“women have a harder time than men in being perceived as effective leaders.” this statement is a(n)

MAKING OB WORK FOR ME

What Is OB and Why Is It Important?

THE VALUE OF OB TO MY JOB AND CAREER The term organizational behavior (OB) describes an interdisciplinary field dedicated to understanding and managing people at work. To achieve this goal, OB draws on research and practice from many disciplines, including:  Anthropology  Economics  Ethics  Management  Organizational theory  Political science  Psychology  Sociology  Statistics  Vocational counseling

How OB Fits into My Curriculum and Influences My Success A Contingency Perspective—The Contemporary Foundation of OB A contingency approach calls for using the OB concepts and tools that best suit the situation, instead of trying to rely on “one best way.” This means there is no single best way to manage people, teams, or organizations. A particular management practice that worked today may not work tomorrow. What worked with one employee may not work with another. The best or most effective course of action instead depends on the situation. Thus, to be effective you need to do what is appropriate given the situation, rather than adhering to hard-and-fast rules or defaulting to personal preferences or organizational norms. Organizational behavior specialists, and many effective managers, embrace the contingency approach because it helps them consider the many factors that influence the behavior and performance of individuals, groups, and organizations. Taking a broader, contingent perspective like this is a fundamental key to your success in the short and the long term.

How Self-Awareness Can Help You Build a Fulfilling Career The Stanford Graduate School of Business asked the members of its Advisory Council which skills are most important for their MBA students to learn. The most frequent answer was self- awareness.6 The implication is that to have a successful career you need to know who you are, what you want, and how others perceive you. Larry Bossidy (former CEO of Honeywell) and Ram Charan (world-renowned management expert) said it best in their book Execution: “When you know yourself, you are comfortable with your strengths and not crippled by your shortcomings. … Self-awareness gives you the capacity to learnPage 6 from your mistakes as well as your successes. It enables you to keep growing.”9 They also argue that you need to know yourself in order to be authentic—real and not fake, the same on the outside as the inside. Authenticity is essential to influencing others, which we discuss in detail in Chapter 12. People don’t trust fakes, and it is difficult to influence or manage others if they don’t trust you.

As professors, consultants, and authors, we couldn’t agree more! To help you increase your self- awareness we include multiple Self-Assessments in every chapter. These are an excellent way to learn about yourself and see how OB can be applied at school, at work, and in your personal life. Go to

Connect, complete the assessments, and then answer the questions included in each of the Self- Assessment boxes.

Uncommon Sense Let’s return to common sense. At first glance the contingency perspective may look like simple common sense. But it’s different. Common sense is often based on experience or logic, both of which have limits, and it suffers three major weaknesses you need to be aware of and avoid:  Overreliance on hindsight. Common sense works best in well-known or stable situations with

predictable outcomes—what worked before should work again. But modern business situations are complex and uncertain and require adapting to change. Common sense is especially weak in responding to the unknown or unexpected. And because it focuses on the past, common sense lacks vision for the future.

 Lack of rigor. People comfortable with common-sense responses may not apply the effort required to appropriately analyze and solve problems. If you lack rigor, then you are unlikely to define the problem accurately, identify the true causes, or recommend the right courses of action.

 Lack of objectivity. Common sense can be overly subjective and lack a basis in science. In such cases we are not always able to explain or justify our reasoning to others, which is a sign that common sense lacks objectivity.

In BusinessNewsDaily, Microsoft researcher Duncan Watts says we love common sense because we prefer narrative: “You have a story that sounds right and there’s nothing to Page 8 contradict it.” Watts contrasts a more effective, scientific approach in his book Everything Is Obvious Once You Know the Answer: How Common Sense Fails Us. “The difference [in a scientific approach] is we test the stories and modify them when they don’t work,” he says. “Storytelling is a useful starting point. The real question is what we do next.”10 OB is a scientific means for overcoming the limits and weaknesses of common sense. The contingency approach in OB means you don’t settle for options based simply on experience or common practice if another solution may be more effective. Thus the goal of OB is to give you more than common sense and thus enhance your understanding of situations at work and guide your behaviors. This in turn will make you more attractive to potential employers and more effective once hired. Let’s explore this idea in more detail, beginning with the importance of possessing and developing both hard and soft skills.

Employers Want Both Hard and Soft Skills  Hard skills are the technical expertise and knowledge required to do a particular task or

job function, such as financial analysis, accounting, or operations.  Soft skills relate to human interactions and include both interpersonal skills and

personal attributes.

How OB Fits into My Career

What It Takes to Get Hired

What It Takes to Get Promoted

Performance Gives Me Credibility Performance matters because it gives you credibility with your peers and those you may manage. Just be aware that early in your career your bosses will be looking for more. They will evaluate your management potential, and their opinion will affect your opportunities. So even in a line (nonmanagement) position, you need to know how to:  Apply different motivational tools (Chapter 5).

 Provide constructive feedback (Chapter 6).  Develop and lead productive teams (Chapters 8 and 13).  Understand and manage organizational culture and change (Chapters 14 and 16).

RIGHT VS. WRONG—ETHICS AND MY PERFORMANCE

Ethics guides behavior by identifying right, wrong, and the many shades of gray in between.

Ethics also gets priority because many OB topics have a direct and substantial influence on the conduct of individuals and organizations. Notably, reward systems (Chapter 6), decision making (Chapter 11), leader behavior (Chapter 13), and organizational culture (Chapter 14) all can powerfully call upon our ethical standards at work.

Cheating The news now routinely reports about cheating in sports, such as alleged match-fixing by a number of professional tennis players and scores of instances of the use of performance- enhancing drugs: the Russian Olympic team’s systematic use and cover-up, cyclist Lance Armstrong’s public confession of drug use during each of his Tour de France victories (legal charges were ultimately filed), and Major League Baseball’s lifetime ban of pitcher Jenrry Mejia for three separate steroid violations. But cheating occurs in every other area of our lives too.

In early 2016, tennis star Maria Sharapova (left photo) tested positive for a performance-enhancing drug. She quickly admitted to the finding and apologized. Sepp Blatter (right photo), former president of soccer's international governing body FIFA, was at the heart of a scandal that rocked the organization, cost Blatter and others their jobs, and led to formal investigations across the globe. Investigators uncovered a well-entrenched and long-lasting pattern of bribes and other financial misconduct. (Left) © Damian Dovarganes/AP Photo; (right) © Valeriano Di Domenico/AFP/Getty Images

What about cheating at school? Anonymous surveys by the Josephson Institute of more than 23,000 students at private and public high schools across the United States found 59 percent admitted cheating on a test in the past academic year, and 32 percent reported plagiarizing material found on the Internet.22 Fifty-seven percent of participating high school students

agreed with the statement “In the real world, successful people do what they have to do to win, even if others consider it cheating.”23 Page 13The story doesn’t get any better in college. Turnitin.com, the plagiarism-checking service, reported finding 156 million matches between college student papers and previously published Internet material. The two top sources? Wikipedia and Yahoo Answers. As an example, 125 of 279 members of a particular government class at Harvard University were suspected of cheating on a take-home final.24 These are just a few examples and statistics of a very long list. What percentage of students at your school do you think cheat on homework assignments? Exams? Take-home finals?

Ethical Lapses—Legality, Frequency, Causes, and Solutions The vast majority of managers mean to run ethical organizations, yet corporate corruption is widespread.27 Some of the executives whose unethical behavior bankrupted the organizations they led, destroyed the lives of many employees, and caused enormous losses for employees, investors, and customers in the last few decades are Michael Milken (Drexel Burnham Lambert, 1990), Kenneth Lay and Jeff Skilling (Enron, 2001), Bernie Ebbers (WorldCom, 2002), Bernie Madoff (Madoff Investment Securities LLC, 2009), Hisao Tanaka (Toshiba, 2015), and Sepp Blatter (FIFA, 2015). None of these leaders acted alone.

Unethical Does Not Mean Illegal While extreme examples of unethical and illegal conduct make headlines, they are the exception. The truth is that very few unethical acts are also illegal, most are not punished in any way, and even if illegal, few are prosecuted. This means you should not rely on the legal system to manage or assure ethical conduct at work. For instance, FoxConn, Apple Computer’s top supplier in China, was in the spotlight for its highly publicized ill-treatment of 1.2 million Chinese employees, who suffered 14-hour workdays, six- to seven-day workweeks, low wages, and retaliation for protesting.28 American Airlines pilots provided another example in 2012 when they created widespread slowdowns in flights to pressure the company in negotiations with their union. American’s on- time performance dropped from 80 percent to 48 percent, versus 77 percent for Southwest and 69 percent for Delta. The slowdowns resulted in enormous costs and inconveniences for thousands of customers.29 None of the conduct in these examples was illegal. The following OB in Action box provides another notable instance of how widespread unethical behavior has resulted in virtually no legal consequences

Why Ethics Matters to Me and My Employer Criminal or not, unethical behavior negatively affects not only the offending employee but also his or her coworkers and employer. Unethical behavior by your coworkers, including company executives, can make you look bad and tarnish your career.

Thankfully, research provides us with clear ways to avoid such problems: … sustainable businesses are led by CEOs who take a people-centered, inclusive approach rather than a controlling, target-driven one. They are people who listen, who foster cultures in which employees are not scared to point out problems and in which staff feel they have a personal responsibility to enact corporate values, be they health and safety concerns or putting the client’s interests first.35 Ethical Dilemmas Ethical dilemmas are situations with two choices, neither of which resolves the situation in an ethically acceptable manner. Such situations surround us at work and school. They highlight the fact that choosing among available options is not always a choice between right and wrong. Because such dilemmas are so frequent and potentially consequential, we include an Ethical/Legal Challenge feature at the end of each chapter that asks you to consider what you might do if confronted with difficult ethical choices at work.

What Causes Unethical Behavior?

What about Unethical Behavior in College and When Applying for Jobs? A study of graduate students in the United States and Canada, including MBAs, found that peer behavior was by far the strongest predictor of student cheating, followed by severity of penalties and certainty of being reported.43 Students are more likely to cheat if their classmates cheat, and/or they think the probability of being caught is small, and if caught that the penalties will not be severe. However, don’t be too quick to blame this bad behavior on your lying, cheating classmates. The same researchers acknowledge that there are many other potential reasons for cheating, such as perceived unfairness in grading. It also is possible that students see different degrees of cheating—for instance, in homework assignments versus on exams. As for job hunting, an analysis of 2.6 million job applicant background checks by ADP Screening and Selection Services revealed that “44 percent of applicants lied about their work histories, 41 percent lied about their education, and 23 percent falsified credentials or licenses.”44 Figure 1.2 highlights some of the most common and most outrageous lies told on résumés. Can you imagine being a recruiter? If you believe these numbers, half the people you interview could be lying to you about something! Many Page 19potential reasons for unethical behavior at work exist, beyond those listed in Table 1.2, such as: 1. Personal motivation to perform (“I must be No. 1”). 2. Pressure from a supervisor to reach unrealistic performance goals along with threats for

underperforming. 3. Reward systems that honor unethical behavior. 4. Employees’ perception of little or no consequences for crossing the line.45

What Can I Do about It? Like most others, you have or likely will witness questionable or even blatantly unethical conduct at work. You might be tempted to think, This is common practice, the incident is minor, it’s not my responsibility to confront such issues, and loyal workers don’t confront each other. While such rationalizations for not confronting unethical conduct are common, they have consequences for individuals, groups, and organizations. What can you do instead? Here are a few suggestions: 1. Recognize that it’s business and treat it that way. Ethical issues are business issues, just

like costs, revenues, and employee development. Collect data and present a convincing case against the unethical conduct just as you would to develop a new product or strategy.

2. Accept that confronting ethical concerns is part of your job. Whether it is explicit in your job description or not, ethics is everybody’s job. If you think something is questionable, take action.

3. Challenge the rationale. Many lapses occur despite policies against them. If this is the case, ask, “If what you did is common practice or OK, then why do we have a policy forbidding it?” Alternatively, and no matter the rationale, you can ask, “Would you be willing to explain what you did and why in a meeting with our superiors or customers, or during an interview on the evening news?”

4. Page 20Use your lack of seniority or status as an asset. While many employees rely on their junior status to avoid confronting ethical issues, being junior can instead be an advantage. It enables you to raise issues by saying, “Because I’m new, I may have misunderstood

something, but it seems to me that what you’ve done is out of bounds or could cause problems.”

5. Consider and explain long‐term consequences. Many ethical issues are driven by temptations and benefits that play out in the short term. Frame and explain your views in terms of long-term consequences.

6. Suggest solutions—not just complaints. When confronting an issue, you will likely be perceived as more helpful and be taken more seriously if you provide an alternate course or solution. Doing so will also make it more difficult for the offender to disregard your complaint.46

What Role Do Business Schools Play? The researchers asked this question and found that the gender and academic background of deans, along with whether the school was public or private, predicted the likelihood that ethics courses were required. Female deans with a background in management were most likely to require ethics courses, while men with economics and finance backgrounds were least likely. Private and religiously affiliated schools were more likely than public schools to require classes in ethics.48 What is the case at your school? Does it align with these findings?

