.⁷⁹ A recent study found that leader humility creates shared leadership in teams by encouraging proactive team members to take responsibility. Shared leadership was most strongly related to team performance when team members had high levels of task-related competence. ⁸⁰

Best Practices

Is Narcissism Good or Bad for Business?

When many people think of a successful CEO these days, they imagine someone with a take-charge personality who is self-centered and ruthless. This seems at odds with the research findings on humble leadership. According to Christian J. Resick and his colleagues, “narcissism is broadly defined as an exaggerated, yet fragile self-concept of one’s importance and influence.” Lolly Daskal, a well-known leadership coach, points out that a narcissistic CEO has the following traits:

A sense of entitlement and superiority.
A strong need for attention.
A single-minded focus on themselves.
A lack of empathy for others.
Constant criticism of others.
High levels of aggression.
An unwillingness to hear feedback.

There seem to be pros and cons to narcissistic leadership. Such a CEO may drive high performance and achieve bottom-line results during times of rapid change. John Stahl-Wert and Kenneth Jennings, authors of the book The Serving Leader, explain why self-serving leaders are bad for business. First, they may fail to serve the customer because they focus too much on themselves. CEOs receive high compensation and may become greedy. Also, they may inhibit innovation because they prefer their own ideas and don’t listen to input from others. They may even avoid learning new things needed to stay abreast of trends.

Narcissistic behavior, in the long term, may have more cons than pros, and such leaders may need to keep their ego in check for the benefit of followers and the organization. Followers must be aware of the potential negative aspects of this behavior pattern and pay attention to how the narcissistic leader may be affecting their own well-being.

Discussion Questions

Provide an example of a leader that demonstrates narcissism.
Discuss the impact of the narcissistic behavior on others in the organization. Does this affect the organization’s performance?
What can organizations do to guard against the impact of a narcissistic leader?

Sources: Daskal, L. (2015). How to deal with a narcissistic leader. Retrieved from http://www.inc.com/lolly-daskal/how-to-deal-with-a-narcissistic-leader.html; Tenney, M. (2016). Why egos are bad for business, and what to do about it. Retrieved from http://www.huffingtonpost.com/matt-tenney/why-egos-are-bad-for-business-and-what-to-do-about-it_b_9090098.html; Resick, C. J., Whitman, D. S., Weingarden, S. M., and Hiller, N. J. (2009). The bright-side and the dark-side of CEO personality: Examining core self-evaluations, narcissism, transformational leadership, and strategic influence. Journal of Applied Psychology, 94, 1365–1381; Wales, W. J., Patel, P. C., & Lumpkin, G. T. (2013). In pursuit of greatness: CEO narcissism, entrepreneurial orientation, and firm performance variance. Journal of Management Studies, 50(6), 1041–1069.

Critical Thinking Questions: Compare and contrast ethical, servant, and authentic leadership. What do they have in common, and what are the key differences?

Authentic leadership involves knowing oneself and behaving in a way that is consistent with what is intuitively right.⁸¹ Authentic leaders are most effective when they develop an effective vision that relates to the shared interests of their team. Dan Vesella (CEO of the pharmaceutical company Novartis) is an example of such a leader because he is successful but also demonstrates compassion by assisting people suffering from life-threatening diseases.⁸² Authentic leadership has four dimensions:⁸³

Self-awareness—for example, seeks feedback to improve interactions with others.
Relational transparency—for example, says exactly what he or she means.
Internalized moral perspective—for example, demonstrates beliefs that are consistent with actions.
Balanced processing—for example, solicits views that challenge his or her deeply held positions.

These leadership theories seem to sound alike, but they also have some differences so it is important to compare and contrast them. Table 6.2 shows a comparison of transformational leadership (which we discussed earlier in this chapter under Full-Range Leadership Development), ethical leadership, authentic leadership, and servant leadership. As you can see from the table, there are some similarities among these approaches to leadership, but there are also some key differences. Transformational leadership is probably the most unique but does share some aspects of servant leadership. A recent study conducted several meta-analyses to compare these approaches and found that authentic and ethical leadership may not offer unique contributions to understanding the relationship of leadership to employee performance, organizational citizenship behaviors, and attitudes. However, servant leadership did appear to be significantly different than transformational leadership.⁸⁴

✓ = focal component, * = minor or implicit component

Source: Adapted from Walumbwa, F., Avolio, B., Gardner, W., Wernsing, T., & Peterson, S. (2008). Authentic leadership: Development and validation of a theory-based measure. Journal of Management, 34, 89–126.

Critiques of Leadership Theory

A key theme of this textbook is to apply critical thinking. Despite the proponents of leadership, there have been some important critiques that have been supported. Some researchers have criticized the emphasis on the leader and their behavior. An alternative view is that leadership is in the eyes of the follower. In other words, leadership is an attribution that a follower makes about another person. These perspectives include the implicit leadership theory and romance of leadership, which are addressed next.

Implicit Leadership Theory

Implicit leadership theory (ILT) examines how attributions about leadership affect follower perceptions of who you are in the role of leader. Research has shown people have implicit leadership schemas (or models) in their minds about what constitutes an effective leader.⁸⁵ These models are traits and characteristics that a person thinks are being linked to a leader. For example, a person might believe all leaders are tall and highly intelligent. Followers find such models of leaders to be an effective way to categorize leaders and interpret their behavior.⁸⁶ For example, followers can accurately recall neutral leadership behaviors, but they exaggerate or distort either positive or negative leadership behaviors.⁸⁷ Such implicit assumptions about what an effective leader is serve as a benchmark for how the leader’s behavior is interpreted.⁸⁸ The models then affect how followers respond to the leader and the way that the relationship develops.⁸⁹ To apply this idea, assume that you thought all leaders should be supportive of followers. But you have a leader who is not supportive, which results in a discrepancy, and you don’t respond positively to the leader’s request for extra effort on a task. This may affect your job performance and evaluation in the future. Changing your assumptions and responding to a task-oriented leader may be difficult to do since this approach assumes leadership is in the “eye of the beholder”—the followers.

Attributions may affect how we process information and lead to errors in judgment. Also, they affect how we develop leader–member relationships with followers and others at work. Attributions may also affect the way that we view leaders in general. Research has found that people make significant attributions about the power of leaders, which is called the romance of leadership. In other words, leaders are not powerful because of their expertise or behaviors, but their power is derived from follower attributions of their influence over events.

Romance of Leadership

The romance of leadership perspective represents a critique of all leadership research. This perspective articulates why people credit leaders for their influence to change organizations and even societies.⁹⁰ This approach highlights the fact that leaders are often the most favored explanation for both positive and negative outcomes in organizations. There is an overemphasis on the importance of the leader: People value performance results more highly when those results are attributed to leadership. Moreover, if an individual is perceived to be an effective leader, his or her personal shortcomings and even poor organizational performance may be ignored. Thus, the romance of leadership perspective challenges the public’s apparent fascination with leaders and leadership in which leaders are portrayed as heroes and heroines even when there is no real evidence to support this level of admiration. Leadership is viewed as an attribution by the followers rather than a trait or behavior of the leader. This perspective is not “antileadership,” but it does place an emphasis on the follower and the situation. This helps explain why some leaders exercise so much power in organizations.

Leadership Implications: Flexibility Matters

A key takeaway from this chapter is that leaders need to stay flexible and adapt to both followers and the situation they are in. This chapter covers the essential core leadership theories that are best supported by research. Effective leaders understand the manager role and build upon it to create vision and move the organization toward the future. Leadership represents a full range of behaviors, and this is perhaps best represented by the full-range leadership model. Leaders engage in both transactions and transformation, and the importance of behavioral flexibility is a theme in the chapter. This adaptability has been supported by research on the path–goal theory of leadership and other situational approaches. This chapter discusses emerging perspectives on leadership that all emphasize morality, including ethical, authentic, and servant leadership. While research on these perspectives is new, it shows much promise for understanding a new role for leaders that places integrity at the forefront.

In adapting to the situation, leaders should follow these steps based on leadership research:

Assess your followers’ individual differences in terms of abilities and motivation. Get to know followers individually and develop one-on-one relationships with them. Some followers are motivated by pay and other monetary incentives such as bonuses. Others desire more challenging work and a chance to learn new things. Some followers prefer more structure and want direction, and others need relatively more support. Some followers may need both direction and support. Consider their personality differences (you learned about personality in Chapter 2). Consider their Big Five characteristics, and have them complete the Big Five Personality Test found in the Chapter 2 Toolkit (Openness, Conscientiousness, Extroversion-Introversion, Agreeableness, and Neuroticism/Emotional Stability). If they are Type A, they may need to feel a sense of control over their work, and you can help them cope with stress. Remember, not everyone is alike, and leaders need to adapt to followers, as the path–goal theory prescribes.
Assess the situation. Is the work structured or unstructured? In other words, is there only one way to perform a task, or can multiple solutions address the problems they are working on? How much power do you have in the situation? How important is it for you to balance your use of power with maintaining positive work relationships? Finally, consider your entire team. How will the development of in-group relationships with some members affect those in the out-group? Develop plans for engaging those in the out-group and offering them the opportunity to join your in-group. Do members of your work group stick together as a group? Do they have shared goals of performing at a high level?
Pay attention to follower behaviors, and take corrective actions and apply rewards as suggested by the full-range model of leadership. Assess the need for transformational leadership. Consider whether the organization is going through change and if you need to articulate a vision and inspire your followers. If so, implement the four Is of idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration (individualized consideration also addresses Step 2—treat each follower as a unique individual).
Assess the moral component of every leadership decision you make. Start to view your role as a leader as a servant, as suggested by the servant leadership theory. In your interactions with your followers, be yourself (be authentic). Apply ethical guidelines to your interactions with your followers. This will go a long way toward building relationships that are based on trust. This chapter reviews theories that relate to the development of trust and what to do to repair it.

Leadership is a relationship that is built on trust that develops over time. Guidelines for taking responsibility for managing the boss are discussed. Some leader–member relationships develop into mentoring relationships, and the follower can behave in ways that increase the chances of becoming a mentee and experiencing a transformational work relationship. It is important to understand the dynamics of leader–follower relationships, and the role of attributions in relationship development is highlighted.

Leadership is important to the topics covered in all of the chapters in this textbook. Leaders need to understand individual differences such as personality (Chapter 2) and manage emotions and moods (Chapter 3). Leaders can change follower attitudes and improve job satisfaction (Chapter 4). An important leadership role is the decision-making role, and leaders are problem solvers (Chapter 5). To motivate effectively, leaders need to build trust and establish high-quality relationships with their followers (Chapters 8 and 9). You will learn that leadership matters in teams (Chapter 10) as well. One of the most important things a leader must do is resolve conflict and negotiate with others effectively (Chapter 11). Effective leaders know how to communicate one-on-one as well as in large groups⁹¹ (Chapter 12). Leaders today must understand diversity and cultural differences that may affect how employees interact with one another at work (Chapter 13). Organizational culture is, in part, shaped by the leader (Chapter 14). Leaders play an important role in the implementation of organizational change through transformational leadership and helping employees cope with change (Chapter 15). Leadership is a two-way influence process, and the next chapter discusses power as well as influence and politics (Chapter 7).

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Key Terms

achievement-oriented leadership, 133
attributions, 138
attribution theory, 138
authentic leadership, 147
calculus-based trust (CBT), 142
consideration, 132
counterdependent, 138
directive leadership, 133
ethical leadership, 146
external attribution, 138
fundamental attribution error, 138
humble leadership, 148
identification-based trust (IBT), 143
implicit leadership schemas, 150
implicit leadership theory (ILT), 150
in-group members, 134
initiating structure, 132
interdependent, 138
internal attribution, 138
just-world hypothesis, 139
knowledge-based trust (KBT), 142
leader–member exchange (LMX), 134
mentoring, 140
out-group members, 134
overdependent, 138
participative leadership, 133
path–goal theory (PGT), 133
romance of leadership, 151
self-serving bias, 138
servant leadership, 147
supportive leadership, 133
trait approach, 131
transactional leadership, 145
transformational leadership, 145

TOOLKIT ACTIVITY 6.1: Applying the Full-Range Leadership Development Model

These short cases provide an opportunity to practice applying the full-range leadership development model. For each case, select the leadership approach you would take and explain why.

Case 1

Because of organizational restructuring directives from your boss, your department must reassign team members to new project teams. You are thinking of asking a highly capable and experienced member of your work group to handle these reassignments. This person has always been dependable and a high performer. She also has positive working relationships with other team members. She is very willing to help with the reassignments. What would you do? Circle it.

Do nothing and hope the problem takes care of itself.
Allow your follower to complete the reassignments and tell her she may have the afternoon off when it is completed.
Allow your follower to complete the reassignments and only intervene if you notice a problem.
Allow your follower to complete the reassignments and watch to see if she makes mistakes, and then intervene to correct them.
Mentor your follower one-on-one and discuss how doing this task will help her learn new skills. Remind her of how important the restructuring is to the overall vision and strategy of the organization, and be a positive role model.

Discussion Questions

Identify the approach from the full-range leadership development model (e.g., transactional/MBEP or transformational/four Is).
Explain why you would use this approach, citing the full-range leadership development model.

Case 2

You have noticed that one of your team members is not following through on the part of a project assigned to her. She is very motivated and has told you she wants a promotion; however, her recent actions are contradictory to her goal. The current staffing situation does not allow you to reassign the project to someone else in your work group. What would you do? Circle it.

Do nothing and hope the problem takes care of itself.
Tell her that if she wants the promotion she will need to finish the project in 1 week.
Allow your follower to complete the task, and only intervene if you notice a problem.
Allow your follower to complete the task and watch to see if she makes mistakes, and then intervene to correct them.
Mentor your follower one-on-one and discuss how doing this task will help her learn new skills. Remind her of how important the project is to the overall vision and strategy of the organization, and be a positive role model.

Discussion Questions

Identify the approach from the full-range leadership development model (e.g., transactional/MBEP or transformational/four Is).
Explain why you would use this approach, citing the full-range leadership development model.
Compare your responses to the two case studies. Are you consistent with your leadership style, or do you adopt a contingency approach to leadership by changing your leadership style based upon the circumstances?

Source: Cases adapted from Hersey, P., & Blanchard, K. H. (1988). Management of organizational behavior: Utilizing human resources. Englewood Cliffs, NJ: Prentice-Hall.

TOOLKIT ACTIVITY 6.2: Comparing Supervisor Leader–Member Exchange

Locate a manager who will complete the following form about three of their direct reports. He or she can indicate their followers by using initials, first names only, or even fabricated names. Ask the manager to think about their relationship with the member(s) of their staff. Then have them indicate the extent to which they disagree or agree with each statement using the 1 to 5 scale with respect to each of the staff listed by circling their answers.

Source: Scandura, T. A., & Graen, G. B. (1984). The moderating effects of initial leader–member exchange status on the effects of a leadership intervention. Journal of Applied Psychology, 69, 428–436.

Discussion Questions

What patterns do you see in the working relationships that the manager rated? Did they rate everyone the same, or did they give higher scores (4s and 5s) to some followers? Followers with higher scores are the in-group.
Did your manager have any out-group members? If so, which questions indicated that they were in the out-group? Explain why the person was in the out-group. What do you think they could do to improve their working relationship with their boss?
Were all working relationships equally effective (question 7)? Follow up with the manager and ask them to tell you who they trust most to delegate work to.

CASE STUDY 6.1: Which Boss Would You Rather Work For?

José works for a transportation company in Miami. He works on the loading dock but has been taking business courses part time at a local community college. He was married recently and has a baby on the way. He is a good performer but is interested in moving up in the organization. He approached his boss, Kim, and asked how he could learn new skills that would prepare him for the next level, which would be a supervisory position with oversight of seven workers on the dock. His boss listened to his situation and asked questions regarding José’s specific job-related interests and career plans. José told his boss that he had been taking courses, including an organizational behavior course in which he learned leadership skills. Kim was surprised since she didn’t know that José was attending college and he never missed work. She promised to meet with the general manager and discuss José’s increasing qualifications and interests. After discussion, management decided to pay for José’s tuition but encouraged him to wait until he completed his bachelor’s degree so that he could focus on building his management and leadership skills. They promised to consider him for a promotion when he completed his degree. José was somewhat disappointed but was even more motivated to finish school and appreciated the tuition support. José became even more dedicated to his job and the organization. He became one of the best employees in the company and the informal leader of the dock workers. He proactively advocated and protected the reputation of the company outside the organization. For example, another worker was stealing from the boxes on the loading dock and José stopped him and reported it to Kim. Two years later, José completed his degree and the company held a party for him and his family celebrating his achievement. As promised, when a supervisor left the company, José was promoted into a management position. He always remembered Kim’s encouragement and treated his followers the same way—by listening and supporting their goals.

Paula recently graduated from college with a bachelor’s degree in accounting and landed her dream job as an accountant/analyst at a financial services company. Paula was excited about the new opportunity to showcase her skills and contribute to the company. On her first day, Paula arrived early to make a good impression. Her new boss, Jennifer, wasn’t there to see her arrive early. When she did arrive, she breezed past Paula’s cubicle without saying anything. Paula noticed that other people in the office acted the same way that Jennifer did. No one in the office acknowledged Paula’s presence or introduced themselves to her. Paula thought that the cubicle environment was sterile. She had not seen it before starting the job since she had been interviewed in a conference room. Jennifer immediately put Paula to work, however. Her first assigned task was to prepare a bank reconciliation. She had completed a similar assignment in an accounting class, but this was somewhat different and more complex. Paula began working on it but reached a point where she needed help to finish it. She went to Jennifer for help, but Jennifer told her to figure it out by herself. She remarked, “I am so busy right now, I just don’t have time to teach you what you should already know how to do.” Paula was shocked at Jennifer’s response and felt overwhelmed by her new job. She returned to her desk and continued to work on the reconciliation, which took her 3 days to complete. Although she was proud of herself for completing it, she was still concerned that her boss wouldn’t help her and began to doubt herself and whether she was qualified for the job. Over the next year that Paula worked for the company, Jennifer gave Paula low-level tasks that were not challenging and didn’t provide any opportunities to learn. Also, Jennifer never provided Paula with feedback on her work. Paula received no training beyond the online orientation and videos on company policies required by corporate headquarters. As a result, Paula spent most of her days alone in her cubicle and even ate her lunch there, which she packed and brought from home. She did her job but put in minimal effort and spent her time looking for another job. Her first performance appraisal by Jennifer was mostly negative, and she was told that she didn’t perform to standards and did not show initiative. After this appraisal, Paula took a job at another company for less money.

Discussion Questions

Compare the experiences of the two employees (José and Paula). Which boss would you rather work for? Why?
Think about the path–goal theory that was covered in this chapter and determine which leadership styles are exemplified in the two scenarios. Which ones should have been used?
What steps could Paula have taken to develop a higher-quality LMX relationship or “manage her boss” more effectively? Do you think this would have worked in this case?
What were the outcomes for each of the employees and companies in these two scenarios? Thinking about these outcomes, why is it important for organizations to have effective leaders?

SELF-ASSESSMENT 6.1: Mentoring Functions Questionnaire

Think of a person who is or has devoted special time and consideration to helping you with your career. Answer the following questions to determine the type(s) of mentoring you are receiving from this person. This person can be a boss, former boss, professor, former teacher, peer, or family member. Write your responses on the line to the left of the question. There are no right or wrong answers, and you do not have to share your results with others unless you wish to do so.

Scoring and Interpretation

You rated your mentoring on nine questions. Add the numbers you circled in each of the columns to derive your score for each dimension of mentoring. Then add your scores to determine your total mentoring score.

Discussion Questions

Which mentoring function was the highest? If it was role modeling, do you know this person? If not, can you create a relationship with them?
Career development mentoring has been most consistently related to career outcomes for mentees. Evaluate your score on this measure. What can you do to increase your career development mentoring?
Do you think your results would have been different if you had chosen a different person as your mentor? For example, if you chose a peer, would the results be different if you had chosen a boss or a professor? Explain.

Sources: Adapted from Pellegrini, E. K., & Scandura, T. A. (2005). Construct equivalence across groups: An unexplored issue in mentoring research. Educational & Psychological Measurement, 37, 264–279; Hu, C., Pellegrini, E. K., & Scandura, T. A. (2011). Measurement invariance in mentoring research: A cross-cultural examination across Taiwan and the U.S. Journal of Vocational Behavior, 78, 274–282.

SELF-ASSESSMENT 6.2: How Trustful Are You?

This self-assessment exercise identifies your propensity to trust others. The goal is for you to learn about yourself. There are no right or wrong answers, and this is not a test. You don’t have to share your results with others unless you wish to do so.

Instructions: Circle the response that best describes your behavior.

Scoring: Add your responses to the eight questions to compute your total propensity to trust others:

Question 1 ___+ 2 ___+ 3 ___ + 4___ + 5 ___ + 6 ___ + 7 ___ + 8 ___ = _____

Interpretation

Score

Discussion Questions

Evaluate your level of trust in general, considering at least two different situations in which you behaved in a way that is consistent with your overall range.
Are there some situations in which you are more trusting than others? Explain why you tend to trust more in certain circumstances.
Compare your trust assessment results with a classmate. Are your scores similar or different? If they are similar, discuss why you see things the same way. If they are different, discuss why you differ with respect to how much you trust other people.

Source: Adapted from Mayer, R. C., & Davis, J. H. (1999). The effect of the performance appraisal system on trust for management: A field quasi-experiment. Journal of Applied Psychology, 84(1), 123–136.

Chapter Seven Power and Politics

Learning Objectives

After studying this chapter, you should be able to do the following:

7.1: Define power and influence, and provide an example of each.
7.2: Compare and contrast the five bases of power.
7.3: Demonstrate understanding of the three lines of power in organizations by providing examples.
7.4: Identify the most effective influence strategies.
7.5: Compare and contrast “minimizing bad” and “maximizing good” impression management strategies.
7.6: Define perceptions of organizational politics (POP) and evaluate the negative outcomes for employees having this perception.
7.7: Explain why political skill is important for a leader to be effective.

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What Is It Like to Have Power?

Researchers have long asked the question: “What is it like to have power?”¹ The research evidence shows that having power has strong effects on a person’s thoughts (cognitions), affect (emotions and moods), and their behavior. A review of research summarized research findings on the effects of power on the person who holds it. Table 7.1 shows the results of this review. For example, a person’s thoughts are changed, resulting in more optimism, risk taking, and confidence. However, those with a lot of power do not always consider the perspectives of other people and tend to rely on stereotypes of others. With respect to affect, they may have greater emotional displays (such as enthusiasm and pride). However, those in power may be less compassionate and unable to take the perspective of others. They lack empathy and cannot feel the suffering of others. They feel more distant than others. On the flip side, people who feel powerless express more discomfort and fear when asked to discuss controversial subject matter.² Organizational behavior (OB) researchers are particularly interested in the effects of power on behavior, and research has shown that power affects behaviors also. Powerful individuals are more likely to take action, pursue rewards, and initiate negotiations. However, they may also be corrupt and less likely to conform to norms. One study found that powerful individuals have been found to experience less guilt, even when they know that they are violating social norms,³ and they are more likely to be good liars.⁴ Another study found that having powerful individuals in a team harms team performance. When working together in groups, high power groups performed worse than did other groups; individuals who were randomly assigned power in an initial task were less creative.⁵ Power affects us in our personal lives as well. An interesting study of consumer spending found that powerful individuals may be more selfish than others and spend more money on themselves.⁶ In sum, this line of research clearly demonstrates that having power changes people. As you move up in the organization in your career, will power change you?

Source: Adapted from Sturm, R. E., & Antonakis, J. (2015). Interpersonal power: A review, critique, and research agenda. Journal of Management, 41(1), 136–163.

Power and Influence

Learning Objective 7.1: Define power and influence, and provide an example of each.

Ana Guinote, author of a large-scale review of how power affects people, notes: “Power is admired and fought over by those who desire it and often feared by those who lack it. It is ubiquitous and affects the fate of many.”⁷ Decades ago, Bertrand Russell observed that “the fundamental concept in social science is Power, in the same sense in which Energy is the fundamental concept in physics.”⁸^,9 It can be said that power is the other side of the leadership coin. Without power, leadership cannot be effective. If you think about it, leadership requires some form of deference to a leader: “If leadership involves actively influencing others, then followership involves allowing oneself to be influenced.”¹⁰ Yet leaders are reluctant to admit that they want power, and power and politics have been called the “last dirty words.”¹¹ Power is defined as “having the discretion and the means to asymmetrically enforce one’s will over others.”¹² Nearly all definitions of leadership include the idea of influencing others, and power is the source of influence. A useful distinction between power and influence follows:¹³

Power is the potential of one person (or group) to influence another person or group. Some people have a lot of power but they don’t need to actually exercise it. For example, a police officer sitting on the side of the interstate affects your behavior (and those ahead of you!). You remove your foot from the accelerator and slow down. It is the officer’s potential power to write you a ticket and not the actual behavior of writing it that changes your behavior. This is important to keep in mind. You don’t always have to demonstrate your power—if you attain a managerial position and have others who report to you, it is unspoken. Often, power is best executed when it is done so in a subtle manner. Influence, in turn, is the exercise of power to change the behavior, attitudes, and/or values of that individual or group.

Critical Thinking Question: Examine the table and sort the thoughts, affect, and behavior into positive responses and negative ones. Do you think the pros outweigh the cons of having power? Explain.

Critical Thinking Question: What is the difference between power and influence? Provide an example of each.

Influence can, therefore, be thought of as power in use. We first discuss where power comes from followed by how power and influence are effectively used in organizations.

Bases of Power

Learning Objective 7.2: Compare and contrast the five bases of power.

Five bases of power in organizations have been described.¹⁴ Some forms of power come with a person’s position in the hierarchy: position power. Other power may come from the personal characteristics of the person and may have no relationship to their position in the organization: personal power. Position power includes the following:

Coercive power—the ability to punish, and can include threats. For example, a supervisor threatens to write a memorandum to an employee’s file for being late all the time.
Reward power—the ability to provide incentives or other things valued, such as pay raises, bonuses, and promotions.¹⁵ For example, an employee receives a merit pay increase.
Legitimate power—the ability to make a request and get a response due to the nature of the roles between two people (e.g., boss and direct report, a favor-doer and a favor-recipient), it is based upon structural level in the organization and/or a feeling of obligation. For example, an employee completes a sales report for their boss, and such reports are in their job description.

While coercive power is on the list of bases of power, most leaders in organizations say that they rarely, if ever, use it. French and Raven warned that the use of coercion may result in employee resistance and other forms of dysfunctional behavior on the part of the follower. Another example of dysfunctional behavior is when followers talk badly about the boss behind his or her back. The personal sources of power are not tied to position but can be generated by anyone in the organization. They help explain why many people in organizations have a great deal of power although they don’t have important-sounding titles and are not at the upper levels in the organizational hierarchy. These personal power sources are as follows:

Expert power—the ability to influence others due to knowledge or a special skill set or expertise. For example, the information technology department has special skills to troubleshoot computer problems for a manager.
Referent power—the ability to influence based upon others’ identification with the individual and followers’ desire to emulate them, it is based on liking, respect, and admiration. For example, volunteers work hard for a political candidate that they admire.

A study of college coaches found that expert power was most related to athletes’ satisfaction with the coach, coaches’ general influence, training effort, and the team’s belief in their abilities (collective efficacy). Coaches’ use of other bases of power had mixed results, however.¹⁶ A study of Malaysian employees found that expert, referent, and reward power were positively related to satisfaction with the supervisor, but legitimate and coercive power were not.¹⁷ A meta-analytic review¹⁸ found that legitimate power exerts little influence on either job satisfaction or performance. Similarly, reward power does not significantly affect satisfaction, but it does have a positive influence on performance. In contrast, coercive power seems unrelated to performance but does negatively affect satisfaction. With regard to the personal power bases, referent power most strongly influences satisfaction, and expert power positively influences both satisfaction and performance.

As noted previously with respect to coercion, these power bases may result in different reactions from followers. Three possible outcomes of an influence attempt can be distinguished:¹⁹

Commitment— also known as internalization; a strong effort made and enthusiastically carries out the request. Both attitudes and behaviors change.
Compliance—willing to complete the request but does so in an apathetic manner giving minimal effort; only behavior changes.
Resistance—opposed to the request and refuses to do it. They may explain why they can’t complete it, try to change it, get superiors to change it, delay it, or even sabotage the task by doing it wrong; no change in attitude or behavior toward the request.

Figure 7.1 summarizes the bases of power and shows the likely responses from followers. Coercive power may be met with resistance, but referent power, in contrast, may result in commitment to the leader’s vision. Compliance can be expected from legitimate power and the ability of the leader to reward followers for their work. Expertise may also result in compliance, but it is higher than legitimate power since some may admire expertise and it may have some impact on commitment. The figure also depicts another important concept with respect to power: the zone of indifference.²⁰

Figure 7.1 Bases of Power and Follower Responses

Sources: French, J. R. P., & Raven, B. (1960). The bases of social power. In D. Cartwright & A. Zander (Eds.), Group dynamics (2nd ed., pp. 607–623). New York, NY: Harper & Row; Barnard, C. (1938). Functions of the executive. Cambridge, MA: Harvard University Press.

There exists a “zone of indifference” in each individual within which orders are acceptable without conscious questioning of their authority…. The zone of indifference will be wider or narrower depending upon the degree to which the inducements exceed the burdens and sacrifices which determine the individual’s adhesion to the organization. It follows that the range of orders that will be accepted will be very limited among those who are barely induced to contribute to the system.

As shown in Figure 7.1, the zone of indifference falls between reward power and expert power, and is centered on legitimate power. In most cases, followers will comply with directions from leaders because they fall within the zone in which they are indifferent. Followers become dissatisfied and resist when coercive tactics are employed. However, working within the zone does not produce high levels of commitment or engagement, which are now needed for organizations to function most effectively. To gain high levels of engagement and commitment, the leader should develop and use expert power at a minimum and try to develop referent power through being a positive role model and getting followers to respond in an emotionally positive way to his or her influence. For example, a new graduate negotiates his salary when offered employment by a consulting company. At the outset, the graduate focuses on long-term financial benefits. But after the graduate is hired, he begins to become more committed to the mission of the consulting firm and admires his mentors. Over time, pay becomes less important, and he makes sacrifices by working long hours for the company.

Organizational Sources of Power

Learning Objective 7.3: Demonstrate understanding of the three lines of power in organizations by providing examples.

Power is based on how much people depend upon others for necessary resources.²¹ A leader’s control over resources has been linked with follower perceptions of their power and outcomes of more hope and lower turnover.²² Rosabeth Moss Kanter described power as a property of organizational systems rather than individuals.²³ She presented the following three “lines” of power for leaders in organizations to tap into to gain productive power:

Lines of supply. Leaders bring in the things that their group needs, such as materials, money, and resources such as rewards and even prestige.
Lines of information. Leaders need to know what is happening in the organization that may affect their group’s goals. Having access to information from all areas of the organization is an important source of power. Also, knowing who to share information with (and not share it with) is an essential skill that leaders need to develop.
Lines of support. A leader needs to be able to innovate to have an impact on the organization. He or she needs support that allows for risk taking beyond typical organizational routines. Leaders also often need the backing of other influential managers in the organization to get things done.

Research in Action

Can Power Make Followers Speechless?

A series of laboratory experiments was conducted to examine the impact of how much the formal leader of a group talks on the reactions of team members. MBA students were assigned to work on a leadership simulation. The first experiment showed that leaders who felt powerful were more likely to verbally dominate discussions, and this decreased perceptions of their openness. As a result, team performance was lower. The second experiment replicated these findings and further demonstrated the important role of team members’ reactions to leaders’ behavior. Specifically, although subjective feelings of power increased leaders’ autocratic tendencies, their formal role determined team members’ willingness to give in to them. The third experiment replicated the findings from Studies 1 and 2 with respect to formal leaders. This study also found that teams with powerful formal leaders reported higher levels of their leader talking, lower team open communication, and lower team performance. This only occurred when leaders were not reminded of how important their team member input was for success. When leaders were reminded that all team members had the potential to contribute to team success, these effects did not emerge. These findings show that a leaders’ awareness of the importance of their team members motivates them to overcome their tendency to discount others’ perspectives and input. In other words, the negative effect of power on team open communication is eliminated. A summary of these research findings is shown in Figure 7.2.

Figure 7.2 Power and Talking Affects Team Communication and Performance

Discussion Questions:

Why do you think that being assigned as a formal leader results in the person dominating team discussions?
Have you ever held back communication in a team when the leader behaved autocratically? Explain why the leader’s amount of talking suppresses team members’ open communication.
How can organizations implement the idea that reminding a leader of the importance of team open communication is important for team performance?

Source: Tost, L. P., Gino, F., & Larrick, R. P. (2013). When power makes others speechless: The negative impact of leader power on team performance. Academy of Management Journal, 56(5), 1465–1486.

Structural power comes from a person’s position and the communication networks they are in. This view of power suggests that sometimes power arises from “being in the right place at the right time.” Organizational sources of power result in part from being in a position of authority within an organizational hierarchy.²⁴ For example, a leader may be in a place to resolve uncertainty for the organization or bargain across departments, which may also result in being powerful. For example, purchasing agents may have a great deal of power because they operate between engineering, production scheduling, and marketing within the organization and outside vendors. They can use their position to influence other departments and gain preferential treatment in exchange for expedited purchasing orders.²⁵ Also, a person’s position in an organization determines with whom they communicate and what information they have access to. These sources of power exist in organizations regardless of one’s individual personality or leadership style.²⁶ That being said, some people are more adept at using influence strategies to attain their goals than others. A clever person might even be able to generate sources of power, including supply, information, and support.

Remember that power is simply a stored-up ability to get others to do what you want them to do, and that some power will come from the position you have in the organizational hierarchy. However, what happens if you don’t have formal authority over another person and you need them to commit to your goals? Research on influence without authority addresses this important question.

Influence Without Authority

Power is based upon the general dependence postulate: The greater someone depends upon another person, the more power they have over them. Based upon this idea, to influence someone over whom you have no formal authority, you need to assess whether and how much they may depend upon you.²⁷ A model of influence without authority can be used in wide variety of situations.²⁸ The model is based upon the law of reciprocity first articulated by Gouldner: the nearly universal belief that if someone does something for you, they should be paid back.²⁹ The influence without authority process is depicted in Figure 7.3. It begins with assuming the other person is your ally and wants to exchange with you. You need to be clear about what your goals are and then understand the other person’s situation (showing empathy). Then you identify what you have to exchange (i.e., the currencies) and what you need from them. Dependence is created when you control resources that are important, scarce, and cannot be substituted by others.³⁰ Examples of such resources are support, loyalty, and extra effort on the job. In their model, Cohen and Bradford call these resources the “currencies of exchange,” and others include supporting the vision, gaining additional resources, providing visibility, giving personal support, and showing gratitude. It is important to assess the quality of the relationship (if it is a supervisor, you can use the LMX7 measure from Chapter 6 to assess relationship quality). Finally, influence the person and emphasize the give-and-take as shown in the figure.

Critical Thinking Questions: Do you think the “influence without authority” approach contains risks? If not, why? If so, what are they?

Figure 7.3 Influence Without Authority

Source: Cohen, A. R., & Bradford, D. L. (2005). Influence without authority (2nd ed.). New York, NY: Wiley.

Next, we turn to more research evidence on how power is used in organizations and the specific strategies (tactics) that have been shown to work (and those that don’t).

Influence Strategies

Learning Objective 7.4: Identify the most effective influence strategies.

Social influence is one of the oldest experimental topics in the behavioral sciences, dating back to Triplett’s³¹ investigation of how cyclists become more competitive in the presence of other cyclists—their behavior changed compared to when they rode alone.³² Much more recently, Gary Yukl presented a typology of proactive influence tactics based upon his decades of research. While other typologies exist,³³ Yukl’s typology is comprehensive and has been researched employing a wide variety of research methods including “critical incidents, diaries, questionnaires, experiments, and scenarios.”³⁴ He and his colleagues developed an assessment for use in research called the Influence Behavior Questionnaire.³⁵^,36 These tactics may be used alone or in combinations, and some are more effective than others.³⁷ Research has also shown that there are cross-cultural differences in perceptions of the effectiveness of influence tactics.³⁸ For example, U.S. managers prefer rational persuasion, whereas Chinese managers prefer coalitions.³⁹ In all cases, a careful diagnosis of the person you are trying to influence and the situation is necessary. These tactics are shown in Table 7.2.

Source: Yukl, G. (2013). Leadership in organizations (6th ed.). Boston, MA: Pearson.

Which Influence Strategies Are the Most Effective?

So what does research show with respect to which tactics work and with whom? As noted earlier, followers may respond to an influence attempt with commitment, compliance, or resistance. OB research has demonstrated that the different influence strategies used have different reactions from followers and other targets of influence.⁴⁰^,41,42

Rational persuasion is a tactic commonly employed by leaders, and it is very effective—particularly if the leader is viewed as an expert. Apprising involves persuading the target of influence that complying will advance his or her career. It is more likely to be used with peers or followers than with the boss. Inspirational appeals try to arouse followers’ emotions and can work with all targets of influence. It may be particularly useful during times of organizational change. Consultation invites the person to be involved with a proposed idea and may be used in any direction as well. It may be particularly effective with peers in cross-functional teams, for example. Exchange is based on the quid pro quo in organizational life. It may be direct or indirect, but it will involve the idea that the exchange of favors will occur between the parties. This tactic has been shown to be more effective with peers than with bosses. Collaboration is an offer to provide assistance or resources to the person being asked to do something. It is used least with superiors in the organization but can be very effective with peers and followers.

Ingratiation is compliment-giving or acting deferential. This tactic must be used with caution because if it is overdone or comes across as insincere, it can fail entirely. Personal appeals are based on friendship or loyalty and may be more appropriate with a peer or someone outside the organization than with bosses or subordinates. Asking someone to do something based on a personal friendship may be a risky strategy. Legitimating tactics remind the target of their role in the organization in relation to the person making the request—for example, “I am asking you to do this because it is your job.” This works with followers better than other targets. Pressure tactics are threats and relate to coercion. For this reason, pressure tactics should be used sparingly—even with followers, where they are most commonly found. Finally, coalition tactics involve gaining the support of others. They are more likely to be used with peers or bosses, but the idea is that there is “strength in numbers” and should be used carefully, especially with supervisors or those higher in the organization. A meta-analysis of 8,987 respondents⁴³ examined the impact of influence tactics and task (e.g., performance) and relationship outcomes (e.g., trust). Rational persuasion, inspirational appeal, apprising, collaboration, ingratiation, and consultation were positively related to both task and relationship effectiveness. Pressure was negatively related to both outcomes. Rational persuasion is the only tactic that held stable positive relationships with both task and relationship outcomes.

Ingratiation is an influence tactic in which flattery is used to create a favorable impression, but are there other ways to change the way others see you? Research on impression management addresses this question, and the next sections addresses how people manage impressions of others in organizational settings.

Impression Management

Learning Objective 7.5: Compare and contrast “minimizing bad” and “maximizing good” impression management strategies.

People in organizations care about what others think about them. Social psychologists have researched self-presentation and the motivations that people have to present themselves in a positive way to others.⁴⁴ Impression management is a set of behaviors that people use to protect their self-image or change the way they are seen by others (or both).⁴⁵^,46,47 People are motivated to manage impressions for three reasons: the relevance of the goal of the impressions, the value of these goals, and the difference between their desired and current image. For example, a person is motivated to manage impressions when they see their image as important for achieving a goal, such as a promotion or pay raise. Research has also shown that when people feel there is a discrepancy between the way they hope to be seen and how they are currently seen, they are more motivated to manage impressions. For example, if an employee thinks they are not liked by their coworkers, they may begin to compliment them (ingratiation).⁴⁸ It is important to keep in mind that impression management may be an inauthentic representation of the self, so it’s important not to be seen as insincere when engaging in these behaviors.⁴⁹ Research has found that when presenters engaged in internal self-enhancement they were viewed as immoral, unintelligent, and unfriendly.⁵⁰

Impression management has been shown to affect interviews, performance appraisals, and career success.⁵¹ A wide range of impression management tactics have been studied, and there are two different goals for using them. One goal is to use them defensively to avoid blame for poor performance or ask for forgiveness (“minimizing bad”), and the other goal is to generate respect and liking from other people (“maximizing good”).⁵² This view of impression management includes these maximizing good tactics: self-promotion, whereby individuals point out their abilities or accomplishments in order to be seen as competent by observers; ingratiation, whereby individuals do favors or use flattery to elicit an attribution of likability from observers; and exemplification, whereby people self-sacrifice or go above and beyond the call of duty in order to gain the attribution of dedication from observers. The minimizing bad tactics include: intimidation, where people signal their power or potential to punish in order to be seen as dangerous by observers; and supplication, where individuals advertise their weaknesses or shortcomings in order to elicit an attribution of being needy from observers.⁵³ For example, supplication would be telling your team members that you didn’t do well in statistics courses to elicit their help on a team project. This is an example of trying to influence teammates to see you as needing help. An example of “maximizing good” is exemplification in which a person stays late at work so that others know they are a hardworking employee. This approach was later modified by researchers, and Table 7.3 shows examples of impression management strategies in which some additional “minimizing bad” tactics were added, such as apologies, excuses, and justifications.⁵⁴ Impression management strategies have been found to be job-focused (e.g., exemplification), supervisor-focused (e.g., ingratiation), or self-focused (e.g., self-promotion).⁵⁵ Despite the large number of impression management tactics discovered, the strategies most relevant for leaders are the ones that maximize good intentions: exemplification, ingratiation, and self-promotion.⁵⁶ In Self-Assessment 7.1 at the end of this chapter, you can learn the degree to which you would use some of the “maximizing good” impression management strategies.

Critical Thinking Questions: Do you think that impression management strategies are ethical? Why or why not? Can you think of situations where these tactics could be abused?

Sources: Adapted from Bolino, M. C., Kacmar, K. M, Turnley, W. H., & Gilstrap, J. B. (2008). A multi-level review of impression management motives and behaviors. Journal of Management, 34(6), 1080–1109.

Managing Impressions With Body Language

Making direct eye contact and having a relaxed facial expression predict whether a person is viewed as having power.⁵⁷ Recent research by Amy Cuddy and her colleagues has indicated a person’s body language is also an important aspect of impression management. For example, holding an expansive posture may make a person feel more confident and, in turn, influences how they are perceived by others.⁵⁸ For example, think about the stance of Wonder Woman with her arms on her hips and legs planted firmly apart. In the research, “power poses” were not superhero stances but were expansive—either sitting with one’s arms behind the head and legs up on a table or leaning forward on a table with arms spread apart. Another example of powerful body language is extending one’s hand with the palm down for a handshake. This communicates dominance. Examples of the power poses used in this research are shown in Figure 7.4. The researchers conducted experiments in which subjects were asked to hold a power pose for 2 minutes. Following the power pose, subjects self-rated themselves higher on how powerful they felt (compared to subjects that held low power poses) and were more likely to take risks in a gambling task.⁵⁹ Another study found that subjects who did the power poses prior to a job interview did better and were more likely to be hired.⁶⁰ These subjects were asked to stand with their hands on their hips and feet apart for about 5 minutes while they prepared for an interview (i.e., the Wonder Woman pose). A meta-analysis of 55 studies found that power posing appears to be related to feelings of power, including emotions, affect, mood, and evaluations, attitudes, and feelings about the self.⁶¹ According to Cuddy, “poses are powerful … it’s about becoming so comfortable and feeling you have so much control over how you present yourself that you become more your authentic self.”⁶²

Figure 7.4 Power Poses

Source: Carney, D. R., Cuddy, A. J. C., & Yap, A. J. 2010. Power posing: Brief nonverbal displays affect neuroendocrine levels and risk tolerance. Psychological Science, 21(10), 1363–1368.

This discussion suggests that exercising power and influence effectively requires both planning and skill. OB research has identified three important political skills: Leaders need to understand the perceptions of organizational politics, have political skill, and must use power ethically (see the boxed insert for specific guidelines to help in making ethical decisions regarding the use of power). The next section describes organizational political skills and how you can develop your leadership through political acumen.

Best Practices

Power and Ethics: Making Tough Choices

Perhaps the most important point about the use of influence in organizations is the ethical use of power and politics for leaders. We only need to think of the scandal where a Manhattan jury found Dennis Kozlowski and Mark Swartz guilty of stealing more than $150 million from Tyco through fraud in the sale of company shares and falsification of company records. Leaders must apply ethical tests to every action they take in the organization using the tactics in this chapter. How Good People Make Tough Choices provides a nine-step checklist you may use to determine if they are being ethical in their dealings with others:⁶³

Recognize that there is a moral issue.
Determine the actor (and the players) in the issue.
Gather the facts.
Test for right vs. wrong: four tests.
- Is it legal?
- Does it feel right at the gut level?
- Would you want to see this on the front page?
- What would your mother/family think?
Test for right vs. right (when both options seem moral): e.g., truth vs. loyalty (hard decisions).
Apply the appropriate ethical principles (e.g., utilitarian, rights, justice).
Is there a third way through the dilemma?
Make the decision.
Revisit and reflect.

Discussion Questions

Provide an example of the utilitarian approach in organizations (think of a decision that does the most good for the most people).
How does the utilitarian approach in your example differ from focusing on individual rights? What would you do differently if focusing on individual rights?
What approach do you think most leaders use in practice?

Source: Kidder, R. M. (2003). How good people make tough choices: Resolving the dilemmas of ethical living. New York, NY: HarperCollins.

Perceptions of Organizational Politics

Learning Objective 7.6: Define perceptions of organizational politics (POP) and evaluate the negative outcomes for employees having this perception.

Organizational politics have been defined as unsanctioned influence attempts that seek to promote self-interest at the expense of organizational goals.⁶⁴^,65 Behaving politically is not prescribed in an employee’s job description or formal role, but people engage in these behaviors to gain advantage over others.⁶⁶ Research has shown that employees vary in the degree to which they perceive behaviors of others as constituting organizational politics as being self-serving and at the expense of others. Negative political behaviors are a pressing problem for organizations and can create “corrosive political climates.”⁶⁷ Perceptions of organizational politics (POP) is defined as an individual’s subjective appraisal of the extent to which the work environment is characterized as self-serving of various individuals and groups, to the detriment or at the cost of other individuals or groups.⁶⁸ This is an employee’s perceptual evaluation of a behavior as being political, and this may or may not reflect reality. POP consists of general political behavior, which includes the behaviors of individuals who act in a self-serving manner to obtain valued outcomes; going along to get ahead, which consists of a lack of action by individuals (e.g., remain silent) in order to secure valued outcomes; and pay and promotion policies, which involves the organization behaving politically through the policies it enacts.⁶⁹ Sometimes it can be difficult to determine whether or not a given behavior is political—Toolkit Activity 7.1 will allow you to assess how you might react to a political situation in an organization.

How would you answer the following?

People in this organization attempt to build themselves up by tearing others down.
There has always been an influential group in this department that no one ever crosses.
Agreeing with powerful others is the best alternative in this organization.
Telling others what they want to hear is sometimes better than telling the truth.
Favoritism, rather than merit, determines who gets good raises and promotions around here.
Inconsistent with organizational policies, promotions in this organization generally do not go to top performers.⁷⁰

These questions are taken from the measure used to assess POP. If you found yourself agreeing or strongly agreeing with these questions, you view your organization as having a great deal of organizational politics. The first two questions are general political behavior, the second two questions are going along to get ahead, and the last two questions are pay and promotion policies. These perceptions of organizational politics have been associated with decreased job satisfaction, increased anxiety and stress, increased turnover, and reduced performance.⁷¹ These results have been shown to be consistent over the past 30 years of research. A meta-analytic study⁷² found POP has strong negative relationships with job satisfaction and organizational commitment. However, POP had moderately positive relationships with job stress and turnover intentions. There was no relationship between POP and job performance. A second meta-analysis involving a larger sample of 44,560 participants found that POP is positively related to stress, burnout, turnover intentions, and counterproductive work behavior, and negatively related to job satisfaction, citizenship behavior, and job performance.⁷³

Research has identified some potential causes of POP including job ambiguity, scarcity of resources, and a poor trust climate.⁷⁴ Other causes include highly centralized decision making, lack of formality in procedures, and low procedural justice (unfairness). In addition, career-related events such as lack of advancement opportunities may trigger POP. Mistrust in management and low leader-member exchange (LMX, described in Chapter 6) also influence POP. In other words, out-group members are more likely to view the work environment as being political. Personality factors such as having a high Mach personality (see Chapter 2 for discussion of the Mach personality) and negative affect (see Chapter 2 for discussion of negative affect) influence POP.⁷⁵^,76,77,78 A summary of these factors and the outcomes of POP is shown in Figure 7.5. Research has shown that the job/work context factors have the most influence on POP (i.e., things like the lack of career opportunities and development, mistrust, and low LMX).⁷⁹ As the figure shows, POP is related to job anxiety (stress), lower job satisfaction, increased turnover, and lower job performance, as the meta-analytic studies reviewed have shown. However, how much control a person has over their work and understanding of what is happening in the organization reduces the effects of POP on stress and job satisfaction.⁸⁰ It is important for a leader to build effective working relationships with all of the members of their work group and be fair to avoid the emergence of POP. As Chapter 6 discusses, trust really matters in organizations, and POP is yet another outcome of the lack of trust in management.

Figure 7.5 Influences on Perceptions of Organizational Politics

Source: Adapted from Atinc, G., Darrat, M., Fuller, B., & Parker, B. W. (2010). Perceptions of organizational politics: A meta-analysis of theoretical antecedents. Journal of Managerial Issues, 494–513; Ferris, G. R., Perrewé, P. L., Daniels, S. R., Lawong, D., & Holmes, J. J. (2016). Social influence and politics in organizational research: What we know and what we need to know. Journal of Leadership & Organizational Studies, 24(1), 5–19.

Organizational politics can bring out the “dark side” of power. You have probably heard of Bernard Madoff, who almost always tops the list of leaders who have abused their power. Madoff ran an investment securities firm that delivered high percentage returns over a long period of time. But a lot of people were suspicious of Madoff’s ability to deliver such returns compared to the markets. It turns out that he ran a $50 billion Ponzi scheme that, when discovered, ruined the life savings of many people. It’s not yet clear how many people at Bernard L. Madoff Investment Securities knew of the scam, but it’s clear that Madoff was the mastermind.⁸¹ He was clearly a Machiavellian personality, and his company lacked the formal checks and balances that would have uncovered the scandal sooner. The Madoff example shows how a leader’s abuse of power becomes political and unethical.

Another influence on POP is unethical leader behavior. A study of 136 pairs of matched leaders and followers found that when ethical leadership is lacking, there may be increased POP. This study also found that political skill reduced the negative effects of POP on the helping behaviors and how promotable followers were seen by supervisors.⁸² Political acumen may mitigate the perceptions that behaviors are politically self-serving. Next, we turn to research on political skill.

Political Skill

Learning Objective 7.7: Explain why political skill is important for a leader to be effective.

The power bases and influence tactics described in this chapter may be viewed by others in an organization as political. Political skill has been defined as follows:

The ability to effectively understand others at work, and to use such knowledge to influence others to act in ways that enhance one’s personal and/or organizational objectives.⁸³

Political skills are comprised of four sets of behaviors. First, networking ability is the ability to create a diverse constellation of contacts both inside and outside of the organization. Second, social astuteness is being able to accurately interpret the behavior of others through attentive observation. Third, interpersonal influence is having the ability to adapt influence strategies to different situations. Fourth, apparent sincerity is appearing to others as genuine and honest.⁸⁴ The Toolkit Self-Assessment 7.2 at the end of this chapter contains a self-assessment that you can complete to assess your political acumen with respect to these four behaviors.

A meta-analysis of 120 unique samples⁸⁵ found that political skill is positively related to self-efficacy, job satisfaction, organizational commitment, work productivity, organizational citizenship behavior, career success, and personal reputation. In this study, political skill was also found to be negatively related to stress due to physiological strain. Employees higher in political skill benefit when leaders have in-groups and out-groups. Politically skilled employees reap the benefits of in- and out-groups since they enjoy higher LMX and relative (i.e., to their peers) LMX quality. Those with political skills are also rated higher by their supervisors with respect to job performance and organizational citizenship.⁸⁶ Research has shown that political skill increases the effectiveness of impression management. Individuals who are high in political skill have the ability to create better supervisor impressions when they use impression management. However, individuals who engage in high levels of impression management are viewed less favorably when they are low in political skill. If lacking political skill, a person should avoid using impression management tactics.⁸⁷

Having Both the Will and the Skill for Politics

Research shows that individuals need to have the “will” as well as the “skill” for political acumen. Being proactive combined with political skill was most related to career satisfaction in a recent study.⁸⁸ Research has demonstrated how “will” and “skill” combine: Having a strong power motive is related to being viewed as a formal leader in a group, but political skill is related to higher perceptions of leadership performance.⁸⁹ The relationship between will and skill is now considered to be more complex and can best be described as an inverted U-shaped relationship between will and job performance. In other words, having the will to use political skills will improve job performance—to a point. However, the will can go too far because if a person engages in too much political activity, it may actually harm their job performance.⁹⁰ This relationship is shown in Figure 7.6. For example, if a leader constantly displays apparent sincerity, people may begin to question whether or not they are genuine. Or the leader may switch their influence style so often that they appear inconsistent to others. So scholars in the area of political skill offer a word of caution: It is important not to take your will and political skill behaviors to extremes.

Figure 7.6 The Relationship of Political Will and Political Skill to Job Performance

Source: Adapted from Harris, J. N., Maher, L. P., & Ferris, G. R. (2016). The roles of political skill and political will in job performance prediction: A moderated nonlinear perspective. In E. Vigoda-Gadot & A. Drory (Eds.), Handbook of organizational politics: Looking back and to the future (pp. 15–39). Northampton, MA: Edward-Elgar. (p. 27.)

To mitigate the negative outcomes associated with perceptions of political behavior, there are two main approaches. The first is to develop political skill, and the second is to consider the ethical implications of organizational politics. Political skill is the first tool essential for making all of the tactics described in this chapter work. The second approach to mitigate the negative impact of perceptions of politics is to ask whether the use of power, influence, and/or political skill in an organization to obtain outcomes that you prefer is ethical. It may depend, in part, on the goals and objectives being pursued. However, the ends don’t justify the means. It is also important to treat others ethically and fairly.

Critical Thinking Question: In addition to the goals and objectives of an influence attempt, what are other ethical concerns regarding the use of political skills in organizations? Develop an example of a leader taking political skills too far and being seen as dishonest or not genuine.

Leadership Implications: Managing With Power

An effective leader needs to understand the difference between power and influence. Based upon the research evidence presented in this chapter, it is important to recognize that there are structural as well as personal sources of power. Every leadership position will have some positional sources of power due to location in the organizational hierarchy. By virtue of position, a leader will also have access to information through communication networks (communication systems are discussed in Chapter 12 of this textbook). Generating power and storing it for future use is important. The skillful leader understands how to use this stored power to get things done and solve problems in the organization. Jeffrey Pfeffer of Stanford University, an expert on power in organizations and author of the best-selling book Managing With Power, offers the following guidelines for managing with power⁹¹ (with notes on how the guidelines relate to the updated research covered in this chapter).

Recognize that every organization has varying interests, and the leader needs to first diagnose the political landscape. Understand these interests and whom they belong to. Perceptions are not necessarily reality, but they do influence thoughts, feelings, and behaviors. Understand that perceptions of politics matter and affect employees’ satisfaction, performance, and stress levels. Develop political acumen by understanding that political skill can be learned and may reduce the perceptions of politics in the organization.
Figure out what point of view various individuals and units have on issues of concern to the leader. The secret to success is to get those who hold different views from your own on board with what we need and want them to do. In general, the personal sources of power (expert and referent) get the most positive responses from people in organizations. However, reward power can also be used effectively.
Understand that to get things done, you need power—so you need to understand where power comes from and how the sources of power can be developed. Be willing to do things that build your sources of power. Know that power comes from position as well as individual personality and leadership style. Develop strategies for “maximizing good” impression management, as well as effective use of body language to convey that you have power. Assess whether you have the “will” to demonstrate political “skill” but be careful not to take political skills to an extreme or you may be viewed as a fake.
Understand the strategies and influence tactics through which power is developed and used in organizations. These include influence strategies discussed in this chapter, but also the timing, the use of structure, and the social psychology of commitment. This requires an understanding that the target of your influence strategies may respond with commitment, compliance, or resistance. As shown in this chapter, there is a zone of indifference, where compliance may be gained by making legitimate requests. However, the most effective response is commitment, where the target of your influence attempt internalizes your goals and responds by changing both their attitude and behavior.

Effective leaders use power, influence, and politics to get things done. It is part of every manager’s job to generate and use power. This chapter opens with a discussion of how power changes people, so as you advance to higher levels in an organization, be mindful of the impact that being more powerful is having on your thoughts, feelings, and behaviors. Having political skills can have positive outcomes for a leader personally as well as benefitting their organization. Political skills may reduce negative perceptions of politics. The relationships of political skills to career satisfaction, job satisfaction, and performance have been established, but be careful not to take them to an extreme. Remember that it is important to influence others ethically. A nine-step checklist has been provided for a leader to check all influence attempts to ensure they follow ethical guidelines. This chapter highlights the importance of using power, influence, and politics in an ethical way.

