Unlike a traditional performance appraisal a 360 degree review quizlet

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Learning Outcomes

After reading this chapter, you should be able to

De�ine I/O psychology.

Explain the history and evolution of I/O psychology.

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

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

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

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

1What Is Industrial/OrganizationalPsychology?

David Ridley/Getty Images

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1.1 De�ining I/O Psychology

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

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

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

The Importance of People

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

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

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

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

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

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

Concepts in Action: Corporate Focus on Employees

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

The Nature of Work

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

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

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

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

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

wID=100753&xtid=40875)

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Dominique Deckmyn/CartoonStock

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

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

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

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

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

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

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

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

Consider This: Work Identity

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

Methods of I/O Psychology

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

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

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

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

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

Consider This: I/O Psychology as a Science

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

Find Out for Yourself: Psychological Assessment

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

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

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

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

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

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

What Did You Learn?

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

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

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

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

What Did You Learn?

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

about your own levels of each?

http://journal-bmp.de/2013/12/validation-of-the-organizational-commitment-questionnaire-ocq-in-six-languages/?lang=en
http://strengths.gallup.com/private/Resources/Q12Meta-Analysis_Flyer_GEN_08%2008_BP.pdf
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Stock Montage/Contributor/Getty Images

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

1.2 A Brief History of I/O Psychology

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

Key Founders of I/O Psychology

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

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

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

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

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

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

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

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

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

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

What Did You Learn?

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

Contributions to the War Efforts

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

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

The Hawthorne Studies: A Precursor to Human Relations

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

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

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

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

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

Consider This: The Hawthorne Effect

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

Postwar, 20th-Century Approaches

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

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

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

Find Out for Yourself: The Civil Rights Act and Discrimination

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

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

What Did You Learn?

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

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

http://www.ourdocuments.gov/doc.php?doc=97&page=transcript
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1.3 Emerging 21st-Century Perspectives

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

Positive Psychology

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

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

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

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

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

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

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

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

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

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

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

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

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

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which can lead to increased performance at work.

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