APPLYING OB TO SOLVING PROBLEMS We all encounter problems in our lives. A problem is a difference or gap between an actual and a desired state or outcome. Problems arise when our goals (desired outcomes) are not being met (actual situation). So it is important to carefully consider what your goal or desired outcome is in order to define the problem appropriately. In turn, problem solving is a systematic process for closing these gaps.

A 3‐Step Approach Basics of the 3‐Step Approach Here are the three steps in our applied approach to problem solving. 1. Step 1: Define the problem. Most people identify problems reactively—after they happen—

which causes them to make snap judgments or assumptions, often plagued by common sense, that incorrectly define the problem and its causes and solutions. All of us would likely benefit from Albert Einstein’s comment, “If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it.” Let’s take Professor Einstein’s advice. The following tip will serve you well when defining problems throughout this course and your professional life.

 Define problems in terms of desired outcomes. Then test each one by asking, “Why is this a problem?” Define problems in terms of desired outcomes or end states— compare what you want to what you have. Resist the urge to assume or infer you “know” what the problem and underlying causes are. Instead, start with available facts or details. Then ask yourself, “Why is this gap a problem?” For example, suppose you are disengaged from your work. How do you know this? What is the evidence? Perhaps you no longer go out of your way to help your coworkers and you stop responding to e-mails after work hours. You’ve defined your problem using evidence (or data). Now ask, “Why is this a problem?” Because when you are engaged, your coworkers benefit from you sharing your knowledge and experience. Coworkers and customers benefit from your responsiveness and willingness to respond to e-mails on their time line, even when it isn’t necessarily convenient for you (after hours).

2. Step 2: Identify potential causes using OB concepts and theories. Essential to effective problem solving, regardless of your approach, is identifying the appropriate causes. So far

you have OB concepts like the contingency perspective and ethics—and many more are coming—to use as potential causes. The more options you have to choose from, the more likely you will identify the appropriate cause(s) and recommendation(s). To improve your ability to accurately identify potential causes, we provide the following tip for Step 2.

 Test your causes by asking, “Why or how does this cause the problem?” Once you have confidently defined the problem in Step 1—disengagement—you need to identify potential causes (Step 2). Ask, “Why am I disengaged?” One common reason, backed by science, is that you perceive you were evaluated unfairly in your recent performance review. “Why or how did this cause disengagement?” Because if you feel unappreciated for what you’ve done, you are not motivated to go the extra mile to help your coworkers or customers. Asking “why” multiple times and following the line of reasoning will lead you to define and identify problems and causes more accurately.

3. Step 3: Make recommendations and (if appropriate) take action. In some workplace situations you will make recommendations, and in others you will also implement the recommendations. Here is a simple suggestion to improve the quality of your recommendations and overall problem solving.

How This Problem‐Solving Approach Develops Throughout the Book Tools to Reinforce My Problem‐Solving Skills

STRUCTURE AND RIGOR IN SOLVING PROBLEMS The Person–Situation Distinction Person factors are the infinite characteristics that give individuals their unique identities. These characteristics combine to influence every aspect of your life. In your job and career, they affect your goals and aspirations, the plans you make to achieve them, the way you execute such plans, and your ultimate level of achievement. Part One of this book is devoted to person factors.

Situation factors are all the elements outside ourselves that influence what we do, the way we do it, and the ultimate results of our actions. A potentially infinite number of situation factors can either help or hinder you when you are trying to accomplish something (see the following Problem-Solving Application box). This is why situation factors are critically important to OB and your performance. Parts Two and Three of this book are devoted to situation factors.

Which Influences Behavior and Performance More—Person or Situation Factors?

People and Situations Are Dynamic People change, situations change, and the two change each other. To illustrate:  People bring their abilities, goals, and experiences to each and every situation, which often changes

the situation.  Conversely, because situations have unique characteristics, such as opportunities and rewards, they

change people. What you value in a job will likely differ between now and the time you are trying to make a move to senior management.

 It also is true that the current job market and employer expectations differ from those at the height of the technology bubble in the late 1990s or in the depths of the Great Recession in 2007–2009. In the first scenario employees changed, and in the second the situation or environment changed.

 Finally, your manager—a situation factor—can change what you do, the way you do it, and your effectiveness. You can exert the same influence on your manager.

The bottom-line implication for OB and your work life is that knowledge of one type of factor without the other is insufficient. You need to understand the interplay between both person and situation factors to be an effective employee and manager. How Does the Person–Situation Distinction Help Me Apply OB Knowledge?

Many companies restructure indiscriminately and cut large percentages from their employee ranks. Assume you and five coworkers, who all do the same job, are downsized. You all experience the same event, but your reactions will vary. For instance, you might not feel too bad if you didn’t like the job and were considering going to graduate school anyway. Two of your coworkers, however, may be devastated and depressed. Nevertheless, because the downsizing event was the same for all of you (the situation factors were identical), we can assume that the differences in everyone’s reactions were due to things about you as individuals (person factors), such as other job opportunities, how much each of you likes the job you just lost, your ratio of savings to debt, and whether you have kids, mortgages, or a working spouse. The person–situation distinction, therefore, provides a means for classifying OB concepts and theories into causes of behavior and problems. Page 27

Levels—Individual, Group/Team, and Organization We saw above that OB distinguishes among three levels at work: individual, group/team, and organizational. To illustrate how considering levels helps in solving real-world problems, think about the many reasons people quit their jobs.  Some people quit because their job doesn’t fulfill what they value, such as challenging and

stimulating work (an individual-level input).  Others quit because of conflicts with their boss or because they have nothing in common with their

coworkers (a group/team-level process).

 A common reason people quit is a faulty reward system that unfairly distributes raises, bonuses, and recognition (an organizational-level process).

Understanding and considering levels increases your problem-solving effectiveness and performance. This is highlighted in the problem-solving example in Section 1.6.

Applying OB Concepts to Identify the Right Problem Nothing causes more harm than solving the wrong problem. To illustrate, assume that many people in your department at work are quitting. What could be the reason? The person– situation distinction allows you to consider unique individual factors as well as situation factors that might be the source of the problem. And considering the levels of individual, group, and organization will allow you to look at each for possible causes. For example:  Person factors. Do your departing coworkers have something in common? Is there anything about

their personalities that makes work difficult for them, such as a preference to work collaboratively rather than independently? What about their ages? Gender? Skills?

 Situation factors. Have there been changes in the job market, such as a sudden increase in employment opportunities at better wages? Have working conditions such as promotion opportunities become less attractive in your organization?

 Individual level. Has the job itself become boring and less meaningful or rewarding to the employees who quit?

 Group/team level. Have there been any changes to the work group, including the manager, that might make work less satisfying? How does turnover in your department compare to that in other departments in the organization? Why?

 Organizational level. Has the organization changed ownership, or rewritten company policies, or restructured such that the most desirable positions are now at the headquarters in another state?

By following this approach and asking these questions, you widen your focus and review a larger number of possible causes, increasing the likelihood you will identify the right problem. If you don’t quite follow this example, then have no fear. We analyze a turnover scenario in the last section of this chapter and provide a more detailed application. Stay tuned!

THE ORGANIZING FRAMEWORK FOR UNDERSTANDING AND APPLYING OB

A Basic Version of the Organizing Framework The foundation of the Organizing Framework is a systems model wherein inputs influence outcomes through processes. The person and situation factors are inputs. We’ve organized processes and outcomes into the three levels of OB—individual, group/team, and organizational. This framework implies that person and situation factors are the initial drivers of all outcomes that managers want to achieve. This is the case because inputs affect processes, and processes

affect outcomes. And because events are dynamic and ongoing, many outcomes will in turn affect inputs and processes. See Figure 1.3. The relationships Page 29 between outcomes at one point in time and inputs and processes at another are shown as feedback loops in the Organizing Framework (the black arrows at the bottom of the figure).

Using the Organizing Framework for Problem Solving You can use the Organizing Framework at all three steps of the problem-solving process to add rigor, intelligently apply your OB knowledge, and in turn improve your performance. 1. Step 1: Define the problem. Problems can be defined in terms of outcomes in the Organizing

Framework, and these outcomes occur at three levels. 2. Step 2: Identify causes. Causes are often best thought of in terms of inputs (person or situation) or

processes at various levels (individual, group/team, organizational). 3. Step 3: Make recommendations. Consider the most appropriate solutions using your OB

knowledge and tools. Then map these onto the causes (inputs or processes).

Selecting a Solution and Taking Action (if appropriate)

Don’t Forget to Consider Constraints As a matter of practicality, most people lack the time, knowledge, or access to data to routinely follow such a rigorous procedure. Therefore, your selection most often requires you to consider various constraints—on time, money, your own authority, and information—that can occur at different levels. We close this chapter with practical pointers on how to select the best solution.

Applied Approaches to Selecting a Solution You can save time and hassle with the following practical advice from renowned problem- solving expert and professor Russell Ackoff. Ackoff recommends first deciding how complete a response you are looking for. Do you want the problem to be resolved, solved, or dissolved?  Resolving problems is arguably the most common action managers take and simply means choosing

a satisfactory solution, one that works but is less than ideal. Putting on a “doughnut” or temporary spare tire fixes a flat, but it certainly is not ideal and is unlikely to last.Page 32

 Solving problems is the optimal or ideal response. For instance, you could buy a new, high-quality, full-size spare to keep in your trunk (not the typical doughnut or the “run-flats” that manufacturers frequently provide).

 Dissolving problems requires changing or eliminating the situation in which the problem occurs. Keeping with our example, the city you live in could build and utilize effective public transportation and thus remove the necessity of having cars (and tires) altogether.63

Basic Elements for Selecting an Effective Solution After deciding whether to resolve, solve, or dissolve your identified problem, you need to select the most effective solution. A problem-solving expert says: “The essence of successful problem solving is to be willing to consider real alternatives.”64 To help you choose among alternatives identified in Step 2, we distilled three common elements that will help you qualify the best solution: 1. Selection criteria. Identify the criteria for the decision you must make, such as its effect on:

 Bottom-line profits.  You and classmates or coworkers.  Your organization’s reputation with customers or the community.  Your own values.  The ethical implications.

2. Consequences. Consider the consequences of each alternative, especially trade-offs between the pros and the cons, such as:  Who wins and who loses.  Ideal vs. practical options.  Perfection vs. excellence.  Superior vs. satisfactory results.

3. Choice process. Decide who will participate in choosing the solution. (If more than one person, agree on the method. Will you vote? Will the vote be public or secret? Unanimous or simple majority?):  You  Third party  Team

In every case, consider the necessary resources, including which people will be key sources of support for (and resistance to) your ultimate selection. Consider who can help and who can hurt your efforts—what’s in it for them?

PREVIEW AND APPLICATION OF WHAT I WILL LEARN

The 3‐Step Problem‐Solving Approach

Using the Framework for Learning

Breadth and Power of OB

Hypothetical Problem‐Solving Scenario

Step 1: Define the Problem Step 2: Use OB to Highlight the Causes Step 3: Generate Effective Recommendations Using OB

3 INDIVIDUAL DIFFERENCES AND EMOTIONS

How Does Who I Am Affect My Performance?

THE DIFFERENCES MATTER Individual differences (IDs) are the many attributes, such as traits and behaviors, that describe each of us as a person. IDs are a big part of what gives each of us our unique identities, and they are fundamental to the understanding and application of OB. So, what is it that makes us different? Is it our genetics or our environment? The answer is both.2 And while the way you are raised, along with your experiences and opportunities, indeed helps shape who you are, a large volume of research on twins suggests that genetics matters more. But what is more important at work is recognizing the many attributes that make us unique individuals, regardless of whether they are due to nature or nurture.

On the left-hand side of Figure 3.2 we arrange individual differences on a continuum. At the top of the continuum are intelligence and cognitive abilities, which are relatively fixed. This means they are stable over time and across situations and are difficult to change. At the bottom are attitudes (which we discussed in Chapter 2) and emotions, which are relatively flexible. Emotions change over time and from situation to situation, and they can be altered more easily. To elaborate, you aren't more or less intelligent at school than you are at work or home, although your emotions commonly change within and between all of these places. Of course both your intelligence and emotions, as well as many other individual characteristics influence the many outcomes included in the right side of Figure 3.2. The distinction between relatively fixed and flexible individual differences has great practical value. Wise managers know they have little or no impact on fixed IDs. You can’t change an employee’s level of intelligence or remake an employee’s personality.3 But you can help employees manage their attitudes and emotions. For instance, many effective managers (and their employers) select employees based on positive, job-relevant, butPage 82 relatively stable IDs. This hiring strategy enables managers to capitalize on the personal strengths that someone brings to a job because these stable strengths affect behavior and performance in most every

work situation.4 Intelligence and analytical abilities, for example, are beneficial in front of customers, in teams with coworkers, and when working alone on a project. In contrast, managers can have more influence on relatively flexible IDs that influence individual-level work outcomes, like performance and job satisfaction. They can do this by implementing policies that raise employees’ core self-evaluations, attitudes, and emotions. For example, as a manager you’ll likely see better results from assigning work with new products and new markets to employees who are open to experience than to employees with low levels of this attribute. Similarly, you could help build new employees’ confidence about selling to tough customers if you role-model how to do this effectively, give them experience presenting to easy customers first, and provide verbal encouragement before and constructive feedback after.