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Key Terms

apprising, 168
coalition tactics, 169
coercive power, 162
collaboration, 168
commitment, 163
compliance, 163
consultation, 168
exchange, 168
exemplification, 169
expert power, 163
impression management, 169
influence, 162
ingratiation, 169
inspirational appeals, 168
intimidation, 169
law of reciprocity, 166
legitimate power, 162
legitimating tactics, 169
organizational politics, 172
perceptions of organizational politics (POP), 172
personal appeals, 169
personal power, 162
political skill, 171
position power, 162
power, 162
pressure tactics, 169
proactive influence tactics, 167
rational persuasion, 168
referent power, 163
resistance, 163
reward power, 162
self-promotion, 169
supplication, 170
three “lines” of power, 164
zone of indifference, 163

TOOLKIT ACTIVITY 7.1: Politics or Citizenship?

Instructions

Put yourself in the situation described in this scenario and then answer the questions that follow:

Smitheson & Company was founded in 1989 in a small Chicago suburb. Since its creation, the company has grown from a small printing company to a midsized printing and distribution enterprise that provides services to corporate customers as well as to private individuals. Smitheson & Co. presently employs 51 individuals. The company is set up so that there is one supervisor in charge of the employees in each of three departments: design, printing, and sales/distribution. Each of the three supervisors report directly to the president of the company.

Most people who work as Smitheson would agree that it is the kind of work environment where it is important to find out right away which people can help you get ahead and which people not to cross. Even for people who aren’t the hardest workers, trying to impress the boss seems to be beneficial in terms of getting promotions and pay raises. All in all, it’s the kind of place where it is more important to impress the boss than to be the best at doing your job. Smitheson supervisors do not use a formal system to evaluate their employees’ performance: Pay raises and promotions are rewarded every year in December based on managers’ informal assessments of “employees’ contributions.”

You have worked at Smitheson for the past 2 years in the printing department as a “printing worker.” There are 15 other people who also work in the printing department under Cory, the printing supervisor. You enjoy your job on most days, mostly because of your fascination with the printing process and the enjoyment you get from mastering the operation of the various machines. Your job involves four main work tasks: Consulting with the design department, preparing for printing (choosing materials and programming machines), printing itself, and inspection. At the beginning of each workday, each of the employees in the department is given a list of the projects that they are expected to complete that day.

Kris is another employee who works in the printing department and was hired at about the same time you were. Kris is an average performer; in fact, you would guess that the quality of Kris’s work is about the same as yours. Even though it’s not required, Kris has attended and made suggestions at three company workforce development meetings (you have noticed that he has never attended one of these meetings when he knows Cory won’t be there). Twice you noticed that when other printing workers fell behind in production, Kris slid over to their production stations to help them get back on track. Both times he did this, Cory was right there in the production room, able to witness Kris’s good deeds. When a new employee started recently, Kris went to Cory and volunteered to “show him the ropes” and answer any questions that he might have.

When pay raises and promotions are announced, you learn that Kris has been promoted from “printing worker” to “project coordinator.” The promotion means that Kris will be given more of the important corporate projects to work on and, as a result, will get a pay raise.

Imagine that you work in Kris’s department and were passed over for the promotion and pay raise. Answer these questions:

In this department, the pay and promotion policies are applied politically.

Yes ______ No ______ Not sure ______

The pay increase and promotion was inconsistent with the published policies.

Yes ______No ______ Not sure ______

I did not receive a raise that was consistent with the policies on how raises should be determined.

Yes ______No ______ Not sure ______

In this department, the stated pay and promotion policies had nothing to do with how pay raises and promotions are determined.

Yes ______No ______ Not sure ______

When it comes to pay raise and promotion decisions, policies were irrelevant.

Yes ______No ______ Not sure ______

Promotions in this department are not valued much because how they are determined is so political.

Yes ______No ______ Not sure ______

If you answered “Yes” to four or more of these questions, you are experiencing POP related to pay and promotion policies. If you answered “not sure” to more than four of these questions, you may have difficulty discerning political behavior from citizenship behavior in organizations. In other words, you believe that the same behavior could be interpreted different ways. However, participants in the research study cited below could detect that Kris’s behaviors were “self-serving.”

Form a group of four to five classmates and compare your answer to the questions about POP above. Discuss the following questions and be prepared to report your consensus on them to the class.

Discussion Questions

Why do you think Kris got promoted, even with average performance? How do you feel about being passed over for the promotion and Kris getting it?
Do you feel that Kris’s behavior was altruistic (i.e., being a good organizational citizen)? Or do you view the behavior as self-serving and political? Will POP change your job satisfaction? Your performance?
What aspects of “maximizing good” impression management was Kris exhibiting? Would you behave this way to gain a promotion?

Sources: Vignette from Farrell, S. K., & Finkelstein, L. M. (2011). The impact of motive attributions on coworker justice perceptions of rewarded organizational citizenship behavior. Journal of Business and Psychology, 26(1), 57–69. Used with permission. POP questions on pay and promotion policies adapted from Kacmar, K. M., & Carlson, D. S. (1997). Further validation of the perceptions of politics scale (POPS): A multiple sample investigation. Journal of Management, 23(5), 627–658.

TOOLKIT ACTIVITY 7.2: What Would You Do?

Read the following situations and make some brief notes about what you would do in the situation. After you have completed making your notes, join a group of four to five classmates and discuss your reactions and planned behaviors.

You walk by your boss’s office and hear him asking his spouse how their sick child is doing.
You see your boss taking a box of pens from the storeroom and putting it in her purse on the way out of the office.
Your boss asks your opinion about a nice purse on eBay. She shows it to you on her computer after your meeting.
You overhear your boss making calls to advance his part-time freelance business.
You hear your boss making abusive remarks to a coworker who made mistakes on a report. She yells at your coworker, “Why are you so stupid?”
You are reviewing expense reports submitted by your boss, and you notice that one of the documents submitted has been Photoshopped to make the expense look greater than it was.

Discussion Questions

Do you think that any of the above behaviors are acceptable? Which ones? Did you decide to “do nothing” in any of the cases. Explain why.
Rank the behaviors of your boss in terms of the degree to which they violate ethics. Explain your ranking.
When you discussed these situations with your classmates, did differences of opinion on what to do and what was/was not unethical emerge? Explain your reactions to your classmates’ decisions.

CASE STUDY 7.1: Can You Succeed Without Power?

Scoria is a company that helps provide colleges and universities the tools needed to offer degree programs online. The firm’s basic package provides services like the learning management system (LMS), tech support for the system, and online application management. However, it also offers packages with marketing, recruitment specialists, student services specialists and at-risk student support, course-building assistance, textbook and materials management, and human resource services for adjuncts. Depending upon the services a university chooses, Scoria charges 30% to 80% of the revenues the university makes from each online student.

Scoria recently entered a partnership with Daily University, a fairly well-known private university in the southeastern United States. Daily wants to offer its MBA, master of education, and master of professional studies degrees online. The reason driving this decision is that there are many students in the state’s rural areas that want to earn a degree but live more than 60 miles from the campus and are not able to make the drive after work each night or want to give up their weekends in all-day intensive sessions. Daily decides to use the learning management and online teaching tools, course-building services, student recruitment and admission services, and textbook and materials management services. The contract is drawn up, and it is agreed that Scoria will receive 50% of the revenues generated from the students in the online program.

However, now that the contract is signed, a number of issues are arising that are causing Daily University and its faculty problems. Academic regulatory agencies require that courses be developed and taught by individuals with proper degree credentials. So in this partnership, Daily faculty develop the course content and send it to the team at Scoria that build the course in the LMS. Once the courses are built, Scoria does not allow changes to be made for causes like poor student feedback or changing book editions. So the faculty have the authority to develop their courses but lack the ability to make interesting changes to the courses based upon what they think is happening. This really bothers one faculty member, Dr. Kelly, who wants to pull in different current articles each week when she is teaching the course. However, she cannot do so, and Scoria is not willing to find a way to work around the current system to find a solution that would benefit both the faculty and students. Several other faculty members share Dr. Kelly’s desire.

But Daily University personnel are not the only ones having a hard time in this partnership. Scoria is providing recruitment and admission services for Daily by ensuring students have a complete application, including any test scores, before sending an application to Daily’s admission office. This is a benefit to Daily as then they are only processing complete applications. However, to the employees at Scoria that are working as admissions specialist, the process of application review by Daily is too long and frustrating for students and Scoria staff. The current process is for the admission team to review the application materials and transfer them to Daily’s system. The system then kicks the application to the dean of the program the applicant has applied to for review. As deans are busy people, this can take a few days, if not a week. To further bog down the process, Scoria has forbidden the deans from contacting applicants or their references, and so the deans don’t have a way to get clarification for any questions arising from the materials. Thus, on borderline or questionable applications, it can take the deans extra time to consider and make a decision regarding a candidate. However, to Scoria’s employees, they feel that Daily should be able to make a decision within 48 hours and constantly are asking for updates.

Finally, Daily’s IT department is having issues in the partnership as well. Scoria and Daily use different systems that don’t interface with each other. The administrators have been discussing options for solving the problem, such as adding new lines of code that should help one system drop data into the other system, having Daily upgrade and change its systems, having Scoria provide staff that enters the data into Daily’s system using remote access and Daily’s software licenses, and hiring more staff on Daily’s end to enter the data from Scoria. However, none of the solutions are that ideal to either party, and so the IT administrators are looking to the provost of Daily and the vice president at Scoria to come up with an amicable solution.

So far, this partnership is off to a rocky start, but it is early in the relationship and there is hope that the relationship can be saved.

Discussion Questions

Identify the different power issues going on in the case. What types of power do the different parties have? Explain.
How are individuals reacting to their power or lack thereof?
What types of influence techniques could be used to help in any of these situations to reach commitment by both parties? Identify and justify at least three.

SELF-ASSESSMENT 7.1: Your Impression Management Strategies

This self-assessment exercise identifies your impression management strategies for maximizing good impressions. There are no right or wrong answers, and this is not a test. You don’t have to share your results with others unless you wish to do so.

Part I. Taking the Assessment

You will be presented with some questions representing different strategies. If you don’t currently have a job or boss, then answer the questions with respect to what you would likely do.

Part II. Scoring Instructions

In Part I, you rated yourself on 15 questions. Add the numbers you circled in each of the columns to derive your score for your impression management strategies. We will discuss each approach—its strengths and weaknesses—and how you can improve impressions others have of you. Scores on each dimension below can range from 5 to 35. In general, a lower score is from 5 to 14; a higher score is above 15.

Source: Adapted from Bolino, M. C., & Turnley, W. H. (1999). Measuring impression management in organizations: A scale development based on the Jones and Pittman taxonomy. Organizational Research Methods, 2(2), 187–206.

Notes: Self-Promotion—pointing out your abilities or accomplishments in order to be seen as competent by observers; Ingratiation—doing favors or using flattery to elicit an attribution of likability from observers; Exemplification—self-sacrificing or going above and beyond the call of duty in order to gain the attribution of dedication from observers.

Discussion Questions

Compare your scores for self-promotion, ingratiation, and exemplification. Provide an example of the strategy when you used impression management for the tactic with your highest score.
Examine your lowest score. Explain whether or not you would use this tactic in practice and why.
Do you feel that using these tactics is faking? How does this relate to being authentic (authentic leadership was covered in Chapter 6)?

SELF-ASSESSMENT 7.2: What’s Your Level of Political Acumen?

This self-assessment exercise identifies your level of political acumen in four areas determined by research. There is no “one best” approach; all approaches have strengths and weaknesses, and the goal is for you to learn about your political skill and think of ways to improve it. There are no right or wrong answers, and this is not a test. You don’t have to share your results with others unless you wish to do so.

Part I. Taking the Assessment

Instructions: Circle the response that best describes your behavior.

Part II. Scoring Instructions

In Part I, you rated yourself on 12 questions. Add the numbers you circled in each of the columns to derive your score for the four political skills. Your scores for each skill can range from 3 to 21. Scores above 12 can be considered higher.

Source: Adapted from Ferris, G. R., Treadway, D. C., Kolodinsky, R. W., Hochwarter, W. A., Kacmar, C. J., Douglas, C., & Frink, D. D. (2005). Development and validation of the political skill inventory. Journal of Management, 31, 126–152.

Discussion Questions

Which political skill are you most adept at (what were your highest scores)?
Which political skills(s) do you need to develop (what were your lowest scores)? Develop strategies to improve upon your lowest scores.
Discuss apparent sincerity in terms of impression management. Do you feel that someone could fake being sincere for political purposes? Is this ethical?

Chapter Eight Motivation: Core Concepts

Learning Objectives

After studying this chapter, you should be able to do the following:

8.1: Identify and discuss the three parts of the motivation process.
8.2: Compare and contrast Maslow’s hierarchy with McClelland’s need theory.
8.3: Produce an example of a SMART goal.
8.4: Describe the job characteristics theory (JCT) and why growth needs matter.
8.5: Explain why fairness is a necessary condition for leadership using equity theory and the four types of organizational justice.
8.6: Discuss how the expectancy theory of motivation predicts effort.
8.7: Summarize how self-fulfilling prophecies affect motivation.

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Do You Have Grit?

Do you think that perseverance is as important as intelligence (IQ)? This is the question that Angela Duckworth, professor of psychology, has been investigating. She calls a high level of effort and persistence “grit” and defines it as “perseverance and passion for long-term goals.”¹ Grit is the ability to stick to a goal and not give up, even in the face of adversity. Research has shown that grit may be as important as intelligence. There are a lot of smart people who don’t achieve, and Duckworth’s research found students who had more grit but were not as intelligent as their peers worked harder and had higher GPAs. Another study Duckworth conducted was at West Point, and cadets who had the highest levels on the “grit scale” were the most likely to succeed in the rigorous summer training program known as “Beast Barracks.” Grit mattered more than intelligence, leadership ability, or physical fitness. In a third study, she found that participants in the National Spelling Bee contest who had higher levels of grit were ranked higher. This study revealed that success was, in part, due to participants with more grit spending more hours practicing for the contest. Two work-related studies found that soldiers who reported having more grit were more likely to complete a special operations selection course, and grittier sales employees were more likely to keep their jobs.² In Duckworth’s research, grit was not related to IQ, but it was related to the Big Five personality trait conscientiousness. Perseverance pays off since conscientiousness has been significantly and positively related to motivation in numerous studies.³ A meta-analysis⁴ of 88 independent samples representing 66,807 individuals found that grit is moderately correlated with performance and retention (for example, not dropping out of school) and that grit is very strongly correlated with conscientiousness. The perseverance of effort was related to performance even when conscientiousness was accounted for. Duckworth’s advice for people with a desire to achieve is: “If it’s important for you to become one of the best people in your field, you are going to have to stick with it when it’s hard. Grit may be as essential as talent to high accomplishment.”⁵ If you would like to learn how much perseverance you have, you can take the perseverance assessment found in Self-Assessment 8.1 at the end of this chapter.

As suggested by the research on grit, motivation is important for leaders to understand; thus, there is a large evidence base on motivation in organizational behavior (OB). The next two chapters focus on the role of the leader as motivator. This chapter reviews theories of motivation that have received research support and provide evidence-based guidance for practice. The next chapter (Chapter 9) reviews research on applications of motivation concepts including rewards in organizations and how to design reward systems that motivate.

Critical Thinking Question: What do you think is more important: IQ or perseverance? Explain why.

What Is Motivation?

Learning Objective 8.1: Identify and discuss the three parts of the motivation process.

The word motivation comes from the Latin word for movement (movere).⁶ Motivation has been defined as “what a person does (direction), how hard a person works (intensity), and how long a person works (persistence).”⁷ An overview of the motivation process is shown in Figure 8.1. This figure depicts motivation as a process that follows three stages. First, a leader must energize their followers’ behavior by activating underlying needs and drives. For example, an employee may have a strong need for personal growth and want to learn new things on the job. Once energized, the leader then directs the energized behavior toward goals that are important to the employee and the organization. In this chapter, we explore models of motivation that activate and direct behavior (for example, by setting the right type of goals). The third step in the figure is sustaining behavior. This is often done through the provision of rewards that employees value (such as a pay raise). Research shows that reward systems are necessary to sustain behavior over the long term, and the next chapter addresses rewards as motivation in practice. Finally, for motivation to be effective, feedback is needed so that the processes of energizing and directing behavior stay on track. Feedback is essential in a number of theories of motivation, including goal setting. Feedback is also a central part of the design of performance management systems.

Need Theories

Learning Objective 8.2: Compare and contrast Maslow’s hierarchy with McClelland’s need theory.

Early theories of motivation address the first part of Figure 8.1 by focusing on what needs or drives motivate people. The most well-known theory of need motivation is the Maslow hierarchy of needs.⁸ The theory was the first to point out that there are individual differences in motivation. The first level in the hierarchy of needs is physiological needs (e.g., hunger, sex, and other bodily needs). The next level is safety needs (e.g., the need for protection from physical harm). At the third level of the hierarchy are a person’s social needs (e.g., belongingness and friendship). The fourth level is esteem needs (e.g., status and recognition from others). Finally, at the top of the hierarchy is what Maslow termed self-actualization, which is the drive to meet our fullest capacity (e.g., growth and feeling fulfilled as a person). Physiological and safety needs are lower-order needs, and social, esteem, and self-actualization are higher-order needs, according to the theory. When a need is not satisfied, it becomes dominant. For example, if a person’s safety is threatened, they focus on finding a place where there is no threat of physical harm.

Figure 8.1 The Motivation Process

Despite the popularity of Maslow’s hierarchy due to its simplicity and intuitive appeal, it has not been supported by research evidence.⁹ Needs are not arranged in this particular hierarchy, and there is no evidence that unsatisfied needs become dominant and induce motivation. However, this theory remains a commonly mentioned theory by many practicing managers, so it is important to be aware of it.

Another need theory considers three fundamental needs:¹⁰

Need for achievement (nAch)—the drive to succeed at high levels
Need for power (nPow)—the need to influence others to do what you want
Need for affiliation (nAff)—the need for close personal relationships

Most of the fundamental need research was on nAch. There is some research support for the idea that people who have a higher need to achieve do perform at higher levels and people with a higher nAch may be more successful entrepreneurs.¹¹ However, a high need to achieve is not necessarily related to being an effective leader, since those with higher nAch may be more interested in their own attainment rather than coaching others to succeed. McClelland’s theory has received more research support than other need theories; however, the application of the theory to motivate followers is limited because these needs are believed to be learned at a young age (in other words, it may not be possible to increase an adult’s nAch).

The two-factor theory relates to lower- and higher-order needs, and relates them to job satisfaction (which is discussed in Chapter 4).¹² This is also called the motivator–hygiene theory and sought to answer the question of what people really want from their work. When people think about what makes them dissatisfied with work, they think of things like supervision, pay, company policies, and the working conditions, which are called hygienes. On the other hand, when people think of what satisfies them, they are more likely to think of things like advancement, recognition, and achievement, called motivators. Hygiene factors can only bring a person’s satisfaction to the level of “no dissatisfaction” (in other words, they stop complaining about their pay). To motivate people, leaders need to focus on the motivators, such as providing people with a sense of achievement.

As with Maslow’s theory, Herzberg’s two-factor theory is widely cited, but it has not received much research support.¹³ For example, the methods used in this research have been criticized because it was all self-reported data based on limited samples. Also, the relationship of satisfaction to job performance was assumed in his research but never tested.

Critical Thinking Questions: Explain the relationship between high self-actualization (Maslow) and nAch. Next, explain the relationship between high self-actualization and motivators.¹⁴

This brief review of research on need theories is a cautionary tale. Overall, research on need theories has not provided strong research evidence for how to motivate people. In the following sections, theories aimed at understanding what directs a person’s behavior toward outcomes, such as high job performance, are discussed. Recalling the research on grit in the introduction to this chapter, we know that persistence plays a role in understanding how individuals attain high levels of performance. Once people set a goal, perseverance (grit) measures their ability to stick to it until it is attained. There has been a great deal of research on goal setting in OB, and some of the most practical and well-substantiated guidelines for motivating followers are provided by this research.

Goal Setting

Learning Objective 8.3: Produce an example of a SMART goal.

OB research has investigated the properties of motivating goals in numerous laboratory and field experiments.¹⁵^,16 For goals to motivate employees, they must have certain properties.¹⁷ These goal-setting principles can be remembered with the acronym SMART for specific, measurable, actionable, relevant, and time-based goals.

“SMART” Goals

Specific: A specific goal has been shown to be more motivating than a “do your best” goal. Answer these questions: Who is involved? What do I want to accomplish? Where will this need to occur? When will it happen? Why am I or we doing this?
Measurable: Set concrete criteria for measuring progress toward the attainment of each goal. Measuring progress provides feedback and keeps people on track. Answer these questions: How much? How many? How will I know this goal is attained?
Attainable: Goals need to be challenging, but they also need to be seen as attainable by the person setting them. When people identify goals that matter to them, it energizes them and motivates a search for ways to perform. This may require new skills or resources. Answer these questions: Is this goal realistic? Do I have the skills and abilities to achieve it? Do I have the resources needed to achieve it? Have I attained something similar in the past?
Relevant: The goal you set needs to matter—to the individual setting it and/or the organization. Goals that are relevant are more likely to gain the support and the resources needed. Relevant goals (when met) drive the team, department, and organization forward. A goal that supports or is in alignment with other goals would be considered a relevant goal. Answer these questions: Does this matter? Is this the right time to do this? How does this fit in with the broader mission of the organization?
Time based: To be motivating, goals should have a specific time frame. This creates a sense of urgency and encourages benchmarking toward the attainment of the goal. Ask yourself these questions: When do I need to attain this goal? Are there minigoals or benchmarks I can set to monitor progress toward the goal?

For example, a not-so-smart goal would be the following: “Improve your punctuality.” In comparison, an example of a SMART goal would be as follows: “Be at work by 8:30 a.m. every day this month because everyone being at work on time contributes to our team’s productivity.” Toolkit Activity 8.1 contains a goal-setting exercise where you write a letter to your “future me” and can apply SMART goal setting to your own life and career.

In practice, SMART goal setting has been applied using management by objectives (MBO). MBO is a performance appraisal program where leaders meet with their direct reports and set specific performance objectives jointly. Progress toward objectives is periodically reviewed, and rewards are allocated on the basis of that progress.¹⁸ Performance appraisal is discussed in more detail in Chapter 9.

The degree to which a person is committed to a goal influences their willingness to persist and attain it. Also, motivation is higher when an employee is more committed to challenging goals compared with easy goals.¹⁹ It is not clear whether allowing a person to participate in setting their own goals makes a difference; research findings are mixed.²⁰ However, if the goal is set by the leader, it is important for the leader to focus on the relevance of the goal to the person and the organization.

Critical Thinking Question: Why would allowing followers to participate in setting their own goals make a difference? Provide an example.

Regulatory Goal Focus

Regulatory focus theory (RFT) is an alternative approach to understanding how individuals strive to meet their goals. According to RFT, individuals who are promotion-focused are oriented toward growth and development, and becoming their ideal. In contrast, individuals who are prevention-focused are oriented toward the things they feel that have to do and focus on their job responsibilities.²¹ It’s important to ensure that the person’s regulatory orientation (i.e., whether they are promotion- or prevention-focused) fits the situation they are in. For example, a promotion-focused person will want to be provided with goals that stretch their abilities. Promotion-focused individuals have a need for achievement, focus on advancement, and set learning goals. In contrast, a person who is prevention-focused would be stressed out by such stretch goals and should be given goals that are within their job description. A prevention focus is a tendency to aim for getting to an end because of a fear of an undesirable alternative. Prevention-focused individuals are vigilant and careful, emphasize fears, focus on avoiding threats, and set prevention goals. The motivating force of a prevention focus is the avoidance of pain. Research has shown that the match between regulatory focus and the situation results in fewer negative emotions and more self-regulation in working toward the goals.²² If there is a mismatch, then the person may feel negative about their work and not pursue the goal. In contrast, promotion-focused individuals tend to have a learning goal orientation (LGO); they want to learn new things at work and see themselves as adaptable.²³^,24 A meta-analysis²⁵ reviewed over 20 years of research on learning goal orientation and found that it predicts job performance. This is likely because employees with a learning goal orientation are more persistent, ask for feedback, and set their own goals. As a result, employees with a learning goal orientation report higher-quality relationships (LMX) with their supervisors.²⁶ Organizations should provide training to educate leaders about the motivational orientations of their employees so that they can better shape work experiences and challenges in ways that allow employees to attain their orientation-related goals.²⁷ Research on goal orientation suggests that leaders respond to goal setting by followers, and they play a significant role in the goal-setting process.

The Role of Leaders in Goal Setting

An example of successful implementation of goal setting is how they do it at Microsoft.²⁸ Goal commitment is so important that they changed the name of the process from “goal setting” to “goal commitment.” Also, the leaders are actively involved in the process of developing commitments from followers. Each leader is expected to do the following:

Discuss and document the commitments of all employees.
Revisit and refresh commitments over time.
Agree to success metrics for each commitment, including the “how” behind execution (e.g., the plans to be used to attain the commitments), not just the “what.”
Align commitments across the company by cascading commitments, beginning with Microsoft’s commitments and connecting to organizational, team, and ultimately individual commitments.
Drive management team calibration discussions so interdependencies and metrics are vetted across individuals.²⁹

This case example shows that leaders play an important role in negotiating mutual goals one-on-one with each of their direct reports. This process assures alignment with the organization’s goals, commitments, and accountability for results. Psychologists have demonstrated that goals operate at the subconscious level and that cues for high performance result in high performance.³⁰ Thus, the leader can set challenging goals to obtain higher performance from followers.

Research on goal setting has also demonstrated that employees who receive feedback on their progress achieve higher levels of performance than those who don’t.³¹ Feedback on goals guides performance and allows the person to correct behaviors that may not be working or to try different performance strategies. Further, research has indicated that if employees are allowed to generate their own feedback, it may be more motiving than feedback from an outside source such as their supervisor.³² Goal setting has been criticized due to the fact that goal setting may undermine creativity and the flexibility of employees to adapt to changing situations. For example, focusing on only one criterion for success may preclude looking at other opportunities to improve.³³ However, despite this concern, proponents of the theory maintain that the benefits of goal setting outweigh the limitations.³⁴ A SMART goals worksheet that can be used to set goals for yourself or for your followers is provided in Toolkit Activity 8.2 at the end of this chapter. As we have seen, feedback is essential to the process of motivation. In addition to setting SMART goals and learning feedback on performance, an employee may gain feedback from the work itself. Another major theory of motivation is the job characteristics theory (JCT), which looks at the motivating properties of work. We turn to this core theory of motivation next.

Job Characteristics Theory

Learning Objective 8.4: Describe the job characteristics theory (JCT) and why growth needs matter.

The work itself may have characteristics that have the potential to motivate people to higher levels of performance.³⁵ Also, people are more satisfied when their work is interesting, and they may be less likely to quit. JCT is shown in Figure 8.2. In this theory of motivation, jobs can be designed so that people are more motivated and satisfied, as well as perform better.

The Motivating Potential of Work

First, the JCT specifies five core job dimensions. These dimensions combine to produce the critical psychological states that enhance motivation:

Skill variety—the extent to which people use different skills and abilities at work. The employee is not doing the same repetitive tasks over and over.
Task identity—the task is one that people experience from beginning to end. In other words, they identify with an entire work product.
Task significance—the degree to which the job is seen as having an impact on others. The work does something good for society.
Autonomy—the employee has the freedom to plan and perform his or her own work. The employees have discretion about their work and are not intensely supervised.
Feedback—the job provides information on how effective the employee’s work is. Just doing the work itself provides performance feedback.

Skill variety, task identity, and task significance combine in the job characteristics model to produce a sense of meaningfulness of the work. For example, autonomy increases a person’s responsibility for the work they perform. As in goal setting, feedback provides knowledge of the actual results of a person’s work. These states experienced from the nature of the work performed translate into high work motivation, work performance, satisfaction, and lower absenteeism and turnover.

Critical Thinking Questions: How do growth needs relate to higher-order needs as described in the need theories earlier in this chapter? How can a leader identify growth needs in followers?

As Figure 8.2 shows, the growth needs of employees affect the degree to which a person experiences meaningfulness, responsibility, and knowledge of results from their work. Growth need strength refers to a person’s need to learn new things, grow, and develop from working. People vary in this need; some people have a high desire to grow as a result of their work, and others do not. This need also affects performance. In other words, if a person’s job is interesting, he or she may not have higher motivation and performance if he or she doesn’t really need to grow from the work. Employees who prefer challenging work experience have less stress after their work is redesigned.³⁶

Figure 8.2 The Job Characteristics Model

Source: Hackman, J. R., & Oldham, G. R. (1980). Work redesign. Reading, MA: Addison-Wesley.

Designing Work to Be Motivational

Based on the research on the job characteristics model, organizations have implemented work redesign to enhance the motivating potential of work.³⁷ The basic idea is to load jobs with more of the core job characteristics that have been shown to motivate. This job loading may be horizontal (e.g., adding different tasks at the same level) or vertical (e.g., adding decision-making responsibility). Recall that it is important to consider the growth needs of employees when redesigning work since these employees will respond more positively to the redesign of their work. These strategies have been referred to as job enrichment, and some examples follow.³⁸

Job rotation involves cross-training or allowing workers to do different jobs. This increases the skill variety, task identity, and possibly the task significance. For example, a person who works on an assembly line is rotated to a clerical position in which he or she learns the purchasing process for supplies needed on the line 1 day a week. This provides variety and also allows the worker to see more of the “big picture” of what is needed to perform the work. In addition to job rotation, work may be designed to create natural work units by combining tasks. For example, a worker who drills holes for a door handle of a car would also learn to install the handle. Job rotation and combining tasks must be supported by adequate training and coaching for employees as they learn new skills on the job. Job rotation and combining tasks are examples of horizontal job loading.

Jobs may also be loaded vertically by allowing employees to establish client relationships in which workers can interact directly with clients to increase the meaningfulness of work. For example, the human resources manager for the Applied Systems Group at Spar Applied Systems redesigned the work into teams so that most workers interacted with customers to increase the focus on customer needs.³⁹ Another example is a study of callers requesting donations that found the callers were more persistent and motivated when they were in contact with undergraduate students funded by their efforts.⁴⁰ Thus, organizations might increase employee motivation by designing interactions with those who benefit from the employee’s efforts. The authors of this study conclude:

Consider the back room accountant who never meets the clients who benefit from her work. Merely introducing her to these clients may allow her to perceive her impact on them and feel affectively committed to them and thereby enable her to maintain her motivation.⁴¹

This form of motivation is based on how people may be motivated by helping others—prosocial motivation, which has emerged as an important outcome variable in OB as noted in Chapter 1.⁴²^,43 A meta-analytic review found that the prosocial aspects of work contribute to the explanation of performance, turnover, and job satisfaction beyond that of job characteristic.⁴⁴ Thus, it appears that both the work itself and social aspects are important to motivation.

Work may be redesigned so that employees have more autonomy and discretion in how they perform their work to increase the level of autonomy experienced. Finally, opening feedback channels so that employees can learn more quickly about the results of their work may increase motivation (as we have seen, feedback is an important aspect of motivation in other theories such as goal setting). Research has supported the job characteristics model by demonstrating that job enrichment does reduce turnover and increases employee motivation and satisfaction.⁴⁵^{,46,47,48,49,50}

Work Redesign and Job Stress

The design of jobs may also lessen the experience of work stress. In a study conducted in Sweden, work was redesigned to improve the quality of work life, and this intervention alleviated work stress.⁵¹ Another study found that when workers are able to create their own job designs to solve problems in their work, they experience less fatigue.⁵² Employees felt they had more job control, which is the authority to make decisions about their job on a day-to-day basis. The study also measured negative affectivity (being pessimistic) and cognitive failure, and the results are shown in Figure 8.3. This study also found asking for social support and executing job control to solve problems encourages further job redesign. Thus, work redesign appears to reduce stress—particularly when followers are empowered to make changes to their work to solve the problems they face.

Figure 8.3 The Relationship Between Job Control, Fatigue, Negative Affectivity, and Cognitive Failure

Source: Daniels, K., Beesley, N., Wimalasiri, V., & Cheyne, A. (2013). Problem solving and well-being: Exploring the instrumental role of job control and social support. Journal of Management, 39(4), 1016–1043. p. 1033.

Job Crafting

Recent work on job design has examined job crafting, or the extent to which individuals can demonstrate initiative in designing their own work. The term job crafting is used “to capture the actions employees take to shape, mold, and redefine their jobs.”⁵³ Jobs vary in the degree of discretion that they offer, but in many cases, employees may be able to design aspects of their own work. Outcomes include changes to the work itself as well as interactions with others that may enhance the meaningfulness of the work performed.⁵⁴ A three-wave longitudinal study⁵⁵ of 368 police officers found that job crafting was positively associated with engagement, adaptability, and fewer stress demands during change. However, change communication was important too since it increased job crafting behaviors for promotion-focused employees. An example of job crafting would be a team member who is working on a marketing research project designing a set of team-building activities and implementing them to improve the way that the team works together on the project. Additional examples of job crafting are shown in Table 8.1. A review of the job design literature states the following: “Job crafting is an exciting area of research.”⁵⁶ However, the authors caution that there may be dysfunctional consequences from employees designing their own work that need research. For example, an employee might redesign their work to include extraneous meetings with other department members that cause them to be away from the office, resulting in work disruptions to coworkers.

Source: Wrzesniewski, A., & Dutton, J. E. (2001). Crafting a job: Revisioning employees as active crafters of their work. Academy of Management Review, 26, 179–201. p. 185.

Critical Thinking Questions: What limitations (if any) would you put on allowing followers to craft their own work? What are the risks of not putting any limitations on job crafting?

There has been much research on motivation that has provided specific guidelines for leaders to follow: Setting SMART goals and designing work to be motivational are key takeaway concepts. Despite effective goals and challenging work, however, motivation may be lower if employees have strong negative reactions based on how rewards are distributed or how they are treated. To effectively motivate followers and avoid costly absenteeism and turnover, leaders must follow principles of organizational justice.

The next sections address this concern.

The Importance of Fairness

Learning Objective 8.5: Explain why fairness is a necessary condition for leadership using equity theory and the four types of organizational justice.

Despite our parents telling us that “life is not fair,” employees expect the workplace to be fair. This is, in part, due to the “just-world hypothesis,” or the belief that people should get what they deserve. There are situations in which employees experience anger when they don’t receive what they believe they deserve on a performance evaluation and subsequent pay raise. It has been proposed that the need for fairness is a universal motive.⁵⁷ For example, an employee may feel that he should have been promoted to a higher position instead of a coworker. Employees may react to even lesser outcomes, such as who in the work group gets an office that has a window. As these examples illustrate, concerns for fairness permeate the workplace, and effective leaders need to be aware of how followers might react to their decisions.

Equity Theory

Equity theory focuses on distributive justice (what people receive as a result of their knowledge, skills, and effort on the job).⁵⁸ As shown in Figure 8.4, equity theory suggests that people may become demotivated or put forth less effort when they feel that what they give and what they get is not in balance. According to the theory, a person (the focal person, or FP) compares himself to the coworker (or CO). Next, he compares his inputs (skills, abilities, effort on the job) to his outcomes (e.g., a merit raise). Three situations can occur in this comparison:

The inputs and outcomes for the FP equal the inputs and outcomes for the CO. What this means is that the FP puts in effort and receives a certain pay raise. This is compared with a CO who puts in more effort and receives a higher pay raise. There is balance because the FP recognizes that the CO works harder and gets a higher raise.
The inputs and outcomes for the FP are lower than the inputs and outcomes for the CO. For example, the FP views the ratio of his inputs and outcomes as less than the CO. The FP realizes that they are “underpaid,” and this causes dissonance or stress for the FP. In this situation, the FP may become demotivated (reduce inputs or efforts) to bring the ratios back to balance. If the situation persists, they may leave the situation entirely (find another job that pays better). This is referred to as underpayment inequity.
The inputs and outcomes for the FP are higher than the inputs and outcomes for the CO. For example, the FP makes the comparison of inputs to outcomes and views their ratio of inputs to outcomes as higher than his CO. The FP realizes that he is being “overpaid” for his contributions compared to his CO. This situation is interesting because while we might expect the FP to work harder, this typically does not happen. People are more likely to distort the perceptions of inputs and/or outcomes to justify or rationalize their relative overpayment inequity. For example, they may point to their degree being from a better business school or adjust their view of their CO’s input downward.

Figure 8.4 Equity Theory

Source: Adapted from Adams, J. S. (1965). Inequity in social exchange. In L. Berkowitz (Ed.), Advances in experimental social psychology (Vol. 2, pp. 267–299). New York, NY: Academic Press.

Inequitable comparisons affect employee attitudes such as job satisfaction.⁵⁹ For example, employees in underpayment conditions engage in behavior to adjust or compensate for the inequity (theft, for example).⁶⁰ Also, employees who experience unfair situations don’t help their coworkers out (organizational citizenship).⁶¹^,62 There is strong research support indicating that perceptions of fairness affect motivation. However, research has also shown that equity may be viewed differently depending on whether or not a person has a positive or negative relationship with their comparison other.⁶³ In other words, if we like our coworker and they get a raise, then we are happy for them and less likely to experience a sense of inequity. On the other hand, if we don’t like them, we may perceive the raise as unjust. Given the limited resources a leader has to distribute (particularly monetary compensation), leaders need to work at being perceived as fair. Research on equity (or distributive justice) was expanded to include other forms of justice that help explain how employees come to view their leader as fair.

Organizational Justice: Expanding Fairness

The concept of equity was expanded to consider broad concerns for organizational justice at the workplace.⁶⁴ Organizational justice is the “members’ sense of the moral propriety of how they are treated.”⁶⁵ When people feel an event is unfair, they may even experience moral outrage, which is a severe reaction to the perceived injustice (including strong emotions such as anger and resentment).⁶⁶ One study found that followers even engaged in sabotage when they perceived situations to be unfair.⁶⁷ Given that OB researchers have documented the importance of fairness perceptions (particularly underpayment inequity) on demotivation, researchers became interested in how other forms of justice might somehow address fairness concerns. When leaders follow fair procedures, followers are more willing to accept distributive outcomes and their formal authority—even if they receive less.⁶⁸ Research on organizational justice turned to the development of additional forms of fairness, broadening the concept into the overall umbrella term organizational justice.

Organizational justice is now considered to have four components: distributive (equity), procedural, interactional, and informational.⁶⁹ As noted earlier, distributive justice refers to the fairness of decisions made as perceived by followers as described above.⁷⁰ Procedural justice is the perception of how fair the process was in making decisions that affect employees. There are certain rules of fair process that are expected by employees.⁷¹^,72 For example, employees want to have a voice in decisions that affect them. They also want some form of an appeal process or way to correct something they see as unfair. Third, they want procedures to be consistent across people and over time. They also want the process to be unbiased and to represent the concerns of everyone affected by the decision. Finally, procedures need to be based on accurate information. Procedural justice has been shown to be more important than distributive justice in how followers respond to the decisions of their leaders in two meta-analytic studies that included a variety of organizational and occupational samples.⁷³^,74

Interpersonal justice refers to how employees are treated by their leaders, including respect and propriety (which refers to whether the leader refrains from offending the follower with comments that are inappropriate).⁷⁵^,76 The final form of justice is informational justice, which refers to the perceived fairness of the communications made by leaders during a process. Informational justice includes full explanations of processes and the perception that the leader is being truthful.⁷⁷^,78 For example, during the great recession of 2008, many organizations had zero pay raises. When this happened, leaders provided explanations for why raises were zero for hardworking employees because of the economic situation. Figure 8.5 summarizes the four components of organizational justice and provides a sample item from an organizational justice measure to illustrate each aspect of justice.

Figure 8.5 Components of Organizational Justice

Source: Colquitt, J. A. (2001). On the dimensionality of organizational justice: A construct validation of a measure. Journal of Applied Psychology, 86(3), 386–400.

Given the central role of fairness in motivation, OB theory and research has described how a leader can change the perceptions of their followers that they are being fair. Research has shown a clear relationship between fairness and effective leadership. This research is described in the following section, as well as the process through which a leader can develop a reputation in the organization for being fair.

Research in Action

Who Cares About Fairness?

Equity sensitivity is an individual difference which affects how different people react to inequity.⁷⁹ Individuals can be thought of as being along a continuum as either benevolents (tolerant of underpayment), equity sensitives (adhere to equity norms), or entitleds (tolerant of overpayment). Benevolents don’t get stressed when they experience underpayment or overpayment, but people who are equity sensitive do. Equity sensitivity may also affect the types of rewards that people prefer: Entitled employees prefer monetary rewards, whereas benevolents prefer intrinsic rewards such as the ability to learn something new on the job.⁸⁰ Equity sensitivity has also been associated with motivation: Benevolence is related to job performance and organizational citizenship.⁸¹^,82 Intriguing experimental research found benevolent individuals report the highest pay satisfaction, pay fairness, and lowest turnover intentions.⁸³ However, entitled individuals did not report lower overall pay satisfaction, perceived pay fairness, or higher turnover intentions than benevolents. The overrewarded condition was also very interesting: All three equity sensitivity groups preferred being overrewarded to being fairly rewarded and were distressed when underrewarded. These findings support equity theory for underpayment. Yet overpayment is enjoyed by everyone, regardless of whether they are sensitive to equity or not. So whether we care about equity may depend on whether we are being overpaid or underpaid.

Discussion Questions

Given the descriptions just given, do you consider yourself to be equity sensitive? In other words, do you believe that employees should be rewarded relative to their contributions?
Explain why overpayment satisfies employees regardless of whether they are equity sensitive or not.
Why is it important for a manager to consider the equity sensitivity of their followers?

Sources: Bing, M. N., & Burroughs, S. M. (2001). The predictive and interactive effects of equity sensitivity in teamwork-oriented organizations. Journal of Organizational Behavior, 22(3), 271–290; Blakely, G. L., Andrews, M. C., & Moorman, R. H. (2005). The moderating effects of equity sensitivity on the relationship between organizational justice and organizational citizenship behaviors. Journal of Business & Psychology, 20(2), 259–273; Huseman, R. C., Hatfield, J. D., & Miles, E. W. (1987). A new perspective on equity theory: The equity sensitivity construct. Academy of Management Review, 12(2), 222–234; Miles, E. W., Hatfield, J. D., & Huseman, R. C. (1994). Equity sensitivity and outcome importance. Journal of Organizational Behavior, 15(7), 585–596; Shore, T. H. (2004). Equity sensitivity theory: Do we all want more than we deserve? Journal of Managerial Psychology, 19(7), 722–728.

Developing a Fair Reputation

Fairness is a necessary (but not sufficient) condition for effective leadership.⁸⁴ The ability to develop high-quality relationships depends upon following norms of procedural justice and ensuring that outcomes are fairly distributed. Interpersonal and informational justice are both important; leaders must respect followers and provide truthful explanations of how they make decisions. Fairness is pivotal to relationships between leadership and employee work attitudes, relationships with coworkers, and employee turnover.⁸⁵ And employees with good relationships with their boss also engage in more organizational citizenship when they perceive a fair climate in the work group.⁸⁶ Fairness issues emerge at the group level when followers compare their relationships with their boss (in-group or out-group) and the outcomes they receive. Thus, the procedural justice climate that a leader creates is essential to being effective in motivating followers and avoiding costly turnover.

Leaders can develop followers’ perceptions that they are being fair—a fair identity.⁸⁷ When a follower presents the boss with an unfair situation, it is a predicament for the boss. For example, a coworker gets assigned to a more lucrative client; however, another direct report feels they deserved the assignment. What should the leader do to resolve this? First, the leader should have empathy and see the situation from the follower’s perspective. The leader then has options to respond to the follower, but these should be carefully thought through because they have consequences for the continued trust and development of the relationship.

Critical Thinking Question: Do you believe that other forms of justice can compensate for distributive justice (what people get)? Provide an example of when this happens.

One set of options are verbal; the leader can deny the unfairness, show regret, or admit that it was not fair to the follower. These actions may damage the trust in the working relationship. Other options are to provide explanations to justify the action by making excuses or apologies. While these verbal responses represent better options for the maintenance of the working relationship, the follower may still not be satisfied. Finally, the leader can take actions to address the concern, such as restoring the benefit (in the example just given, the leader could assign the follower to join the coworker in working with the lucrative client). Another action would be to provide alternative recompense; assign the follower an equally valuable client to work with. A fair identity and reputation for being fair is thus negotiated and must be monitored carefully.

Best Practices

The Importance of Leader Attention for Employee Motivation

A survey conducted by McKinsey Quarterly asked 1,047 executives, managers, and employees from a range of industries what practices were the most effective motivators. While most people expect financial incentives such as cash bonuses and increases in base pay to be the biggest motivators, the research indicated that this was not the case. Despite the survey findings that financial incentives are frequently used (e.g., 68% of those surveyed indicated that their organization used cash bonuses), they are not the most effective.

Praise and commendation from leaders was cited as the most effective motivator with 67% reporting that this was effective, followed by attention from leaders at 63%. In addition, opportunities to lead projects or task forces were reported effective (62%). According to Dewhurst, “these themes recur constantly in most studies on ways to motivate and engage employees.”⁸⁸ With many organizations cutting back on financial incentives, now may be the best time to begin to work on more effective leadership as a motivational tool for effective motivation.

Source: Dewhurst, M. (2009). Motivating people: Getting beyond money [Commentary]. McKinsey Quarterly. Retrieved on January 2, 2014, from http://www.mckinsey.com/insights/organization/motivating_people_getting_beyond_money

Discussion Questions

Explain why praise from the immediate supervisor was the most effective motivator using the principle of feedback discussed in this chapter.
Use the motivator–hygiene theory to explain why financial incentives were less related to effective motivation than nonfinancial incentives such as praise, leader attention, and opportunities to lead projects.

This example shows that leaders play a large role in follower perceptions of fairness, which may avoid demotivation and withdrawal behaviors such as absenteeism and turnover. In essence, organizational justice theory addresses what has happened in the past. Leaders also help employees understand how they will be rewarded in the future. The next section discusses theory and research on expectancy theory and how leaders motivate by articulating the pathways to goals.

Expectancy Theory

Learning Objective 8.6: Discuss how the expectancy theory of motivation predicts effort.

Valence-instrumentality-expectancy (VIE) theory was one of the most influential approaches to motivation in the 20th century.⁸⁹ A review of research on expectancy theory noted the following: “Expectancy theory has become a standard in motivation, as reflected by its incorporation as a general framework for a wide variety of research.”⁹⁰ The expectancy theory of motivation has received mixed research support but does provide insight into the process of motivation.⁹¹ The theory has three basic principles:⁹²

Employees decide to put forth effort when they believe that their effort will lead to good performance. This is called the effort à performance relationship, which is the probability that a person believes that their effort will lead to performance (designated as the E → P expectancy).
The employee’s performance will be evaluated accurately and will lead to rewards (e.g., pay raises, bonuses). This is the follower’s estimated probability that if they perform well, they will actually receive the reward from the organization (designated as the P → O instrumentality).
The employees value the rewards offered by the organization. One level of performance may have multiple outcomes (such as a salary increase and a bonus) (designated as the list of valences, Vs, which can be either positive or negative). For example, a negative outcome associated with high performance might be having to stay late at work to accomplish a task and the employee misses his daughter’s violin solo at a school concert. So receiving a salary increase and a bonus has a positive (+) valence. At the same time, having to work late has a negative (–) valence.

In the original formulation of expectancy theory, these components were multiplied to predict effort.⁹³ Later, these three aspects of motivation were shown to each directly predict effort (rather than needing to be multiplied together).⁹⁴^,95 For example, a person’s belief that he or she can perform affects performance (“I can do the task”). The person’s belief in the organizational reward system also affects his or her performance (“My leader will provide me with a bonus if I perform well”). Finally, the degree to which rewards are valued also affects performance (“I really want that bonus!”). A summary of the expectancy theory of motivation is shown in Figure 8.6. Expectancy theory highlights the role that a leader plays in motivating followers by strengthening their perception that they can perform a task—their self-efficacy (you learned about efficacy as part of PsyCap in Chapter 2).⁹⁶ Also, the leader can reassure followers that if they perform, they will be rewarded. Finally, the leader can engage in candid conversations with followers regarding what rewards they value most (and therefore, most motivating). In sum, leaders can take several actions to motivate employees based upon VIE theory:⁹⁷

First, leaders should ensure that their employees expect that they can achieve whatever goals are set. This begins with selecting employees who have the knowledge, skills, and ability (KSA) to perform the goals.
Second, leaders should offer rewards that employees value (positive valences). Keep in mind that employees may not value the same things as leaders and managers.
Third, leaders should make a strong linkage between goal attainment and valued rewards. Employees must also perceive this linkage; don’t assume that they see the association between performance and rewards.

Figure 8.6 The Expectancy Theory of Motivation

Source: Vroom, V. H. (1964). Work and motivation. New York, NY: Wiley.

Leader transformational behavior is related to the degree to which followers set goals that are related to authentic values.⁹⁸ This goal setting translates into job performance, initiative, self-direction, and innovation on the job. Leaders influence follower motivation and performance.

A leader may also influence follower performance by having positive expectations of them. In other words, how a leader views their followers may become a motivating force. There is much research on the Pygmalion effect, which shows that performance expectations by a leader play a significant role in improving follower motivation and performance.

Critical Thinking Questions: Apply expectancy theory to explain whether a talented junior football player should go to a professional football league or stay and finish his college degree. What are the valences, expectancies, and instrumentalities the player might have?

The Pygmalion Effect

Learning Objective 8.7: Summarize how self-fulfilling prophecies affect motivation.

Perceptions sometimes result in the self-fulfilling prophecy, or Pygmalion effect, in which the high expectations of performance by leaders actually create conditions in which followers succeed. Named after a George Bernard Shaw play, effect was first studied by Robert Rosenthal in an elementary classroom setting.⁹⁹ In his experiments, he told teachers that some of their students had the capability to be leading performers—or as he called them “intellectual bloomers.”¹⁰⁰ The teachers, unknowingly, gave these students more learning opportunities and more positive feedback. These students had actually been chosen randomly, but the result was that they did end up performing better. As a leader, you may challenge your employees or empower them to confront a difficult situation by persuading them into positive thoughts. Having positive expectations may cause a leader to provide more attention and feedback to followers and, in turn, result in them performing at a higher level.

Research on the Pygmalion effect suggests managers can boost performance by raising their expectations of followers.¹⁰¹ This occurs through higher goals being set and followers being more engaged and striving to learn more on the job.¹⁰² A meta-analysis concluded the Pygmalion effect is fairly strong in organizations, but the work context of the research was limited since many early studies were conducted in military settings with men.¹⁰³^,104 However, later research demonstrated the Pygmalion effect in nonmilitary settings and with women as well.¹⁰⁵^,106 Leaders in organizations can communicate high expectations to followers in the following four ways:¹⁰⁷

Create a warmer emotional climate.
Provide more and increasingly challenging opportunities to learn.
Invite followers to ask questions of clarification.
Provide feedback on performance.

What about a person’s expectations of himself or herself? The Galatea effect is present when an individual sets high expectations for themselves and then performs to these expectations. Such a follower already has high self-esteem and believes in his or her ability to succeed. The Galatea effect was examined by conducting an experiment where subjects’ self-esteem was boosted by a series of positive feedback messages.¹⁰⁸ This intervention resulted in improved self-esteem, motivation, and an impact on performance. Thus, leaders need to provide ongoing feedback and challenging assignments to increase follower expectations. The Galatea effect suggests followers may even exceed the leader’s expectations when they have confidence in their ability to succeed.

As might be expected, expectations may also work in the opposite direction where lower expectations lead to lower performance, and this is called the Golem effect. Golem comes from the Hebrew slang for dumbbell. Bosses can “kill” followers’ motivation by having low expectations. A 2-year study was conducted of 50 boss–subordinate pairings; the managers were asked to differentiate high performers from low performers. Within 5 minutes of meeting and working with new employees, managers could easily evaluate their future performance. They unanimously stated that the low performers were passive, less motivated, less proactive, and so on. Some followers were classified as not having potential; therefore, the managers spent less time providing them with instructions on how to do their jobs. The managers viewed the low performers as weak and, thus, did not assign challenging tasks to them where they could learn new skills. When the “weak” performers began to notice the bosses’ treatment, they became disengaged, their performance deteriorated, and they ended up matching the bosses’ expectations. In effect, these bosses set the followers up to fail.¹⁰⁹ It is possible, through training, to reverse the Golem effect (“de-Golemization”) in which supervisors can change their expectations of low performance to higher performance, and followers respond positively with more effort.¹¹⁰^,111 Based upon the long stream of research on Pygmalion effect in organizations, it is clear that high expectations play a role in enhancing job performance. Toolkit Activity 8.3 provides you with the opportunity to check your understanding of the Pygmalion effect.

Critical Thinking Question: Based on what you have learned about the Galatea effect, how can you use the concept to improve your grades? Develop two or three positive feedback messages that will impact your performance.

Leadership Implications: Who Will Lead?

This chapter has discussed how leaders serve as motivators for their followers. But is everyone equally motivated to be a leader? Research on motivation to lead (MTL) has addressed this interesting question. The MTL is defined as “an individual differences construct that affects a leader’s or leader-to-be’s decisions to assume leadership training, roles, and responsibilities and that affect his or her intensity of effort at leading and persistence as a leader.”¹¹² This research has found that people have different reasons for wanting to be a leader. There are three basic reasons, based on the measurement of MTL:

Affective-identity MTL—the natural tendency to lead others—reflects the value an individual places on a leadership role and most directly reflects leadership self-efficacy and experience. For example, how would you respond to the statement “Most of the time I prefer to be a leader rather than a follower when working in a group”?
Social-normative MTL—the tendency to lead because of a sense of duty or responsibility—is associated with general attitudes toward social norms. For example, how would you respond to the statement “I feel that I have a duty to lead others if I am asked”?
Noncalculative MTL—where people agree to lead without calculating the costs and benefits of assuming leadership—is associated with an individual’s level of altruism. For example, how would you respond to the statement “I am only interested in leading a group if there are clear advantages for me”? (If your answer is no, you tend to have a higher noncalculative MTL.)¹¹³

Of course, these reasons can combine to produce stronger MTL. For example, a person might have a natural tendency to lead others and also feel a sense of duty to lead them. They may also not be interested in the advantages that being a leader provides. While people vary in their motivation to lead, scholars believe that MTL results from experiences that shape a person’s motivation to assume leadership roles. In other words, MTL is learned through experience. For example, a person with MTL may pay more attention when leadership is covered in an OB course, or they may sign up for leadership training provided by their organization. MTL may be affected by regulatory focus. For example, affective-identity MTL is more related to promotion (advancement) focus, whereas social-normative MTL is more related to prevention-focus because such individuals do things out of necessity (to avoid pain).¹¹⁴ A study of students participating in team projects found that those who were high in affective-identity MTL became leaders in leaderless discussions, while high social-normative MTL individuals assumed leadership roles in long-term project teams.¹¹⁵ Thus, the particular reason why a person is motivated to lead influences the type of leadership roles they assume. A study of 215 Israeli military recruits found that those with higher MTL were more likely to display effective teamwork and emerge as team leaders; however, intelligence combined with MTL to predict leader emergence.¹¹⁶ A follow-up study of 60 recruits conducted 1 year later found that MTL predicted which ones became commanders (i.e., formal leaders). Another study of 100 leaders in an experimental simulation of a manufacturing organization found that MTL was related to perceptions of leader effectiveness as rated by followers, after taking personality traits into account.¹¹⁷ In other words, MTL cannot be explained by whether a person is an extrovert or not. The results of these studies suggest that organizations can influence MTL by providing training in leadership and leadership development opportunities to build a person’s belief in their own leadership abilities (known as leader self-efficacy).

Some people will follow, and some will lead. Leadership is an identity that emerges through social interactions with others.¹¹⁸ People hold images in their minds of what a leader is and they compare themselves to those images to determine whether they have a leader identity, but the degree of leader self-efficacy is also important. Congruence between a person’s self-image with images of great leaders and leader self-efficacy relate to MTL.¹¹⁹ If you aspire to be a leader, it is important to understand your motivations for being a leader. Once you understand your own motivations, you will be better able to lead others. Take opportunities to assume leadership roles to gain experience to build your leader self-efficacy.

Leaders play a major role in how motivated their followers are to perform at high levels. First, leaders must assure that followers understand their goals and are committed to their goals. Second, leaders can design more motivating work or allow followers some discretion to craft their own work (aligned with work unit and organizational objectives). Leaders must negotiate a fair identity with their followers so that followers don’t become unmotivated by perceptions of inequity. Finally, leaders strengthen followers’ expectations that they can perform at a high level (expectancy) and that they will receive rewards they value for performing (instrumentality). Holding high expectations of followers can induce the positive effects of a Pygmalion effect on follower motivation. Finally, leaders need to talk to their followers to understand their motives and what rewards they value. The next step is to provide those rewards. The next chapter discusses the motivating properties of rewards and reward systems in organizations.