INTELLIGENCES: THERE IS MORE TO THE STORY THAN IQ

lthough experts do not agree on a specific definition, many say intelligence represents an individual’s capacity for constructive thinking, reasoning, and problem solving. Most people think of intelligence in terms of intelligence quotient or IQ, the famous score on tests we often take as children. Thus many people typically view intelligence and IQ as one big attribute of brainpower. However, intelligence, intelligence testing (for IQ), and related research are more complex. The concept of intelligence has expanded over the years and today is thought of and discussed in terms of general mental abilities. Of course, people are different in terms of such abilities, but this isn’t what is important at work. What is important is to understand intelligence or mental abilities so you can manage people more effectively. Put another way, the reason we highlight intelligence and mental abilities is that they are related to performance at work.5 This section provides a brief overview of intelligence and mental abilities and then highlights practical implications.

Intelligence Matters … and We Have More Than We Think Historically, intelligence was believed to be purely genetic—passed from one generation to another—so you were either born “smart” or not. Do you agree with this belief? What are the implications of believing that intelligence is a gift of birth? Regardless of your personal views, research has shown that intelligence, like personality, can be altered or modified in a number of ways.6 Think about it. No matter who you are or where your starting point in education or experience is, if you engage in more constructive thinking, reasoning, and problem solving, you will get better at these skills. You’ll be more intelligent. If you buy this argument, then after reading this book and studying OB you’ll be more intelligent due to the practice in critical thinking and problem solving you’ll gain. Your intellectual development can also be damaged or diminished by environmental factors such as drugs, alcohol, and poor nutrition.7 Am I More Intelligent than My Parents? If you answer yes to this question, research might just support your claim. A steady and significant rise in average intelligence among those in developed countries has been observed over the last 70 years. Why? Experts at an American Psychological Association conference concluded, “Some combination of better schooling, improved socioeconomic status, healthier nutrition, and a more technologically complex society might account for the gains in IQ scores.”8 So, if you think you’re smarter than your parents and your teachers, despite their saying you don’t know important facts they do, you’re probably right! Page 84

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While many people think of intelligence in general terms, such as IQ, it is more common and more practical to think in terms of multiple intelligences, or an intelligence for something specific. Howard Gardner, a professor at Harvard’s Graduate School of Education, investigated the nature of intelligence for years and summarized his findings in his 1983 book Frames of Mind: The Theory of Multiple Intelligences.9 The eight different intelligences he identified, listed in Table 3.1, include not only mental abilities but social and physical abilities and skills as well.

Many believe the concept of multiple intelligences has important implications for employee selection, training, and performance. For example, one-size-fits-all training programs often fall short when diversity of intelligences is taken into consideration. When clinical training for undergraduate nursing students was designed to draw on and apply their eight intelligences, for example, they acquired greater proficiency in clinical skills. This type of training also enabled them to utilize and develop their interpersonal intelligence, extremely important for effective patient care.13 Near the end of this chapter, you will encounter the concept of emotional intelligence, which managers can apply for employee selection and other purposes. Future breakthroughs in the area of multiple intelligences will attract more OB researchers and practicing managers.

Page 86 Practical Intelligence We can draw practical benefits from Gardner’s notion of multiple intelligences. For instance, Yale’s Robert J. Sternberg applied Gardner’s “naturalist intelligence” to the domain of leadership under the heading practical intelligence. He explains: “ Practical intelligence is the ability to solve everyday problems by utilizing knowledge gained from experience in order to purposefully adapt to, shape, and select environments. It thus involves changing oneself to suit the environment (adaptation), changing the environment to suit oneself (shaping), or finding a new environment within which to work (selection). One uses these skills to (a) manage oneself, (b) manage others, and (c) manage tasks.”14

Practical Implications Many educators and parents have embraced the idea of multiple intelligences because it helps explain how a child could score poorly on a standard IQ test yet be obviously gifted in other ways such as music, sports, or relationship building. It then follows that we need to help each child develop in his or her own unique way and at his or her own pace. Many people make the same arguments about college students and employees. Of course, everybody has strengths and weaknesses. But what is important as a matter of practice is to identify intelligences relevant to the job, and then to select, place, and develop individuals accordingly. What is your view? Do you see any value in testing for various forms of intelligence at work? Why or why not? Not Just Kid Stuff Some Proof?

PERSONALITY, OB, AND MY EFFECTIVENESS Personality is the combination of stable physical, behavioral, and mental characteristics that gives individuals their unique identities. These characteristics or traits—including the way we look, think, act, and feel—are the product of interacting genetic and environmental influences and are stable over time and across situations and cultures.22 Personality is a person input in the Organizing Framework.

There Is More to Personality Than Liking and Fit Like most people, you may often think of personality in terms of whether you like or dislike someone. For instance, if you’re asked to describe your professor for this class you might say: “She's great. I love her personality.” Or if asked to describe your boss you might say: “He’s a difficult individual, he’s unethical, many of his colleagues won’t associate with him, and he is widely disrespected and should be fired.” If you are recruiting somebody for a job (or your fraternity or sorority) you might say: “I really like his/her personality … I think he/she will fit in great with the rest of us.” What Can I Do with “Like”? Be Precise to Be Effective To be effective at managing people you need to be more precise (and scientific) about personality. This challenge has motivated a tremendous amount of research about personality in psychology and in OB. What we need are more specific definitions of what personality is, tools to measure it, and data about the effect it has on important processes and outcomes across all levels of the Organizing Framework.Page 89

©

The Big Five Personality Dimensions Defining something as complex as personality is quite a challenge. Fortunately, psychologists and researchers have distilled long lists of qualities and characteristics into the Big Five Personality Dimensions that simplify more complex models of personality. The dimensions are extroversion, agreeableness, conscientiousness, emotional stability, and openness to experience.24 Table 3.2 details the five personality dimensions. For example, someone scoring high on extroversion will be an extrovert—outgoing, talkative, sociable, and assertive. Someone scoring low on emotional stability will likely be nervous, tense, angry, and worried. TABLE 3.2 CHARACTERISTICS OF PERSONS SCORING HIGH ON THE FIVE DIMENSIONS

The Big Five Personality Dimensions Personality Characteristic

1. Extroversion Outgoing, talkative, sociable, assertive

2. Agreeableness Trusting, good‐natured, cooperative, softhearted

3. Conscientiousness Dependable, responsible, achievement‐oriented, persistent

4. Emotional stability Relaxed, secure, unworried

5. Openness to experience Intellectual, imaginative, curious, broad‐minded

SOURCE: Adapted from M. R. Barrick and M. K. Mount, “Autonomy as a Moderator of the Relationships between the Big Five Personality Dimensions and Job Performance,” Journal of Applied Psychology, February 1993, 111–118.

A person’s scores on the Big Five reveal a personality profile as unique as his or her fingerprints. To discover your own Big Five profile, complete Self‐Assessment 3.1. In the process you’ll learn there is more to personality than just being likable or fitting in. This Self- Assessment will increase your self-awareness and illustrate some of the concepts just described. Many companies use personality profiles for hiring and promotions, so your profile should provide practical insights

Hail the Introverts Proactive Personality A proactive personality is an attribute of someone “relatively unconstrained by situational forces and who effects environmental change. Proactive people identify opportunities and act on them, show initiative, take action, and persevere until meaningful change occurs.”27 In short, people with proactive personalities are hard-wired to change the status quo. It therefore is no surprise that this particular individual difference has received growing attention from both researchers and managers. Think about it. Companies, and their managers, routinely say they want employees who take initiative and are adaptable. Many argue that today’s hypercompetitive and fast-changing workplace requires such characteristics. Proactive Managers What about your manager? Interesting recent work showed that the ideal scenario is for both you and your manager to be proactive. This results in a better fit and better relationship between the two of you, and it also increases your level of job performance, job satisfaction, and affective commitment.30 The same study also showed that the worst scenario in terms of performance was low proactivity for both you and your manager, followed by a highly proactive manager and a low proactivity follower. Thus proactivity is a highly valued characteristic in the eyes of employers. And being proactive has direct and indirect benefits for your performance. Given these facts, how proactive do you believe you are? How might you increase your proactivity? To help answer these questions, learn about your own proactivity, and explore the potential benefits for you, complete Self‐Assessment 3.2. Proactivity and Entrepreneurs Besides leading to increases in job performance, job satisfaction, and affective commitment (as discussed in Chapter 2), proactive personality is also linked to intentions to be entrepreneurial. This really should not be surprising, but it is helpful to know that scientific OB research substantiates this belief. Building on this, we can say that employees with proactive personalities are more likely to be engaged (again, see Chapter 2) and creative at work.31 Successful entrepreneurs often exemplify the proactive personality. Consider Dan Goldie, former professional tennis player and successful financial adviser. Goldie’s youthful passion was tennis, and his talent led him to junior championship titles, a scholarship at Stanford, and a ranking of 27th on the pro tour. Now he considers himself more successful at managing money than he ever was at tennis. Impressive to be sure.

Personality and Performance Instead of simply assuming personality affects performance, let’s see what research has to say and how this knowledge can make you more effective. First, and most generally, your personality characteristics are likely to have the greatest influence and effect on performance when you are working in situations that are unstructured and with few rules.34 This makes sense. You’re more likely to show your true colors (your personality) when the situation is open and lacks constraints. As for the Big Five, knowledge of these stable personality dimensions can assist in selecting the right people and assigning them responsibilities that will set them up to win.  Conscientiousness has the strongest (most positive) effects on job performance and training

performance. Individuals who exhibit traits associated with a strong sense of purpose, obligation, and persistence generally perform better than those who do not. They also tend to have higher job satisfaction.35This trait has consistently been shown to be the most influential when it comes to performance at work.

 Extroversion is associated with success for managers and salespeople, and more generally for jobs that require social skills. It is also a stronger predictor of job performance than agreeableness, across all professions.

 Introverts have been shown to score their extroverted and disagreeable coworkers more harshly than their similarly introverted coworkers. The implication is that introverts focus on interpersonal skills more than extroverts when evaluating coworkers’ performance.36 How might this affect you in peer evaluations at school and/or work?

 Agreeable employees are more likely to stay with their jobs (not quit). They tend to be kind and get along with others, and thus they often have positive relationships and experiences at work.37

 Openness seems to lead to higher turnover. Open employees are curious and likely to seek out new opportunities, even when they are satisfied with their current jobs.38 This characteristic seems like a double-edged sword for employers. On the one hand they want open and flexible employees, but these are also the same employees who are likely to quit. How might you deal with this as a manager or the owner of a business?Page 94

 Emotional stability, along with conscientiousness and agreeableness, is associated with a greater focus on and practice of workplace safety. Imagine you are a manager in a chemical plant. How might you use this knowledge in selecting new employees? In assigning and training existing employees?

Personality Testing at Work Personality testing is a commonly used tool for making decisions about hiring, training, and promotion. Current estimates are that approximately 76 percent of organizations with more than 100 employees now use some sort of pre- or post-hiring assessment, including personality tests,39 spending more than $500 million annually on such services.40 A few of the major reasons organizations use such tests are that they: 1. Reduce time and cost of recruiting and hiring. 2. Reduce biases in the interview process. 3. Increase the pool of candidates (because such tests can be administered electronically and

remotely). 4. Complement candidate information found in résumés and interviews.41 Personality tests, in particular, are more widely used at the management level than at the entry level (80 percent and 59 percent of the time, respectively).42 However, despite this widespread use, many experts argue that the typical personality test is not a valid predictor of job performance.43 One reason might be that many test takers don’t describe themselves accurately but instead try to guess what answers the employer is looking for.44

APPLYING OB

Wise managers learn about personality and the tools used to measure it before investing in and/or utilizing the data they yield. Table 3.4 provides some insights.

There Is No “Ideal Employee” Personality Given the complexity of today’s work environments, the diversity of today’s workforce, and recent research evidence, the quest for an ideal employee personality profile is sheer folly. Just as one shoe does not fit all people, one personality profile does not fit all job situations. Good managers take the time to get to know each employee’s unique combination of personality traits, abilities, and potential and then create a productive and satisfying person–job fit. In other words, a contingency approach to managing people is best (recall the discussion of contingency in Chapter 1).

4 SOCIAL PERCEPTION AND MANAGING DIVERSITY

PERSON PERCEPTION Perception is key to resolving the above questions. Perception is a cognitive process that enables us to interpret and understand our surroundings. Recognition of objects is one of this process’s major functions. But because organizational behavior’s (OB’s) principal focus is on people, our discussion will emphasize person perception rather than object perception. Perception is important to OB because behavior is based on our perception of reality, not on reality itself. Our exploration of this important process begins by considering a model of person perception. The model provides a practical framework for understanding how we form perceptions of others. We then consider the managerial implications of person perception.