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Key Terms

autonomy, 192
combining tasks, 192
distributive justice, 195
equity theory, 195
feedback, 190
Galatea effect, 202
Golem effect, 202
growth need strength, 191
horizontal, 192
hygienes, 187
informational justice, 196
interpersonal justice, 196
job crafting, 193
job enrichment, 192
job rotation, 192
learning goal orientation (LGO), 189
management by objectives (MBO), 188
moral outrage, 196
motivation to lead (MTL), 203
motivator–hygiene theory, 187
motivators, 187
need for achievement (nAch), 187
need for affiliation (nAff), 187
need for power (nPow), 187
organizational justice, 194
overpayment inequity, 195
prevention-focused, 189
procedural justice, 196
promotion-focused, 189
prosocial motivation, 192
Pygmalion effect, 201
regulatory focus theory (RFT), 189
self-actualization, 186
self-efficacy, 200
two-factor theory, 187
underpayment inequity, 195
valences, 200
vertical, 192
work redesign, 192

TOOLKIT ACTIVITY 8.1: Future Me Letter

Gary Wood has developed a motivational technique called “Future Me.” You write a letter to yourself in the future. You give yourself thoughtful advice and encouragement like you would to a good friend. We learned about self-fulfilling prophecies in this chapter—the Galatea effect—in which a person sets high expectations for themselves and then their performance meets these expectations. In a sense, writing a letter to your future self is creating a self-fulfilling prophecy.

Here are the steps:

Start by outlining some ideas of how you want things to be in your life in 6 months. According to Wood, 6 months should allow you to focus on medium-term goals and goals that are not so ambitious that they can’t be attained in a reasonable amount of time.
Recall the properties of SMART goals. Write out specific, measurable, actionable, realistic, and time-based statements (for the 6-month time frame).
Write the letter to yourself. Be realistic, and give yourself sound advice and encouragement on how great it is that you reached your goals. For example, this can be tangible like landing a new job if you are 6 months from graduation. Your goals might also be more intangible such as increasing your emotional intelligence (EQ).
Print the letter. Place the letter in an envelope and seal it. Write your name on the envelope and the date 6 months from when you wrote it. Put it in a safe place. You may want to put a reminder in your calendar to open the letter.
When you open the letter, reflect on your achievements, personal learning, and growth over the 6 months. If you reached any of your goals, give yourself positive feedback and add a reward (a nice dinner out or a trip to the mall to get that jacket you have been wanting). For things you may not have attained, reflect on why and set new goals. If this is important to you, remember the concept of “grit.” Stick with it!

Source: Adapted from Wood, G. (2013). Future me—Write yourself a letter from the you in six months time. Retrieved from http://psycentral.wordpress.com/2013/08/09/future-self-letter-goals-dr-gary-wood-life-coach-birmingham

TOOLKIT ACTIVITY 8.2: SMART Goals Template

SMART goals help improve achievement and success. A SMART goal clarifies exactly what is expected and the measures used to determine if the goal is achieved and successfully completed.

A SMART goal is as follows:

Specific (and strategic): It is linked to job description, departmental goals/mission, and/or overall company goals and strategic plans. It answers these questions: Who? What?
Measurable: The success toward meeting the goal can be measured. It answers this question: How?
Attainable: Goals are realistic and can be achieved in a specific amount of time and are reasonable. It answers this question: Is this reasonable?
Relevant (results oriented): The goals are aligned with current tasks and projects and focus in one area; it includes the expected result. It answers this question: Why?
Time based: Goals have a clearly defined time frame, including a target or deadline date. It answers this question: When?

Examples:

This is not a SMART goal:

Employee will improve their writing skills.

This does not identify a measurement or time frame, nor identify why the improvement is needed or how it will be used.

This is a SMART goal:

The department has identified a goal to improve communications with administrative staff by implementing an online newsletter. Jane will complete a business writing course by January 2015 and will publish the first monthly newsletter by March 2015. She will gather information and articles from others in the department and draft the newsletter for supervisor review. After approval by supervisor, Jane will create an e-mail distribution list and send the newsletter to staff by the 15th of each month.

TOOLKIT ACTIVITY 8.3: Understanding the Pygmalion Effect

It is a scientific fact that people perform, to a large degree, according to the expectations others have for them. If deep down a manager believes his or her subordinates are incompetent and irresponsible, the chances are good that the employees will act that way. Conversely, if a manager treats employees as competent and responsible, the employees will generally live up to those expectations.

This exercise provides an opportunity to explore various scenarios that might occur within a work environment. Each scenario involves a manager and one or more employees. Divide into groups of two or three. Each group will be assigned one of the scenarios and explore the discussion questions listed after the scenarios.

Scenario 1

Jim is the production floor manager at Acme Cabinets. He supervises over 100 assemblers who work on the company’s day shift assembling audiovisual cabinets. He has noted a recent decline in productivity and an increase in error rate. In order to improve performance, Jim has posted a chart in the lunchroom. This chart contains the names of all the employees as well as their daily performance (by number of cabinets assembled) and their error rate (by number of mistakes).

Scenario 2

Lynn is the director of a nonprofit organization that works with local children and teachers to build their arts education programs. She has recently hired several individuals who previously worked as classroom teacher aides. Her intent was to have them do clerical tasks for her professional staff. However, one of the aides has shown an exceptional talent for painting and sculpture. Lynn has asked this aide to design a program that would introduce preschool children to art and, in order to help train the aide, has enrolled her in a child development class at a local college.

Scenario 3

Gina is the newly appointed manager of marketing communications for a large corporation. She is responsible for the activities of seven employees—all of whom have been with the company for several years and are experienced, creative, and competent at their jobs. In an effort to appear strong and managerial, Gina has “laid down the law” in her new department. She has asked everyone to account for their time by project and to submit a weekly report of their activities. In addition, she has installed a sign in/sign out board to keep track of employee breaks and lunch hours.

Scenario 4

Jill recently returned to her job as executive assistant after 2 months of maternity leave. Her boss, Susan, is thrilled to have Jill back because the temp assigned to cover for Jill left a lot to be desired. However, in the past week, Susan has noticed that Jill is very tired and is spending a lot of time on personal calls. While Jill’s work is getting done and the quality hasn’t suffered, Susan voices her concerns. Jill confesses that her babysitter isn’t working out and that the baby is keeping her up at night. Susan explains that while she is sympathetic, it is important that Jill reduce the number of personal calls she is making and be more alert on the job. She also asks Jill to take on the added responsibility of a special research project because “no one else in the company is capable of finishing it on time.”

Discussion Questions

Is the manager communicating high or low expectations to the employee by his or her behavior?
How do you think the employee(s) will react to the manager’s behavior? Choose several adjectives that you believe describe this reaction (e.g., angry, motivated).
If low expectations are being communicated by the manager in the scenario, answer this question: If you were the manager in this scenario and wanted your employee(s) to respond in a positive manner, what would you have done differently?
If high expectations are being communicated by the manager in the scenario, discuss what benefits might result. For the sake of contrast, pretend the manager in the scenario held low expectations for the employee(s). What might that low expectation manager have done in these scenarios, and what would be the result?

Source: CRM Learning. (2009). Pygmalion effect training activity. Retrieved from http://www.crmlearning.com/blog/index.php/2009/08/pygmalion-effect-training-activity

CASE STUDY 8.1: Building Motivation

Construction Products Inc. sells construction products to various retail and wholesale markets across the United States. Its only office is in Illinois, and so it sends sales representatives on the road to different territories to obtain orders and develop relationships with retailers. You are the newest sales representative and have been assigned to the Southeast territory. A typical workday for a sales rep involves stopping at numerous stores and talking with general managers while visiting the retail stores to view how products are marketed and displayed. On these visits, sales reps try to increase wholesale orders by improving the sales of Construction Products. Also, they complete market reports that are used by the Illinois main office for future forecasting of product demand. Most territories are responsible for about 50 retail stores and about a dozen wholesale accounts. Sales reps are expected to spend a lot of time in the stores focusing on optimizing product location within the store, training employees, and educating customers about the benefits of the company’s products. For example, a sales rep typically tries to get larger space in the store for plywood so that more can be sold. Employees and customers need to be educated on the different grades of plywood and how to match them with building projects. This is important since the stores carry competitors’ products in the stores.

After 6 months on the job, your boss has tasked you with increasing sales in your territory by 20%. You plan to meet this goal by explaining the benefits of your product and why it should be the product of choice. During store visits, you socialize with store employees but realize quickly that getting everyone on the same page is not going to be as easy as anticipated. You learn that most employees don’t really care if the customer gets the best material for their project. They get their paycheck regardless of how much of your products are sold. They listen politely but are not enthusiastic about your ideas. Among the 50 retail stores that you are assigned to, there are seven that agree to help you with increasing sales in their store. You plan to track the sales in these stores compared to the others that did not agree to help. After a month, you see only slight increases in the sales in the seven stores but you are encouraged. Sales are about the same in the other 43 stores. You realize that focusing on the seven stores will not meet your boss’s goal of increasing sales by 20%.

The next month, you try a different approach in your other 43 stores. In those stores, you spend time teaching employees about various building products so they can educate their customers. They seem to grasp an understanding of the benefits your product could bring to the customers compared to competitors’ products. They also seem to understand the applications and how to match your products with customers’ building needs. But when you ask them to teach customers what you had shown them, you were met with looks of confusion and aggravation. Although a bit reluctant, they agree to give it a try.

Checking the weekly sales figures over the next month, you notice that there has been little improvement in the sales of your product at these 43 stores. You ask your boss for advice, and he suggests that you speak with the manager of one of the retail stores to gain an understanding for the lack of motivation. You show him a printout of the sales numbers and how much income your products bring to the store as well as ask for his help getting employees on board with promoting the products. Since the store manager’s main concern is revenue for the store, he quickly agreed and offered his full support.

The store manager calls a meeting where he, the store employees, and you discussed techniques for product presentation and how employees can effectively pitch the product to customers. You left feeling confident that the employees would be effective since the goal was reinforced by their boss. However, on the next review, not only had there been no improvement in sales but the employees’ attitudes toward you had drastically declined. They either avoided you or were unfriendly when you tried to speak to them.

You realize you must come up with a completely different plan of attack to be successful and spend the next Monday morning considering your courses of action.

Discussion Questions

Relate the motivation techniques described in the case to those covered in this chapter. What have you tried already? What do you think should still be tried?
How is it different trying to motivate people who work directly for you compared to those who work for someone else (as in the situation with the store employees in the case)?
Explain the role that the retail store manager plays in motivating these retail employees. What can you do to encourage more support from the managers?
As a follow-up to this case, you started offering financial incentives (bonuses) to employees that met the desired sales increase. Discuss the pros and cons of using incentives to increase sales.

SELF-ASSESSMENT 8.1: How Much Perseverance Do You Have?

This self-assessment exercise identifies your degree of perseverance. There are no right or wrong answers, and this is not a test. The purpose of this assessment is for you to learn about yourself. You don’t have to share your results with other classmates unless you wish to do so.

Part I. Taking the Assessment

Directions for taking the perseverance scale: Please respond to the following eight items. Be honest. There are no right or wrong answers! You will be presented with some questions representing different characteristics that may or may not describe what kind of person you are.

As an example, the answer to a question could look like this:

I enjoy solving complex puzzles.

Add up all the points. The maximum score on this scale is 40 (extreme perseverance), and the lowest score on this scale is 8 (not much perseverance).

Sources: Adapted from the Perseverance-Persistence scale at http://ipip.ori.org/newVIAKey.htm#Industry_Perseverance_Persistence; Finholt, T. A., & Olson, G. M. (1997). From laboratories to collaboratories: A new organizational form for scientific collaboration. Psychological Science, 8(1), 28–36.

Part II. Interpreting Your Scores

Chapter Nine Motivation: Applications

Learning Objectives

After studying this chapter, you should be able to do the following:

9.1: Demonstrate understanding of OB mod by providing an example.
9.2: Describe the four steps in the modeling process articulated in social learning theory.
9.3: Compare and contrast intrinsic and extrinsic rewards.
9.4: Discuss the guidelines for using monetary rewards effectively.
9.5: Illustrate the methods of performance management with examples.
9.6: Critique the performance review process.
9.7: Explain how feedback seeking by employees relates to more accurate perceptions of performance.

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The Meaning of Money

We all have logo-imprinted gifts from universities, employers, or customer gifts. But do people value such tchotchkes more than money? Why doesn’t your organization just give you cash instead of an engraved set of glasses with the company logo? Nobel laureate George Akerlof, a pioneer in the field of behavioral economics, found the answers by studying gift exchange at the workplace. Gifts are viewed as acts of kindness by an employer, which carries more meaning than cash. But will people work harder for gifts?

This premise was studied in a German university that needed to catalog books in their library.¹ Students were employed to catalog books, and some were told they would receive a bonus of 20% more than base pay. Another group was told they would receive a gift-wrapped water bottle. A third group didn’t receive any bonus at all to establish the baseline for productivity. The results are shown in the accompanying chart. The cash bonus had no effect on the speed or accuracy of cataloging the books. But those receiving the water bottle increased their data entry rate by 25% (a productivity increase that more than offset the 7 euro cost of the water bottle). It was the thought that seemed to matter; we know from research on engagement (discussed in Chapter 4) that most employees are searching for meaning in their work. This was reinforced by a second study done by the authors. Money was delivered as a bonus but either as cash or a cute origami folded shirt with a two-euro coin that had a smiley face painted on it. The origami money gift resulted in the highest increase in productivity of all (even more than the wrapped water bottle). Another study found that paying higher wages had no effect on productivity in jobs with no future employment opportunities. However, when a portion of the wage was given as an unexpected gift (offering a bonus raise after the employee accepted the contract for temporary work), it led to higher productivity for the duration of the job.² The implications of these studies illustrate an important point for leaders. Even a slight gesture of appreciation may increase motivation (even if it involves a cash bonus). However, gifts seem to work best when they are personalized to the employee.

So what does money really mean? Money has symbolic meaning for employees, and it represents nonmonetary aspects of life such as achievement, success, competence, autonomy, security, and power.³ Some people feel that money may even bring many friends. Employees pay attention to money and compare what they make to their peers. Perceived pay inequity motivates employees to take action, and compensation is often the focus of employee grievances and lawsuits regarding fairness. The essentials of reward systems and how they are administered are discussed in this chapter. First, the fundamentals that underlie the philosophy of reward systems as they are used in organizations are reviewed.

Source: Kube, S., Maréchal, M. A., & Puppe, C. (2012). The currency of reciprocity: Gift-exchange in the workplace. American Economic Review, 102(4), 1644–1662. Retrieved from HBR.org.

Critical Thinking Questions: The research on gifts described previously was conducted in Germany. Do you think that this would work in the United States or the culture you are from? Explain why or why not. Can you think of any potential limitations to the motivating potential of gifts?

Reinforcement Theory

Learning Objective 9.1: Demonstrate understanding of OB mod by providing an example.

Reinforcement theory is based upon the law of effect, which states that past actions that led to positive outcomes tend to be repeated, whereas past actions that led to negative outcomes will diminish.⁴ The law of effect led to the development of operant conditioning (sometimes referred to as reinforcement theory).⁵ In this approach to motivation, individual personality, thoughts, and attitudes don’t motivate behavior. Instead, the emphasis in operant conditioning is on the environment. The goal of reinforcement theory is to explain learned behavior. B. F. Skinner is the psychologist most associated with this approach. He conducted experiments with animals to understand how behavior could be shaped by setting up systems of rewards and punishments. These rewards (or punishments) were contingent on the response of the animals he studied (probably the most well-recognized studies are those of rats who were taught to run mazes through the shaping of their behavior with pellets of food as rewards).

Reinforcers

Reinforcement is any event that strengthens or increases the behavior it follows. Skinner’s research found there are reinforcers that increase behavior and those that decrease behavior. The two kinds of reinforcement that increase behavior are as follows:

Positive reinforcement is a favorable event or outcome presented after the behavior (e.g., praise or a bonus).
Negative reinforcement is the removal of an unpleasant event or outcome after the display of a behavior (e.g., ending the daily criticism when an employee shows up for work on time).

Punishment

Punishment, in contrast, is the presentation of an adverse event or outcome that causes a decrease in the behavior it follows. There are two kinds of punishment:

Punishment by application is the presentation of an unpleasant event or outcome to weaken the response it follows (e.g., writing a letter to an employee’s file for failing to meet a deadline).
Punishment by removal (also called extinction) is when a pleasant event or outcome is removed after a behavior occurs (e.g., withholding praise when an employee does not perform well).

Critical Thinking Questions: Explain why punishment may not be the most effective way to encourage learning. What would you do to encourage learning instead?

A summary table of these contingencies of reinforcement is shown in Figure 9.1; it is important to consider whether the reward is applied or withheld and whether the event is pleasant or unpleasant. Figure 9.1 and the previously given definitions and examples refer to the type of reward or punishment that is applied or removed. For example, a pleasant event that is applied would be a manager praising an employee when he or she completes an excellent project report (a positive reinforcement).

Figure 9.1 Contingencies of Reinforcement

Schedules of Reinforcement

Skinner’s research also found how often a reward (or punishment) is applied also predicts learning and motivation. He referred to this as the schedules of reinforcement.⁶ The first schedule is continuous—a specified behavior is rewarded or punished every time it occurs. This is not seen often in organizations; however, it is useful during the learning process (e.g., when an employee is learning to use a new computer program). In this example, the employee would be allowed to leave work one-half hour early (a positive event) each time he completes a module of a computer training program successfully. Once the employee has attained an acceptable level of mastery, they are moved to a partial reinforcement schedule. For example, the employee is no longer rewarded or punished every time, but they are rewarded (punished) on a more random basis as described next.

As illustrated in Figure 9.2, the schedules of partial reinforcement are based on time (interval) or the number of times the response is given by the employee (ratio). Also, the schedule can be fixed or variable (random). These two dimensions result in four possible schedules of partial reinforcement as shown in the figure:

Fixed-interval schedules are those where the first response is rewarded only after a specified amount of time has elapsed. This schedule causes high amounts of responding near the end of the interval. An example of this in a work setting is the way pay is typically disbursed—every 2 weeks or every month, for example. After a fixed amount of time, the employee receives a paycheck.
Variable-interval schedules occur when a response is rewarded after an unpredictable amount of time has passed. This schedule produces a slow, steady rate of response. An example of this would be bringing in bagels for breakfast once a week for employees but varying which day they are brought in (e.g., sometimes on Monday and sometimes Wednesday). The employees never know when they will be treated to bagels, so the element of surprise is motivating and they may come to work on time regularly so they don’t miss out.
Fixed-ratio schedules are those where a response is reinforced only after a specific number of responses. This schedule produces a high, steady rate of responding. An example of a fixed-ratio schedule would be payment to employees based upon the number of items they produce (a piece-rate pay system). In piece-rate systems, the employee is paid for each article produced; for example, a worker sewing zippers into jeans is paid for each zipper correctly sewn in.
Variable-ratio schedules occur when a response is reinforced after an unpredictable number of responses. This schedule creates a high, steady rate of responding. Gambling and lottery games are good examples of a reward based on a variable ratio schedule. This is why gambling results in such long-term and persistent behavior (it’s the element of chance that motivates the behavior). In a work setting, this might be offering praise to an employee for good performance after one time and then again after four times and then another time after two times.

Figure 9.2 Schedules of Partial Reinforcement

Critical Thinking Questions: Discuss why the biweekly paycheck form of payment is not the most motivating schedule based upon the principles of reinforcement. Provide an example of a method of payment that would be more motivating.

Partial schedules are more motivating than continuous reinforcement (e.g., the employee may become accustomed to praise from the leader so it loses its motivating power on behavior). Of the partial reinforcement schedules, research has demonstrated that the variable-ratio schedule of partial reinforcement produces the most persistent, long-term effects on behavior.⁷ Receiving rewards in a random fashion tends to increase effort until the reward is received.

As the previously given examples indicate, reinforcement is used in organizations in a variety of ways to increase employee motivation and performance. It is also used to extinguish undesirable behaviors. Given the strong research base supporting the principles of reinforcement theory, it represents a powerful tool most leaders use to motivate performance.⁸ The application of reinforcement theory in organizational behavior (OB) is known as organizational behavior modification (OB mod).

Organizational Behavior Modification

OB mod has been employed to increase performance and reduce absenteeism. Figure 9.3 shows how to apply OB mod using the principles of reinforcement theory. As shown in the figure, the first step is to pinpoint the specific behavior that needs to be changed. For example, coming to work on time every day is an example of a behavior that needs intervention if an employee is not doing it. Second, measure the baseline: How many days per month is the employee on time? Third, perform an A-B-C analysis. This stands for antecedents, behavior, and consequences:

Antecedents: What is causing the behavior? Consider both internal and external factors.
Behavior: What is the current behavior? What is the desired behavior?
Consequences: What is currently reinforcing the behavior? What needs to be changed?

Figure 9.3 Applied Behavior Modification

Fourth, develop an action plan based on reinforcement theory strategies to apply (using the contingencies of reinforcement and the schedules). Implement the plan and then evaluate the plan comparing the behavior to the baseline (after compared to before). This will provide feedback, and the plan may need to be changed or another behavior targeted for the future. A comprehensive review of OB mod interventions⁹ stressed the importance of following up after interventions to ensure the long-term durability of the intervention. Also, the authors concluded that follow-up is needed to provide the feedback necessary to adjust the intervention if warranted. Leaders use the principles of OB mod to change employee behaviors by meeting with followers to discuss their performance. In some cases, this discussion takes place during performance management reviews (this process is discussed later in this chapter).

An example of applied OB mod for an employee who is late to work frequently is shown in Figure 9.4. As this example shows, the specific behavior targeted is that the employee arrives at work on time (say, 8:30 a.m. each day). If the employee is on time, the supervisor can praise them (positive reinforcement) or withhold criticism (this only works if the supervisor has consistently criticized the employee’s tardiness prior to the day they arrive on time, of course). If the employee is late, the objective is to decrease the behavior, so the supervisor can withhold praise to produce extinction of the behavior (punishment by removal), or write a reprimand and put it in the employee’s file, which is unpleasant (punishment). Of course, the supervisor can use more than one behavior change strategy and should eventually move the employee to a variable interval or ratio schedule (i.e., apply or remove the reinforcement more randomly) once the employee is coming to work consistently on time.

Figure 9.4 Applied Behavior Modification Example

Proponents of behavior modification argue that it has a strong research base and applies to all employees regardless of individual difference and national culture.¹⁰ A meta-analysis found that OB mod increased task performance by 17%; however, results of interventions using OB mod were stronger in manufacturing than service organizations.¹¹ Critics of operant conditioning and OB mod have argued that the results can be explained using theories that involve cognitions (thoughts) of employees.¹² Also, some people may react negatively to the use of operant conditioning to control the behavior of employees, feeling that it is manipulative. In response to criticisms of behavior modification, subsequent research incorporated thought processes into reinforcement theory. Social learning theory extends operant conditioning to consider the fact that people can learn from watching other people succeed or fail.

Social Learning Theory

Learning Objective 9.2: Describe the four steps in the modeling process articulated in social learning theory.

Albert Bandura presented social learning theory, and it is perhaps the most influential theory of learning today.¹³ Bandura believed that operant conditioning (reinforcement) was useful but did not explain all of the ways a person can learn. Social learning theory introduced the social element into how people acquire new skills and described the ways that people learn by watching other people. Known as observational learning (or modeling), this form of learning explains much behavior in organizations. Second, external reinforcements are not the only factors that influence motivation. Intrinsic reinforcement is related to pride, satisfaction, and a sense of accomplishment in learning something new. Social learning theory considers people’s thoughts as well as their perceptions of others (a social cognitive theory). While reinforcement theorists maintained external rewards create permanent behavioral changes, social learning theory proposes that people can learn things but not necessarily change their behavior.

The Modeling Process

The modeling process has four steps:

Attention. To learn, a person has to be paying attention to another’s behavior. People pay attention to things that are either interesting or new.
Retention. The information must be stored for access in the future. This is important to observational learning since a person must remember what they have observed.
Reproduction. Once information is noted and retained, the next step is that the person imitates (i.e., performs) the behavior that they recall. Repeating the behavior (i.e., practicing) leads to improved performance.
Motivation. For observational learning to work, the person needs motivation to imitate. Thus, social learning theory discusses the roles of reinforcement and punishment. For example, if you see another student rewarded with extra credit points for participating in class every day, you might begin to do the same.

As noted previously, not all reinforcement comes from external rewards such as pay. OB researchers became interested in the motivational power of both external (extrinsic) as well as internal (intrinsic) reinforcement on motivation at work. The next section discusses these two forms of motivational rewards and what the research has shown regarding their effectiveness.

Intrinsic Versus Extrinsic Rewards

Learning Objective 9.3: Compare and contrast intrinsic and extrinsic rewards.

Expectancy theory (covered in Chapter 8) includes both intrinsic and extrinsic work motivation.¹⁴^,15 Intrinsic motivation is when someone works on a task because they find it interesting and gain satisfaction from the task itself. Extrinsic motivation involves the performance to outcome instrumentality between the task and a tangible reward. Satisfaction does not come from the task itself but rather from the extrinsic outcome to which the activity leads (e.g., working extra hours to earn a bonus). Work should be set up in a manner so effective performance leads to both intrinsic and extrinsic rewards to produce job satisfaction.¹⁶ There are other sources of motivation in addition to intrinsic and extrinsic such as the enhancement of self-concept and the degree to which a person internalizes the goals of the organization.¹⁷

Does paying someone to do a job reduce their intrinsic motivation? Intrinsic motivation refers to their internal reasons for doing something such as enjoying the task or being interested in it. For example, are you reading this because you want to get a good grade (extrinsic), or are you interested in learning more about motivation (intrinsic)? The answer can be both, but OB researchers designed experiments to see what would happen if people were paid for doing something they enjoy. Extrinsic rewards can lead to reduction in intrinsic motivation. For example, in an experimental study, paying money was found to undermine college students’ intrinsic motivation to perform a task.¹⁸ These experiments were replicated in work organizations.¹⁹

Critical Thinking Questions: Explain why paying someone to do something they like doing reduces their intrinsic motivation. What steps can a leader take to address this situation?

Rewards should be administered so that they are contingent upon effective performance. However, research on the impact of paying someone to do something that they enjoy showed surprising findings. While it appears counterintuitive, pay may not motivate people to perform at the highest levels. Also, extrinsic motivation plus intrinsic motivation (for example, pay plus challenging work) may not always combine to produce the highest motivation (see the boxed insert for further discussion of this effect).

Relationship Between Intrinsic and Extrinsic Rewards

There can be synergistic effects between intrinsic and extrinsic motivation, and there are two psychological mechanisms that illustrate this. First, “extrinsics in service of intrinsics”²⁰ refers to how extrinsic rewards may support an employee’s sense of competence if they don’t undermine autonomy (self-determination). For example, a reward can be more time to work on creativity projects. This has been implemented at Google, where engineers and project managers are given 20% of their work time to work on something that they are passionate about. In other words, one day per week they can work on anything they like, even if it falls outside of the scope of their job or is unrelated to the mission of the company.²¹ A second mechanism is the motivation–work cycle match. This is the understanding that innovation occurs in phases and intrinsic motivation may be more important during the idea-generation phase. However, when the project is being implemented, extrinsic rewards may be needed to ensure that deliverables are produced on time and within the budget. A longitudinal study found support for this idea in study of project teams.²³ Team members reported higher levels of radical creativity in early phases of a project compared to incremental creativity at later phases. Thus, one type of motivation may not suit all types of project work. A meta-analysis of over 40 years of research on intrinsic and extrinsic motivation found that intrinsic motivation predicts quality of performance, whereas extrinsic motivation (incentives) is a better predictor of quantity of performance.²⁴ These findings may be surprising since most people think that money matters more than other rewards. In fact, paying people money for doing something they enjoy may actually reduce their motivation.²⁵ Edward Deci and his colleagues developed the theory of self-determination to explain why this happens.

Research in Action

Why the “Carrot and Stick” May Not Always Work

Daniel Pink (2009), in his book Drive: The Surprising Truth About What Motivates Us, discusses three forms of motivation as “operating systems.” Motivation 1.0 was humankind’s inherent need to survive. The next operating system, Motivation 2.0, was the carrot-and-stick approach (or the rewards and punishments we discussed in reinforcement theory research). Pink is critical of the carrot-and-stick approach, pointing out the carrot and the stick can produce results that are the opposite of what leaders are looking for because rewards can transform an interesting task into drudgery; they can turn play into work. Traditional “if-then” rewards (if you do this, then you will get that) cannot produce high levels of motivation for seven reasons, according to Pink:

It extinguishes intrinsic motivation.
It diminishes performance.
It crushes creativity.
It crowds out good behavior.
It encourages cheating and unethical behavior.
It becomes addictive.
It fosters short-term thinking.

Pink considered these to be bugs in human beings’ current operating systems. For those driven by intrinsic motivation, the drive to do something because it is interesting and challenging is essential for high creativity and motivation. Goals that people set for themselves for mastering a skill are healthy. But goals imposed by others such as sales targets, quarterly returns, and standardized test scores can sometimes have the seven dangerous side effects listed previously. Pink presented what he believes is the next operating system for human motivation—Motivation 3.0, which goes beyond the carrot-and-stick approach and centers on intrinsic motivation. He believes there are three important aspects to this new operating system based on psychological empowerment: autonomy, mastery, and purpose. Pink highlighted autonomy as one of the most important motivating factors at work. He said that people want control over the task (what they do), time (when they do it), team (who they do it with), and technique (how they do it).²² These three new elements of motivation are fueled by intrinsic and not extrinsic rewards.

Discussion Questions

Discuss Pink’s premise in light of what you have learned about the effectiveness of positive reinforcement. Why are these criticisms valid (or not)?
Do you agree that intrinsic motivation is a preferable way to influence performance? Why or why not? Why is autonomy so important to intrinsic motivation?
What other factors do you think are important for increasing intrinsic motivation?

Source: Pink, D. H. (2009). Drive: The surprising truth about what motivates us. New York, NY: Penguin Books.

Critical Thinking Questions: Use reinforcement theory to explain why extrinsic rewards may not produce long-term effects on motivation. What should a leader do instead to motivate workers based on the relationship between intrinsic and extrinsic motivation?

Self-Determination Theory

Intrinsic motivation is a function of a person’s needs for autonomy and competence in the theory of self-determination (also known as cognitive evaluation theory).²⁶ Autonomy is the need to work alone without constant surveillance. Competence is the sense of mastery an employee has over their job. A large-scale meta-analytic study of 99 studies of self-determination theory (119 distinct samples) found that these needs for autonomy and competence significantly predict employee psychological growth, internalization (the shift of motivation from extrinsic to intrinsic), and well-being.²⁷

The effects of a reward depend on how the person views the reward’s effect on their autonomy and competence. Rewards that diminish these perceptions tend to decrease intrinsic motivation. The issue with extrinsic rewards like money is that such rewards might be interpreted by employees as controlling by the boss rather than indicators of their competence. If the reward is seen as controlling, then the individual’s need for autonomy is challenged, and this undermines intrinsic motivation. If a reward is seen as useful feedback and informational, then it increases motivation. For example, setting limits for employees could be seen as either informational or controlling depending on the relationship with the boss.²⁸ Managers can create a climate of trust that alters whether a person views their rewards as controlling or good feedback.²⁹ For example, a leader can communicate a pay raise without compromising motivation by emphasizing the informational aspect of the raise as valuable feedback rather than just money. Self-determination theory views rewards as a continuum from the lack of motivation to intrinsic motivation as shown in Figure 9.5. Extrinsic motivation is seen as complex and ranges from external regulation (rewards and punishments) to feelings of self-worth derived from job performance (introjected regulation). At the higher end of extrinsic motivation, identified regulation means employees realize that the goals of the organization are important. At the highest level for extrinsic motivation, the employee identifies with the values and integrates them into automatic performance (integrated regulation). This continuum helps the manager understand that extrinsic motivation can play an important role in encouraging employee performance. However, as shown in the figure, intrinsic motivation reflects the enjoyment of work, and extrinsic rewards may not be needed to maintain high levels of performance.³⁰ Therefore, with respect to performance, incentives and intrinsic motivation are not necessarily antagonistic and are best considered simultaneously. So it is important to keep in mind that extrinsic rewards can motivate, but they also have limitations. The next section discusses what money can and cannot do in terms of motivation.

Figure 9.5 The Self-Determination Continuum of Rewards

Source: Gagné, M., & Deci, E. L. (2005). Self-determination theory and work motivation. Journal of Organizational Behavior, 26(4), 331–362.

What Money Can and Cannot Do

Learning Objective 9.4: Discuss the guidelines for using monetary rewards effectively.

There are pros and cons of using money as a motivational tool.³¹ On the one hand, organizations that appropriately tie pay to performance and pay more have higher rates of return.³² A study of hospitals showed that pay-level practices and pay structures combined to affect resource efficiency, patient care outcomes, and financial performance. On the other hand, tying pay directly to performance can have dysfunctional or even unethical consequences.³³ For example, Green Giant, a producer of frozen and canned vegetables, implemented a pay system that rewarded employees for removing insects from vegetables. It was later discovered that employees were bringing insects from home and putting them into the vegetables to receive the monetary rewards.³⁴

Pay Dispersion

Another caveat regarding money as a motivational tool is that care must be taken when implementing systems in which employees receive different levels of rewards for individual efforts. This results in pay dispersion, which can cause jealously among employees or harm team performance. If pay dispersion creates pay inequity due to discrimination, it may result in litigation under the Equal Pay Act of 1963 (see Case Study 9.1 for an example of a pay dispersion lawsuit and an update on legislation related to equal pay at the workplace).

To summarize, there are five evidence-based guidelines for money as a motivator: (1) define and measure performance accurately, (2) make rewards contingent on performance, (3) reward employees in a timely manner, (4) maintain justice in the reward system, and (5) use monetary and nonmonetary rewards.³⁵ These evidence-based guidelines are summarized in Table 9.1.

Source: Adapted from Aguinis, H., Joo, H., & Gottfredson, R. K. (2013). What monetary rewards can and cannot do: How to show employees the money. Business Horizons, 56(2), 241–259.

As the previous review of monetary and nonmonetary rewards shows, the ability to assess employee performance is essential to the successful implementation of any reward system. Most organizations today employ pay for performance incentive systems, which include individual merit pay.³⁶ A review of this research concludes with this: “Job performance is perhaps the most central construct in work psychology.”³⁷ The approaches to performance evaluation and guidelines for effective practice are covered next.

Performance Management

Learning Objective 9.5: Illustrate the methods of performance management with examples.

As noted previously, performance management is essential for the determination of compensation and other outcomes such as promotions. But there are other objectives that are equally important. The performance management session is an opportunity to regularly discuss an employee’s performance and results. The leader can identify the follower’s strengths, weaknesses, and areas for improvement. The process supports pay equity in which followers are paid according to their inputs and results, and it supports a climate of organizational justice. Performance management, thus, provides essential feedback for followers. Importantly, it can recognize exceptional performance and document weak performance. Also, it can lead to effective goal setting for future performance and identify training that may be needed to improve skills. Most organizations use the performance management process for compensation decisions and performance improvement as well as to provide feedback to employees.³⁸ Next, we discuss the sources and methods used by organizations to evaluate employee performance—who rates performance and how it is managed.

Sources of Performance Management Ratings

In most organizations, the immediate supervisor is involved in the performance appraisal and often is the only person conducting the review. This appraisal is often reviewed by the human resources department. In some cases, the process is reviewed by a manager one level above the supervisor. However, recent trends have included ratings from higher management, peers (coworkers), the employee’s followers, and customers. Performance appraisal may also include self-ratings in which the employee rates his or her own performance, and this becomes a part of the file. However, self-ratings are typically used for development purposes and not for compensation or promotion decisions because they suffer from self-interest bias and they don’t agree well with supervisor ratings.³⁹ In a 360-degree performance appraisal, the input from a number of these sources is included to provide a more comprehensive view of an employee’s performance. The research evidence on 360 degree suggests it increases the perspectives that provide input into the review process.⁴⁰^,41 The challenge with 360-degree reviews is that organizations don’t often provide necessary training for peers to provide constructive feedback. Peers, for example, tend to be more lenient than supervisors in rating their coworkers.⁴²^,43 Despite these challenges, 360-degree feedback has been implemented successfully in numerous organizations.

An example of a successful implementation is Starwood Hotels and Resorts Worldwide. The executive team wanted to provide their managers with valuable feedback on their strengths and areas for development. They used the viaPeople 360-degree feedback system along with a proprietary, internally developed, and validated competency model, and this process produced the following individual and organizational benefits:⁴⁴

Individual Benefits

A simple, easy-to-use 360-degree feedback tool
A “self-paced” 360-degree feedback report complete with targeted questions to guide the leader through the process of uncovering strengths and development areas
Specific interpretive tables and graphs in the feedback report that helped leaders analyze their data
A downloadable discussion guide for report recipients and their managers—what to focus on, how to lead and focus the discussion, and how to deal with emotions/defensiveness

Organizational Benefits

Competency/skill strengths and development areas across division and employee level
Better understanding the skill mix across the organization, Starwood was able to more effectively leverage the leadership strengths and refocus efforts where developmental opportunities may exist
Data specific for each division provided (by viaPeople) allowed Starwood to target local training efforts, thereby saving precious resources
Each divisional leader received analysis of their division’s results so they could take specific actions on the data and have a better understanding of the team strengths/development areas.

Performance Management Methods

It is best to avoid rating traits such as having a positive attitude since they may not relate to actual performance.⁴⁵ Most organizations use a standard form to evaluate employee performance. There may be an overall global rating for performance, but there are also specific dimensions that are rated. These ratings are typically on a graphic rating scale having multiple points along a continuum. Here is an example:

Outstanding Performance is consistently superior.
Exceeds expectations Performance is routinely above job requirements.
Meets expectations Performance is regularly competent and dependable.
Below expectations Performance fails to meet job requirements on a frequent basis.
Unsatisfactory Performance is consistently unacceptable.

An example of a graphic rating scale is shown in Toolkit Activity 9.2 at the end of this chapter. You have the opportunity to practice using this commonly-used performance management tool in the role-play exercise.

Another approach is to use behaviorally anchored rating scales (BARS) in which a vertical scale is presented with specific examples of performance provided. For example, for an executive assistant, a BARS might look like this:

As this table shows, the creation and updating of BARS can be time consuming, but they can be more effective because they focus on specific behaviors rather than general statements such as “knowledge of work.”

Some organizations use a forced-ranking method in which all employees in the work group are ranked relative to one another. This approach was made famous by Jack Welch at GE, where he committed to firing the bottom 10% of the workforce each year.⁴⁶ Even if the bottom 10% is not fired, such forced-ranking systems may make managers uncomfortable and create a culture of competition. Recently, such forced-ranking systems have come under scrutiny by large corporations. Microsoft, for example, has done away with their long-standing practice of forced rankings. According to research conducted by the Institute for Corporate Productivity, only 145 companies surveyed in 2011 reported that their appraisal process included forced rankings—down from 49% in 2009.⁴⁷ See the boxed insert for an update on why many organizations are doing away with forced rankings due to their limitations.

Critical Thinking Questions: Do you agree that forced rankings should be eliminated in evaluating performance? Why or why not? Discuss the positive side of having competition in the organization.

Problems with Performance Reviews

Learning Objective 9.6: Critique the performance review process.

There are issues related to performance appraisals that a leader needs to know about. Some employees view the appraisal process as unfair and showing favoritism. Others may fear the appraisal process and view it as punitive.⁴⁸ There are perceptual biases that may affect the rater’s ability to accurately rate follower performance (from Chapter 5, major perceptual errors are primacy, recency, availability, contrast, and halo). These errors have been shown by research to affect the performance rating process. In addition, there may be a tendency for a rater to be too lenient (or too strict) in their ratings.⁴⁹ They might have a central tendency error in which they rate all dimensions of performance as average (e.g., rating every dimension as 3 on a 5-point scale). Cultural values such as power distance and collectivism may influence how a rater assesses the performance of another person.⁵⁰ Performance appraisals should be supported by training for those making the ratings to avoid these errors and increase sensitivity to the perspectives of employees from different cultural backgrounds.

These perceptual biases may be avoided by rewarding for results rather than behaviors. For example, in profit-sharing plans, employee bonuses are based upon reaching a financial target such as return on assets or net income. Stock options are a variation of profit sharing where employees are given stock options as part of their compensation package. Gain-sharing plans are another alternative, in which compensation is tied to unit-level performance (e.g., the employees receive a percentage of the sales increase or cost savings for efficiency improvements). These plans tend to increase performance.⁵¹ However, the pay may be too variable for employees to rely solely on these plans for their total compensation. Also, the focus on results may encourage unethical behaviors to reach the targets.⁵²

Other Forms of Compensation

Other benefits that employees may value as rewards include flexible working hours, which research has shown relates to employee satisfaction and motivation. Flexible working hours may be formal (i.e., allowing employees to arrive later to work and stay later) or informal (i.e., a supervisor being flexible regarding an employee’s need to pick up children from school). Another variation on flexible hours is job sharing, or splitting one full-time job into two jobs.⁵³ Another benefit that many employees value is remote working (also known as telecommuting), or the ability to work from home—or anywhere. A study of 2,617 employees in four organizations⁵⁴ found that remote working and flexible hours were related to organizational commitment. This commitment translated into higher job performance. Another reward that progressive organizations are offering is sabbaticals from work. A sabbatical is a leave taken from work to “recharge one’s batteries” or take care of family responsibilities. In some cases sabbaticals are paid and others are unpaid. For example, Genentech, a San Francisco, California, breast cancer research firm, offers a 6-week paid sabbatical after 6 years of continuous service with the company. In 2015, 1,100 employees took advantage of the program, in addition to their 18 paid vacation days.⁵⁵

Some managers feel that performance appraisals offer little benefit relative to the time involved. Some are not comfortable with face-to-face confrontation over difficult performance issues. Finally, there is an inherent conflict in the role of the supervisor as evaluator and at the same time performance coach. Despite this discomfort on the part of supervisors, research has shown employees are satisfied with their performance evaluation when the process combines development with administrative reward purposes.⁵⁶ Moreover, employees reported higher intentions to use developmental feedback when rewards were also discussed. One study found that all employees are unhappy with receiving negative feedback—even those with a strong learning orientation.⁵⁷ It appears that negative feedback does not help employees learn more from their jobs.

Another criticism that has been leveled at the performance management process is that by focusing on individual achievement, effective teamwork is discouraged.⁵⁸^,59 While the critics of individual performance management have made important points, team-based reward systems also have drawbacks. Most employees prefer that their pay be based on individual merit rather than group output.⁶⁰ This preference is strongest among the most productive and achievement-oriented employees.⁶¹^,62 Thus, if pay is based on group performance, an organization’s best performers may become frustrated and seek other jobs. It’s best to offer mixed or aggregate compensation systems, which include individual merit pay, group incentives, and gain sharing to offset the advantages and disadvantages of the different approaches.

Best Practices

Rethinking the Review: For Whom the Bell Curve Tolls

The logic behind forced-ranking systems is that employee performance falls on a bell-shaped curve—the normal distribution, as you learned in your statistics courses. Thus, only a small percentage of employees fall into the outstanding category, and an approximately equal number fall into the unsatisfactory category. Most employees are considered average in terms of their performance and need further coaching and/or training to improve. Large organizations have recently been questioning whether such systems work. Concerns have been raised that forced rankings are demotivating and harm cooperation and teamwork. Some companies, including Microsoft and Adobe Systems, have even removed numerical ratings from their evaluation systems after learning that employees stop listening after they get their number and don’t hear the essential feedback they need to improve their performance. Shelly Carlin, senior vice president of human resources at Motorola Solutions, agrees: “In a traditional review, the employee listens until he hears the rating and then tunes out because he’s doing the calculation in his head about how that will affect his bonus.”⁶³ At Adobe Systems, Donna Morris, the senior vice president of human resources, noticed that turnover increased each year after the performance review process. There has also been a trend toward more frequent reviews—quarterly or monthly—rather than the traditional 1-year review.⁶⁴ Morris stated the following:

We came to a fairly quick decision that we would abolish the performance review, which meant we would no longer have one-time-of-the-year formal written review. What’s more, we would abolish performance rankings and levels in order to move away from people feeling like they were labeled.⁶⁵

The company changed to a process where check-in conversations that focus on ongoing feedback were instituted instead of numerical ratings each year.⁶⁶ In addition to reducing turnover, increasing regular feedback, and improving teamwork, many organizations feel that the performance review process must change because organizations themselves have changed. According to the founder and principal at Bersin by Deloitte, a research-based provider of human resource systems, “Organization structures have changed and companies need to be more agile. We have a shortage of key talent and the keys to success now focus on regular alignment, coaching, creating passion and engagement, and continuous employee development.”⁶⁷

Discussion Questions

List the pros of performance appraisals. Provide an example of when a performance appraisal has a positive benefit.
List the cons of performance appraisals. Provide an example of when a performance appraisal has a negative outcome.
Based on motivation theory, we know that employees need feedback to perform well. Describe an alternative to performance appraisal that provides necessary feedback.

Sources: Bersin, J. (2013). Is it time to scrap performance appraisals? Retrieved on December 2, 2013, from http://www.forbes.com/sites/joshbersin/2013/05/06/time-to-scrap-performance-appraisals; McGregor, J. (2013). For whom the bell curve tolls. Retrieved on November 20, 2013, from http://www.washingtonpost.com/blogs/on-leadership/wp/2013/11/20/for-whom-the-bell-curve=tolls; Morris, D. (2013). Forget reviews, let’s look forward. Retrieved on November 20, 2013, from http://blogs.adobe.com/conversations/tag/donna-morris; Ramirez, J. C. (2013). Rethinking the review: After 50 years of debate, has the time come to chuck the performance review? Retrieved on November 20, 2013, from www.hronline.com/HRE/view/story.jhtmal?id=534355695&.

Critical Thinking Questions: Explain how the management of individual performance may harm team performance. How can this be addressed?

A research report from McKinsey Consulting summarizes recent trends that reflect changes to traditional performance appraisals in organizations. These trends include the following:

Some companies are rethinking what constitutes employee performance by focusing specifically on individuals who are a step function away from average—at either the high or low end of performance—rather than trying to differentiate among the bulk of employees in the middle.
Many companies are also collecting more objective performance data through systems that automate real-time analyses.
Performance data are used less and less as a crude instrument for setting compensation. Indeed, some companies are severing the link between evaluation and compensation, at least for the majority of the workforce, while linking them ever more comprehensively at the high and low ends of performance.
Better data back up as a shift in emphasis from backward-looking evaluations to fact-based performance and development discussions, which are becoming frequent and as-needed rather than annual events.⁶⁸

What should a leader do to improve motivation given these trends in performance management? A leader should focus on what is important to the employee and what they learned from mistakes. Performance management should be about employee growth and development. Leadership consultant Jose Luis Romero suggests that growth means two things:

To help employees possess the needed skill level to achieve desired performance; and
To help employees develop the ability to exceed desired performance and move to greater levels of more complex performance.⁶⁹

HR consultant Earl Silver notes that ratings can be demotivating, so it is important for a leader to separate discussions of growth and development from salary increases. He reminds leaders to make an investment in making their performance management process work effectively to motivate employees.⁷⁰ Toolkit Activity 9.1, at the end of this chapter, provides some additional tips for conducting an effective performance appraisal. Then practice your skills in developing a plan for growth and development by completing the role-play exercise in Toolkit Activity 9.2.

As noted previously, one of the primary goals of the performance evaluation process is to provide feedback to employees on their performance. Research has shown that some employees seek feedback from their supervisors to enhance their performance that does not depend on the formal performance management process. Thus, the formal appraisal review process is not always enough to provide followers with the feedback they need to perform well. Research on feedback seeking by followers has demonstrated that accuracy of follower perceptions of their performance is improved by more frequent feedback from leaders.

Feedback Seeking

Learning Objective 9.7: Explain how feedback seeking by employees relates to more accurate perceptions of performance.

As noted previously, performance management systems have been criticized for emphasis on categorizing employees and failure to address the followers’ need for feedback on their work on a day-to-day basis.⁷¹ As shown in Figure 9.6, the situation affects the person’s motives for feedback seeking. People may either want to defend their self-perception or image (ego or image defense). Alternatively, their goal may be to enhance their self-perception (or image) in the eyes of others (by asking for feedback on something they knew they did a good job on, for example). There are five patterns of feedback seeking that matter: (1) how frequently people seek feedback, (2) how they seek it (observing, comparing, or asking for it), (3) the timing, (4) whom they ask for feedback from (i.e., the target), and (5) what they ask for feedback about (e.g., success on an task assignment).⁷² Outcomes from feedback seeking are a more accurate perception of one’s own performance and progress on goal attainment by gaining feedback when needed. Also, one’s self-perception and image may be enhanced through the five strategies of feedback seeking. Research on feedback seeking suggests seeking negative feedback does improve an employee’s image (unless the feedback seeker is a poor performer). However, seeking positive feedback can be detrimental to a leader’s image as seen by subordinates.

Figure 9.6 Antecedents and Consequences of Feedback Seeking

Source: Ashford, S. J., Blatt, R., & Vandewalle, D. (2003). Reflections on the looking glass: A review of research on feedback-seeking behavior in organizations. Journal of Management, 29(6), 773–779. p. 775.

Critical Thinking Questions: Can you explain why it isn’t a good idea for a leader to seek feedback from followers? Do you agree or disagree? Why or why not?

Leadership Implications: Motivating With Rewards

Leaders play an important role in managing follower motivation and performance. Research has shown that the relationship between and leader and follower (i.e., leader–member exchange [LMX]) is an important factor in the performance appraisal process. A study found that perceptions of performance management process fairness matter to individuals, and high LMX employees tend to see the process as being fairer than low LMX employees.⁷³ Leaders need to pay close attention to the extent to which followers perceive that the performance appraisal process is procedurally fair. The authors conclude that “all employees need to feel cared for and supported.”⁷⁴ Leaders should ask their followers how they feel about the organization’s performance appraisal procedures and practices on an informal basis. Suggestions for improving the process should be taken seriously. Good supervisor–subordinate relationships create a social context that substantially influences the performance management discussion and how followers respond to their feedback.⁷⁵ A longitudinal study⁷⁶ found that employee voice during the performance management session (procedural justice) influenced the reactions to receiving negative feedback. In this study, the relationship with the supervisor (LMX) was more important than the differences in performance ratings. What this study suggests is that followers will accept feedback when they are rated lower than their peers if they have a trusting and high-quality relationship with their boss, and they have a voice during the process. A case study of a performance appraisal process supported this finding. Followers who trusted their leaders were more satisfied with the performance appraisal process in their organization.⁷⁷

An example of how the leader plays an important role is shown in a study of performance management conducted at Deloitte Consulting by a team of consultants.⁷⁸ To see performance at the individual level, consultants asked team leaders not about the skills of each team member but about their own future actions with respect to that person. At the end of every project (or once every quarter for long-term projects), they asked team leaders to respond to four future-focused statements about each team member. These questions were designed to clearly highlight differences among individuals and reliably measure performance. Here are the four questions:

Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus (measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree”).
Given what I know of this person’s performance, I would always want him or her on my team (measures ability to work well with others on the same five-point scale).
This person is at risk for low performance (identifies problems that might harm the customer or the team on a yes-or-no basis).
This person is ready for promotion today (measures potential on a yes-or-no basis).

In effect, team leaders were asked what they would do with each team member rather than what they think of that individual. Completing these assessments after each project produces a rich stream of information for leaders’ discussions of what they, in turn, plan for each follower in terms of their growth and development as well as promotions. This process shifts the role of the leader from evaluator to coach and provides followers with feedback on a more frequent basis (after each project or quarterly) rather than once per year.

This chapter has shown that research supports how leaders can motivate followers using rewards. Knowing reinforcement and social learning basics is essential to understanding how reward systems operate in organizations. Based on the self-determination theory, it is important for leaders to recognize that follower needs for autonomy and competence play an important role in intrinsic motivation and well-being. It is also important to become thoroughly familiar with the performance management in your organization so that it can be used effectively to provide the necessary feedback to motivate employees to high levels of performance. Research has shown that the process must be perceived as fair, and employees need to be able to voice their concerns during the process. People are more likely to accept feedback, even if it is negative, if they trust their leader. Feedback-seeking research has demonstrated that employees need feedback far more often than yearly performance management reviews. Leaders should encourage their followers to seek feedback so they can stay on track toward reaching their goals. A number of organizations, including GE, Microsoft, Netflix, and Google, have redesigned their performance management systems to provide fluid and frequent feedback that emphasizes the role of the leader as coach.⁷⁹ Some organizations are even experimenting with apps that provide real-time feedback to employees.⁸⁰ The process of motivating employees is evolving, but current trends indicate that the leader will play an even more central role in the performance management process in the future.

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Key Terms

A-B-C analysis, 215
behaviorally anchored rating scales (BARS), 223
central tendency error, 224
cognitive evaluation theory, 219
competence, 219
extrinsic motivation, 217
“extrinsics in service of intrinsics,” 217
feedback seeking, 227
fixed, 213
flexible working hours, 224
gain-sharing plans, 224
interval, 213
intrinsic motivation, 217
job sharing, 224
law of effect, 211
motivation–work cycle match, 217
observational learning, 216
operant conditioning, 211
organizational behavior modification (OB mod), 214
pay dispersion, 220
pay inequity, 220
profit-sharing plans, 224
ratio, 213
reinforcement theory, 211
reinforcers, 211
remote working, 224
sabbaticals, 224
schedules of reinforcement, 213
self-determination, 219
social learning theory, 216
stock options, 224
360-degree performance appraisal, 222
variable, 213

TOOLKIT ACTIVITY 9.1: Performance Appraisal Do’s and Don’ts

Refer to these guidelines the next time you have to conduct performance appraisals.

Do’s

Reassure your staff member by building on strengths; give him or her confidence. Set the stage for a two-way conversation. Relieve tension and facilitate dialogue by communicating up front your review process agenda. Let the employee know they have input.
Use a “we” approach when discussing problems. Talk about their strengths and challenge areas. Deliver the negative (avoid sugarcoating), but make sure the employee knows what he or she can do about it.
Be specific when discussing performance appraisal. Identify what success looks like for the coming year given the organization’s objectives. Create an employee development plan with specific goals and tasks.
Keep the interview on track. Start the process by letting employees assess themselves. What are they most proud of, and what do they consider areas for development?
Draw him or her out by asking thought-provoking questions (not the yes or no type); then listen. Restate or reflect the follower’s statements. Listen with warmth, frankness, and real interest.
Talk about job results, not activities. Seize the opportunity to acknowledge what you like and appreciate about how the employee performs.
Function as a coach, not as inspector. Counsel—don’t advise. Focus on the employee. Be truly present. Listen and make a genuine attempt to understand concerns and any feedback.
Close properly, summarize, and plan for improvements and changes. Write down the results.

Don’ts

Don’t use negative words or too many negative criticisms. Everyone has room for improvement. Even the most talented individuals want to know how they can reach the next level. Refusing to identify issues, challenges for improvement, or not holding the individual accountable does not foster growth. When you avoid giving tough, direct feedback, you are not doing them (or you) any favors.
Don’t hammer on negatives. Don’t shred personal self-esteem by telling them every negative thing you’ve ever noticed. Reinforce that it is behaviors and actions you want changed and that you have confidence in the person.
Don’t give insincere or excessive praise.
Don’t use generalities that cannot be backed up by examples.
Don’t dominate the conversation. Don’t offer challenging feedback in general terms. Many people are told during performance appraisals that they need to improve “communication.” Most people have no idea what this means. Identify how you and the follower will know that he or she met your expectations for improvement.
Don’t place emphasis on personality traits. Don’t make it personal. Stick to behavior specifics.
Don’t be fussy, picky, or hurried. Don’t make assumptions about how the employee is receiving the feedback. Emotionally charged situations often foster misunderstanding. Probe for understanding reactions, including confirmation of the critical points of the review.
Don’t rush or talk too much. Reviews should be interactive. Don’t let whatever “form” you use dictate your process; it’s not about the form. If you are doing all the talking, you’ve probably lost them.

Discussion Questions

Which of the do’s for performance appraisal would you find most difficult to do? Explain why.
Which of the don’ts for performance appraisal would you find most difficult to refrain from doing? Explain why.
Provide an example of how you would specifically coach a follower on how to improve their communication with coworkers. What would you say to them?

Source: Basking, K. (2013). Performance appraisal do’s and don’ts. Retrieved from www.evaluationforms.org/tips/performance-appraisal-dos-and-donts

TOOLKIT ACTIVITY 9.2: Performance Management Role-Play

In this exercise, you will role-play a performance management session with another student in the class. One of you will play the role of the leader, and the other will play the role of the follower. On the next pages, you will find the leader role and the follower role. You and your partner should select a role and take 10 minutes to study the information and review the performance appraisal form. It is Monocle’s practice to have the follower provide a self-assessment, so both of you should complete the form. After you have completed the form, you will conduct the performance appraisal session for 30 minutes. It is important that you both sign the performance appraisal document.

Refer back to Toolkit Activity 9.1 on the do’s and don’ts for conducting a performance appraisal, and try to follow these guidelines during the session.