A Model of Person Perception

Perception is influenced by three key components: the characteristics of

the perceiver, of the Page 126target—the person or group being observed—and of the situation (see Figure 4.2).7 Let’s take a closer look at how these components

work.

Characteristics of the Perceiver Characteristics of the Target Characteristics of the Situation Managerial Implications of Person Perception

Hiring Interviewers make hiring decisions based on their impression of how an applicant fits the perceived requirements of a job. Unfortunately, many of these decisions are made on the basis of implicit cognition. Implicit cognition represents any thoughts or beliefs that are automatically activated from memory without our conscious awareness. The existence of implicit cognition leads people to make biased decisions without realizing they are doing so.19 A recent study of job applicants’ résumés, for instance, demonstrated that recruiters evaluated women more favorably than men for customer service jobs, probably based on gender-role stereotypes.20

Performance Appraisal Faulty perceptions about performance can lead to inaccurate performance appraisals, which erode morale. Consider the results of a recent study of commanding officers in the US military. The research looked at 193 commanding officers who were assigned legal advisers. The advisers were all professionals with a law degree, and the commanding officers were responsible for conducting their performance evaluations. On average, female advisers received lower performance ratings than males as their pay grade approached that of the boss. Male advisers did not have this experience.21 The only good news from the study is that this form of bias occurred only when evaluators had high social dominance orientation, a personal characteristic in which someone prefers to dominate other groups of people, in this case women.22 Perceptual biases in performance appraisals can be reduced by the use of more objective measures of performance. While this is a good idea, it is hard to implement for jobs that require interdependent work, mental work, or work that does not produce objective outcomes. Companies can also reduce bias by providing managers a mechanism for accurately recalling employee behavior, such as a performance diary. Finally, it would be useful to train managers about perceptual biases and about how they can avoid them in performance evaluations.23 Page 130

Leadership Research demonstrates that employees’ evaluations of leader effectiveness are influenced strongly by their categorical knowledge of what constitutes good and poor leaders. For example, a team of researchers found that the following behaviors are representative of effective leadership: 1. Assigning specific tasks to group members. 2. Telling others they have done well. 3. Setting specific goals for the group. 4. Letting other group members make decisions. 5. Trying to get the group to work as a team. 6. Maintaining definite standards of performance.26

STEREOTYPES “A stereotype is an individual’s set of beliefs about the characteristics or attributes of a group.”27 We need to recognize how stereotypes affect our perception because we use them without intending to or even being consciously aware that we are.28 Unfortunately, stereotypes can lead to poor decisions. Consider people diagnosed with cancer, about 40 percent of men and women living in the United States.29 A recent study of the retail industry showed that managers made discriminatory decisions about individuals whose job applications indicated they were cancer survivors.30 All told, stereotypes can create barriers for women, older individuals, people of color, and people with disabilities, all while undermining loyalty and job satisfaction. Let’s look at examples. Gender. A summary of research revealed that:  Men were preferred for male-dominated jobs (e.g., firefighters), but there was no preference

for either gender in female-dominated jobs (e.g., nurse).  Women have a harder time than men in being perceived as effective leaders. (The exception:

Women were seen as more effective when the organization faced a crisis and needed a turnaround.)

 Women of color are more negatively affected by sex-role stereotypes than are white women or men in general.31

Race. Studies of race-based stereotypes demonstrated that people of color experienced more perceived discrimination and less psychological support than whites.32 Perceived racial discrimination was also associated with more negative work attitudes, physical health, psychological health, and organizational citizenship behavior.33

Age. Another example of an inaccurate stereotype is the belief that older workers are less motivated, more resistant to change, less trusting, less healthy, and more likely to have problems with work–life balance. A recent study refuted all these negative beliefs about age.34

Stereotype Formation and Maintenance We build stereotypes through a four-step process: 1. Categorization. We categorize people into groups according to criteria (such as gender, age,

race, and occupation). 2. Inferences. Next, we infer that all people within a particular category possess the same traits

or characteristics: women are nurturing, older people have more job-related accidents, African Americans are good athletes.Page 132

3. Expectations. We form expectations of others and interpret their behavior according to our stereotypes.

4. Maintenance. We maintain stereotypes by:  Overestimating the frequency of stereotypic behaviors exhibited by others.  Incorrectly explaining expected and unexpected behaviors.  Differentiating minority individuals from ourselves.

Research shows that it takes accurate information and motivation to reduce the use of stereotypes.35

Managerial Challenges and Recommendations The key managerial challenge is to reduce the extent to which stereotypes influence decision making and interpersonal processes throughout the organization. We suggest three ways that this can be achieved. 1. Managers should educate people about stereotypes and how they can influence our

behavior and decision making. Many people may not understand how stereotypes unconsciously affect their perception. For example, people evaluating symphony orchestra musicians for jobs were found to be biased toward men. This unconscious tendency was reduced by using a curtain to block the evaluation committee from seeing applicants. Significantly more females were hired under this unbiased approach.36

2. Managers should create opportunities for diverse employees to meet and work together in cooperative groups of equal status. Social scientists believe positive interpersonal contact among mixed groups is the best way to reduce stereotypes because it provides people with more accurate data about the characteristics of others.

3. Managers should encourage all employees to increase their awareness of stereotypes. Awareness helps reduce the application of stereotypes when making decisions and interacting with others.

CAUSAL ATTRIBUTIONS Attribution theory is based on a simple premise: Rightly or wrongly, people infer causes for their own and others’ behavior. Formally defined, causal attributions are suspected or inferred causes of behavior. Managers need to understand how people formulate these attributions because they profoundly affect organizational behavior. Consider Table 4.1, in which the manager’s understanding of observed behavior leads to very different actions. TABLE 4.1 THE LINK BETWEEN ATTRIBUTIONS AND MANAGERIAL ACTIONS.

Observed Behavior Manager’s Attribution Managerial Action

Employee fails to meet minimum standards Lack of effort Reprimand

Employee fails to meet minimum standards Lack of ability Training

Kelley’s Model of Attribution Current models of attribution build on the pioneering work of the late Fritz Heider. Heider, the founder of attribution theory, proposed that behavior can be attributed either to internal factors within a person (such as ability) or to external factors within the environment (such as a difficult task). Following Heider’s work, Harold Kelley attempted to pinpoint some specific antecedents of internal and external attributions. Kelley hypothesized that people make causal attributions by observing three dimensions of behavior: consensus, distinctiveness, and consistency.37 These dimensions vary independently, forming various combinations and leading to differing attributions.

How do these three dimensions of behavior lead to specific attributions? Kelley theorized that people attribute behavior to either internal causes (personal factors) or external causes (environmental factors) depending on the way they rank consensus, distinctiveness, and consistency as shown in Table 4.2: TABLE 4.2 FORMATION OF INTERNAL AND EXTERNAL ATTRIBUTIONS

Attribution Consensus (People)

Distinctiveness (Tasks)

Consistency (Time)

Internal Low Low High

External High High Low

Attributional Tendencies Researchers have uncovered two attributional tendencies that distort our interpretation of observed behavior—fundamental attribution bias and self‐serving bias. Fundamental Attribution Bias The fundamental attribution bias reflects our tendency to attribute another person’s behavior to his or her personal characteristics, rather than to situation factors. This bias causes perceivers to ignore important environmental factors (again refer to the Organizing Framework), which often significantly affect behavior. Such bias leads to inaccurate assessments of performance, which in turn fosters inappropriate responses to poor performance. Self-Serving Bias The self‐serving bias represents our tendency to take more personal responsibility for success than for failure. The self-serving bias suggests employees will attribute their success to internal factors (high ability or hard work) and their failures to uncontrollable external factors (tough job, bad luck, uncooperative coworkers or boss). This tendency plays out in all aspects of life.

Managerial Applications and Implications Attribution models can explain how managers handle poorly performing employees. One study revealed that managers gave employees more immediate, frequent, and negative feedback when they attributed their performance to low effort. Another indicates that managers tended to transfer employees whose poor performance they attributed to a lack of ability. These same managers also decided to take no immediate action when poor performance was attributed to external factors beyond an individual’s control.38

DEFINING AND MANAGING DIVERSITY Do you have any preconceived notions about diversity that are worth considering? Let’s take a reality check:  Assumption: Gender diversity on boards of directors does not affect firm

performance. Wrong, says a team of researchers who aggregated results from 140 research studies. Findings showed that firms were more profitable when women were members of the board of directors.40

 Assumption: Organizations had a hard time finding qualified employees during the 2014–2015 slow‐growth economy. Yes, according to 2015 data from Indeed.com, the top employment-related website in the world. It seems that 56 percent of all job openings remained open after one month, and 33 percent were still active after three months. All told, Indeed.com estimated in 2015 that “over 330 million working hours are lost every month in the United States from unfilled job openings.” The most difficult jobs to fill across all industries were managerial and supervisory.41

 Assumption: Whites will constitute the majority among US racial groups through 2050. No, according to the US Census Bureau. Today whites represent 63 percent of the population, but that will drop below 50 percent in 2043.42

The United States is becoming more diverse in its gender, racial, educational, and age makeup. For example, there are now more working parents, more nonwhites, and more older people, and the consequences are not always what you might expect. Demographics are the statistical measurements of populations and their qualities (such as age, race, gender, or income) over time. The study of demographics helps us better appreciate diversity and helps managers develop human resource policies and practices that attract, retain, and develop qualified employees. In the remainder of this chapter we will further your understanding of diversity and its managerial challenges.

Layers of Diversity Diversity represents the multitude of individual differences and similarities that exist among people, making it an input in the Organizing Framework for Understanding and Applying OB. As you will learn, however, managing diversity also affects a variety of processes and outcomes within the Organizing Framework. Moreover, diversity pertains to everybody. It is not just an issue of age, race, or gender; of being heterosexual, gay, or lesbian; or of being Catholic, Jewish, Protestant, orPage 137 Muslim. Diversity pertains to the host of individual differences that make each of us unique and different from all others. Lee Gardenswartz and Anita Rowe, a team of diversity experts, identified four layers of diversity to help distinguish the important ways in which people differ (see Figure 4.4). Taken together, these layers define our personal identities and influence the way each of us sees the world.

Figure 4.4 shows that the next layer of diversity consists of external influences. These are individual differences over which we have more control, such as where we live, our religious affiliation, our marital and parental status, and our work experience. These dimensions also exert a significant influence on our

perceptions, behavior, and attitudes.

Affirmative Action vs. Diversity Management Affirmative Action Affirmative action is not a law in and of itself. It is an outgrowth of equal employment opportunity (EEO) legislation. The goal of this legislation is to outlaw discrimination and to encourage organizations to proactively prevent discrimination. Discrimination occurs when employment decisions about an individual are based on reasons not associated with performance or related to the job. For example, organizations cannot legally discriminate on the basis of race, color, religion, national origin, sex, age, physical and mental disabilities, and pregnancy. Affirmative action is an intervention aimed at giving management a chance to correct an imbalance, injustice, mistake, or outright discrimination that occurred in the past.

Affirmative action  Can refer to both voluntary and mandatory programs.  Does not legitimize quotas. Quotas are illegal and can be imposed only by judges who

conclude that a company has engaged in discriminatory practices.  Does not require companies to hire unqualified people.  Has created tremendous opportunities for women and minorities.  Does not foster the type of thinking needed to manage diversity effectively. 

Managing Diversity Managing diversity enables people to perform to their maximum potential. Diversity management focuses on changing an organization’s culture and infrastructure such that people work to the highest productivity possible. Ann Morrison, a diversity expert, attempted to identify the types of initiatives 16 companies used to successfully manage diversity. Her results found three key strategies at work: education, enforcement, and exposure. She describes them as follows:  The educational component. Education “has two thrusts: one is to prepare nontraditional

managers for increasingly responsible posts, and the other is to help traditional managers overcome their prejudice in thinking about and interacting with people who are of a different sex or ethnicity.”49

 The enforcement component. Enforcement “puts teeth in diversity goals and encourages behavior change.”50

 The exposure component. Exposing people to others with different backgrounds and characteristics “adds a more personal approach to diversity by helping managers get to know and respect others who are different.”51

In summary, both consultants and academics believe organizations should strive to manage diversity rather than being forced to use affirmative action.

BUILDING THE BUSINESS CASE FOR MANAGING DIVERSITY Business Rationale The rationale for managing diversity is more than the fact that it’s legally, socially, or morally desirable. Quite simply, it’s good business. The OB in Action box illustrates how companies can gain competitive advantage by producing products targeted at specific demographic groups—in this case, men who do laundry. An access‐and‐legitimacy perspective on diversity is based in recognition that the organization’s markets and constituencies are culturally diverse. It therefore behooves the organization to match the diversity in parts of its own workforce as a way of gaining access to and legitimacy with those markets and constituent groups.58

Women Break the Glass Ceiling—but Navigate a Labyrinth Coined in 1986, the term glass ceiling identifies an invisible but absolute barrier that prevents women from advancing to higher‐level positions. Various statistics support the existence of the glass ceiling. Take the pay gap between men and women, for example. In 2014, the median weekly income in full-time management, professional, and related occupations was $1,346 for men but $981 for women. Even among female and male MBA graduates who made about the same upon graduation in 2007–2009, by 2014 a gap had opened—women earned $140,000 and men $175,000.61 Some people think these pay differences come about because women leave the workforce to raise children, or because men perform better on the job. Although women are more likely than men to take time off to raise children, research spanning 30 years demonstrated that pay differences were not due to differences in performance evaluations.62 Other unknown causes are behind the gender pay gap. Alice Eagly and Linda Carli conducted a thorough investigation into the organizational life of women and in 2007 published their conclusions that women had finally broken through the glass ceiling.63 We’ve updated the data reported in Eagly and Carli’s book that led them to their conclusion. In 2016 there were many more female CEOs (21 within the Fortune 500 and two more expected by late 2016) and more women in managerial, professional, and related occupations than in the 1980s and 1990s.64 Statistics further showed that women had made strides along several measures. 1. Educational attainment: Women earned the majority of bachelor’s and master’s degrees in

2014. 2. Seats on boards of directors of Fortune 500 firms: Women held 9.6 percent of seats in 1995

and 19.7 percent in 2015. 3. Leadership positions in educational institutions and Congress: In 2016 women

represented 23 percent of college presidents, and in 2014, 100 women served in Congress— the largest number ever.

4. Federal court appointments: In 2016, 35 percent of federal courts of appeals judges were female.65

You can interpret the above statistics in one of two ways.  No Change. On the one hand, you might see proof that women remain underpaid and

underrepresented in leadership positions, victims of discriminatory organizational practices.  Positive Change. Or you can agree with Eagly and Carli’s conclusion that “men still have

more authority and higher wages, but women have been catching up. Because some women have moved into the most elite leadership roles, absolute barriers are a thing of the past.”66

Racial Groups Face Their Own Glass Ceiling and Perceived Discrimination The US workforce is becoming increasingly diverse. Between 2012 and 2060, the Census Bureau predicts the following changes in ethnic representation:  Growth: The Asian population will grow from 5.1 percent to 8.2 percent of the total.  Growth: The Hispanic population will grow from 17 percent to 31 percent.  Mild growth: The African American population will rise from 13.1 percent to 14.7 percent.  Decline: Non-Hispanic whites will drop from 63 percent to 43 percent.67

In 2060 so-called minority groups will constitute approximately 57 percent of the workforce, according to the Census Bureau.68 And yet three additional trends suggest that current-day minority groups are stalled at their own glass ceilings: Smaller percentage in the professional class. Hispanics, or Latinas/os, and African Americans have a smaller relative hold on managerial and professional jobs compared with whites. Women of color generally do better than men of color. More discrimination cases. The number of race-based charges of discrimination that were deemed to show reasonable cause by the US Equal Employment Opportunity Commission increased from 294 in 1995 to 678 in 2015. Companies paid a total of $88.4 million to resolve these claims without litigation in 2015.69 Lower earnings. Minorities also tend to earn less personal income than whites. In 2015 median weekly earnings for workers 16 years and older were $847, $643, $1,091, and $624 for whites, blacks, Asians, and Hispanics, respectively. Asians had the highest median income.70 Sexual Orientation: LGBTQ People Become More Visible The term LGBT is a widely recognized acronym to represent lesbian, gay, bisexual, and transgender. However a fifth letter has been gaining acceptance—Q—which according to the Human Rights Campaign can mean either “questioning” or “queer.”

Q for “questioning” refers to someone in the process of exploring his or her sexual identity. “People use the term queer because it’s not specific to sexual orientation or to gender identify but is more of an umbrella term that can encompass a lot of people.” You may want to avoid using the term queer because it is offensive to some in the LGBT community.71 We are discussing sexual orientation because organizations cannot afford to allow between 1.2 and 6.8 percent of the workforce to feel disenfranchised. This represents the estimated number of people who identify as LGBT.72 Because LGBTQ employees often experience a lack of inclusion, their engagement, performance, and retention can be affected. A study by the Human Rights Campaign Foundation, for instance, revealed that unwelcoming environments can lead to a 30 percent decrease in employee engagement and an increase in turnover. Nine percent of LGBT employees reported leaving a job because of unwelcoming work environments.73 The good news is that a majority of Fortune 500 companies offer workplace protections on the basis of sexual orientation and gender identify. In contrast, 29 states do not offer such protections.74

Physical and Mental Abilities: People with Disabilities Face Challenges Approximately 20 percent of Americans have a physical or cognitive disability, according to the US Census Bureau. The Americans with Disabilities Act prohibits discrimination against those with disabilities and requires organizations to reasonably accommodate an individual’s disabilities.75 Not surprisingly, some people with disabilities have difficulty finding work. The US Bureau of Labor Statistics found that 10.4 percent were unemployed in July 2015, much higher than the 5.4 percent rate for those without disabilities. Contrary to negative Page 144 stereotypes about hiring the disabled, such as that making reasonable accommodation is expensive, many organizations are finding this group of people to be a valuable source of talent. Walgreens, for example, is dedicated to hiring people with disabilities. Forty percent of the workforce at two of its distribution centers have disabilities.76 Generational Differences in an Aging Workforce The US population and workforce are getting older, and the workforce includes greater generational differences than ever before. We already see four generations of employees working together, soon to be joined by a fifth (see Table 4.3). Managers need to deal effectively

with generational differences in values, attitudes, and behaviors. Many companies, including IBM, Lockheed Martin, Ernst & Young LLP, and Aetna, address this issue by providing training workshops on generational diversity. TABLE 4.3 GENERATIONAL DIFFERENCES

TRADITIONALIST S

BABY BOOMERS GEN XERS

MILLENNIAL S (GEN Y) GEN 2020

Birth Time Span 1925–1945 1946–1964 1965–1979 1980–2001 2002–

Current Populatio n 38.6 million 78.3 million 62 million 92 million 23 million

Key Historical Events

Great Depression, World War II, Korean War, Cold War era, rise of suburbs

Vietnam War; Watergate; assassination s of John and Robert Kennedy and Martin Luther King, Jr.; women’s movement; Kent State killings; first man on the moon

MTV, AIDS epidemic, Gulf War, fall of Berlin Wall, Oklahoma City bombing, 1987 stock market crash, Bill Clinton– Monica Lewinsky scandal

September 11 terrorist attack, Google, Columbine High School shootings, Enron and other corporate scandals, wars in Iraq and Afghanistan, Hurricane Katrina, financial crisis of 2008 and high unemploymen t

Social media, election of Barack Obama, financial crisis of 2008 and high unemploymen t

Broad Traits

Patriotic, loyal, disciplined, conformist, possessed of a high work ethic and respect for authority

Workaholic, idealistic, competitive, materialistic, possessed of a high work ethic, in search of personal fulfillment

Self‐reliant, adaptable, cynical, independent, technologicall y savvy, distrustful of authority, in search of work–life balance

Entitled, civic minded, close parental involvement, cyberliteracy, appreciate diversity, multitasking, in search of work–life balance,

Multitasking, online life, cyberliteracy, communicate fast and online

technologically savvy

Defining Invention Fax machine

Personal computer Mobile phone

Google and Facebook

Social media and iPhone apps

SOURCE: Adapted from J. C. Meister and K. Willyerd, The 2020 Workplace (New York: Harper Collins, 2010), 54–55; and R. Alsop, The Trophy Kids Grow Up (San Francisco: Jossey-Bass, 2008), 5.

Table 4.3 summarizes generational differences using common labels: traditionalists, baby boomers, Gen Xers, Millennials/Gen Ys, and the incoming Gen 2020s. We use such Page 145 labels (and resulting generalizations) for sake of discussion. There are always exceptions to the characterizations shown in Table 4.3.77 Educational Levels: Mismatch between Education and Organizational Needs There are three potential education–work mismatches:  College graduates may be in jobs for which they are overqualified. The US Census Bureau

estimates that 26.8 percent of the US workforce has at least a college degree.80 Unfortunately, about a half a million college graduates are working minimum-wage jobs—260,000 with bachelor’s degrees and 200,000 with associate’s degrees.81 These graduates are underemployed, working at jobs that require less education than they have such as waiting tables, tending bar, painting, and other work that someone with less education could perform. Underemployment is associated with poorer work attitudes, job performance, job satisfaction, motivation, and psychological well-being.82

 College graduates may not have the skills desired by employers. Recent studies show that college graduates, while technically and functionally competent, lack teamwork skills, critical-thinking ability, oral communication skills, and analytic reasoning.83 There is also a shortage of college graduates in technical fields related to science, math, and engineering.

 High‐school dropouts and others may not have the literacy skills needed for many jobs. A recent study revealed that 7 percent of all US students between 16 and 24 dropped out of high school in 2013.84 The dropout rate is higher for males. This statistic, along with the fact that 14 percent of US adults read below a basic level, is a real problem for employers, because about 70 percent of on-the-job reading materials are written at or above a ninth- grade level.85

BARRIERS AND CHALLENGES TO MANAGING DIVERSITY MAJOR QUESTION

What are the most common barriers to implementing successful diversity programs? THE BIGGER PICTURE Wouldn’t you rather know what obstacles lay ahead, instead of discovering them too late? We share 11 common challenges to effectively managing diversity. The following is a list of the most common barriers to implementing successful diversity programs:86 1. Inaccurate stereotypes and prejudice. Mistaken perceptions manifest themselves in the

belief that differences are weaknesses and that diversity hiring means sacrificing competence and quality. As a reporter for The Wall Street Journal noted, “Studies show that

negative stereotypes about aging—for example, that older people inevitably grow less productive and more depressed—are as pervasive as they are inaccurate.”87 Inaccurate stereotypes like this limit the promotability and job satisfaction of older workers.

2. Ethnocentrism. The ethnocentrism barrier is based on the feeling that our cultural rules and norms are superior to or more appropriate than the rules and norms of another culture.

3. Poor career planning. Lack of opportunities for diverse employees to get work assignments that qualify them for senior management positions can stunt careers.

4. A negative diversity climate. We define organizational climate in Chapter 7 as employee perceptions about an organization’s formal and informal policies, practices, and procedures. Diversity climate is a subcomponent of an organization’s overall climate and is defined as the employees’ aggregate “perceptions about the organization’s diversity‐ related formal structure characteristics and informal values.”88 Diversity climate is positive when employees view the organization as being fair to all types of employees, which promotes employee loyalty and overall firm performance.89 It also enhances psychological safety. Psychological safety reflects the extent to which people feel free to express their ideas and beliefs without fear of negative consequences. As you might expect, psychological safety is positively associated with outcomes in the Organizing Framework like innovation.90

There are over 11 different types of lightning. This is an anvil crawler. It travels horizontally and generally at high altitudes. A lightning storm like this can be dangerous and we must be careful to avoid being struck. The same is true for an organization's diversity climate. It signals the extent to which an organization's “internal climate” supports diversity initiatives. Bad climates, like bad lightning storms, result in people taking cover by withholding effort and talent. Have you ever worked in a company with a negative diversity climate? © Jason Weingart Photography RF

5. Page 147A hostile working environment for diverse employees. Hostile work environments are characterized by sexual, racial, and age harassment and can be in violation of Equal Employment Opportunity law, such as Title VII of the Civil Rights Act.91 Whether

perpetrated against women, men, older individuals, or LGBTQ people, hostile environments are demeaning, unethical, and appropriately called “work environment pollution.” You certainly won’t get employees’ best work if they believe the work environment is hostile toward them. The Applying OB box illustrates how Chicago-based online lender Enova International Inc. is trying to create a work environment supportive of Millennials.

Enova International Provides a Millennial Supportive Environment Enova was founded by two brothers in 2004 and grew rapidly. Soon it experienced challenges in retaining its technologically savvy employees because they were in high demand in the job market. The company then developed a three-part retention strategy targeted at Millennials:

1. Development. Millennials like to know their career game plan. According to a freelance writer for HR Magazine, “Enova offers employees workshops on technology and soft skills, such as how to develop a professional presence and how to increase their emotional intelligence.” The company displays charts on its website that show career paths for employees. 2. Recognition. Millennials are known to like frequent and clear feedback. Enova addresses this desire by using a “game-like recognition system in which employees can award points to their colleagues, whether peers or subordinates, for a job well done," according to HR Magazine. Employees then cash the points in for prizes that include iPods and designer purses. 3. Perks. Millennials seem to prefer collaboration and the opportunity to stay connected with friends. Enova tried to accommodate these needs by building the “chill hub,” a room that contains a waterfall wall, board games, massage chairs, and exercise balls. Once a month employees are allowed to volunteer during the workday for a nonprofit of their choice. The company also offers a host of personal perks that include onsite dry cleaning services, yoga classes, snacks and beverages, and Weight Watchers classes.92

6. Diverse employees’ lack of political savvy. Diverse employees may not get promoted

because they do not know how to “play the game” of getting along and getting ahead in an organization. Research reveals that women and people of color are excluded from organizational networks that could help them rise.93 Some organizations attempt to overcome this barrier by creating employee-resource groups that encourage individuals with similar backgrounds to share common experiences and success strategies. American Express has 16 network groups and Cisco has 11.94

7. Difficulty balancing career and family issues. Women still assume most of the responsibilities associated with raising children. This makes it harder for them to work evenings and weekends or to travel. Even without children in the picture, household chores take more of a woman’s time than a man’s.