Leader Role: You have an MBA from a prestigious university and have worked for Monocle Software for 20 years. Monocle conducts enterprise resource planning (ERP), which is the process of examining business functions and installing software that allows an organization to use a system of integrated software applications to manage the business and automate functions. ERP software integrates all facets of an operation, including product planning, development, manufacturing processes, sales, and marketing. ERP software typically consists of a variety of modules that are individually purchased based on what best meets the specific needs and technical capabilities of your clients. Each ERP module is focused on one area of business process, such as human resources or project management. You are conducting an appraisal with one of your team leaders. He or she has been responsible for the accounting application. There have been a number of complaints from the client regarding the software taking too long to customize and some functions that do not work. The employees in the client company are frustrated, and they have commented that the new software doesn’t work as well as what they had before. The members of this follower’s team have complained that the client did not know what they wanted and has unrealistic expectations about what the software would be able to do. They have told you that they were not involved as a team in the early stages and did not have input into what was promised to the client. You observed your follower’s behavior in the initial meeting and felt that he or she may not have fully understood the threats to the employees’ sense of security and potential resistance to change during an ERP implementation. This contract is several million dollars, and you are concerned that the complaints are spreading throughout the client organization, and other software applications are being questioned recently. Unfortunately, you are finding out about these problems from the client and your follower’s team members. He or she has not been communicating with you regularly regarding the situation. You hope to provide feedback that will turn the situation around.

Follower Role: You have a master’s degree in computer science from a top regional university. You have worked for Monocle Software for 10 years and have worked your way up from a software developer; you were promoted 6 months ago to project team leader. You took over a project that was nearing completion at the time of your promotion and saw it through to a successful implementation. Your current assignment is your first full implementation from beginning to end. You met with the clients in the accounting area and conducted the needs assessment following Monocle’s protocols. Your supervisor asked you if you needed assistance or if you wanted another team leader with more experience to sit in on some of the early meetings with the client, but you assured your boss that you were ready to handle the client on your own. There have been some difficulties with the project, and some of the programmers on your team have complained that the client did not know what they wanted and has requested numerous changes to the applications. The project is not on schedule for successful completion with the other modules, and you have had to request overtime payments for your team to complete the modules on time. Your supervisor has been reluctant to approve the overtime payments due to concerns about the overall budget for the implementation and complaints about too much weekend work by your team. You realize that there have been some client complaints, but you have tried to address their concerns by convincing them that the overall structure of the software is sound and has worked in many other companies. You have added additional features that they only learned they wanted after they had experienced the new software. Members of your team have been complaining about the clients’ demands and blaming one another for the failure to complete the necessary changes during normal working hours. They are tired of being asked to work on weekends and trying to shift responsibility to one another. Despite the challenges, you remain confident that with 2 additional weeks and overtime budget approval you will complete the project on time.

Monocle Software Job Performance Management Form

Supervisor Name: _____________________________________________________________________________________

Employee Name: ______________________________________________________________________________________

Evaluation Period: _____________________________________________________________________________________

Title: _________________________________________________________________________ Date: _________________

Performance Planning and Results

Performance Review

Rate the person’s level of performance, using the definitions that follow.
Review with employee each performance factor used to evaluate his or her work performance.
Give an overall rating in the space provided, using the following definitions as a guide.

Performance Rating Definitions

The following ratings must be used to ensure commonality of language and consistency on overall ratings. There should be supporting comments to justify ratings of “outstanding,” “below expectations,” and “unsatisfactory.”

Outstanding Performance is consistently superior.
Exceeds expectations Performance is routinely above job requirements.
Meets expectations Performance is regularly competent and dependable.
Below expectations Performance fails to meet job requirements on a frequent basis.
Unsatisfactory Performance is consistently unacceptable.

Rate the employee’s behavior on the dimensions on the following form. There is space on the form to add comments that are specific to each dimension of performance. Also, complete the sections on strengths, areas for improvement, and plans for improved performance.

Performance Factors
Employee Strengths and Accomplishments

Include those that are relevant during this evaluation period. This should be related to performance or behavioral aspects you appreciated in their performance.

Performance Areas That Need Improvement:
Plan of Action Toward Improved Performance:
Employee Comments:
Signatures:

Employee ________________________________________________________________ Date ___________________

(Signature does not necessarily denote agreement with official review and means only that the employee was given the opportunity to discuss the official review with the supervisor.)

Evaluated by ________________________________________________________________ Date ___________________

Reviewed by ________________________________________________________________ Date ___________________

Discussion Questions

If you were the leader giving the appraisal, discuss whether it was difficult to give negative feedback. What emotions did you experience? If you were the follower, was it difficult to hear negative feedback? What emotions did you experience?
Did you find that you rated all aspects of performance the same (e.g., all “meets expectations”), or did you vary your responses? Explain why you did your ratings the way that you did.
Discuss the areas that you feel need improvement. Did you agree or disagree with your leader/follower? If you disagreed, did you come to an agreement during the performance appraisal? Why or why not?

CASE STUDY 9.1: Pay Inequity at Goodyear Tire and Rubber

One evening when she came to work to start the night shift, Lilly Ledbetter found an anonymous note in her mailbox at the Goodyear Tire & Rubber plant in Gadsden, Alabama. She had worked for Goodyear for 19 years as a manager and was shocked at what she read. On the note, her monthly pay ($3,727) was written along with the pay (which ranged from $4,286 to $5,236) of three of her male colleagues who started working for Goodyear the same year that she did and did the same job. Ledbetter (2012) stated, “My heart jerked as if an electric jolt had coursed through my body.” She filed a gender pay discrimination lawsuit under the 1964 Civil Rights Amendment and was awarded $3 million in back pay and other benefits she lost due to pay discrimination (e.g., contributions to her retirement).

Lilly’s case was appealed to the U.S. Supreme Court, which ruled against Ledbetter. In the case of Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), the U.S. Supreme Court decided that the statute of limitations for presenting an equal-pay lawsuit begins on the date that the employer makes the initial discriminatory wage decision, not at the date of the most recent paycheck. Lilly became famous after she lost the Supreme Court case. While she did not win the case, it did result in new legislation regarding when an equal-pay lawsuit can be filed. This court decision ultimately led to the Lilly Ledbetter Fair Pay Act of 2009 (Pub.L. 111–2, S. 181), which states the 180-day statute of limitations for filing an equal-pay lawsuit resets with each new paycheck affected by discrimination. The act is a federal statute and was the first bill signed into law by President Barack Obama in 2009. Lilly’s website states the following:

For 10 years, Lilly Ledbetter fought to close the gap between women’s and men’s wages, sparring with the Supreme Court, lobbying Capitol Hill in a historic discrimination case against Goodyear Tire and Rubber Company…. Ledbetter will never receive restitution from Goodyear, but she said, “I’ll be happy if the last thing they say about me after I die is that I made a difference.” (www.lillyledbetter.com)

The Lilly Ledbetter case shows that employees care a great deal about the rewards they receive from an organization, and these rewards must be fair. Lilly learned of the pay disparity with her male coworkers after a number of years on the job. She experienced a sense of moral outrage and filed a lawsuit to address the unfairness. As you learned, fairness is one of the guidelines for the effective implementation of reward systems in organizations. Employees pay attention to rewards—particularly what they are paid. Pay inequity may cause employees to feel undervalued by the organization and may reduce motivation. As seen in this case, unfair pay practices may also result in litigation. The federal statute based on Lilly’s case is clear that pay discrimination lawsuits may be based on every paycheck that a person receives throughout their employment. Equal pay for equal work is a concept that individuals in the same workplace be given equal pay for doing the same work. This concept is most commonly applied with respect to the gender pay gap—it was once estimated that women are paid 77.5% of men’s earnings (U.S. Census Bureau, 2008). On the seventh anniversary of the passage of the Lilly Ledbetter Fair Pay Act, the Council of Economic Advisors⁸¹ published an update on the wage gap between men and women. In 2014, median earnings for a woman working full-time all year in the United States totaled only 79% of the median earnings of a man working full-time all year. Phrased differently, women earned 79 cents for every dollar that men earned. The gender wage gap has many causes and contributors, including differences in education, experience, occupation and industry, and family responsibilities. But even after accounting for these factors, a gap still remains between men’s earnings and women’s earnings. Organizations should be proactive in examining their pay policies to ensure equal pay for men, women, and minorities. Employers must design reward systems that are fair and follow organizational justice guidelines to avoid litigation—but also because it is the right thing to do.

Discussion Questions

What are the implications of the Ledbetter case for the performance management system?
Explain Lilly Ledbetter’s reaction to learning she was being paid less than her coworkers based upon pay dispersion.
How do you feel about Ledbetter never receiving compensation from Goodyear for her lower wages for 10 years?
Referring back to Chapter 7, relate this case to what you learned about organizational justice. What type(s) of justice does the case illustrate?

Sources: Council of Economic Advisors. (2016, January). The gender pay gap on the anniversary of the Lilly Ledbetter Fair Pay Act. Retrieved on April 20, 2017, from http://digitalcommons.ilr.cornell.edu/key_workplace/1580/; Ledbetter, L. (with Isom, L. S.). (2012). Grace and grit: My fight for equal pay and fairness at Goodyear and beyond. New York, NY: Crown Archetype; Bishaw, A., & Semega, J. (2008, August). Income, earnings, and poverty data from the 2007 American Community Survey [U.S. Census Bureau, American Community Survey Reports, ACS-09]. Washington, DC: U.S. Government Printing Office, p. 14.

SELF-ASSESSMENT 9.1: Work Values Checklist

Every day, we make choices—some without careful consideration. Whether we realize it or not, often our career choice is based on values rather than the work. Values are the beliefs, attitudes, and judgments we prize. Are you aware of your values? Do you act on them?

Use this checklist to get a better idea of what’s important to you. It’s divided into three categories related to intrinsic, extrinsic, and lifestyle values.

Intrinsic Values

These are the intangible rewards—those related to motivation and satisfaction at work on a daily basis. They provide the inner satisfaction and motivation that make people say, “I love getting up and going to work!”

How important (on a scale of 1 to 5, with 5 being most important) are these intrinsic values to you?

Extrinsic Values

These are the tangible rewards or conditions you find at work, including the physical setting, job titles, benefits, and earnings or earning potential. Extrinsic values often trap people into staying at jobs they don’t like, saying, “I just can’t give up my paycheck!” They are commonly called golden handcuffs.

How important (on a scale of 1 to 5, with 5 being most important) are these golden handcuffs to you?

Lifestyle Values

These are the personal values associated with how and where you want to live, how you choose to spend your leisure time, and how you feel about money.

How important (on a scale of 1 to 5, with 5 being most important) are these lifestyle values to you?

Once you have completed all three checklists, write down all the values you rated as 5s. If you have less than five, add the values you rated as 4s to the list. If your list of 4s and 5s has more than 20 values, you need to stop and prioritize your list. To prioritize, select no more than four or five values from each category.

Discussion Questions

Analyze which of the three categories is most important to you. How is each reflected in the work or schoolwork you currently do? Are there overlaps in your values that seem to go together, such as “be wealthy” from Extrinsic Values and “save money” from Lifestyle Values?
If there is no overlap or compatibility between categories (or if everything is important to you), then what are your top 10 values? What are your top five values you absolutely need both on and off the job?
Write two or three sentences describing or summarizing how your values will translate into your ideal job. Knowing what’s important will help you prepare for your next interview or help you find increased satisfaction with the job you have. What motivates you (are your rewards already a part of your lifestyle)? What can you do to incorporate your values into your lifestyle?

Source: Adapted from Boer, P. (n.d.). Work values checklist. Retrieved on February 5, 2015, from http://career-advice.monster.com/job-search/career-assessment/work-values-check-list/article.aspx

Chapter Ten Group Processes and Teams

Learning Objectives

After studying this chapter, you should be able to do the following:

10.1: Explain the difference between a working group and a team.
10.2:: Illustrate the relationship between team purpose and performance by using a team charter.
10.3: Compare and contrast the five-stage and team performance curve models of team development.
10.4: Describe the three main aspects of team effectiveness.
10.5: Demonstrate how to assess the cohesion of your team.
10.6: Compare and contrast consensus decision making and the nominal group technique (NGT).
10.7: Generate an example of how a team leader can reduce social loafing.
10.8: Discuss the challenges and benefits of team diversity.

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Does Trust Impact Team Performance?

How much time do you spend building trust with your team members? New research¹ shows that leaders would do well to spend more time creating trusting partnerships among team members. A meta-analysis of 112 studies representing over 7,700 teams found that the degree to which team members trust one another increases team performance (achieving shared goals). Trust makes a significant difference. This study also revealed how trust works and the team situations when it matters most. Trust within a team setting reduces the feelings of vulnerability that members experience, and this helps them to work more effectively together to achieve team goals. In other words, when trust is present, team members are more likely to admit they don’t know something and critique one another’s ideas. They are more likely to share creative ideas and resolve conflict. But the opposite holds true as well. When there is a lack of trust, people are more defensive and work at odds with the team goals. They also avoid criticism and don’t provide constructive feedback. This defensiveness impairs the team from optimal functioning. The findings of this study are summarized in Figure 10.1.

Figure 10.1 How Might Trust Impact Team Performance?

Source: Hirsch, W. (n.d.). Trust: Does it impact team performance … or not? Retrieved on March 21, 2017, from: http://scienceforwork.com/blog/trust-impact-team-performance/

Another interesting finding from this study is that trust among team members is perhaps more important than trust in the team leader or past success. Team situations when trust matters the most are when the members must depend upon one another and when leaders depend upon followers to make decisions (rather than only one person making the decision). The bottom line from this study is that if you are interested in enhancing the performance of your team, pay attention to how much team members trust one another and create opportunities to strengthen trust.

Research on teams at work is not new. Beginning in the 1960s, organizations experimented with teams in the workplace, and there was an explosion in interest in team-based organizations in the 1980s. At the same time, research on teams in organizations began to expand rapidly and has increased significantly since 2005.² Some employees were skeptical and viewed teamwork as a “fad” that would go away. However, it is now clear that teamwork is here to stay, and most organizations employ teams to make significant decisions and develop new ideas. After the downsizings of the 1980s and 1990s, leaders needed a way to get more done with fewer people. Teams turned out to be one answer to this challenge. By the 1990s, the digital age had arrived, and leaders looked for new ways to structure and manage work flows. Team-based work arrangements created much-needed flexibility and became even more common.³ The competitive landscape has become increasingly global and complex requiring more teamwork. One study found that the time spent by managers and employees in collaborative teamwork has increased by more than 50% over the last 2 decades.⁴ Teams allow for more creative solutions and build commitment to the implementation of innovative ideas. Teamwork revolutionized the world of work.⁵ It is thus essential for a leader to understand team basics and how to lead teams effectively.

This chapter reviews the essential research on small groups from social psychology and discusses current approaches to work teams. The emphasis is on leading teams, since this is a core competence given that most organizations now use work teams to maximize organizational performance. As we learn in this chapter, teams are also one of the best forums for learning, since employees share their skills and expertise with one another. Teams are now often charged with making important decisions, and a variety of techniques for team decision making are discussed.

What Is a Team?

Learning Objective 10.1: Explain the difference between a working group and a team.

Numerous definitions of teams appear in the literature. An influential book, The Wisdom of Teams, defines a team as follows: “A team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.”⁶ Another often-cited research definition of a team is

(a) Two or more individuals who; (b) socially interact (face-to-face or, increasingly, virtually); (c) possess one or more common goals; (d) are brought together to perform organizationally relevant tasks; (e) exhibit interdependencies with respect to workflow, goals, and outcomes; (f) have different roles and responsibilities; and (g) are together embedded in an encompassing organizational system, with boundaries and linkages to the broader system context and task environment.⁷

These definitions reflect evidence-based research that has shown that teams engage in social interaction, members depend upon one another, and are part of larger systems (i.e., organizations). Also, research has shown that commitment to a common goal and performance strategies enhances performance. Finally, team members must accept relevant team goals and make a commitment to being accountable for them.

A question often asked is whether all work should be done by teams. The answer to the question is no. In many cases, teams become dysfunctional when there is actually no need for the task to be performed by a team at all. The team may flounder as it searches for a meaningful goal that everyone on the team can commit to. Teams should not be used when an individual can perform the task as well as a team (e.g., the leader could delegate the ordering of supplies to one person rather than having a team discussion about it). Also, if a performance goal can be met by adding up individual contributions (known as an additive task), then members of the work unit can work independently and their efforts can be combined later. The right time to use teams is when a performance goal requires collective effort and a work project that reflects the contributions of everyone on the team. To accomplish a team goal, different skill sets, perspectives, or experiences are often needed.⁸ So sometimes a work group is needed, and other times, a team is needed. There is an important distinction between a work group and a team, and this is discussed next.

Critical Thinking Questions: In addition to the type of task, provide some other factors that influence whether a work group or a team is needed. Provide an example of a task in which a team is not needed.

Work Group Versus Team

Some of the literature on groups and teams is confusing because the terms group and team are used interchangeably. To clarify this, the distinction between the group and team has been articulated.⁹ A work group interacts primarily to share information with other members (e.g., members of a work group attend a monthly staff meeting and share what they are working on). They are not responsible for a collective work effort, or their individual contributions can be added up to create something. An example of a work group is the service department of an automobile dealership, which consists of a service manager and 12 service advisers who report to the manager. Each service adviser meets with their own customers independently, and the contributions are summed for an overall customer rating of the dealership’s service department. If conflicts arise in work groups, the group typically looks to the leader to resolve them.

A work team, in contrast to a work group, depends on one another, and they must interact to create something that no one person on the team could create. There is synergy on the team, which means that the team can produce something beyond the sum of individual member contributions. An example of a work team is a task force assembled to brainstorm ideas for improving patient safety in a hospital. The team depends highly on the participation of all members for success since each member contributes a unique perspective that influences the quality of the suggestions for patient safety. If conflicts emerge within a work team, the members manage it internally since there may be no designated leader. Some work groups can become teams, and a strong purpose or performance challenge sets a work group on the path to becoming a real team.

Team Purpose

Learning Objective 10.2: Illustrate the relationship between team purpose and performance by using a team charter.

Setting goals for teams is just as important as it is for individuals. As discussed in Chapter 8, goal setting increases both motivation and performance. It’s important to keep in mind that team goals should also be SMART (specific, measurable, actionable, relevant, and time based). Effective teams have a sense of shared purpose, and it is one of the components of the definition of a team. Specific team goals predict specific team performance (e.g., setting challenging goals for quantity results in higher team output). Also, feedback on performance affects the allocation of resources when individuals strive to accomplish both individual and team goals. For example, allowing team members to decide on how resources are distributed (a team regulatory process) increases team performance. Also, feedback on team performance is essential for teams to make the correct allocation of resources for future team performance.¹⁰ Team members who receive no team-level feedback can’t effectively set team goals and, as a result, set completely unrealistic goals.¹¹ Once a team has established its purpose, team norms emerge and have a powerful effect on team member attitudes and behaviors.

Team Norms

Team norms are defined as informal and interpersonal rules that team members are expected to follow.¹² These standards may be explicit and formally stated by the leader or members of the team. But norms may also be implicit. They are not written down, and communication of the norms to team members depends on the ability of the leader (or team members) to effectively convey the expected behaviors. Norms have a strong influence on team members’ behavior, and they are often difficult to change. For example, some teams allow team members to miss team meetings, and this disrupts the flow of work. While this isn’t written down anywhere that it’s OK to miss meetings, it just starts happening. One team member misses without an excuse, and since there is no penalty, others start to miss too. This is an example of an implicit norm. Implicit norms are tricky in that they are difficult to detect, and it is easy to misinterpret them. Of course, norms can have a positive influence on team member behavior as well. An example of the power of team norms was demonstrated by the results of research conducted by Google’s People Operations department who set out to study teams with the goal of building the perfect team.¹³ The project was code-named Project Aristotle, and hundreds of Google teams were studied to learn what made some more effective than others. No matter how they analyzed the data, the composition of the teams did not matter (nothing showed that demographics or personality combinations created a great team). What the analysts learned was that team norms made the difference. These “unwritten rules” defined the team performance culture. The specific norms they identified were communication and empathy. High-performing teams engaged in conversational turn-taking in which all members spoke in roughly equal proportions (communication). The second norm was that high-performing team members had high social sensitivity—they were good at interpreting team members’ feelings based on their tone of voice and facial expressions (empathy). The Google research team shared their findings about communication and empathy with Google employees to make these implicit norms more explicit. Explicit norms are written down and discussed. One way to make norms explicit is by developing a team charter.

The Team Charter

One of the best ways that a leader can make norms explicit and clearly communicate them to team members is by engaging the team to develop a team charter. In creating a team charter, not only is the team purpose clarified but the expectations for behavior are set forth (e.g., required on-time attendance at meetings). Norms provide an important regulatory function in teams. Once they are developed through a charter and agreed upon, misunderstandings should be fewer and a team member violating a norm (e.g., missing meetings) can be reminded of the group’s commitment to attendance. Some groups even apply sanctions to the violation of norms, such as small fines or social ostracism. However, sanctioning systems are ineffective if they are not applied consistently. In other words, it is important to be fair and apply the principles of organizational justice described in Chapter 8 if sanctions are included in a team charter.

The influences of having a team charter and performance strategies of 32 teams of MBA students were studied using a business strategy simulation.¹⁴ Taking the time to develop a high-quality team charter and performance strategies paid off in terms of more effective team performance over time. Teams that had high-quality charters and strategies outperformed teams with poor-quality charters and strategies. Charters are an important tool the leader can use to get their team off to a good start by developing a sense of purpose and performance strategies. Toolkit Activity 10.1 contains specific guidelines for developing a team charter.

Strong team norms give rise to shared understandings within teams, known as team mental models (TMMs). These models and why they are important for team process and performance are discussed next.

Team Mental Models

TMMs “are team members’ shared, organized understanding and mental representation of knowledge about key elements of the team’s relevant environment.”¹⁵ TMMs are related to effective team processes and performance¹⁶ because they serve a number of functions, including (1) allowing team members to interpret information similarly, (2) sharing expectations concerning the future, and (3) developing similar reasoning as to why something happens.¹⁷ Teams with highly developed TMMs are fundamentally “on the same page” with respect to sharing a common view of what is occurring in the team. This makes decision making more efficient and enhances team performance.¹⁸ A summary of how TMMs affect performance and other team outcomes is shown in Figure 10.2. The shared similarity and/or accuracy of TMMs translates demographic factors, skills, and training into shared norms, effective team processes, and higher performance. A meta-analysis of 65 studies of TMMs and performance found that teams with shared mental models interacted more frequently, were more motivated, had higher job satisfaction, and were rated as more productive by others.¹⁹

Figure 10.2 Team Mental Models and Outcomes

Source: Mohammed, S., Ferzandi, L., & Hamilton, K. (2010). Metaphor no more: A 15-year review of the team mental model construct. Journal of Management, 36(4), 876–910. p. 892.

TMMs affect a team’s purpose and team processes, including how team members back one another, coordination, and communication. For example, shared understandings emerge in TMMs, which determine how much participation by members is allowed. Team purpose, norms, and mental models are typically established in the early stages of a team’s development. Teams then follow predictable patterns over their life cycles. Team development is discussed in the following section.

Team Development

Learning Objective 10.3: Compare and contrast the five-stage and team performance curve models of team development.

Teams don’t emerge just by putting individuals together. Teams go through a process of development over time, and success is not guaranteed. Research on teams recognizes the role of time in the development of the team. Next, two important models of team development are discussed: the five-stage model and the team performance curve.

Five-Stage Model

A classic model of team development is the five-stage model, which includes five stages: forming, storming, norming, performing, and adjourning.²⁰^,21 During the forming stage, team members may experience stress due to the uncertainty of not knowing the other team members and understanding their role on the team. Initial interactions may be tentative as team members “test” one another to determine what the norms and expectations will be. The team leader should clarify the team purpose and set up ground rules through a team charter, as previously discussed. As the team interacts on project work, conflicts begin to emerge regarding the goals and contributions of team members, and the team enters the storming stage. There may be challenges to the leader of the group (either a formally assigned leader or an informal one). The team leader should openly address conflict and maintain a focus on the team purpose and ground rules established in the charter. At the end of this stage, the leadership question is typically resolved, and it is clear who will lead the group. Also, a status hierarchy, or pecking order, may be established. If the storming phase does not destroy the team and result in abandonment of the team by all of its members, the team moves to the next stage of development, which is called norming. In this stage, the members of the team form a cohesive unit and close relationships among team members develop. The group establishes additional implicit norms regarding what is acceptable behavior (beyond that specified in the team charter). For example, if the team members who show up late for meetings are called out by their teammates, then lateness is unacceptable and the tardy members start to show up on time. During the norming phase, the leader should remind the followers of the ground rules and address deviations constructively. Once norms are established, the team should be performing by producing collective work products. The group shifts from relationship development and norm articulation to the work itself and goal attainment. For a work group or a task force that is permanent, the performing stage is the last stage. In this phase, the team leaders should celebrate success along the way to achieving the team goal. However, in some cases, teams are temporary and have a specific goal to accomplish. When this is the case, the team finalizes their work in the adjourning stage and disbands. The team leader should arrange a celebration activity such as a party or dinner to reward the members for achieving the team goals.

While the model proposes that teams move through the phases smoothly, in actuality, the team may regress to a previous stage or runs the risk of adjourning at any stage. For example, the level of conflict during the storming stage may result in team members deciding it’s just easier to work alone. Even after the norming stage, the group is at risk of adjournment if the performance norms are repeatedly violated and the team determines that members aren’t really committed.

In many student project teams—and also at work—teams are temporary and have a clear deadline. Teams don’t follow the typical stages of development in such teams. In fact, there is a transition between an early phase of inactivity followed by a second phase of significant acceleration toward task completion. This process is called punctuated equilibrium.²² There is an initial meeting in which the group’s goals are discussed. Following this meeting, not much gets done until about halfway to the deadline. This midpoint transition occurs regardless of the total time allowed for the project. In other words, it doesn’t matter whether the total time for the project is 1 hour or 6 months. At about halfway toward the completion of a project, team members begin to revisit goals and discuss how to get the group moving toward finishing the task. Following this midpoint discussion, there is a burst of new activity as team members scramble to reach their goals in time.

You may be able to relate to this by recalling times when you and your team pulled an “all-nighter”—a meeting that lasts hours and is intense right before your team project is due for a class. It is important to recognize that this doesn’t apply to all types of teams; the punctuated equilibrium effect appears to be most prevalent in temporary teams with a fixed deadline.²³ The takeaway message from this research is clear: Try not to procrastinate when a team project is assigned. The team leader should get the momentum going early by setting benchmarks to avoid having to rush at the end of the project.

Critical Thinking Question: How can you keep a team from procrastinating on the start of a project? Describe what you would do specifically.

Not all team development follows an upward pattern of productivity. A second model of team development addresses the potential performance losses that may occur during the initial storming or procrastination phases. This model is known as the team performance curve.

Team Performance Curve

Like the punctuated equilibrium model, the team performance curve recognizes that team performance over the course of the life of the team is not always linear, and performance does not always increase over time.²⁴ Figure 10.3 combines the five-stage model with the team performance curve and shows there may be a performance decrease as the team goes through the storming phase. A working group is a collection of people without a common sense of purpose. As the figure shows, this produces a certain level of performance, and some tasks are appropriate for a working group because they are additive. The team leader may attempt to transform his or her group into a team by introducing a common goal—particularly a challenging one. As team members organize to attain the goal, storming occurs and the team performance may actually decline for a period of time. Some working groups remain at this point as a pseudoteam because they are not on the path toward becoming a high-performance team. If the team gets past the storming and establishes productive norms, they reach a point where they can be considered a potential team. At this stage, the team has the potential to become a real team, which exhibits the characteristics of the definition of a team (i.e., they are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable). A small number of teams become high-performance teams, which have all of the characteristics of real teams plus team members are deeply committed to the growth and development of the other team members. For example, a team member would teach another member how to use new presentation software. Research has shown that team leaders play a critical role in the development of high-performance teams (also known as intense teams). During the launch phase, the team leader must emphasize the vision and establish trust. The second phase is focused on sustaining trust between team members and creating a team identity. In the third phase, team members collaborate and begin performing and evaluating their work compared to their goals.²⁵ A high-performance team is enabled by six key factors:

team member competencies;
skills, processes, tools, and techniques;
interpersonal skills, communication, understanding personality differences;
a shared value system;
shared vision, purpose, goals, direction; and
supporting organizational values including openness.²⁶

Figure 10.3 The Stages of Group Development

Source: Adapted from Katzenbach, J. R., & Smith, D. K. (1993). The wisdom of teams: Creating the high-performance organization. New York, NY: Harper Business; Tuckman, B. (1965). Developmental sequence in small groups. Psychological Bulletin, 63, 384–399; Tuckman, B., & Jensen, M. (1977). Stages of small-group development revisited. Group & Organization Studies, 2(4), 419–427.

Thus, in high-performance teams, team interests become more important than individual interests. High-performance teams are rare. If you think about it, this would mean that team members would celebrate the success of a teammate receiving a promotion rather than feeling jealous. They would do everything to help their teammate be successful in the new position. Given that high-performance teams are rare yet essential for organizations, the next sections discusses team performance effectiveness and how it is defined and measured.

Critical Thinking Questions: How can the use of a team charter help a team get through the storming phase? How could it help establish team norms and lead to high performance?

Team Effectiveness

Learning Objective 10.4: Describe the three main aspects of team effectiveness.

The question of how to know if a team is effective is an important one. Team effectiveness has a number of dimensions. The input-process-output model defines the different aspects of team effectiveness.²⁷ First, input refers to the individual characteristics of team members (e.g., skills and abilities) and the resources they have at their disposal. Inputs may also refer to knowledge and personality. For example, a study of 51 teams found that both general mental ability (IQ) and personality (particularly conscientiousness, agreeableness, extroversion, and emotional stability) increased team performance.²⁸

Process is the second aspect of team effectiveness and refers to how the team interacts. Examples of process include team development and patterns of participation. Also, trust, cross-training, and coordination relate to team effectiveness.²⁹^,30 Third, the most obvious measure of team effectiveness is team output—the collective work product generated from the team (team performance). Output has three components: (1) performance as rated by those outside of the team, (2) how well team member individual needs are met, and (3) the willingness of team members to stay on the team.³¹

Team effectiveness reflects three broad categories: performance, behaviors, and attitudes as shown in Figure 10.4.³² The figure indicates important inputs to team processes such as the organization environment and design of the task. On the output side, performance is the team’s productivity, quality, or innovation as examples (i.e., the collective work effort). Behaviors are what individual team members do, such as going the extra mile for the team. “Extra milers” engage in more helping behaviors outside of their roles than other team members. A study of these extra milers found that they influence team processes and, ultimately, team effectiveness beyond the influences of all the other members.³³

Figure 10.4 Model of Team Effectiveness

Source: Cohen, S. G., & Bailey, D. E. (1997). What makes teams work: Group effectiveness research from the shop floor to the executive suite. Journal of Management, 23(3), 239–290.

An important team process that has received much research attention is team conflict, which is covered in Chapter 11. Attitudes are team members’ reports on their experience in the team, such as team satisfaction. These attitudes and behaviors matter because organizational behavior (OB) research has demonstrated that team behaviors relate to team outcomes such as job performance and satisfaction. For example, motivating and confidence building are teamwork processes that develop and maintain members’ motivation and confidence that the team will accomplish its goals.³⁴

Team Metrics

In addition to the team charter, it is also important to have measures (or metrics) to assess how a team is performing over time and to provide feedback to team members. Metrics are important to assess team effectiveness. There are three types of metrics for teamwork:

Task metrics. These are the “what” of teamwork. They relate to the actual work the team is performing. For example, task metrics might be goals for quantity and/or quality and deadlines for the project completion. It is important to set 30-day targets as minigoals toward task completion so team members have a sense of forward momentum.
Process metrics. These are the “how” of teamwork. These metrics are assessment of how the teamwork is operating. For example, process metrics might be assessments of team communication or who is participating. Teams often focus on task goals to the exclusion of process goals, but they are important because the process affects task performance.
Individual development metrics. These metrics relate to how much individuals are developing new skills and learning through teamwork. For example, individual development metrics might be how well one team member is developing leadership abilities from working with the team. Individual development is important to track, since the hallmark of a high-performance team is when team members genuinely care about the development of their teammates.³⁵

Critical Thinking Questions: Provide additional examples of task, process, and individual development metrics. Next, create an example of an organization-level metric related to teamwork.

As indicated, team process metrics are important indicators of team effectiveness. In addition to team affect and viability, team learning is another outcome that reflects team process effectiveness. Also, team creativity and innovation are additional outcomes of effective team process. These team effectiveness outcomes are emerging as important outcomes of teamwork and are covered in the following sections.

Team Learning

Individual development of team members is an important metric for teams and defines a high-performance team. Team learning is now considered essential and has received a considerable amount of research. Viewing teams as a forum for learning began with the publication of the influential book The Fifth Discipline: The Art and Practice of the Learning Organization. Author Peter Senge views teamwork as one of the key experiences that lead to employee learning:

When you ask people about what it is like being part of a great team, what is most striking is the meaningfulness of the experience. People talk about being part of something larger than themselves, of being connected, of being generative. It becomes quite clear that, for many, their experiences as part of truly great teams stands out as singular periods of life lived to the fullest. Some spend the rest of their lives looking for ways to recapture that spirit.³⁶

Critical Thinking Question: Describe a situation in which you learned something from interacting with others on a team (this can be related to task, process, or your individual development).

Team learning is an ongoing process through which teams acquire, combine, and apply knowledge.³⁷ For example, asking questions, seeking feedback, improvising, discussing errors, challenging underlying assumptions, and reflecting on specific results or unexpected outcomes increases a team member’s knowledge.³⁸ Team learning originates in individual intuitions, is amplified through interpretation, and emerges at the team level as collective thoughts and actions. Teams that have a higher learning orientation (a proactive climate toward learning) outperform teams that don’t.³⁹ Research has identified two related but distinct types of personal learning that can occur in work settings: relational job learning and personal skill development. Relational job learning refers to an “increased understanding about the interdependence or connectedness of one’s job to others,” whereas personal skill development refers to the “acquisition of new skills and abilities that enable better working relationships.”⁴⁰ Transformational leadership predicts team members’ personal learning.⁴¹ Research has also shown that team learning significantly affects team performance.⁴² One key factor for team learning to translate into performance is the degree to which team members agree that they feel a sense of psychological safety for taking risks.⁴³

Team psychological safety allows members to take risks and be more creative and innovative. In addition to learning, research has also shown that teams enhance creativity and innovation. Creativity as a result of teamwork is recognized as essential to make high-quality decisions that relate to organizational effectiveness.⁴⁴ The next section discusses research on team creativity and innovation.

Team Creativity and Innovation

In Chapter 5, you learned that individual creativity is a key aspect of the problem-solving process. Research has shown that creativity in teams is essential to the innovation process. In fact, research has shown that teams produce more new knowledge than individuals.⁴⁵ Due to synergy, team creativity is not just the additive sum of individual team member creativity. Team creativity involves both processes and outcomes of developing new ideas for innovation. Team creativity encompasses what team members do behaviorally, cognitively, and emotionally as they define problems, generate ideas, and attempt new ways of doing their work.⁴⁶ Communication of new ideas and sharing information with diverse others leads to higher creativity.⁴⁷ The sharing of information increases team innovation, and this is facilitated by the leader being positive.⁴⁸ The positive behaviors of leaders should be directed at individuals but also at the entire team. Expressing positive affect supports being a transformational leader and stimulates creativity both in the team as well as in individuals.⁴⁹ Also, shared team goals result in higher creativity. In a study of project teams, more creative teams recognized that there was a need to be creative to be successful, and they valued participation by all team members. Interestingly, more creative teams also spent more time socializing with each other, both inside and outside of work.⁵⁰ For creativity to flourish, it is important that the team does not have too much structure or bureaucratic red-tape to get through. A study of 100 research and development (R&D) teams found that a team’s ability to improvise is enhanced by knowledge sharing and the minimum amount of structure needed to manage the innovation process. Team improvisation can be assessed by asking the following questions:

Is the team good at dealing spontaneously with unanticipated problems?
Is the team capable of responding extemporaneously to unexpected opportunities?
Does the team have a strong capability to creatively improvise?⁵¹

In addition to knowledge sharing within teams, it is also important that teams share knowledge with other teams in the organization to enhance innovation. This helps avoid the problem of “reinventing the wheel” but also creates a culture of innovation where diverse knowledge is shared throughout the entire organization.⁵² In a study of 397 R&D employees (consisting of 68 teams), benevolent R&D leaders who treated their team like a family facilitated innovative behavior at the individual level through creating strong identifications with the team. These leaders also enhanced cross-team innovative behavior at the team level via identification with the R&D department.⁵³ Thus, leaders influence both within-team and cross-team innovative behavior.

As this review has shown, team effectiveness has many dimensions and includes performance, learning, and innovation. A review of the research on team effectiveness concluded that team performance is the most commonly studied outcome. However, recent studies have considered team viability to be an important indicator of effectiveness. Team viability is a collective sense of belonging similar to team cohesion.⁵⁴ Cohesion is the “team spirit” experienced in high-performing teams and is discussed next.

Cohesion

Learning Objective 10.5: Demonstrate how to assess the cohesion of your team.

Cohesion is defined as “the resultant of all the forces acting on the members to remain part of the group.”⁵⁵ These forces depend on the attractiveness (or unattractiveness) of the prestige of the group, the group members, and/or the group’s activities. Cohesion becomes a state in which a group tends to stick together and unite in the pursuit of team goals.⁵⁶ The mutual attraction of the member to the group is the most important determinant of cohesion.⁵⁷ Also, the degree to which people feel that being in a team where they fit in (i.e., a climate of inclusiveness) influences cohesion.⁵⁸ Cohesion influences the behaviors of team members. Behavioral indicators of cohesiveness are team members attending meetings more often, being on time, sitting closer to one another, making more eye contact, being less likely to quit, and even engaging in longer group hugs.⁵⁹ When cohesion is strong, the group is motivated to perform and is better able to coordinate activities for success. In cohesive teams, there is a sense of “we-ness” since team members tend to use we rather than I to describe the team and its activities.⁶⁰ A three-wave longitudinal study of 188 project teams found that team cohesion leads to group members being engaged in the task, which in turn had a positive effect on team creative performance.⁶¹ Meta-analytic studies have found that team cohesion and team performance are positively and significantly related.⁶²^,63 For example, one review reports the average cohesive team performed 18% higher than the average noncohesive team.⁶⁴ Since cohesion and performance influence one another (in other words, high performance can lead to more cohesion), a study was designed to determine which comes first—cohesion or performance. The results of this longitudinal study⁶⁵ of 205 members of 57 student teams competing in a complex business simulation over 10 weeks found that cohesion causes performance, and this effect became stronger over time. This study also found that the leader makes a difference as well: Teams that shared leadership had higher cohesion and performance.

Critical Thinking Question: Explain why cohesion in teams may not always be a good thing. Discuss the potential downside of a team being too cohesive.

You may be working in a team for a project for your OB course (or another course). The extent to which your team is cohesive can be assessed by asking the following questions:⁶⁶

How well do members of your group get along with each other?
How well do members of your group stick together (i.e., remain close to each other)?
Would you socialize with the members of your group outside of class?
How well do members of your group help each other on the project?
Would you want to remain a member of this group for future projects or in future courses?

A sense of cohesion in a team may also be due to a person’s allegiance to the social groups they belong to. Social identity was introduced as a way to explain how people view their own place in society through membership in various groups.⁶⁷

Social Identity Theory

Social identity is “the individual’s knowledge that he belongs to certain social groups together with some emotional and value significance to him of this group membership.”⁶⁸ People belong to different groups (e.g., a student can also be a coworker, a friend, and a member of a church), and these categorizations comprise their social identity.⁶⁹ Also, these groups exist in relation to other groups, so people derive meaning by relating their membership in a group by comparison to other groups. Think about the team spirit we feel when our football team defeats one of its longtime rivals. We feel a sense of belonging to our university and purchase a new shirt with our team’s logo to show the world we are members of that university. Leaders should increase the sense of group cohesion, or solidarity, to stay in power and motivate followers to high performance.⁷⁰ Social identity binds people to a group—especially if the group has higher status or is distinctive and motivates people to behave in a manner that is consistent with the norms of the group.⁷¹ Thus, the self-attributions of who people believe themselves to be (i.e., the social identity) are an important consideration for leaders. Leaders are also members of the groups they lead and can communicate with their followers as a member of the group. This plays a key role in followers’ perceptions of their leaders’ effectiveness. Viewing the leader as being “one of us” increases followers’ positive endorsements of the leader due to their social identity with the team. When followers’ identification with the group is important to them, and followers trust the leader’s orientation to the group, they are more likely to be motivated, perform at high levels, and are more willing to accept change.⁷²

Research in Action

Coaching for Cohesion

Sports teams represent a unique place for the effects of cohesion to take hold due to their well-defined structures, tasks, and roles.⁷³ A review of the relationship between cohesiveness and team performance concluded that in 83% of the studies, team cohesiveness was significantly and positively related to team performance.⁷⁴ Research on sports psychology has examined the relationship between coaching style and team cohesion. When coaches exhibit training, being democratic, supporting, and giving feedback, team cohesion is higher.⁷⁵ An in-depth interview study of male and female athletes in college sports plus a case study of a Division I college football team was conducted to determine the effects of coaching styles on team cohesion.⁷⁶ This study found that using abusive language, treating the relationship as a superior or subordinate one, being unfair, lacking communication, and ridiculing players all related to lower team cohesion. Motivational coaching (being inspirational, having a personal relationship with athletes, showing support, and having dedication) was related to higher team cohesion. A case study of a football team indicated that players felt that bragging about the abilities of their teammates, talking about the quality of their opponent, giving motivational speeches, and conducting a team prayer increased feelings of team cohesion. This was confirmed by a meta-analysis⁷⁷ examining coaching style and team cohesion that included 288 effects from 24 studies that used the same sports leadership scale. The leadership scale was the Leadership Scale for Sport (LSS) and is composed of five leadership dimensions for a coach’s behaviors: (1) training and instruction, which emphasizes athletes’ development of skills, tactics, and physical performance; (2) democratic, which focuses on motivating athletes to make decisions on their goals, training objectives, and game strategies; (3) autocratic, which focuses on authority and independent decision making; (4) social support, which emphasizes interpersonal relationships with athletes outside of practice; and (5) positive feedback, which focuses on rewarding and praising athletes for outstanding performance. Overall, a moderate relationship was found between leadership and cohesion, and a large relationship was found between leadership and satisfaction, with training being the highest contributor for both. The gender composition of the athletic teams was also important. When coaches displayed a high frequency of positive behavior, teams comprised of females or coed teams showed an increase in players’ satisfaction; however, this effect was not as strong for teams composed of only male athletes. It is important to recognize the influence of leadership behaviors on team cohesion, especially as sports evolve to be more competitive. This interesting research on coaching shows that being inspirational and developing the skills of your followers will likely enhance your team’s cohesion.

Discussion Questions

To what extent can these findings for sports teams be applied to teams at work? What are the limitations of using sports examples?
In these studies, training, being democratic, showing support, and giving feedback were important in developing team cohesion. Which do you think is most important and why?
Based on the meta-analysis, why do you think that coaches’ positive behaviors were more important for the satisfaction of female and coed teams but not for male teams?

Sources: Jowett, S., & Chaundy, V. (2004). An investigation into the impact of coach leadership and coach–athlete relationship on group cohesion. Group Dynamics: Theory, Research and Practice, 8(4), 302–331; Kim, H. D., & Cruz, A. B. (2016). The influence of coaches’ leadership styles on athletes’ satisfaction and team cohesion: A meta-analytic approach. International Journal of Sports Science & Coaching, 11(6), 900–909; Pescosolido, A. T., & Saavedra, R. (2012). Cohesion and sports teams: A review. Small Group Research, 43(6), 744–758; Widmeyer, W. N., Carron, A. V., & Brawley, L. R. (1993). Group cohesion in sport and exercise. Handbook of Research on Sport Psychology, 672–692; Turman, P. D. (2003). Coaches and cohesion: The impact of coaching techniques on team cohesion in the small group sport setting. Journal of Sport Behavior, 26(1), 86–104.

Despite the best efforts to form an effective team by using a charter and establishing norms that result in cohesion, teams still encounter challenges. In fact, cohesion may work against the team and result in what is known as groupthink.

Groupthink

Groupthink is a team decision-making challenge that arises due to a high degree of cohesiveness and group norms that result in conformity.⁷⁸ Groupthink is defined as the conformity-seeking tendency of the group, which results in compromised decision making. Due to group pressure, the team does not survey all alternatives, and expressions of views that go against the majority of team members are suppressed. Team members apply direct pressure on dissenters and urge them to go along with the majority. The symptoms of groupthink are as follows:

Group rationalization. The team members generate explanations that support their preferred course of action.
Direct pressure. Those who speak out against the group decision are pressured into conformity.
Suppression. Members with differing views don’t share them with the group for fear of ostracism and/or ridicule.
Illusion of unanimity. The team members believe that they are in agreement. But in fact, they are not. Dissenting views have been suppressed. Not speaking is interpreted as support for the team decision.

Groupthink occurs most often in highly cohesive groups and when the group is confident about their course of action early in the process.⁷⁹ Initial research on groupthink involved case studies of public policy decisions including the Bay of Pigs invasion of Cuba and the attack on Pearl Harbor.⁸⁰ Experimental research has partially supported the theory.⁸¹ For example, an experiment tested groupthink and found support for the ideas that direct pressure from leaders increased the symptoms of groupthink.⁸² Teams with directive leaders proposed and discussed fewer alternatives than groups with leaders who encouraged member participation. These teams were also willing to comply with the leaders’ proposed solutions when the leaders stated their preferences early in the group discussion. The Challenger space shuttle disaster case has been interpreted using groupthink.⁸³ In this scenario, the decision by NASA to launch the space shuttle when temperatures were too low for O-rings to function properly resulted in the death of six astronauts and a civilian teacher. The analysis concludes that directive leadership and time pressure contributed to the impaired decision-making process of NASA engineers.

Critical Thinking Questions: Why is directive leadership the strongest antecedent to groupthink? What else can leaders do to prevent putting undue pressure on a group to conform to their decision preferences?

To minimize groupthink, the leader can avoid being too directive and encourage everyone to participate fully in team discussions. The leader can assign a member of the team to play the devil’s advocate, which is a role that challenges team assumptions and decisions throughout the process.

Most students recognize groupthink symptoms since they have probably occurred in student project teams. Think about a time when you felt like disagreeing with your team but stayed silent because the team was cohesive or you didn’t want to create conflict. You may have been a victim of groupthink.

Groupthink represents deterioration in the effectiveness of team decision making. Fortunately, research has also indicated how groupthink can be prevented. For example, leaders can employ a variety of decision-making techniques instead of always relying on consensus decision making to provide more structure and avoid conformity. OB research has investigated other important techniques for the effectiveness of decision-making processes. These techniques are essential for a leader to know since decision quality may be affected by how the decision is made by the team. For example, involving followers in decisions by allowing participation is one important aspect of team decision making. The next sections discuss participation, brainstorming, consensus, multivoting, nominal group technique (NGT), and the stepladder technique.

Team Decision Making

Learning Objective 10.6: Compare and contrast consensus decision making and the nominal group technique (NGT).

Participation in Team Decisions

Leadership research has long recognized that leaders have options with respect to the degree of participation they allow their followers when making team decisions.⁸⁴ Table 10.1 shows the normative decision-making model, which shows that team decisions fall on a continuum ranging from leaders making the decision themselves to delegating the decision to the team.⁸⁵ Between these two points, there are consultative modes of decision making. The manager can consult followers one-on-one or as a group. They also have the option of serving as the facilitator of a group decision. Involving the right people in group decision making has been shown to result in higher quality decisions and more support for decision implementation.⁸⁶^,87 However, key elements of the situation are important to consider when applying the normative decision-making model of participation. These factors include the following:⁸⁸

How significant is the decision?
How likely is it that your team members will disagree?
Do you (or your team) have the knowledge necessary to make the decision?
Do you need commitment from your team?
How likely is it that you will have commitment from your team?
Is there a time constraint?
Is team interaction difficult or impossible?
Do your team members function effectively as a team?
Is development of your team members important?
Do members of your team agree with your goals (and those of the organization)?

Source: Vroom, V. H. (2003). Educating managers for decision making and leadership. Management Decision, 41(10), 968–978.

Employees value being able to participate in group decisions, and research has shown involving them in decisions increases their satisfaction and the chances of success.⁸⁹^,90 Results from a study of over 400 decisions that had been made by managers in medium to large organizations found that over half of the decisions failed (they were either never implemented or fell apart within 2 years).⁹¹ While some decisions failed due to technical issues such as the problem being defined wrong, the best predictors of success were the involvement and participation of key stakeholders. Specifically, decisions that used participation to foster implementation succeeded more than 80% of the time.

Participation is the foundation for decision-making effectiveness. Balanced participation of team members is needed for the following decision-making techniques, beginning with the process of brainstorming.

Brainstorming

Brainstorming is one of the most common forms of team decision making.⁹² Brainstorming should be used when the team needs to produce a creative solution. It enhances the creative process because idea generation is separated from idea evaluation. Members are trained not to critique ideas but just to write them down as the group generates solutions to a problem. Ideas are typically written on flip-chart paper or a whiteboard so that everyone can see them. The team meets in a separate session to evaluate the ideas generated and decide on a course of action. IDEO is a successful product design company, and their rules for brainstorming are shown in the boxed insert.

Consensus

Consensus decision making is another technique that is commonly used in organizations. In many cases, consensus is preferable to voting (although voting is more common). Voting creates winners and losers, and may result in a lack of commitment to implement the decision. In a consensus decision-making process, everyone can say they have been heard and will support the final decision. The following steps are suggested for reaching consensus:⁹³

Introduction. It typically takes fewer than 5 minutes and covers the following:
- Why are we talking about this? Why does it matter?
- History of the issue (including results of any previous meetings on it).
- Goal for this item at this particular meeting (a report, decision, to gather input, etc.).

At the end of the initial presentation, others who have factual knowledge of the issue are sometimes invited to add in further bits about the issue—as long as it doesn’t go on for too long.

Clarifying questions. These are simple questions just to make sure everyone in the room fully understands what has been presented or proposed.
Discussion. This is the exploratory phase, where people are invited to ask further questions, show the full diversity of perspectives, raise challenges and concerns, and so on. Agreements and disagreements on general direction are noted and the reasons for them examined—not just what the positions are but why and any underlying value conflicts they represent.
Establish basic direction. What is the sense of the meeting, in terms of basic direction on this issue? Here we seek general or philosophical agreement—an agreement in principle.
Synthesize or modify proposal (as needed). Integrate what’s been shared, and make it as specific as needed, recognizing that some details will always be left to implementation. Again, notice agreements and disagreements (this time on the specifics of the proposal), and work with the underlying reasons, then generate ideas for addressing and resolving concerns, emerging with a proposal that has substantial group support. Periodically, the facilitator may ask, “Are there any remaining unresolved concerns?”
Call for consensus. The facilitator clearly restates the proposal and then asks people to indicate where they are.
Record. The note taker reads back the decision to the group. In addition, they record any implementation information needed (tasks, who’s responsible, timelines, etc.).

At the point that the facilitator calls for consensus (Step 6), participants typically have the following options:

Agreement: “I support this proposal and am willing to abide by and help implement it.”

Stand Aside: “I have major concerns with the proposal and agree to stand aside and let the group proceed with it.” The choice to stand aside may be based on (but is not limited to) any of the following:

- Disagreement with the proposal or the process used to reach the decision
- Personal values or principles
- Personal impact or need—for example, “I can’t afford this” or “I’d have to leave the group.”

If someone stands aside, their name and reason are traditionally recorded in the minutes. That person is relieved of lead implementation responsibilities yet is still bound to follow the decision.

Blocking: “I believe this proposal would be majorly detrimental to our group, because either it goes against our fundamental principles or it would lead to a disastrous outcome.” Note that none of the following are appropriate reasons to block:

- To get your way or because you prefer a different proposal, or no proposal
- Because you’d have to leave the group if the proposal passed
- Tradition: Because things have always been done a certain way
- Because the proposed action doesn’t fit your personal needs (or finances)
- To fulfill your personal moral values or how you want to live

In order to function and prevent tyranny of the minority, consensus-based groups rely on having a robust response to inappropriate blocks. The form of this response varies but usually includes both procedural and cultural elements.

Abstain: “I choose not to participate in the making of this decision.” It is typically used because a participant feels uninformed or not ready to participate.

Critical Thinking Question: Explain why following the consensus guidelines will result in more support for the implementation of a decision rather than simply voting on it.

Best Practices

IDEO’s Rules for Brainstorming

Defer judgment. Creative spaces don’t judge. They let the ideas flow so that people can build on each other and foster great ideas. You never know where a good idea is going to come from. The key is to make everyone feel like they can say the idea on their mind and allow others to build on it.
Encourage wild ideas. Wild ideas can often give rise to creative leaps. In thinking about ideas that are wacky or out there, we tend to think about what we really want without the constraints of technology or materials. We can then take those magical possibilities and perhaps invent new technologies to deliver them.
Build on the ideas of others. Being positive and building on the ideas of others take some skill. In conversation, we try to use and instead of but …
Stay focused on the topic. We try to keep the discussion on target; otherwise, you can diverge beyond the scope of what we’re trying to design for.
Have one conversation at a time. There are lots of conversations happening at once, which is great! Always think about the topic and how the ideas could apply.
Be visual. In live brainstorms, we use colored markers to write on Post-it notes that are put on a wall. Nothing gets an idea across faster than drawing it. It doesn’t matter how terrible of a sketcher you are! It’s all about the idea behind your sketch. You could also try your hand at sketching it out or mocking it up on the computer. We love visual ideas as the images make them memorable. Does someone else’s idea excite you? Maybe make them an image to go with their idea.
Go for quantity. Aim for as many new ideas as possible. In a good session, up to 100 ideas are generated in 60 minutes. Crank the ideas out quickly.

Discussion Questions

Provide an example of how a team leader can train team members to defer judgment.
Evaluate the IDEO guideline for quantity of ideas. Do you feel that generating 100 ideas in 60 minutes is realistic? Why or why not?
What do you think a team leader should do after brainstorming? In other words, how should the final decision be made?

Source: OpenIDEO. (2011). 7 tips on better brainstorming. http://www.openideo.com/blog/seven-tips-on-better-brainstorming

Some groups include other options, such as consent with reservations: “I support the basic thrust of this proposal and have one or more minor unresolved concerns.”

Consensus is one of the most commonly used and effective decision-making processes in organizations. The previously given guidelines should be followed in situations in which the support of all members of a team is needed for effective implementation of the decision.

Multivoting

In practice, it is often required that votes be taken. Given that voting has a number of disadvantages, including dissatisfaction with decisions and lack of commitment, the leader should know that multivoting is another decision-making option. The steps for multivoting follow.⁹⁴ As with other team decision-making techniques, you need a flip chart or whiteboard, marking pens, plus five to 10 slips of paper for each individual, and a pen or pencil for each individual.

Display the list of options. Combine duplicate items. Organize large numbers of ideas, and eliminate duplication and overlap. List reduction may also be useful.
Number (or letter) all items.
Decide how many items must be on the final reduced list. Decide also how many choices each member will vote for. Usually, five choices are allowed. The longer the original list, the more votes will be allowed—up to 10.
Working individually, each member selects the five items (or whatever number of choices is allowed) he or she thinks most important. Then each member ranks the choices in order of priority, with the first choice ranking highest. For example, if each member has five votes, the top choice would be ranked five, the next choice four, and so on. Each choice is written on a separate paper, with the ranking underlined in the lower right corner.
Tally votes. Collect the papers, shuffle them, and then record the votes on a flip chart or whiteboard. The easiest way to record votes is for the note-taker to write all the individual rankings next to each choice. For each item, the rankings are totaled next to the individual rankings.
If a decision is clear, stop here. Otherwise, continue with a brief discussion of the vote. The purpose of the discussion is to look at dramatic voting differences, such as an item that received both 5 and 1 ratings, and avoid errors from incorrect information or understandings about the item. The discussion should not pressure anyone to change his or her vote. Also, if a team member or members feel strongly that an option should be considered, the team can put it back in the voting process.
Repeat the voting process in Steps 4 and 5. If greater decision-making accuracy is required, this voting may be done by weighting the relative importance of each choice on a scale of 1 to 10, with 10 being most important. As can be seen from this process, multivoting allows for multiple rounds and discussion as the list gets reduced. It allows team members to have more of a voice in the final decision through a series of votes rather than just one.

Critical Thinking Questions: What are the advantages and disadvantages of multivoting? Would you consider using this technique? Why or why not?

Nominal Group Technique

The NGT is a more structured process that may be effective if there are status differences in the team or if the team has one or more dominating participants. The group meets face-to-face, but the discussion is more restricted than in brainstorming or consensus decision making. This process reduces status differentials since participants write their ideas on index cards and they are collected by a facilitator. This process is particularly effective when the team has a dominating participant who shuts down the team discussion with criticism. Research has indicated that NGT works better than brainstorming.⁹⁵ NGT is often used by senior management teams as a preparation tool for productive strategy meetings. The steps for the NGT follow:⁹⁶

Each team member independently writes their ideas on the problem on 3×5 cards or slips of paper.
Each member presents one idea to the team. The cards are collected by the facilitator who can either read them or redistribute them randomly to the team members who then read the ideas on the card. This way, no one is identified with a particular idea.
The discussion continues until all ideas are heard and recorded.
The team discusses the ideas and asks questions to clarify them.
Each team member then silently ranks the ideas independently. The idea with the highest total ranking is the final decision.

Stepladder

The stepladder technique is a newer technique and may also be an effective way to combat the challenge of dominating participants in the team. It has five basic steps:

Present the task. Before getting together as a group, present the task or problem to all members. Give everyone sufficient time to think about what needs to be done and to form their own opinions on how to best accomplish the task or solve the problem.
Two-member discussion. Form a core group of two members. Have them discuss the problem.
Add one member. Add a third group member to the core group. The third member presents ideas to the first two members before hearing the ideas that have already been discussed. After all three members have laid out their solutions and ideas, they discuss their options together.
Repeat, adding one member at a time. Repeat the same process by adding a fourth member and so on to the group. Allow time for discussion after each additional member has presented his or her ideas.
Final decision. Reach a final decision only after all members have been brought in and presented their ideas.⁹⁷

An experiment was conducted to see if the stepladder technique resulted in higher-quality decisions compared to consensus decision making.⁹⁸ Stepladder groups produced significantly higher-quality decisions than did conventional groups in which all members worked on the problem at the same time. Stepladder group decisions surpassed the quality of their best individual members’ decisions 56% of the time. In contrast, conventional group decisions surpassed the quality of their best members’ decisions only 13% of the time. Since all members must contribute in the step-ladder process, it is suggested as a way to help teams address the challenge of social loafing. This and other team challenges are discussed in the following sections.

Team Challenges

Learning Objective 10.7: Generate an example of how a team leader can reduce social loafing.

Social Loafing

A group challenge that is common in student project teams is social loafing. You will recognize this one if you have ever been in a team where you (or a subgroup of team members) did all the work but others got the credit and didn’t contribute. Social loafing is defined as the reduction in motivation and effort when individuals work collectively compared with when they work individually or coactively (i.e., they work with others but do not combine inputs into a group product).⁹⁹ Social loafing occurs more often in larger teams where individuals can hide in the team.¹⁰⁰ When there is skill redundancy, some team members may feel that their contributions are not valued. If others are slacking, then team members may stop contributing. Team members may not see the goal as valuable or agree with it, so they don’t contribute. There are individual differences as well: Research has shown men are more likely to social loaf than women, and those from individualistic cultures are more likely to loaf.¹⁰¹ Leaders can prevent social loafing by doing the following:

Keep teams small (four to six members).
Set meaningful team goals.
Set clear roles for team members.
Eliminate redundancy.
Select members with high motivation and affinity for teamwork.
Provide feedback and coaching to members who social loaf.

Virtual Teams

Today, more work is being conducted through the Internet in virtual teams. Virtual teams are defined as “functioning teams that rely on technology-mediated communication while crossing several different boundaries.”¹⁰² Such teams rely on technology to communicate, and this has significantly changed how teamwork is conducted. It has been suggested that virtual teams have more challenges in developing the TMMs needed to be effective.¹⁰³ In many cases, virtual team members are geographically dispersed and may even be working in different countries and time zones. A comparison of computer-mediated teams to face-to-face teams in a longitudinal study found the relationship between technology and performance depended on experience with the technology.¹⁰⁴ The results also suggested the newness of the medium to team members and not the newness of the group led to poorer task performance for computer groups. Another study found that communication apprehension and poor typing ability negatively influenced the quality and quantity of communication in virtual teams, and this determined who emerged as the team leader.¹⁰⁵ A review of studies on computer-mediated groups reported computer-based groups generated more ideas but had more limited interactions and took longer to complete their work compared with teams that met face-to-face.¹⁰⁶ Research has shown that trust is essential for knowledge sharing to occur in virtual teams.¹⁰⁷ However, virtual teams may have less social support and direct interaction among team members, which are needed to build trust.¹⁰⁸ A meta-analysis of more than 5,000 teams found virtual teams share less information.¹⁰⁹ Also, virtual work and the use of e-mail in combination may change the distribution of information within an organization and change knowledge flows.¹¹⁰

Leaders play a central role in virtual team functioning since they influence how a team deals with obstacles and how the team ultimately adapts to the unique challenges they face.¹¹¹ A study of student teams was conducted in which the leaders of virtual teams were compared with those in face-to-face teams.¹¹² Researchers found that leader behaviors focusing on the task and monitoring of performance significantly impacted the performance of virtual teams. Leaders can enhance the effectiveness of virtual teams by establishing trust, carefully monitoring e-mail, attending to team progress, and by sharing the team’s work with others.¹¹³ Establishing team goals early in the life cycle of the team also improves virtual team cohesion and effectiveness.¹¹⁴ Advanced information technology (IT) will have a significant impact on leadership in organizations in the future, and leaders must be aware of the impact for leading virtual teams.¹¹⁵ Additional guidelines for leading virtual teams are shown in Table 10.2.

Critical Thinking Question: Provide an example of a type of work that cannot be done by a virtual team. Why do you think this would be the case?

Source: Malhotra, A., Majchrzak, A., & Rosen, B. (2007). Leading virtual teams. Academy of Management Perspectives, 21(1), 60–70. p. 62.

One of the advantages of virtual teams is that team members can be geographically dispersed. Members can contribute to teamwork from anywhere in the world. In many cases, virtual teams are diverse and comprised of members from different cultures. In addition to being virtual, cultural differences affect teams. Diversity is a challenge for teams but it also offers opportunities to increase team performance. Diversity within teams is addressed next, considering its challenges and benefits.

Team Diversity

Learning Objective 10.8: Discuss the challenges and benefits of team diversity.

Challenges of Team Diversity

Consider the following hypothetical product development team at a leading manufacturer of industrial and medical products:

This four-member team is composed of one mid-level female accountant, one newly hired female biomedical engineer, one established male executive vice-president (VP) of marketing and one male mid-level production manager with a degree in industrial engineering. The biomedical engineer is passionate about biomedical innovation, while the production manager is equally committed to incrementally improving the company’s existing products for the gas and oil industry. Team members have a variety of in-house connections: the biomedical engineer meets regularly with other medical staff to discuss new products, the production manager meets weekly with other industrial engineers from the manufacturing department to coordinate workflow and the VP of marketing has executive meetings to plan marketing strategies. During lunchtime, the two females get together in the office and the two males join their old-time group of friends. Top management considers medical marketing core to business growth, whereas accounting and engineering on the industrial side are perceived as less competitive functions.¹¹⁶

How will the diversity of this team affect its processes and outcomes? For over 20 years, researchers have been studying the effects of diversity in teams. The previous example reflects diversity that is related to the functional areas and gender of the team members. There has also been a great deal of research on the effects of cultural differences in multicultural teams. This research has high relevance for team leaders since teams have become increasingly diverse, with individuals from different cultural backgrounds working closely with one another both in virtual as well as face-to-face teams.

Not all team processes translate cross-culturally. One study surveyed members of 461 self-managed work teams (SMWTs) in four countries: the United States, Finland, Belgium, and the Philippines.¹¹⁷ Resistance to SMWTs was affected by cultural values of collectivism and power distance. Collectivism is group orientation, and power distance is respect for authority. Also, the degree of determinism (i.e., the belief that “people should not try to change the paths their lives are destined to take”) affected reactions to the implementation of SMWTs. Employees in the Philippines were significantly more likely to reject self-management compared to employees in the United States. Caution should be exercised when implementing SMWTs and other forms of participation in countries with high power distance. Individuals in high power distance cultures respect authority and expect the leader to have all the answers. They may be confused by a leader who asks for their input and make the attribution that the leader is not competent to make the decision alone. Similar reactions to the offer of participation might be found in Russia and Mexico.¹¹⁸^,119 Participation in countries with high power distance may not be appropriate, and managers should check cultural assumptions before offering participation to multicultural teams. Diversity presents a challenge to the team leader in that there is a greater need to manage conflict. But it appears to be worth the effort since benefits can be realized through increased creativity and satisfaction in diverse teams.

Benefits of Team Diversity

Diverse teams can accomplish great things. For example, in the wake of the earthquake and tsunami in Japan, rescue professionals from different countries had to come together quickly to fulfill critical rescue missions. These international teams, which possessed different professional capacities, did not have the luxury of negotiating clear formal leadership before undertaking time-critical, life-saving tasks at ground zero.¹²⁰ Thus, these international teams had to be self-managed, and research has shown that there are certain characteristics of team members that enable self-managed multicultural teams to perform well. A longitudinal study of multicultural MBA project teams found that teams performed better when members had more tolerance for uncertainty and were more relationship-oriented.¹²¹

Diversity may enhance team creativity, and this is considered one of the benefits of having a diverse workforce. For example, different abilities are related to particular cultures: British inventiveness, for example, or Japanese pragmatism. According to the head of R&D at Hitachi Europe, the underlying consideration in the internationalization of R&D is the conviction that mixing western and Japanese mentalities achieves high-quality R&D results faster.¹²² This belief is supported by evidence from a study¹²³ of 574 R&D multicultural team members, their leaders, and their leaders’ managers in 82 co-located teams in a Chinese branch of a large German global organization. Multicultural team leaders with high global identity leveraged cultural diversity to promote innovative goals, which further enhanced team communication, inclusion, and its positive impact on team innovation.

Critical Thinking Question: How can a team leader ensure that diversity does not result in conflict that negatively affects performance? Describe specifically what a team leader can do to manage diverse viewpoints during a team discussion.

Diversity in teams can increase flexibility, creativity, and problem solving.¹²⁴ A meta-analysis of team diversity and team performance found having members with diverse skill sets and backgrounds enhances team creativity and innovation.¹²⁵ Specifically, differences in functional expertise, education, and organizational tenure were most related to team performance. A second meta-analysis of 108 studies in 10,632 teams found cultural diversity leads to process losses through task conflict.¹²⁶ Effective team leaders credit diversity for being a key reason for team creative outputs that directly impact organizational success.¹²⁷ There is some evidence that diversity training enhances creativity. An experimental study compared the creativity of teams that attended nationality diversity training to teams that did not have the training (controls). Results of the study indicated that for teams with less positive diversity beliefs, diversity training increased creative performance when the team’s nationality diversity was high.¹²⁸

Leadership makes a difference in how well diverse teams perform. Throughout this chapter, a clear theme is that the leader can set up groups for success by directing the group toward a meaningful goal, selecting the right decision-making tools, and preventing groupthink. In the concluding section of this chapter, the importance of empowering team leadership is discussed further.

Leadership Implications: Empowering the Team

Research has shown that team leaders engage in certain behaviors that enhance team performance. The focus of team leadership has shifted from the leader to the team, and this is called team-centric leadership. One review notes that: “Team-centric leadership research has exploded in the past decade.”¹²⁹ A team-centric leader creates the right climate for a team, and this increases followers’ empowerment.¹³⁰ Leadership climate is effective when a team leader gives their team many responsibilities, asks the team for advice when making decisions, is not too controlling, allows the team to set its own goals, stays out of the way when the team works on its performance problems, tells the team to expect a lot from itself, and trusts the team. A study of 62 teams in a Fortune 500 company found leadership climate is related to team performance through team empowerment.¹³¹ More-empowered teams are more productive and proactive than less-empowered teams and have higher levels of customer service, job satisfaction, and commitment. However, shared leadership is most strongly related to team performance when team members have high levels of task-related competence.¹³² Empowerment is also related to lower employee cynicism and “time theft” (spending time on non-work-related activities during working hours).¹³³ A meta-analysis of relationships between leader behaviors and team performance found task-focused behaviors are moderately related to perceived team effectiveness and team productivity. However, person-focused behaviors are more related to perceived team effectiveness, team productivity, and team learning than task-focused behaviors. Examining specific leader behaviors, empowerment behaviors accounted for nearly 30% of the variance in team learning.¹³⁴ Empowerment seems to be a critical aspect of the development of highly effective teams. Team members need to feel that they have the power to make significant decisions about their work. Empowering leadership has also been found to increase the effectiveness of collaboration in virtual teams where members are geographically dispersed.¹³⁵ Empowering leaders act more like coaches than command-and-control formal leaders. A study¹³⁶ of 70 service teams compared formal team leaders to leaders that behaved as coaches and found that coaches significantly influence team empowerment, and thereby team processes and performance, whereas formal team leaders did not. Team coaches engaged in behaviors such as building teamwork and giving team members the technical information needed to do their jobs. Complete Self-Assessment 10.2 to learn about your team leadership style.

In some cases, empowerment takes the form of the team being SMWTs. SMWTs are teams that are empowered to lead themselves without a formal assigned leader. In SMWTs, decisions regarding the specific ways that tasks are performed are left up to the members of the team.¹³⁷ These teams are now common at the workplace, and they have been related to higher job satisfaction and commitment.¹³⁸ SMWTs are in place in 79% of Fortune 1000 companies and in 81% of manufacturing companies.¹³⁹ The role of the leader in SMWTs is to relate (build trust), scout (seek information and diagnose problems), persuade (gain external support and influence the team), and empower (delegate and coach). The research evidence on SMWTs reports mixed results, however. While members report that they are more satisfied, team performance may be more difficult to attain without a leader. For example, SMWTs’ members don’t manage conflict well, and this may result in an erosion of trust.¹⁴⁰ A study of SMWTs that compared them to traditional teams found that claims of the effectiveness of self-management may have been inflated; SMWTs did not perform better than traditional teams.¹⁴¹

Leadership matters for team performance in a number of ways. Leaders can move their team through the team development process by establishing SMART goals and having the team create a team charter to guide them. The team charter establishes team norms that can lead to higher levels of cohesion, which has been shown to impact team effectiveness. Leaders should pay attention to the metrics that the team uses to evaluate their performance and include task, process, and individual development measures to assess the team. A team leader needs to assess any challenges that the team may face such as social loafing, being virtual, and the degree of diversity. Diversity can benefit team process and performance but must be effectively managed. Finally, leaders should use a variety of team decision-making processes, including participation, brainstorming, consensus, NGT, and the stepladder technique. If a vote must be taken, a leader should consider using multivoting rather than a simple majority vote that creates winners and losers. For these techniques to work, it is important that the leader create the right leadership climate for the team and empower the team to act.

Critical Thinking Question: Explain why the existence of SMWTs that also have a team leader poses a paradox for the leader. If a team is self-managed, what is the leader’s role?

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Key Terms

additive task, 242
adjourning, 245
brainstorming, 256
cohesion, 251
collective effort, 242
collectivism, 263
consensus, 256
consultative, 255
delegating, 255
determinism, 263
facilitator, 255
five-stage model, 245
forming, 245
groupthink, 253
idea evaluation, 256
idea generation, 256
leadership climate, 264
nominal group technique (NGT), 254
normative decision-making model, 255
norming, 245
performing, 245
power distance, 263
psychological safety, 250
punctuated equilibrium, 246
self-managed work team (SMWT), 263
social identity, 252
social loafing, 260
storming, 245
synergy, 243
team affect, 249
team charter, 244
team mental models (TMMs), 244
team norms, 243
team performance curve, 245
team viability, 251
virtual teams, 261
work teams, 241

TOOLKIT ACTIVITY 10.1: The Team Charter

Getting Started: Developing Ground Rules

Anyone who plays sports has to learn the rules. Anyone who learns to play an instrument has to learn the techniques. The rules of “how we do things here” (the etiquette of the situation, the appropriate behaviors) are the ground rules.

Teams often begin making assumptions about ground rules. Members believe that everyone knows how it should be and how everyone should behave. When someone else’s behavior fails to conform to one’s own expectations, people tend to be surprised. Even more important, because the rules are not clear and because there has been no discussion as to how problems will be managed, unnecessary conflict follows. This assignment serves the following objectives:

Gives you the opportunity to get to know your team members
Provides a short but important task so that the team can learn to function quickly without a large portion of your grade resting on the initial outcome
Enables the team to develop and understand the rules of conduct expected of each team member

Your team will be required to submit a team charter. The following points that must be included in your charter are listed next, with some examples of the kinds of questions that might be addressed. However, use these as starting points; be sure to address any other important issues that come up in your discussions.

Attendance

How often should we meet?
How long should our meetings be?
When is it okay to miss a meeting?

Lateness

Since team meetings should start on time, how do we deal with lateness?
What does “on time” mean?

Interruptions

How do we deal with interruptions?
What is allowed? Phone calls? Messages?

Food, Coffee, and Breaks

Do we have food or coffee?
Who cleans up?
How many breaks should we have?
How much socializing is permissible?

Participation

What do we mean by participation?
How do we encourage participation?
Are there group norms that we can establish to encourage participation?

Goals

What are the team’s goals and objectives?
What is the team’s mission?
How will the team keep members motivated?
How will the team reward itself (and individual members) for a job well done?

Norms

What behaviors are permissible?
How do we deal with people who dominate, resist, are too quiet, are too noisy, etc.?
How will we monitor our progress?
What important roles need to be assumed by team members during the semester? How will these roles be assigned?

Decision Making

How do we make decisions?
What decisions must be agreed to by all?
What does consensus mean?

Conflict

How will the team encourage positive (creative) conflict and discourage negative (dysfunctional) conflict?
How can the team encourage and manage differences of opinion and different perspectives?

Sanction Issues (What Will the Team Do With Deviates?)

How will the team deal with members who violate the agreed-upon norms of the team? For example, how will social loafing or inadequate participation be dealt with?

Firing Team Members

What are the specific rules or criteria for firing a team member? (You must give two written notices to the person and a copy to the professor prior to dismissal.)

Team Member Strengths and Weaknesses

Each team member should be identified (name, phone number, e-mail) along with an assessment of his or her strengths and his or her areas for improvement.

Other

Are there other issues that have a positive or negative impact on the team?

The Next Step: A Name and a Logo

After your team has prepared its team charter, create a name for your team and design a logo. The name and logo should be meaningful to the team, reflecting an attribute that the team members believe is important (humor is allowed and encouraged, but both the team logo and name should be meaningful). The name is limited to one or two words. Write a brief explanation of your name and logo choice. Give a copy to your instructor (along with your team charter). Your team charter should also include the following:

A cover page with the following printed on it: the team name; team logo; team member names; and course name, number, and section
A page with team member names, phone numbers, and e-mail addresses
Team charter rules and expectations
A brief explanation of your team name and logo choice

Discussion Questions

Which part(s) of the team charter was the most difficult for your team to reach agreement on? Why do you think this was the case?
What did you learn about your teammates by listing their strengths and weaknesses? How can you help them develop their weak areas?
How do you plan to use the team charter to keep your team on track toward accomplishing its goals?

Source: Adapted from Cox, P. L., & Bobrowski, P. E. (2000). The team charter assignment: Improving the effectiveness of classroom teams. Journal of Behavioral and Applied Management, 1(1), 92–103.

TOOLKIT ACTIVITY 10.2: The Marshmallow Challenge (Team Exercise)

The Marshmallow Challenge has been tested worldwide by consultant Tom Wujec. Wujec has run the challenge with different categories of teams such as CEO teams, teams of architects, teams of engineers, teams of business students, and teams of kindergarten children.

First, form teams of four people. Provide each team with a building kit containing 20 sticks of spaghetti, 1 yard of masking tape, 1 yard of string, and 1 marshmallow. You need a measuring tape and watch. Run the challenge with your group, and then watch the debriefing video provided at http://www.tomwujec.com/design-projects/marshmallow-challenge/

The goals and rules of the Marshmallow Challenge follow.

Build the tallest freestanding structure: The winning team is the one that has the tallest structure measured from the tabletop surface to the top of the marshmallow. That means the structure cannot be suspended from a higher structure, like a chair, ceiling, or chandelier.
The entire marshmallow must be on top: The entire marshmallow needs to be on the top of the structure. Cutting or eating part of the marshmallow disqualifies the team.
Use as much or as little of the kit: The team can use as many or as few of the 20 spaghetti sticks, as much or as little of the string or tape. The team cannot use the paper bag that the materials are in as part of their structure.
Break up the spaghetti, string, or tape: Teams are free to break the spaghetti, cut up the tape and string to create new structures.
Observe the time limit: You have 18 minutes to build your structure.

Discussion Questions

Was there a leader on your team? Who was this person, and who decided who the leader would be? If you had no leader, do you think having designated someone a leader would have helped?
Did you feel everyone’s ideas were well received during the activity? How did you deal with frustration? Were all teammates included?
Did your team have a plan? Did the plan work? Did you veer from the plan at all? Why or why not? What worked? What didn’t work?

Source: http://www.tomwujec.com/design-projects/marshmallow-challenge/

TOOLKIT ACTIVITY 10.3: How to Run an Effective Meeting (Checklist)

Research has demonstrated that running meetings effectively increases team performance. A study of 63 team meetings¹⁴² including a total of 359 meeting participants from different organizations found that leaders must remember to show considerate leadership, which was positively related to satisfaction with meetings. Also, team leaders need to balance relational- and task-oriented meeting procedures. The following checklist is a useful guide to ensuring a successful meeting.

Before the meeting

Set goals for the meeting, and prepare an agenda.
Prioritize issues to be discussed, including carryover issues from previous meetings.
Consult with team members to finalize the agenda.
Research information necessary for making important decisions (or delegate this).
Arrange logistics: date, time, place, catering. Select a comfortable and convenient meeting place.
Send out announcements and reminders for the meeting, including the meeting agenda.
Arrange for AV equipment, flip charts, markers, and other supplies.
Arrive early to set up, and check for adequate lighting, ventilation, heating, or air-conditioning.
Arrange seating, and post directional signs if needed.
Prepare name tags or tent cards if needed.

During the meeting

Greet people warmly as they arrive individually.
Announce the nearest restrooms.
Have the agenda at each person’s place or projected on screen.
Set a welcoming tone: introductions (you may want to include an icebreaker exercise if time permits).
Review minutes from the previous meeting if appropriate.
Provide background information, and review the meeting goals.
Be courteous, respectful, and inclusive during the discussions.
Start and finish the meeting on time.

Bring closure

Make decisions.
Prepare action plans and follow up.
Summarize main points and what was accomplished during the meeting.
Schedule the next meeting (if needed).

After the meeting

E-mail participants, and thank them for their contributions.
Distribute minutes of the meeting and action plans.
Include a reminder about the next meeting.

Discussion Questions

From the checklist, identify which behaviors are task-related and which behaviors are relationship-related. Explain how you would set the tone for the meeting by being a considerate leader.
Discuss why it is important to have an agenda for the meeting. Should the leader set the agenda or have it created by the team? Explain.
Why is it important to start and finish the meeting on time? What should the leader do if the agenda is not completed by the end of the meeting time?
Why is it important to follow up after the meeting? Create one or two additional items that should be included in the follow-up after a meeting.

Source: Odermatt, I., König, C. J., Kleinmann, M., Nussbaumer, R., Rosenbaum, A., Olien, J. L., & Rogelberg, S. G. (2017). On leading meetings: Linking meeting outcomes to leadership styles. Journal of Leadership & Organizational Studies, 24(2), 189–200.

CASE STUDY 10.1: Problem Solving in Virtual Teams

Shelia works for General Electric’s (GE) energy company in the wind turbine manufacturing division as an inventory controller. Her job duties include receiving the wind turbine components into GE’s inventory when vendors provide the required documentation and then moving them out of inventory when the components reach the wind field site. She handles primarily the large components including tower segments, blades, machine heads, and hubs. The tower segments are made by firms in the United States and China and are received into inventory once the signed inspection tags are e-mailed to her. For the blades, they are shipped to the port of Houston, and once they are unloaded and pass inspection they are entered into inventory. The machine heads and hubs are made by GE at three different plants and go into inventory once completed and ready for shipment.

Sheila is based in the Greenville, NC, plant with two of the three-person buyer teams that handle the orders of the parts to make the machine heads and hubs. Another of the machine head teams is based in Schenectady, NY. She also works with a team based in Houston, TX, that handles the ordering of the wind turbine blades and the tower team that works in the plant in Pensacola, FL. She also works with a transportation specialist on each team to help with the shipment of these large wind turbine components to the client’s site, and with up to two dozen wind farm site teams at any given time to capture the delivery and installation of the different wind turbine components in order to move items out of inventory and trigger billing to the client.

The majority of the work Sheila does with her teams is through the phone, e-mail, and occasional web meeting. Rarely does she get to see any of the teams outside of the two located at Greenville, as there is trust and respect among teammates as well as understanding of what is her role on these teams. However, working in such spread-out teams that span the globe as well as several organizations creates a number of challenges. Sometimes, there are issues with suppliers when they do not provide the proper documentation for completion and still are seeking payment. Sometimes, there are issues with working out replacement shipments when the blades and towers from overseas are damaged in transit. However, most of the time the job and relationship between team members goes smoothly thanks to a number of processes and procedures that have been set in place to help with those challenges.

Currently, a new team is being formed in the wind division. As can often happen when shipping goods, the hubs, machine heads, and towers frequently have components that are damaged in transit. In order to assist the wind farm sites to get the turbines up and running as fast as possible, they need all the parts fully functional. So a team is forming to help the wind farm sites quickly get the replacement parts that are needed. A ticket system has been set up for the wind farm site team to put in reports of damaged parts. The system then assigns each case to a different team member, who is responsible for finding the solution to the problem and getting the needed parts to the wind farm site as quickly as possible. In addition, there is a weekly web meeting on Wednesdays where the cases are discussed and everyone on the team is updated.

Sheila was assigned to work on this new team, but it has not been going as well as the work on her other teams. First, while she knows some of the larger components based upon the receiving she does, she does not have a clue as to the list of smaller components, cables, and wires used to make the larger components. While the on-ground crews provide pictures and a description, they don’t provide the exact part number or name that is needed, and so for her first two cases she spent nearly a week hunting down schematics and talking with engineers in both Schenectady and Greenville to figure out what part is needed. She then spent 3 more days getting the purchase orders needed to order the parts (as receivers can’t cut their own purchase orders for fraud prevention reasons), and shipping took another 2 days. The team leader was upset with the amount of time Sheila took to close the cases and reprimanded her on the weekly call. Sheila felt that this was unfair, as she does not have access to the knowledge and resources to get the job done as quickly as others. However, she still tried to do her best on her next case, getting replacement ladders for the towers at a couple different sites. However, that case took 3 weeks to close as a result of the ladders arriving damaged from transit and required Sheila to find another vendor to ship and deliver the ladders.

Discussion Questions

How does trust and respect facilitate the virtual teams’ ability to operate?
What processes and procedures are important to making the teams work?
Why do you think Sheila is having trouble in her role on the new team?
What factors should you consider when putting together a virtual team?

SELF-ASSESSMENT 10.1: Teamwork Orientation

This self-assessment exercise identifies your propensity toward working in teams. The goal is for you to learn about yourself. There are no right or wrong answers, and this is not a test. You don’t have to share your results with others unless you wish to do so.

Part I: Taking the Assessment

Part II. Scoring Instructions

Add your responses to determine your total for team orientation. Higher scores suggest a higher propensity for teamwork. In general, scores from 5 to 12 indicate a lower interest in being on a team, and scores above 13 indicate a higher interest in being on a team.

Discussion Questions

Based on your results, are you a team-oriented person? How does this affect your attitude toward working in teams?
Compare your results to your teammates. Are there more people who are team-oriented compared to those who are not? How might this affect your team process?
How can a team leader motivate team members who don’t value the team concept (in other words, lower scores on this assessment ranging from 5 to 12)? What can a leader do to convince such reluctant members to engage with the team?

Source: Adapted from Scandura, T. A. (1995). Management practices survey. Coral Gables, FL: University of Miami.

SELF-ASSESSMENT 10.2: Team Leadership Inventory (TLI)

To take this assessment, use the number 4 for the response that is MOST like you, a 3 for the one that is MODERATELY like you, a 2 for the one that is LITTLE like you, and a 1 for the response that is LEAST> like you. Do not repeat any number when answering a given question. Use all four numbers when responding to a question. There are no right or wrong answers, so respond to what comes first to your mind.

Example:

In the example above, giving directions is most like you, being expert is moderately like you, listening to people is a little like you, and making goals exciting is least like you. Note that all four numbers are used. Now, answer the following questions about yourself:

Interpretation

Column 1 = Command and control (C)

You stick to deadlines and reinforce this with your team. You focus on individual accomplishments and take charge of the team in an efficient manner. You are results-oriented. Power base: Legitimate.

Column 2 = Logic and persuasion (L)

You are dependable, logical, and develop arguments that persuade others. You are an effective problem solver for your team and are valued for your expertise. You are thorough and painstakingly detail-oriented. Power base: Expert.

Column 3 = Visionary (V)

You focus on the big picture for the team and see your role as a change agent. You thrive on finding new opportunities and exploring options. You have a clear understanding of the organization’s mission and translate this for your team. Power base: Charisma.

Column 4 = Relationship-oriented (R)

You focus on people and provide a supportive environment for your team. You are seen as a consensus-builder and participative manager. You are skilled in communication and listening, and develop a sense of trust in your team. Power base: Referent.

Discussion Questions

Which team leadership style is your dominant style (the highest score)? Are you strong in another type of team leadership? Are you balanced across three or all four?
Assess the basis of power you use with your team (refer back to the discussion of the French and Raven bases of power from Chapter 7). Would another power base be more effective? Explain why or why not.
Ask some of your team members to complete this assessment about you, and then compare your ratings to their ratings. Do you see yourself as your team members do? Can you explain why there is agreement or disagreement? How can you use this information to improve your team leadership?

Chapter Eleven Managing Conflict and Negotiation

Learning Objectives

After studying this chapter, you should be able to do the following:

11.1: Describe the causes of conflict in organizations and devise solutions for them.
11.2: Compare and contrast the five conflict resolution styles.
11.3: Explain how team conflict affects team performance.
11.4: Provide an example of how managing conflict differs across cultures.
11.5: Identify how third-party interventions can reduce conflict.
11.6: Describe the negotiation process, and explain the difference between integrative and distributive bargaining.

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The Costs of Workplace Conflict

A study commissioned by Consulting Psychologists Press, Inc., publishers of the Myers-Briggs Type Assessment and the Thomas-Kilmann Conflict Mode Instrument, found that U.S. employees spend 2.1 hours per week involved with conflict, which amounts to approximately $359 billion in paid hours (based on average hourly earnings of $17.95), or the equivalent of 385 million working days. For the purposes of the study, the authors defined conflict as: “any workplace disagreement that disrupts the flow of work.” According to the report, Workplace Conflict and How Businesses Can Harness It to Thrive, the following statistics demonstrate how pervasive conflict is in the workplace:

85% of employees deal with conflict on some level;
29% of employees deal with it almost constantly;
34% of conflict occurs among frontline employees;
49% of conflict is a result of personality clashes and “warring egos”;
34% of conflict is caused by stress in the workplace; and
33% of conflict is caused by heavy workloads.

In addition to the dollar costs of conflict, employees report a number of negative outcomes, which are shown in Figure 11.1.

Figure 11.1 Negative Outcomes of Workplace Conflict

Source: Consulting Psychologists Press. (2008). Workplace conflict and how businesses can harness it to thrive. Retrieved from http://img.en25.com/Web/CPP/Conflict_report.pdf

The inability for managers to effectively manage conflict and bring about positive resolution is costing them nearly one full day of productivity per month—about two-and-a-half weeks per year. Also, the study found that 70% believe managing conflict is a critically important leadership skill. And 54% of employees believe managers could handle disputes more effectively by addressing underlying tensions immediately when they surface.

Another poll conducted by Stanford University and the Miles Group asked CEOs two questions: What skills are you working on? and What skills do you think you need more development for? They also asked their boards of directors what skills CEOs need development in. Conflict management skills were the most mentioned skill that CEOs believed they needed development in (42.9% reported needing to develop this skill). What is also interesting about these poll results is that CEOs also reported that they were working on skills related to conflict management such as listening (32.1%) and persuasion (14.3%). The results of this poll underscore the importance of the ability to manage conflict since it was mentioned as the number one skill needing development by top executives.¹

This chapter reviews the research on conflict management in organizations. The relationship between conflict and performance is emphasized, with coverage of both interpersonal two-party and team conflict. Also, conflict resolution is needed for effective negotiation, and this core management competency is also covered in this chapter.

Critical Thinking Questions: Do you agree that conflict resolution is the most important skill that leaders need? Which other skills do you think are most important?

What Is Conflict?

Learning Objective 11.1: Describe the causes of conflict in organizations and devise solutions for them.

Conflict is defined as “the process that begins when one party perceives that the other has negatively affected, or is about to negatively affect, something that he or she cares about.”² Note that conflict is a perception, and as discussed in Chapter 5, perceptions don’t always line up with reality. However, they do influence behavior and they can be changed, which is essential for leaders to keep in mind as they approach conflict resolution in organizations. Managing conflict is a skill that managers at all levels need, not just CEOs. This suggests that managing conflict is an important aspect of a leader’s job and that most leaders are not well equipped to deal with it. In this chapter, we review the evidence-based research on conflict and discuss how it can be effectively managed. First, it is important to understand what causes conflict in the first place (so that some conflict might be avoided).

Causes of Organizational Conflict

There are three general sources of organizational conflict:³

Substantive conflict. This occurs because people have different opinions on important issues in the organization that affect them. For example, there may be differences of opinion about which advertising campaign would best promote a new product. Such conflict can result in better decisions because both sides have to defend their position.
Affective conflict. This is conflict that engenders strong emotions such as anger or disgust. This may be due to personality differences or arguments. For example, two individuals in the organization escalate an argument to the level of shouting (it happens). This form of conflict may be highly disruptive to both parties and may even create stress for other members of the work group.
Process conflict. At times, people disagree on what course of action to pursue or the best way to operate even after a decision has been made. For example, team members may disagree on what aspects of a project should be assigned to specific individuals. This type of conflict reduces team performance.

Critical Thinking Questions: How do the three forms of conflict relate to one another? For example, how might affective conflict affect process conflict?

Paul Endress, a nationally recognized consultant, provides some specific examples of where conflict in organizations may originate and recommends solutions a leader may follow to resolve each type:⁴

Personalities
- Organizational strife is sometimes traced to personalities (as we learned in Chapter 2). This is one person differing with another based on how he or she feels about that person.
- Solution: Train everyone to recognize the personality types along with their inherent strengths and weaknesses so that they understand one another. For example, the Big Five Personality Test (included in this textbook in Self-Assessment 2.1) can be given to team members. Based on the results, team members can discuss their personality differences and how they affect team interactions (extraverts may be dominating the team meetings, for example).
Sensitivity/hurt
- This occurs when a person, because of low self-esteem, insecurity, or other factors in his or her personal life, sometimes feels attacked by perceived criticism.
- Solution: Adopt the belief that even negative behaviors may have a positive intention. Use active listening, and ask questions to understand the root cause of the problem.
Differences in perception and values
- Most conflict results from the varying ways people view the world. These incongruent views are traceable to differences in personality, culture, race, experience, education, occupation, and socioeconomic class, as examples.
- Solution: A leader must set and communicate the values for the organization.
Differences over facts
- A fact is a piece of data that can be quantified or an event that can be documented. Arguments over facts typically need not last very long since they are verifiable. But a statement like “It is a fact that you are insensitive to my feelings” is neither documentable nor quantifiable and is actually a difference in perception.
- Solution: Have a neutral third party or expert arbitrate the dispute (third-party intervention is discussed later in this chapter).
Differences over goals and priorities
- This is a disagreement over strategy. For example, this may be an argument about whether a bank should focus more resources on international banking or on community banking. Another example would be whether or not to increase the amount of advanced professional training given to employees.
- Solution: A leader must set, communicate, and enforce the goals and values for the organization.
Differences over methods
- Two sides may have similar goals but disagree on how to achieve them. For example, a manager and their direct reports may not agree on how a training program should be conducted.
- Solution: Try seeing the other person’s point of view by perspective taking. You can practice perspective taking in Case Study 11.1. Read the case study and practice perspective taking on a controversial issue where people have different points of view. Another alternative is to have a neutral third party or expert arbitrate the dispute (third-party alternative dispute resolution is covered later in this chapter).
Competition for scarce resources
- This occurs when there are limited resources that must be allocated in the organization. For example, two managers might argue over who has the greater need for an assistant, whose budget should be increased more, or how to allocate recently purchased computers.
- Solution: Upper-level management must set and communicate the values hierarchy for the organization. Resources can then be allocated based upon alignment with the organization’s priorities.
Competition for supremacy
- This occurs when one person seeks to outdo or outshine another person. You might see it when two employees compete for a promotion or for power. Depending on personalities, this type of conflict can be visible or very subtle.
- Solution: A leader must set and communicate the values for the organization and emphasize that everyone’s contribution matters.
Misunderstanding
- The majority of what looks like interpersonal conflict is actually a communication breakdown. Communication, if not attended to, is as likely to fail as to succeed. And when it does, a listener’s incorrect inferences about a speaker’s intent often create interpersonal conflict. Communication is discussed in more detail in Chapter 12.
- Solution: Ask this question—“What else could this mean?”—before assuming a negative intent of the other person.
Unfulfilled expectations
- Many of the causes listed previously can be linked to one person not fulfilling the expectations of another. Unfulfilled expectations are often the cause of firings and other forms of relational breakdown. Expectations go unfulfilled because they may be unreasonable, inappropriate, too numerous, or unstated.
- Solution: Use active listening and questioning techniques to set and clarify expectations on a regular basis. Active listening is discussed in detail in Chapter 12.

As these examples illustrate, a leader can take actions that affect whether conflict is dysfunctional or may become productive. It is also clear from the solutions suggested that conflict may result in either higher or lower performance in organizations. The next section discusses whether conflict can be good for an organization.

Critical Thinking Question: How would you resolve a conflict between two of your direct reports who both want an office with a window when there is only one such office available? Identify the sources of the conflict from the list above and evaluate the recommended solutions.

Is Conflict Always Bad?

Organizational behavior (OB) research has recognized that there are some situations where conflict may have a positive effect on performance.⁵ There is a difference between unproductive (dysfunctional) organizational conflict and functional (productive) conflict. Conflict may be productive if it aligns with the goals of the organization and improves performance.⁶ Dysfunctional conflict can harm relationships between leaders and followers and among teammates, and ultimately harms performance.⁷ A useful way to think about the relationship between conflict and performance is shown in Figure 11.2. As shown in the figure, on the left-hand side, if conflict is too low, there may be apathy and a lack of constructive discussion regarding important issues that need to be addressed. People may even be avoiding conflict, which is dysfunctional. As the level of conflict increases, performance increases as long as the conflict is aligned with the goals of the organization and does not become personal.

Figure 11.2 The Relationship Between Conflict and Performance

Source: Adapted from Duarte, M., & Davies, G. (2003). Testing the conflict–performance assumption in business-to-business relationships. Industrial Marketing Management, 32(2), 91–99.

Productive (functional) conflict enhances organizational performance.⁸ In fact, a study of 232 employees in a long-term health care organization found that more frequent mild task conflict resulted in more information being generated.⁹ However, at a point, too much conflict may become unproductive or even dysfunctional, particularly if it brings affective conflict in which individuals become frustrated or angry. Performance may begin to suffer as the level of conflict becomes too much and begins to disrupt the work process. For example, people may become so involved with the conflict that they spend time complaining to one another rather than on work that needs to be performed. Thus, it is important to keep in mind that how conflict is managed by the leader plays a pivotal role in channeling conflict toward the organization’s goals and ensuring that unproductive conflict is resolved before it harms performance. This approach focuses on task conflict, but this is only one form of conflict—relationship conflict exists in organizations as well, and research has shown that they may affect performance differently.

Task Versus Relationship Conflict

Conflict may focus on task-related issues or around relationship issues.¹⁰^,11 Disagreements about resource allocation, policies, or even interpretation of data are known as task conflict. A meta-analysis of the relationships of task and relationship conflict with team performance and satisfaction found strong negative associations between relationship conflict, team performance, and team member satisfaction.¹⁷ This study also found strong negative correlations between task conflict, team performance, and team member satisfaction. The number of people in a team that experience task conflict may make a difference. Task conflict may be positively related to team performance when a majority of members perceive lower levels of task conflict in the group while a minority perceives higher levels of task conflict.¹⁸ Relationship conflict involves personality clashes or differences in values.¹⁹ Relationship conflict may be particularly detrimental to new employees since they are unable to get needed information from their coworkers.²⁰

Best Practices

Planned Conflict: The Devil Made Me Do It!

Kodak managers missed many opportunities in digital photography, a technology its employees invented. Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, said management’s reaction was “that’s cute—but don’t tell anyone about it” (reported in the New York Times on May 2, 2008). Kodak management had the technological breakthrough, but its senior managers were not able to assess its potential. Senior managers did not question their commitment to the production and marketing of film and did not see the technological disruption that unfolded in later years.¹² As the Kodak case illustrates, sometimes there needs to be planned conflict where differences of opinions are stated regardless of the preferred course of action of the decision makers. Devil’s advocacy is a technique in which one member is assigned to play the role of the devil’s advocate (DA) and critically evaluate the leader’s (or a team’s) decision. The role of the DA is “a procedure which involves the appointment of one or more persons to raise objections to favored alternatives, challenge assumptions underlying them, and possibly point out alternatives.”¹³ This is one of the recommended strategies for preventing groupthink (described in Chapter 10). The devil’s advocate method is the application of critical thinking to decisions to uncover assumptions and provide a reality check. The DA approach improves critical thinking because beliefs and assumptions are challenged to foster a better understanding about the complexity of decisions.¹⁴ Devil’s advocacy leads to higher-quality recommendations and assumptions compared to consensus decision making.¹⁵ Appropriate application of the devil’s advocate method may increase the creativity of decisions and avoid errors. The steps for the devil’s advocacy approach are as follows:

Propose a course of action.
Assign a devil’s advocate to critique the proposal.
Present the critique to the decision maker(s).
Gather additional information if the critique reveals it is needed.
Make a decision to adopt, modify, or end the proposed course of action.
Monitor the implementation of the decision.

The final step is an important one. A study found that teams that had a DA achieved higher decision quality than groups under open discussion. However, devil’s advocacy teams also had higher levels of affective conflict. As a result, while they selected the best solution, devil’s advocacy introduced some adverse conditions that hindered the implementation of a decision.¹⁶

Discussion Questions

Explain why assigning a devil’s advocate during a decision-making meeting reduces groupthink.
Give an example of a decision you have been involved in that might have benefited from the assignment of a devil’s advocate using the previously given steps.
Describe the steps that you would take to reduce the potential negative effect of conflict due to a devil’s advocate to protect the implementation of a decision.

Sources: Cosier, R. A., & Schwenk, C. R. (1990). Agreement and thinking alike: Ingredients for improper decisions. Academy of Management Executive, 4(1), 72–73; Davis, J. R. (2013). Improving students’ critical thinking and classroom engagement by playing the devil’s advocate. Academy of Management Learning Education, 11(2), 228–243; Power, D. J., & Mitra, A. (2016). Reducing “bad” strategic business decisions. Drake Management Review, 5(1/2), 15–31; Schweiger, D. M., Sandberg, W. R., & Ragan, J. R. (1987). Group approaches for improving strategic decision making: A comparative analysis of dialectical inquiry, devil’s advocacy, and consensus. Academy of Management Journal, 29(1), 51–71; Waddell, B. D., Roberto, M. A., & Yoon, S. (2013). Uncovering hidden profiles: Advocacy in team decision making. Management Decision, 51(2), 321–340.

Relationship conflict may have some benefits in certain circumstances. Experimental studies found that relationship conflict increased group creativity because it increased persistence.²¹ Relationship conflict was also lower when followers reported that they had tenacity and passion for work. Passion is the willingness to engage in activities with the team that team members love and value (and thus find important), and in which they invest time and efforts together.²² The more that team members identify with the goals of the team, the less relationship conflict they experience.²³ These studies on passion support research that found emotions play an important role in linking task and relationship conflict.²⁴ Group emotional intelligence (EI), good working relationships, and norms for suppressing negative emotions decrease the relationship between task and relationship conflict. In other words, regulating emotions may keep the conflict focused on the task so that it is not perceived as a personal attack on others.

Team leadership may buffer the effects of conflict on the team. A study²⁵ conducted in a large Mexican-based distributor of pharmaceutical products found that task conflict reduces job satisfaction, but this effect is weaker at higher levels of transformational leadership. Leaders should first diagnose the type of conflict (task or relationship) and then provide coaching on how to manage the conflict. When task conflicts emerge, team performance may benefit but only when the conflict is managed constructively by the leader. When relationship conflicts occur, performance and satisfaction may suffer and intervention is necessary. A study²⁶ of head-nurse–nurse relationships in 56 units of two major hospitals found that head nurses who had in-groups and out-groups experienced more relationship conflict in their units. The relationship conflict had a negative effect on customer service. This may be due to out-group members experiencing envy of the in-group. Another study found that relationship conflict exacerbated the effect of envy on team members undermining others on their team, which in turn related to lower job performance.²⁷ So leaders should pay attention to the potential downside of having better relationships with some followers than others. To summarize, in considering the potential for conflict to be productive, active conflict management by the leader to develop a climate of openness and trust is essential or conflict may harm performance.²⁸ In addition, helping followers feel passion and regulating negative emotions also helps focus the conflict on the task and not personal relationships.

Critical Thinking Questions: What can a leader do specifically to keep followers focused on the task? How can a leader develop trust with followers so that conflict management is effective?

As this section has suggested, conflict at work may become personal. It may even escalate to more intense levels such as bullying.²⁹ Workplace bullying is an emergent phenomenon; it refers to “a social interaction through which one individual (seldom more) is attacked by one or more (seldom more than four) individuals almost on a daily basis and for periods of many months, bringing the person into an almost helpless position with potentially high risk of expulsion.”³⁰ The next section discusses workplace aggression and violence, and how leaders should address it.

Workplace Incivility and Aggression

Workplace incivility is “low intensity deviant behavior with ambiguous intent to harm the target, in violation of workplace norms for mutual respect. Uncivil behaviors are characteristically rude and discourteous, displaying a lack of regard for others.”³¹ Workplace incivility may even extend to the classroom. Research has examined student perceptions of incivility of professors. Students’ perceptions of incivility fall into two areas: a professor’s competence and interest as well as respect for the individualism of students.³² Workplace incivility appears to be on the rise (refer to the boxed insert). In some cases, incivility may escalate to aggression or even workplace violence.³³ Workplace aggression is defined as overt physical or nonphysical behavior that harms others at work (e.g., yelling or pushing).³⁴

Workplace aggression can emanate from the culture of the organization and/or the behavior of supervisors. The next sections discuss abusive supervision and toxic organizational cultures as sources of workplace incivility and aggression.

Abusive Supervision

Incidences of harassment and bullying at work are rising. Having a “bad boss” may be a source of stress for employees. Supervisors have a lot of power over followers and control their work experiences to a great extent. Some supervisors engage in hostile behavior known as abusive supervision.³⁵ Supervisors may ridicule, spread rumors, take credit for work done by followers, give the “silent treatment,” and/or withhold information.³⁶ Research has shown that such supervisory abuse is related to psychological distress, anxiety, and emotional exhaustion.³⁷ Research has also shown that abusive supervision may even evoke a “paranoid” reaction from followers that is characterized as hypervigilance, rumination, and sinister attributions about others.³⁸ Employees may be affected even when they are not the target of workplace abuse. For example, one study found that employees who watched their supervisor abuse customers were more likely to have intentions to leave their jobs.³⁹ Poor supervision is a root cause of stress at the workplace.⁴⁰ This occurs for two primary reasons: Abusive supervisors place additional job demands on employees, and they don’t provide support to help employees cope. To address the problem of abusive supervision, organizations are encouraged to set up confidential (or even anonymous) reporting “hotlines” so that supervisory abuse can be reported.⁴¹ Also, training that focuses on appropriate supervisory behaviors may alleviate stress and improve employee well-being.⁴²

Critical Thinking Questions: Have you ever experienced (or observed) a situation of abusive supervision? What did you do about it? If you did nothing, what would you do differently?

Abusive supervision is a serious concern in organizations. But supervisors are not the only sources of stress due to work relationships. A review of the literature on “coworkers behaving badly” found that deviant behavior of coworkers violates organizational norms and may include “aggression, bullying, harassment, incivility and social undermining.”⁴³ The literature on deviant behavior in organizations has documented negative impacts of deviance on attitudes, emotions, and performance. Deviant, dysfunctional, and counterproductive behavior of a coworker affects others in three ways. First, there are direct effects where the employee is the target of a coworker’s deviant act. Second, there are indirect effects, or vicarious impact, in which an employee is affected by learning of another coworker’s deviant behaviors. Third, there can also be ambient impact in which collective deviant behavior creates a hostile working environment. Coworker deviant behavior is considered a workplace demand and creates stress for the target. Being mistreated by one’s coworkers creates emotional strain, which leads to lower morale and turnover.⁴⁴ Ambient effects may build and create what are known as “toxic” workplaces.

“Toxic” Workplaces

Employees lower in the hierarchy of bureaucratic organizations experience more frustration and anger compared to managers. A study found that employees who had jobs at lower levels in an organization’s hierarchy felt more powerless and had less control over their work. They also report more emotional distress, medication use, cardiovascular disturbance, gastrointestinal disturbance, and allergy/respiratory disturbance.⁴⁵ A study of engineers found frustration was associated with anger reactions, latent hostility, job dissatisfaction, and work-related anxiety.⁴⁶ Toxic workplaces may be exacerbated by organizational politics. Political behavior may increase during times of organizational turmoil, and this represents an additional source of stress.

In many situations, it is necessary to engage in organizational politics to survive or advance in the organization. Highly political organizations reward employees who engage in hardball influence tactics, take credit for the work of others, join powerful coalitions, and have connections to high-ranking supporters in the organization.⁴⁷ This may place strain on employees who feel they must engage in these behaviors to succeed. Research has shown significant relationships between perceptions of organizational politics and psychological strain. For example, a study of Israeli employees found job distress was an immediate response to organizational politics. Also, organizational politics resulted in aggressive behavior by employees.⁴⁸ In politicized workplaces, there are less helping behaviors (organizational citizenship behavior) toward individuals and organizations.⁴⁹

Workplace Violence

The U.S. Department of Labor reports that every year, 2 million people in the United States are victims of nonfatal violence at the workplace.⁵⁰ They cite data from the U.S. Department of Justice, which found violence to be a leading cause of fatal injuries at work with about 1,000 workplace homicides per year. This violence occurs in a variety of situations, including robberies and other crimes, actions by dissatisfied clients or customers, and acts perpetrated by disgruntled coworkers or coworkers who have been fired. It is difficult to profile the type of employee who may commit workplace violence, but a combination of personal and workplace factors must be considered. For example, alcohol use or a history of aggression may combine with perceived organizational injustice to evoke a violent response.⁵¹ The term going postal denotes the situation in which organizational members suddenly become extremely violent, derived after several incidents in the U.S. Postal Service in the late 1980s involving workplace homicides. Another incident reported in the media was a Connecticut Lottery Corporation accountant who searched for and then killed the corporation’s president and three of his supervisors before killing himself.⁵² Despite such media accounts of workplace violence, most aggression experienced by employees emanates from unhappy clients or customers.⁵³

Research in Action

Is the Workplace Becoming More Uncivilized? Send in Miss Manners!

Examples of uncivil workplace behavior include making demeaning remarks, ignoring, and hostile looks. Results of public polls suggest that incivility at work is increasing, with four out of five employees viewing disrespect and a lack of courtesy as a serious problem.⁵⁴ Nearly three out of five believe that the problem of workforce incivility is getting worse, and a poll of 800 workers found that 10% witnessed incivility daily and 20% said that they personally were the direct targets of incivility at least once per week.⁵⁵ Another study of 603 nurses found 33% had experienced verbal abuse in the previous 5 days.⁵⁶ The source of incivility can be supervisors, coworkers, or customers.⁵⁷ The rise of incivility may be due to the increasing rates of change; people don’t have the time to be “nice” anymore. Another explanation is generational differences; the “me generation” is focused more on their own concerns and lacks respect for others.⁵⁸ Workplace incivility has been linked to outcomes for individuals and the organization. For example, a study conducted in a large public-sector organization found workplace incivility is related to sexual harassment and that both were detrimental to female employees’ well-being.⁵⁹ When employees experience incivility, they respond in various ways, including losing work time to avoid the uncivil person, decreasing their effort, thinking about quitting, and leaving the job to avoid the instigator.⁶⁰ Workplace incivility predicts burnout, which, in turn, predicts employees’ intentions to quit.⁶¹ In response to this growing concern, organizations are beginning to set zero-tolerance expectations for rude and disrespectful behavior at work.⁶² Others are even implementing training in proper etiquette for managers.⁶³ A research study found that leaders can be proactive in reducing workplace incivility by taking actions such as describing the policies available in the organization for preventing aggression incidents between employees, encouraging employees to keep them updated regarding signs of potential coworker-initiated aggression, and assigning a victim of incivility to work with different coworkers.⁶⁴ Workplace incivility needs to be addressed to reduce the personal and professional impact on employees, and leaders need to take a proactive role to prevent it.

Discussion Questions

Provide an example of an incident that you have experienced that was rude and discourteous, displaying a lack of regard for others. This can be an example you or another person at work or school experienced.
How did the experience of incivility (previously described) make you feel? What did you do about it?
Which source of workplace incivility do you feel is most harmful and why (supervisors, coworkers, or customers)?

Sources: Andersson, L. M., & Pearson, C. M. (1999). Tit-for-tat? The spiraling effect of incivility in the workplace. Academy of Management Review, 24(3), 452–471; Coutu, D. L. (2003, September). In praise of boundaries: A conversation with Miss Manners. Harvard Business Review, 41–45; Graydon, J., Kasta, W., & Khan, P. (1994, November–December). Verbal and physical abuse of nurses. Canadian Journal of Nursing Administration, 70–89; Magley, V. J., Williams, J. H., & Langhout, R. D. (2001). Incivility in the workplace: Incidence and impact. Journal of Occupational Health Psychology, 6, 64–80; Pearson, C., Andersson, L., & Porath, C. (2000, Fall). Assessing and attacking workplace incivility. Organizational Dynamics, 123–137; Schilpzand, P., De Pater, I. E., & Erez, A. (2016). Workplace incivility: A review of the literature and agenda for future research. Journal of Organizational Behavior, 37, S57–S88; Taylor, S. G., Bedeian, A. G., Cole, M. S., & Zhang, Z. (2014). Developing and testing a dynamic model of workplace incivility change. Journal of Management, 43(3), 645–670; Yang, L. Q., & Caughlin, D. E. (2017). Aggression-preventive supervisor behavior: Implications for workplace climate and employee outcomes. Journal of Occupational Health Psychology, 22(1), 1–18.

Research has shown that leaders can reduce the exposure of their followers to workplace aggression and the strain it causes by directly or indirectly helping employees prevent aggression (e.g., stepping in to resolve disputes between employees before they escalate into aggressive incidents).⁶⁵ Therefore, one important way that a leader can avoid escalation of conflict into workplace incivility or aggression is to engage in effective conflict resolution. The following sections discuss different conflict-handling styles. It is important for a leader to recognize their own predisposition toward conflict as a first step to becoming effective at resolving conflicts at work. From the previously given discussion of workplace incivility and aggression and sources of conflict, it is clear that leaders need to take an active role in resolving workplace conflicts before they escalate.

A leader should be able to adapt to situations and adjust their conflict resolution style as needed. However, most people have a dominant style that they use, particularly when they are under stress. It’s important to know what your tendencies are toward avoiding conflict. Complete Self-Assessment 11.1 to learn what your conflict resolution style is so that you are aware of how you approach conflict. Complete the assessment before you read further.

Conflict Resolution Styles

Learning Objective 11.2: Compare and contrast the five conflict resolution styles.

Conflict resolution can be seen as two dimensions in a space that reflect possible outcomes for handling interpersonal conflict.⁶⁶^,67 First, a person involved in a conflict is concerned with the satisfaction of their own concerns in a dispute. Second, the person may or may not also be concerned with the satisfaction of the other party’s concerns. This may be represented by two dimensions, thus combining concern for self and others. This conceptualization was refined,⁶⁸ and a measure of conflict-handling styles called the Rahim Organizational Conflict Inventory (ROCI-II) was developed.⁶⁹ This framework is shown in Figure 11.3, depicting “concern for self” on the horizontal axis from high to low and “concern for others” on the vertical axis from low to high. By combining these two concerns, different approaches toward resolving conflicts result: integrating, obliging, dominating, avoiding, and compromising.

Figure 11.3 Two-Dimensional Model of the Styles of Handling Interpersonal Conflict

Source: Rahim, M. A. (1985). A strategy for managing conflict in complex organizations. Human Relations, 38(1), 81–89. p. 84.