8. Page 148Fear of reverse discrimination. Some employees believe diversity management is a smoke screen for reverse discrimination. This belief leads to very strong resistance because it makes people feel one person’s gain is another’s loss.

9. Lack of organizational priority for diversity. Low priority for diversity leads to subtle resistance in the form of complaints and negative attitudes. Employees may complain about the time, energy, and resources devoted to diversity that could have been spent doing “real work.”

10. A poor performance appraisal and reward system. Performance appraisals and reward systems must reinforce the need to effectively manage diversity. Success must thus be based on a new set of criteria. For example, General Electric evaluates the extent to which its managers are inclusive of employees with different backgrounds. These evaluations are used in salary and promotion decisions.95

11. Resistance to change. Effectively managing diversity entails significant organizational and personal change. Sometimes this resistance is a function of cross-cultural values. In Japan, for example, women have a difficult time being promoted to senior management positions because of the practice of lifetime employment and age-based promotions. This tradition still holds at both large and small companies.96

ORGANIZATIONAL PRACTICES USED TO EFFECTIVELY MANAGE DIVERSITY MAJOR QUESTION

What are organizations doing to effectively manage diversity, and what works best? THE BIGGER PICTURE Whether you manage a diverse work group or find yourself managed within a diverse work group, you’ll do better by understanding the various ways in which organizations attempt to manage diversity. You’ll be able to review eight options in the following section. Hint: We recommend mutual adaptation. What are organizations doing to effectively manage diversity? We can answer this question by first providing a framework for categorizing organizational initiatives.

Framework of Options One especially relevant framework was developed by R. Roosevelt Thomas Jr., a diversity expert. Thomas identified eight generic action options that organizations can use to address any type of diversity issue. After describing each option, we discuss relationships among them.97 Option 1: Include/Exclude Include/exclude is an outgrowth of affirmative action programs. Its primary goal is to either increase or decrease the number of diverse people at all levels of the organization. Shoney’s restaurant chain attempted to include diverse employees after settling a discrimination lawsuit. The company subsequently hired African Americans into positions of dining-room supervisors and vice presidents, added more franchises owned by African Americans, and purchased more goods and services from minority-owned companies.98 Option 2: Deny People may deny differences exist, saying that all decisions are color-, gender-, and age-blind and that success is determined solely by merit and performance. Novartis Pharmaceuticals agreed to a $152 million settlement in a gender discrimination lawsuit. Holly Waters, one of the plaintiffs, charged that “she was not only paid less than her male equivalents at Novartis, but was fired when she was seven months pregnant after taking a few weeks off on advice of her doctors.” Waters was the highest performer in her district.99 Novartis denied that gender discrimination was a companywide issue despite the fact that 5,600 women received compensation in the settlement.100 Option 3: Assimilate The idea behind assimilation is that, given time and reinforcement, all diverse people will learn to fit in or become like the dominant group. Organizations initially assimilate employees through their recruitment practices and through orientation programs that describe their preferred values and standard operating procedures. Employees then are encouraged to refer to policies and procedures when confused about what to do in a specific situation. These practices create behavioral homogeneity among employees. Page 150

These U.S. soldiers of the 101st Airborne Division are a great illustration of assimilation. Note the uniform dress and structured approach toward marching. Assimilation techniques used by the military create homogeneity in dress, behavioral expectations, and many other aspects of military life. Do you think nonmilitary organizations desire the same type of homogeneity?© Zoom Dosso/AFP/Getty Images

Option 4: Suppress Differences are squelched or discouraged when suppression is the diversity strategy. Managers and peers tell employees to quit whining and complaining about issues. Saying, “You’ve got to pay your dues” is another way to suppress differences and promote the status quo. Option 5: Isolate Isolation maintains the status quo by setting the diverse person off to the side. Then he or she is unable to influence organizational change. Managers can isolate people and entire teams and departments by putting them on special projects, creating functionally independent entities often referred to as silos. Option 6: Tolerate Toleration entails acknowledging differences but not valuing or accepting them. This live-and- let-live approach allows organizations to give lip service to the issue of managing diversity. It differs from isolation in that it allows for the inclusion of diverse people, but differences are still not truly valued or accepted. Option 7: Build Relationships Relationship building is based on the premise that good relationships can overcome differences. It addresses diversity by fostering high-quality relationships—characterized by acceptance and understanding—among diverse groups. Marriott, for example, has paired younger and older employees in teams so they can more effectively capitalize on their strengths and weaknesses.101 Option 8: Foster Mutual Adaptation Mutual adaptation allows people to change their views for the sake of creating positive relationships with others. Employees and managers alike must be willing to accept differences and, most important, agree that everyone and everything is open for change. Diversity training is one way to kick-start mutual adaptation. Research shows that such training can positively enhance people’s attitudes and feelings about working with diverse employees.102

Conclusions about Action Options Although the action options can be used alone or in combination, some are clearly more effective than others. Exclusion, denial, assimilation, suppression, isolation, and toleration are the least preferred options. Inclusion, building relationships, and mutual adaptation are preferred. That said, Thomas reminds us that mutual adaptation is the only approach that unquestionably endorses the philosophy behind managing diversity.

Choosing how to best manage diversity is a dynamic process and is influenced by the context. For instance, some organizations are not ready for mutual adaptation. The best they might be able to achieve is the inclusion of diverse people.

How Companies Are Responding to the Challenges of Diversity We close this chapter by sharing some examples and models that demonstrate how companies are responding to the emerging challenges of managing diversity. Compare these to Thomas’s framework and you’ll find the greatest activity around Options 7 and 8, building relationships and fostering mutual adaptation. Page 151

Response: Paying Attention to Sexual Orientation The Transgender Law Center estimates that about 2 percent of the population is transgender. The term transgender applies to anyone whose gender identity or gender expression is different from sex at birth. Although 61 percent of Fortune 500 firms forbid discrimination based on gender identity, transgender people are protected against discrimination in only 17 states and the District of Columbia.103 More companies recognize that they don’t want to alienate this segment of the population, however, and are implementing programs to help them transition. Aetna, for example, has developed a policy that covers issues involving leave benefits, restroom use, and the transitioning employee’s preferred pronouns and names. It also includes medical coverage for therapy and surgery. Companies including Alcatel-Lucent and Glassdoor have addressed the needs of transgender employees by trying to create an inclusive culture. Mariah DeLeon, Glassdoor’s vice president of people, noted, “The phrase we have here is ‘Bring your whole self to work.’”104

Response: Addressing Changing Customer Demographics A Citizens Union Bank branch in Louisville, Kentucky, was designed and staffed with the goal of attracting more Latina/o customers. The interior contains “bright, colorful walls of yellows and blues, large-scale photos of Latin American countries, comfortable couches, sit-down desks, a children’s play area, a television tuned to Hispanic programming, and even a vending area stocked with popular Latin American-brand soft drinks and snacks.” The branch also took on a new name: Nuestro Banco, Spanish for “Our Bank.” Branch deposits are setting records, and the CEO is planning to repeat the model in other locations.105 Response: Helping Women Navigate the Career Labyrinth Organizations can make career navigation easier by providing flexible work schedules and the developmental assignments that prepare women for promotional opportunities. According to a business writer, the Boston Consulting Group “focuses heavily on recruiting and retaining women, offering part-time options, mentoring and professional-development programs.” On‐ ramping programs encourage people to reenter the workforce after a temporary career break. Companies such as McKinsey & Co. and Goldman Sachs Group offer these to women in particular. Goldman, for example, instituted “returnship” programs that offer short-term job assignments to former employees.106

Response: Helping Hispanics Succeed Miami Children’s Hospital and Shaw Industries Inc. in Dalton, Georgia, hope to raise employee productivity, satisfaction, and motivation by developing customized training programs to improve the communication skills of their Spanish-speaking employees.107 Research reveals that retention and career progression of minorities can be significantly enhanced through effective mentoring. Response: Providing Community and Corporate Training to Reduce the Mismatch between Education and Job Requirements To combat education gaps on a more global level, JPMorgan started The Fellowship Initiative (TFI) in New York in 2010 and expanded it to Chicago and Los Angeles in 2014. The goal is to provide intensive academic and leadership training to young men of color. Jamie Dimon, chair and CEO of JPMorgan, is committed to the program. “These young men need access to high quality education and positive role models in and outside the classroom,” he said. Michael Bloomberg, then New York City’s mayor, applauded JPMorgan’s effort by concluding, “We need more civic-minded companies and organizations to step up and join this work, and I congratulate JPMorgan Chase for being a leader in this effort and for making a real difference in the lives of young men of color in our city.”108 At the individual corporate level, companies, including Wheeler Machinery Co. in Salt Lake City, have instituted specialized training programs that enable less-qualified people to perform more technically oriented jobs. Lockheed Martin and Agilent Technologies also offer paid apprenticeships or internships to attract high-school students interested in the sciences.109 Page 152

Response: Retaining and Valuing Skills and Expertise in an Aging Workforce Here are seven initiatives that can help organizations to motivate and retain an aging workforce: 1. Provide challenging work assignments that make a difference to the firm. 2. Give employees considerable autonomy and latitude in completing a task. 3. Provide equal access to training and learning opportunities when it comes to new

technology. 4. Provide frequent recognition for skills, experience, and wisdom gained over the years. 5. Provide mentoring opportunities whereby older workers can pass on accumulated

knowledge to younger employees. 6. Ensure that older workers receive sensitive, high-quality supervision. 7. Design a work environment that is both stimulating and fun.110 You’ll see a number of these tactics being used by BAE, a multinational defense and aerospace company, according to a writer for Bloomberg Businessweek. “When BAE learns that an employee with deep institutional knowledge plans to retire, whether in a few months or a couple of years, a knowledge-transfer group of about a half-dozen people of varying ages working in the same area is formed. The teams meet regularly over months to talk and exchange advice. Younger workers elicit tips, and in some cases older ones gradually hand off tasks to junior employees.”111 Some companies, such as Staples, have encountered problems managing older employees; see the Problem‐Solving Application box.

PROBLEM‐SOLVING APPLICATION 64‐YEAR‐OLD MALE SUES STAPLES FOR WRONGFUL TERMINATION AND AGE DISCRIMINATION Bobby Nickel, a 66-year-old facilities manager for Staples Contract and Commercial, Inc., and Staples, Inc., was fired. He claims the company

discriminated against and harassed him and ultimately terminated him due to his age.

From 2002 to 2008 Nickel worked for Corporate Express, which Staples then acquired. He received positive performance evaluations for nine years before his termination.

“Because Corporate Express’ pay scale had been higher than the pay scale for employees hired by Staples, Nickel alleged in his complaint that his managers noted that they needed to ‘get rid of’ older, higher paid employees. Nickel’s complaint also explained how he became the regular butt of jokes at staff meetings and was referred to as ‘old coot’ and ‘old goat," according to blogger Larry Bodine.112 Further, Nickel claimed that Lionel Marrero, his fulfillment center manager, regularly made harassing statements like, “Take a closer look at the older people. They are starting to drag and are slowing down. If they are not top performers, write them up and get rid of them.” It was also alleged that Marrero said, “We need young, energetic people. Walk around the facility with the older workers and if they cannot keep up, then get rid of them.… We need to get rid of old people because they are slow. And we can get younger people to work cheaper.”113 Nickel was ultimately pressed by a manager to resign. When he didn’t, he experienced increased incidents of harassment from coworkers and a manager. “This included being written up and suspended for ‘stealing,’ after taking a bell pepper valued at 68 cents from the company cafeteria.” A receptionist Page 153 told Nickel she had been instructed by management “to provide a false statement about Nickel’s conduct but she refused to do so, said blogger Larry Bodine.114 Counsel for Staples contended that the company had cause to suspend Nickel because he violated “the company’s zero-tolerance policy when it came to ‘dishonesty of any kind, including theft or misappropriation of company property.’”115 APPLY THE 3‐STEP PROBLEM‐SOLVING APPROACH 1. Step 1:Define the problem in this case. 2. Step 2:Identify the OB concepts or theories that may be causing the problem. For example, are stereotypes,

diversity climate, or frameworks for managing diversity causes of the problem? 3. Step 3:Recommend what you would do to correct the situation. Think both short term and long term. Response: Resolving Generational Differences

What Did I Learn? You learned that person perception and managing diversity are essential for success. Why? Person perception helps you better understand the perception process, improve the way you are perceived, and adjust your own perception to avoid common perceptual errors. Managing diversity (represented by both diversity and demographics in our Organizing Framework) lets you better optimize diversity’s effect on individual and group/team outcomes. Reinforce your learning with the Key Points below. Then consolidate your learning using the Organizing Framework. Finally, challenge your mastery of the material by answering the Major Questions in your own words.