These five conflict-handling styles are:⁷⁰^,71

Integrating. Both parties confront the issue directly and discuss alternative courses of action. The strength of this approach is that it should provide a mutual benefits (win-win) solution and results in the conflict being resolved for the long term. The major drawback to this approach is that it is time consuming. This approach is the most appropriate for complex problems, strategic planning, and innovation.
Obliging. In this approach, Figure 11.3 indicates that a person’s concern for themselves is low but their concern for others is high. A person with a predisposition toward obliging “gives in” to the demands of others and may neglect his or her own concerns. It might be the best approach if the person is not sure they are right about a preferred course of action or it is politically best because the matter is so important to the other party. If used as a strategy, the person should consider requesting a reciprocated exchange in the future because they gave in the first time. It is not the best for complex problems and may result in a short-term solution. If it becomes a pattern, the obliging person may become resentful over time. The weakness of this strategy is that it is temporary, but its strength is that it will resolve the problem rather quickly.
Dominating. In this approach, the individual is high with respect to his or her own concerns but low with respect to the concerns of others. People adopting this approach take a win-lose approach to problem solving, and their focus is on winning their position at the expense of others. The person using this approach may use their formal position to force others to comply (i.e., “do it because I am the boss”). It may be appropriate, however, for small decisions, or when the person knows the decision will be unpopular and discussion will not bring others on board. It may also be used when there is time pressure to make a decision, such as in a crisis situation. The primary strength of this approach is that it is quick and relatively easy. However, this style may breed resentment among those affected by decisions. If this becomes an overall pattern, it may breed even more resentment and attributions of a leader being an autocrat.
Avoiding. In the avoiding style, a person is low on their own concerns and the concerns of others. This approach reflects an inability to deal with conflict, and the person withdraws from the conflict situation. This approach sidesteps the issues, which may be important, but there is no attempt to confront and resolve them. This style might be appropriate for trivial decisions or when the possibility of unproductive conflict is so high that it is better to avoid discussion rather than risk performance. The weakness of this approach is that by pretending conflict does not exist, it rarely goes away; it may be a temporary fix and the conflict will return in the future. If you have a tendency to avoid conflict, be sure to review the checklist for having difficult conversations in Toolkit Activity 11.1 at the end of this chapter.
Compromising. This approach reflects a moderate level of concern for the self and for others. It is a give-and-take approach to conflict in which concessions are made in exchange for getting some aspects of the desired outcome. It is appropriate when parties have strongly opposing views and there is little hope of an integrative solution. It may also be the only possible approach when both parties have equivalent influence in the organization (e.g., two equally powerful vice presidents competing for resources). However, this approach may result in suboptimal or even strange solutions that try to include disparate views. The main strength is that everyone gets something in a compromise; however, it is important to keep in mind that no one is completely satisfied with the outcome. For this reason, it can be unproductive and worse than even the dominating or obliging styles. Also, with compromise, there is not creative problem solving or an attempt to come up with a win-win solution as in the integrating style.

Critical Thinking Questions: Is one style better overall than the others for resolving conflict? Or does it depend on the situation, like situational leadership? If you think it depends, what are the situational factors that should be considered?

While some early research suggested that the integrative style is best, later research suggests that the right conflict resolution style may depend upon the situation.⁷²^,73 It is important to first correctly diagnose the conflict situation before selecting an intervention strategy. Generally, integrating is best for complex and strategic decisions, with compromise as a second option. The other styles may be effective to resolve smaller problems that occur on a day-to-day basis in the organization.⁷⁴ Table 11.1 lists the five conflict-handling styles and when they are appropriate or inappropriate.

Source: Rahim, M. A. (2002). Toward a theory of managing organizational conflict. International Journal of Conflict Resolution, 13(3), 206–235.

This chapter has focused on interpersonal conflict to this point—conflict between two parties and strategies for conflict resolution. Conflict may also occur in teams; this situation may be among the most challenging for a leader to work through. Consider student teams that you have worked on during your undergraduate or graduate experience. Did they all run smoothly and free of conflict? If they did, you may consider yourself to be very lucky. Most students report that they have experienced dysfunctional and unproductive conflict that caused stress and perhaps even resulted in getting lower grades on team projects. Leaders in organizations have similar challenges with team conflict. Fortunately, the study of conflict at the team level has emerged as an important area of OB research that offers guidance for reducing team conflict.

Team Conflict and Performance

Learning Objective 11.3: Explain how team conflict affects team performance.

Conflict within teams produces stress and arguments that distract the team from working on the task and thus harms performance.⁷⁵ All types of conflict (task, relationship, and process) are detrimental to member satisfaction.⁷⁶^,77 However, moderate levels of task conflict actually improve team performance because this stimulates information exchange among team members. Task conflict and differences of opinion may improve decision quality by forcing members to see other viewpoints and think creatively.⁷⁸^,79,80 Effective teamwork results in higher performance when task conflict exists, and this is especially the case when team members trust one another.⁸¹ Another study of 57 self-managed work teams (SMWTs; discussed in Chapter 10) found teams that improve or maintain top performance over time engage in three conflict resolution strategies:

They focus on the content of interactions rather than delivery style.
They explicitly discuss reasons behind any decisions in distributing work assignments.
They assign work to members who have the relevant task expertise rather than assigning by other common means such as volunteering, default, or convenience.⁸²

Both task and relationship conflict can occur at the same time in teams.⁸³^,84 Relationship conflict, as a hindrance, should always be avoided as a way to promote positive emergent team states. To do so, managers can provide communication training and engage in conflict resolution. At the same time, leaders should encourage their team to generate and express divergent opinions about what to do and about how to do it, ensuring a trustful environment without fear of negative consequences. In fact, leaders may want to encourage task conflict in teams where cohesion and team engagement have already been established.⁸⁵ In conflict situations, leaders can try to get team members to see both sides of an issue. Doing so increases creativity and job performance.⁸⁶ Leaders of high-performing teams are proactive in anticipating the need to resolve their conflicts and search for strategies that apply to all team members. Thus, the relationship between conflict and performance may depend upon how the team resolves conflict.

A meta-analysis found that the conflict to performance relationship in teams is more complex than previously assumed.⁸⁷ Task conflict and performance are more positively related when the association between task and relationship conflict is relatively weak. Also, the relationship of conflict to performance is stronger for top management teams rather than non-top management teams. Finally, when performance is measured by financial performance or decision quality rather than overall performance, there was a stronger effect of team conflict on performance. This meta-analysis provides support for the inverted-U relationship (refer back to Figure 11.2) at the team level.

The relationship of team conflict to performance appears to hold in other cultures. A test of the inverted-U relationship was conducted in two separate studies of work teams in Taiwan and Indonesia.⁸⁸ This study found the relationship between task conflict and team effectiveness outcomes varies as a function of the level of relationship conflict in the team. For team performance, the curvilinear relationship (inverted U) holds when relationship conflict is low but that task conflict is negatively related to performance when relationship conflict is high, as shown in Figure 11.4. The authors concluded the following: “Team members who have high relationship conflict and interpersonal tensions are more likely to bicker so intensely that the slightest task conflict is associated with performance declines.”⁸⁹ Therefore, both task and relationship conflict matter in terms of understanding the impact of conflict on team performance. This study was conducted in Taiwan and Indonesia, and additional research has been conducted that examines conflict resolution across cultures.

Figure 11.4 The Interaction of Task Conflict and Relationship Conflict in Predicting Team Performance

Source: Shaw, J. D., Zhu, J., Duffy, M. K., Scott, K. L., Shih, H. A., & Susanto, E. (2011). A contingency model of conflict and team effectiveness. Journal of Applied Psychology, 96(2), 391–400. p. 397.

Critical Thinking Questions: How would you address one essential team member who continually interrupts others, creating conflict within the team, which harms the team’s productivity? Would your approach be different if this team member were from another culture (Taiwan, for example)?

Resolving Conflict Across Cultures

Learning Objective 11.4: Provide an example of how managing conflict differs across cultures.

Addressing conflict when working with a person from another culture requires knowledge of cultural differences (you will learn more about national culture values in Chapter 12). Research has shown that conflict resolution styles may differ by culture.⁹⁰ One study examined conflict resolution styles of MBA students from highly ranked programs in the United States, China, the Philippines, and India.⁹¹ The study found that Chinese students are more likely to report an avoiding style, whereas the U.S. students were more likely to report a competing style. This is explained by the Chinese being more likely to value harmony over discord. In contrast, managers in the United States are more competitive and individualistic. Similar findings have been reported for U.S. students compared with Mexican students.⁹²

Well-managed conflict contributes significantly to successful leadership in China.⁹³ Given China’s emergence as a world market leader, they place an emphasis on openness and collaboration, which is consistent with their cultural values for group harmony. Another study compared conflict resolution styles for North American, Arab, and Russian negotiators.⁹⁴ This research found that North Americans tended to rely more on facts and logic. Arabs, in contrast, used emotional appeals to persuade others and made concessions during the bargaining process. Russians made few concessions and based their persuasion on ideal principles. Research conducted on 409 expatriates suggests the following guidelines for resolving cross-cultural conflict (ranked in order of importance):⁹⁵

Be a good listener.
Be sensitive to the needs of others.
Be cooperative rather than overly competitive (tied with the #2 skill).
Advocate inclusive (participative) leadership.
Compromise rather than dominate.
Build rapport through conversations.
Be compassionate and understanding.
Avoid conflict by emphasizing harmony.
Nurture others (develop and mentor).

Critical Thinking Question: How would you address conflict due to cultural differences in a team you lead that has members who are from China, Venezuela, and the United States?

The key takeaway from the research on cross-cultural conflict resolution is that the leader needs to consider the impact that national culture values may have on a person’s perception of conflict and how to resolve it.

Despite attempts by leaders to facilitate conflict resolution, at times, conflict can continue for a long period of time and become complicated. There are situations where a third party must be called in to help resolve the conflict. This is sometimes done to avoid costly litigation. There are a number of options for resolving conflict using a third party. The next section discusses these options.

Third-Party Interventions

Learning Objective 11.5: Identify how third-party interventions can reduce conflict.

Facilitation is when a leader intervenes to resolve a conflict. Leaders essentially play the role of an impartial mediator (discussed below) and engage in the following behaviors: taking the time to understand the employees’ point of view, recognizing the employees’ needs, taking the time to gain information on the conflict’s context, giving employees a chance to express their emotions, showing understanding of what employees are going through, getting employees to understand other perspectives, encouraging the parties to propose solutions, getting employees to agree on concrete actions, does not take sides, and remains unbiased.⁹⁶ Before engaging in facilitation, leaders should ask the following questions when they are attempting to resolve a conflict:⁹⁷

Is intervention necessary or appropriate?
If so, what type of intervention is most appropriate?
Is the leader the appropriate person to intervene?
If not, should the services of an independent resource person be provided? If so, how might the leader make use of the resource person?

If the answer to the third question above is no, then the leader needs to consider other options to resolve the conflict by bringing in an independent resource person. These options are known as alternative dispute resolution, which are methods to resolve conflict that both parties agree to without involving litigation. There are a variety of techniques available, which range from the leader bringing in a third party to restore damaged relationships to legally binding arbitration.⁹⁸ The most commonly used alternative dispute resolution approaches used by organizations follow. For example, your university may have an ombudsperson, who works for the university but hears grievances from students on an informal basis and attempts to resolve them. Your university may also have an honor code council, which is an example of a peer review process (or dispute resolution panel) for resolving cases of alleged cheating by students. In organizations, a leader may call in a neutral third party (e.g., another manager) to attempt to resolve the conflict (known as conciliation). Private-sector organizations including General Electric, Prudential, Johnson & Johnson, and Alcoa have in-house mediators, arbitrators, ombudspersons, and other conflict resolution specialists. Large federal agencies such as the U.S. Postal Service, the Department of the Interior, and the Departments of the Navy and Air Force have trained many of their own employees to become conflict resolution specialists.⁹⁹

Sometimes, the conflict can become so complex that a more formalized dispute resolution method is needed. Conflicts sometimes escalate to legal action; however, mediation is a less adversarial and more personal process.¹⁰⁰ Mediation is when a third-party neutral person is called in to resolve the conflict. Mediation is the most common form of alternative dispute resolution because the fairness of the process results in people being satisfied with the outcome.¹⁰¹ Mediation often results in an outcome that satisfies both parties. A study of 449 cases handled by four major alternative dispute resolution service providers in the United States that proceeded to mediation revealed that 78% were settled whether or not the parties had voluntarily participated in the process.¹⁰² Mediation can result in improved workplace relationships, increased performance, improved morale, and less occupational stress.¹⁰³ Mediators are formally trained to perform this role; typically, they are outside of the organization in which the conflict has occurred. The mediator does not make a decision; their role is to help the parties reach an acceptable solution. In general, the steps in mediation are as follows:

Participation—participants are actively involved in the decision-making process. By participating, it may be found that simple misunderstandings are at the heart of a dispute.
Representation/reparation—parties are allowed to express their perspective and how they feel about what has occurred. One of the most powerful forms of reparation is an apology (research on apologies at work has found them to be effective in certain circumstances).
Validation/reintegration—parties work to solve a dispute in a cooperative and respectful way. For example, in restorative justice, balance is achieved through forgiveness as the parties are reintegrated back into the original “community” (the team or organization they work for).¹⁰⁴

In arbitration, both parties agree in advance to accept the decision, and it is made by a neutral third party. The decision of the arbitrator is legally binding on the parties. Mediation and arbitration are the most expensive, and thus, many organizations have ombudspersons or peer review available if the leader cannot resolve the conflict through facilitation or conciliation.

Critical Thinking Question: In the United States, employers have a legal right to require mandatory arbitration if their employees have a grievance. Do you agree or disagree? Explain your position.

The process of alternative dispute resolution often involves negotiating a settlement that both parties will agree to. One of the most common conflict-laden situations a leader encounters involves negotiation. Negotiation is one of the key applications of conflict resolution techniques learned in this chapter. Conflict resolution styles, for example, may influence how a leader enters into a bargaining situation. For example, if a leader has a dominating style, they are only concerned about their own outcomes. With this style, it may be impossible to develop a win-win bargaining solution. In contrast, a negotiator with an integrating style may be able to claim value for themselves but also address the interests of their negotiating partner. The negotiation process is described in the following sections.

Negotiation

Learning Objective 11.6: Describe the negotiation process, and explain the difference between integrative and distributive bargaining.

The steps involved in an ideal negotiation situation are shown in Figure 11.5. As shown in the figure, preparation for the negotiation is the first step. A leader needs to do their homework so they have all of the facts and possible options researched prior to negotiation. During the preparation, it is essential to gather good information, assess the bargaining position, and be creative about developing options.¹⁰⁵ Next, the process of building the relationship follows. Not all negotiations start out discussing business. Often, there is an exchange of personal greetings prior to the actual bargaining process. Also, developing rapport with the bargaining partner reduces the chances that they will get angry during the negotiation.¹⁰⁶ Building the relationship is an area to pay particular attention to in cross-cultural negotiations. For example, negotiators from the Middle East may be more relationship-oriented.¹⁰⁷ Negotiators in Costa Rica were found to be more likely to build the relationship through the expression of emotions.¹⁰⁸ Another study¹⁰⁹ compared negotiators in the United States, China, and Qatar. In the United States, negotiators based their negotiation behavior on dignity, which is deriving self-worth based on the individual achievements in pursuit of individual goals and values. In China, negotiators were influenced by face, in which self-worth is based on others’ assessments of whether the individual is fulfilling stable social role obligations. In Qatar, negotiation was found to be based on honor, where self-worth is based on an individual’s reputation and also the assessment of what others think of a person. These cultural orientations influence how negotiators approach a bargaining situation. The Chinese and Qatari negotiators were more competitive than the U.S. negotiators. This study demonstrates the nuances of cross-cultural negotiation. Some cultures build relationships; however, they may still be competitive. It’s important to study the culture in detail prior to a cross-cultural negotiation.

Figure 11.5 Steps in the Negotiation Process

Source: Thompson, L. (2012). The mind and the heart of the negotiator (5th ed.). Upper Saddle River, NJ: Prentice Hall.

Next, the process of gathering and using information follows. For example, in a real estate negotiation, the seller’s agent often has conducted a market analysis of the value of the property so that the buyer gets the property at a fair price. This information is shared with the seller, particularly if the price the seller wants is significantly above the market. Also, research has shown that the process of asking questions and answering them builds trust during the negotiation.¹¹⁰ The next step is the bidding process—offers and counteroffers are extended until a mutually agreeable solution is attained. However, this doesn’t always go smoothly since emotions can become heightened during the bidding process. It’s important to keep your emotions in check. Research has shown that displays of anger result in more impasses and less attractive outcomes during negotiations. Anger erodes trust and liking in the relationship. This is especially true if the anger is faked, known as the blowback effect.¹¹¹ Also, displays of anger create stress, and experimental research has shown that when negotiators experienced anxiety, they ended up with deals that were 12% less attractive than those who remained calm.¹¹² Finally, the implementation of the decision involves the execution of the contract. In a purchasing situation, this would be the transfer of money and goods and/or services. In some cases, implementation of an agreement involves a contingency contract. These contracts bridge concerns about future events that are brought up during the negotiation, and they become part of the agreement.¹¹³ For example, an entrepreneur may sell an invention to venture capitalists, but their concerns about letting go of the future potential benefits could be addressed by including a contingency that they will receive 1% of all future revenues from the sales of the product.

There are two general types of negotiation—distributive and integrative—and these are discussed next. Generally, distributive bargaining is hardball, whereas integrative bargaining takes a softer approach to the deal. A meta-analysis of 34 studies analyzed the impact of hard and soft bargaining strategies on economic and emotional negotiation in distributive negotiations.¹¹⁴ Hard bargaining led to higher economic outcomes, but soft bargaining led to higher emotional outcomes such as satisfaction and relationship development. Your approach to negotiation on these dimensions may determine how successful you are at getting the best deal. However, it is important to keep in mind what your goals are: getting the best deal, preserving the quality of the relationship, or both.

Distributive Bargaining

The distinction to remember about distributive bargaining is that the negotiator approaches the process as a zero-sum game. In other words, one person gains at the expense of the other. The negotiator views the possible outcome as a fixed pie, meaning that there is a limited amount of goods to be divided up, and the goal is to get the largest share. Each negotiator has a goal, or target point, of what they want to get from the bargaining process. They may also have a best alternative to a negotiated agreement (BATNA) if they have prepared properly. This concept was put forth in the best-selling book Getting to Yes: How to Get What You Want Without Giving In.¹¹⁵ The BATNA is an alternative that negotiators will accept if the negotiation reaches an impasse and they can’t get their ideal outcome. If neither the preferred alternative nor the BATNA is accepted, then there is no deal. The strategies the negotiator uses in distributive bargaining involve making the first offer to anchor the bargaining process, since people focus on the first information they see (recall the primacy effect discussed in Chapter 5).¹¹⁶ Decades of research on negotiation has supported the first-offer effect, in which counteroffers and final offers correlate strongly with the first offer, making first offers among the best predictors of final prices. In other words, final prices often end up higher when sellers versus buyers go first in negotiations. On the other hand, prices are lower when the buyer makes the first offer. Follow these guidelines in making the first offer:

Be confident in your speech and demeanor. Phrase your offer as a statement, not a question. Avoid terms like “somewhere around.” Resist the temptation to immediately revise the number.
Be precise—but not too precise. For example, if you are buying a used car, an offer such as $10,425 might work. It sounds like you’ve done your homework about the value of the car. However, $10,425.52 probably won’t work. The seller may become suspicious because the offer looks fake.
Avoid ranges. For example, if you say $10,000 to $12,000, the other side won’t even hear the numbers; they’ll just pick the part of the range they like.¹¹⁷ If you do use a range, be sure that the endpoint of the range is your target.
Be aggressive but realistic. A first offer that is too extreme can have a “chilling effect.” This may make the bargaining partner angry and they walk away.¹¹⁸

Another tactic that research has shown to be effective is to use a deadline to put pressure on the person you are bargaining with to make a decision faster.¹¹⁹ For example, an employer may make a job offer and request that the applicant respond within 1 week (known as an “exploding offer”). Research has shown that most negotiators begin the process with the fixed-pie bias—they assume it is a zero-sum game. However, experimental research has demonstrated that it is possible to change the mental model of the fixed pie to one that reflects win-win.¹²⁰ This is known as integrative bargaining.

Integrative Bargaining

Integrative bargaining differs from distributive bargaining in one significant way: The parties do not see the process as a zero-sum game, and they believe that an agreement can be reached that satisfies all concerns.¹²¹ Thus, they view the possible outcome space as an expanding pie in which a win-win solution can be reached. In general, integrative bargaining is preferable, particularly when the parties value having a long-term relationship. No one walks away from the negotiation as a loser, so there are no hard feelings. Negotiators are more likely to want to bargain with one another again after an integrative bargain is reached—even the losing party.¹²² For integrative bargaining to work, individuals need to be willing to share information (this is more difficult to achieve than it may seem because people tend to want to hide information on their goals and acceptable outcomes during negotiation). Another successful tactic is to put more issues out for discussion during a negotiation.¹²³ This is known as “sweetening the deal” with added incentives and different features. For example, when negotiating for a new car, dealers will often throw in extras such as an upgraded stereo system or sunroof to get the buyer focused on features other than the price of the car. To be effective in integrative bargaining, negotiators also need to get past the fixed position of one another and discuss what their real interests are.¹²⁴ This gets to what people really value since money has symbolic meaning in some cases (recall the discussion of the meaning of money from Chapter 9). For example, a person who is presenting their product on Shark Tank, a popular TV show where entrepreneurs pitch their products and services to investors, might really want to maintain control over their invention rather than make more money. Thus, they might accept an offer of less money but more control over their business in the long run. By focusing on interests, the investor might get a higher percentage of the profit by letting the inventor control their business. Finally, integrative bargaining requires creativity and the ability to think of novel solutions that can address the concerns of both parties.¹²⁵

A review of research on negotiation found that the principles put forth in Fisher and Ury’s Getting to Yes have generally been supported by research evidence.¹²⁶ This book is recommended reading for all leaders. Interest-based negotiation as presented in this book is based on four pillars:

Focus on interests and not on positions;
Imagine a wide range of solutions before making a decision. Explore solutions providing a mutual benefit;
Resolve disputes and choose solutions based on objective criteria to which everyone agrees; and
Distinctly address people issues and substantive issues.

Try to practice putting these principles into action by completing Toolkit Activity 11.2. This is an opportunity to practice win-win negotiating skills to negotiate a better employment package while creating a good working relationship with your future boss.

Union-Management Negotiations

Labor relations refer to activities that labor unions and managers engage in to resolve conflicts between employers and employees represented by a union that they have elected.¹²⁷ Historically, unions were created to counter the power of employers by giving employees more voice. Unionization occurs when employees are dissatisfied with wages, job security, and supervision.¹²⁸ Given that employees’ motivation to unionize is to right what they view as wrongs, it isn’t surprising that labor management negotiations are often adversarial. In the past, when negotiations took place between unions and management, distributive (win-lose) bargaining was often employed by both sides. Unions would stage strikes or walk-outs. Management would engage in strategic actions to lower a firm’s perceived ability to meet wages or other demands. For example, they might hold less cash, cut dividends, and use other methods to present a negative picture to get a better negotiated agreement. Such managers are reluctant to share information on their organizations’ financial health with labor so as to preserve bargaining power.¹²⁹

During the 1990s, there was a decrease in the number of labor disputes. This was due to the economy, in part, and the rate of organizational change. Many organizations began implementing practices that improved job satisfaction. Scholars have noted a shift in the adversarial role of management toward unions to a more cooperative process that employs integrative bargaining, employing interest-based negotiation.¹³⁰ When top management teams realize they are facing a union movement capable of resistance, they adopt a strategy of cooperation rather than restriction of their bargaining options.¹³¹ Being emotionally intelligent has been linked to successful negotiation and dispute resolution.¹³²^,133 Leaders in a unionized environment are advised to show emotional intelligence, work with their unions, and show empathy for their workers rather than taking an adversarial role that may end up with costly work stoppages and bad press.

Successful integrative negotiation in all contexts requires a leader to be able to see things the way the other party sees them. Empathy is part of being emotionally intelligent (discussed in Chapter 3). Research has indicated that some individuals have a greater ability to engage in seeing another person’s point of view than others. The concluding section discusses perspective taking and how it plays a key role in conflict resolution and negotiation.

Leadership Implications: Perspective Taking

Being emotionally intelligent is critical for resolving conflict and effective negotiation. To do this, a leader needs to be able to see the situation from the other party’s point of view. This is called perspective taking, which is defined as a cognitive process in which an individual adopts another person’s views to better understand their preferences, values, and needs.¹³⁴ In other words, it is the ability to see things from another person’s perspective, even if it conflicts with their own. In a classic study, researchers found that when people were asked to give directions to a landmark in New York City, they changed the way they described how to get to the landmark depending on whether the person asking was from the city. For those that lived in the city, people gave less specific instructions because they assumed people would know basic aspects of navigating the city, like how to get uptown versus downtown.¹³⁵ For those who were not from the city, they provided more specific instructions and described buildings on the way to the landmark. These researchers also examined whether perspective taking was a single ability or a task that involves multiple different skill sets. They concluded that perspective taking is complex and involves a number of different abilities. People have to diagnose what information someone else has access to (or what information they are likely to have in the future) and then use that information to inform their decisions. Perspective taking requires good memory and imagination. And the skills needed may vary due to the situation and the task being performed. One review of perspective taking concluded: “The ability to intuit another person’s thoughts, feelings, and inner mental states is surely among the most impressive of human mental faculties.”¹³⁶ Perspective taking is a useful skill for a leader to develop, and it is also useful for those in sales positions because they can see their product the way that a customer sees it. It is also important for effective conflict resolution and negotiation.

There are two reasons why perspective taking helps resolve conflict.¹³⁷ First, when people engage in perspective taking, they are more likely to create a social bond with the other person.¹³⁸ Second, perspective taking creates positive attributions about another person’s behavior, such as recognizing the effects of external circumstances on what they do. For example, if a person gets into an argument with another person, perspective taking helps the person resolving the conflict by providing insight into why they care so much about an issue that they will fight about it. Perspective taking enhances the ability to repair emotions and enables a person to forgive and problem solve during a conflict situation.¹³⁹ This results in a more integrating conflict resolution style as well as less use of the dominating style. Perspective taking has a number of other benefits. For example, it increases the relationship between intrinsic motivation and creativity, particularly for employees with prosocial motivation.¹⁴⁰ Entrepreneurs who are able to take the perspectives of customers are more likely to identify business opportunities.¹⁴¹ Another study of 397 employees in 25 work teams found that perspective taking was related to knowledge sharing and better customer service climates.¹⁴²

A negotiator that is able to take the perspective of the person they are bargaining with has an advantage. Research has demonstrated that perspective taking is related to effective integrative negotiation.¹⁴³ This is because taking the perspective of another person reduces the errors in misrepresenting their true interests. Another set of experiments¹⁴⁴ found that perspective taking increased individuals’ ability to discover hidden agendas and to both create and claim resources at the bargaining table. However, empathy did not prove nearly as advantageous and at times was detrimental to discovering a possible deal and achieving individual profit. The authors conclude that it pays to get inside the head of your opponent in a negotiation situation. There is some evidence that leaders can create the right conditions for their followers to engage in perspective taking. For example, a research study found that when leaders are humble, followers are more likely to engage in perspective taking.¹⁴⁵ Team members who take the perspectives of their teammates are more likely to emerge as informal leaders.¹⁴⁶

In this chapter, essential research evidence on identifying and resolving conflict has been reviewed. The sources of workplace conflict have been identified and solutions recommended. Five conflict resolution styles are described with an emphasis on the leader being able to adapt the style used to the situation. In general, the integrating style is best for complex problems. The role of conflict at the team level has been discussed, noting the importance of identifying task and relationship conflict so that a leader can manage the conflict appropriately. Sometimes, conflict escalates to workplace incivility and even aggression. This chapter also covers conflict resolution in the context of negotiations and compares distributive bargaining with integrative bargaining. The chapter ends with the leadership implication of perspective taking where you see things from another person’s point of view. Research has demonstrated that perspective taking is essential for both conflict resolution and negotiation.

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Key Terms

abusive supervision, 282
affective conflict, 277
alternative dispute resolution, 291
ambient impact, 283
arbitration, 292
best alternative to a negotiated agreement (BATNA), 293
conciliation, 291
conflict, 276
contingency contract, 293
deviant behavior, 283
direct effects, 283
expanding pie, 294
facilitation, 290
fixed pie, 293
indirect effects, 283
integrative bargaining, 294
labor relations, 295
mediation, 291
negotiation, 292
ombudsperson, 291
peer review, 291
perspective taking, 295
process conflict, 277
relationship conflict, 280
substantive conflict, 277
task conflict, 280
“toxic” workplaces, 283
workplace aggression, 282
workplace bullying, 282
workplace incivility, 282

TOOLKIT ACTIVITY 11.1: Checklist for Difficult Conversations

Before you jump into a difficult conversation, spend some private time to identify the difficulty and acknowledge different points of view.

How do you see the situation?
What assumptions are you making? What stories are you telling yourself?
How might the other person perceive the same situation?
What emotions are this problem stirring up for you?
What is the impact of this situation on you, and what hypothesis do you have about the other person’s intention?

Be certain this is a conversation that is worth having.

What is your purpose in addressing this issue or having this conversation?
What will likely happen if you ignore this problem? How will you feel?
How is this problem affecting the productivity and morale of your unit?

Invite the other person to talk with you. Emphasize your interest in working well together and hearing their point of view. A couple of sentences you might consider using are as follows: “I would like to understand where you are coming from on …” or “Can you say a little more about how you see things regarding …?”

Start the conversation by “seeking first to understand.” Ask the other person an open-ended question that will get him or her to describe how he or she sees the situation. Do your very best listening. Listen with empathy. Acknowledge the other person’s feelings and point of view. Paraphrase to see if you got it right.

Share your own point of view, your intentions, and your feelings. Use I statements. Describe how you believe you got to where you are, including how you contributed to the problem. Take responsibility for your part.

Talk about the future and what can happen differently so you don’t end up in the same place. Offer what you plan to do differently. Ask the person what suggestions they have to resolve the situation. Suggest what you think the other person could do.

Thank the other person for talking with you. Offer why it was important to resolve this conflict.

Discussion Questions

Recall a situation in which you needed to have a difficult conversation with another person and you avoided having it (this can also be a current situation). Why did you do so? What emotions were you feeling about the situation?
Imagine that you will have a conversation with the person about your concerns. Complete one of these sentences to begin the conversation: “I would like to understand where you are coming from on …” or “Can you say a little more about how you see things regarding …?”
Next, write an open-ended question to follow up so that you would have listened and been able to empathize with the other person. If this is a current situation, consider having the conversation. What happened?

Source: Stone, D., Patton, B., & Heen, S. (1999). Difficult conversations: How to discuss what matters most. New York, NY: Penguin.

TOOLKIT ACTIVITY 11.2: Salary Negotiation

For this role-play exercise, you will find another classmate to negotiate with. Choose one of the roles (but don’t look at the role of your negotiating partner, and don’t show him or her the role you have been assigned).

Role of Pat (Boss)

You are the brand manager of a division of an organization that makes a variety of household products. You are in charge of a major brand of laundry detergent located in a downtown area in the Midwest. You have been having some trouble finding the right candidate for your open position in marketing research. While the job has been advertised, you have been taking on this responsibility in addition to your own job duties, so you are motivated to fill the position.

You are seriously considering the application of Terry, who is about to graduate with an MBA from a good school in Florida. You were impressed with Terry’s assertiveness in pursuing the opportunity, and the interviews went well. Terry lacks specific marketing research experience, but he has a great personality that you feel will be a good fit with others in your division. You are concerned that Terry may not want to relocate from great weather in South Florida to dreary winter weather in the Midwest, but you are ready to make the job offer.

Your company does not pay high salaries but has a generous bonus plan that could be up to 10% of the base salary. Typically, someone with Terry’s lack of experience would start between $80,000 and $85,000, and you are prepared to make an offer in this range. You have been working for the company for 3 years, and you make $115,000. You may also offer relocation expenses up to $5,000.

You have an alternative candidate who did not interview as well but has an MBA from Wharton and has done an internship in marketing research at a competitor. This applicant is asking for $105,000 to start, and you don’t like his attitude about insisting on this salary level. You wonder if his personality will be a good fit with your team.

You need to meet with Terry and make a decision whether to make the offer and the terms.

Role of Terry (Applicant)

You are graduating from a good business school in South Florida with an MBA in management in late May. You took a variety of management electives (leadership and teams) and enjoyed them, but you also enjoyed your introduction to a marketing course where you did a marketing research project on preferences for soft drinks. Your fiancée lives in the Midwest and does not want to relocate too far from where the family lives. You have found what you think is a perfect job in marketing research as an entry-level position with great management potential for the future. The job is in a large metropolitan area that is listed in the top 10 in terms of quality of life due to major sports, a lively music scene, and fabulous restaurants. Based on your experience leading teams, you know this is the right job to really show your managerial skills.

You had two interviews that went well, and you liked Pat, who would be your boss. You feel that you would enjoy working with Pat and the division team members (some of whom you met during the interviews). You are sure that you made a positive impression on Pat although you lack specific experience in marketing research. You are good at statistics and feel that you can apply them in a marketing research position. You are expecting an offer from Pat in your next meeting, but you feel that you will have to negotiate for a good package.

You have done research at the career center at your school, and you know that this company has rather strict salary ranges for entry-level positions. You learned that starting salaries for management majors start at $80,000, but the average salaries for recent MBA graduates is around $100,000. You also learned that the company is doing well financially, and they can afford to pay well. You think you are above average in your leadership potential, and your friends are telling you not to accept an offer less than $100,000.

You have gotten a quote from a moving company from South Florida to the midwestern city where the company is located, and moving your furniture and car would cost around $9,000. You are hoping that the company can pay you in advance for the moving expenses.

You have another job offer with a small consulting firm in the Midwest. The offer is good at $100,000, including the bonus and stock options. You are certain that the potential for upward mobility would not be as good as it would be with a larger consumer products company. Also, the location is not as desirable as the consumer products company because it is a small city with limited quality of life opportunities.

Discussion Questions

Names (Roles): _____________________________________________________ (Pat: Boss)

__________________________________________________________________ (Terry: Candidate)

Did you reach an agreement? ____ Yes ____ No
If not, why not? ___________________________________________________________________________________________________________________________________________________
If so, what was the final agreement?

Salary ____________________________________________________________________________

Benefits ____________________________________________________________________________

Other terms _______________________________________________________________________

How satisfied are you with the agreement you made? (Each person rates on a scale of 1 to 10, with 1 being extremely dissatisfied and 10 being extremely satisfied).

Did you reach an integrative (win-win) agreement? Explain.

TOOLKIT ACTIVITY 11.3: Negotiation Style Assessment

Negotiating Partner’s Name: ________________________________________________________

Your Name: _____________________________________________________________________

Instructions: Please rate your negotiating partner on the following aspects of performance in the negotiation you just completed. Do not be overly harsh or overly lenient.

Total: Add the responses for questions 1 through 6: ______ (scores range from 6 to 30). In general, a low score for integrative (win-win) bargaining style is between 6 and 19, and a high score for integrative bargaining style is above 19.

Discussion Questions

Compare your ratings of one another. Was one person a more effective negotiator? Why?
Were you able to engage in perspective taking during the negotiation exercise? In other words, did you see things from one another’s point of view (review your answers to question 2 above)?
What role did trust play in the negotiation? Did you trust one another (review your answers to question 4 above). Do you think that you will be able to work together effectively as boss and follower in the future? Why or why not?

CASE STUDY 11.1: Perspective Taking: Captain Owen Honors

Naval captain Owen Honors was fired for the production of video skits with offensive content using navy equipment starring his crew members during 2006 and 2007. The following case study illustrates how different parties can view the same events differently, leading to conflict.

On January 1, 2011, Norfolk’s newspaper the Virginian-Pilot greeted the new year with a story of videos produced, written, and featuring naval captain Owen Honors, at the time commander of the USS Enterprise. Four days later, Captain Honors, 49, had been relieved of his command and essentially put on desk duty pending further investigation. The cited reason was this: “profound lack of good judgment and professionalism.”

The Virginian-Pilot article reported that anonymous men and women who served on the ship at the time the videos were created and aired complained immediately to no avail. In fact, Captain Honors stated this in the introduction of his “last video”: “Over the years I’ve gotten several complaints about inappropriate material during these videos, never to me personally but, gutlessly, through other channels.” He then suggests the following: “This evening, all of you bleeding hearts … why don’t just go ahead and hug yourself for the next 20 minutes or so, because there’s a really good chance you’re gonna be offended.”

Although it appears that Captain Honors’s supervisors learned of the videos at the time, Captain Honors was not reprimanded—other than told to cease production of them—and was ultimately promoted to commander of the USS Enterprise in May of 2010. It is important to note that it is not public knowledge as to who knew about the videos prior to the Virginian-Pilot article.

As a result of the videos surfacing, the navy stripped Captain Honors of command of the USS Enterprise. However, the “firing” of Captain Owen Honors has not quieted the public debate over the videos or the naval response.

To do nothing is to condone. By not acting at the time, the navy essentially condoned the videos and Captain Honors’s making of them. Perhaps the current navy leadership’s response is one impacted by public relations; perhaps the existence of the videos had been the secret of a select few who protected Captain Honors from being penalized in the past. Whatever the impetus for the action taken, at this point the navy has made a public decision not to condone the videos or the behavior.

The public debate, however, exemplifies what so often happens in a conflict: Each side demands that the other side admit defeat and agree that the other side is right. Regardless of an individual’s perspective—one of support for Captain Honors, one of agreement with the navy’s decision, seeing nothing objectionable in the videos, or finding the videos offensive—the discourse is one of proving the other side wrong. Once this happens, the conflict grows and the discussion becomes polarized, with each side refusing to consider how the other opinion is not wrong, just different.

As this scenario illustrates, the same events may be viewed and interpreted differently by different individuals who deeply care about an issue. Some support Captain Honors because he was attempting to entertain his crew members, and the videos had been shown for some time, airing on the closed-circuit televisions on the ship. Others view the content of the videos as repulsive sexual harassment and gay slurs, and feel that the navy was justified in removing Captain Honors from his post. This case brought forth strong emotions on either side, indicating that people really care about the outcome or the issues that surfaced from the production of the videos.

Discussion Questions

Do you think the navy was justified in firing Captain Honors? Explain your position.
How open are you to another point of view on this case?
Take the opposite position to your point of view and write a paragraph explaining the other point of view. For example, if you think the navy was wrong to fire Captain Honors, write a statement that supports firing him.
Think about the other alternatives to conflict—compromise and collaboration—that don’t involve one side losing and the other winning. In situations like the one in the case, is it possible for both sides to come to a compromise or collaboration? Why or why not? How might the number of parties play a role in the type of solution generated?

Source: Johnston, E. (2011). Workplace conflict case study: The navy & Capt. Owen Honors. Retrieved on December 13, 2012, from http://cfrmediation.com/workplace-conflict-case-study-the-navy-capt-owen-honors

SELF-ASSESSMENT 11.1: Conflict Resolution Styles

This self-assessment exercise identifies your conflict resolution style. There are no right or wrong answers, and this is not a test. The purpose of this assessment is for you to learn about yourself. You don’t have to share your results with other classmates unless you wish to do so.

Part I. Taking the Assessment

Purpose:

To identify your conflict style
To examine how your conflict style varies in different contexts or relationships

Directions:

Think of two different situations (A and B) where you have a conflict, a disagreement, an argument, or a disappointment with someone, such as a roommate or a work associate. Write the name of the person for each situation that follows.
According to the following scale, fill in your scores for Person A and Person B. For each question, you will have two scores. For example, on question 1, the scoring might look like this: 1. 2 | 5 (see the example below).

Directions for taking the conflict scale: Please respond to the following 25 items. Be honest. There are no right or wrong answers!

You will be presented with some questions representing your approach to conflict.

As an example, the answers to situations could look like this:

Person A: Miriam (write first name) Person B: Jose (write first name)

I try to resolve conflict constructively.

Person A 2 | Person B 5

This response indicates that you seldom try to resolve conflict with Miriam constructively, but you always try to resolve conflict with Jose constructively.

Person A: ______ (write first name) Person B _____(write first name)

Part II. Scoring Instructions

Add up your scores on the following questions:

Scoring Interpretation

This questionnaire is designed to identify your conflict style and examine how it varies in different relationships. By comparing your total scores for the different styles, you can discover which conflict style you rely most heavily upon and which style you use least. Furthermore, by comparing your scores for Person A and Person B, you can determine how your style varies or stays the same in different relationships. Your scores on this questionnaire are indicative of how you responded to a particular conflict at a specific time and therefore might change if you selected a different conflict or a different relationship. The conflict style questionnaire is not a personality test that labels or categorizes you; rather, it attempts to give you a sense of your more dominant and less dominant conflict styles.

Scores from 21 to 25 are representative of a very strong style.
Scores from 16 to 20 are representative of a strong style.
Scores from 11 to 15 are representative of an average style.
Scores from 5 to 10 are representative of a weak style.

Discussion Questions

Based on the results of this assessment, what is your primary conflict resolution style? What is your secondary (back-up) style?
Given your results on this assessment, is there anything that you would change in the future with respect to how you manage conflict? Explain.
Did you have a consistent conflict management style, or did you vary it depending on the person? Compare your responses for Person A and Person B and explain differences if you see any.

Source: Adapted from Rahim, M. A., & Magner, N. R. (1995). Confirmatory factor analysis of the styles of handling interpersonal conflict: First-Order factor model and its invariance across groups. In W. Wilmot & J. Hocker (2011), Interpersonal conflict (pp. 146–148). Washington, DC: American Psychological Association. (Reprinted from Journal of Applied Psychology, 80[1], 122–132.)

Chapter Twelve Organizational Communication

Learning Objectives

After studying this chapter, you should be able to do the following:

12.1: Describe the communication process, and discuss sources of noise in the process.
12.2: Identify how communication apprehension affects the communication process.
12.3: Compare and contrast different forms of communication networks.
12.4: Discuss the advantages and disadvantages of electronic communication.
12.5: Provide an example of how to communicate effectively across cultures.
12.6: Summarize the significance of the percentages of verbal and nonverbal face-to-face communication.
12.7: Explain why employees remain silent or withhold information and how to address this.

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“Thin Slicing” a Conversation

Can the first few minutes of communication define the course of the conversation and the benefits or costs derived from it? These first few minutes are referred to as “thin slices” of behavior. Thin slices were studied by having college students evaluate 30-second video clips of instructors teaching a class.¹ These quick evaluations significantly predicted teacher ratings at the end of the semester. Research on thin slicing has shown that early interactions (minutes) predict conviction of criminals and divorce (in some cases, months or years in the future).² This fascinating line of research has revealed the surprising finding that observation of a thin slice of behavior (minutes or even seconds) predicts important outcomes such as professional competence as rated by a person conducting an employment interview. Early cues are often based on both verbal and nonverbal behaviors in communication. Another study³ examined the accuracy of a 5-second thin slice of another person with respect to their personality characteristics. Results of this experiment found that negative affect, extraversion, conscientiousness, and intelligence were judged moderately well after just 5 seconds of exposure. However, positive affect, neuroticism, openness, and agreeableness required more exposure time to achieve similar levels of accuracy.

An experimental study examined whether conversational dynamics early in negotiation predict the attractiveness of an employment package.⁴ Researchers examined four types of initial communication: activity level, conversational engagement, emphasis, and vocal mirroring. Activity level refers to how much time a person is speaking during the conversation. Conversational engagement is how much influence one person has on the turn-taking process of speaking. Emphasis is the variation in the person’s tone, stress, and rhythm. Finally, vocal mirroring is copying of the others’ behaviors (e.g., body movements, facial expressions, or speech). The results of this experiment showed that 30% of the variation in negotiators’ success was due to these four conversational behaviors during the first 5 minutes of negotiation interactions that lasted up to 45 minutes. Negotiators that had high activity, engagement, emphasis, and mirroring during the first five minutes received better employment deals (salary, vacation days, job assignment, company car, signing bonus, moving expense reimbursement, and a preferable insurance provider). Another experiment⁵ examined first impressions of job applicants in 163 mock interviews. The results suggest that a significant portion of initial impressions’ influence overlaps with what questions applicants were asked in the interview. More important, these initial impressions were strongly related to interviewer evaluations of applicant responses earlier rather than later in the structured interview. While you might find this amazing, your communication in the first few minutes of a meeting may determine the benefits you derive from it. This research highlights the importance of communicating effectively at work. In this chapter, research on organizational communication is discussed—and this knowledge is essential for leaders.

What Is Organizational Communication?

Learning Objective 12.1: Describe the communication process, and discuss sources of noise in the process.

Organizational communication is “the process by which individuals stimulate meaning in the minds of other individuals by means of verbal or nonverbal messages in the context of a formal organization.”⁶ As indicated in the research discussed in the previous section on thin slicing, communication is important for job interviews and negotiating the best deals. Also, positive organizational communication relates to both job performance and satisfaction.⁷^,8,9 One of the earliest statements regarding the importance of organizational communication is found in The Functions of the Executive: “The first function of the executive is to develop and maintain a system of communication.”¹⁰ Organizational communication is a specialized field today and emerged as a scientific discipline by the 1960s.¹¹ Organizational communication has been referred to as “the social glue that ties organizations together.”¹² Entire books have been written on organizational communication. However, the purpose of this chapter is to provide you with the essential knowledge of communication needed to lead effectively.

The Communication Process

The Shannon–Weaver model of communication is essential to understanding the two-party communication process.¹³ The key elements of the communication process are shown in Figure 12.1. These are described in the following sections.

The sender. This is the source transmission who selects a desired message out of a set of possible messages. The selected message may consist of written or spoken words, pictures, music, or combinations of these. The message may also contain nonverbal behaviors such as gestures. For example, a leader prepares a speech for her employees consisting of a written outline and a PowerPoint presentation that contains graphs and pictures.
Encoding. This is the transformation of the message into the signal, which is sent over the communication channel from the transmitter to the receiver. For example, if a leader makes a speech to employees, the leader is the encoder.
The channel. The channel is the medium that transmits the message. In the previously given example, the channels are the leader’s voice and the projector that shows slides that accompany the speech. The choice of communication channel (or medium) is influenced by institutional conditions (e.g., incentives, trust, and physical proximity) and situational conditions (e.g., urgency, task), and by the routine use of the media over time.¹⁴ Research has indicated that the choice of communication medium (e.g., e-mail versus face-to-face) affects both attitudes and behaviors of the receiver.¹⁵
Decoding. The receiver then decodes the message sent through the selected channel or channels by translating what is seen and heard into an understanding of the message. This is not a perfect process since there is noise in the communication process that affects the decoding process. Noise is any communication barrier that may affect how a person interprets a message. For example, perceptual biases, language choice, cultural differences, and the room being too hot may affect how a person decodes a message and result in errors. This is why feedback is so important in the communication process. A leader must check to see that the message was understood by followers. They need to know whether followers understood the speech. This might be accomplished by inviting followers to e-mail with questions and comments after the speech.
The receiver. The receiver is the person or persons who receive the message. There may be noise on the receiver’s part as well. For example, the receiver may not be paying attention or they may be distracted by noise in the room.

Critical Thinking Question: Provide an example of noise in the communication process based on your experience. How could this noise have been reduced?

Figure 12.1 The Communication Process

Source: Weaver, W. (1949). Recent contributions to the mathematical theory of communication. The Mathematical Theory of Communication, 1, 1–12.

Noise represents barriers to communication, as the previously given examples illustrate. There are other barriers to communicating effectively in organizations, and some of these are discussed next.

Barriers to Effective Communication

Learning Objective 12.2: Identify how communication apprehension affects the communication process.

Communication Apprehension

Some people are uncomfortable communicating with others, and it seems clear that this imposes a significant barrier to their success as a leader. A classic definition of communication apprehension (CA) is “an individual’s level of fear or anxiety with either real or anticipated communication with another person or persons.”¹⁶ A more recent and expanded definition of CA is “anxiety or fear suffered by an individual of either actual or anticipated communication, with a group or a person, that can profoundly affect their oral communication, social skills, and self-esteem.”¹⁷ There are two types of CA: trait-based and state-based. Trait-based CA affects a person’s ability to communicate with others across a variety of situations.¹⁸ State-based CA is triggered by specific situations, such as being required to give a speech.¹⁹ Therefore, CA may affect communication between two parties, team participation, or giving presentations. A meta-analysis of 36 studies on CA found that it is negatively related to both the quality and quantity of communication behavior.²⁰ CA may affect numerous aspects of behavior in organizations. For example, people with high CA may seek jobs with lower communication requirements and would seek less advice or assistance from their managers.²¹ Another study of found that students with high CA preferred to sit in the back or at the edges of a classroom to restrict their interaction with the professor.²² A study of CA and leadership abilities of 263 students found CA was detrimental to performance although these students had high intellectual ability (their GPA was not a factor).²³ The research showed CA was negatively associated with students’ perceptions of their adaptability, appreciation for a multicultural world, and willingness to take on leadership roles. The authors recommend self-awareness (being aware that you are high in CA) and assertiveness training to overcome this communication barrier. Leaders should be aware that some followers may have CA and carefully draw them out in one-on-one conversations before asking them to speak in a team meeting or make a presentation.

Language

Words may have different meanings to different people even if they are communicating in the same language. Slang, or colloquial terms, are used in organizations and can be bewildering to new employees or those outside of the organization. For example, a new employee may be told by her boss to “scale” her ideas for a new product implementation. What does it mean to scale something in business? Josh Lawry, general manager at 2nd Watch, a premier cloud partner for Amazon Web Services, noted that the word scale is often used in business and can have different meanings depending on the context.²⁴ Some common examples include the following: “Are we operating the business at scale?” (allocating and optimizing resources to drive the greatest results) or “Are we taking advantage of the scale of our business?” (another way to say size) or “Can the product scale up or scale down depending on demand?” (increasing or decreasing capacity). This example shows that beyond vocabulary, it is important to understand the context of business jargon and multiple meanings for the same phrase.

Critical Thinking Questions: Provide an example of jargon or slang used in an organization that could be misinterpreted by a new employee. Then, provide an alternative way of stating this concept so that it is more easily understood.

Due to noise and communication barriers, it is important for the receiver of a communication to provide feedback to the sender to ensure that the communicated message was understood correctly. This can be accomplished through active listening.

Active Listening

In his impactful psychology book A Way of Being, Carl Rogers described “active listening” as the way of listening that is “a creative, active, sensitive, accurate, empathic, nonjudgmental listening.”²⁵ Experimental research has shown study participants who receive active listening responses feel they are understood better than participants who receive either advice or a simple acknowledgment. This research also found participants with active listening responses were more satisfied with their conversations. Active listening has three components:

It demonstrates moderate to high nonverbal involvement.
It reflects the speaker’s message using verbal paraphrasing.
It may include asking questions that encourage speakers to elaborate on his or her experiences.²⁶

Leaders must become active listeners to be more effective since listening allows them to verify their communications, clarify messages, and encourage more two-way communication with followers.²⁷ Kevin Sharer, the former CEO of biotechnology giant Amgen, stated the following:

As you become a senior leader, it’s a lot less about convincing people and more about benefiting from complex information and getting the best out of the people you work with. Listening for comprehension helps you get that information, of course, but it’s more than that: it’s also the greatest sign of respect you can give someone.²⁸

A study of 183 undergraduate students²⁹ found that mindfulness relates to active listening. This occurred because being mindful resulted in students observing their feelings, being able to describe them, and then being nonjudgmental about why they felt the way they did. This opened the pathway for them to be more empathetic and actively listen to others. Active listening is also a powerful tool used by effective salespeople—they do more listening than talking to their potential customers.³⁰ An interview study³¹ of 43 middle managers found that effective managers engaged significantly more in positive relations-oriented “active listening” and “agreeing” behaviors, and significantly less in “task monitoring” and counterproductive work behaviors (such as “providing negative feedback” and “defending one’s own position”). Based on research evidence, active-listening is a skill that effective leaders need to develop. Guidelines for active listening are provided in Table 12.1.

Source: Adapted from Rogers, C. R., & Farson, F. E. (1987). Active Listening. In R. G. Newman, M. A. Danzinger, & M. Cohen (Eds.), Communicating in business today. Washington, DC: Heath & Company.

To develop your active listening skills, complete Toolkit Activity 12.1 at the end of this chapter. This is an active listening exercise that you can use to practice active listening and receive feedback on your listening accuracy. The exercise involves a dyadic (or two-party) conversation. However, in organizations, it is important to recognize that communication often occurs through networks that flow in all directions (upward communication, downward communication, and lateral communication).

Critical Thinking Questions: Why do you think that people in organizations have a difficult time listening? What can organizations do to increase the degree to which their leaders listen to their followers?

Communication Networks

Learning Objective 12.3: Compare and contrast different forms of communication networks.

Communication flows through relatively reliable patterns in organizations. Figure 12.2 depicts some of the common communication networks. First, the wheel network indicates that all communication flows through one person, who is most likely the group leader. This is the most centralized communication network shown. The next one is the circle communication network in which each person can communicate with two others located adjacent to them. The all-channel (or star) pattern is more decentralized and allows a free flow of information among all group members. The chain gives a flow of information among members, although the people are at the end of the chain. Finally, the Y-pattern is slightly less centralized than the all-channel network since two persons are closer to the center of the network.

Figure 12.2 Communication Networks

Source: Adapted from Leavitt, H. J. (1951). Some effects of certain communication patterns on group performance. Journal of Abnormal and Social Psychology, 46, 38–50.

Research has shown that communication networks are an important way for job applicants to learn about job opportunities. The “strength of weak ties” thesis is that weak ties—especially bridging ties—help people tap into nonredundant pools of information.³² For example, a weak tie when looking for a job would be a suggestion from your parents’ neighbor about a job opening in the accounting firm she works for. An interesting study³³ was conducted by examining tie strength on Facebook by counting tagged photos, posts to others’ walls, and the number of mutual friends that people had. Results showed that weak ties are important because of the quantity, but strong ties may also be important because of their quality. A study of 709 graduating MBA students³⁴ found that a search through social networks typically results in job offers with lower total compensation (for both strong and weak ties), compared with jobs found through on-campus recruiting. However, students were considerably more likely to accept offers found from weak ties. They did so because the referred jobs were perceived to have greater growth potential and other noncompensation value. This study supports the idea that communication networks provide value in a job search by facilitating access to information that is otherwise difficult to obtain rather than only relying on compensation information to decide which job to accept.

Critical Thinking Questions: Which communication network is the most effective in terms of an organization’s ability to innovate? Why?

Communication Flows in Organizations

Organizational communication may be external or internal. External communication refers to information that is shared with the public through marketing and public relations efforts.³⁵ These communication flows are important because leaders must create a positive impression with various stakeholders such as customers, shareholders, the government, and the general public. For example, when a flight from Fort Lauderdale, Florida, to Newark, New Jersey, left travelers stranded on the tarmac at the wrong airport for more than 7 hours in November 2011, Rob Maruster, JetBlue’s CEO at the time, made an apology in a video message posted on blog.jetblue.com. More than 100 passengers on that flight were left on board the plane without food, water, or functioning bathrooms, causing a public relations nightmare for the airline. JetBlue has had difficulty shaking this image; Forbes named JetBlue one of the “worst airlines.” JetBlue’s troubles continue to be profiled in the media. In June 2014, a woman’s young daughter urinated in her seat during a delay of a flight from New York to Boston. Flight attendants refused to let the child go to the restroom during the delay on the tarmac. JetBlue publicly apologized—again.³⁶

Internal communication refers to “the communication transactions between individuals and/or groups at various levels and in different areas of specialization that is intended to design and redesign organizations, to implement designs, and to co-ordinate day-to-day activities.”³⁷ Internal communication is considered a strategic business imperative due to the importance of sharing the organization’s vision and helping employees cope with change (this is discussed in more detail in Chapter 15).³⁸ Over time, the distinction between external and internal communication has become blurred. This is because employees are now considered important stakeholders of an organization. Also, some employees communicate externally with suppliers, customers, or clients (known as boundary spanners). As a result, external and internal communications have now become fused into one function in most organizations, representing “integrated communications.”³⁹ Thus, the patterns of information discussed in the following sections may refer to both external and internal communication.

In organizations, communications often flow downward. For example, the leader of an organization communicates the vision of the organization to the employees. Downward communication is essential to explain new policies or help an organization adapt to change. In a study of communications in a hospital, downward communication on task and administrative matters was related to performance of nurses, but the relationship was influenced by the tasks performed, the organization’s context, and individual differences.⁴⁰ In other words, the organizational culture or follower personalities may play a role in how communications are interpreted.

In addition to downward communication from leaders at the top of the organization and bosses, communication may be lateral or flow sideways in the organization. Lateral communication takes place among peers or members of the same team or work group. This form of communication may either support or challenge the information received in downward communication. For example, a leader may communicate that all employees must be on time for work, but the members of a work group may challenge this by communicating an informal norm that it is acceptable to be late. Lateral communications may also reflect conflicts among team members that negatively impact satisfaction and performance. On the positive side, effective lateral communication in support of the organization’s goals can enhance adaptability and effectiveness since peers may be more available to provide information quickly than superiors.

Upward communication refers to the process by which employees communicate with others who are higher in the organizational hierarchy.⁴¹ Upward communication provides essential feedback to leaders regarding whether messages to employees have been understood. Upward communication is also important to assess the morale of employees and learn of their progress on goals. In some instances, a follower will offer an idea for improving something by communicating it to a person higher in the organization. Employees are closer to the work and the customers, and also learn more about what might be improved. It is important for leaders to encourage upward communication from their followers.