Key Points for Understanding Chapter 4 You learned the following key points.

4.1 PERSON PERCEPTION  Perception is a mental and cognitive process that enables us to interpret and

understand our surroundings.  Person perception is influenced by three components: characteristics of the

perceiver, characteristics of the target, and characteristics of the situation.  Person perception affects a wide variety of organizational activities including

hiring decisions, performance appraisals, and leadership. 4.2 STEREOTYPES  Stereotypes represent generalized beliefs about the characteristics of a group.  Stereotypes are not always negative, and they are not always inaccurate.  Common stereotypes exist about gender, race, and age.  Stereotyping is a four-step process that consists of categorization, inference,

expectation formation, and maintenance.  We maintain stereotypes by (a) overestimating the frequency of stereotypic

behaviors exhibited by others, (b) incorrectly explaining expected and unexpected behaviors, and (c) differentiating minority individuals from ourselves.

4.3 CAUSAL ATTRIBUTIONS  Causal attributions are suspected or inferred causes of behavior.  According to Kelley’s model of causal attribution, we make external attributions

when consensus and distinctiveness are high and consistency is low. We make internal (personal responsibility) attributions when consensus and distinctiveness are low and consistency is high.

 The fundamental attribution bias emphasizes personal factors more than situation factors while we are formulating attributions. In the self-serving bias we personalize the causes of our success and externalize the causes of our failures.

4.4 DEFINING AND MANAGING DIVERSITY  Diversity represents the individual differences that make people unique from

and similar to each other.  Diversity varies along surface-level characteristics like race, gender, and age

and along deep-level characteristics such as attitudes, opinions, and values.  Affirmative action is an outgrowth of equal employment opportunity legislation

and is an intervention aimed at giving management a chance to correct past discrimination.

 Managing diversity entails enacting a host of organizational changes that enable all people to perform to their maximum potential.

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4.5 BUILDING THE BUSINESS CASE FOR MANAGING DIVERSITY  Managing diversity is predicted to be good business because it aims to engage

employees and satisfy customers’ unique needs.  There are six key demographic trends: (a) women are navigating a labyrinth

after breaking the glass ceiling, (b) racial groups are encountering a glass ceiling and perceived discrimination, (c) recognition of sexual orientation is growing in importance, (d) people with disabilities face challenges, (e) generational differences are growing in an aging workforce, and (f) a mismatch exists between workers’ educational attainment and organizational needs.

4.6 BARRIERS AND CHALLENGES TO MANAGING DIVERSITY  There are 11 barriers to successfully implementing diversity

initiatives: (a) inaccurate stereotypes and prejudice, (b) ethnocentrism, (c) poor career planning, (d) a negative diversity climate, (e) a hostile working environment for diverse employees, (f) diverse employees’ lack of political savvy, (g) difficulty balancing career and family issues, (h) fears of reverse discrimination, (i) lack of organizational priority, (j) the need to revamp the organization’s performance appraisal and reward systems, and (k) resistance to change.

4.7 ORGANIZATIONAL PRACTICES USED TO EFFECTIVELY MANAGE DIVERSITY  Organizations have eight options for addressing diversity

issues: (a) include/exclude the number of diverse people at all levels of the organization, (b) deny that differences exist, (c) assimilate diverse people into the dominant group, (d) suppress differences, (e) isolate diverse members from the larger group, (f) tolerate differences among employees, (g) build relationships among diverse employees, and (h) foster mutual adaptation to create positive relationships.

The Organizing Framework for Chapter 4 As shown in Figure 4.5, you learned that diversity, demographics, and stereotypes serve as key person factors, while diversity climate is an important situation factor. You also know there are relevant processes across the individual level (perception, Page 156attributions, and psychological safety), the group/team level (group/team dynamics), and the organizational level (options to manage diversity). These inputs and processes have critical outcomes.

FIGURE 4.5 Organizing Framework for Understanding and Applying OB

© 2014 by Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without express permission of the authors.

Challenge: Major Questions for Chapter 4 1. How do I form perceptions of others? 2. How can I use awareness of stereotypes to make better decisions and manage

more effectively? 3. How do I tend to interpret employee performance? 4. How does awareness about the layers of diversity help organizations effectively

manage diversity? 5. What is the business rationale for managing diversity? 6. What are the most common barriers to implementing successful diversity

programs? 7. What are organizations doing to effectively manage diversity, and what works

best? IMPLICATIONS FOR ME We see four additional things you can do to apply this chapter’s lessons. First, remember that your personal and professional success depends upon others’ perceptions of you. Because perceptions can override your good work, it is important to gain feedback on what others’ think about you. Second, it is normal to be affected by stereotypes. It would be helpful to reflect on your stereotypes and to try to avoid letting them bias your decisions and perceptions of others. Third, consider how you will respond when you hear negative or disparaging things about diverse people. It’s going to happen, and your response can make the difference in stopping such statements. Finally, celebrate your uniqueness, but remember that some people are uncomfortable with individual differences among people. We encourage you to just be yourself. IMPLICATIONS FOR MANAGERS There are three key implications for managers. First, because managers make many types of judgments about people, it is important to try to make these judgments without being biased or using stereotypes. This can be difficult because

such cognitive errors are a natural and normal part of how we process information. Second, the fundamental attribution bias can lead to inaccurate interpretations of someone’s suitability for a job or a performance evaluation. Be aware of this attributional error, and try to consider both personal and situation factors when evaluating others. Third, managing diversity is good for individual employees, managers, and organizations as a whole. Organizations, whether local or global, will compete more effectively when all employees feel included, supported, and valued. We all should try our best to be understanding and supportive of people who are different from the majority.

Problem‐Solving Application Case White, Male, and Asian: The Diversity Profile of Technology Companies Managing diversity is a hot topic among technology companies, some of which have started to display transparency by publishing their diversity profiles.

Google’s diversity report showed its workforce is 70 percent male and 30 percent female. Ethnicity data for its US workforce indicated 61 percent white, 30 percent Asian, 4 percent of two or more races, 3 percent Hispanic, 2 percent black, and 1 percent other. This pattern is similar to those of Apple (30 percent female and 55 percent white, and US ethnicity data showing 15 percent Asian, 11 percent Hispanic, 7 percent black, 2 percent of two or more races, 1 percent other, and 9 percent undeclared) and Facebook (31 percent female, and US ethnicity data of more than half white, 41 percent Asian, 3 percent Hispanic, and 1 percent black).116 Executives within the technology industry have started to implement a variety of programs and policies to change the demographic profiles of their companies. For example, Intel established a 2015 hiring goal of 40 percent new hires from diverse backgrounds and 22.7 percent of technical employees who are female. Pinterest established a 2016 goal to have 30 percent of new engineering hires in engineering roles be female and 8 percent from underrepresented ethnic minorities.117 Is setting diversity hiring goals fair? While companies that set them note they are not meant to be quotas, some managers may perceive them that way. This would likely create feelings of reverse discrimination, fueling resistance to hiring diverse employees.

What has led to the skewed demographics at technology companies? Some experts believe the root cause goes back to patterns and norms in elementary and high school, where girls are not encouraged to focus on the STEM subjects (science, technology, engineering, and math). If this is true, female high‐school students are not developing the proficiency that would help them major in STEM subjects in college. Further, a writer for Forbes concluded that an unconscious bias exists “that science and math are typically ‘male’ fields while humanities are primarily ‘female’ fields, and these stereotypes further inhibit girls’ likelihood of cultivating an interest in math and science.”118 A related issue is the “information gap.” High‐school students simply do not know which jobs are in high demand. For example, research shows that 24 percent of high‐school seniors “have no idea of what career they want to pursue. Of high school seniors who have pinpointed a desired profession, 23 percent said they made their career choice based on something they saw on TV or in a movie.”119 This is a problem because TV shows often depict technology‐oriented people as geeky males. Who wants to be a geek? Others claim the industry has a pipeline problem. In other words, not enough females and minorities are majoring in STEM subjects in college. Statistics conflict on this subject. Some data indicate that females earn fewer than 20 percent of college degrees in computer science, even though they achieve the majority of bachelor’s degrees in the United States.120 In contrast, other studies show that there is not a pipeline issue. According to Forbes writer Bonnie Marcus, there is “an equal number of high‐school girls and boys participating

in STEM electives." Marcus also notes that 50 percent of the introductory computer science students at Stanford and Berkeley are women.121 USA study further showed that “top universities graduate black and Hispanic computer science and computer engineering students at twice the rate that leading technology companies hire them.”122 There must be some reason these students are not being hired. If the above data are accurate, then it is possible that companies have a systemic problem based on hiring managers’ beliefs, stereotypes, or unconscious biases. This occurred at Pinterest, for example, when it tried to increase the number of women and minorities being hired. Although recruiters found qualified applicants “from nontraditional backgrounds, managers often continued to prioritize people from places like Stanford and MIT, which have less broad student bodies. And while Adam Ward, Pinterest’s head of recruiting, and Abby Maldonado, its diversity‐programs specialist, had encouraged colleagues to pass along résumés form a range of candidates, most of the referrals were still white or Asian," according to FastCompany.123 Pinterest founder Evan Sharp believes technology companies may not be giving diversity the same type of attention given to product development initiatives. Page 158There may also be more overt causes of the underrepresentation of female and minority tech employees. Consider results from an interview study of 716 women who had held technology positions. These women left the industry after seven years, and 27 percent cited “discomfort working in these companies.” Other top reasons were perceived discrimination in regard to gender, race, or sexual orientation, lack of flexible hours, and unsupportive work environments.124 Could something as subtle as gender‐based communication contribute to the problem? The answer is yes according to a recent report presented in Fortune. A study of 1,100 technology résumés from 512 men and 588 women uncovered gender‐related differences that may affect a recruiter’s perceptions. For example, “women’s résumés are longer, but shorter on details…. Yet when it comes to providing details about previous jobs, the men present far more specific content than the women do,” according to the Fortune report. Women were also found to “lead with their credentials and include more personal background. On average, the women’s résumés cite seven personal distinctions apiece, while the men’s cite four.” Overall, women tend to use more narrative while men are more precise about their experiences.125 Assume you are a senior leader at a technology company. What does the information in this case tell you about managing diversity?

Apply the 3-Step Problem-Solving Approach to OB

Step 1: Define the problem. A. Look first at the Outcome box of the Organizing Framework in Figure 4.5 to help identify the important

problem(s) in this case. Remember that a problem is a gap between a desired and current state. State your problem as a gap, and be sure to consider problems at all three levels. If more than one desired outcome is not being accomplished, decide which one is most important and focus on it for steps 2 and 3.

B. Cases have protagonists (key players), and problems are generally viewed from a particular protagonist’s perspective. You need to identify the perspective—employee, manager, team, or the organization—from which you’re defining the problem.

C. Use details in the case to identify the key problem. Don’t assume, infer, or create problems that are not included in the case.

D. To refine your choice, ask yourself, Why is this a problem? Explaining why helps refine and focus your thinking. Focus on topics in the current chapter, because we generally select cases that illustrate concepts in the current chapter.

Step 2: Identify causes of the problem by using material from this chapter, which has been summarized in the Organizing Framework shown in Figure 4.5. Causes will appear in either the Inputs box or the Processes box. A. Start by looking at Figure 4.5 to identify which person factors, if any, are most likely causes of the defined

problem. For each cause, explain why this is a cause of the problem. Asking why multiple times is more likely to lead you to root causes of the problem. For example, if you think demographics—an input in the Organizing Framework—is a cause, ask yourself why. This might lead to the conclusion that there are not

enough females and minorities who are taking STEM majors in college. In turn, this might lead to the conclusion that a poor pipeline is a root cause of demographics at technology companies. Then ask yourself why this is happening. The cause might go all the way back to elementary and high school. By following this process of asking why multiple times, you will be more likely to arrive at a more complete list of causes.

B. Now consider the Processes box shown in Figure 4.5. Consider whether perception, attributions, psychological safety, group/team dynamics, or options to manage diversity are causes of the problem. For any concept that might be a cause, ask yourself, Why is this a cause? Again, do this for several iterations to arrive at root causes.

C. Follow the same process for the situation factors. D. To check the accuracy or appropriateness of the causes, be sure to map them onto the defined problem. Step 3: Make recommendations for solving the problem. Consider whether you want to resolve it, solve it, or dissolve it (see Section 1.5). Which recommendation is desirable and feasible? A. Given the causes identified in Step 2, what are your best recommendations? Use the content

in Chapter 4 or one of the earlier chapters to propose a solution. B. Potential solutions may be found in the OB in Action and Applying OB boxes within the chapter.