An experimental study found that followers’ reputations and perceptions of their competence were affected by whether they communicated in a way that indicated the importance of their idea to the organization’s goals. Also, the study found that supervisors were more likely to grant requests if the follower was not seen as aggressive or self-promoting in making it.⁴² Thus, upward communication, if done effectively, may enhance a person’s reputation in the organization.

Upward communication from subordinate to superior relates to (a) information about the subordinate himself, (b) information about coworkers and their problems, (c) information about organizational practices and policies, and (d) information about what needs to be done and how to do it.⁴³ This information is clearly essential for the leader to know; thus, accuracy is important. However, upward communication is more likely to be distorted than other directions of communication.⁴⁴ Ensuring truthful upward communication is recognized as a serious problem.⁴⁵^,46 The accuracy of upward communication is improved if the followers trust their boss, believe the boss has influence over their career, and have high mobility aspirations.⁴⁷^,48 Upward communication is essential for leaders to implement change for the following reasons:

The promotion of shared leadership and an enhanced willingness by managers to act on employee suggestions
A greater tendency by employees to report positive changes in their managers’ behavior
Actual rather than perceived improvements in management behavior following feedback
A reduced gap between managers’ self-ratings and those of their subordinates
The creation of improved forums for obtaining information, garnering suggestions, defusing conflict, and facilitating the expression of discontent
An enhancement of organizational learning
Better decision quality (currently, it is estimated that about half of decisions in organizations fail—largely because of insufficient participation)
Enhanced participation⁴⁹

Critical Thinking Questions: Why do you think followers distort information when they communicate with those higher in the organization? What can be done to address this concern?

The Grapevine

Much communication in organizations happens through the informal network known as the grapevine. The term grapevine is believed to have originated during the Civil War when messages were transmitted through telegraph lines strung from tree to tree resembling grapevines.⁵⁰ Information transmitted through grapevines is often rumor and gossip, but it is still an important source of information that leaders need to tap into. For example, a survey of 419 managers found 89% of those surveyed believed that the grapevine carried rumors that reflected a lack of trust in organizational leaders and their policies.⁵¹

Rumors that flow through the organizational grapevine can be destructive.⁵² They “can drain productivity, reduce profits, create stress in the workplace, or sully a company’s image. Some rumors tear at a company’s credibility, with both personnel and customers. In other instances, rumors have catapulted firms into financial disaster.”⁵³ This has become even more important due to the spread of information on social media as a grapevine. For example, a Domino’s Pizza employee uploaded a video to YouTube that depicted a coworker doing unappetizing things to the pizzas he was preparing for delivery. The video was faked, but by the time Domino’s was able to remove the video, it had been viewed over 1 million times. Their stock plummeted, and their brand was damaged as shocked customers reacted to the video.⁵⁴ Leaders should be aware that the grapevine may even lead to litigation if rumors and gossip contain defamation, fraud or misrepresentations, invasion of privacy, harassment, or discrimination, as well as cause emotional distress for an employee. In such cases, leaders are expected to take reasonable action to squelch the rumor mill.⁵⁵ An interview study of 15 top-ranked corporate executives found that employees engage in Internet grapevine behavior due to familiarity with the Internet, anonymity, the wide reach of the Internet, and opportunities for cyberloafing at work.⁵⁶

Despite the evidence that the grapevine is often negative, some research has shown benefits. One study found that gossip is a powerful tool to control behavior in groups. Gossip kept group members in line by discouraging social loafing (refer back to Chapter 10 for a refresher on this team challenge).⁵⁷ Thus, while most see gossip as a negative force, it may have benefits. Another benefit is that information about working for an organization transmitted through the grapevine influences whether job applicants view employment opportunities as attractive and want to apply to work for a particular organization.⁵⁸

Common internal corporate rumors include those connected with organizational change, such as layoffs, reorganizations, mergers, and changes in management.⁵⁹ The grapevine allows employees to vent during organizational change. In a study of a hospital undergoing change, there were more negative rumors than positive rumors in the grapevine. Also, employees exposed to negative rumors reported more stress.⁶⁰ Leaders should not ignore the grapevine; it can be an important part of the socialization of employees.⁶¹ In sum, the grapevine is an important source of information in organizations that leaders need to monitor since it has been shown to have both negative and positive effects.

Research in Action

Communication Networks and Ethics

The Enron Corporation was the seventh-largest business organization by 2001 and employed over 21,000 people in 40 countries with gross revenues of over $100 billion. Enron was “an exceedingly successful global financial powerhouse from very simple beginnings.”⁶² By the end of 2001, the organization was suddenly insolvent and filed for bankruptcy after the company admitted to inflating reports of earnings. Following investigations, the Federal Energy Regulatory Commission conducted investigations and released the e-mail records of 158 employees from the company over a period of 3.5 years to help the public understand what happened in what is now considered “one of the United States’ most disastrous business failures.”⁶³

The e-mail communications analyzed by researchers found Enron executives’ communication networks “lit up” with activity. As interpersonal communication became more intense and spread through the networks, formal chains of command previously in place were ignored. Executives deferred to others in the e-mails, resulting in “groupthink” (explained in Chapter 10). For example, peers of equal rank deferred to their peers to preserve their status by protecting themselves from being seen as “overstepping one’s place.”⁶⁴

Could anything have been done to prevent the Enron meltdown? Executives failed to (a) communicate appropriate values to create a moral climate, (b) maintain adequate communication to be informed regarding organizational operations, and (c) maintain openness to signs of problems.⁶⁵ The lessons from Enron seem clear: Leaders must communicate their expectations for integrity for their followers as well as their peers.

Discussion Questions

Explain how the grapevine had both negative and positive effects in this case.
Discuss this case in terms of the characteristics of groupthink from Chapter 10 (group rationalization, direct pressure, suppression, and illusion of unanimity). What role do you think communication plays in the emergence of groupthink?
Provide some guidelines that organizations can implement to address the process of negative communication through the grapevine in an organization.

Sources: Diesner, J., Frantz, T. L., & Carley, K. M. (2005). Communication networks from the Enron email corpus: “It’s always about the people. Enron is no different.” Computational & Mathematical Organization Theory, 11(3), 201–228; Fragale, A. R., Sumanth, J. J., Tiedens, L. Z., & Northcraft, G. B. (2012). Appeasing equals: Lateral deference in organizational communication. Administrative Science Quarterly, 57(3), 373–406; O’Connor, M. A. (2002). Enron board: The perils of groupthink. University of Cincinnati Law Review, 71, 1233–1471; Seeger, M. W., & Ulmer, R. R. (2003). Explaining Enron communication and responsible leadership. Management Communication Quarterly, 17(1), 58–84.

The Research in Action box on Enron indicates that much communication in organizations is through electronic means. What is also clear is that organizations have the right to monitor the communications of their employees, and most employees feel that this is acceptable as long as they are notified in advance.⁶⁶ So a leader must be careful regarding what is transmitted in e-mails. The next section discusses the emerging importance of understanding the implications of electronic communication in its various forms, including e-mail, texting, social media, and videoconferencing.

Critical Thinking Questions: Do you agree that organizations have the right to monitor employee e-mails and other forms of electronic communication? Why or why not?

Electronic Communication

Learning Objective 12.4: Discuss the advantages and disadvantages of electronic communication.

E-mail

E-mail has become a primary mode for communicating in organizations. Even employees who work in offices next to one another often communicate by e-mail rather than face-to-face! A study of face-to-face and e-mail communication in a Fortune 500 office equipment firm employing over 100,000 people employed interviews, questionnaires, and actual e-mails. Researchers found that more information is conveyed in e-mail than other communication mediums: People paid less attention to social cues that suppress information and were more uninhibited in e-mails.⁶⁷ Due to this inhibition, harassment may be more likely to occur through e-mail compared to face-to-face interactions. In some cases, this harassment includes comments that are sexual in nature.⁶⁸ Organizations should have formal policies for harassment that include “e-harassment.”⁶⁹

Leaders should avoid e-harassment. However, some e-mail offenses are more subtle. The Internet has evolved over time, and there are now rules for how to be polite in e-mail. This is termed netiquette (e-mail etiquette). Whether you are communicating with a prospective employer or to others you work with, it is sound advice to show good manners. Without knowing netiquette, you might annoy or even offend someone unintentionally. These rules developed as norms (unwritten rules) over time, so everyone may not be aware of them (refer to Chapter 10 for a discussion of the powerful impact of norms). According to one communication expert, “Netiquette rules are based on common sense and respect, but since email is so quick, we often forget that we are still using a form of written communication.”⁷⁰ Ten rules for netiquette are shown in Table 12.2. You should be familiar with these rules to avoid social blunders in e-mail communication. The lack of visual cues may lead to difficulty interpreting the meaning of e-mail communication. Miscommunications of emotion occur in e-mail messages more than face-to-face communications, and this affects both the relationships and the information conveyed. These miscommunications affect both satisfaction and performance.⁷¹

Source: Goldman, L. (2007). Netiquette rules—10 best rules for email etiquette. Retrieved from http://ezinearticles.com/?Netiquette-Rules—10-Best-Rules-for-Email-Etiquette&id=785177

Research on e-mail usage and performance is mixed. The amount of e-mail sent and received is positively related to job performance.⁷² Yet some research suggests checking e-mail frequently may result in interruptions that affect the flow of work.⁷³ Frequently checking e-mail has been related to information overload and stress.⁷⁴^,75 High levels of e-mail use in the workplace relate to avoidant decisional styles such as procrastination.⁷⁶ A study⁷⁷ surveyed 341 employees over 7 days immediately after they received an electronic communication from work after they had left work. Researchers focused on key elements of the communication message. They asked questions about the time it took to read and address the e-mail, whether the e-mail was negative, and how it affected their emotional reactions (i.e., anger or happiness). Results showed that such e-mails were related to stress. In other words, employees felt angry that the e-mail was taking away from their time with family and friends. Another study of knowledge workers found employees adapt to e-mail interruptions through new work strategies as they negotiate the constant connectivity of communication media. For example, employees find ways to leverage the importance of e-mail for environmental monitoring by setting aside uninterrupted work time by shutting off e-mail alerts.⁷⁸ Managers need to be mindful of employees’ needs to “unplug” from work. Table 12.3 provides some guidelines for electronic communication at work.

Source: Boswell, W. R., Olson-Buchanan, J. B., Butts, M. M., & Becker, W. J. (2016). Managing “after hours” electronic work communication. Organizational Dynamics, 45(4), 291–297, p. 294.

Text Messages

With the ubiquitous use of smartphones and other mobile devices, employees can now check e-mail and send text messages more frequently than ever—even during evenings and weekends. Text messages are far more likely to be sent from handheld mobile devices than from desktop or laptop computers. The Cellular Telecommunications & Internet Association reports that in 2015, there were over 1.9 trillion text messages sent in the United States (that’s over 4 million per minute).⁷⁹ For business communications, it is important to follow the rules of grammar and capitalization and avoid abbreviations (brb for “be right back,” for example). Due to their brevity, text messages will probably never replace e-mail as the primary mode for electronic business communications. Also, there are concerns about the privacy of text messages. Finally, general business expectations are that sending text messages at work is not a good use of time or is undesirable behavior.⁸⁰ However, a recent study conducted found that the use of smartphones during working hours to take short breaks increased employee well-being. The authors believe that the use of smartphones may have benefits, but too much time using social media may harm productivity.⁸¹ When smartphones are used seems to be an important consideration. An interview study conducted found mobile text and e-mail usage patterns “are dangerous, distracting, anti-social and … infringe on work-life boundaries.”⁸² This research also found that many employees check e-mail during their commutes to and from work.

Critical Thinking Questions: List the advantages and disadvantages of being able to access work e-mail from a mobile device.

Social Networking

It is estimated that more than 2 billion people worldwide are making use of social media platforms.⁸³ You are probably familiar with social networking sites such as Facebook, Twitter, LinkedIn, and Instagram. As discussed earlier in this chapter, being central to a communication network may result in more power. But social networking has caveats. It is important to keep in mind that if your social media site such as Facebook is public, your current or prospective employers might check it. It’s best to assume that what you post may become public, so discretion matters. For example, employees have been fired for writing about their employer in inappropriate ways in blogs (web logs).⁸⁴ The First Amendment does not protect employees by giving them the right to say whatever they want about their job or employer, and many employers now have specific blogging policies, including Cisco, IBM, Intel, and Microsoft.⁸⁵

Could your social media account cost you a job? A clever study⁸⁶ captured Facebook profiles of college students who were applying for full-time jobs and then asked job recruiters to evaluate them. Next, researchers followed up with applicants in their new jobs. The results are interesting. Recruiter ratings of applicants’ Facebook information were unrelated to supervisor ratings of job performance, turnover intentions, and actual turnover. This research also uncovered evidence of potential discrimination because the Facebook ratings tended to favor female and White applicants. The overall results suggest that organizations should be very cautious about using social media information such as Facebook to assess job applicants.

On the other hand, blogs have become popular as a way for leaders to promote their organization. Twitter is a microblog that limits messages to 140 characters called tweets. A social media strategist noted that “smart brands use Twitter in meaningful ways, and most of them use their brand name as a way to make sure customers can find and recognize them.”⁸⁷ The strategist cited Chevrolet, Wachovia, The Home Depot, Zappos.com, and the Red Cross as some of the most successful Twitter brands. However, a study of university business deans found that posting on Twitter was not related to rankings of the school. The findings of the study suggest speaking at stakeholders from a public microblog may not be the most effective way for leaders to connect with followers.⁸⁸

Critical Thinking Question: Discuss the advantages and disadvantages of using social media to promote an organization’s public image.

Another challenge for organizations due to the use of the Internet at work is cyberslacking. Research has documented an increase in the use of the Internet for personal use during working hours. This may include using social media, shopping, looking at pornography, and looking for another job while at work: “When employees use workplace PCs for personal reasons, the immediate effect is a loss of productivity…. Time is an asset and a misuse of that asset is just as wrong as the misuse of any other asset.”⁸⁹ One study found that 60% of companies surveyed had disciplined employees for inappropriate use of the Internet during work.⁹⁰ Communication researchers offer the following guidelines for the use of social media by employees:⁹¹

Recognize the inevitable presence of social media to avoid asserting impractical social media guidelines.
Dialogue with employees with regard to social media demonstrates mutual trust and reciprocates employee dedication.
Employees can be the best ambassadors and can create substantial stakeholder engagement. Encourage them to use social media to communicate about the organization they work for in a positive way.
Social media guidelines create opportunity for employers in reducing risk exposure as well as for employees as a provision of information and a guide for behavior.
Social media guidelines benefit from cross functional and professional input.
The use of social media has maximum impact when coupled with positive employee–organization relationships.

Despite the persistence of e-mail as the main communication mode for organizations, there still appears to be a need for face-to-face contact. Being able to see another person is important since face-to-face contact is much richer due to the ability to read nonverbal messages that accompany the words. Thus, videoconferencing is now an important communication mode for organizations.

Videoconferencing

Videoconferencing (or conducting virtual meetings) has long been an important communication mode at the workplace. Virtual meetings may be through the telephone only (a conference call) or they may be face-to-face. Skype has made it possible to speak to one or more persons face-to-face nearly everywhere in the world. Videoconferencing is advantageous because you are able to discern emotions through the tone of voice and/or facial expressions. Most large organizations depend on videoconferencing to coordinate work among employees who are not co-located. Accenture, a technology consulting firm, installed 35 videoconferencing rooms at its offices around the world. In 1 month alone, its consultants used virtual meetings to avoid 240 international trips and 120 domestic flights for an annual saving of millions of dollars and countless hours of tiring travel for its workers.⁹² Thus, there are cost savings plus reductions in employee travel stress that result from the use of videoconferencing. Videoconferencing has not replaced face-to-face meetings at companies such as IBM, but rather, it has reduced the number of travel days. For example, Darryl Draper, the national manager of customer service training for Subaru of America, used to travel 4 days a week for 9 months of the year. Now, much of her training is done online.⁹³

Today, for most organizations, having a social media plan is an essential business strategy.⁹⁴ The landscape for social media in business is a new one, but it is clear that on both a personal and business level, social media will significantly impact organizational behavior (OB) in the years ahead. The use of the Internet at work has brought both opportunities for organizations and new challenges. Some challenges stem from the nature of the communication process itself and apply to both electronic and face-to-face communication.

The use of e-mail and videoconferencing has made it possible to communicate with employees and customers anywhere in the world. For example, many videoconference calls take place in globally distributed teams, where employees from a number of different countries participate. Thus, cross-cultural communication is now more important than ever, and this applies to electronic as well as face-to-face interactions.

Cross-Cultural Communication

Learning Objective 12.5: Provide an example of how to communicate effectively across cultures.

An executive from India referred to women in an organization as “females,” and U.S. women in the organization thought this was an odd way to refer to them and were offended. As this example illustrates, the ability to communicate effectively with those from other cultures is now an essential leadership skill.⁹⁵ There is a difference between cross-cultural and intercultural communication. Cross-cultural communication compares one culture to another, and intercultural communication focuses on the behavior of two individuals’ communication patterns.⁹⁶ For example, a cross-cultural communication study of 124 managers from the United States and Russia found cultural values affected communication competence and performance in teams.⁹⁷ Another study⁹⁸ examined the differences in the ways that CEOs of Fortune’s Global 500 corporations in China and the United States communicated with shareholders by analyzing the wording they used in the annual letter to shareholders. The results showed significant differences in communication styles: Chinese leaders tend to be more instrumental, elaborate, and competitive, while U.S. leaders are more emotional, succinct, and harmonious. An example of an intercultural study examined business meetings between British and Chinese managers and found that mismatches in expectations regarding silence during meetings resulted in feelings of “uncomfortable silence.”⁹⁹ These cultural differences can result in misunderstandings, even if communication is in English. Translation adds yet another layer of complexity that may lead to misunderstandings. An example of miscommunication due to literal translation in intercultural communication follows:

In translating an English financial report, a translator from Xian, by taking the surface value of words, translated terms like red gold, green sheet, and white goods as chijin (gold in red color), ludan (paper in green color), and baihuo (goods in white color) literally so that the clients had no idea what the expressions referred to.¹⁰⁰

Differences in language are only part of the challenge of communication with a person from another culture. It has been noted that “language-related inefficiencies take numerous forms: loss of information, added work, loss of learning opportunities, and disruption of the collaborative process.”¹⁰¹ Misunderstandings often occur due to cultural value differences. For example, perceptions of time, individualism, risk, relationship orientation, and power may affect intercultural communication.¹⁰²^,103 The next chapter discusses cultural values in more detail (Chapter 13).

There are nine levels of differences on which cross-cultural communication can falter: when to talk; what to say; pacing and pausing; listenership; intonation; prosody; formality; indirectness, and coherence.¹⁰⁴ There are several ways to address such cross-cultural communication challenges. For example, emotional intelligence (EI; discussed in Chapter 3) has been positively associated with communication competence.¹⁰⁵ Preparation for cross-cultural communication challenges and active listening also improves communication with persons from a culture other than one’s own.¹⁰⁶ Bilingualism has been shown to improve communication efficiency—especially when both parties are at least partially fluent with respect to the language of the person they are working with.¹⁰⁷ Finally, training in cross-cultural communication is also effective.¹⁰⁸^,109

Another important aspect of cross-cultural communication is nonverbal communication. Gestures may not mean the same thing in different cultures. For example, in the United States, not making eye contact may be associated with not telling the truth. However, in certain Arabic cultures, it may be viewed as rude and intrusive to look into another person’s eyes. Another example is how close you should be to a person. In Japan, people are comfortable at about 30.2 inches apart; in Venezuela, it is 32.2 inches; and in the United States, it is 35.4.¹¹⁰ For example, someone from Venezuela could make someone from the United States very uncomfortable by unknowingly invading their space. As these examples illustrate, knowledge of the meaning of nonverbal communication is essential in preparing for an interaction with a person from another culture or an expatriate assignment (expatriation is discussed in more detail in the next chapter).

Best Practices

You Just Don’t Understand: Women and Men in Conversation

Women and men communicate differently at the workplace.¹¹¹ This is in part due to fundamental differences in why men and women communicate in the first place. Most men see themselves as individuals in a hierarchically structured world where they are trying to get ahead. In contrast, most women see themselves as bringing closeness, confirmation, and support to the world. Hence, when women display connection, which they think is positive (i.e., thanking their boss for being a mentor), a male mentor might interpret this as lack of independence or insecurity. When presented with a problem, men often respond with “I’ll fix it for you.” Men see themselves as problem solvers and focus on solutions. Women are more likely to show empathy when a problem is brought to their attention: “I support you and want you to know you’re not alone.” Thus, in leadership positions, a man might interpret a woman showing empathy and listening as not being an active problem solver.

Other differences in communication styles at work have been found.¹¹² For example, women apologize more often. Also, women tend to have a more indirect communication style compared to men. Another example is that men and women have different views about giving praise. Many women believe that if their boss does not praise them, their work is not acceptable. Women appear to need more feedback (men believe that if their boss says nothing, then everything is fine).

Leaders must remember that understanding gender differences in communication is a two-way street. Leaders need to understand that men and women have different communication styles. The need for feedback or showing empathy is not a sign of weakness. In fact, women may be well-suited for organizations interested in a more emotionally intelligent workplace.

Discussion Questions

Explain how you could use active listening (discussed earlier in this chapter) to more effectively communicate with someone of the opposite gender.
This research is based upon generalizations, and leaders must be careful not to stereotype employees. Give an example of a man who exhibits a more female pattern of indirect communication. Give an example of a woman who exhibits a direct communication style (these examples can be from your experience or from leaders in the media).

Source: Tannen, D. (1990). You just don’t understand: Women and men in conversation. New York, NY: William Morrow; Tannen, D. (1994). Talking from 9 to 5: How women’s and men’s conversational styles affect who gets heard, who gets credit, and what gets done at work. New York, NY: Simon & Schuster.

Nonverbal communication is important for all forms of face-to-face and telephone conversation. Even on the telephone, nonverbal communication, such as a sigh or grunt, will be interpreted by the receiver and may change the intended meaning of the message. People use emoticons (i.e., faces with emotional expressions) in their text messages to convey nonverbal sentiments. Next, we discuss the evidence on nonverbal communication in organizations.

Nonverbal Communication

Learning Objective 12.6: Summarize the significance of the percentages of verbal and nonverbal face-to-face communication.

Nonverbal communication is “the sending and receiving of thoughts and feelings via nonverbal behavior.”¹¹³ Nonverbal communication includes facial expressions, posture, gestures, and tone of voice. As shown in Figure 12.3, when it comes to face-to-face communication, approximately 7% of a person’s understanding of others is attributed to words, whereas 38% is attributed to verbal tone and 55% is attributed to facial expressions.¹¹⁴ The meaning of a message can even be negated by a facial expression or a person rolling their eyes. For example, if a person says, “I love my accounting class” and rolls their eyes, it means the opposite of what they are saying. If a verbal message contradicts a nonverbal message, the nonverbal message will carry the meaning. On the other hand, nonverbal messages can reinforce a verbal message. For example, a leader can raise their voice slightly while speaking to emphasize a point they are making to the team. Leaders are observed constantly, and every action is analyzed by others.¹¹⁵ So it’s important to pay attention to nonverbal as well as verbal communication. Think of it this way: “Leaders are never not communicating. As a result, increasing their awareness of nonverbal communication may be a key factor in improving their communication skills and ultimately helping them to become better leaders.”¹¹⁶ Nonverbal communication serves the following functions in organizations.¹¹⁷

Display of personal attributes. Nonverbal communication reveals information about a person’s personality, intentions, and attitudes. In other words, people “give off signals” to what they are really thinking and feeling.¹¹⁸
Establishment of dominance and hierarchy. Nonverbal cues of power are responded to with nonverbal cues that signify submission.¹¹⁹ Other nonverbal behaviors associated with power include talking time and interruption. In addition to “power posing” (recall this research covered in Chapter 7), eye contact, tone of voice, and facial expressions are used to signal who is in control in organizations.
Promotion of social functioning. Beyond influencing others via dominance and power cues, followership and social coordination can be achieved via nonverbal displays of competence, prestige, and persuasion.

For example, people are more likely to follow those who exhibit charisma, and nonverbal behaviors are an effective tool in communicating these elements in charismatic leaders. For example, conveying passion through body language, such as animated body gestures and voice and message-appropriate expressions, contributes to a charismatic leader’s effectiveness.¹²⁰

Fostering high-quality relationships. Nonverbal behaviors such as eye contact and facial expressions increase the development of rapport between employees. Nonverbal messages that enhance coordination behaviors, such as mimicking another person’s expressions, can also create affiliation and trust.¹²¹ A study of leaders and their direct reports found that supervisors’ nonverbal kinesics (e.g., nodding of the head appropriately) led to greater relational identification with the leader.¹²²
Display of emotions. An employee’s emotional displays influence the emotional experiences of other employees due to the emotional contagion process (discussed in Chapter 3). Emotions are manifested via facial expressions, bodily gestures, and tone of voice, which are processed by others. For example, authentic smiles as compared to inauthentic smiles lead to greater positive customer emotional reactions and good customer–employee rapport, which influence customer satisfaction.¹²³

Figure 12.3 Elements of Face-to-Face Communication

Sources: Ambler, G. (2013). When it comes to leadership everything communicates. Retrieved from http://www.georgeambler.com/when-it-comes-to-leadership-everything-communicates; Mehrabian, A. (1981). Silent messages (2nd ed.). Belmont, CA: Wadsworth.

To this point, we have been discussing processes of communication where information is shared between and/or among employees in organizations. However, what happens when there is no communication? In other words, what are the consequences when employees remain silent? The next section summarizes the evidence on organizational silence and its implications for leadership.

Silence

Learning Objective 12.7: Explain why employees remain silent or withhold information and how to address this.

Employee silence is the intentional withholding of meaningful information from management, which includes asking questions, expressing concerns, and offering suggestions.¹²⁴ A diary study¹²⁵ conducted with professionals from diverse organizations found that employees with negative affect were more likely to be silent when they also had high levels of rumination. In other words, employees who have negative emotions and also worry about their job situation are more likely to withhold information. This effect was even stronger for employees whose jobs had high demands for problem solving. Another study found that employees’ perceptions of procedural justice generated positive emotions, and thus, they were less likely to remain silent.¹²⁶

Climates of organizational silence emerge due to organizational structures or policies, managerial practices, and degree of demographic dissimilarity between employees and top managers.¹²⁷ A sample of 461 MBAs and managers were asked if they had intentionally remained silent about an issue at work, and 95% stated that they had.¹²⁸ The types of incidents reported in the study are shown in Table 12.4. The most common type of silence incident was unfair treatment (21%). Given recent attention to ethics at the workplace, it is disturbing that the second most common silence incident was someone else behaving unethically (17.6%). Concerns about a coworker’s competence or performance (16.8%) and operational process concerns and/or ideas for improvement (13.3%) were other areas where employees withheld information.

Critical Thinking Question: What are the potential costs of organizational silence? Give an example where an employee withholding information damages the performance of an organization.

Source: Brinsfield, C. T. (2013). Employee silence motives: Investigation of dimensionality and development of measures. Journal of Organizational Behavior, 34(5), 671–697. p. 675.

Withholding information by remaining silent is a barrier to organizational change and compromises the ability to hear different points of view on important organizational matters.¹²⁹ Organizational silence can have detrimental effects on decision making by blocking alternative views, negative feedback, and accurate information.¹³⁰ Managerial secrecy combined with employee silence may combine to enable corruption.¹³¹ Remaining silent has negative consequences for employees as well. Research has shown silence is negatively related to job satisfaction and organizational commitment.¹³² In sum, organizational silence has numerous negative outcomes for both employees and the organization.

Can leaders take actions to reduce silence? Research on employee voice suggests formalized employee involvement and a participative climate both encourage employees to provide opinions, which reduce organizational silence.¹³³^,134 For example, a study of police officers found building trust with higher-level managers and building communication bridges reduced officer silence.¹³⁵ Also, ethical leadership supports employees and encourages them be more confident to speak up in a constructive way.¹³⁶

As the preceding discussion indicates, leaders have an influence on the degree to which employees voice their concerns and suggestions up the organizational hierarchy. There are additional ways that theories of communication inform leadership, and the next section addresses the power of framing, which is essential for leaders in communication with followers and others.

Leadership Implications: The Management of Meaning

In an influential Harvard Business Review article, Deborah Tannen stated, “Talk is the lifeblood of managerial work.”¹³⁷ Without a doubt, spoken communication (i.e., face-to-face, phone, or videoconferencing) is a powerful way to influence others as a leader. But we have also learned in this chapter that “talk” does not only mean verbal face-to-face conversation but may also mean electronic communication and the powerful influence of nonverbal behavior. The knowledge and skills discussed in this chapter are essential for a leader to be effective. This is because leaders manage meaning for their followers. Leaders create a frame of reference for employees, particularly during times of organizational change.¹³⁸ Leadership scholar and former president of the University of Cincinnati Warren Bennis writes: “To make dreams apparent to others, and to align people with them, leaders must communicate their vision. Communication and alignment work together.”¹³⁹ Regardless of the communication channel chosen (i.e., verbal, nonverbal, face-to-face, one-on-one, or formal presentations), leaders interpret what is happening in the organization and what it means for employees. Strategic leadership is the creation and maintenance of organizational systems that result in organized action toward goals.¹⁴⁰

Communication scholars define leadership in terms of communication: “Leadership is human (symbolic) communication that modifies the attitudes and behaviors of others in order to meet shared group goals and needs.”¹⁴¹ This perspective implies that a failure to communicate is a failure in leadership.

Leaders, thus, frame organizational events. Framing is defined as:

the ability to shape the meaning of a subject, to judge its character and significance. To hold the frame of a subject is to choose one particular meaning (or set of meanings) over another. When we share our frames with others (the process of framing), we manage meaning because we assert that our interpretations should be taken as real over other possible interpretations.¹⁴²

In other words, leaders manage meaning by using talk to get followers to act.¹⁴³ To do so, leaders may use metaphors, jargon, and stories in their communications. We are all familiar with “spin” during political campaigns. This is also employed by leaders to reframe a negative event that has occurred.¹⁴⁴ Leaders can’t always control what happens in their environments or within their organizations, but they can control how events are interpreted.¹⁴⁵ Here are five communication guidelines for leaders to follow in the management of meaning:¹⁴⁶

Leaders “cannot not communicate.”¹⁴⁷ While discussions of leadership communication typically focus on the creation and delivery of intentional, verbal messages with particular ends in mind, a leader’s nonverbal behavior will be interpreted as well. Even not communicating is interpreted. For example, a leader not showing up at a meeting communicates that the meeting isn’t important.
Leadership communication is a process that involves the negotiation of meaning rather than the transmission of meaning. Leaders interpret events for followers and attach meaning to them.
Communication creates a history that shapes and guides future influence efforts. The flow of messages, along with their interpretations, builds over time. This shapes current meanings and creates the foundation for future communications. The history provides a backdrop and context for the communications that follow.
All leadership communication is intercultural. Leadership communication is essentially an intercultural phenomenon in which one’s own personal experiences, language patterns, religion, family history, work history, values, and beliefs provide a unique set of cultural filters through which all messages flow and are interpreted.
Leadership communication always has both content and relational consequences. What one says and does influences both the content of the messages sent and received, and the leader–follower relationship that is being formed through communication. In other words, when leaders communicate, it changes their relationships with their followers.

The creation of meaning applies to strategic leadership. However, the relationship with the boss also matters; research has shown that effective communication from leaders relates to follower satisfaction and motivation.¹⁴⁸ The quality of leader–member exchange (LMX; discussed in Chapter 6) strongly influences subordinates’ satisfaction with personal feedback and supervisory communication. Good relationships with followers also positively influence team and organizational communication. One study concludes “the quality of LMX has a ‘spillover’ or ‘ripple’ effect on perceptions of communication satisfaction in other forms of communication interaction.”¹⁴⁹ Thus, the context of a positive working relationship affects perceptions of communication and the meaning that is attached to them.

In sum, leaders influence followers through effective communication that helps them make sense of organizational events. They also use effective communication to give followers a sense of meaning in their work, which motivates them. In this chapter, the communication process has been presented, followed by discussion of barriers to effective communication, including communication apprehension. Communication in organizations flows in all directions through networks, including the grapevine. Finally, new forms of communication have been covered, including the emergence and power of electronic communication and social media. All communication is filtered by culture, and cross-cultural and intercultural communication has been discussed. Finally, organizational silence has been addressed since in some cases employees withhold information, which generally has negative consequences. Communication is fundamental to leadership since leaders are constantly communicating at all organizational levels within their organizations and to their constituents outside of it.

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Key Terms

active listening, 309
all-channel (or star) network, 311
boundary spanners, 312
chain network, 311
circle network, 311
communication apprehension (CA), 308
cross-cultural communication, 320
cyberslacking, 319
downward communication, 311
e-harassment, 315
external communication, 312
grapevine, 313
intercultural communication, 320
internal communication, 312
lateral communication, 311
netiquette, 316
noise, 308
nonverbal communication, 322
organizational communication, 307
Shannon–Weaver model of communication, 307
upward communication, 313
wheel network, 311
Y-pattern network, 311

TOOLKIT ACTIVITY 12.1: Active Listening Exercise

Asking about what causes negative emotions can provide much information about someone’s values, beliefs, and needs. By asking questions, we increase our understanding. Increased understanding leads to compassion, empathy, and a sense of connection with others.

In this exercise, you will partner with another classmate. Ask them to tell you about a setback in their life that they felt strongly about. Listen for feelings, values, and beliefs. Make notes using the form in this activity.

Focus on the feelings and the causes of them, not the details of the story. Try to get to the underlying thoughts below the emotions. While listening, remember not to give advice or try to solve the person’s problems.

How did this person feel (name at least five feelings)?
What does this person value?
What needs were not met?
What are some of the person’s beliefs?

After you have noted the person’s values, needs, and beliefs, share them with the person. Ask the person to circle on a scale from 1 to 10 how accurate you were in identifying them using the following scale.

If time permits, switch roles and let the other person practice active listening.

Discussion Questions

Did you feel an increased level of empathy with the person as you were listening to them describe their experience? In other words, could you put yourself “in their shoes” and see the situation the way they did?
Was it difficult just to listen and not try to give advice? Why or why not?
How accurate were you in identifying the person’s values, needs, and beliefs? Were you surprised at your feedback?
If you were the person describing the setback in your life, how did it feel to be listened to?
If you were the person describing the setback, what did the listener do that helped you continue speaking? Provide them with this feedback.

CASE STUDY 12.1: What’s App-ening?

In order to better communicate and engage with employees, organizations are taking advantage of technology. What was once shared by posters, flyers, and word of mouth is now spread through company e-mails or notices on the company website. However, to Carla Jennison, head of human resources (HR) at the southern division of Hospital Care Corporation (HCC), that kind of communication has not been as effective as she would have liked. For instance, HCC rolled out a wellness program 4 months ago and let employees know through an e-mail. There have only been a few dozen sign-ups among several thousand employees at 12 different hospitals. However, when surveyed at trainings, only one or two participants had heard of the program. So Carla has decided that HCC definitely needs a new way to communicate with its employees.

Carla thinks that the problem may be that most hospital personnel don’t have time to check e-mail on their shift and that the website is built more for other aspects of HR—like job applications or completing forms. In order to find a different solution, she begins looking into alternatives. After exploring recommendations and products both online and at the Society of Human Resource Management conference, Carla has narrowed it down to two options. The first comes from the company Straight to Text, which will send texts to employees’ cell phones that let them know about things going on at HCC and where to go from there. It works similar to the emergency alert system that the hospital uses to notify employees of emergencies like bad weather or Amber Alerts. However, the one most intriguing to her was to get a cell phone app for employees that lets them learn about new benefits, receive benefit-related news, and even manage and make changes to their benefits from the company Katora Inc. For those employees that do not have phones that use apps or tablets, there is also a web-based option. After getting demos of each product and pricing the different package options, Carla decides to go with Katora’s app for communicating with HCC’s employees.

The app is rolled out over the next 6 months at the 12 different hospitals during different trainings and events. In order to get people to install the app, she uses three tactics: (1) require training attendees to log into the app at the training sessions in order to get credit for their training; (2) to log into the app to make an appointment to get service or help at the local HR office, including making adjustments to their benefits; and (3) new hires have to download it and log in to set up their benefit communication preferences at hire. She also puts the information in companywide e-mails and on the hospital websites under the employee information page. Carla figures that these methods should get the app out to employees, and from there, word of mouth can help drive employees to install the app and use it.

It has been a year since HCC’s Southern Division started using Katora’s employee benefits app. So far, about 87% of all employees have adopted the app and use it to get news and at least partially manage their benefits. It has been successful because it is easy and convenient to use, can be used when the employee has time either at work or off the clock, and has the right functionality to get the employees and HCC HR what it needs. In fact, it has been successful enough that the company is planning to extend the use of the app nationwide. While it has worked well for communicating information about benefits, Carla’s bosses are now looking for something more. With the changes that have happened in health care over the last decade, it is more important to come up with ideas on how to be more competitive. Employees who work on the frontlines are a great resource in knowing what is going wrong, what is going right, and what can be done better. However, getting employees’ input on these issues is currently time consuming and inefficient. Carla’s boss, Devon, has asked her to look into other apps to see if there are any that might work for what they need.

Carla begins figuring out the criteria to evaluate the apps. Working with her boss and with her direct reports, she has determined that the app will need to have survey capability to poll employees about different ideas the company has, that allows written feedback to these surveys, that would integrate with several different systems like the facilities management system so repair requests could be input directly and pictures attached if needed, and would have a way for employees to provide anonymous feedback about others and themselves, and allow them to see and respond to anonymous feedback from supervisors, coworkers, and patients. She also creates a list of features and functions that would be nice for the app to have but could be passed on if the costs grew too high. After some research, Carla has found several companies that might have what the company needs. Now it is time to schedule demos and even see if she could trial the different apps on a larger scale.

Discussion Questions

What kind of communication would you say these apps would be?
What problems do you see with using an app for upward communication? For using an app for formal organization communication?
Do you have any concerns with the employees using their own cell phones or tablets to run the company apps? Why or why not?
What do you think a company should look for in terms of functionality for employee engagement and two-way communication? Explain your thoughts.

Source: This case is based upon actual companies; however, all names are fictitious.

SELF-ASSESSMENT 12.1: Quality of Communication Experience

This self-assessment exercise provides feedback on how you feel about communication with another person. There are no right or wrong answers, and this is not a test. You don’t have to share your results with others unless you wish to do so.

Part I. Taking the Assessment

You will be presented with some questions representing how you feel about your communication with another person. Circle the response that indicates your agreement with each of the following statements.

Choose a person to rate that you communicate with on a regular basis. This should be a person that you communicate with at least five times during a typical week. Then think of a specific time when you communicated with them about something that was important to you for at least 30 minutes. For example, you could select a person that you are working with on a team project for a class. Write their first name or initials here: ________________.

Part II. Scoring Instructions

Add the numbers you circled in each of the columns to derive your scores for the quality of communication experience.

Interpretation

Clarity—the degree of comprehension of the meaning being communicated. Meaning encompasses not only factual information but also ideas, emotions, and values conveyed through symbols and actions. Scores can range from 5 to 25. In general, scores from 5 to 14 are lower, and scores above 15 are higher.
Responsiveness—refers to how well the other party’s communications meet expectations regarding how they react to you. Scores can range from 5 to 25. In general, scores from 5 to 14 are lower, and scores above 15 are higher.
Comfort—experienced by communicators, it reflects the affective aspect of communication, and it is the ease and pleasantness felt when interacting with the other person. Scores can range from 5 to 25. In general, scores from 5 to 14 are lower, and scores above 15 are higher.

Discussion Questions

Which of the dimensions of the Quality of Communication Experience was the highest one for you? Which was the lowest? Explain why you think this was the case based upon your interaction with the person you chose to complete the assessment about.
Do you think your results would differ if you had chosen another person? Explain how.
How could you use the results of this assessment to provide feedback to the person you chose to complete the assessment about? How can you use this information to improve your communication with them?

Source: Liu, L.A., Chua, C. H., & Stahl, G. (2010). Quality of communication experience: Deﬁnition, measurement, and implications for intercultural negotiations. Journal of Applied Psychology, 95(3), 469–487.

Chapter Thirteen Diversity and Cross-Cultural Adjustments

Learning Objectives

After studying this chapter, you should be able to do the following:

13.1: Compare and contrast surface-level and deep-level diversity.
13.2: Name the characteristics of four generations at work, and describe how millennials will affect organizations.
13.3: Explain why culture is important for understanding organizational behavior (OB).
13.4: Summarize the key findings from the Global Leadership and Organizational Behavior Effectiveness (GLOBE) project international study of leadership effectiveness.
13.5: Discuss the importance of developing global leaders and the impact this has on an organization.
13.6: Devise a plan for coping with the symptoms of culture shock.
13.7: Explain the steps for an expatriate to take when adjusting to a cross-cultural assignment.

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Diversity: A Key Workforce Trend

The term diversity was first used in the early 1990s following the passage of U.S. equal employment opportunity laws protecting certain classes of employees based upon their sex, race, and ethnicity.¹ Embracing diversity is now considered a competitive advantage, and organizations should include the following in their planning: cost, attraction of human resources, marketing success, creativity and innovation, problem-solving quality, and organizational flexibility.² These six dimensions of business performance are directly impacted by the management of diversity. Research evidence supports the argument that diversity increases performance and organizations that embrace diversity build more inclusive work environments. In fact, ignoring diversity may result in an apathetic or even resistant workforce. Also, by not allowing individuals to express their differences, creativity may be suppressed.

In today’s multicultural and multinational context, leaders regularly interact with those whose assumptions about work behavior differ from their own. Global diversity is identified as a key workforce trend in a Human Capital Trends report:

In the midst of ongoing global expansion and a worldwide shortage of critical talent, companies are stepping up efforts—at very different speeds and levels of investment—to recruit and retain a workforce diverse in both demographics and ideas.³

Being able to effectively engage diverse employees is now a necessary leadership skill. For example, unsuccessful cross-cultural interaction leads to “failed integration that can seriously affect the realization of desired organizational outcomes such as successful technology transfer, knowledge-sharing, and the general realization of global growth.”⁴

One aspect of diversity is national culture. Culture is so ubiquitous that we rarely think about it until we travel to another country. Then it becomes obvious that our own culture influences the way we think because we are struck by the fact that people from other cultures dress, think, and behave differently than we do. Some characterize the French as rude for their abrupt attitudes toward Americans who are loud in restaurants. However, another explanation is that the physical space in many older French restaurants is smaller and customers are closer to one another. Many French people are brought up to be quiet in public spaces because they want to focus on the conversations of the people they are with and not everyone else in the restaurant. This preference is passed down from their grandparents and parents, and they don’t question why it is not appropriate to be boisterous in places for intimate dining.

Fortunately, there has been a lot of research on diversity and how it influences the work environment. There are frameworks that guide the cross-cultural adjustment process, including adjustment for leaders on expatriate assignments. Thus, embracing diversity is important to being an effective leader both at home as well as abroad given the changing landscape of business. Multinational corporations are common, and many products are built either partly or entirely with contributions from other countries. Products and services are marketed abroad. The best-selling book The World Is Flat describes a new world where organizations are becoming global villages with contributors from anywhere in the world due to advances in technology and the Internet.⁵ For example, many organizations employ workers in other countries to staff call centers. Your lab results may be read by a technician in Australia and sent back to your doctor while she is sleeping in the United States, and they will be waiting for her electronically at 6:00 a.m. As discussed in Chapter 12, multinational corporations require work to be geographically dispersed, and team members communicate with one another only through e-mail or teleconference meetings. With these global changes in work, the effective leader will be equipped with a sound understanding of culture, cultural differences, and how to adjust when other cultural values are encountered. This chapter covers research and practical applications of diversity, national culture, cross-cultural organizational behavior (OB), and the process of cross-cultural adjustment. Embracing diversity and leading across cultures has become an essential skill set in today’s working world. Case Study 13.1 provides an example of how a multinational company, IBM, takes a proactive approach to managing their diverse workforce.

Diversity

Learning Objective 13.1: Compare and contrast surface-level and deep-level diversity.

There are a number of challenges and values to having a diverse workforce. In the workplace, diversity is commonly referred to as “differences between individuals at work on any attribute that may evoke the perception that the other person is different from the self.”⁶ These differences pose a challenge for leaders who must unite their followers in the pursuit of common goals. One scholar notes that “Leadership is impossible outside of a community defined by shared values and vision.”⁷ Diversity poses some unique challenges for OB. On the one hand, the leader must articulate a shared vision that all followers can embrace (as we learned in Chapter 6). On the other hand, the leader must respect the differences of all followers.

We first must acknowledge the powerful North American culture largely rooted in a sense of independence. Leaders need to create a shared culture that all followers can embrace regardless of such attributes as gender, race or ethnicity, age, sexual orientation, or disability status. However, leaders must also show discretion when balancing the needs of the organization with the needs of employees. For example, members of some Latin American cultures are somewhat casual with respect to being on time. Leaders must ask themselves how it will affect their team if they allow some workers to habitually show up late for work. Leaders must enforce organizational policies but do so in a respectful way. They need to remember that human beings want to belong and have a shared sense of values in social groups. Hence, one of the leader’s top goals is to integrate individuals with the organization’s culture.

Organizational cultures can be powerful forces (you will learn more about this in Chapter 14), but for now, note that strong cultures can bind individuals together—even those with diverse backgrounds. Leaders may be able to build consensus among diverse followers by relating to values held in common by the majority of people in the world (e.g., justice or personal happiness). It has become part of the leader’s job to help diverse employees (particularly recent immigrants) adjust to the job and the organization’s culture. Leading diverse followers is thus a process of adjustment, taking into account demographic differences as well as values and reactions to work. But diversity goes beyond what can be seen and also includes deeper attitudes, values, and work habits, which are not visible.

Surface-Level and Deep-Level Diversity

The demographic attributes we typically think of when we think of “diversity” are called surface-level diversity because they are visible to observers. Surface-level diversity is defined as “differences among group members in overt, biological characteristics that are typically reflected in physical features.”⁸ A review of the research on surface-level diversity concluded that relationships of sex, race, and age had mixed results in the prediction of job performance and work attitude—that is, sometimes these demographic variables were related to performance and sometimes they were not. To fully understand diversity, we need to also consider deep-level diversity, which is defined as “differences among members’ attitudes, beliefs, and values.”⁹ More recent research shows that prior studies that had predicted poor outcomes when groups were diverse should be interpreted with caution. This is because when deep-level diversity is considered, diversity may actually contribute positively to work group functioning and effectiveness. In other words, the values and attitudes of organizational members may matter more than surface characteristics. Another interesting diversity attribute is age; different generations have been shown by research to have different underlying mind-sets, and this may be a source of conflict at the workplace.

Generations at the Workplace

Learning Objective 13.2: Name the characteristics of four generations at work, and describe how millennials will affect organizations.

Age is a demographic or surface-level diversity variable, but there are clear values and attitudes that have been shown to be related to what generation an employee belongs to. Much has been written about generations interacting at the workplace, and this poses some challenges for the leader. Generational differences affect everything, including recruiting, building teams, dealing with change, motivating, managing, and productivity.¹⁰ Table 13.1 shows the four generations now at the workplace, their characteristics, career goals, and work–life balance attitudes. The traditionalists were born between 1900 and 1945 and are retiring or have passed on. However, trends indicate that people are retiring later than 65, so it can be expected that many will remain in the workforce for some time since retirement plans were dented by the great recession of 2007 to 2009. The boomers were born between 1946 and 1964 and are called this due to the baby boom that occurred after World War II (also called the “me” generation or yuppies for young upwardly mobile professionals). They had significant influence throughout their lives and brought about the social changes experienced in the 1960s. The generation Xers, or gen Xers, were born between 1965 and 1980 and are sometimes referred to as the “baby busters” or “latchkey kids” because many of them had to let themselves into their homes after school because their parents were both at work. Now the millennials are entering the workforce and having a clear impact on organizations (and they are the largest group in the general population). They were born between 1981 and 1999 and look for flexibility and choice. Due to their numbers and impact, employers need to transition “from a ‘boomer-centric’ workplace to a ‘millennial-centric’ workplace.”¹¹

Source: Adapted from Zemke, R., Raines, C., & Filipczak, B. (2000). Generations at work: Managing the clash of Veterans, Boomers, Xers, and Nexters in your workplace. New York, NY: American Management Association.

Consider the following situations:

At annual appraisal time, a manager from the traditionalist generation gives out a nice bonus for a project well done. The generation X employee is ungrateful and says, “Why didn’t I get this 6 months ago, when the project was completed?” Gen X wants instant gratification, whereas a person in the traditionalist generation is happy to get money anytime. The solution here may be for the company to explore reward plans geared to the different generations, or things like monetary rewards and recognition given at the time when it is earned.
A generation X manager tells a boomer he has been working too hard and should take time off to take the family on vacation. Instead of saying thanks, the boomer replies, “I work to get ahead, to get a promotion, not for a vacation.” The next time that situation comes up, the manager might elect to give this particular employee a bonus rather than suggest a vacation.¹²

As these scenarios illustrate, the interactions of the different generations pose challenges for boomers, gen X, and millennials alike. As shown in Table 13.1, the four generations have different attitudes about work and the balance between work and home life. Gen X employees want portable skills that they can take with them to their next job. The boomers strive for monetary gain and mobility, whereas the millennial generation doesn’t view work as the be-all and end-all of their existence. They are the children of the boomers, and most grew up more affluently than other generations. This generation is more interested in career options and choice rather than employment with one organization long term. There are important differences across the generations in the workforce. It’s important to understand your own generation and how you fit in with others at the workplace. Toolkit Activity 13.1 provides you with an opportunity to reflect on your generation and how this may influence your approach to your work and career.

The Millennials

A recent study¹³ found that millennials are the only generational group that does not conceptually link organizational commitment with workplace culture. Millennials think about work differently than members of the other generations, and managers need to understand their attitudes toward duty, drive, and reward. For example, most millennials received trophies for participation in high school sports, even if they didn’t win.¹⁴ An in-depth study of the personalities of millennials administered personality inventories online to more than 1,000 millennials (up to 29 years old) and more than 3,000 persons from other generations (above 29 years old). The results indicated that millennials are motivated by recognition, public acknowledgment, instant and frequent positive feedback, and instant gratification. A survey of undergraduates found that millennials want praise when they do a good job and rewards for hard work on occasion. They show a clear communication preference for one-on-one honest feedback from their bosses. They also enjoy communicating with coworkers and feel that they can learn from them.¹⁵

Millennials also state that they need to balance their personal and professional lives, and have a comfortable work environment. They want flexible work schedules; however, they resent having to stay at work after hours. In particular, they are motivated by work in a nonconformist environment without strict rules and traditional work approaches. They tend to challenge the status quo and they will not be patient to keep the same job many years.¹⁶ Millennials are the first wave of the digital generation born into the high levels of technology. They are far more qualified in digital knowledge than the generations that preceded them, and they quickly acquire new information technology. They have wide networks of friends and nurture these relationships using social media platforms.¹⁷

Managers from other generations are sometimes surprised at the work habits of millennials. For example, a survey found that during interviews, millennials asked questions such as: “Do I have to show up every day for work?” “Do you drug test—often?” and “Can my mom call you about the benefits package?”¹⁸ Despite the discomfort with these questions that may reflect underlying attitudes toward work, other generations can’t simply avoid millennials; there are an estimated 40 million in the workforce today. The consulting firm that conducted this survey offers the following advice:

Make training and mentoring a priority. Millennials respond to one-on-one attention.
Set clear objectives—from the start—with the different generations and diversity at the workplace. Don’t assume that millennials understand the ground rules.
Consider the medium. Millennials grew up on the Internet and respond to YouTube, TED Talks, and blogs. They are used to accessing information in different ways though Google searches and Wikis, for example.
Provide feedback early and often. Build it into the job for millennials. Feedback is important to all generations, but millennials grew up experiencing more from parents and online learning platforms.
Pause before reacting. Think through your response to what might appear to be inappropriate workplace behavior, and choose your response carefully.

Building relationships to enhance effectiveness is a two-way street. If you are a millennial, organizational consultant Jeanne Meister offers the following advice:

Don’t “friend” your boss on Facebook or other social media platforms.
Remember that social media is forever. Don’t criticize your boss or employer on social media.
Keep your need to text in check. You are used to sending as many as 1,500 text messages a month, but prior generations are not.
Become an expert on your generation. Your perspective is valued, so offer your ideas on how to design a product or service to fit the needs of millennials.
View your manager as a role model. Ask him or her to explain the corporate culture and what is (and is not) appropriate.

What’s Next? Generation Z

Research is just beginning on the generation that will follow the millennials. The Z generation is comprised of individuals born between 1995 and 2010. Generation Z is the “net generation” due to the highly developed digital era they were born into. They are also referred to as the “Facebook generation,” “digital natives,” or sometimes the “iGeneration.” The norms of generation Z are different from the norms of millennials. They tend to use slang and expressions that may seem strange to other generations, and this distances them from other groups. Since generation Z was born into technology, they feel good in the digital world and surround themselves in the online environment. They are constantly online on a variety of devices, with no interruptions. Other forms of socialization may be difficult for them. They are more impatient than their predecessors, and they look for new challenges continuously. They are not afraid of change. To solve problems, they try to find the solutions on the Internet.¹⁹ While millennials were considered the first “global” generation with the development of the Internet, generation Z will become even more global in their outlook and interactions with others. A survey found that 58% of adults worldwide ages 35 or older agree that “kids today have more in common with their global peers than they do with adults in their own country.”²⁰

The generation you belong to is possibly one that already thinks globally; however, this perspective is becoming increasingly important for members of all generations. The next sections discuss research on cross-cultural adjustments, how national culture affects OB, and the requirements for effective leadership. First, the concept of culture is defined.

Best Practices

Understanding Millennials

An article with a provocative title appeared in Time magazine in May 2013.²¹ According to research cited by Stein and conducted by the National Institutes of Health (NIH), there may be more to this than an older generation stereotyping a younger one: 58% more college students scored higher on a personality measure of narcissism in 2009 than in 1982. The study also indicated that 40% of millennials think “they should be promoted every two years, regardless of performance” (p. 28). Clearly, their personality characteristics and expectations will challenge leaders in the years ahead. But Stein also cited other research that shows some positive characteristics of this generation. He stated that they tend to be optimistic and crave new experiences (which may be more important than material things). And they are “pro-business” (p. 34), which should be a good thing for organizations. They have endured years of cynicism from baby boomers and gen Xers, who are both burnt out from overwork. Gen Xers were disengaged from work after the ethics scandals of the 1980s and 1990s. Millennials highly value their free time and do not define themselves through their job. Instead, they value the impact they are able to make on the community through their active involvement in things that matter to them.²² So before reacting negatively to something a millennial says, it may be best to remember that (like all prior generations before them) they have a complex mix of values and attitudes (both positive and negative), and they are worth taking the time to understand.

Discussion Questions

What are some limits to using categorizations of generations such as millennials to understand behavior in organizations?
Can you think of people of this age group that don’t fit the descriptions (i.e., they were born between 1981 and 1999)? What are they like, and why do you think they are different than how millennials are often described?
What is useful about these attempts to understand different generations at the workplace?

Sources: Kelly, C., Elizabeth, F., Bharat, M., & Jitendra, M. (2016). Generation gaps: Changes in the workplace due to differing generational values. Advances in Management, 9(5), 1–8; Stein, J. (2013, May). The me me me generation: Millennials are lazy, entitled narcissists who still live with their parents. Why they’ll save us all. Time, 28–34.

What Is Culture?

Learning Objective 13.3: Explain why culture is important for understanding organizational behavior (OB).

Before defining culture, it should be noted that the culture of an organization is also important to understand and is covered in Chapter 14 of this textbook. National culture is an elusive concept in terms of definition. Definitions typically employed in OB have their roots in sociology or anthropology. Sociologists define culture as follows:

It is shared by almost all members of a social group.
Older members of the group pass it on to younger members.
It shapes behavior or structures one’s perception of the world (such as morals, laws, and customs).²³

A straightforward definition of culture is that it is the unstated standard operating procedures or ways of doing things.²⁴ As this definition implies, culture is comprised of things that we can see (e.g., the clothing a person wears or the objects they display in their home) and things we cannot see (e.g., how they define morality and what they value). It is important to bear in mind that culture is not the same thing as country.²⁵ Different countries may share cultural values. For example, Hong Kong and China are in the same country but have very distinct cultural values. Also, a meta-analytic study found that there is within-country variation on cultural values—approximately 80% of variation in cultural values reside within countries, confirming that country is not the same as culture.²⁶

A useful way to think about culture is the analogy of an iceberg (see Figure 13.1).²⁷ As shown in the figure, at the observable level, we can see dress, home or office décor, language, and even customs that are followed (what holidays are celebrated, as an example). However, under the surface, there are expectations of acceptable behavior, such as whether or not you should enter another’s personal space. So what we can observe is only the tip of the iceberg, and leaders may make errors if they only rely upon what can be seen. These unobservable aspects’ attributes of culture are often so deeply rooted in a person’s worldview that they are not questioned by them. For example, some people have little respect for authority and even lampoon political leaders, whereas other cultures have such a high respect for authority that they don’t question those in power. From the previously given examples, it is clear that cultural values affect OB. A leader can’t assume that what works in their native culture will work everywhere in the world. And only viewing the tip of the iceberg can be treacherous when dealing with people of different cultural backgrounds. As with the iceberg, a leader may get into difficulties by not being able to see what is underneath the surface. Fortunately, today we have sonar and GPS to locate and estimate the size of what’s underneath the surface of the ocean. Like sonar, there is research in OB that helps us to understand what’s underneath the culture iceberg. This chapter provides evidence-based guidelines that are essential to a leader being effective in today’s international context.

Figure 13.1 The Culture Iceberg: Observable and Unobservable Aspects of Culture

Source: Adapted from Hall, E. T. (1977). Beyond culture. New York, NY: Random House.

Critical Thinking Question: Give an example of an assumption about another culture that may influence your working relationship with a person from that culture. What questions could you ask them to determine whether the person fits your assumption?

High-Context Versus Low-Context Cultures

High-context cultures rely heavily on situational cues for meaning when perceiving and communicating with others. For example, in a high-context culture, a person may need to get to know a negotiating partner as a person before proceeding to business. In low-context cultures, written and spoken words carry the burden of shared meanings. So when negotiating with a person from a low-context culture, you can expect that the person will want to see a written formal agreement early in the process as a reference. From these examples, it is clear that employees bring their national culture values with them to work every day and that understanding them is essential to succeed as a leader. Examples showing the range from high- and low-context cultures (from low to high) are shown in Figure 13.2.²⁸^,29

Figure 13.2 Examples of High- and Low-Context Cultures

The situation with Brian and Chan described in Case Study 13.2 at the end of this chapter can be understood by considering that China is a high-context culture (Chan took extra meaning from Brian’s words because he is from a culture that relies on situations to determine meaning). However, Brian is from a relatively low-context culture (the United States) in which his words were not meant to be a personal attack on Chan but rather about the work. A common phrase we hear in the United States is “it’s not personal, it’s just business.” To an employee from a high-context culture, this might not make sense since they look to situations, including those at the workplace, to understand whether they are a worthy person.

One of the most often quoted definitions of culture is “the collective mental programming of the mind which distinguishes the members of one human group from another … the interactive aggregate of common characteristics that influence a human group’s response to its environment.”³⁰ This definition has become famous among managers, and its author is one of the most-cited researchers in the social sciences. In addition to offering a definition of culture, Hofstede articulated four cultural values that have received much research attention. In 1988, a fifth cultural value, time orientation (called Confucian dynamism), was added.³¹ Thirty years after the initial research, the cultural value of indulgence versus restraint was added to the set. These cultural values remain the most well-known framework for understanding cross-cultural differences in a variety of disciplines, including management. Next, we review them and the research on these cultural values, which has had a large impact on how we view the effects on national culture in organizations.

Hofstede’s Cultural Values

The five cultural values articulated by Hofstede and his colleagues follow, and their definitions are summarized in Table 13.2. Brief definitions and examples of countries with the United States as the referent culture for comparison purposes are provided next.

Sources: Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. Beverly Hills, CA: Sage; Hofstede, G. (1991). Culture’s consequences: International differences in work-related values (2nd ed.). Newbury Park, CA: Sage; Hofstede, G., & Bond, M. H. (1988). The Confucius connection: From cultural roots to economic growth. Organizational Dynamics, 16(4), 5–21: Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and organizations, software of the mind: Intercultural cooperation and its importance for survival (3rd ed.). New York, NY: McGraw-Hill.

Power distance—deference to authority (e.g., the United States is low, China is high)
Collectivism–individualism—group orientation (e.g., the United States is low, Russia is high)
Uncertainty avoidance—risk aversion (e.g., the United States is low, France is high)
Relationship orientation (masculinity–femininity)—a focus on people over material things (e.g., the United States is low and the Netherlands is high on femininity/relationship orientation)
Confucian dynamism (long-term orientation)—a focus on the future rather than the past and present³² (e.g., the United States is low, Japan is high)
Indulgence—how much each individual lacks control of their desires and impulses compared with its opposite of restraint (being repressed) (e.g., China is low, the United States is high).³³

Hofstede collected surveys from employees all over the world—initially from 40 countries.³⁴ His research was later expanded to 62 countries (116,000 managers and employees working for the large multinational company IBM were surveyed twice).³⁵ Hofstede found cultural values remained relatively stable over time. With this large database, he was able to create cultural clusters of countries. For example, Venezuela, Peru, Mexico, and Argentina are high power distance and collectivist cultures.³⁶ In contrast, the United States, Great Britain, Canada, and Australia are relatively lower on power distance and higher on individualism. Spain, France, Belgium, and Italy are higher on power distance but also relatively more individualistic cultures.

There has been a great deal of research interest in OB on the dimensions of national culture and collectivism in particular.³⁷^,38 For example, being a loyal team member is expected to be more important in collectivist cultures compared to individualist cultures.³⁹^,40 Research has linked collectivism to positive team outcomes.⁴¹^,42,43 The high level of individualism in the United States may help explain why teams have been more challenging to implement in the United States compared with some Asian cultures such as Japan. In individualistic cultures, employees’ personal relationships with supervisors are important since they view the relationship as being tied to advancement and monetary rewards.⁴⁴ A recent meta-analysis showed that cooperation and performance were higher in collectivistic cultures compared to individualistic cultures.⁴⁵ On the other hand, individualism may have positive benefits. A study of 72 cultures found that individualism, long-term orientation, and indulgence were associated with innovation (creation of new technology and creativity).⁴⁶

Power distance has been linked to leadership and team behavior. For example, for individuals with high power distance, high-quality relationships with their boss may not be expected, and they don’t attempt to manage their boss because they tend to have unquestioning deference to authority.⁴⁷ In contrast, for employees with low power distance, relative position and status in the organizations are likely to be overlooked, and they may see themselves as equal to their supervisors.⁴⁸

Hofstede’s research has had a large effect on both research and practice in management. A review of impactful publications in the social sciences published by the London School of Economics and Political Science found his book Culture’s Consequences to be one of the 25 most-cited books, with over 42,000 citations.⁴⁹ This cultural values framework has been instrumental in the overseas implementation of many business systems, including compensation, budget control, entrepreneurial behavior, training design, conflict resolution, work group dynamics, innovation, and leadership.⁵⁰^,51

Critical Thinking Questions: Do you think that cultures around the world are becoming more “westernized” (in other words, like the United States)? Why or why not?

Criticisms and Usefulness of Hofstede’s Research

Despite the high level of research interest and management application of these cultural values, the Hofstede model has been criticized for relevancy (i.e., the values and measures were developed in 1980). Other criticisms are that it is not possible to characterize all people in one culture the same way. Also, the use of nations for the study is a limitation of the research (i.e., the United States and Canada are similar). The Hofstede studies also lack attention to political influences on the data collected in the 1980s and the use of only one company (IBM) for the original research. Some scholars believe that culture is complex and cannot be captured in only four or five dimensions.⁵² Hofstede’s measures and statistical analyses have been criticized for their lack of validity and rigor.⁵³ Another criticism is that most research does not adopt a multiple levels perspective and analyze the effects of national culture on organizations and teams.⁵⁴ One review points out some strengths of Hofstede’s work: The study was published when there was little work on culture and spurred a great deal of research interest, his approach was systematic and rigorous for the time, and other studies have generally confirmed the initial results.

A meta-analysis of research covering 30 years on the Hofstede cultural values analyzed 598 studies (and over 200,000 employees and managers). Hofstede’s original four cultural value dimensions and work outcomes were equally important. Five cultural values (with the exception of indulgence, which was added later) were significantly and positively related to organizational commitment, identification, citizenship behavior, team-related attitudes, and feedback seeking. However, personality and demographics were better predictors of performance, absenteeism, and turnover than cultural values.⁵⁵

A new approach to understanding cultural differences has emerged in recent years. Research on cultural tightness–looseness is intended to be complementary to the Hofstede values framework. For example, collectivist countries tend to be tighter compared to individualistic countries (e.g., China).⁵⁶ This perspective brings together the different cultural values and summarizes them in terms of how tight or loose a culture is with respect to how much people follow society’s norms.

Cultural Tightness–Looseness

Cultural tightness–looseness is described as the strength of social norms and the level of sanctioning within societies.⁵⁷ Tightness is associated with order and efficiency, conformity, and low rates of change. In contrast, looseness is associated with social disorganization, deviance, innovation, and openness to change. Tightness–looseness is reflected by the clarity and pervasiveness of norms within societies and the degree of tolerance for deviation from these norms. The first factor delineating tight and loose societies is the level of accountability in organizations and the extent to which individuals have a sense of accountability. A large-scale study assessed cultural tightness–looseness in 33 cultures with the following survey questions (respondents were asked to agree or disagree with the questions on a 6-point scale):

There are many social norms that people are supposed to abide by in this country.
In this country, there are very clear expectations for how people should act in most situations.
People agree upon what behaviors are appropriate versus inappropriate in most situations in this country.
People in this country have a great deal of freedom in deciding how they want to behave in most situations (reverse-scored; higher scores indicate more cultural tightness).
In this country, if someone acts in an inappropriate way, others will strongly disapprove.
People in this country almost always comply with social norms.⁵⁸

This research found the 33 cultures studied varied with respect to tightness–looseness. Tight cultures had more social controls and were more likely to be autocratic. They were also more likely to have more rules and laws, for instance. Examples of tight cultures are India, Malaysia, and Pakistan. Examples of relatively loose cultures are Hungary, Israel, and Ukraine. The United States had a score of 5.1, which was a bit below the overall average score of 6.5 across all respondents from all cultures. So the United States can be seen as somewhat loose.

Cultural tightness is likely a response to ecological and historical threats such as population density, conflict, natural disasters, and disease (as examples). Also, governments, the media, education, laws, and religion shape cultural tightness. These aspects relate to the structure of norms and tolerance for deviation from them, and this affects the degree of structure in everyday situations, including OB. Researchers conclude that “understanding tight and loose cultures is critical for fostering cross-cultural coordination in a world of increasing global interdependence.”⁵⁹ Another research study⁶⁰ examined perceptions of leadership effectiveness in 29 different tight and loose cultures. Researchers found that tightness is positively related to perceptions that autonomous leadership is effective and negatively related to perceptions that team-oriented leadership is effective. In other words, employees in tight cultures prefer independent leaders who do not rely on others, perhaps because they prefer decisiveness. This study also found that tight cultures did not view charismatic leadership as effective, compared with loose cultures. Research on cultural tightness–looseness is relatively new, but this approach shows a great deal of promise for enhancing our understanding of cross-cultural OB.

Research on cultural values laid the foundations for understanding cross-cultural OB. Another large-scale study of cultural differences specifically focused on cultural values and leadership. The Global Leadership and Organizational Behavior Effectiveness (GLOBE) project at Wharton sought to understand differences in leader behaviors and relationships with relevant organizational outcomes worldwide. We review these studies next.

Globe Studies of Cross-Cultural Leadership

Learning Objective 13.4: Summarize the key findings from the Global Leadership and Organizational Behavior Effectiveness (GLOBE) project international study of leadership effectiveness.

The GLOBE project described and predicted the relationship of specific cultural variables to leadership and organizational processes and their effectiveness. The GLOBE researchers refined and extended the Hofstede cultural value framework. GLOBE involved 170 social scientists and management scholars from 61 cultures throughout the world to collect, analyze, and interpret data collected from employees and managers. This research identified nine cultural concepts that were shown to be relevant to perceptions of leadership. As with Hofstede, this research identified power distance and uncertainty avoidance as cultural values. Collectivism was split into two dimensions—loyalty to the group and loyalty to institutions (such as the organization you work for). In addition, the GLOBE project identified humane orientation, assertiveness, gender, egalitarianism, and future orientation, which is similar to Confucian dynamism and performance orientation. The nine GLOBE cultural dimension definitions and sample questionnaire items are shown in Table 13.3.

Sources: Adapted from House, R., Javidan, M., Hanges, P., & Dorfman, P. (2002). Understanding cultures and implicit leadership theories across the globe: An introduction to project GLOBE. Journal of World Business, 37(1), 3–10.

Based upon the GLOBE research and the 61 countries included in the study, cultures appear to vary on the nine dimensions. High- and low-scoring country examples are shown for each of the dimensions in Table 13.4.

In addition to refining cultural values, the GLOBE research team also examined the question of whether or not there were any leadership behaviors that appear to be effective across cultures. Their analysis found that there are certain culturally endorsed attributes of leadership that may be universal. This is known as the culturally endorsed implicit leadership theory (CLT), which identified the following leadership behaviors that were perceived as effective across cultures.

Charismatic/value-based—the ability to inspire and motivate others to high performance
Team-Oriented—effective team building and implementing a common goal
Participative—involving others in decisions and implementations
Humane-Oriented—being supportive and showing consideration, compassion, and generosity
Autonomous—independent and individualistic leadership
Self-protective—ensuring safety and security of individuals, including face-saving

Thus, GLOBE research found that employees may have some similar conceptions of leadership based on implicit assumptions regarding what constitutes effective leadership. These belief systems affect the way that a person responds to directives from a leader. GLOBE uncovered some important underlying perceptions regarding what is deemed effective in terms of leadership and offers some practical advice for leaders operating abroad.⁶¹ There appear to be some cultural “universals” according to GLOBE: having integrity, having vision, being inspirational, and building teams. Also, there are universal attributes of ineffective leadership: being a loner, being irritable, and being autocratic. Other attributes may depend on the culture: individualism, being conscious of status, and risk taking.

Critical Thinking Questions: What are the advantages of knowing cultural values that generalize across cultures? Is it more useful to learn about cultural values that are unique to a culture? Why or why not?

Following this foundation in cultural value differences, we next turn to the development of global leaders. Experts have concluded that most of today’s managers lack the global leadership skills needed to be effective in the multinational business context.⁶² One study estimated that 85% of Fortune 500 companies have a shortage of global managers.⁶³ The critical skills needed for effective global leadership and how they can be developed are discussed in the following sections.

Developing Global Leaders

Learning Objective 13.5: Discuss the importance of developing global leaders and the impact this has on an organization.

Carlos Ghosn, the chairman and CEO of the Renault-Nissan Alliance, was asked about the importance of cross-cultural management education for managers. Here is his reply:

More and more, managers are dealing with different cultures. Companies are going global, and teams are spread across the globe. If you’re head of engineering, you have to deal with divisions in Vietnam, India, China or Russia, and you have to work across cultures. You have to know how to motivate people who speak different languages, who have different cultural contexts, who have different sensitivities and habits. You have to get prepared to deal with teams who are multicultural, to work with people who do not all think the same way as you do.⁶⁴

Ghosn’s view is shared by other top executives who view the ability to influence people from other cultures as the most important skill required for their own success.⁶⁵ Global mind-set has been defined as a set of individual attributes that enhance a manager’s ability to influence others who are different from them.⁶⁶

The global mind-set is developed through three interrelated skills: cultural intelligence (CQ) and integrative acculturation (becoming bicultural). Also, the boxed insert describes the process of cultural retooling, which is the psychological process of adapting to another culture. The next sections elaborate on these leadership skills; all of them are needed to develop effective working relationships with others that result from a mutual adjustment process resulting in a third culture.

The Third Culture

The third culture has been defined as “the construction of a mutually beneficial interactive environment in which individuals from two different cultures can function in a way beneficial to all involved.”⁶⁷ The third culture consists of shared frameworks, value systems, and communication patterns that emerge when people from different cultures interact. This is an important concept because it is through a mutual adjustment process over time that a third culture emerges, which has features of both so that both parties can be comfortable interacting. While this is a two-person example, third (or hybrid) cultures have also been shown to be important for team harmony and performance.⁶⁸ The process of the development of the third culture is shown in Figure 13.3. As shown in this figure, third cultures emerge over four phases as follows:

Phase 1. Initial contact may result in the person withdrawing from the other person (or culture). For example, an expatriate travels to the city of Al Ain in the United Arab Emirates (UAE) from Argentina to develop a contract for oil exports. The expatriate insists that business colleagues taste wine brought as a gift from Argentina. The Arab executives are uncomfortable and limit their interactions after this exchange.
Phase 2. The parties evaluate the need for continued interaction. As the discussions continue, the UAE representatives realize that a business between Argentina may open additional markets in Latin America, and the executive from Argentina has valuable contacts. The parties have options at this point. They may choose to rely on their own cultural values and not adapt. At this point, the interaction might end, so the risk of staying with one’s own values must be evaluated. For extended interactions, however, the parties begin a natural process of mutual adjustment. The need for ongoing and mutually beneficial interactions supports the cultural adjustment process.
Phase 3. The dependence of the parties on one another is clear by this point. Norms for interaction have evolved to the point where they feel “natural” to both parties. Positive outcomes reinforce the motivations for continued adjustment, and a third culture emerges that accommodates both parties’ cultures. Following the previously given example, the attractiveness of the Latin American market for oil exports motivates the UAE executives to explain why their religious and cultural beliefs don’t allow them to drink alcohol. Both parties become accustomed to cultural differences in cultural values and a balanced approach emerges.
Phase 4. Interdependence results in more nuanced development and maintenance of the third culture. There is a continued process of open communication, and the process becomes dependent on trust. In the previously given example, the executive from Argentina contacts the home office and requests that alternative gifts of leather binders be sent immediately. This example illustrates that there is a type of intelligence that emanates from an interest in learning about other cultures and a willingness to make adjustments. The next section discusses research on cultural intelligence.

Figure 13.3 Model of Third-Culture Building

Source: Casrnir, F. L. (1999). Foundations for the study of intercultural communication based on a third-culture building model. International Journal of Intercultural Relations, 23(1), 91–116.

Cultural Intelligence

CQ has been defined as an individual’s capabilities to function and manage effectively in culturally diverse settings.⁶⁹ The personality trait of openness to experience, combined with agreeableness, relates positively to CQ.⁷⁰ However, CQ does not appear to be a trait. Like emotional intelligence (EI; as discussed in Chapter 3), CQ can be cultivated by first assessing one’s strengths and weaknesses in CQ, undergoing training in cross-cultural interactions, and then applying CQ learning to real-life cross-cultural situations to build confidence.⁷¹ A study of 183 college-level business students who had recently completed study-abroad experiences found that CQ influenced the relationship between core self-evaluation and the success of the study-abroad experiences (i.e., their enjoyment, personal growth, and success).⁷² Another study of 254 university students who were enrolled in an international exchange program were assessed at three points in time, and results of the study showed that positive cross-cultural adjustment experiences predicted CQ.⁷³

CQ is composed of four dimensions: metacognitive, cognitive, motivational, and behavioral, as shown in Figure 13.4. Metacognitive CQ refers to the cognitive processing necessary to recognize and understand expectations appropriate for different cultural situations. Cognitive CQ refers to self-awareness and the ability to detect cultural patterns. Motivational CQ refers to persistence and goal setting for cross-cultural interactions. Behavioral CQ is the ability to adjust to others’ cultural practices. To assess your CQ, complete Self-Assessment 13.1 in the Toolkit at the end of this chapter. The cognitive aspect of CQ predicts cultural judgment, whereas motivational CQ predicts cultural adaptation. Both cognitive and behavioral CQ predicts task performance.⁷⁴ A review of the research on CQ concluded that CQ positively relates to expatriate adjustment and leadership effectiveness.⁷⁵ But can CQ be acquired through training? Two multination studies compared students’ CQ before taking cross-cultural management courses to their scores afterward. Student CQ was significantly higher after taking courses that included CQ, with stronger effects found for cognitive CQ than motivational or behavioral. Thus, there is some indication that CQ can be learned.⁷⁶ CQ training should include assessment and training on all facets of CQ:

Cognitive (and metacognitive)—acquiring information on the new culture and engaging in self-reflection
Motivational—developing culture-specific confidence (self-efficacy) and setting goals for cross-cultural adjustment
Behavioral—includes role-plays to model and practice effective behaviors with those from another culture⁷⁷

Figure 13.4 Dimensions of Cultural Intelligence

Source: Adapted from Earley, P. C., & Ang, S. A. (2003). Cultural intelligence: Individual interactions across cultures. Stanford, CA: Stanford University Press; Eisenberg, J., Lee, H., Bruck, F., Brenner, B., Claes, M., Mironski, J., & Bell, R. (2013). Can business schools make students culturally competent? Effects of cross-cultural management courses on cultural intelligence. Academy of Management Learning & Education, 12(4), 603–621.

Critical Thinking Questions: Explain whether or not you agree that CQ can be learned. What aspect of CQ do you feel is the most important for a leader to exhibit? Why?

Thus, CQ involves the ability to learn about other cultures and develop the confidence and skills to engage in new behaviors. Adaptation is a key aspect of success in working with others to achieve a third culture both one-on-one and in teams.

Cross-Cultural Adjustment Strategies

With respect to cross-cultural adjustment, four acculturation strategies are possible: assimilation, separation, marginalization, and integration.⁷⁸^,79 Assimilation involves relinquishing cultural heritage and adopting the beliefs and behaviors of the new culture. For example, a Chinese person adopts an English name to better fit in with U.S. coworkers. Separation involves maintaining only the heritage culture without intergroup relations. For example, a Russian scientist avoids contact with coworkers by eating lunch at his desk. Marginalization involves rejecting both the old and new culture. For example, an Indian expatriate working in Saudi Arabia does not celebrate Christmas or Ramadan. Integration (or biculturalism) involves maintaining one’s cultural heritage and adopting a new cultural identity; the identities remain independent of one another. For example, a Cuban immigrates to the United States and speaks Spanish at home with her family but speaks English at work.

We have learned a lot about how people adjust to different cultures from the study of bicultural individuals. Biculturals are defined as “people who have internalized more than one cultural profile.”⁸⁰ These individuals are therefore comfortable operating in two different cultures, and they have been found to have more cross-cultural adaptive skills compared to monoculturals (those comfortable with only one culture).

Integrative Acculturation: Biculturals

Biculturals have higher metacognitive CQ skills and have been shown by research to be more complex than those using other strategies.⁸¹ This is referred to as integrative complexity, which is defined as follows:

The degree to which a person accepts the reasonableness of different cultural perspectives on how to live, both at the micro interpersonal level and at more macro organizational-societal levels and, consequently, is motivated to develop integrative schemas that specify when to activate different worldviews and/or how to blend them together into a coherent holistic mental representation.⁸⁴

Research in Action

When in Rome … Cultural Retooling

The need to adapt to another culture is not new. You have probably heard the phrase, “When in Rome, do as the Romans do.” This originated with an ancient Roman leader’s need to adjust to another culture. Augustine, a native of Carthage serving as Bishop of Milan, wrote to Januarius, Bishop of Naples, with advice about an upcoming trip to their organization’s headquarters in Rome. At the time, Christians in Rome fasted on Saturday, whereas Christians in other cities did not. To avoid scandal or offense, Augustine’s approach was to fast when in Rome but not when at home in Milan, and he advised Januarius to adapt to local norms in the same way. Augustine had a long successful career, and it may have been due to his ability to adapt and do as the Romans did when in Rome.⁸² Today’s OB research has shed light on the process that individuals go through in adapting to another culture.

The psychological process of adaptation to another culture is called cultural retooling.⁸³ Using longitudinal data from foreign-born master’s degree students in the United States, researchers found that during cultural retooling individuals experience internal conflicts. This conflict can be related to either values or disruptions in routines. Cultural retooling follows three distinct phases:

Phase 1. Deep conflict—feeling illegitimate and awkward (e.g., a Japanese student does not feel comfortable talking about her strengths at networking events)
Phase 2. Ambivalence—adjusting and not feeling as negative about the behavior (e.g., the Japanese student overcomes the strong negative reaction to “boasting” and begins to imitate others at networking events)
Phase 3. Authenticity—naturally engaging in the new behavior consistent with the new culture (e.g., the Japanese student experiences a shift in values that is consistent with talking about her strengths to others)

Not all of the participants in the study experienced the third phase of authenticity. They adapted using different strategies. Some took an integrative approach and allowed themselves to change (telling themselves it was okay to behave a certain way because it is acceptable in the new culture and personalizing experiences by making them more congruent with their home culture). Using an instrumental approach, those finding themselves in conflict recognize that it is necessary to adapt by switching their culture’s behavior for a new one. Another strategy was to suppress their conflict by telling themselves they were just acting out a role. This research provides insight into the thought processes people go through when making cross-cultural adjustments.

Discussion Questions:

Explain why the instrumental approach is more effective in adapting to another culture than suppression.
Provide an example of a time when you experienced a conflict due to interaction with a person from another culture. Reflect on this experience. What did you learn from this?
How can you use knowledge of cultural retooling phases to help you adapt to another culture?

Sources: Molinsky, A. (2013). The psychological processes of cultural retooling. Academy of Management Journal, 56(3), 683–710; Morris, M. W., Savani, K., Mor, S., & Cho, J. (2014). When in Rome: Intercultural learning and implications for training. Research in Organizational Behavior, 34, 189–215.

Research involving Asian American college students and Israelis working in the United States found that bicultural individuals are more integratively complex in both cultural and work situations compared to assimilated or separated individuals. Integrative complexity was assessed by asking study participants to write answers to questions like “What does it mean to you to be bicultural?” and then trained raters scored them for the degree to which they were able to recognize causality, see issues from different points of view, and show value trade-offs. This research also showed that pressure to acculturate drives individuals toward more integrative complexity.⁸⁵ Hence, integrative complexity might be developed rather than a completely inborn trait.

Research on acculturation suggests that it is possible to adjust to a new culture. This is important because many people experience culture shock, which is feeling stress and being uncomfortable when a new culture is experienced for the first time. It’s important to remember that this is a normal reaction, and you can work through your feelings of stress in stages. In addition, as a leader, it’s important to understand that some of your followers may be recent immigrants who may be experiencing such conflicts, and you can help them adjust through CQ.

Culture Shock

Learning Objective 13.6: Devise a plan for coping with the symptoms of culture shock.

Culture shock has become a common term, and most people are now familiar with the concept. The term was coined by an anthropologist who defined culture shock as the distress experienced by a traveler from the loss of familiar patterns of social interaction.⁸⁶ He described several “symptoms” of culture shock, including

stress due to the effort required to make necessary adjustments;
having a sense of loss from missing family and friends—“homesickness”;
wanting to avoid interactions with persons from the host culture;
feeling helpless and wanting to depend on those from one’s home country;
having a fear of being robbed or injured, or becoming ill;
being angry at delays and inconveniences experienced; and
feeling incompetent from not being able to cope with the new environment.

Culture shock is a series of phases a person goes through—particularly expatriates on assignment. First, the expatriate is excited and finds the new culture to be “exotic.” Then, he begins to feel it is “wicked and silly.” Finally, he sees it as “dissimilar and diverse.”⁸⁷ The process of culture shock from predeparture to reentry is shown in Figure 13.5. As this figure illustrates, the impact of cultural transitions on well-being follows a W-shaped curve. During the predeparture phase, there is a sense of excitement and anticipation of experiencing a new adventure in another culture. On arrival, there is typically a sense of confusion due to jet lag and getting accommodated to one’s surroundings. As noted previously, most expatriates experience a honeymoon period followed by a plunge when they begin to encounter difficulties in understanding cultural practices and values. Over time, reconciliation occurs, and the expatriate begins to adjust and accommodate to the new environment. Nearing the time he will return home, there is a similar excitement as that of predeparture where the expatriate puts things in order in the host country and makes preparations to return to his home country.

Figure 13.5 Stages of Culture Shock

Source: Gaw, K. F. (2000). Reverse culture shock in students returning from overseas. International Journal of Intercultural Relations, 24(1), 83–104; Oberg, K. (1960). Culture shock adjustment to new cultural environments. Practical Anthropology, 7, 177–182.

It is important to keep this in mind and anticipate the “highs” and “lows” that will likely be experienced while on an expatriate assignment. Being able to work through culture shock is critical for expatriates since many organizations now expect significant international experience as a prerequisite to promotion to the highest rank. It has been reported that “companies like GE, Citigroup, Shell, Siemens, and Nokia are using international assignments of high potential employees as the means to develop their managers’ global leadership mindset and competencies.”⁸⁸ International assignments are the most effective source for developing global leaders.⁸⁹ So if you have aspirations to be an executive-level leader, it is important for you to understand the process of expatriate cross-cultural adjustment and be ready for the adjustment process of culture shock. Fortunately, OB researchers have been studying this process for a number of years.

Critical Thinking Question: Give an example of when you found something troubling about a different culture. What did you do?

Expatriate Adjustment

Learning Objective 13.7: Explain the steps for an expatriate to take when adjusting to a cross-cultural assignment.

Jack Welch stated that the CEOs of the future will be able to adjust to other cultures:

The Jack Welch of the future cannot be like me. I spent my entire career in the U.S. The next head of General Electric will be somebody who spent time in Bombay, in Hong Kong, in Buenos Aires. We have to send our best and brightest overseas and make sure they have the training that will allow them to be the global leaders who will make GE flourish in the future.⁹⁰

Welch was right. His successor, Jeffrey Immelt, held a series of leadership positions with GE that included marketing and global product development, and vice president of worldwide marketing and product management for GE Appliances. Multinational organizations need employees who are globally mobile in today’s competitive global business environment. Global mobility occurs when individuals, and often their families, are relocated from one country to another by an employer, generally from a familiar situation (a home country) to a novel one (a host country) for a fixed period of time. These globally mobile employees, also known as expatriates, have grown in importance as firms expand their global reach. As the number of a firm’s foreign subsidiaries grows, the number of expatriates working in them often grows as well.⁹¹

Despite the prevalence and importance of expatriates on international assignments, poor cross-cultural adjustment often results in dissatisfaction and lower performance.⁹²^,93 This can be costly for organizations that make a significant investment in training, relocating, and compensating expatriates. Some estimate the failure rate (leaving an assignment early) to be between 8% and 12%.⁹⁴^,95,96 Recently, a study of global leadership trends was released by the consulting firm Right Management, which found that managers still fail in overseas assignments. A survey of 202 CEOs and senior human resource management professionals found that just 58% of overseas assignments were considered to be successful, and there was little difference based upon the region.⁹⁷ With respect to the costs, for the United States, expatriate failure costs have been estimated to be about $1 million per failure,⁹⁸^,99 and the total economic impact of failure ranges between $2 billion and $2.5 billion.¹⁰⁰^,101 These costs have led to the development of sophisticated measures of the return on investment for expatriate assignments, which include such costs as selection, moving expenses, housing, compensation, bonuses, and readjustment costs after the assignment.¹⁰² In addition to these costs, there are psychological effects on expatriates and decreased productivity that are not accounted for in these estimates.¹⁰³

An expatriate assignment can be either self-initiated or assigned by the organization. Self-initiated expatriates (SIEs) choose to go abroad, and assigned expatriates (AEs) are offered the opportunity by their organization. A study of 193 expatriates (67 AEs and 126 SIEs)¹⁰⁴ indicates that self-initiated foreign work experience is significantly more likely to be chosen by women and those having lower job levels. Also, SIEs have higher organizational mobility. So there may be a difference in career outcomes for those who have the flexibility to volunteer for an expatriate assignment. But what makes people want to volunteer for an expatriate assignment? Based upon a study of 514 university students,¹⁰⁵ CQ influences the degree to which career adaptability relates to intentions to go abroad for their careers. In other words, being flexible and culturally intelligent seems to influence the intention to become an expatriate. CQ also has been related to the ability to adjust to the expatriate assignment in the host country.¹⁰⁶ Being an expatriate relates to compensation as well as career mobility. A study of 440 graduates of elite MBA programs from around the world¹⁰⁷ found that expatriates receive more total compensation but only if they have experienced more than one expatriate assignment and acquired knowledge and new skills utilized during postrepatriation. They also tend to be at higher organizational levels. In other words, expatriation relates to compensation attainment because it is an intense developmental experience and not merely a signaling mechanism for who is on the fast track.

What can organizations do to help expatriates adjust to their international assignments? A study of the adjustment experiences of 213 expatriates from three U.S.-based Fortune 500 companies found perceived support from the organization influenced their adjustment.¹⁰⁸ Expatriates’ adjustment was, in turn, related to their performance as rated by their supervisors. Surface-level cultural differences (e.g., food, housing, and climate) were most strongly related to general adjustment. However, deep-level cultural differences (e.g., values and assumptions) affected work and interaction adjustment, and expatriates who reported self-transcendence had an easier time adjusting to their expatriate assignment. Self-transcendence includes universalism (understanding, appreciation, tolerance, and protection for the welfare of all people and for nature) and benevolence (preservation and enhancement of the welfare of people with whom one is in frequent personal contact).¹⁰⁹

Expatriate managers need to realize that they don’t have to go it alone. Adjustments in personal interactions with people from a host culture were a significant predictor of expatriate retention in a study of 321 U.S. expatriates assigned to the Pacific Rim or Western Europe.¹¹⁰ Also, having a mentor provides both career and social support that are essential.¹¹¹ Mentors are key resources before, during, and after international assignments and are often indispensable for facilitating promotions after the assignment ends. Expatriates must think in terms of having a network of mentors who can provide support for adaptation in terms of host country culture, task assistance, and office culture (these may or may not be the same mentors and can be supervisors, peers, or someone outside of the organization).¹¹² Finally, training in cross-cultural interactions, culture, and language has been shown to improve adjustment for expatriates.¹¹³

At the end of the assignment, expatriates return to their home country. The process of returning to work and family life may also have shocks, known as “reverse culture shock” or “re-entry shock.” As with expatriation, two research studies of international students and recent university graduates found that CQ can also ease the reverse culture shock when an expatriate returns.¹¹⁴ Additional research on the process of repatriation will be discussed next.

Repatriation

Even when an expatriate has adjusted and performed well on assignment, he or she must also be prepared for repatriation. Repatriation, or reentry, refers to the transition when the expatriate has completed the international assignment and returns home.¹¹⁵ Expatriates are at risk of leaving the organization after they return. It has been estimated that 10% of expatriates leave their firm shortly after completing an international assignment, and another 14% leave between 2 and 3 years of their return.¹¹⁶ Expatriates may experience a similar sequence of culture shock feelings when they return to their home culture. Successful expatriates become accustomed to their host culture and are tolerant of unfamiliar situations and work habits. Reverse culture shock is the realization that time has moved on and things have not stood still while the expatriate was away from the home office.¹¹⁷^,118 The returning expatriate experiences confusion and disappointment that may lead to a temporary state of depression and a sense of loss. Upon return to the home country, they may even look judgmentally upon their home culture as they realize some of the negative aspects of their own national culture. They may be disappointed in the reactions of coworkers and superiors upon their return. Also, they feel that their work abroad is not understood or appreciated, and expected rewards and promotions may not follow.¹¹⁹ Other employees who stayed home may have been promoted, and the expatriate was “out of sight, out of mind” in the eyes of their supervisor. Finally, there is a readjustment phase (whether the expatriate leaves the job or not) in which there is resolution of the reentry culture shock and the expatriate puts the experience into perspective.

As shown in Figure 13.5, the expatriate can expect a series of “culture bumps,” and research suggests the following steps to cope with them:

Pinpoint the specific time when you felt different or uncomfortable.
Define the situation.
List the behaviors of the other person(s).
List your own behavior.
List your feelings in the situation.
List the behaviors you expect from people in your own culture in that same situation.
Reflect on the underlying value in your culture that prompts that behavior expectation.¹²⁰

Communication and validation are important to successful repatriation.¹²¹^,122 Communication is how much information the expatriate has regarding what is happening at home while on assignment. With higher levels of communication, those who return are more proactive, effective, and satisfied with their jobs after they return.¹²³ Fortunately, today we have Skype and Google hangouts (virtual face-to-face chat rooms), which allow expatriates to have face-to-face contact with their families and colleagues while on assignment. If the family is living abroad with the expatriate, the spouse has a significant influence on the expatriate adjustment process.¹²⁴ Culture shock may be more difficult for the spouse, who may feel isolated while the expatriate has peers at work to interact with.¹²⁵ Validation refers to the amount of recognition the expatriate gets for success on the international assignment. This may include a promotion—those who are promoted after an expatriate assignment adjust better than those who are not.¹²⁶

Critical Thinking Questions: Have you been on a study-abroad experience (or an expatriate assignment)? Describe your process of cultural adjustment and repatriation. If you have not been on a study-abroad experience (or expatriate assignment), explain why.

Leadership Implications: Becoming a Global Leader

Diversity takes many forms, including surface- and deep-level diversity (which includes cultural values). Embracing diversity relates to organizational effectiveness. For example, a study of Standard & Poor’s firms over a 15-year period showed that having women in top management teams improves firm performance for firms whose strategy is focused on innovation.¹²⁷ The study authors concluded that in a context of innovation, “the informational and social benefits of gender diversity and the behaviors associated with women in management are likely to be especially important for managerial task performance.”¹²⁸ International management scholars have noted a shift from “international management” to “global leadership” being the required skill set in today’s business environment.¹²⁹ It is imperative that leaders embrace all forms of diversity to enhance the engagement of a diverse and multinational workforce to harness their productive and creative work to meet organizational goals.

A convincing example of the power of diversity is from a study of NFL draft picks for 12 players by well-known sports analysts from NFL Countdown, Sporting News, Sports Illustrated, CBS SportsLine, About.com, and Fanball.com. Since their reputations depend on being right, the analysts care about whether or not they make the right predictions in the NFL draft. Researchers found that the average of all analysts was a better predictor of any individual analyst. Prediction diversity matters, and this example demonstrates that diverse points of view can enhance organizational functioning through better decisions: “Diversity matters just as much as individual ability. That is not a feel-good statement. It’s a mathematical fact.”¹³⁰ Thus, the field of OB recognizes that diversity is not something that must be “managed,” but rather, it is something that must be embraced because it is a business imperative. Many organizations today reflect diversity in mission statements. For example, ESPN has won several awards for diversity, and their mission statement reflects the importance of valuing diversity to their profitability:

ESPN will embrace diversity to better serve our fans and customers. We strive to attract and retain talented and diverse people, and to create an inclusive environment where all employees can contribute to their fullest potential. In a changing world in which we endeavor to grow our business, it is imperative that ESPN’s workforce reflects the diversity of cultures, thinking and perspectives of its current and prospective fans and customers. Tapping the skills, ideas and perspectives of a diverse workforce will make us a better and more profitable company, and is key to sustaining our continued growth. (Diversity at ESPN, 2013, http://espncareers.com/working-here/diversity.aspx)

This seems like a great vision statement, but what can organizations do specifically to develop an inclusive and diverse work environment? One thing is to apply critical thinking by asking key questions about diversity. Leading a diverse workforce does have some challenges, such as shifting power dynamics in the organization or employees not being willing to participate in diversity initiatives. A study of human resource managers revealed several questions that every leader should be asking themselves and others in their organization to promote open discussions about diversity:¹³¹

Are there challenging or pressing issues in managing a diverse workforce? If so, which do you find to be most challenging?
What are specific things you have done personally to ease those challenges?
In regard to diversity, are there things you wish had been done differently? If so, what? And how would you have handled those things differently?
What are specific things your company has done to ease those challenges?
What are your (or your company’s) future plans for diversity? Do you have specific plans that will be implemented in the near future? If so, what?

Asking such questions (and thinking thoughtfully about the answers) should help a leader identify what challenges the organization faces and what is (or is not) being done to address them. For example, pairing employees with different backgrounds in terms of age, gender, and race or ethnicity in a one-on-one coaching program might be something an organization could implement.

Critical Thinking Questions: What do you think is the biggest challenge in leading a diverse workforce? How can a leader address this challenge?

A case study of a multicultural organization found that the organization implemented several key managerial actions:¹³²

CEO support of diversity initiatives
Managerial accountability
Fundamental change in human resource practices
Employee involvement and buy-in
Overarching corporate philosophy regarding diversity
Ongoing monitoring and improvement of diversity climate
Multiple measures of success

In terms of managerial accountability, 25% of the managers’ salary increase was linked to interaction with diverse individuals as an example in the multicultural organization studied. These authors concluded that it is important to have a plan for diversity and inclusion initiatives, and to link them to hard organizational outcomes such as revenue.

The effective global leader must keep the phrase “explain before blame” in mind when interacting with people from other cultures—employees, supervisors, peers, customers, and negotiating partners. Culture, like personality, is something that is relatively stable, and the leader’s best tools are to understand it and learn to develop mutually adjusted relationships with those from different cultures. The thought patterns and behaviors associated with CQ are helpful in implementing the idea of “explain before blame.” It is important to keep an open mind and be curious about other cultures. It’s fine to politely ask questions about other cultural values and practices. Try to focus on what people have in common rather than differences. For example, the GLOBE research reviewed in this chapter indicated that there are some cultural universals that define effective leadership. Focus on what you have learned from cross-cultural interactions, and support others by providing positive feedback when you see them trying to understand cultural differences.

In summary, the skills needed for successful interactions with another culture are CQ, cultural retooling, and an integrative approach to acculturation. It is also important to anticipate and develop a plan to cope with culture shock if you embark on an expatriate assignment. These guidelines are also helpful for the reentry process for those returning from an international assignment. This chapter has hopefully increased your awareness of the effects of culture on OB. The effective leader must be able to suspend judgment (explain before blame) and use their CQ to effectively adjust to those from other cultures whether assigned in the United States or abroad. Throughout this textbook, we have referenced research on how culture affects leader effectiveness with respect to perceptions, motivation, negotiation, teams, and more. By now, you realize that in today’s global environment, cross-cultural differences affect every aspect of OB.

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Key Terms

assimilation, 347
behavioral CQ, 347
biculturals, 348
boomers, 333
cognitive CQ, 347
cultural intelligence (CQ), 345
cultural looseness, 342
cultural retooling, 345
cultural tightness, 342
cultural tightness–looseness, 341
culturally endorsed implicit leadership theory (CLT), 344
culture shock, 350
deep-level diversity, 333
generation Xers, or gen Xers, 333
Global Leadership and Organizational Behavior Effectiveness (GLOBE) project, 342
global mind-set, 345
global mobility, 352
high-context cultures, 338
integration, 347
integrative acculturation, 345
integrative complexity, 348
low-context cultures, 339
marginalization, 347
metacognitive CQ, 347
millennials, 334
motivational CQ, 347
repatriation, 353
reverse culture shock, 353
separation, 347
surface-level diversity, 333
third culture, 345
traditionalists, 333

TOOLKIT ACTIVITY 13.1: Generations at Work

Based on Table 13.1, identify which generation you are in: _________________________________

What is your current age? ______

Answer the following questions. Then, join a group of four to five classmates and discuss how your answers are similar or different. Do they agree with the characterizations of your generation?

What is your preferred length of workday and the number of days worked per week?

_____________________________________________________________________________________________________

Are you interested in flexible working hours? Working from home? Why or why not?

_____________________________________________________________________________________________________

Do you multitask (do more than one thing at once)?

_____________________________________________________________________________________________________

What frequency and form of team meetings do you prefer?

_____________________________________________________________________________________________________

What style of leadership do you prefer? Why?

_____________________________________________________________________________________________________

What organizational rewards are meaningful to you? Why?

_____________________________________________________________________________________________________

How important is a balance between work and personal life to you? Explain.

_____________________________________________________________________________________________________

TOOLKIT ACTIVITY 13.2: Journey to Sharahad

Background

This exercise simulates an intercultural exchange between Americans and a fictional culture. Participants role-playing either culture can learn from the experience. The task is simple, but the cultural barriers are considerable.

The briefing sheets for the roles are on the following pages. It is important that you do not read the briefing sheet for the other culture or the discussion questions following the briefing sheets. First, the Sharahadans and Americans will go to separate rooms to discuss how to role-play their cultures (10 minutes).

You will join a small group of four or five (more than one group can participate at once). Each group should have two “Americans” and two or three “Sharahadans.” You will discuss the situation for 15 to 20 minutes and then return to the classroom for debriefing.

Situation: The Americans have proposed a business meeting in order to gather information on Mizar Marketing. The questions relate to what kind of performance the Sharahadans can promise the Americans as their distributors. If the information is favorable, they will propose a profitable deal for both sides.

Sharahadan Briefing Sheet

You are representatives of Mizar Marketing, Inc., a computer distributorship in the country of Sharahad. Mizar has been very successful marketing and distributing computers in this region for the last 12 years. Your company has witnessed steady double-digit growth every year it has been in business. You attribute this to your astute customer service skills and your ability to literally speak the language of all of your customers. Your company currently distributes 100,000 units a year (and earns a commission of 15% on each unit sold). You anticipate continued growth—but then, who can predict the future?

An American computer company has contacted Mizar and requested a meeting. You assume that this meeting is some kind of exploratory visit to see if Mizar can serve as the American company’s distributor. You are looking forward to meeting the American representatives, even though you don’t know much about American culture (although you do speak English).

Sharahadan culture exhibits very different communication patterns and values. Sharahadans pride themselves on their ability to speak expressively and to interact with others in a close personal manner. This involves using intense eye contact and standing very close to the person to whom they are speaking (6-12” distance is quite common). Sharahadans like to establish personal relationships before conducting business and prefer to discuss personal matters first. Sharahadans are also likely to discuss multiple topics simultaneously, switching back and forth to keep the conversion animated, and always interjecting personal matters into the business at hand. Sharahadans do not speculate on future events. Any kind of prediction or claim about what will be done in the future is foreign to Sharahadan ways. Sharahadans are also very humble, and never brag about their achievements (bragging is considered taboo), preferring instead to use such phrases as “I have been fortunate” or “God willing” to refer to past successes or future goals. Last, Sharahadans often imply real meanings nonverbally, usually through their degree of enthusiasm. For example, louder vocalizations, closer proximity, and physical contact (such as a hand on another person’s shoulder) always accompany positive messages (such as agreement or when giving genuine compliments).

Mizar has two major competitors in the region: Altair Computers and Vega International. Both Altair and Vega sell fewer computers than your company does and have been in business for less time. They each sell about 50,000 units a year, and currently experience a 5% annual growth rate. However, you would consider it rude to point out their deficiencies so bluntly, preferring instead to let your judgment show in your lack of enthusiasm when you praise them.

Whatever behavior your American guests display, you will always treat them with respect and communicate with them for at least 15- to 20 minutes—even if they violate your cultural norms.

American Briefing Sheet

You and another business associate are sales representatives from an American computer company. You have been chosen to travel far away to the country of Sharahad. Your company has learned that Mizar Marketing, Inc. in Sharahad can distribute your computers in this region of the world for a much cheaper price than your current distributor, Altair Computers. You have come to meet with the company’s representatives. Your goal is to close a deal with them, asking them to sell 10,000 units a year, of which their commission will be 15%. Your current distributor in this region (Altair Computers) can currently sell only 5,000 of your computers (at a commission rate of 25%). Any deal that increases your sales volume and reduces the current commission rate would be considered an improvement and should be accepted.

You did not want to come on this trip. You know very little about the Sharahadan culture. You have heard rumors that the Sharahadans are pushy and loud, have difficulty giving straight answers, and do not take business very seriously. You arrived on a flight late last night, and had a rough night of sleep at the hotel. You have seen little of the country yet. This meeting is your first real experience with the host culture. Fortunately, you know that the representatives at the meeting will speak English, although from your earlier communications, you get the impression that they are not well versed in American cultural norms.

Your plan is to start the meeting by getting right down to business and exploring whether Mizar can meet your needs. Before you can propose any deals, however, you need to confirm the following about Mizar Marketing: (1) Are they growing, and do they have a plan for continued expansion? (2) Can they sell an additional 10,000 units a year? (3) Are they committed to high standards of customer satisfaction? If the answers to these questions are unclear or unsatisfactory, there is little point in proposing a deal.

Because you cannot afford to alienate Altair (in case this deal doesn’t go through), you would prefer not to mention who your current distributor is.

As you and your partner walk into Mizar’s corporate headquarters, you are amazed at the surroundings: ornate Sharahadan office suites and conference rooms furnished with both traditional and modern fixtures. After making your introductions to the people in the outer offices, you are shown into a modest looking room. There, the representatives of Mizar await you. You approach them—ready to act in your most professional manner—and ready to close the deal in 15–20 minutes…

Discussion Questions

Did you come to an agreement? What was the agreement? If not, why not?
[For the Americans:] What kinds of cultural differences did you notice in your discussion with the Sharahadans?
[For the Sharahadans:] What things did your American guests do that you found confusing or frustrating?
What are the real-world implications of an exercise such as this one?

CASE STUDY 13.1: Managing Diversity at IBM Netherlands

A Vision on Managing Diversity

The multinational IT company IBM is convinced that it can only keep its current competitive edge by reflecting marketplace diversity in the workforce and by offering a safe work environment for all employees. The company considers workforce diversity as “the bridge between the workplace and the marketplace.”

Ambition: An Inclusive Work Environment

In 1953, the CEO at that time published IBM’s first equal opportunity policy letter. This letter stated simply that IBM will hire people based on their ability “regardless of race, color or creed.” IBM’s subsequent CEOs reinforced that policy throughout the years. Since then, equal opportunity at IBM has been an evolutionary journey that underscores the company’s commitment to an inclusive work environment where people’s ideas and contributions are welcome—regardless of where they come from, what they look like, or what personal beliefs they hold.

Diversity in Leadership

To stress the importance of workforce diversity, IBM has a vice president of Global Workforce Diversity who formulates global policies on managing diversity. At regional headquarters, diversity managers translate the global policies on managing diversity into regional initiatives. Next, the executive management teams of every branch office formulate local actions in order to increase and to make full use of workforce diversity in that specific IBM establishment. An example of a local action is the adjustment of human resources policies and processes in each country’s offices. Due to the differences in national legislation on employment and discrimination, IBM thinks it’s best to do this at a country level.

Active Input From Managers and Employees

IBM’s leadership underscores its commitment to an inclusive work environment through eight executive task forces, established in 1995:

Asian
Black
Gay/Lesbian/Bisexual/Transgender
Hispanic
Men
Native American
People with disabilities
Women

The mission of each task force is to increase the success of IBM in the marketplace by focusing on the various constituencies as customers. The task forces are chaired and staffed by executives and employees from that particular constituency. Each was formed to look at IBM through the lens of their group and answer these questions:

What is required for your group to feel welcomed and valued at IBM?
What can IBM, in partnership with your group, do to maximize your productivity?
What courses of action can IBM take to influence the buying decisions of your group?

There are also global diversity networks where people from various underrepresented groups can meet each other and colleagues from other backgrounds. Many subsidiaries have local chapters of these networks. IBM Netherlands has local chapters of the global diversity network groups for women (called Women in Blue) and for gays, lesbians, bisexuals, and transgenders (called EAGLE). In both cases, the initiative for the foundation of a local chapter was taken by employees.

The networks organize meetings, lectures, workshops, and social events for employees belonging to the specific underrepresented group or for those interested in managing diversity and learning more about the other. All network activities are aimed at enhancing people’s personal strength. Another employee collects and distributes information via the intranet about people with disabilities. The company stimulates initiatives like this by allocating time, resources, and budget. The human resources department plays a supportive role: It organizes meetings for the initiators to exchange knowledge and ideas. It also gives them advice on how to use the intranet to draw attention for their subject and gives them information about (international) conferences on managing diversity.

Toward Inclusive Leadership

Throughout the years, global and local diversity network groups were founded for almost any of the traditionally underrepresented groups at IBM. Lately, a turn of opinion has evolved. The company now believes that the key to managing diversity is inclusive leadership. Inclusive leadership implies creating a corporate culture where people feel respected and rewarded, with all their differences and similarities. International training has been developed that focuses on this broad concept of managing diversity. Several senior managers and their advisers have already participated in the training program. Among them were some executives from the Dutch subsidiary and their local diversity coordinator. According to these participants, the training made them aware of the fact that you must focus on diversity management by including all employees.

One exercise showed that everybody sometimes feels excluded from a group and that almost everybody experiences exclusion negatively. Because of the training, they now understand that diversity concerns all employees and not just the ones belonging to a minority. IBM strongly believes that this greater understanding is the basis for realizing inclusive leadership.

Discussion Questions

What are the most important aspects of IBM Netherlands’ vision for diversity?
This case study is set in the Netherlands. Do you think that the diversity initiatives could work anywhere? Why or why not?
The executive task forces for diverse groups focus on three questions: (1) What is required for your group to feel valued? (2) What is required to maximize productivity? (3) How do you influence the buying decisions of the group? What other questions should be asked?
What is “inclusive leadership” at IBM? How can diversity training increase this type of leadership?

Source: Diversity@Work (http://www.diversityatwork.net/EN/en_case_004.htm). Used with permission from Richard Wynne.

CASE STUDY 13.2: “A Person Needs Face, Like a Tree Needs Bark”

American Brian Cook meets with his Chinese change manager Chan Ling and his team at the Beijing office of a European corporation to discuss last month’s delay in the change deadlines. He questions Chan Ling repeatedly about his team’s underperformance. Brian openly states he believes the team is not pushing hard enough and that there is a lack of commitment. He stresses than Ling is accountable for the results of the team and that he should have informed him about the issues. Ling nods silently and peers out the window. He picks up his papers, walks through the door without further discussion, and never returns (actual example with fictitious names).

Chan Ling has lost face. The directness of Brian’s questioning was interpreted by Chan as a personal insult. He saw Brian as rude, and their working relationship ended abruptly based on this incident. Chan also terminated his employment with the company at a time when he was really needed. What happened?

In China, as in other cultures around the world, “face” is more important than anything else. Face is related to the Western concept of dignity, but it goes much deeper than that. There is a Chinese proverb that reads Ren yao lian, shu yao pi (“A person needs face, like a tree needs bark”). Losing face has serious consequences for people from such cultures since there is a profound emotion of shame associated with losing face, and this may reflect on the person, their families, or even their entire community. Chan felt a deep sense of embarrassment from Brian’s assertive questioning style, which is commonly accepted in the United States and many other Western cultures. What Brian didn’t realize is that this is not acceptable in all cultures; thus, his leadership effectiveness was compromised.

Discussion Questions

How could Brian have prepared more effectively for his international assignment (refer to the guidelines for culture shock and cultural agility)?
What cultural values (Hofstede; GLOBE) help explain Chan’s reaction? What are the differences between the United States and China?
What should Brian do now? Develop a plan for addressing the situation.

Source: Boot, A., & Siebelink, H. (2013). Cross-cultural leadership: How to avoid making people lose face. Retrieved from www.leadershipwatch-aadboot.com/2013/07/14/cross-cultural-leadership-how-to-avoid-making-people-lose-face. Reprinted with permission.

SELF-ASSESSMENT 13.1: What Is Your Cultural Intelligence?

This self-assessment exercise identifies your approach to interacting with people from different cultures. There are no right or wrong answers, and this is not a test. You don’t have to share your results with others unless you wish to do so.

Part I. Taking the Assessment

You will be presented with some questions representing different situations involving cross-cultural interaction. Answer each question using the scale below each question.

Part II. Scoring and Interpretation

In Part I, you rated yourself on 20 questions. Add the numbers you circled in each of the columns to derive your score for the four aspects of CQ. These dimensions have been shown through research to be related to cross-cultural adjustment and leader effectiveness, and are described in the section on CQ in this chapter. For each dimension, scores can range from 5 to 25. If your score ranges from 5 to 12, you have a lower rating on the dimension, and if your score is above 13, you have a higher rating on the dimension.

Discussion Questions

Which of the dimensions did you score highest on? Lowest? What does this tell you about areas that you may need to improve?
Add the scores together for each dimension to compute an overall score for cultural intelligence. Scores can range from 20 to 100. In general, scores from 60 to 100 are very high, and scores less than 40 are considered low. Do you have a high degree of cultural intelligence?
Discuss how you can increase your cultural intelligence. List two or three specific action steps you will take to improve your scores.

Sources: Eisenberg, J., Lee, H. J., Brueck, F., Brenner, B., Claes, M. T., Mironski, J., & Bell, R. (2013). Can business schools make students culturally competent? Effects of cross-cultural management courses on cultural intelligence. Academy of Management Learning and Education, 12(4), 603–621. doi:10.5465/amle.2012.0022

SELF-ASSESSMENT 13.2: Do You Have a Global Mind-Set?

Part I. Taking the Assessment

Ask another person in your class (preferably a person you work with in a team) to rate you with respect to your overall global outlook. Your rater will be presented with some questions representing different situations involving your interactions. Ask them to answer each question using the scale below each question.

Your Name: __________________________________________________________________

Name of Person That Rated You: ________________________________________________

Part II. Scoring and Interpretation

Add your responses to the four items. Your Total Score: _____.

Scores can range from 4 to 20. Scores over 10 suggest that you have a global mind-set.

Discussion Questions

Do you agree with how the person rated you? Why or why not?
What did you learn about yourself by having someone rate your global mind-set? Rate another person in your class using this assessment. What feedback do you want to provide them with so that they can improve their global mind-set?
Which questions were rated 3 or lower (if any)? How could you improve on those behaviors? Give two or three specific strategies. If all of your ratings were 3 or higher, describe how you would help another person to improve on their global mind-set. Give two or three specific strategies.

Source: Adapted from Gupta, A. K., & Govindarajan, V. (2002). Cultivating a global mindset. Academy of Management Executive, 16(1), 116–126.

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Discuss how you can increase your cultural intelligence. List two or three specific action steps you will take to improve your scores.