These features provide insights about how other individuals or companies are handling the topic at hand.

C. Create an action plan for implementing your recommendations.

Legal/Ethical Challenge Swastikas and Neonatal Care This case describes an incident that occurred at Hurley Medical Center in Michigan and resulted in a lawsuit.

Tonya Battle, a veteran black nurse in Hurley’s neonatal intensive care unit, was taking care of a baby when a man with a swastika tattoo walked into the unit and reached for the baby. Battle stopped him and asked to see the hospital wristband that identified him as the baby’s parent. “He abruptly told her he wanted to see her supervisor, who then advised Battle she should no longer care for the child," according to USA Today.126 The man had requested that no African American nurses should take care of his child. A note was subsequently put on the assignment clipboard saying, “No African American nurse to take care of baby.” Battle was “shocked, offended, and in disbelief that she was so egregiously discriminated against based on her race and reassigned, according to the lawsuit, which asks for punitive damages for emotional stress, mental anguish, humiliation, and damages to her reputation," according to a reporter from the Arizona Republic.127 Battle could not understand why the hospital would accommodate the man’s request. Although the note was later removed, black nurses were not allowed to care for the child for about a month. The Arizona Republic newspaper reported that the “American Medical Association’s ethics code bars doctors from refusing to treat people based on race, gender, and other criteria, but there are no specific policies for handling race‐based requests from patients.” Further, a survey of “emergency physicians found patients often make such requests, and they are routinely accommodated. A third of doctors who responded said they felt patients perceive better care from providers of shared demographics, with racial matches considered more important than gender or religion.”128

Your Views

What would you have done if you were a medical administrator at the time the request was made?

1. I would not have honored the man’s request. I would have explained why Tonya Battle and other African American nurses are best suited to take care of his child.

2. I would have done exactly what the hospital did. The man has a right to have his child taken care of by someone of a race or gender of his choosing.

What would you do about the lawsuit?

1. Fight it. It’s ridiculous that someone would feel emotional stress and humiliation from simply being reassigned.

2. Settle it and create a policy that prohibits honoring future requests like this. 3. Settle it but hold a hospitalwide meeting explaining the rationale for continuing

5 FOUNDATIONS OF EMPLOYEE MOTIVATION VATION How Can I Apply Motivation Theories? MAJOR TOPICS I’LL LEARN AND QUESTIONS I SHOULD BE ABLE TO ANSWER

1. 5.1 THE WHAT AND WHY OF MOTIVATION

MAJOR QUESTION: What is motivation and how does it affect my behavior? 2. 5.2

CONTENT THEORIES OF MOTIVATION

MAJOR QUESTION: How would I compare and contrast the content theories of motivation? 3. 5.3

PROCESS THEORIES OF MOTIVATION

MAJOR QUESTION: How would I compare and contrast the process theories of motivation? 4. 5.4

MOTIVATING EMPLOYEES THROUGH JOB DESIGN

MAJOR QUESTION: How are top‐down approaches, bottom‐up approaches, and “idiosyncratic deals” similar and different? The Organizing Framework for Understanding and Applying OB shown in Figure 5.1 summarizes what you will learn in this chapter. Although Chapter 5 focuses on motivation, an individual-level process, a host of person and situation factors influence it. There are more situation than person factors in the figure. This reinforces the simple fact that managers significantly affect our motivation because they have more control over situation than person factors. Figure 5.1 further shows that processes across the individual, group/team, and organizational level influence a variety of important outcomes. FIGURE 5.1 Organizing Framework for Understanding and Applying O

B

Winning at Work Discussing Pay at Work Ever wonder how your pay compares to that of a coworker? Brian Bader did. Bader had just been hired for a technology-support job at Apple for $12 per hour and was told not to discuss salary with other employees. This requirement made him curious, so he decided to ask coworkers about their salary and found that most people were being paid between $10 and $12 per hour.

Pay Inequity Bader was not upset about his relative pay level at first, but it later became the reason he decided to quit his job. He learned from performance data shared with work teams that he was twice as productive as the lowest performer on the team yet earned only 20 percent more. “It irked me. If I’m doing double the work, why am I not seeing double the pay?” he said when interviewed for The Wall Street Journal.1 In OB we see Bader’s situation as an example of pay inequity. How do Companies Handle Decisions about Pay? Many companies tell employees not to discuss pay with coworkers. Some threaten to fire those who do. Why? Quite simply, when such disparities become public, they lead to feelings of inequity, which in turn lowers employee engagement, motivation, and performance. Dr. Kevin Hallock, dean of industrial and labor relations at Cornell University, said companies keep pay secret because they “aren’t very good at explaining to employees why they’re being paid what they’re paid, or what they must do to earn more.”2 Pay secrecy does not sit well with younger employees like Millennials, who are more willing than earlier generations to talk about pay and even discuss it on social media. Some companies, such as Whole Foods Market, SumAll, and Buffer, are less secretive. Buffer, a small social media marketing and analytics firm, posts all employees’ salaries online, including their names, along with revenue, sales, and the company’s formula for setting salaries.3 Would you like to work at Buffer?

The Wall Street Journal recently offered advice for how companies should handle pay secrecy. Based on OB research covered in this chapter, the writer suggested companies should open up about pay and allow employees to freely talk about their pay concerns. This includes showing pay data on company intranets and performance information by unit. Showing the link between pay and performance is one way to make pay decisions transparent.4 Should You Discuss Pay While at Work? The answer depends on your role and position. Experts contend that the National Labor Relations Act prohibits companies from stopping the rank and file (employees paid by the hour) from discussing salary and benefits packages outside work time. “Outside work time” means on social media as well. T-Mobile was recently found guilt of violating national labor laws by prohibiting employees from talking with each other about wages. The rules are different, however, for managers and supervisors, who can legally be prevented from discussing their pay.5 If you decide to discuss pay at work, keep the following recommendations in mind: (1) understand your company’s policy on the matter, (2) restrict your conversations to people you trust, and (3) don’t brag about your pay.

What’s Ahead in This Chapter There are far too many dysfunctional organizations where managers don’t seem to have a clue about how to motivate workers. OB supplies proven methods of how to motivate employees. These aren’t just abstract theories. All spring from observation and study of the workplace, and they have been validated in real-life testing. Business professionals treasure them as tools for making work better and more productive. We’ll show you how these methods operate and give practical tips and suggestions for implementing them.

THE WHAT AND WHY OF MOTIVATION MAJOR QUESTION

What is motivation and how does it affect my behavior? THE BIGGER PICTURE Motivation is a key process within the Organizing Framework for Understanding and Applying OB. Understanding the principles of motivation can help you both achieve personal goals and manage others in the pursuit of organizational goals. Motivation theories help us understand our own behaviors in organizational settings and provide us tools for motivating others.

Motivation: What Is It? Motivation explains why we do the things we do. It explains why you are dressed the way you are right now, and it can account for what you plan to do this evening.

How Does It Work? The term motivation derives from the Latin word movere, meaning “to move.” In the present context, motivation describes the psychological processes “that underlie the direction, intensity, and persistence of behavior or thought.”6 “Direction pertains to what an individual is attending to at a given time, intensity represents the amount of effort being invested in the activity, and persistence represents for how long that activity is the focus of one’s attention.”7

Bindi Irwin, on the left, and Derek Hough won the 2015 Dancing with the Stars competition. The smiles on their faces show the intrinsic motivation that performers in many fields feel during and after competing. Performers in

many arenas—not just competitive dancing—are motivated to excel by extrinsic factors, such as prize money, praise, recognition from others, and titles. However, often the key motivators are also, or instead, intrinsic, like a feeling of challenge and accomplishment.© Amanda Edwards/WireImage/Getty Images

There are two types of motivation: extrinsic and intrinsic.

 Extrinsic motivation results from the potential or actual receipt of external rewards. Extrinsic rewards such as recognition, money, or a promotion represent a payoff we receive from others for performing a particular task. For example, the Air Force is offering a bonus to drone pilots if they extend their commitment to remain in the military. These pilots can earn a $15,000 annual bonus by extending for either five or nine years, and they have the option to receive half the total bonus up front. The Air Force is doing this because the demand for drone pilots exceeds the supply.8

 Intrinsic motivation occurs when an individual is inspired by “the positive internal feelings that are generated by doing well, rather than being dependent on external factors (such as incentive pay or compliments from the boss) for the motivation to work effectively.”9 We create our own intrinsic motivation by giving ourselves intrinsic rewards such as positive emotions, satisfaction, and self-praise. Consider the intrinsic motivation of the 2015 winners of Dancing with the Stars—Bindi Irwin and Derek Hough. The joy on their faces demonstrates the engagement and fun they are having while dancing.

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The Two Fundamental Perspectives on Motivation: An Overview Researchers have proposed two general categories of motivation theories: content theories and process theories. Content theories identify internal factors such as needs and satisfaction that energize employee motivation. Process theories explain the process by which internal factors and situational factors influence employee motivation.10 It's important to understand both motivational perspectives because they offer different solutions for handling motivational problems. The following two sections discuss several theories for each theoretical perspective.

CONTENT THEORIES OF MOTIVATION MAJOR QUESTION

How would I compare and contrast the content theories of motivation? THE BIGGER PICTURE Five OB theories deal with the internal factors that motivate individuals. Several come from other disciplines. So you may have already encountered Maslow’s hierarchy of needs and related content theories such as McGregor’s Theory X and Theory Y, acquired needs theory, self‐determination theory, and Herzberg’s motivator‐hygiene theory. Most content theories of motivation are based on the idea that an employee’s needs influence his or her motivation. Content theorists ask, “What are the different needs that activate motivation’s direction, intensity, and persistence?” Needs are defined as physiological or psychological deficiencies that arouse behavior. They can be strong or weak and are influenced by environmental factors. This tells you that human needs vary over time and place. Content theories include:  McGregor’s Theory X and Theory Y.  Maslow’s need hierarchy theory.  Acquired needs theory.

 Self-determination theory.  Herzberg’s motivator-hygiene theory.

McGregor’s Theory X and Theory Y Douglas McGregor outlined his theory in his book The Human Side of Enterprise.11 Drawing on his experience as a management consultant, McGregor formulated two sharply contrasting sets of assumptions about human nature. Theory X is a pessimistic view of employees: They dislike work, must be monitored, and can be motivated only with rewards and punishment (“carrots and sticks”). McGregor felt this was the typical perspective held by managers. To help them break with this negative tradition, McGregor formulated his own Theory Y. Theory Y is a modern and positive set of assumptions about people at work: They are self‐engaged, committed, responsible, and creative. Consider the value of adopting a Theory Y approach toward people. One recent study demonstrated that employees and teams had higher performance when their managers displayed Theory Y behaviors. A second study uncovered higher levels of job satisfaction, organizational commitment, and organizational citizenship when managers engaged in Theory Y behaviors.12

Maslow’s Need Hierarchy Theory: Five Levels of Needs In 1943, psychologist Abraham Maslow published his now-famous need hierarchy theory of motivation. Although the theory was based on his clinical observation of a few neurotic individuals, it has subsequently been used to explain the entire spectrum of humanPage 165 behavior. The need hierarchy theory states that motivation is a function of five basic needs: physiological, safety, love, esteem, and self‐actualization. See Figure 5.2 for an explanation. FIGURE 5.2 Maslow’s need hierarchy

The Five Levels Maslow proposed that the five needs are met sequentially and relate to each other in a “prepotent” hierarchy (see Figure 5.2). Prepotent means the current most-pressing need will be met before the next need becomes the most powerful or potent. In other words, Maslow believed human needs generally emerge in a predictable stair-step fashion. Thus when physiological needs have been met, safety needs emerge, and so on up the need hierarchy, one step at a time. Once a need has been satisfied, it activates the next higher need in the hierarchy. This process continues until the need for self-actualization has been activated.13

Using Maslow’s Theory to Motivate Employees Although research does not clearly support its details, Maslow’s theory does offer practical lessons. It reminds us, for instance, that employees have needs beyond earning a paycheck. The hotel chain J.W. Marriott offers health care benefits, filling a physiological need, if hourly employees work 30 hours a week. The company also has companywide awards events, flexible scheduling, and steep travel discounts. The company’s headquarters includes a gym, dry cleaner, gift store, day care, and preferred parking for hybrid vehicles. Marriott also offers an array of wellness initiatives and an employee assistance line in multiple languages.14 This theory tells us that a “one style fits all” approach to motivation is unlikely to work. For example, studies show that different motivators are needed for employees working at small firms. George Athan, CEO of MindStorm Strategic Consulting, aptly noted, “People go to small companies to be part of something that will grow. They like the flexibility, too. The more they are involved in decision making, the more they feel it’s their mini-company.”15 A final lesson of Maslow’s theory is that satisfied needs lose their motivational potential. Therefore, managers are advised to motivate employees by devising programs or practices aimed at satisfying emerging or unmet needs.